Out-of-state banks grab lion's share of Maryland assets N.C. newcomers help turn the tide

October 05, 1993|By David Conn | David Conn,State Bank CommissionerStaff Writer

What a difference a few months make.

When Maryland Bank Commissioner Margie Muller was preparing her annual report on the effects of regional interstate banking, just a handful of large Maryland-based banks had two-fifths of the state's banking assets (about $21 billion), while the dozen or so banks owned by out-of-state companies had close to half that much (about $11 billion).

That was June 30.

Now, with the invasion from North Carolina -- the NationsBank/MNC merger, and the acquisition of the First American Banks by First Union Corp. -- the numbers have flip-flopped: Out-of-state banks in the state have 46 percent of the assets, and the largest Maryland-based banks have 17.8 percent.

Still, competition among banks has remained strong enough to smooth out any real differences in what's important to depositors and borrowers -- namely the prices,products and lending patterns of out-of-state banks compared with their home-owned competitors, according to Ms. Muller's report.

"To date service and price differences have been few to none," the report said. "The newcomers are anxious to demonstrate cordiality in every aspect of their relationships even though some customers complain that any and all local problems should be laid in the laps of the takeover parent companies."

Some businesses have worried that the loss of local banks would make it tougher to borrow money,especially if loan approvals have to come from Charlotte instead of Charles Street.

But that's a red herring, according to Stuart Greenberg, a consultant who helps businesses negotiate with their bankers.

"Has it really cut down on credit? No," he said. "There's more money out there than banks know what to do with." And for small businesses in particular, there isn't an out-of-state bank in town that doesn't grant loan approval authority to its people in Maryland, he said.

If anyone has truly gained by the consolidation of the banking industry, it's the community banks.

As of June 30, before the NationsBank and First Union acquisitions were completed, assets of out-of-state banks in Maryland had risen 38 percent since 1986, when the legislature first allowed interstate banking. That compared with 27 percent for the five largest Maryland banks, according to the bank commissioner's report.

But assets of the 79 smallest community banks grew by 98 percent during the same period, to $11.6 billion from $5.8 billion in 1986. Much of that growth has come from creation of new banks, Ms. Muller said.

"Probably the greatest change brought about by interstate banking has been the chartering of new community banks in all of the state's markets," the report concluded. "Filling niches, custom designing services and offering accessibility to decision-makers, the new banks will not allow the regionals to dominate the marketplace."

Ms. Muller wrote, "Interstate banking hasn't changed the scene radically. But . . . watch this space for next year's edition."

MARYLAND COMMERCIAL BANKS

9) .. .. .. .. .. .. As of June 30, 1993 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. % job

.. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. change .. .. % loans to

.. .. .. .. .. Assets .. .. Deposits .. .. .. .. ..since .. .. . .Maryland

Bank .. .. .. (millions).. ..(millions) ..Employ. .1986 .. .. .. addresses

Acquired banks

Chase Bank of Md $1,061 .. .. $670 .. .. .. 252 .. .. -17.11 .. .. .. .. 78

Crestar/Md. .. .. 807 .. .. .. 720 .. .. .. 290 .. .. 77.91 .. .. .. .. 66

Dominion/Md. .. ..300 .. .. .. 237 .. .. .. 74 .. .. ..-55.69 .. .. .. ..67

Farmers & Merchants 291.. .. ..264 .. .. .. 162 .. .. ..51.40 .. .. .. ..96

1st Va.-Central Md. 273 .. .. 244 .. .. .. 159 .. .. ..11.97 .. .. .. ..95

1st Va.- Md. .. .. 239 .. .. ..215 .. .. .. 171 .. .. ..30.53 .. .. .. ..84

Mellon/Md. .. .. ..477 .. .. ..378 .. .. .. 191 .. .. ..176.81 .... .. ..66

NationsBank/Md. ..4,059 .. .. 3,285 .. .. 1,901 .. .. ..-6.12 .. .. .. ..80

Riggs/Md .. .. .. ..200 .. .. ..186 .. .. .. 88 .. .. ..363.16 .. .. .. .75

Signet/Md. .. .. 3,128 .. .. 2,369 .. .. 1,498 .. .. ..-24.69 .. .. .. 79

Maryland owned

Bank of Baltimore ..2,304 .. 2,103 .. .. 1,036 .. .. .. 31.47 .. .. .. ..64

Citizens Bank .. .. 2,945 .. 2,585 .. .. 1,584 .. .. .. 25.32 .. .. .. ..90

Maryland National..11,758 .. 7,776 .. .. 5,886 .. .. .. -18.41 .. .. .. ..72

Mercantile .. .. .. 2,234 .. 1,697 .. .. ..974 .. .. .. ..-3.66 .. .. .. 86

Provident .. .. .. 1,671 .. 1,261 .. .. ..758 .. .. .. ..16.44 .. .. .. 95

Non-U.S. owned

First American .. 1,085 .. .. 849 .. .. .. 469 .. .. .. .. 13.01.. .. .. ..80

First National .. 7,016 .. ..5,231.. .. ..3,321 .. .. .. .. 6.51.. .. .. ..57

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