First Mariner Bancorp reported Thursday that it earned about $1.6 million in the fourth quarter thanks largely to its mortgage business, making this the fourth quarter in a row that the Baltimore parent of 1st Mariner Bank posted a profit.
For the corresponding quarter a year ago, First Mariner lost nearly $4 million.
On a per share basis, First Mariner earned 8 cents in the quarter ending Dec. 31, compared with a loss of 21 cents per share a year earlier.
"Our overall financial results were substantially improved and reflect the year's robust mortgage banking activities, lower charges related to problem assets as well as our operational efficiency initiatives," CEO Mark A. Keidel said in a statement.
For the year, First Mariner posted a $17 million profit, or 90 cents per share, compared with a loss of $30.2 million, or $1.62 per share, in 2011.
Among the financial highlights for the year, the bank originated a record $2.5 billion in residential mortgages that produced more than $50.5 million in non-interest income, Keidel noted. Charge offs and costs associated with foreclosed properties fell for the year, he said.
First Mariner had been hard hit by the real estate crisis that left the bank reeling from bad loans.
First Mariner has been under orders from regulators to beef up its capital since 2009. About two years ago, it reached an agreement with a New York firm to invest millions in First Mariner if the bank holding company could raise $123.6 million from other investors. First Mariner never raised the money, but backed out of the agreement in November, saying circumstances had changed and the company's capital position had improved.
Keidel acknowledged Thursday that the company still remains below the capital levels required by regulators.
He also said that First Mariner plans to consolidate three branches this year, given the growth of online and mobile banking that reduces the need for brick-and-mortar branches. First Mariner didn't say which three branches would be closed, but said 21 will remain.
Last year, the company also consolidated more than 46,000 square feet of office space at its Canton headquarters.
"It's good that they are making some money and improved their capital position," said Bert Ely, a banking consultant. "This bank is far from being out of the woods."
First Mariner's business model is too dependent on its mortgage business, something it won't be able to sustain in the long term as interest rates rise and refinancings eventually drop off, Ely said.
"They need to raise capital. That continues to be a problem for them," he said.
Total assets at year-end reached $1.38 billion, a 17 percent increase from a year earlier.
Shares of First Mariner, which trade over the counter, closed Thursday at 96 cents a share, down two pennies.