Chase Manhattan Corp. said yesterday that it will sell its six Maryland branches to Crestar Financial Corp., helping the Virginia bank's ongoing expansion in the state even as the money-center bank continues its retrenchment to its core markets in metropolitan New York.
The acquisition is Crestar's second in Maryland in as many months. In late April it agreed to buy Loyola Capital Corp., parent of Loyola Federal Savings Bank, for $252 million.
Included in the sale, terms of which were not disclosed, are about $450 million in deposits, representing 18,000 customer households and $260 million in loans. The deal will not affect its credit card, mortgage or auto finance units, Chase spokesman Gil Sandler said.
Crestar spokesman Tony Mattera said the deal was designed to complement the Richmond-based bank's pending acquisition of Loyola, which has assets of $2.5 billion and deposits of $1.5 billion. He said Crestar will not decide whether to close Chase branches in Baltimore, Timonium, Pikesville, Annapolis, Bethesda and Rockville until it decides how it will integrate Loyola's 35 branches into its existing operations.
The sale marks the end of a short chapter in Maryland business history that began when Chase bought the remains of three state-chartered thrifts that failed during the collapse of the Maryland Savings Share Insurance Corp. in 1985.
But Merritt Commercial Savings and Loan, Chesapeake Savings and Loan and Friendship Savings and Loan did not prove to be a big enough base for Chase to become a major player in Maryland banking, and the 13 branches it took over shrank to a half-dozen.
"It's long overdue," said Arnold Danielson, a Rockville banking consultant. "When a big bank goes into a market with a fringe position that doesn't seem to be going anywhere, they usually bail out. With Crestar and First Union buying everything, they saw it wasn't going anywhere."
Indeed, Chase's position in Maryland is so small that the purchase won't budge Crestar from seventh place in Baltimore-area banking market share, Mr. Danielson said.
After the deal closes during the third quarter, Crestar will have 4.2 percent of Baltimore metropolitan-area deposits, up from 3.2 percent upon closing of Crestar's deal to buy Loyola. The market leaders are NationsBank Corp., First Maryland Bancorp, First Fidelity Bancorp. (which agreed last week to be sold to First Union Corp. of Charlotte, N.C.), Mercantile Bankshares Corp., Signet Banking Corp., and Provident Bankshares Corp.
"This changes nothing," said Mr. Danielson. "It's more important to show that we really are moving to a handful of banking leaders. The fringe people are bowing out."
Mr. Sandler said his company has already sold branches in Ohio, Arizona and Florida as part of its restructuring. He said the decision had nothing to do with Maryland's business climate.
Ten years ago, Maryland leaders saw Chase as a savior at the depths of the S&L; crisis, when selling the failed S&Ls; to Chase required a special session of the General Assembly to approve the takeover.
MSSIC paid Chase $25 million to cover losses from the S&Ls;, mostly at Merritt, whose chief executive was later indicted but acquitted on fraud charges. The law also assigned the insurance fund's right to sue Merritt for damages to Chase.
Crestar shares closed unchanged yesterday at $48.75. Chase Manhataan shares lost 75 cents to close at $47.50.