First Mariner Chairman and chief executive Edwin F. Hale Sr. wasted no time in crafting a strategy to snare customers of Mercantile Bankshares Corp. yesterday.
A day after Mercantile agreed to sell itself to an out-of-town bank, Hale met with his marketing and advertising teams to produce a television spot highlighting First Mariner's ties to Baltimore.
"I told them literally to pick up the pace and roll out the customer talk about us being the local bank," said Hale, the majority owner of the Baltimore-based bank. "I'm going to spend more money on advertising."
The proposed acquisition of Baltimore-based Mercantile offers a new opportunity for the state's remaining homegrown banking operations to lure new customers, while creating the possibility that they, too, could be targeted for takeover, analysts and local bank officials said yesterday.
"Other banks in Maryland or greater Baltimore are going to be very pleased with the merger," said David Danielson, president of Danielson Capital in Vienna, Va.
"It's a tremendous opportunity to get out of Mercantile's shadow," Danielson said.
Mercantile's deal with Pittsburgh-based PNC Financial Services Group alters Maryland's banking landscape, intensifying competition between locally operated independent banks and regional and national banking giants such as SunTrust Banks, Bank of American Corp. and Wachovia Corp. Analysts say there is also pressure on midsize banks to grow in the competitive market in order to survive.
Provident Bankshares Corp., whose Baltimore roots date back 120 years, would become the state's largest independent commercial bank based on deposits. It would take over the spot currently dominated by Mercantile. The top 10 banks in the state with Maryland roots also include Olney-based Sandy Spring Bancorp and privately-held Chevy Chase Bank in Bethesda.
Matt Schultheis, an equity analyst at Ferris, Baker Watts, Inc., predicts that Maryland-owned banks can gain as much as 10 percent of Mercantile's former customers and employees. But other analysts said PNC will aggressively try to hold on to Mercantile customers and attract new ones in the Baltimore region by highlighting its products and services, such as free ATM transactions.
"PNC is coming in here despite the presence of Bank of America, Wachovia and M&T, so there is still a lot of scope," said Babu Baradwaj, an associate professor of finance at Towson University's College of Business and Economics. "It's not necessary a bad thing that a larger national bank will come in. It will open up services that may not be available at small community banks."
