Mercantile Eastern Shore Bank

Banks for the Eastern Shore

In 2004, Mercantile Bankshares Corporation consolidated three of its affiliates – the Chestertown Bank of Maryland, St. Michaels Bank, and Peoples Bank of Maryland – into a single company, Mercantile Eastern Shore Bank headquartered in Chestertown. This reorganization combined three community banks that originated at the turn-of-the-century to serve the agricultural population of their respective towns, Chestertown, St. Michaels, and Denton.

Each of these banks was founded to meet the needs of farmers, watermen, and other workers, people who usually did not use banks. When the Board of Directors of St. Michaels Bank adopted its by-laws in February 1890, it stated its purpose as "receiving such small sums of money as are the profits of its industry and economy or legacies, or donations to widows' children and others who may need its aid" that could, in turn be invested in "public stocks or other such safe securities." When the Peoples Bank of Denton formed in 1898 and the Chestertown Bank of Maryland followed suit in 1904, their purposes were similar to St. Michaels.

Of these banks, only the Chestertown Bank of Maryland expanded significantly before World War II. Six years after its organization in 1910, the bank established an office in Galena and, by 1930, had added offices in Kennedyville and Betterton. Its officers had constructed this branch in 1929, a couple of years after a fire had destroyed its first office.

Even with the changes in banking that followed World War II, these banks tailored service to meet their agricultural base. Like other banks, they added conveniences such as night depositories and teller windows and diversified their services by offering installment loans.

The push to computerize prompted Chestertown Bank of Maryland in 1971, St. Michaels Bank in 1981, and Peoples Bank of Maryland in 1982 to sell their stock to Mercantile Bankshares. As affiliates, each bank retained its own Board of Directors and identity and maintained the high level of community service which the people of the Eastern Shore expected.