Merger Completion

On March 25, Vermont National Bank, Brattleboro, VT, merged with Chittenden Trust Company, Burlington, VT, under the charter and title of Chittenden Trust Company. The transaction represents a corporate reorganization of subsidiaries. As of June 30, 1999, Chittenden Corporation, Burlington, VT, the parent company of Vermont National Bank and Chittenden Trust Company, had total deposits of $3.6 billion and ranked 11th among all commercial banking and thrift institutions in New England. (Internal Notice, 3/27/00)

On March 20, Factory Point National Bank of Manchester, Manchester Center, VT, purchased one branch from Vermont National Bank, Brattleboro, VT. The branch is located in Rutland, VT. As of June 30, 1999, Factory Point Bancorp, Manchester Center, VT, the parent company of Factory Point National Bank of Manchester, had total deposits of $136.7 million and ranked 10th among all commercial banking and thrift institutions in Vermont. (Internal Notice, 3/20/00)

On March 7, shareholders of Peoples Heritage Financial Group, Portland, ME, and Banknorth Group Inc., Burlington, VT, voted separately to approve the acquisition of Banknorth. An overwhelming percent of both institutions' shareholders voted in favor of the transaction. The merged company will take on the Banknorth name. The deal, subject to regulatory approval, is expected to be completed in late April. As of June 30, 1999, Peoples Heritage Financial Group, Boston, MA, had total deposits of $8.4 billion and ranked fifth among all commercial banking and thrift institutions in New England. As of the same date, Banknorth Group Inc., Burlington, VT, had total deposits of $2.6 billion and ranked 12th. (Peoples Heritage News Release, 3/7; SNL Weekly BankFax, 3/13/00)

On February 29, the Office of Thrift Supervision (OTS) approved the divestiture by FleetBoston Financial Corporation, Boston, MA, of 285 New England branches to Sovereign Bancorp, Wyomissing, PA. Under the new terms, Sovereign will make three staggered payments, and acquire the branches in three closing periods. In the first stage, Sovereign will acquire 90 former BankBoston branches in Rhode Island and Connecticut on March 24.The second stage, which will be completed on June 16, consists of Sovereign acquiring 86 Fleet branches in Massachusetts.The final installment, scheduled to close on July 21, would consist of 109 Fleet branches in Massachusetts and New Hampshire. As of June 30, 1999, Fleet Financial Group, Boston, MA, had total deposits of $42.2 billion and ranked first among all commercial banking and thrift institutions in New England. As of the same date, BankBoston Corporation, Boston, MA, had total deposits of $34.6 billion and ranked second. (Boston Globe, 3/1; SNL Weekly BankFax, 3/6/00)

On March 25, Sovereign Bank, Wyomissing, PA, purchased 90 branches, in Connecticut, Massachusetts, and Rhode Island, from Fleet National Bank, Providence, RI. Eighty-five of the branches are fully chartered, and five are miscellaneous. (SNL Weekly BankFax, 3/6/00)

On March 1, North Fork Bancorp, Melville, NY, completed its acquisition of JSB Financial Inc., Lynbrook, NY. The deal represents North Fork's second acquisition in one week; on February 22, North Fork Bancorp, Melville, NY, completed its acquisition of Reliance Bancorp Inc., Garden City, NY. (SNL Weekly BankFax, 2/28; SNL Weekly BankFax, 3/6/00)

On March 1, Unibanco-Uniao de Bancos Brasileiros SA, Sao Paulo, Brazil, signed a definitive agreement to acquire Banco Credibanco SA, Sao Paulo, Brazil, from Bank of New York Co., New York, NY. The transaction is subject to approval by the Brazilian Central Bank. (SNL Weekly BankFax, 3/6/00)

On March 15, Richmond County Financial Corporation, Staten Island, NY, signed a definitive agreement to acquire South Jersey Financial Corporation, Turnersville, NJ. Under terms of the agreement, Richmond County will pay $20 in cash for each share of South Jersey held. The transaction, which is subject to regulatory approval, is expected to be completed in the third quarter. (SNL Weekly BankFax, 3/20/00)

On March 15, the Federal Reserve Board of Governors (Fed) amended its interim rule regarding procedures for bank holding companies and foreign banks that chose to be treated as financial holding companies. The Fed changed the procedures for processing elections filed by foreign banks to allow the use of the 31-day notice procedure applicable to U.S. bank holding companies. The regulator based its decision on its assessment of the comparability of the standards used in the first elections filed by foreign banks. (SNL Weekly BankFax, 3/20/00)

On March 13, the Fed released a partial list of 117 institutions to be treated as financial holding companies. Of the largest U.S. banks, Bank of America Corp., Chase Manhattan Corp., Citigroup Inc., First Union Corp., Firstar Corp., Fleet Boston Financial Corp., J.P. Morgan & Co., Mellon Financial Corp., PNC Bank Corp., State Street Corp., SunTrust Banks Inc., U.S. Bancorp, Wachovia Corp. and Wells Fargo & Co. received the new designation. On March 23, the Fed released a list of 27 additional institutions that will be treated as financial holding companies, effective March 23. The list brings to a total of 144 companies that have elected to take advantage of the Fed`s newly enacted regulations as mandated by the Gramm-Leach-Bliley Act. There are two foreign banking organizations- Credit Suisse Group of Zurich, Switzerland, and Deutsche Bank AG of Frankfurt, Germany - and one large bank holding company, Fifth Third Bancorp., on the list. The remaining 24 on the list are small, local bank holding companies. (SNL Weekly BankFax, 3/20; SNL Weekly BankFax, 3/27/00)

On March 21, the House Banking Oversight and Investigations Subcommittee held a hearing to review margin lending requirements. Rep. Spencer Bachus, R-AL, the subcommittee's chairman, said the hearing would "focus on whether [Fed] interest rate decisions should be influenced by market valuation and speculation, and if so, the appropriateness of responding to the financial markets with general rate increases as opposed to margin lending requirements." Several economists met on Capitol Hill to testify on this issue. Much of the discussion agreed with Fed Chairman Alan Greenspan about the danger of high valuation in the equity markets, but the economists differed on the exclusive use of interest rates as a method of correction. Some of the economists recommended margin requirements, or restrictions on borrowing by investors for stock purchases, even though the Fed has not officially adjusted these since 1974 and Greenspan has said repeatedly that margin changes would not be effective. Sen. Charles Schumer, D-NY, who also addressed the House committee, praised the economists for their testimony "Disagreeing with Chairman Greenspan is always a risk in the economics profession. It is like betting against the house." (SNL Weekly BankFax, 3/20; SNL Weekly BankFax, 3/27/00)

On March 10, the Office of the Comptroller of the Currency (OCC) published the finalized version of its proposal allowing for the formation of financial subsidiaries by national banks to conduct various nonbanking activities. Like a concurrently effective Fed rule establishing financial holding companies, the OCC final rule is one of the first to implement provisions of the Gramm-Leach-Bliley Act. The new rule would authorize national banks to form or acquire interest in "financial subsidiaries" to conduct "expanded financial activities" not directly permissible to the depository parent institution. The rule included a list of about 25 acceptable financial subsidiary activities, which will be available via an expedited notification process for qualified national banks. The OCC also prohibited certain activities that were singled out as impermissible under the Gramm-Leach-Bliley Act providing annuities or certain types of insurance as principal, real estate development and real estate investment for financial subsidiaries, as well as certain activities authorized for financial holding companies by the Gramm-Leach-Bliley Act. (SNL Weekly BankFax, 3/13/00)

On March 23, the Federal Deposit Insurance Corporation (FDIC) released an interim rule to allow nonmember state banks to engage in the same activities as the newly authorized "financial subsidiaries" of national banks. The FDIC final rule implements provisions of the Gramm-Leach-Bliley Act by allowing the institutions under its regulation to conduct these non-banking activities as a principal through subsidiaries.The OCC final rule created a new class of subsidiary for national banks, but the FDIC rule simply permits its institutions to conduct similar activities through existing, acquired or newly formed subsidiaries. (SNL Weekly BankFax, 3/27/00)

Items in Bank Notes focused on developments affecting banking structure in New England. They were condensed from daily newspapers and press releases from federal and state financial regulatory agencies. Their reproduction does not imply our endorsement of the accuracy, opinions or policies reflected in the subject matter.Items in Bank Notes focused on developments affecting banking structure in New England. They were condensed from daily newspapers and press releases from federal and state financial regulatory agencies. Their reproduction does not imply our endorsement of the accuracy, opinions or policies reflected in the subject matter.