As filed with the Securities and Exchange Commission on August 25, 2003
Registration No. 333-107670
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST MARINER BANCORP
(Exact Name of Registrant as Specified in its Charter)
Maryland 52-1834860
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) Number)
3301 Boston Street
Baltimore, Maryland 21224
(410) 342-2600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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Eugene A. Friedman
3301 Boston Street
Baltimore, MD 21224
(410) 342-2600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
Abba David Poliakoff, Esquire
Michele L. Bresnick, Esquire
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
233 East Redwood Street
Baltimore, Maryland 21202-3332
(410) 576-4067
Approximate date of commencement of proposed sale to public: From time to
time after Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commissioner, acting pursuant to said Section
8(a), may determine.
Subject to completion, dated August 25, 2003.
PROSPECTUS
FIRST MARINER BANCORP
888,602 Shares of Common Stock
This prospectus relates to the offer and sale by the selling shareholders
identified in this prospectus, of a maximum of 888,602 shares of common stock of
First Mariner Bancorp issuable upon the exercise of warrants which were
previously issued by us to the selling shareholders in private transactions. As
of July 30, 2003, the number of shares covered by this prospectus represents
approximately 16.4% of the number of outstanding shares of our common stock, and
represents 14.1% of the shares of our common stock that will be outstanding upon
the exercise of all of the warrants to purchase the underlying shares covered by
this prospectus. We are not offering to sell any of our securities. The selling
shareholders may offer and sell some, all or none of the common stock covered
under this prospectus. We will not receive any of the proceeds from the offer
and sale of the shares, however, the shares offered by the selling shareholders
are issuable upon the exercise of outstanding warrants at an exercise price of
$9.09 per share. If these warrants were exercised in full, we will receive
aggregate gross proceeds of $8,077,392. We will issue these shares only to the
extent that the selling shareholders exercise their warrants.
Shares of our common stock are currently quoted and traded on the NASDAQ
National Market under the symbol "FMAR." On July 30, 2003 the last sale price of
the common stock as reported on the Nasdaq National Market was $14.89 per share.
As used in this prospectus, the terms "we," "us," "our" and "First Mariner"
mean First Mariner Bancorp and its subsidiaries (unless the context indicates
another meaning), and the term "common stock" means our common stock, par value
$0.05 per share.
Investing in our common stock involves risks. You should not purchase our
common stock unless you can afford to lose your entire investment. See "Risk
Factors" beginning on page 4 for certain information that should be considered
by prospective shareholders.
Neither the Securities Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
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The date of this Prospectus is ______________, 2003
We have not authorized any dealer, salesperson or other person to give any
information or to make any representations other than those contained or
incorporated by reference in this prospectus in connection with the offer
contained in this prospectus and, if given or made, you should not rely on such
unauthorized information or representations. Neither we nor the selling
shareholders are making an offer to sell or a solicitation of any offer to buy
securities in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation. You should not assume that the information provided in
this prospectus is accurate as of any date other than the date on the front of
this prospectus.
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TABLE OF CONTENTS
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Page
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SUMMARY...............................................................3
RISK FACTORS..........................................................4
DESCRIPTION OF WARRANTS..............................................11
SHARES ELIGIBLE FOR FUTURE SALE......................................11
USE OF PROCEEDS......................................................11
SELLING SHAREHOLDERS.................................................11
PLAN OF DISTRIBUTION.................................................15
LEGAL MATTERS........................................................16
EXPERTS..............................................................16
WHERE YOU CAN FIND MORE INFORMATION..................................16
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................17
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SUMMARY
This summary only highlights the more detailed information appearing
elsewhere in this prospectus or incorporated in this prospectus by reference. As
this is a summary, it may not contain all information that is important to you.
Our Company
First Mariner Bancorp (the "Company") is a financial holding company whose
business is conducted primarily through its wholly-owned operating subsidiaries,
First Mariner Bank (the "Bank") and Finance Maryland LLC ("Finance Maryland").
The Bank, which was formed in 1995 through mergers of several local financial
institutions, serves central Maryland, portions of Maryland's Eastern Shore and
portions of Virginia. The Bank is headquartered in Baltimore City.
First Mariner Bank, whose deposits are insured by the Federal Deposit
Insurance Corporation ("FDIC") is an independent community bank engaged in the
general commercial banking business, with particular attention and emphasis on
the needs of individuals and small to mid-sized businesses. The Bank delivers a
wide range of financial products and services that are offered by many larger
competitors. Products and services include traditional deposit products, a
variety of consumer and commercial loans, residential and commercial mortgage
and construction loans, money transfer services, non-deposit investment
products, and Internet banking and similar services. Most importantly, the Bank
provides customers with access to local Bank officers who are empowered to act
with flexibility to meet customers' needs in an effort to foster and develop
long-term loan and deposit relationships.
Finance Maryland, formed in July 2002, engages in traditional consumer
finance activities, making small direct cash loans to individuals, the purchase
of installment loan sales contracts from local merchants and retail dealers of
consumer goods, and loans to individuals via direct mail solicitations. Finance
Maryland currently operates eight branches in the State of Maryland, and had
loan receivables of $16.1 million as of June 30, 2003.
Since the Company's formation in 1995, the business strategy has focused on
development of an operational and retail distribution infrastructure to create a
platform to support the generation of assets and deposits. At its inception the
Bank had 20 employees, four full service branches and two ATM's in the Baltimore
region, with total assets of $35.2 million, loans of $20.4 million, and deposits
of $24.6 million. Since that time, assets have grown at an average compound
annual growth rate of 45%. At June 30, 2003, the Company had 601 employees, 22
full service branches, and approximately 207 ATMS (47 owned and 160 available to
customers through third party agreements) with total assets of $1.003 billion,
loans of $547.1 million and deposits of $769.2 million. Net income was $3.9
million for the twelve month period ending December 31, 2002, and $2.483 million
for six months ended June 30, 2003.
The Company is not dependent on any single customer or small group of
customers and does not experience any material seasonal variations in its
business. The Company has no foreign operations.
The Company's executive offices are located at 3301 Boston Street,
Baltimore, Maryland 21224 and its telephone number is (410) 342-2600. The
Company maintains an internet site located at 1stmarinerbank.com. The Company's
annual report on Form 10-K and quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to these reports are available, free of charge, on
the Company's internet site as soon as reasonably practicable after they are
filed with the Securities and Exchange Commission.
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Securities to be Offered
The Company is registering for resale the common stock to be acquired by
the selling shareholders upon exercise of the warrants. The registration
statement of which this prospectus is a part registers 888,602 shares of common
stock that may be issued upon exercise of the warrants.
Our common stock is traded on the Nasdaq National Market under the symbol
"FMAR." The transfer agent for our common stock is American Stock Transfer &
Trust Company.
RISK FACTORS
Before purchasing any of the shares of common stock being offered,
prospective investors should carefully consider the following factors in
addition to the other information contained in this prospectus or incorporated
by reference into it.
Statements in this document filed with the Securities and Exchange
Commission ("SEC") include forward looking statements under the federal
securities laws. We caution you to be aware of the speculative nature of
"forward-looking statements". Statements that are not historical in nature,
including the words "anticipate," "estimate," "should," "expect," "believe,"
"intend," and similar expressions, are intended to identify forward-looking
statements. While these statements reflect our good faith belief based on
current expectations, estimates and projections about (among other things) the
industry and the markets in which we operate, they are not guarantees of future
performance, involve known and unknown risks and uncertainties that could cause
actual results to differ materially from those in the forward looking
statements, and should not be relied upon as predictions of future events. In
making these cautionary statements, we are not committed to addressing or
updating each factor in future filings of communications regarding our business
or results, or addressing how any of these factors may have caused results to
differ from discussions or information contained in previous filings or
communications. The following is a discussion of factors that could impact
future results.
COMPANY RISKS
Our Future Depends on the Successful Growth of the Bank and Finance Maryland
Our primary business activity for the foreseeable future will be to act as
a financial holding company. Our future profitability will therefore depend on
the success and growth of the Bank and Finance Maryland. Our growth will depend,
in large part on our ability to leverage our existing infrastructure. The
inability of the Bank to expand its business without substantially increasing
the number of branches, the inability of our mortgage division to grow its
residential mortgage business, or the inability of Finance Maryland to grow its
consumer portfolio may prevent us from realizing our growth objectives.
A Significant Amount of Our Business is Concentrated in Real Estate Lending, and
Most of this Lending Involves Maryland Real Estate
Approximately 29% of our loans are commercial and consumer real estate
development and construction loans, which are secured by the real estate being
developed in each case. In addition to the risk that the market values of the
real estate securing these loans may deteriorate, these loans are also subject
to the development risks that the projects will not be completed in a timely
manner, or according to original specifications. Real estate development and
construction projects that are not completed in a timely manner, or according to
original specifications, are generally less marketable than projects that are
fully developed. The loans underlying such projects may be subject to greater
losses in the event that the real estate collateral becomes the source of
repayment.
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In addition to the financial strength and cash flow characteristics of the
borrower in each case, the Bank often secures its loans with real estate
collateral. At December 31, 2002, approximately 85% of the Bank's loans have
real estate as a primary, secondary or tertiary component of collateral. The
real estate collateral in each case provides an alternate source of repayment in
the event of default by the borrower, and may deteriorate in value during the
time the credit is extended. If we are required to liquidate the collateral
securing a loan during a period of reduced real estate values to satisfy the
debt, our earnings and capital could be adversely affected.
Additionally, because most of our loans are concentrated in Maryland, a
decline in local economic conditions could adversely affect the values of real
estate in Maryland. Consequently, a decline in local economic conditions may
have a greater effect on our earnings and capital than on the earnings and
capital of larger financial institutions whose real estate loan portfolios are
geographically diverse.
Mortgage Banking Activities Generate a Significant Portion of Our Noninterest
Income
A significant portion of our business involves making residential mortgage
loans through our mortgage division, which accounted for over 36% of our
noninterest income for the year ended December 31, 2002, and 35% for the six
months ended June 30, 2003. Real estate loan origination activity, including
refinancings, generally is greater during periods of low or declining interest
rates, and favorable economic conditions and has been favorably affected by
relatively lower market interest rates during the past two years. There is no
assurance that such favorable conditions will continue; any adverse change in
market conditions could have an adverse impact on our earnings. Moreover, most
of our residential mortgage loans are secured by Maryland real estate,
therefore, a decline in local economic conditions could also adversely impact
our earnings.
We May Experience Loan Losses in Excess of the Allowance
The risk of credit losses on loans varies with, among other things, general
economic conditions, the type of loan being made, the creditworthiness of the
borrower over the term of the loan and, in the case of a collateralized loan,
the value and marketability of the collateral for the loan. Management maintains
an allowance for loan losses based upon, among other things, historical
experience, an evaluation of economic conditions and regular reviews of
delinquencies and loan portfolio quality. Based upon such factors, management
makes various assumptions and judgments about the ultimate collectability of the
loan portfolio and provides an allowance for loan losses based upon a percentage
of the outstanding balances and for specific loans when their ultimate
collectability is considered questionable. If management's assumptions and
judgments prove to be incorrect and the allowance for loan losses is inadequate
to absorb future losses, or if regulatory authorities require the Bank or
Finance Maryland to increase the allowance for loan losses as a part of their
examination process, our earnings and capital could be significantly and
adversely affected.
As of June 30, 2003, the allowance for loan losses was approximately $8.2
million, which represented 1.5% of outstanding loans, net of unearned income. At
such date, we had non-accruing loans totaling $2.6 million. Management actively
administers its non-accruing loans in an effort to minimize credit losses.
Although management believes that its allowance for loan losses is adequate,
there can be no assurance that the allowance will prove sufficient to cover
future loan losses. Further, although management uses the best information
available to make determinations with respect to the allowance for loan losses,
future adjustments may be necessary if economic conditions differ substantially
from the assumptions used or adverse developments arise with respect to
non-performing or performing loans. Material additions to the allowance for loan
losses would result in a decrease in net income and capital, and could have a
material adverse effect on us.
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Some of Our Assets are Classified as Non-Performing Assets that May Lose Further
Value
The Bank and Finance Maryland have non-performing assets, which include
non-accruing loans and property, (including real estate), on which we have
foreclosed because of the borrower's default. Although we have written down the
values of these non-performing assets to their estimated fair market values,
there is a possibility that earnings could be further reduced in the event that
the eventual values of these non-performing assets are, or become less than, the
values that we have assigned.
Interest Rates and Other Economic Conditions Will Impact Our Results of
Operation
Results of operations for financial institutions, including us, may be
materially and adversely affected by changes in prevailing economic conditions,
including declines in real estate values, rapid changes in interest rates and
the monetary and fiscal policies of the federal government. Our profitability
is, in part, a function of the spread between the interest rates earned on
assets and the interest rates paid on deposits and other interest-bearing
liabilities, (i.e., net interest income), including advances from the Federal
Home Loan Bank of Atlanta (the "FHLB"). Interest rate risk arises from
mismatches, (i.e., the interest sensitivity gap) between the dollar amount of
repricing or maturing assets and liabilities, and is measured in terms of the
ratio of the interest rate sensitivity gap to total assets. More assets
repricing or maturing than liabilities over a given time period is considered
asset-sensitive and is reflected as a positive gap; more liabilities repricing
or maturing than assets over a given time period is considered
liability-sensitive and is reflected as negative gap. An asset-sensitive
position, (i.e., a positive gap) will generally enhance earnings in a rising
interest rate environment and will negatively impact earnings in a falling
interest rate environment, while a liability-sensitive position (i.e., a
negative gap), will generally enhance earnings in a falling interest rate
environment and negatively impact earnings in a rising interest rate
environment. Fluctuations in interest rates are not predictable or controllable.
We have attempted to structure our asset and liability management strategies to
mitigate the impact on net interest income of changes in market interest rates.
The Market Value of Our Investments Could Decline
Our entire investment securities portfolio as of December 31, 2002 has been
designated as available-for-sale pursuant to Statement of Financial Accounting
Standards No. 115, ("SFAS 115"), relating to accounting for investments. SFAS
115 requires that unrealized gains and losses in the estimated value of the
available-for-sale portfolio be "marked to market" and reflected as a separate
item in stockholders' equity, (net of tax), as accumulated other comprehensive
income. At June 30, 2003, we maintained $125.4 million or 12.5% of our total
assets in securities available-for-sale.
Furthermore, sales of such securities in the past have been one of the
sources of our net income. In fiscal year 2002, income from such sales totaled
$497,000, and $189,000 for the six months ended June 30, 2003. There can be no
assurance that future market performance of our investment portfolio will
continue to enable us to realize income from sales of securities. Stockholders'
equity will continue to reflect the unrealized gains and losses, (net of tax),
of these investments. There can be no assurance that the market value of our
investment portfolio will not decline, causing a corresponding decline in
stockholders' equity.
Management believes that several factors will affect the market value of
our investment portfolio. These include, but are not limited to, changes in
interest rates or expectations of changes, the degree of volatility in the
securities markets, inflation rates or expectations of inflation, and the slope
of the interest rate yield curve (the yield curve refers to the differences
between shorter-term and longer-term interest rates; a positively sloped yield
curve means shorter-term rates are lower than longer-term rates). Additionally,
we own trust preferred securities issued by other financial institutions that
have an amortized cost of $26.5 million and that were carried at an estimated
fair value of $27 million at June 30, 2003. Our return on these securities
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could be limited by a number of factors, including, but not limited to, the
institutions' default on, or deferral of, their obligations to make the required
distributions under these securities. Further, the values of these securities
may be adversely affected by the deterioration of the financial conditions of
these financial institutions. Also, the passage of time will affect the market
values of our investment securities, in that the closer they are to maturing,
the closer the market price should be to par value. These and other factors may
impact specific categories of the portfolio differently, and we cannot predict
the effect these factors may have on any specific category.
Our Ability to Pay Cash Dividends is Limited
Holders of shares of our common stock are entitled to dividends if, when,
and as declared by our board of directors out of funds legally available for
that purpose. Although the board of directors has declared cash dividends in the
past, it has discontinued such payments to conserve cash and capital resources
and does not intend to declare cash dividends until current earnings are
sufficient to generate adequate internal capital to support growth. Our current
ability to pay dividends is largely dependent upon the receipt of dividends from
the Bank. Federal and state laws impose restrictions on the ability of the Bank
to pay dividends. Additional restrictions are placed upon us by the policies of
federal regulators, including the November 14, 1985 policy statement of the
Board of Governors of the Federal Reserve System ("FRB"), which provides that
bank holding companies should pay dividends only out of the past year's net
income, and then only if their prospective rate of earnings retention appears
consistent with their capital needs, asset quality, and overall financial
condition.
Our ability to pay dividends is further subject to our ability to make
payments of interest under our 8.3% junior subordinated debentures due 2028 held
by our statutory trust subsidiary, Mariner Capital Trust ("MCT"), under our
floating rate junior subordinated debentures due 2032 held by our statutory
trust subsidiary, Mariner Capital Trust II ("MCT II"), under our junior
subordinated debentures due 2033, which bear interest at a fixed rate of 5.66%
through July 7, 2008 and then convert to a floating rate, held by our statutory
trust subsidiary, Mariner Capital Trust III ("MCT III"), and under our floating
rate junior subordinated debentures due 2033 held by our statutory trust
subsidiary Mariner Capital Trust IV ("MCT IV"). These payments are necessary to
fund the distributions that MCT, and MCT II, MCT III and MCT IV each must pay to
holders of its trust preferred securities (collectively, the "Mariner Trust
Preferred Securities"). If we are unable to make such payments, if we determine
to defer such payments, or if we default under our other obligations in
connection with the Mariner Trust Preferred Securities, we will not be permitted
to pay dividends to holders of our common stock until such time as we recommence
making payments or are not otherwise in default. We intend to redeem the trust
preferred securities issued by MCT on or about October 1, 2003.
In general, future dividend policy is subject to the discretion of the
board of directors and will depend upon a number of factors, including the
future earnings, capital requirements, regulatory constraints, and our financial
condition as well as that of the Bank and Finance Maryland.
We May be Unable to Keep Pace with Developments in Technology
We use various technologies in our business, including telecommunication,
data processing, computers, automation, internet-based banking, and debit cards.
Technology changes rapidly. Our ability to compete successfully with other banks
and non-banks may depend on whether we can exploit technological changes. We may
not be able to exploit technological changes, and any investment we do make may
not make us more profitable.
Contracts With Our Executive Officers May Discourage a Takeover or Adversely
Affect Our Takeover Value
We have entered into a change in control agreements with 11 of our
officers. These agreements provide for a payment to each officer of a multiple,
(ranging from 1 to 2.99), of his or her salary and bonus upon the occurrence of
either a change in control that results in the loss of employment or a
significant change in his or her employment. Thus, we may be required to make
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significant payments in the event that the rights under these agreements are
triggered by a change in control. As a result, these contracts may discourage a
takeover, or adversely affect the consideration payable to stockholders in the
event of a takeover.
Our Articles of Incorporation and Bylaws May Discourage a Corporate Takeover
Our Amended and Restated Articles of Incorporation, ("Articles"), and
Amended and Restated Bylaws, ("Bylaws"), contain certain provisions designed to
enhance the ability of the board of directors to deal with attempts to acquire
control of the Company. These provisions provide for the classification of our
board of directors into three classes; directors of each class serve for
staggered three year periods. The Articles also provide for supermajority voting
provisions for the approval of certain business combinations. Although these
provisions do not preclude a takeover, they may have the effect of discouraging
a future takeover attempt which would not be approved by our board of directors,
but pursuant to which stockholders might receive a substantial premium for their
shares over then-current market prices. As a result, stockholders who might
desire to participate in such a transaction might not have the opportunity to do
so. Such provisions will also render the removal of our board of directors and
of management more difficult and, therefore, may serve to perpetuate current
management. Further, such provisions could potentially adversely affect the
market price of the common stock.
INDUSTRY RISKS
We Operate in a Competitive Market
We operate in a competitive environment, competing for deposits, loans and
customers with commercial banks, thrifts, finance companies, and other financial
entities. Competition for deposits comes primarily from other commercial banks,
savings associations, credit unions, money market and mutual funds and other
investment alternatives. Competition for loans comes primarily from other
commercial banks, savings associations, mortgage banking firms, consumer finance
companies, credit unions and other financial intermediaries. Many of the
financial intermediaries operating in our market area offer certain services,
such as trust, investment and international banking services, which we do not
offer. In addition, companies with a larger capitalization and financial
intermediaries not subject to regulatory restrictions, have larger lending
limits, and are thereby able to serve the needs of larger customers. Finally,
our continued growth and profitability will depend upon our ability to attract
and retain skilled managerial, marketing and technical personnel. Competition
for qualified personnel in the banking industry is intense, and there can be no
assurance that we will be successful in attracting and retaining such personnel.
Our Industry is Heavily Regulated; Significant Regulatory Changes Could
Adversely Affect Our Operations
Our operations and those of the Bank are and will be affected by current
and future legislation and by the policies established from time to time by
various federal and state regulatory authorities. The Bank is subject to
supervision and periodic examination by the FDIC and the Maryland Commissioner
of Financial Regulation. We are subject to supervision by the FRB. Banking
regulations, designed primarily for the safety of depositors, may limit a
financial institution's growth, and the return to its investors, by restricting
such activities as the payment of dividends, mergers with or acquisitions by
other institutions, investments, loans and interest rates, interest rates paid
on deposits, expansion of branch offices, and the offering of securities or
trust services. The Bank is also subject to capitalization guidelines
established by federal law and could be subject to enforcement actions to the
extent that the Bank is found by regulatory examiners to be undercapitalized. It
is not possible to predict what changes, if any, will be made to existing
federal and state legislation and regulations or the effect that such changes
may have on our future business and
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earnings prospects, as well as those of the Bank. We also cannot predict the
nature or the extent of the effect on our business and earnings of future fiscal
or monetary policies, economic controls, or new federal or state legislation.
Further, the cost of compliance with regulatory requirements may adversely
affect our ability to operate profitably.
We May be Adversely Affected by Recent Legislation
The federal Gramm-Leach-Bliley Act, ("GLBA"), was signed into law on
November 12, 1999. Among other things, GLBA repeals restrictions on banks
affiliating with securities firms. It also permits bank holding companies that
become financial holding companies to engage in additional financial activities,
including insurance and securities underwriting and agency activities, merchant
banking, and insurance company portfolio investment activities that are
currently not permitted for bank holding companies. In 2002, First Mariner
elected to become a financial holding company. GLBA may have the result of
increasing the competition we face from larger banks and other companies. It is
not possible to predict the full effect that GLBA will have on us.
In addition, recent changes in other federal banking laws facilitate
interstate branching and merger activity among banks. Such changes may result in
an even greater degree of competition in the banking industry and we may be
brought into competition with institutions with which we do not presently
compete. From time to time other changes are proposed to laws affecting the
banking industry, and these changes could have a material effect on our business
and prospects. Our future profitability may be adversely affected by increased
competition resulting from this legislation.
RISK FACTORS RELATED TO OUR COMMON STOCK
Our Management Controls a Significant Percentage of Our Stock
At July 30, 2003, our directors and executive officers beneficially owned
1,060,924 shares of our common stock, or 19.61% of our outstanding shares of
common stock. In addition, these persons held options and warrants to purchase
an aggregate of 851,751 shares of our common stock at July 30, 2003. Edwin F.
Hale, Sr., who is our Chairman, Chief Executive Officer, and largest
stockholder, beneficially owns 613,426 shares of common stock, or 11.34% of our
outstanding shares of common stock as of July 30, 2003. Mr. Hale also holds
options and warrants to purchase 657,500 shares of our common stock. Because of
the large percentage of stock held by our directors and executive officers,
these persons could influence the outcome of any matter submitted to a vote of
our stockholders.
Future Sales Of Our Common Stock By Existing Shareholders Could Negatively
Affect the Market Price of Our Common Stock and Make it More Difficult for Us To
Sell Shares Of Our Common Stock in the Future.
Sales of our common stock in the public market, or the perception that such
sales could occur, could result in a drop in the market price of our securities
and make it more difficult for us to complete future equity financings. In
addition to the shares available to be re-sold in this offering, we have
outstanding the following shares of common stock:
o We have approximately 4,348,000 shares of common stock that are either
freely tradeable in the public markets or are eligible for sale in the
public markets
o There are an aggregate of 888,602 shares of common stock that may be
issued on the exercise of outstanding warrants.
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o We have in effect registration statements under the Securities Act
registering approximately 871,500 shares of common stock reserved
under our stock option and employee stock purchase plans.
We cannot estimate the number of shares of common stock that may actually
be resold in the public market since this will depend upon the market price for
the common stock, the individual circumstances of the sellers and other factors.
We also have a number of shareholders, including the selling shareholders named
in this prospectus, that own significant blocks of our common stock. Such
concentration of ownership could affect the liquidity of our common stock and
have an adverse effect on the price of our common stock. If these shareholders
sell large portions of their holdings in a relatively short time, for liquidity
or other reasons, the market price of our common stock could drop significantly.
Our Stock is Not Heavily Traded
The average daily trading volume of our shares on The Nasdaq National
Market for the 12 months ended July 30, 2003 was 7,932 shares. Thus, our common
stock is not heavily traded and can be more volatile than stock trading in an
active public market. Factors such as our financial results, the introduction of
new products and services by us or our competitors, and various factors
affecting the banking industry generally may have a significant impact on the
market price of our common stock. We cannot predict the extent to which an
active public market for our common stock will develop or be sustained after
this offering. In recent years, the stock market has experienced a high level of
price and volume volatility, and market prices for the stock of many companies
have experienced wide price fluctuations that have not necessarily been related
to their operating performance. Therefore, our stockholders may not be able to
large blocks of shares at the volumes, prices, or times that they desire.
Our Stock is Not Insured
Investments in the shares of our common stock are not deposits and are not
insured against loss by the government.
-10-
DESCRIPTION OF WARRANTS
At July 30, 2003 there were outstanding warrants to purchase 888,602 shares
of our common stock at an exercise price of $9.09, which shares are being
registered pursuant to this offering. The warrants were issued to the selling
shareholders in connection with the selling shareholders' purchase of shares of
our common stock in private placement transactions. The warrants may be
exercised in whole or in part. Warrants to purchase 168,111 shares of common
stock will expire on September 30, 2004; warrants to purchase 429,006 shares
will expire on May 22, 2005; and warrants to purchase 291,485 shares will expire
on August 1, 2005. Holders of the warrants have no rights to have the underlying
shares registered under the Securities Act of 1933, as amended ("Securities
Act"). The number of shares that may be purchased upon the exercise of the
warrants will be adjusted in the event of a reclassification, recapitalization
or other adjustment to the outstanding common stock.
Upon exercise of all of the outstanding warrants, we will receive aggregate
gross proceeds of $8,077,392.
SHARES ELIGIBLE FOR FUTURE SALE
The sale, or availability for sale, of a substantial number of shares of
common stock in the public market as a result of or following this offering
could adversely affect the prevailing market price of our common stock and could
impair our ability to raise additional capital through the sale of equity
securities. At July 30, 2003, a total of 5,408,924 shares of our common stock
were issued and outstanding, of which 4,348,000 are held as freely-tradable by
persons who are not affiliates of the Company. As of the same date, a total of
1,060,924 shares of common stock were issued and outstanding and held by our
directors and executive officers, all of whom are affiliates of the Company. The
shares issued in this offering will be freely-tradable by persons who are not
affiliates of the Company.
At July 30, 2003, there were 702,628 shares of our common stock subject to
options, most of which are held by affiliates and are subject to volume
limitations on resale. Finally, at July 30, 2003, there were 110,000 shares of
our common stock reserved for issuance pursuant to our employee stock purchase
plan, all of which have been registered under the Securities Act.
USE OF PROCEEDS
We will not receive any of the proceeds from the resale of the shares upon
exercise of the warrants. All proceeds from the sale of these shares will be
solely for the accounts of the selling shareholders. If the warrants are
exercised either by the selling shareholders or any subsequent purchaser of the
warrants, we will receive the net proceeds of approximately $8,077,392 from such
exercises. Those net proceeds will be used for working capital and/or general
corporate purposes.
SELLING SHAREHOLDERS
Each selling shareholder has represented to us that it received the
warrants to purchase shares for its own account, for investment only and not
with a view toward publicly selling or distributing them, except in sales either
registered under the Securities Act or exempt from registration. In recognition
of the fact that the selling shareholders may wish nevertheless to be legally
permitted to sell its shares when it deems appropriate, we have agreed with the
selling shareholders to file a registration statement to register the shares for
resale and to prepare and file all amendments and supplements necessary to keep
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the registration statement effective until the earlier of four years and the
date on which the selling shareholders have sold all the shares covered by the
registration statement.
At July 30, 2003, a total of 5,408,924 shares of our common stock were
issued and outstanding. The following table provides information as of July 30,
2003, with respect to the common stock beneficially owned by the selling
shareholders. The information presented is based on data furnished to us by the
selling shareholders and assumes an exercise price of $9.09 per share.
The 888,602 shares of common stock offered by this prospectus may be
offered from time to time to the selling shareholders named below. Except as
noted in the footnotes, no selling stockholder has had, within the past three
years, any position, office, or material relationship with us or any of our
predecessors or affiliates:
Shares of Common Maximum Number of
Stock Owned Shares Offered Shares Beneficially
Beneficially Before Under This Owned After
Name of Selling Offering and Registration Offering and
Shareholder Percent Owned (1)(3) Statement Percent Owned (2)(3)
----------- -------------------- --------- ---------------------
Edwin F. Hale, Sr. (4)(5) 1,270,931 408,839 862,092 (13%)
Barry B. Bondroff (4) 52,976 (21%) 3,667 49,309
Rose (4) and Richard Cernak 42,198 3,666 38,532
Bruce H. Hoffman (4) 72,493 (1%) 3,666 68,827 (1%)
George H. Mantakos (4)(6) 92,894 (2%) 5,500 87,394 (1%)
James P. O'Conor (4) 40,447 11,000 29,447
Hanan Y. Sibel (4) 43,143 3,666 39,477
Leonard Stoler (4) 54,090 5,500 48,590
Melvin and Ruth Kabik (7) 18,004 3,667 14,337
Margaret Allen 2,750 2,750 0
Anthony Y. Agnone and Jaynee S. Agone 10,666 3,666 7,000
APX ARC Inc. 5,500 5,500 0
Atlantic Bonding 3,666 3,666 0
Karen A. and Lawrence Baker 110 110 0
BAT, Inc. 2,750 2,750 0
Robert Berman 5,666 3,666 2,000
Frank Bonaventure, Jr. 3,300 3,025 275
Bond Family Partners LTD 3,666 3,666 0
Robert P. Bosworth 2,100 1,100 1,000
Herbert and Lenora D. Brown 2,750 2,750 0
Frederick Brown 3,666 3,666 0
Carski & Sons Partnership 14,666 3,666 11,000
Dr. Stephen Carton 7,334 1,834 5,500
Jay J. Clifford 2,750 2,750 0
Adam Cockey 825 825 0
Eugene Collopy 4,950 3,850 1,100
Joseph and Annette Cooper 14,666 3,666 11,000
Richard Cover 11,550 6,050 5,500
George Cumpata 2,333 1,833 500
D'Anna Family Enterprise LLC 3,666 3,666 0
Nicholas P. Deluca 1,600 1,100 500
Brian Doyle 550 550 0
Dennis M. Doyle 10,010 8,800 1,210
Judith Doyle 7,150 7,150 0
Deborah and John Eckenrode, Jr. 1,650 1,650 0
Conrad H. Everhard 1,834 1,834 0
F&G LTD Partnership 7,334 7,334 0
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Shares of Common Maximum Number of
Stock Owned Shares Offered Shares Beneficially
Beneficially Before Under This Owned After
Name of Selling Offering and Registration Offering and
Shareholder Percent Owned (1)(3) Statement Percent Owned (2)(3)
----------- -------------------- --------- ---------------------
Earl L. Freedman 7,360 3,666 3,694
Israel and Gertrude Freedman 29,333 7,333 22,000
Alvin and Norma Friedman 3,666 3,666 0
Stephen S. George 10,816 3,666 7,150
Stewart Greenebaum 3,666 3,666 0
Rene Gunning, Jr. 1,375 1,375 0
Kim Hammond 3,666 3,666 0
Morris Helman 11,000 11,000 0
Robert Hennessey 1,650 1,650 0
Elayne Hettleman 9,120 7,150 1,970
Harold Hettleman 2,200 2,200 0
William and Loretta Hirshfield 5,500 5,500 0
Nancy Hubble 550 550 0
David B. Irwin 4,334 1,834 2,500
Charles T. Isenhour 2,200 1,100 1,100
Joseph Jankowki, III 1,100 1,100 0
JMI Investment 1992 L.P. 82,950 43,450 39,500
JMI Services, Inc. 550 550 0
Callie Johnson 2,750 2,750 0
Sigmund and Barbara Kassup 36,666 9,166 27,500
Leroy Kirby and Wendy Griswold 5,500 5,500 0
Richard Larkin, Jr. 5,555 5,500 55
Robert W. Lazzaro 1,100 1,100 0
Lenfred LLC 14,666 3,666 11,000
Gilbert and Mary Jane Lewis 550 550 0
Richard and Anita Lichtenberg 5,500 2,750 2,750
John Luetkemeyer, Jr. 13,666 3,666 10,000
Mackler & Mackler Assoc. 27,500 27,500 0
Todd Makler 5,500 5,500 0
Matro Properties (8) 14,666 3,666 11,000
Sarandos A. and Eva Macris 550 550 0
Dennis C. and Carolyn McCoy 3,667 3,667 0
Thomas McDonough 3,666 3,666 0
Walter McManus 18,333 18,333 0
Mitcherling, Mitcherling &
Johnson PA Profit Sharing 9,533 9,533 0
Dennis H. & H. Claire Oates 6,050 6,050 0
JE Oates & Sons Insurance Inc. 12,296 12,296 0
Barbara G. Orman 1,650 1,650 0
Gary and Donna Padussis 220 220 0
Emslie H. Parks 4,950 4,950 0
Stevenson J. Pack 1,100 1,100 0
Brice R. Phillips 916 916 0
Shirley F. Phillips 917 917 0
Lawrence and Debra Plant 5,500 2,750 2,750
Randa Investment Co., Inc. 13,750 13,750 0
Jacob Rappaport 1,375 1,375 0
Jesse Rappaport 1,375 1,375 0
David Rappaport 2,750 2,750 0
Ellen G. Reather 11,000 5,500 5,500
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Shares of Common Maximum Number of
Stock Owned Shares Offered Shares Beneficially
Beneficially Before Under This Owned After
Name of Selling Offering and Registration Offering and
Shareholder Percent Owned (1)(3) Statement Percent Owned (2)(3)
----------- -------------------- --------- ---------------------
Richard A. Reid 2,750 2,750 0
Wayne E. Reis 5,555 5,500 55
Dr. Ivan A. Rosengarden 3,666 3,666 0
Zelda Rosenthal 4,400 4,400 0
Leonard and Lainy Sachs 3,666 3,666 0
Louis Schafer 16,720 16,720 0
Michael Schafer 1,430 1,430 0
Neil Schechter and Marjorie Corwin 2,750 2,750 0
John A. Serio 10,761 4,767 5,994
Ronald Sharrow 3,666 3,666 0
Alan Sklar 2,933 1,833 1,100
Charles Solomon & Successors 14,666 3,666 11,000
Clifford W. Spelke 5,500 5,500 0
David Strohminger 11,000 5,500 5,500
George Strohminger 5,500 2,750 2,750
George Sybert 3,850 3,850 0
Robin Weinberg 3,000 2,750 250
Carl AJ Wright 5,500 5,500 0
Ruth E. Yingling 330 110 220
------------ --------- ---------
TOTAL 2,348,530 888,602 1,459,928
============ ======= =========
-----------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. The rules also provide that beneficial
ownership includes shares of common stock underlying options, warrants and
convertible securities that can be exercised or converted within 60 days.
(2) Assumes that all of the selling shareholders will sell all of the shares
registered for sale hereby. Because the selling shareholders may offer all, some
or none of the shares pursuant to this prospectus, and because there are
currently no agreements, arrangements or understandings with respect to the sale
of any of the shares, no estimate can be given as to the number of shares that
will be held by the selling shareholders after completion of the sale of shares
hereunder.
(3) Unless otherwise indicated, the number of shares owned represents less than
one percent of the Company's shares of common stock beneficially owned.
(4) A director of the Company.
(5) Mr. Hale is the Chairman of the Board and the Chief Executive Officer of the
Company and of First Mariner Bank.
(6) Mr. Mantakos is the Executive Vice President of the Company and the
President of First Mariner Bank.
(7) Mr. Kabik is a former director of the Company who reached mandatory
retirement age in 2001 and was appointed as a director emeritus.
(8) Warrants are held by Matro Properties, an entity owned by Jay J.J.
Matricciani, a director of the Company.
-14-
The selling shareholders will receive all of the proceeds of the shares
offered hereby. We will not receive any of the proceeds from the sale of such
shares. However, if all of the warrants are exercised by the selling
shareholders, we estimate that we would receive gross cash proceeds of
approximately $8,077,392 in the aggregate. We will bear the expenses of this
offering.
PLAN OF DISTRIBUTION
This prospectus relates to the offer and sale by the selling shareholders
of up to 888,602 shares of common stock par value $.05 per share, assuming
exercise of the warrants.
The shares covered by this prospectus may be offered and sold from time to
time by the selling shareholders. The selling shareholders will act
independently of us in making decisions with respect to the timing, manner and
size of each sale. The selling shareholders may sell the shares being offered
hereby (i) on the Nasdaq National Market, or otherwise, at prices and under
terms then prevailing, or at prices related to the then current market price, or
(ii) at negotiated prices directly or through a broker or brokers. Registration
of the shares does not necessarily mean that any of the shares will be offered
by any selling shareholder.
Shares may be sold by one or more of the following means of distribution:
o block trades in which the broker-dealer so engaged will attempt to
sell such shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
o over-the-counter distributions in accordance with the rules of the
NASD;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o privately negotiated transactions.
We will not receive any of the proceeds from the sale of shares by the
selling shareholders. We will bear all expenses of the offering, except that the
selling shareholders will pay all underwriting commissions, brokerage fees and
transfer taxes as well as fees of its counsel.
In connection with distributions of the shares, the selling shareholders
may enter into hedging transactions with broker-dealers or other financial
institutions who may engage in short sales of our common stock in the course of
hedging the positions they assume with the selling shareholder. The selling
shareholders may also (i) sell our common stock short and redeliver the shares
to close out such short positions; (ii) enter into option or other transactions
with broker-dealers or other financial institutions which require the delivery
thereto of the shares offered hereby, which shares such broker-dealer or other
financial institutions may resell pursuant to this prospectus (as supplemented
or amended to reflect such transaction); or (iii) pledge such shares to a
broker-dealer or other financial institution, and, upon a default, such
broker-dealer or other financial institution, may affect sales of such pledged
shares pursuant to this prospectus (as supplemented or amended to reflect such
transaction). In addition, any such shares that qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under that Rule rather than
pursuant to this prospectus.
In effecting sales, brokers, dealers or agents engaged by the selling
shareholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
selling shareholders in amounts to be negotiated prior to the sale.
The selling shareholders and any underwriter, broker, dealer or agent may
be deemed to be "underwriters" within the meaning of the Securities Act in
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connection with such sales, and any such commissions, discounts or concessions
may be deemed to be underwriting discounts or commissions under the Securities
Act.
In order to comply with the securities laws of certain states, the shares
must be sold in such states only through registered or licensed brokers or
dealers. In addition, in certain states shares may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirements is available and has been
complied with.
The rules and regulations in Regulation M under the Exchange Act provide
that during the period that any person is engaged in the distribution (as
defined therein) of our common stock, such person generally may not purchase
shares of our common stock. The selling shareholders are subject to such
regulation which may limit the timing of its purchases and sales of shares of
our common stock.
At the time a particular offer of shares is made, if required, a prospectus
supplement will be distributed that will set forth the number of shares being
offered and the terms of the offering, including the name of any underwriter,
dealer or agent, the purchase price paid by any underwriter, any discount,
commission and other item constituting compensation, any discount, commission or
concession allowed or reallowed or paid to any dealer, and the proposed selling
price to the public.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Gordon, Feinblatt,
Rothman, Hoffberger & Hollander, LLC, Baltimore, Maryland.
EXPERTS
The financial statements of First Mariner Bancorp as of December 31, 2002
and for each of the years in the three year period ended December 31, 2002, have
been incorporated by reference herein and in the registration statement in
reliance upon the report of Stegman & Company, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Exchange Act, and
in accordance with the Exchange Act we file reports, proxy statements and other
information with the SEC. The reports, proxy statements and other information on
file can be inspected and copied at the public reference facilities maintained
by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the SEC's Regional Offices at 7 World Trade Center, 13th Floor, New York, New
York 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and copies may be obtained at the prescribed rates from the
Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549. The SEC also maintains a web site that contains reports,
proxy statements and other information regarding registrants that file
electronically with the SEC. The address of the site is http:\\www.sec.gov.
We have filed a registration statement with the SEC on Form S-3 under the
Securities Act, with respect to the securities offered by this prospectus. This
prospectus, which constitutes part of the registration statement, omits some
information contained in the registration statement and the exhibits to the
registration statement on file with the SEC pursuant to the Securities Act and
the rules and regulations of the SEC under the Securities Act. For further
information with respect to us and the common stock, reference is made to the
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registration statement. We will describe the material provisions of any contract
or other document referred to in this document.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We are incorporating by reference the documents listed below have which
have been filed by us with the SEC under file number 0-21815:
o our Annual Report on Form 10-K for the fiscal year ended December
31, 2002;
o our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2003 and June 30, 2003;
o The description of the Company's Common Stock, $.05 par value per
share (the "Common Stock"), under the caption "Description of
Registrant's Securities to be Registered" in the Registrant's
Registration Statement on Form 8-A (Registration No. 0-21815)
filed with the SEC on December 3, 1996.
We are also incorporating all documents we file pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act (except information that is "furnished"
under Items 9 or 12 of Form 8-K) after the date of this prospectus and before
the termination of the offering made by this prospectus. Any statement in a
document referenced in part or in whole shall be deemed to be modified or
superseded for purposes of the registration statement and this prospectus to the
extent that the statement is modified or superseded by the registration
statement and this prospectus. Any statement that has been modified or
superseded by this prospectus shall not be deemed to constitute a part of this
prospectus beyond the extent of the portion of the modified or superseded.
We will provide a copy of any document incorporated by reference, other
than exhibits to those documents unless the exhibits are specifically
incorporated by reference into the documents that this prospectus incorporates
by reference free of charge to any person who receives a prospectus upon written
or oral request. Requests should be directed to the Secretary, 3301 Boston
Street Baltimore, Maryland 21224, telephone number (410) 342-2600.
-17-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the various estimated expenses to be
incurred by us in connection with the registration of the securities being
registered hereby, all of which will be borne by us except any underwriting
discounts and commissions and expenses incurred by the selling stockholder for
brokerage, accounting or tax services or any other expenses incurred by the
selling stockholder in disposing of the shares (other than the reasonable fees
and expenses of the selling shareholder's counsel).
SEC Registration Fee $ 1,070
Accounting fees and expenses $ 1,000
Legal fees and expenses $ 5,000
Printing fees $ -
Listing fees $ 8,853
Miscellaneous $ 276
------------
TOTAL $ 16,199
Item 15. Indemnification of Directors and Officers.
The Maryland General Corporation Law permits a corporation to indemnify its
present and former directors, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made a party by reason of their services in
those capacities, unless it is established that:
(1) the act or omission of the director was material to the matter
giving rise to such proceeding and
(A) was committed in bad faith or
(B) was the result of active and deliberate dishonesty;
(2) the director actually received an improper personal benefit in
money, property, or services; or
(3) in the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was
unlawful.
Maryland law permits a corporation to indemnify a present and former officer to
the same extent as a director.
In addition to the foregoing, a court of appropriate jurisdiction may under
certain circumstances order indemnification if it determines that the director
or officer is fairly and reasonably entitled to indemnification in view of all
of the relevant circumstances, whether or not the director or officer has met
the standards of conduct set forth in the preceding paragraph or has been
declared liable on the basis that a personal benefit improperly received in a
proceeding charging improper personal benefit to the director or the officer. If
the proceeding was an action by or in the right of the corporation or involved a
determination that the director or officer received an improper personal
benefit, however, no indemnification may be made if the individual is adjudged
liable to the corporation, except to the extent of expenses approved by a court
of appropriate jurisdiction.
The Maryland General Corporation Law additionally permits a corporation to
pay or reimburse, in advance of the final disposition of a proceeding,
reasonable expenses incurred by a present or former director or officer made a
party to the proceeding by reason of his service in that capacity, provided that
the corporation shall have received
(1) a written affirmation by the director or officer of his good
faith belief that he has met the standard of conduct necessary
for indemnification by the corporation; and
(2) a written undertaking by or on behalf of the director to repay
the amount paid or reimbursed by the corporation if it shall
ultimately be determined that the standard of conduct was not
met.
The Company has provided for indemnification of directors, officers,
employees and agents in Article Eleventh, Section 2 of its Articles of
Incorporation, as amended and restated ("Articles"). This provision reads as
follows:
(2) To the maximum extent permitted by Maryland law, the
Corporation shall indemnify its currently acting and its former
directors against any and all liabilities and expenses incurred in
connection with their services in such capacities, and shall indemnify
its currently acting and its former officers to the full extent that
indemnification shall be provided to directors, and may indemnify, to
the same extent, persons who serve and have served, at its request as
a director, officer, partner, trustee, employee or agent of another
corporation, partnership, joint venture or other enterprise. The
Corporation shall advance expenses to its directors and officers and
the other persons referred to above to the extent permitted by
Maryland law. This indemnification of directors and officers shall
also apply to directors and officers who are also employees, in their
capacity as employees. The Board of Directors may by By-Law,
resolution or agreement make further provision for indemnification of
employees and agents to the extent permitted by Maryland law.
As provided in Article Eleventh, Section 3 of the Articles, neither the
repeal or amendment of Article Eleventh shall eliminate or reduce the protection
afforded to any person under the foregoing Section 2 with respect to any act or
omission that shall have occurred prior to such repeal or amendment.
The Maryland General Corporation Law authorizes a Maryland corporation to
limit by provision in its charter the liability of directors and officers to the
corporation or to its stockholders for money damages except to the extent:
(1) the director or officer actually receives an improper benefit or
profit in money, property, or services, for the amount of the
benefit or profit actually received, or
(2) a judgment or other final adjudication adverse to the director or
officer is entered in a proceeding based on a finding in the
proceeding that the director's or officer's action, or failure to
act, was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding.
The Company has limited the liability of its directors and officers for
money damages in Article Eleventh, Section 1 of the Articles. This provision
reads as follows:
(1) Directors and officers of the Corporation shall not be liable to
the Corporation or its stockholders for money damages. The purpose of this
limitation of liability is to limit liability to the maximum extent that
the liability of directors and officers of Maryland corporations is
permitted to be limited by Maryland law. This limitation on liability shall
apply to events which occurred during the term of office of any director or
officer whether or not such director or officer is serving as such at the
time of any proceeding in which liability is asserted commences.
As provided in Article Eleventh, Section 3 of the Articles, neither the
repeal or amendment of Article Eleventh shall eliminate or reduce the protection
afforded to any person under the foregoing Section 3 with respect to any act or
omission that shall have occurred prior to such repeal or amendment.
As permitted under Section 2-418(k) of the Maryland General Corporation
Law, the Company has purchased and maintains insurance on behalf of its
directors and officers against any liability asserted against such directors and
officers in their capacities as such, whether or not the Company would have the
power to indemnify such persons under the provisions of Maryland law governing
indemnification.
Section 8(k) of the Federal Deposit Insurance Act (the "FDI Act") provides
that the Federal Deposit Insurance Corporation (the "FDIC") may prohibit or
limit, by regulation or order, payments by any insured depository institution or
its holding company for the benefit of directors and officers of the insured
depository institution, or others who are or were "institution-affiliated
parties," as defined under the FDI Act, in order to pay or reimburse such person
for any liability or legal expense sustained with regard to any administrative
or civil enforcement action which results in a final order against the person.
The FDIC has adopted regulations prohibiting, subject to certain exceptions,
insured depository institutions, their subsidiaries and affiliated holding
companies from indemnifying officers, directors or employees for any civil money
penalty or judgment resulting from an administrative or civil enforcement action
commenced by any federal banking agency, or for that portion of the costs
sustained with regard to such an action that results in a final order or
settlement that is adverse to the director, officer or employee.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted of directors and officers of First Mariner pursuant to
the foregoing provisions or otherwise, we have been advised that, although the
validity and scope of the governing statute has not been tested in court, in the
opinion of the SEC, such indemnification is against public policy as expressed
in such Act and is, therefore, unenforceable. In addition, indemnification may
be limited by state securities laws.
Item 16. Exhibits.
4.1 Form of Warrant (Incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement, as amended, on Form SB-2, file no.
333-16011 ("the 1996 Registration Statement"))
4.2 Specimen of certificate for Common Stock. (Incorporated by reference to
Exhibit 4.2 of the 1996 Registration Statement)
5.1 Opinion of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
regarding the legality of securities.**
23.1 Consent of Stegman & Company.*
23.2 Consent of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
(included in Exhibit 5.1).**
24 Power of Attorney (included on Signatures Page).**
-----------------------
* Filed herewith
** Previously filed
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act.
(ii) to reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information
in the registration statement.
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that the Registrant does not need to make post-effective
amendments with respect to the information set forth in paragraphs (i) and (ii)
above if the information is incorporated by reference from periodic reports
filed by the Registrant under the Exchange Act.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3/A and has duly caused this Form S-3/A
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Baltimore, State of Maryland, on the 22nd day of
August, 2003.
FIRST MARINER BANCORP
By: /s/ Edwin F. Hale, Sr.
---------------------------------------
Edwin F. Hale, Sr., Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
capacities as indicated below on August 22, 2003.
/s/ Edwin F. Hale, Sr. /s/ Mark A. Keidel*
------------------------------------------ ------------------------------------------------
Edwin F. Hale, Sr., Chief Executive Officer Mark A. Keidel, Chief Financial Officer
and Director
/s/ Joseph A. Cicero /s/ George H. Mantakos*
------------------------------------------ ------------------------------------------------
Joseph A. Cicero, President and Director George H. Mantakos, Executive Vice President and
Director
/s/ Barry B. Bondroff* /s/ Bruce H. Hoffman*
------------------------------------------ ------------------------------------------------
Barry B. Bondroff, Director Bruce H. Hoffman, Director
/s/ John Brown* /s/ Jay J.J. Matricciani*
------------------------------------------ ------------------------------------------------
John Brown, Director Jay J.J. Matricciani, Director
/s/ Stephen A. Burch* /s/ James P. O'Conor*
------------------------------------------ ------------------------------------------------
Stephen A. Burch, Director James P. O'Conor, Director
/s/ Rose M. Cernak* /s/ Patricia Schmoke*
------------------------------------------ ------------------------------------------------
Rose M. Cernak, Director Patricia Schmoke, Director
/s/ Howard Friedman* /s/ Hanan Y. Sibel*
------------------------------------------ ------------------------------------------------
Howard Friedman, Director Hanan Y. Sibel, Director
/s/ Michael R. Watson
------------------------------------------------
Michael R. Watson, Director
By /s/ Joseph A. Cicero
-----------------------------------------
Attorney-in-Fact
EXHIBIT INDEX
Ex. No. Description
------- -----------
4.1 Form of Warrant (Incorporated by reference to Exhibit 4.1 of the
Registrant's Registration Statement, as amended, on Form SB-2, file
no. 333-16011 (the "1996 Registration Statement"))
4.2 Specimen of certificate for Common Stock. (Incorporated by reference
to Exhibit 4.2 of the 1996 Registration Statement)
5.1 Opinion of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
regarding the legality of securities.**
23.1 Consent of Stegman & Company*
23.2 Consent of Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC
(included in Exhibit 5.1).**
24 Power of Attorney (included on Signatures Page).**
-----------------------
* Filed herewith
** Previously filed