Denis J. Curtin's name was misspelled in last week's the Newsmakers column. The parent company of Tucker, Anthony Inc. of Washington was incorrectly identified last week. The company is John Hancock Life Insurance Co. (Published 12/10/90)

In the midst of an economic slowdown that has wounded securities firms nationally and regionally, Ferris, Baker Watts Inc. of Baltimore last month announced a revitalized investment banking program led by new Senior Vice President Todd Parchman.

The firm also hired Vice President Douglas M. Schmidt and associate R. Mark Rust to work with Parchman, bringing the number of investment banking staff to five.

It is the firm's first attempted expansion of investment banking services since Ferris & Co. of Washington merged with Baker, Watts & Co. of Baltimore in 1988. The expansion raised some eyebrows at other area securities firms.

"I'm surprised they're making such an investment in {investment banking} right now, because most regional firms are cutting back," said Richard F. Waid, senior vice president of Tucker, Anthony Inc., an investment banking subsidiary of John Hanson Life Insurance Co.

Last week, Alex Brown Inc. of Baltimore, a major regional investment banking presence, laid off more than 30 workers because of the industry slowdown. Richard L. Franyo, a managing director at Alex Brown, would not elaborate on his company's cutback, but said emphasizing investment banking makes good financial sense because it is a highly profitable business. He said Ferris, Baker Watts will have to target itself well to succeed in the increasingly competitive industry.

"It comes down to, 'What's your niche?' " Franyo said. "The extent to which you can create something that differentiates you and add something that helps your client, that's the key to success."

Investment bankers act as liaisons between investors and companies looking to merge, sell stock, raise capital or go public. Ferris, Baker President Richard P. Sullivan said the firm can increase its activity in those areas despite the moribund state of the industry, and added that Parchman, 36, has the credentials to do the job.

"Primarily, we needed someone with experience," Sullivan said. "His {Parchman's} experience was very much on line because he had started up a similar organization at Signet."

As senior managing director of Signet Investment Banking Co. of Richmond, a subsidiary of Signet Banking Corp., from 1985 until September 1989, Parchman said he built an 11-person investment banking division that earned profits of about $1 million in 1989. Signet refused to confirm those figures.

He was asked to leave Signet last fall because of conflicts with other senior managers about the direction the bank was taking. Signet officials would not comment on the dispute or Parchman's tenure at the bank.

Parchman echoed Sullivan's conviction that Ferris, Baker can expand its investment banking services, despite the lagging economy and a paucity of mergers and acquisitions in this region. "There's still a large amount of private capital out there that's looking for restructuring," he said. "For good companies with good management, there's still equity and there's still debt, although the terms are clearly tougher."

Parchman said that by 1993, he expects investment banking profit at Ferris, Baker Watts to total more than $1 million. He estimated that the firm posted investment banking profit of $100,000 and had revenue from that division of $750,000 in 1989. Because the company is privately held, exact profit and revenue figures are not disclosed.

When Ferris, Baker hired Parchman last spring, he was charged with persuading the firm's board of directors to increase its focus on investment banking.

After receiving a nod of approval from the board, Parchman said, he and Sullivan hired Schmidt and Rust last month.

Parchman spent the months before arriving at Ferris, Baker Watts as an independent adviser to local investors William Middendorf and Cyrus Ansary, who considered -- but decided against -- buying National Bank of Washington, which was taken over by regulators last spring.

He worked at Norwest Bancorporation in Minneapolis from 1979 to 1985, eventually rising to senior vice president and heading the bank's energy division. But he said he prefers the environment at Ferris, Baker, a securities firm, over that of commercial banks.

"Here everybody is client-driven because everybody is on commission," Parchman said. "There is very little senior management that is not directly involved with revenue-producing business."