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The changes in the Maryland and national banking industry just keep coming, during what one banker calls "today's unprecedented times."

On Wednesday, Provident Bankshares Corp., the Baltimore parent company of Provident Bank, agreed to acquire $42 million in deposits at seven Chevy Chase Bank branches inside Giant Food stores in the Greater Baltimore area, executives said. And more banks with Maryland branches reported declining earnings this week, including Wells Fargo of San Francisco, which has agreed to purchase Wachovia Corp., the fourth largest bank in Maryland in deposits.

Also this week, U.S. Treasury Department officials said the agency will purchase as much as $250 billion of preferred stock in thousands of banks and thrifts in an attempt to spur lending — including Maryland's largest bank, Bank of America Corp. And the Federal Deposit Insurance Corp. unveiled a new program that guarantees banks' new senior unsecured debt such as promissory notes and commercial paper issued before next July.

As part of the Chevy Chase deal, those in-store branches will close, as Provident has in-store and conventional branches near the Giant grocery stores, Provident president and COO Kevin Byrnes said. The new consumer and commercial customers for Provident total more than 8,000.

"We will be reaching out to customers individually," Byrnes said in an interview Wednesday. He hoped the new customers would appreciate the convenience of Provident's 142-branch network in Maryland, Virginia and Pennsylvania, particularly its strength in the Baltimore area. Chevy Chase has relatively few of its branches in Baltimore.

The transfer includes only deposits — not loans, leases and other assets inside the affected Giant stores. Provident paid a 3 percent net deposit premium to Chevy Chase for the deposits.

Chevy Chase is pleased that Provident will help provide a "smooth transition" for customers in that region, W. Scott McSween, Chevy Chase's executive vice president for retail banking, said in a statement.

In July, Chevy Chase executives said they would shut down branches in 54 Giant Food stores in the region to focus on regular branches, citing privacy concerns from customers. Some of those in-store branches have already closed, while others are scheduled to be shuttered later this year or by next spring.

"While we have made a decision to discontinue our supermarket banking program and focus instead on our larger traditional neighborhood branches throughout Greater Washington, we wanted to provide customers who opened accounts in our Baltimore-area Giant Food store branches with a convenient alternative," McSween said.

Chevy Chase customers will be able to access cash without fees at any Provident ATM in Baltimore County or city starting Wednesday. The acquisition requires regulatory approval and is expected to close in January.

Provident was the eighth largest bank in deposits in Maryland as of June, with $3.8 billion, according to the FDIC. Chevy Chase, with headquarters in Bethesda, was third in Maryland deposits with $8.2 billion.

Most of Chevy Chase's Maryland branches are in the counties surrounding Washington. The Baltimore-area Chevy Chase Bank branches affected are in Giant stores in Owings Mills, Ridgely Plaza, York Road Plaza, Ravenwood, Hunt Valley and Edmondson Square, and on Wilkens Avenue.

While Chevy Chase is getting out of the supermarket branch operation, Provident has seen that segment grow. Provident opened its first in-store branch in 1993 at a Shoppers Food & Pharmacy in Baltimore, and its supermarket branches have increased to 63, with another slated to open in November in an Annapolis Shoppers.

Most of Chevy Chase's store branches are about 300 square feet. Provident's store branches — which include 45 in Shoppers, eight in Superfresh and seven in Wal-Mart — average from 500 to 600 square feet.

Profits continue

to decline

This week, Wells Fargo reported that net income declined by 24 percent in the third quarter to $1.6 billion from a year ago, as bad loans increased. For the first nine months of 2008, net earnings have declined 20 percent to $5.4 billion.

President and CEO John Stumpf said in a conference call that he expected the acquisition of Wachovia to be completed by Dec. 31. It's too early to tell if any Wachovia branches in Maryland will be closed, said Melissa Murray, a spokeswoman for Wells Fargo.

Wachovia has 81 branches in Maryland. Wells Fargo does not have any consumer bank branches in the state but has about 2,770 employees in mortgage, commercial banking, insurance and investment offices in Maryland.

"As with any merger of this size, some duplicate positions will be eliminated, but just because a position is eliminated doesn't mean the person in that position can't stay with our company in another position," Murray said. "An important test of the success of this merger will be how many talented team members we can retain so they can continue to grow personally and professionally with Wells Fargo."

On Sunday, the Federal Reserve Board approved the purchase, which still requires the OK of Wachovia shareholders.

Wells Fargo is also one of the banks targeted for an initial infusion of capital from the Treasury Department. Bank of America of Charlotte, N.C., the largest bank in Maryland in deposits with $18.5 billion, is another that will get billions from the federal government in an effort to loosen credit and spur more lending.

Some executives with smaller banks have criticized that move as unfairly helping larger banks at taxpayers' expense. But smaller banks will also be able to apply for the capital from the feds, said Cynthia Blankenship, chairman of the Independent Community Bankers of America, a Washington, D.C., trade group.

"The vast majority of community banks remain well-capitalized and have shown resiliency during the current economic downturn due to their safe, common-sense business practices," Blankenship said in a statement. "Nonetheless, ICBA is pleased community banks who choose to participate in this voluntary program will be able to do so. Throughout this crisis, our goal has been to ensure parity for community banks so they are not hampered in their ability to continue serving local communities and Main Street consumers and businesses."

Edward L. Yingling, president and CEO of the American Bankers Association in Washington, said in a statement that he doubted that most banks would participate, because 95 percent of U.S. banks are already well capitalized. "However, it's possible that some strong banks could seek the additional capital as a means to support expanded lending needed to improve the economy, replacing the government capital as soon as the financial markets return to normal," Yingling said.

Quarterly profits down

at BB&T, Severn

BB&T Corp. of Winston-Salem, N.C, the seventh largest bank in Maryland with deposits of $6.2 billion as of June, reported Thursday that net income for the third quarter declined by 19 percent from a year earlier, to $358 million. For the first nine months of 2008, net income dropped by 8 percent to $1.2 billion.

At Severn Bancorp, the Annapolis parent of Severn Savings Bank, third-quarter profit plunged by 75 percent to about $600,000 from a year ago. Earnings for the first nine months of the year were down by 51 percent to $4.3 million. Severn is the 19th largest bank in Maryland with deposits of $674 million.

Nonperforming loans increased in the third quarter from the second quarter, but the bank remains well capitalized, Alan J. Hyatt, Severn president and CEO, said in a statement.

"While we are pleased by our continuing ability to post profitable results during a quarter in which we substantially increased our loan loss reserves, we continue to focus on the many challenges being faced by financial institutions in today's unprecedented times," Hyatt said. "We anticipate that our results will continue to be challenged for the foreseeable future. However, we remain confident in our ability to manage through this difficult environment and feel we are taking appropriate steps relative to our environment."

M&T Bank opening

branch in Clarksville

M&T Bank Corp. of Buffalo, N.Y., the fifth largest bank in Maryland with $7.4 billion in deposits, plans to open a full-service branch Monday in Clarksville.

M&T is also opening branches in Montgomery, Anne Arundel and Baltimore counties. In August, the bank unveiled a new Chesapeake regional headquarters in Annapolis. Maryland deposits in M&T grew by 5.1 percent last year, faster than the statewide average of 1.7 percent.

Like many banks, M&T is reviewing the federal equity plan to see if it would be in any way advantageous to participate.

"We understand banks have about a month to decide if they want to participate," said Philip Hosmer, an M&T spokesman. "We're determining how the plan would benefit a healthy bank like M&T."