Real estate mogul Oliver T. Carr Jr. has resigned from the board of directors at MNC Financial Inc., the area's largest bank company, following months of bad news about the firm's commercial real estate loans and a recent change in top management.
For nearly a decade, the chairman of the Oliver Carr Co. had helped map out business strategy at American Security Bank, which merged with Maryland National Bank in 1985 to form MNC Financial. He continued to serve on both the American Security and MNC boards until Oct. 3, citing personal reasons for his departure.
"I determined that it was time to step down to pursue other interests," Carr said yesterday. He said his resignation was unrelated to the firm's financial problems or the sudden shift in power three weeks ago, which put Cleveland insurance executive Alfred J. Lerner at the helm.
"I have every confidence in Mr. Lerner," Carr said. "I am certain that he will do a great job."
Lerner, who agreed earlier this year to pump $180 million into the cash-strapped company, replaced Alan P. Hoblitzell Jr. as chairman of MNC after Hoblitzell took early retirement at the end of September.
The change in leadership came amid growing concern by shareholders and directors about the financial health of the company, which has suffered along with other area banks from the slump in the real estate industry. MNC lost $75 million in the second quarter, blaming a tougher regulatory climate and souring real estate loans. Third-quarter results, scheduled for release next week, are expected to be just as negative, according to analysts.
MNC officials declined to comment on Carr's resignation. Another major real estate executive, A. James Clark, chairman of Clark Enterprises Inc. -- parent of George Hyman Construction -- remains on the MNC board.
Sources close to the bank company said the mounting losses from real estate loans and a change in strategy away from real estate lending led to Carr's resignation.
"There's a lot of pressure over here right now about the real estate portfolio," said a senior executive, who asked not to be identified. "I think Carr just decided to get out before it got any worse."
Developers like Carr have traditionally been asked to join bank boards for the customer relationships they can bring to the institution. But with the downturn in the area's real estate market, many banks are cutting back their lending to these customers.
MNC said it does not plan to make any new commercial real estate loans in the near future, and it has shifted its business strategy to focus on retail banking customers. Along with the redirection, MNC is merging the operations of American Security and Maryland National to give the company more consistency, sources said. The internal restructuring has left dozens of executives out of work and more layoffs are planned.