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The Price of Convenience
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Chevy Chase has the fifth-largest deposit market share in the Washington area behind Wachovia, Bank of America, SunTrust and BB&T. But Chevy Chase is largely a consumer bank, and doesn't collect many big-dollar corporate deposits. While no reliable figures exist for consumer deposits, local bankers think Chevy Chase probably has the No. 2 or 3 market share, and dominates its traditional and wealthy stomping ground of Montgomery County.
Those who know Saul say he has made clear the importance of preserving Chevy Chase's market share in the face of competition from out-of-towners -- even if it means outspending his rivals on branches and ATMs, and accepting lower returns than Wall Street would tolerate from a publicly traded company.
"Frank is so much more of a marketing and a market-share person than a typical banker, and he doesn't have a board to answer to," Danielson said. "ATMs may be expensive, but these things build market share."
Later this year, Chevy Chase will begin deploying new ATMs that can accept cash and check deposits using an imaging technology that doesn't require envelopes. While more expensive than standard ATMs, customers like them and competitors, such as Bank of America, have begun installing similar machines here.
Competition on price is growing, too. Other banks have reduced ATM charges, especially for their own customers.
PNC Bank entered the Washington market last year when it bought Riggs Bank. To build its customer base, the company not only eliminated foreign bank fees but also offered to reimburse many of its depositors any surcharges collected when they used another bank's ATM.
"It's a cost that we are very happy to pay to provide convenience to our customers," said Joe Rockey, head of retail sales and service at PNC.
New Jersey-based Commerce Bank, also entering Washington for the first time, reimburses ATM surcharges for any customer with at least $2,500 in his or her checking account.
Chevy Chase's McCormick, however, doesn't seem worried.
"Our business proposition is to be the best bank for customers in this region," he said. "We start out first saying we want knowledgeable, courteous and responsive employees. And we want to be the most convenient bank in this region to deal with. ATMs can do most things any branch can do. So, primarily, our ATM network is to facilitate value for our customers. And we think it works."
