- The Washington Times - Monday, March 27, 2006

Mercantile Bankshares Corp. yesterday said it would purchase Arlington’s James Monroe Bancorp for $142.9 million as it continues its march into Washington’s suburbs.

The acquisition of Arlington-based James Monroe gives Mercantile six more branch offices in Northern Virginia, another $530 million in assets and a desirable mix of small-business, professional and retail customers.

The deal is the second acquisition for Mercantile in the past 14 months. Baltimore-based Mercantile purchased Community Bank of Northern Virginia for $212 million in January 2005.

“The metro Washington and Northern Virginia market is a strategic focus for Mercantile Bankshares,” said Mercantile Chief Executive Officer Edward J. Kelly. He noted that the deal would boost Mercantile’s commercial-lending business in the fast-growing Washington suburbs.

Mercantile, Maryland’s second largest in terms of depositors, controls $16.4 billion in assets.

“Mercantile’s network of community banks, its specialized corporate banking services and its wealth management capabilities will significantly enhance our ability to provide value for our customers,” said David Pijor, James Monroe chairman.

James Monroe shareholders have the option of tendering their shares for $23.50 cash or exchanging them for 0.6033 of a share of Mercantile for each share they hold. The price is 27 percent higher than James Monroe’s closing price Friday. The transaction is scheduled to close in the third quarter of this year.

Shares of James Monroe rose $4.36, or 24 percent, to close at $22.90 yesterday on the Nasdaq Stock Market. Shares of Mercantile fell 24 cents, or just under 1 percent, to close at $38.76 on the Nasdaq. Mercantile’s shares have risen 16 percent over the past year.

Mercantile employs 3,600 workers at 11 bank subsidiaries and one mortgage banking company. Its community banks include Annapolis Banking and Trust Co., Citizens National Bank of Laurel and Farmers and Mechanics Bank of Frederick, Md.

Eight of its banks have headquarters in Maryland, two in Virginia and one in Delaware.

Mercantile restructured in 2004 by consolidating 11 affiliate banks. Its retail and small-business, commercial-lending and real estate operations in the region were joined into its affiliate bank based in Montgomery County and renamed Mercantile Potomac Bank.

After acquiring Community Bank of Northern Virginia last year, Mercantile consolidated the Sterling, Va., bank’s 14 branches into Mercantile Potomac Bank’s operations.


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