Harbor Federal Savings Bank has reached an agreement to buy three branches from Bethesda's Sequoia National Bank, the savings and loan said yesterday.
The Towson-based thrift will pick up $45 million in deposits and offices in Pikesville, Perry Hall and Baltimore, which will boost its branch network to nine.
The thrift also acquired $21 million in loans in the deal and about eight employees, most of whom will be retained, said Robert A. Williams, Harbor Federal's president.
"We really wanted" the branches, Mr. Williams said. "We were looking for something like this. These things don't come along every day."
Mr. Williams said Harbor Federal paid a premium for the $45 million in deposits, but he declined to reveal the purchase price. Regulators are expected to sign off on the deal by the end of the year, he said.
Harbor Federal, which has $160 million in assets, has been itching to grow since it raised $21 million in capital last year when it converted to a stock-owned thrift. The company didn't want to spend its money on building branches, because that's a costly strategy.
"The strategy in the banking industry is, everybody is getting bigger," Mr. Williams said. "You can't stand still, you've got to get bigger and stronger."
Alex C. Hart, an analyst with Ferris, Baker Watts Inc., said Harbor Federal needed to put its capital to work. "They have needed to grow," he said. "Getting more scale won't hurt them."
Mr. Williams said he was solicited about the branches in mid- August by a consultant who was working for Sequoia. He said the two sides met three times and signed the agreement yesterday.
James G. Tardiff, Sequoia's chairman and chief executive, said management sold the branches because it wants to focus on the Washington and Montgomery County markets.
Sequoia, which has $150 million in assets, currently is operating under an agreement with the Office of the Comptroller of the Currency. The regulator required the bank to make a number of changes in the way it does business, including adopting a system of internal controls, and improving the way it administers its loan portfolio.