First Maryland Bancorp opened the door to an expansion into Southern Pennsylvania yesterday with the announcement that it had reached an agreement to acquire the York Bank and Trust Co.
First Maryland, the parent of First National Bank of Maryland, Maryland's second-largest bank, is expected to pay about $130 million in cash for its much smaller northern neighbor.
York Bank, which is based in York, Pa., has 22 branches and controls nearly a quarter of the York County market. All of its branch offices are in York County except for one in neighboring Lancaster County.
0 The move, which is still subject to regulato
approval, marks First Maryland's first out- of-state acquisition since November, when it acquired Columbia National Bank, a one-office banking concern in Washington.
York Bank is currently owned by Midlantic Corp., a bank holding company based in Edison, N.J.
Customers of First National and York Bank are not expected to see any immediate changes as a result of the purchase, according to Carol E. Dunsworth, a spokeswoman for First National. She said that the two banks will retain their names and that York Bank and Trust will continue to operate as a separate entity.
As the acquisition moves forward, she said, First National will be making arrangements to allow customers of the two banks to use the automated teller machines, or ATMs, of both institutions.
First Maryland, which is owned by Allied Irish Banks PLC, has assets of $7.8 billion, compared with $1.5 billion for York Bank and Trust.
Ms. Dunsworth said that no major changes are planned for the management of the York bank or its 550 employees.
First Maryland had announced earlier its intentions to expand its banking operation through acquisitions and internal growth.
In April 1990, First Maryland moved to acquire Baltimore Bancorp, the parent of the Bank of Baltimore. After being rebuffed by the directors of Baltimore Bancorp, First Maryland withdrew its bid Nov. 1.
Ms. Dunsworth said that yesterday's acquisition had nothing to do with First National's failed attempt to buy the Bank of Baltimore.
First Maryland revealed its interest in York Bank and Trust Co. in mid-May. But at that time, it said that it was one of a number of banking companies pursuing the Pennsylvania operation.
Under the corporate arrangement outlined in the agreement, YorkBank will become a wholly owned subsidiary of First Maryland Bancorp, which, in turn, is a wholly owned subsidiary of Allied Irish of Dublin, Ireland.
"First Maryland Bancorp has long defined its primary market as extending from Southern Pennsylvania through Northern Virginia," Jeremiah E. Casey, chairman of First Maryland, said in a prepared statement.
"This is a very exciting development . . . a natural, contiguous expansion within our targeted market," he said. Mr. Casey noted that the York bank has been in operation for 180 years.
First Maryland has had a loan production office for making commercial loans in York for a number of years. It also has mortgage lending offices in Northern Virginia.
Mr. Casey noted that as part of a nearly $30 billion international financial services group, York Bank will serve the worldwide needs of the largest companies in the market.
He said that the acquisition of York Bank would help First Maryland expand further into the south-central Pennsylvania market.