Capital One has offered $520 million in cash and stock for the Bethesda, Md.-based bank.
McLean, Va.,-based Capital One expects Chevy Chase to have cumulative losses of about $1.75 billion on its $11.8 billion loan portfolio.
Capital One would get Chevy Chase's 250 branches. With the addition of Chevy Chase’s $11 billion in deposits, Capital One -- the largest retail depository institution headquartered in the Washington, D.C. region -- will also have the largest branch and ATM network in the area.
Sources told the Washington Post that the deal should not have an immediate effect on Chevy Chase depositors or borrowers, and that no layoffs were currently planned.
"Chevy Chase is a great strategic fit for Capital One and the combination of our two banks is economically compelling, said Richard D. Fairbank, Chairman and Chief Executive Officer of Capital One, in a press release. "Chevy Chase provides an opportunity to acquire a well-run retail bank with local scale in one of the best local banking markets in the U.S. ... The integration of Chevy Chase and the continued growth of our banking businesses is our highest priority. I am personally very pleased that we will be bringing onboard a bank of this caliber in our own backyard.”
Other bidders for Chevy Chase had included Citigroup and JPMorgan Chase, sources told Reuters earlier this month.
U.S. banks are broadly looking to expand their branch networks and amass pools of low-cost retail deposits after seeing how unreliable funding through capital markets can be when times are tough.