Sandy Spring Bancorp in Olney, Md., made some noise last week in announcing a deal to buy seven branches from Mellon Bank Corp.
The $1.3 billion-asset company, which has not made an acquisition since 1996, plans to pay about $25 million for six Maryland branches and one in Tysons Corner, Va., it said Thursday.
The deal would not only strengthen Sandy Spring's presence in the Maryland suburbs of Washington but also give it a foothold in booming Northern Virginia.
"Management expects the deal to help earnings by 2000," said Collyn Bement Gilbert, an analyst at Ferris Baker Watts in Baltimore. "And just knowing those markets and knowing the profitability opportunities there, I would think that that's totally likely. This is a good move for them."
Sandy Spring operates 21 branches in Maryland. Its deal for the Mellon offices includes about $235 million of deposits and $35 million of loans.
The market reacted coolly to Sandy Spring's announcement. Its stock closed Thursday at $28 a share, unchanged from the previous day's close. The shares were at $27.6562 in midday trading Friday.
Nonetheless, Sandy Spring chief executive officer Hunter R. Hollar was enthusiastic about the deal. "We view this as a natural addition to our existing offices," he said.
Ms. Gilbert said she expects Sandy Spring to look for other deals in Maryland and Virginia. "I think this is a bank you would probably want to keep an eye on," she said.
She added that the company is also eager to increase its exposure to analysts and the public.
Many in the investment community regard Sandy Spring as an aloof institution that avoids analyst coverage. But Thursday's deal announcement may have been intended to attract attention and put investors on notice that the company seeks a more active market role, Ms. Gilbert said.
Regardless of whether the spotlight shines on Sandy Spring, Ms. Gilbert said it could become one of the region's toughest competitors.
"I think they could grow to become the lead bank in that area," she said.