Early Briefing: A New Banking Giant

The merger Monday of Wachovia and Citigroup combines two of metropolitan Washington's largest banks, creating a potential powerhouse accounting for nearly a quarter of the region's deposits.

Wachovia was the region's largest bank, with $20.8 billion in deposits in 2007, and its combination with Citi, the seventh-largest, left local community banks taking stock of their own role in the marketplace.

Sam Schneider, Wachovia's mid-Atlantic regional president, said it was too soon to gauge the effect that the merger would have on the banks' Washington-area employees. He declined to comment on whether any branches would close, saying it was too early in the process, but noted that there were relatively few places in the region where the two institutions compete head to head.

"There is very little overlap, if any, in this marketplace for what we do versus what Citi would like to do," Schneider said.

Wachovia and Citi have a total of about 450 branches in Maryland, Virginia and the District.

Some local bankers said the merger of two national players could be an advantage for smaller institutions that base their appeal on being community banks.

As national franchises, Wachovia and Citi probably are "not looking to expand their small to mid-size local customer relationships like community banks are," said Ronald D. Paul, chairman of EagleBank, a Bethesda-based bank with $1.5 billion in assets and 15 branches.

In other news:

* Army officials announced Monday that thousands of jobs originally destined for Fort Belvoir will be moved to an office complex to be built off Seminary Road in Alexandria, despite objections from state and Fairfax County officials who said that the plan will worsen traffic in the area.

After a year-long study of three locations in Alexandria and Fairfax, Army officials decided to put 6,400 workers at the Mark Center, a private development near Interstate 395 but miles from the nearest Metro station. It will save the federal and state governments hundreds of millions of dollars on construction, relocation and transportation improvements that would have had to be spent if either of the other sites had been chosen.

* The Washington Post Co. has purchased Foreign Policy magazine from a Washington think tank for an undisclosed sum, the company announced Monday.

The bimonthly glossy has a circulation of 100,000 and is published by the Carnegie Endowment for International Peace.

The magazine's new executive editor will be Susan Glasser, who stepped down from her job as The Post's assistant managing editor for national news in April and has spent the past several months working as an adviser to Graham on next-generation news and how it's going to look online.

Mois├ęs Naim will remain Foreign Policy's editor in chief.

According to a senior Carnegie Endowment official familiar with Foreign Policy's finances, the magazine posts $1.3 million per year in losses.

Foreign Policy will be placed under The Post Co.'s Slate Group of publications, headed by Jacob Weisberg, which includes Slate magazine and TheRoot.com.

* Clearspring Technologies, an online widget maker, is buying AddThis, a bookmarking and content-sharing service, creating a combined company with broad reach across the Internet, the firms announced Monday.

Clearspring of McLean makes mini-applications such as games, slideshows and news feeds that can be added to Web sites, helping people distribute content across many networks. AddThis of Princeton, N.J., makes a widely used tool for bookmarking and sharing Web pages.

Terms of the deal were not disclosed. The two companies, which combined have less than $10 million in annual revenue, will employ 100 people at Clearspring's Tysons Corner offices, said Clearspring chairman Ted Leonsis. He said he expected the company to be profitable soon.

* Science Applications International Corp. said its subsidiary SAIC-Frederick won a contract valued at up to $5.2 billion to help operate and provide technical support to the National Cancer Institute's research and development center in Frederick.

The award, which SAIC said was the largest single research contract awarded by the Department of Health and Human Services, has a three-year base period of performance, along with options.

* Creative Loafing, owner of six weekly U.S. newspapers including Washington City Paper, sought bankruptcy protection after its advertising revenue slipped for its print editions.

In court papers, the private, Tampa-based company said its troubles were not caused by declines in readership but by "advertising trends that are shifting from traditional media to digital strategies."

During its reorganization, Creative Loafing plans to deliver more news and information over the Internet and to handheld electronic devices.

By Dan Beyers  |  September 30, 2008; 9:00 AM ET  | Category:  Economy Watch
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