Bank's sale worries some F&M Bancorp to buy Taneytown Bank & Trust for $81 million

September 09, 1998|By Donna R. Engle | Donna R. Engle,SUN STAFF

The buyer of the Taneytown bank that has served the community for 114 years is promising to continue Taneytown Bank & Trust Co.'s role as a supporter of community organizations and as a small town bank where tellers and senior vice presidents know their customers by name.

But the corporate headquarters will be in Frederick, not Taneytown.

F&M Bancorp of Frederick announced Friday that it will acquire Monocacy Bancshares Inc. of Taneytown, parent company of the Taneytown bank, for 2.22 million shares of F&M stock, valued at $81 million, based on yesterday's closing price.

F&M Bancorp owns Farmers & Mechanics National Bank.

"Carroll County has been a bastion of community banking," said Thomas K. Ferguson, president of Mason-Dixon Bancshares Inc., parent of Carroll County Bank & Trust Co.

"I don't know if [the sale] changes the equation, but what it does say is that Carroll County, like the rest of the state, is not immune from the consolidations that are going on in the banking industry," Ferguson said.

Analysts say community banks are likely to be swallowed as the industry consolidates, shrinking the 9,000 U.S. banks to perhaps 200 in the next 12 years.

Carroll County Bank's Taneytown branch is Taneytown Bank's only competitor in the northwestern Carroll community of 4,500. Ferguson said Farmers & Mechanics' entry is likely to make the banking environment in Taneytown more competitive.

Taneytown Bank has historically been a major supporter of community organizations, a tradition that will benefit both if it continues, said Dr. William R. Linthicum, president of Taneytown Chamber of Commerce.

Linthicum said he hadn't heard much reaction from residents, other than anxiety because they're unsure what will change.

"I guess the saddest thing I've heard from any particular person is that the name will change. What has been Taneytown Bank for as long as any of us can remember isn't going to be Taneytown Bank anymore," he said.

The local bank has contributed to the city's summer concerts in the park and the annual Celebrate Taneytown festival. It lent money to Western Maryland Interfaith Housing Corp. to start a Taneytown self-help housing project and made loans to prospective homeowners.

"They've been a great asset to us. They've given lots of money to community organizations and to the city. Whether that will change or not, I don't know. I hope not," said Mayor W. Robert Flickinger.

Mayor Pro Tem Henry C. Heine Jr. said Taneytown Bank has been "one of the community icons. We were more like neighbors than customers." He said he fears the effect of the sale.

"To some extent, we're going to become account numbers, like the other banks treat you," he said.

Said Faye E. Cannon, F&M president and chief executive, "Absolutely not. With a bank that is now more than 180 years old, if anyone understands community banking, F&M does."

Cannon said it is too soon to say whether any of Taneytown Bank's 11 branches will be closed or any of its 175 employees laid off. But she said the two banks' branch networks have very little overlap.

F&M, with assets of $1.07 billion and 24 branches, dwarfs Taneytown Bank, with assets of $294 million. F&M has been growing west and east. It acquired Home Federal Savings Bank of Hagerstown in 1996 and Keller-Stonebraker Insurance Inc. of Hagerstown this year. The bank has two branches in Carroll County -- in Union Bridge and Mount Airy.

Cannon said the Taneytown F&M Bank will continue the tradition of community support. The Frederick parent bank was the lead organization in helping Interfaith Housing obtain grants for Frederick County projects. She said the Washington County branches support their communities.

The F&M bank in Union Bridge "has always been supportive of the town," said Mayor Perry L. Jones Jr. He said the bank has donated to the annual town fall festival and lent the town money to build Town Hall.

Pub Date: 9/09/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.