Farmers and Mechanics Bank in Frederick, Md., has applied to switch from a national to a state charter.

The $1.5 billion-asset bank cited the expense of national charter examinations as its reason for seeking to join the long list of banks that have recently converted to state charters. Farmers and Mechanics estimates it would save $15,000 this year in examination fees and even more in the future, as its assets increase.

"The cost associated with a national bank are higher, and the former advantages of a national charter no longer really exist for us to continue to incur the additional expense," said James Hogan, senior vice president of risk management.

Because of recent legislation changes, the differences between the operation of national- and Maryland-chartered banks are "infinitesimal." Mr. Hogan added.

Under the state charter, Farmers and Mechanics would pay about $125,000.

A spokesman from the Office of Comptroller of Currency declined to discuss Farmers and Mechanics' decision. But Comptroller John D. Hawke Jr. had said Thursday that he knew many banks change charters because of the fee disparity, and that there had been numerous proposals to try to eliminate the difference.

"Anytime we lose a large bank, it is a significant loss to the system," an American Banker article quoted Mr. Hawke as saying.

Mr. Hogan said that Farmers and Mechanics made the decision to switch on its own, and was not wooed by Maryland regulators. State officials are expected to approve the switch this quarter.

The change would leave only one of the 10 largest Maryland-based banks - $1.7 billion-asset Sandy Spring National Bank of Maryland in Olney - with a national charter. Two years ago the state's largest bank, First National Bank of Maryland in Baltimore, a unit of Allied Irish Banks PLC, switched to a state charter and was renamed Allfirst Bank.

Mary Louise Preis, Maryland's commissioner of financial regulation, said that other banks may follow Farmers and Mechanics' lead.

"We think that some banks are reevaluating their market position and honing there business plans and realizing that a state charter serves most, if not all, of their needs," she said.

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