The once high-flying Second National Federal Savings Bank, which fell victim to the real estate crash of the late 1980s and early 1990s, will be divvied up among 17 banks and thrifts, according to sources close to the breakup of the Salisbury-based savings and loan.
The Resolution Trust Corp., which took over the floundering thrift in December 1992, has accepted bids from the banks and thrifts for the deposits at 34 Second National branches in Maryland, Delaware, Pennsylvania, Virginia and Washington, according to the sources.
Because the branches are so widely distributed -- 10 of the bidders are getting one branch apiece -- the sale of the deposits is not expected to change the landscape of Maryland banking.
The RTC refused to confirm that it has accepted any bids, but a spokesman said the agency is working to sell the savings and loan.
"We expect to it to be resolved anytime between now and the end of the year," said RTC spokesman Michael W. Fulwider.
The largest buyer was the Mellon Bank Corp. of Pittsburgh, which is scheduled to acquire all 7 branches in Delaware, according to the sources. It was followed by the Baltimore-based First National Bank of Maryland, which bid on four branches in Anne Arundel County and the Eastern Shore; and Maryland Federal Savings and Loan of Hyattsville, which also bid on four branches in Annapolis and suburban Washington.
All three banks refused to comment.
Other institutions that submitted winning bids were Wilmington Trust in Wilmington, Del.; Baltimore County Savings Bank in Baltimore County; Loyola Federal Savings Bank of Baltimore; Suburban Federal Savings Bank in Landover Hills; Hebron Savings Bank in Hebron; Prime Bank in Philadelphia; Sovereign Bank in Wyomissing, Pa.; Jefferson Bank in Haverford, Pa.; Harbor Bank of Maryland in Baltimore; Enterprise Bank in Upper Marlboro; Crestar Financial Corp. in Richmond; Washington Federal Savings Bank in Herndon, Va.; Peninsula Bank in Princess Anne; and Chestertown Bank of Maryland in Chestertown.
Both Peninsula and Chestertown are part of Mercantile Bankshares Corp., a Baltimore-based bank holding company.
Besides the branches in Delaware, Second National also has four branches in Pennsylvania, one in Washington and one in Virginia. The other 21 are in Maryland, primarily on the Eastern Shore and in the Annapolis area. As of June 30, the thrift has $855 million in assets and $526 million in deposits, Mr. Fulwider said.
All deposits are insured up to $100,000 by the federal government.
The branches were probably not bought in a group because they were so far-flung and because the thrift's reputation has suffered from being held by the RTC for so long, according to Jonathan D. Holtaway, a senior associate at Danielson Associates, a Rockville-based banking and thrift consulting firm.
"It's a lousy franchise," he said, adding that the action will not change the state's banking market. "If you're looking for a change, this sure isn't it."
In the 1980s, Second National was one of the state's fastest-growing thrifts, reaching $1.6 billion in assets before being taken over in 1992. Its fortunes turned down when many resort projects to whom it had lent money turned sour in the late 1980s.