Sequoia National Bank is leaving its hometown of Baltimore in favor of the glitzier Washington area.

Sequoia agreed to sell its three Baltimore-area branches to Harbor Federal Savings Bank, a small, old-line Baltimore thrift that has been looking for expansion opportunities for a year, according to Harbor chief executive Robert Williams. Terms of the deal were not disclosed.

Harbor will pick up three long-established branches plus $45 million in deposits. Mr. Williams said the deal also included some offsetting assets, "so we'll have some income stream along with the deposits from the beginning."

He added that the acquisition fit well with Harbor's strategy. The $153 million-asset thrift, whose 17% core capital ratio is the highest of any thrift in Maryland, is mostly a residential lender but has a thriving consumer lending and small commercial lending businesses.

Sequoia president J. Paul McNamara could not be reached for comment.

Sequoia, founded in 1916, was a sleepy, small thrift for most of its life. In the 1980s, Mr. McNamara and James G. Tardiff, career commercial bankers, bought it and moved its headquarters to Bethesda, Md., a northern suburb of Washington.

Then, early this year, the thrift pulled off a reverse merger with a D.C. commercial bank, converting the organization into a national bank with branches in the District.

Sequoia has about $149 million in assets, which will be reduced by about one-third after the sale of its three Baltimore-area branches. Its core capital on March 31 was 5.5% of total assets, making it one of the most thinly capitalized banks in the state. In addition, more than 4% of its assets were not performing on March 31, according to Sheshunoff Information Services. It earned a 0.69% return on assets in the first quarter.

"They wanted to consolidate their operations down there," said Mr. Williams. "It was a two-pronged operation. It would be like us having branches down in Washington. It doesn't fit well."

Harbor, a unit of Towson, Md.-based Harbor Federal Bancorp, said it expected to complete the deal late this year or early in 1996, subject to regulatory approval.

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