OK, who?s next?
With outlander PNC Financial Services Group?s pending $6 billion purchase of Mercantile Bankshares Corp. ? one of the Baltimore-D.C. area?s few remaining independent banks ? the lucrative corridor?s field of subsequent takeover targets is considerably clarified, bank analysts say.
“The best way to look at this, is where is everybody on the relative outlet share ? and where are they in the relative [local] deposit share,” John Ryan International?s Dean Silverman said of the acquirer-acquisition question.
And that “who,” Silverman and others add, boils down to three likely hometown prospects: Bethesda-based Chevy Chase Bank, a $14 billion-asset, privately owned thrift with $10 billion in local deposits; Baltimore-based Provident Bank, a $6 billion-asset, $4 billion-in-deposits new Maryland hometown leader; and Sandy Spring Bank, an Olney, Md.-based, $2.6 billion-asset institution with $1.8 billion in deposits.
Chevy Chase, according to the FDIC, has 124 branches in Maryland, 21 in D.C. and 80 in Virginia; Provident has 100 branches in Maryland, one in D.C. and 52 in Virginia; and Sandy Spring has 32 branches in Maryland?s Howard, Carroll, Frederick, Montgomery and Prince George?s counties.
“It certainly puts all the spotlight on Provident,” Danielson Associatesanalyst Arnold Danielson says of Maryland?s new independent leader. “They lost a potential buyer that pays good money ? PNC ? so whenever you crow about being the only one left, you have to realize that for your investors you waited a little too long.”
Experts say several factors influence whether likely shoppers ? Atlanta-based Sun Trust Bank, Reston, Va.-based Citibank F.S.B., Charlotte, N.C.-based Wachovia, Winston-Salem, N.C.-based BB&T, The Royal Bank of Scotland ? will move on any of the local talent.
They are: bank profitability, branch and ATM coverage and overlap considerations, merged systems interactiveness, product and services and corporate culture compatibility, price and other operational redundancies.
Asked if he knows if Provident is looking, Danielson replies: “No. But you know investors always think that way. I think [Mercantile?s sale] is going to make Provident start thinking. ? Chevy Chase as well,” he adds. “They?re the other one that?s attractive ? more so than Provident.”
However, Gary Townsend, of Friedman, Billings, Ramsey and Co., says he thinks Sandy Spring might be the next takeover target.
