Capital One to buy Maryland bank

Access to funding typically used by credit lenders such as Capital One has all but disappeared. (Mark Lennihan/associated press/file 2008)

NEW YORK - Capital One Financial Corp. said it will acquire Chevy Chase Bank for $520 million in cash and stock, as it continues to bolster its deposit base to help fund operations amid the ongoing credit crisis.

Capital One is fresh off receiving $3.56 billion in funds as part of the government's bank investment program.

Chevy Chase Bank, which has about $11 billion in deposits, operates branches in Maryland, Virginia, and Washington, D.C. Capital One had about $98.9 billion in deposits as of Sept. 30.

Bethesda, Md.-based Chevy Chase Bank is the latest in a string of regional banks Capital One has purchased in recent years as it expands to become a full-service bank after primarily operating as a credit card lender.

In November 2005, Capital One bought New Orleans-based Hibernia Corp., which had branches in Texas and Louisiana. In December 2006, the company completed its acquisition of North Fork Bank, which operates banks in New York and New Jersey.

Capital One has sidestepped the worst of the credit crisis as access to typical funding has all but disappeared. By purchasing Chevy Chase Bank, Capital One can increase its funding through traditional savings and checking accounts.