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CEO connects with stockholders

May 25, 2004|by JULIE E. GREENE

julieg@herald-mail.com

Boonsboro resident Rodney Cline never thought he'd get to meet the chairman and chief executive officer of a company he's invested in, but on Monday he got that chance.

Edward "Ned" J. Kelly III, chairman and chief executive officer of Mercantile Bankshares Corp., spoke to approximately 128 people at the Four Points Sheraton on Monday thanks to a new investor luncheon series started by Ferris, Baker Watts, Inc.

The series was started to connect the upper management of publicly-held companies with current and prospective stockholders, said John R. Hershey III, branch manager of Ferris, Baker Watts' Hagerstown office.

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"I personally thought it was pretty neat that he came here to talk to us. I enjoyed his presentation," said Cline, 64, a Verizon retiree.

Kelly told the crowd, which included business people in suits and casually dressed retirees, that he seldom gets the opportunity to talk to "retail investors." Retail investors are consumer, or noncommercial, customers and represent 60 percent of the bank's investor base.

Last year, Mercantile bought Home Federal Savings Bank's parent company, Frederick, Md.-based Farmers & Mechanics Bank. The bank now is known in Washington County as Fidelity Bank.

Historically, Mercantile's business centered in Baltimore, north of the city and on the Eastern Shore, Kelly said. The acquisition allowed Mercantile to expand to the west and south, where Maryland's strongest growth is, Kelly said.

The banks complemented each other, he said. Mercantile has a stronger commercial business and Farmer and Mechanics has stronger retail and mortgage businesses, Kelly said.

Hershey said 850,000 shares of Mercantile are held by customers of Ferris, Baker Watts' Hagerstown office.

While researching local purchases of Mercantile stock, Hershey said he found that someone bought approximately 20 shares at $103 a share in 1958.

If the shareholder did nothing but hold those shares and accept stock splits, the value of that stock when the stock market closed Monday would be $146,221, Mercantile's Director of Tax and Investor Relations David E. Borowy said later in a phone interview. That amount would be much higher if the shareholder reinvested dividends, he said.

Kelly said Mercantile's hallmark in recent decades has been consistency.

With another financial quarter about to end, Kelly said he is not going to break the 27-consecutive year streak Mercantile has of increasing dividends.

It's not easy, but Mercantile aims to grow earnings per share by 10 percent a year while the industry's earnings grow by about 5 percent to 6 percent a year, Kelly said.

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