Ed Hale's white elephants
Yesterday Hanah Cho and I asked 1st Mariner boss Ed Hale (her story here, my column here) and other company officials whether the slight revival in the housing market and the first-time homebuyer tax credit were helping the bank unload its inventory of foreclosed houses. The answer is not very much.
Much of the housing bubble was in McMansions -- expensive homes sold to people who probably never should have gotten near any mortgage, let alone one for a million-dollar house. These are what 1st Mariner owns. It's safe to say that they are not the ones first-time buyers are snapping up. The bank owns 29 houses, many in Virginia but also in Chicago, Michigan and Florida. They range in price from $700,000 to $2 million -- and that's after the bank has already written them down by a ton. Six are on the runway to be sold in the next few weeks, Hale said. Others will take months and months to get rid of, and meanwhile 1st Mariner has to pay for somebody to cut the grass etc. It's a lot more work-intensive to handle foreclosed residential real estate than the hotels Hale was dealing with in the 1990s with the Bank of Baltimore.
The housing improvement -- you can't call it a turnaround -- is helping 1st Mariner in other ways. The bank is doing a land office business in mortgage refinancing -- for responsible clients this time, officials say! And the lessening in home-price declines lowers the chances that new customers will default. But there is no boom in the kind of 3,500-square-foot, brick-and-plastic veneer stuff that 1st Mariner owns, and there won't be for a long time.







Comments
I hope that with all his problems that he can somehow keep the Blast going. If not they'll be so many disappointed fans.
Posted by: John | September 23, 2009 11:00 AM
Funny how Hale's radio commercials are warning those who's banks have been taken over by out-of-town banks (Buffalo, Pittsburgh and Charlotte) to switch over to him. While not mentioning any banks by name, I know that he is referring to M&T taking over Provident for one. Now it looks like an out-of-country bank will be taking 1st Marine over (Paris-based Natixis SA). WAY TO GO ED !!!!!
Posted by: Tony | September 23, 2009 11:18 AM
Ed Hale is a true gentlemen and one of the saviors of Baltimore. If Ed Hale can't weather this storm its a sad commentary.
Posted by: Josh | September 23, 2009 11:20 AM
I read the headline of this blog and immediately thought of Canton Crossing. It is a white elephant that is helping drag down 1st Mariner and its boss. The bank is like many things in Baltimore; it thinks too big in fantasy land and gets destroyed in the real world. Here's hoping Southeast at least gets a shopping center there.
Posted by: Brian | September 23, 2009 11:39 AM
Ed, do you believe in Karma? What comes around goes around. You destroyed the Bank of Baltimore just so you can personally gain, and I hope you get every bad thing that's coming to you. Soooo long Eddie-boy....:))
Joe
Posted by: Joe | September 23, 2009 11:43 AM
Why is Mayo Shattuck at CEG trying to cause problems for Ed Hale. Wasn't ruining and selling out Alex Brown enough.
Posted by: Bob | September 23, 2009 12:20 PM
P.S. Hale couldn't wait to foreclose on the Senator theatre. Now he'll know how it feels.
Posted by: Tony | September 23, 2009 1:33 PM
This is an "Emperor's New Clothes" moment.
Facts = Hale is a fairly arrogant, egomaniacal person who is actually a poor businessman and even worse relationship-builder. Wealth emanated from shipping and real estate businesses created by his father, not by him. The surprise is not the current dilemma he faces, but that it took this long for it to occurr.
Posted by: Bill Greer | September 23, 2009 4:09 PM
For years, I have brought to the attention of the Board of Directors as well as the shareholders the need for changes at the top of First Mariner. Unfortunately, my warnings went unheeded. It was only a matter of time before the house of cards came crashing down. Mr. Hale has never been able to grasp the concept that the bank is not his personal pocketbook. You only have to look at the tens of millions of dollars that Mr. Hale has funneled from the bank to various personal projects.
Posted by: John | September 23, 2009 5:48 PM
Bill Greer could not be more wrong about Ed Hale's father. He was not in shipping or real estate, but worked most of his career at BGE. Ed created all his enterprises on his own. You should at least try to check your facts.
Posted by: kmn | September 28, 2009 11:55 AM
I don't believe what I am reading on these posts.
Ed Hale is a self made guy who has poured his heart into making Baltimore a better place to live and work. You won't find nicer looking buildings in many of the neighborhoods than the First Mariner Branches.
Not only has he built and maintained a Baltimore based local bank, he has helped rejuvenate the Canton area by bringing life back to the area.
Unfortunately the financial plight that he seems to be in is the result of the current nationwide financial crisis that has affected even the giant banks. (ex Citi and Bank of America) He could have sold out long ago and walked away with a substantial gain, but he is standing by his business plan of maintaining a local bank and rejuvenating the Canton area.
All this and he constantly is giving time and money to Charities big and small behind the scenes.
Don't like his business plan ? Don't bank there. Don't like him personally ? Don't send him a Christmas Card. But don't post untrue "facts" just to bash a guy when he is not on top of his game... Like every other banker in the US.
Posted by: Mike Long | September 28, 2009 6:48 PM
Blatenly Untrue Facts: Wealth emanated from shipping and real estate businesses created by his father, not by him.....
Facts: Ed Hale might not be the smartest person in the world but he is the hardest working person I've ever met and his heart is always in the right place for a better cause and not JUST his personal gain. It is obvious that he has done so much for Baltimore and for a lot of people.... and always gives back to the community.... and his only mistake was putting too much of his personal money and time into projects that have gone sour because of this economic climate and bigger bank failures.... bigger banks that are run by higher paid idiots that don't have 1/10th of the integrity of Ed Hale and are more concerned with money than helping the little guys.
Check your facts please. I know this personally and this is the first time I have spoken about it and I'm still being very vague out of respect to this situation so I'm not naming names or details... and NO I didn't drink the Ed Hale Koolaid but yes I actually dated him for 9 months last year and checked my facts before I opened my damn mouth.
Posted by: M Flynn | October 1, 2009 11:18 AM