Provident Bankshares Corp. is increasing its market share in Maryland by acquiring deposits worth $42 million from seven Chevy Chase Bank branches that are to close in January at Giant Food stores, the parent company of Provident Bank said yesterday.
Provident purchased the deposits of more than 8,000 individuals and commercial customers at those seven branches in the Baltimore region. The agreement does not include the sale of loans, leases and other assets. A Giant Food spokesman said yesterday that the grocery chain is seeking a new banking partner for its 54 in-store branches after its contract with Chevy Chase expired.
Provident said a 3 percent net deposit premium it paid to acquire those deposits from Chevy Chase would have a minimal impact on the company's capital ratios.
Provident's acquisition comes at a time of heightened anxiety about the stability of financial institutions. The federal government said this week that it will buy stakes in banks to spur lending to consumers and businesses.
But Provident President and Chief Operating Officer Kevin Byrnes said the deposit acquisition is helping its growth strategy. Provident, Maryland's largest independent bank, had $4.36 billion in deposits as of June 30, up about 8 percent from the year-ago period, according to the Federal Deposit Insurance Corp.
"It gives us a unique opportunity to add to our customer base," Byrnes said. "At Provident, we're trying to grow our franchise. We're open for business and we're extremely well-capitalized."
Provident shares declined 5 cents to close at $9.41 yesterday.
A contract between Giant Food and Chevy Chase Bank expired this summer, resulting in the scheduled closure of 54 branches. Provident has an in-store branch within two miles of each affected Chevy Chase Bank location for its new customers, Provident said. Besides its stand-alone locations, Provident also operates branches in SuperFresh, Shoppers Food Warehouse and Wal-Mart, among other stores.
Chevy Chase Bank customers will be notified by both banks about the transfer of their accounts from these Giant Food locations: 4622 Wilkens Ave., Baltimore; Edmondson Square at 4624 Edmondson Ave.; Hunt Valley at 11399 York Road, Cockeysville; 9730 Goffs Mills Road, Owings Mills; Ravenwood at 8100 Loch Raven Boulevard, Towson; Ridgely Plaza at 1734 York Road, Lutherville; and York Road Plaza at 6340-50 York Road.