Washington is just a 45-minute drive from First Maryland Bancorp's downtown Baltimore headquarters, but in many ways their economies are worlds apart.
Baltimore is largely industrial and has one of the East Coast's biggest seaports. Washington is full of lawyers, doctors, and government contractors and other service industries.
But in recent years, as out-of-state companies bought many of the region's banks, First Maryland saw an opportunity to expand its small- business lending in the Washington area. Doing so is paying off.
"Baltimore and Washington were considered two markets, but the proximity is such that very few (banking) companies still distinguish between them," said Maureen Konschnik, senior vice president of $10 billion-asset First Maryland.
The new focus helped First Maryland quadruple its small-business assets, to $202 million, in the 12 months through last June 30, while nearly doubling the number of loans in the portfolio.
About 35% of the individual loans are in Washington and in Maryland's Montgomery and Prince George's counties.
Baltimore's roots are in manufacturing and shipping; Washington is dominated by suit-clad workers linked to the federal government. But the cities have become linked by suburban sprawl along Interstate 95 and in the growing Montgomery County communities of Rockville and Bethesda.
Washington and its suburbs lost all their home-grown big banks in the early 1990s, when NationsBank Corp. bought Virginia's C&S/Sovran Corp. and Baltimore's Maryland National Bank while First Union Corp. bought First American Bank of Maryland.
That gave First Maryland the opportunity to position itself as a local bank - even though it isn't locally owned. Allied Irish Banks PLC bought it nearly a decade ago but retained its name and much its management.
"With all the changes that have taken place in the Washington market, this has been a very favorable time" for First Maryland, said Arnold G. Danielson, chairman of Danielson Associates, a Rockville, Md.-based consulting firm.
The shake-up in the suburban Washington market is expected to continue with Crestar Financial Corp.'s recent acquisition of $3 billion-asset Citizens Bancorp, which is based in Laurel, Md.
"The marketplace is looking for a bank that can provide a long-term relationship," Ms. Konschnik said.
For the Washington market, First Maryland tailored its sales techniques and designed cash management products for businesses such as law firms and medical practices with inconsistent cash flows.
"We are dealing with more sophisticated customers in the Washington area," said Steven Levin, vice president of the bank's suburban Washington region. "Their expectation is: 'If you can do it for the Fortune 500 company, why can't you do it for me.'"
While small-business customers in Baltimore use the bank branches, customers in Washington suburbs request telephone and personal computer banking. The bank set up drop boxes in office buildings or a courier service for small-business customers in areas where branches are sparse.
The bank developed new small-business banking products and encouraged its sales staff to take a more active role in the community by working with local business groups.
"They are very supportive of the local business community," said Ronald Resh, president and chief executive of the Montgomery County Chamber of Commerce.
Mr. Danielson said entrepreneurs in the Washington area are more interested in service and price than in where a bank has its headquarters.
"In Baltimore, people like to bank with Baltimoreans. In Washington, people want the best deal - and they don't care if the name of the bank is Wells Fargo," he said.
Kavita Dawson, owner of Comptech Corp., a 10-year-old Rockville company that exports machine parts, said she switched from a superregional bank to First Maryland three years ago to get more personal service.
"I can call one person to get what I need, rather than hearing from my old bank, 'This is done in Charlotte, that is done in Atlanta or Dallas,'" Ms. Dawson said.