Provident Bank of Maryland staked its claim to Baltimore's moneyed class last week with a planned acquisition of the city's most successful private bank.

Sterling Bank and Trust Co., a $70 million asset bank with a profitable niche in serving high-net-worth individuals, agreed to become a subsidiary of Provident in a $10.6 million stock transaction. Sterling's 100 shareholders will receive 1.5 times book value for their shares in the stock of Provident, which has $ 1.7 billion of assets.

In a rarity for an in-market acquisition, Sterling will remain independent, keeping its name and current management. Baltimore-based Provident has been formulating a way to break into the private banking business, having even formed its own private banking department.

"Sterling brings a well-established expertise in personal banking to an organization which can help it grow ever more rapidly and profitably than it could on its own," said Provident CEO Carl Stearn.

Art Silber, Sterling's chief executive and biggest shareholder, said the affiliation with Provident will allow it to increase its lending relationships. "We have a few prime people who are maxed out now because of our loan-to-one-borrower limit," he said.

Sterling, founded in 1985, has only 22 employees.

"We are very expensive," Mr. Silber said of Sterling's market niche. "We love our customers to death, and we rarely charge less then two points over prime for a line of credit."

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