Magazine article American Banker

Mellon to Buy Branches in Washington Suburbs

Magazine article American Banker

Mellon to Buy Branches in Washington Suburbs

Article excerpt

WASHINGTON - In a long-anticipated move, Mellon Bank Corp. announced an acquisition that will double its foothold in the capital's Maryland suburbs.

Mellon said Tuesday that its Rockville, Md., subsidiary signed a definitive agreement to buy eight branches from Standard Federal Savings Bank, Gaithersburg.

Pending regulatory approval, Mellon will pay $12.5 million, a 4% premium, for $313 million in 38,000 deposit accounts. The Pittsburgh-based company currently controls $182 million in deposits in eight Maryland branches.

Standard Federal, a capital-strapped thrift that is a leading servicer of mortgage loans, will be left with 11 branches.

The deal comes seven months after Mellon lost a bidding contest for the failed Perpetual Savings Bank. That Virginia-based thrift, with $3.4 billion in assets and 61 branches in the Washington area, was awarded to Crestar Financial Corp. of Richmond.

Mellon, which has $30 billion in assets including $250 million at Mellon Bank (MD) of Rockville, has made no secret of its desire to be a major competitor in the lucrative Washington metropolitan market.

Seeking Growth Opportunities

Kenneth R. Dubuque, chairman and chief executive of the Maryland unit, said the loss of Perpetual was disappointing, and the company has been "looking locally for opportunities" to grow.

Mr. Dubuque, who formerly headed the parent company's strategic planning department, was sent to Maryland to pursue a growth strategy. "We are looking at lots of possibilities," he added. …

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