- The Washington Times - Monday, February 26, 2001

The banking market in the Washington area is more balanced than in the past few years, according to the latest look at bank deposits by Danielson Associates Inc.

SunTrust and Bank of America, with about a 14 percent market share each, have a solid stake in the region, while former front-runner First Union has fallen behind, says the study released last week by Danielson, a Rockville bank consulting firm.

The firm's chairman, Arnold Danielson, says the area has gone from a "big three" to "big two" banking structure with the decline of First Union and rise of Chevy Chase Bank, which has continued to grow deposits with a strong branch base.

First Union of Charlotte, N.C., has been undergoing restructuring. Most recently, its chief executive froze the salaries of his top 1,000 managers to rein in expenses.

Despite the wave of consolidation that swept the industry two years ago, consumers in the Washington area have a high number of choices relative to other metro regions, Mr. Danielson says.

Choices range from huge national players such as SunTrust of Atlanta (formerly Crestar), with local 2000 deposits of $10 million, to venerable family-owned operations like Burke & Herbert of Alexandria, with deposits of $655,000.

"We have six or seven big banks, some with smaller shares, and in other markets, they always have just about three," Mr. Danielson says, citing Philadelphia as an example.

But the banking mix still could change, notes Bert Ely, a banking analyst at Ely & Co.

"Market shares and the players in the market have not fully settled out," he says.

Mr. Ely and Mr. Danielson agree that Riggs Bank of the District and First Virginia Banks of Falls Church, two midsized institutions that have resisted mergers, are still prime acquisition targets.

Mr. Danielson says he expects to see First Union's deposits here slide further because of the bank's weak strategy.

Like Bank of America and Crestar, First Union has been a consolidator, but he says it took over weak-performing banks and were unable to improve operations.

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