August 31, 2009 —

Annapolis, MD – Kathleen Murphy, president and CEO of Maryland Bankers Association, has the following statements about today’s announcement of the Office of Thrift Supervision’s closure and FDIC’s receivership of Bradford Bank of Baltimore.

About Bradford Bank and its customers:

“The FDIC has acted to protect the insured deposits of Bradford Bank’s customers, which is essential to the overall stability and confidence in the banking system.  No one has ever lost a penny of FDIC insured deposits, and the system that is in place to protect deposits in times of economic stress is working well.  The most important thing for customers to know right now is all deposits were assumed by Manufacturers and Traders Trust Company (M&T) of Buffalo, New York.  There is no need for customers to change their banking relationship to retain their deposit insurance coverage.

On Saturday, the nine branches of Bradford Bank will reopen as branches of M&T.  Depositors of Bradford Bank will automatically become depositors of M&T.  Customers should continue to use their existing branches until M&T can fully integrate the deposit records of Bradford Bank.  This evening and over the weekend, depositors of Bradford Bank can access their money by writing checks or using ATM or debit cards.  Checks drawn on the bank will continue to be processed.

Loan customers should continue to make their payments as usual.”

About the General State of Maryland’s banking industry:

“It remains important to emphasize that 92 percent of Maryland-headquartered banks are classified as “well capitalized” by their banking regulators, which is the highest regulatory designation possible.  Consumers and businesses continue to recognize that Maryland banks are the safest place to keep their money, with deposits growing by 16 percent, or $3.8 billion from June 30, 2008 to June 30, 2009.  The overall Maryland banking industry is strong and has stood the test of time.”

“Banks have much higher regulatory capital requirements and improved risk analysis programs today as compared to the last major recession which occurred in the late ‘80s and early ‘90s.  There are currently 8,195 banks nationally; since 2007, 106 banks have failed nationally.  This figure pales in comparison to the 1,368 bank failures from 1989 – 1992. While two banks have failed in Maryland this year, the first in 17 years, the vast majority of Maryland banks have been in existence for decades and we have every confidence that the long-term future is positive. See the attached chart.

“With FDIC-insurance limits of up to $250,000 per individual per account, deposits remain protected in Maryland’s banks.  And Maryland banks continue to make loans to well-qualified borrowers.  Through the end of the second quarter, loans made by Maryland-headquartered banks and savings institutions increased 8 percent from June 30, 2008 to June 30, 2009.   Maryland’s bankers are being appropriately cautious and thorough in evaluating loan requests because of economic conditions.  Borrowers with good credit, reasonable debt and solid cash flow, among other things, are receiving loans.”

General banking advice for consumers and businesses:  “In the 75-year history of the FDIC, no depositor has ever lost a penny of insured deposits and the industry is committed to maintaining the strength of the deposit insurance fund.  Each depositor is fully insured up to $250,000. 

“We emphasize that if your deposits at your bank are fully covered, there’s no need for you to take unnecessary, drastic actions with your deposit accounts.  We continue to advise consumers to fully understand FDIC insurance limits and how their accounts are structured to maximize their coverage.  Your banker is trained to know how to maximize your deposit insurance coverage to best accommodate your needs.  If you have concerns about your level of deposit insurance coverage, be sure to talk with your banker.  Also, log on to www.fdic.gov for tools and an explanation of coverage.”

About MBA:

Founded in 1896, the Maryland Bankers Association promotes the competitiveness and safety and soundness of the Maryland banking industry.  For more than 113 years, the MBA has provided Maryland’s banks with top-quality professional development, revenue-enhancing products and services, governmental relations and public advocacy.  The association’s members hold nearly 90% of the FDIC-insured deposits in the State.