Why are so many banks interested in buying Chevy Chase Bank in Maryland? Location, location, location.

The $15.5 billion-asset thrift is one of the few banks of its size available in the Washington area, particularly since PNC Financial Services Group Inc. bought Washington's Riggs National Corp. in 2005 and Mercantile Bankshares Corp. of Baltimore last year.

Citigroup Inc., JPMorgan Chase & Co., BB&T Corp., SunTrust Banks Inc., and Capital One Financial Corp. have all taken a look at Chevy Chase in recent weeks.

Roughly 85% of Chevy Chase's 292 branches are in the Washington area. It ranks seventh in deposit share, with 6.6% of the market; and one-quarter of the company's deposits are in Montgomery County, Md., the wealthy jurisdiction where Chevy Chase is headquartered.

"While stressed … the Washington area remains one of the best demographic markets in the country, and it will probably turn up sooner than most others," said Jeff Davis, a bank analyst and principal at Wolf River Capital LLC. "It is a great place to do business and is along a major geographic intersection."

Chevy Chase has kept mum, and a spokeswoman said last week that vice chairman Alexander Boyle, who typically addresses such issues, was unavailable for comment. The potential bidders were not commenting either.

The next-largest banking company in the Washington area is the $4.2 billion-asset United Bank in Vienna, Va., according to SNL Financial LP in Charlottesville, Va. After that, it is $3.2 billion-asset Sandy Spring Bancorp Inc. in Olney, Md., and the $2.7 billion-asset Virginia Commerce Bancorp Inc. in Arlington.

Laurence C. Pettit 3rd, who oversees the community banking portfolio at Anderson & Strudwick Inc. in Richmond, Va., said that large banking companies looking to significantly raise their profile around Washington would have little interest in the area's smaller institutions. Though Mr. Pettit said Chevy Chase has had its problems, "you must pounce on an opportunity like this," he said.

Though profitable in the third quarter, Chevy Chase reported earnings were off 69% from a year earlier, at $5.9 million, as its loan-loss provision swelled to $72 million from $5.2 million a year before. Nonaccrual loans grew more than sixfold from a year earlier, to $530.3 million, and 89% of those involved residential mortgages.

Meanwhile, the thrift company has been retooling its retail strategy, saying in June that it would not renew a contract with Giant Food stores and that it would close its 54 in-store branches to focus on larger branches in the Washington area. In October, Chevy Chase said it would sell seven in-store branches with about $42 million of deposits to Provident Bankshares Corp. in Baltimore.

However, Chevy Chase still has an alluring deposit base.

Montgomery County is "among the wealthiest areas in the country," said Gary Townsend, the chief executive of Hill-Townsend Capital LLC. Mr. Pettit said 65% of Chevy Chase's $11.5 billion in deposits appear to be "low-cost money" such as checking and savings accounts. "They are a deposit haven," he said, adding that a would-be buyer should weigh the benefits of any deposit "premium" against the risks associated with the deteriorating mortgage book.

Wolf River's Mr. Davis said the rich deposit base would be particularly attractive to McLean, Va.-based Capital One Financial Corp., which entered retail banking in 2005 as a means of bringing in low-cost funding to support is consumer lending businesses. It is the market's second-largest player, and buying Chevy Chase would begin to fill a huge retail gap between its New York and Gulf Coast regions.

For JPMorgan Chase, he said, the natural benefit would come from promoting wealth management services, something that Chevy Chase has never aggressively pursued despite its affluent clientele. A deal would help the New York company move south from its Northeast retail base, and BB&T and SunTrust could significantly boost the size of their operations in the Washington area, allowing either to vie for the third-largest position in that market. E-Trade Financial Corp., which mostly gathers deposits through its online operations, was No. 1, with 19.3% of the market in June 30 data from the Federal Deposit Insurance Corp. Charlotte-based Bank of America Corp. and SunTrust Banks in Atlanta were fourth and fifth, respectively. BB&T, which is based in Winston-Salem, N.C., was No. 6, and Citi had the No. 9 spot.

Gary Crittenden, the chief financial officer at Citigroup, declined to comment specifically on Chevy Chase in an interview last week. (Citi this fall lost a bid for Charlotte-based Wachovia Corp. to Wells Fargo & Co. Citi and Wells briefly negotiated a scenario in which they would split Wachovia's retail banking network, but neither one was willing to give up the Washington branches.) "If we had another opportunity that would be akin to the Wachovia opportunity … that's probably something we'd look at seriously," Mr. Crittenden said. Wachovia, which San Francisco-based Wells is poised to acquire this month, was the third-largest depository institution in the Washington area at midyear.

Kelly King, BB&T's chief operating officer, said in October that the company is looking to buy in Maryland and "would lean" targets with no more than $15 billion of assets.

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