Washington, D.C., June 12, 2006 A continuously growing retail banking market in the Greater Washington Region has stimulated competition amongst local and regional banks and also fueled the interest of many large banks outside of the Region to get into the game, often by way of acquisition. Last spring’s acquisition of Riggs Bank by Pittsburgh’s PNC Bank and, on a smaller scale, new contender Washington First’s recent purchase of First Liberty are perfect examples. Many in the local banking industry are predicting that a new round of bank mergers and acquisitions is about to kick off and smaller, community banks are particularly attractive targets for the big regional and national players. A June 1st front page Washington Business Journal article recently addressed this trend.

The article details the cycle small startup banks typically go through within their first 10 years in existence. It points to several banks that - for the right price - may be the most likely candidates for a takeover. Looking at the opposite side of the story – who may be in the market to buy a bank or two – also reveals some industry heavyweights. Wachovia, the nation’s 4th largest bank, may have already tipped their hand that they are back in the buyout game in a big way with their recent $25.5 billion acquisition of Golden West. Despite the fact that Golden West was California-based, many industry observers are hearing rumblings of some local buyout activity.

Although their name is more linked to the credit card business, McLean-based Capital One bought the retail branches of Hibernia Bank in Texas and Louisiana in 2005. This past spring, Capital One picked up North Fork Bancorp and its sizable footprint in New York, New Jersey and Connecticut which officially catapulted the “credit card company” into the ranks of the 10 largest retail banks in the country! Is a push into their Northern Virginia and D.C. backyard on the horizon for Capital One?

Other names seemingly not connected to banking in any way are also making waves in the industry. Retailing behemoth, Wal-Mart, recently filed an application with the FDIC (Federal Deposit Insurance Corporation) to charter its own bank! Although the Arkansas-based giant claims its intention is simply to use the charter to set up its own industrial bank as a clearing house for all credit card transactions allowing Wal-Mart to lower its processing fees, many local industry groups have cried foul. In fact, state banking regulators in Maryland are already considering legislation potentially aimed at derailing a future push by Wal-Mart into the traditional banking scene.

Other players seem content to build their footprint the old-fashioned way: through bricks and mortar. Commerce Bank out of New Jersey, for example, announced an aggressive plan to build over 200 new branches in the D.C. region within two years. Unfortunately, that announcement by Commerce came almost three years ago and, to date, the company has a mere 3 locations open in the area at Dupont Circle, Old Town Alexandria and Manassas although they are rumored to have several parcels of land in various stages of re-zoning and other branches presently under construction but not yet completed. It is possible that Commerce did not bargain on how fiercely the local banks already established in the D.C. market would protect their turf and the long jurisdictional delays in permitting new projects.

Whether a new spate of bank mergers is about to be unleashed or new branches continue to be built from scratch, consumers are likely to see some new names begin to dot the landscape and the D.C. region appears unlikely to be dethroned as the top retail banking market in the nation.