Another local bank gets swallowed

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 a force that roughly half the deposits in Maryland are now held by banks owned by out-of-state companies.

Crestar, the Richmond-based financial giant, has announced that 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 regional network of 302 branches.

Annapolis Federal has been around since 1925. That may seem like a long time, but in fact it's not a very old institution if one considers that Anne Arundel County's first bank, Farmers National Bank of Maryland, dates to 1805. Over the years, Annapolis Federal has become a trusted institution to many area residents. Today, it has some 36,000 accounts.

Probably motivated by the aggressive acquisition spree of Charlotte, N.C.-based NationsBank, which is swallowing Maryland National Bank, Crestar has been busy solidifying 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 bank deposits for the Washington area. 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 empire are likely to mean more money to loan and added services such as insurance and brokerage assistance to customers of Annapolis Federal. 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 does exist. It is up to Crestar to show that Richmond can be just as civic-minded as Annapolis.

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