Another Local Bank Disappears

December 06, 1993

American banking laws are still so restrictive that true nationwide banking is a mirage. But in just a few short years, regional banking has been introduced with such force that roughly half the deposits in Maryland are now held by banks owned by out-of-state companies.

Richmond-based Crestar bank has announced it will buy Annapolis Bancorp Inc. When completed, the transaction will add Annapolis Federal Savings Bank's 10 branches and $332 million in assets to Crestar's asset base of $13 billion and its network of 302 branches.

Annapolis Federal has been around since 1925. That's not very old if one considers that Anne Arundel's first bank, Farmers National Bank of Maryland, dates to 1805. But over the years, Annapolis Federal has become a trusted institution to many county residents; today, it has some 36,000 accounts.

Probably motivated by the aggressive acquisition spree of Charlotte, N.C.-based NationsBank, which has swallowed this state's biggest bank, Maryland National, Crestar has been busy firming its own foothold in the region. Also last month, it moved to buy NVR Federal Savings Bank, the savings and loan subsidiary of the McLean, Va., homebuilder.

"They are going around picking up every slightly hurting thrift in the Washington area," one analyst said. "But [Annapolis Bancorp] is a good acquisition for them."

Crestar already ranks second -- behind only NationsBank -- in Washington-area bank deposits. Through Annapolis Federal, it will strengthen its reach from Severna Park to Annapolis and also into Prince George's County.

The deep pockets and superior resources of the Richmond financial firm are likely to mean more money to loan and added services such as insurance and brokerage assistance to Annapolis Federal customers. It will also mean keener competition among banking institutions serving Anne Arundel County, four of which continue to be locally owned.

Previous banking acquisitions have shown that transfer of control to out-of-towners does not necessarily mean a lesser commitment to the local community, its concerns and charities. But such a danger exists. It is up to Crestar to show that Richmond can be just as friendly as Annapolis.

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