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The news for Ed Hale, Chairman at 1st Mariner Bank continues to get worse as time goes on. You might remember that Ed Hale was a big supporter of O'Guvnah's 2006 Campaign, when he basically turned his bank properties into MASSIVE advertising billboards for O'Guvnah and his Lefty Dem downticket campaigns.
The result of this massive endorsement was the loss of a number bank customers totalling a couple million in deposits. In addition, employee contributions to the 1st Mariner PAC (Political Action Committee) collapsed. Turns out that Ed's employees are a LOT smarter than he is.
A lot smarter...
Ed's mortgage operation was one of the first to take a complete beating in the subprime market, as Bear Stearns quickly realized his office in Northern Virginia was writing a ton of fraudulent paper. Ed had to close the office, but in the process he had to bring in the FBI, which is conducting an ongoing investigation. What they will turn up is unclear at this point, but its looking like Ed had some pretty bad employees down there in Northern Virginia who were comitting all sorts of fraud.
Just a few weeks ago, 1st Mariner announced a loss of $10 million for 2007, driven largely by a slowdown in its commercial and residential loan business. The Board has all but shut off Ed's ability to use 1st Mariner Bank as a personal debit card.
Then, two weeks ago, Ed Hale himself was sued in Baltimore Circuit Court for defaulting on a $3.7 million loan from Maryland Financial Bank. MFB exists largely as a way to loan money to bank officers so that they can avoid the conflict-of-interest issues borrowing money from their own banks. Part of Ed's problem is surely the fact that the value of his collateral -- almost 500k shares of 1st Mariner Bancorp -- has dropped by almost $1 million.
Teller's Check:
A check drawn by a depository institution on an account maintained at a second depository institution and signed by a teller at the originating institution. Teller's checks are often used in payment of withdrawal orders.
And now, word comes from Bank of America Headquarters that they are no longer cashing Teller's Checks issued by 1st Mariner Bank. They will hold those checks for seven days to make sure they clear. This is a huge blow to 1st Mariner Bank, as it shows that the nation's largest retail bank has little confidence in 1st Mariner's ability to pay. This is shocking.
If I had any money in 1st Mariner Bank, I might start looking elsewhere.