Vol. XXIX No. 12

Bank Notes

December 2000 December 2000

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December 1, 2000

Merger Completions

On November 1, Investors Fiduciary Trust Company, Kansas City, MO, a non-depository trust company, merged with State Street Bank & Trust Company, Boston, MA, under the charter and title of State Street Bank & Trust Company. Investors Fiduciary will become a branch of State Street. As of June 30, 1999, State Street Corp, Boston, MA, parent company of State Street Bank & Trust Company, had total deposits of $13 billion and ranked fourth among all commercial banking and thrift institutions in New England. As of June 30, 2000, State Street Corp had total assets of $64.6 billion and ranked 20th among all bank holding companies in the United States. On November 10, Nutmeg Federal S & L Association, Danbury, CT, merged with NewMil Bank, New Milford, CT, under the charter and title of NewMil Bank. As of June 30, 1999, NewMil Bancorp, Inc., New Milford, CT, parent company of NewMil Bank, had total deposits of $303 million and ranked 31st among all commercial banking and thrift institutions in Connecticut. As of the same date, Nutmeg Federal Savings & Loan Association, Danbury, CT, had total deposits of $88.5 million and ranked 65th. (Internal Notice, 11/1; 11/3; 11/10; National Info Center, 11/29; SNL Weekly BankFax, 11/20/00)

On November 11, Woronoco Bancorp, Inc., Westfield, MA, acquired two branches in East Longmeadow and Ludlow, MA, from FleetBoston Financial Corporation, Boston, MA. A Woronoco spokesman said that the transaction involved only the physical branch buildings and locations; no customer deposits or loans changed hands. Woronoco Savings Bank, Westfield, MA, a subsidiary of Woronoco Bancorp, Inc., will relocate its current Ludlow branch to the new location. On November 13, Superior Savings of New England, NA, Branford, CT, purchased one branch from North Fork Bank, Mattituck, NY. The branch, located in Bronx, NY, had deposits of $1.1 million as of June 30, 1999. As of the same date, Superior Savings' single branch was located in Connecticut, and North Fork Bank owned 109 branches, all in New York. The institutions are subsidiaries of North Fork Bancorp, Inc., Melville, NY. On November 18, Katahdin Trust Co., Patten, ME, purchased eight branches from Peoples Heritage Bank, NA, Portland, ME. The branches are located in Ashland, Eagle Lake, Easton, Fort Fairfield, Limestone, Mars Hill, Van Buren, and Washburn, ME, and contained total deposits of $111.4 million as of June 30, 1999. Katahdin Trust Company has consolidated the Mars Hill branch of Peoples Heritage Bank, NA (37 Main Street), into its own Mars Hill branch (28 Main Street). As of June 30, 1999, Peoples Heritage Financial Group, Portland, ME, parent company of Peoples Heritage Bank, NA, had total deposits of $2.9 billion and ranked first among all commercial banking and thrift institutions in Maine. As of the same date, Katahdin Bankshares Corp, Patten, ME, parent company of Katahdin Trust Company, had total deposits of $110.1 million and ranked 29th. Peoples Heritage Financial Group merged with Banknorth Group, Inc., Burlington, VT, under the charter of Peoples Heritage Financial Group and the title of Banknorth Group, Inc., on May 10. The institution, currently headquartered in Portland, ME, owns seven commercial banks with branches in all six New England states (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island, and Vermont). (Internal Notice, 11/20; 11/27; SNL Weekly BankFax, 11/13/00)

On September 22, Saugus Co-Operative Bank, Saugus, MA, changed its title to Saugusbank, A Co-Operative Bank. (Internal Notice, 11/1/00)

On November 14, the Federal Reserve Board of Governors (Fed) approved the proposal of Northfield MHC, Northfield, VT, and Northfield Bancorp, Inc., Northfield, VT, to become a mutual bank holding company and a bank holding company, respectively, through the acquisition of Northfield Savings Bank, Northfield, VT. (Actions of the Board, 11/18/00)

On November 11, South Shore Savings Bank, Weymouth, MA, signed a definitive agreement to acquire the Quincy, MA, branch of Cambridgeport Bank, Cambridge, MA, a subsidiary of Port Financial Corp, Cambridge, MA. Port Financial's title before April 11 was Cambridgeport Mutual Holding Company. The branch, located in a Roche Bros. Supermarket, had deposits of $11.3 million as of June 30, 1999. South Shore will transfer the deposits to its Quincy office in 2001. The transaction is subject to regulatory approval. As of June 30, 1999, South Shore Savings Bank, Weymouth, MA, had total deposits of $444.3 million and ranked 38th among all commercial banking and thrift institutions in Massachusetts. As of the same date, Cambridgeport Mutual Holding Company, Cambridge, MA, had total deposits of $588.8 million and ranked 27th. (SNL Weekly BankFax, 11/13/00)

On November 8, BNY Clearing Services, LLC, Milwaukee, WI, a subsidiary of Bank of New York Co., New York, NY, agreed to acquire the correspondent clearing business of Schroder & Co., Inc., New York, NY, from Citigroup, Inc., New York, NY. Schroder & Co., Inc., is a subsidiary of Citigroup unit Salomon Smith Barney, Inc., New York, NY. Schroder's correspondent clearing business provides securities clearing, execution, and settlement to a wide range of institutional investors. The deal is subject to regulatory approval. The transaction is the third such acquisition announced by BNY Clearing Services this year. The company previously agreed to acquire the correspondent clearing business of SG Cowen Securities Corp, New York, NY, and acquired BHF Securities Corp, New York, NY, on February 1 and July 11, respectively. (SNL Weekly BankFax, 2/22; 7/17; 11/13/00)

On October 31, Webster Financial Corp, Waterbury, CT, entered a definitive agreement to acquire a 65 percent interest in financial adviser and investment bank Duff & Phelps, LLC, Chicago, IL. Duff & Phelps will continue to operate under its current name. The deal is expected to be completed before the end of the year. (SNL Weekly BankFax, 11/06/00)

On November 6, First Niagara Financial Grp., Lockport, NY, completed its acquisition of Iroquois Bancorporation, Inc., Auburn, NY. Iroquois Bancorp's subsidiary, Cayuga Bank, Auburn, NY, will retain its name and operate as a unit of First Niagara Financial Grp. (SNL Weekly BankFax, 11/13/00)

On November 24, Hudson River Bancorp, Hudson, NY, signed a definitive agreement to acquire Cohoes Bancorp, Cohoes, NY, this time committing to pay $19.50 per share in cash, in a $158 million transaction. The last time the two parties attempted to merge, on April 25, Cohoes was valued at $11.04 per share, or $87.5 million. The April 25 offer was only the first in a series of events. Eventually, two other institutions, TrustCo Bank Corp of NY, Schenectady, NY, and Ambanc Holding Co, Amsterdam, NY, announced their interest in acquiring Cohoes. Not surprisingly, those unsolicited and informal bids quickly became considered hostile takeover attempts by the Cohoes board, which spurned the offers and attempted to move forward with its Hudson River merger. But the rising bids (Ambanc first offered $15.25 per share, a price that gradually increased as TrustCo later offered $18 in a cash and stock mix) prevented the merger between Hudson River and Cohoes. (SNL Weekly BankFax, 11/27/00)

On November 6, Chase Manhattan Corp, New York, NY, received Hart-Scott-Rodino (H-S-R) approval for its acquisition of J.P. Morgan & Co., New York, NY. The Department of Justice (DOJ) and the Federal Trade Commission (FTC) each granted early termination of the H-S-R waiting period. The DOJ has also concluded its review of the merger. The H-S-R Antitrust Improvements Act of 1976 requires persons planning certain mergers, consolidations, or other acquisitions to report information about the proposed transactions to the DOJ and to the FTC in order to allow for effective premerger antitrust review. (FTC Formal Interpretation, 3/3; SNL Weekly BankFax, 11/13/00)

On October 23, the Office of the Comptroller of the Currency (OCC) confirmed that a national bank may acquire a non-controlling investment in an investment advisory company registered with the Securities and Exchange Commission (SEC) when the investment advisory company owns limited equity interests in investment funds to which it provides services. Among the conditions for such an investment are the following "the Advisor's maximum investment in a fund it advises or subadvises shall not exceed five percent of a class of voting securities or 24.99% of total equity of the fund, and shall not exceed 1% of the equity capital of the fund measured at the time the Advisor makes the investment"; "the advisor's maximum aggregate investment, measured at the time of the investment, in all such funds shall not exceed an amount equal to 10% of the Bank's capital"; and "the Advisor shall not invest as principal in any funds it advises or subadvises other than those that invest in securities and financial instruments, and the Advisor shall not invest in any fund that holds real estate or tangible personal property." (OCC Interpretations and Actions, 11/00)

On November 16, the Fed announced its annual adjustments to both the amount of net transaction accounts used in calculating reserve requirements and cutoff levels used to determine the detail and frequency of deposit reporting. In a news release, the Fed noted that all depository institutions must retain a percentage of certain types of deposits in the form of vault cash, as a deposit in a Federal Reserve Bank, or a pass-through account at a correspondent institution. In 2001, the first $5.5 million of net transaction accounts, up from $5 million this year, will be exempt from reserve requirements. A 3 percent reserve ratio will be assessed on net transaction accounts between $5.5 million and $42.8 million, which is down from $44.3 million in 2000. A 10 percent reserve ratio will be applied at levels above $42.8 million. The Fed also increased its deposit cutoff level used with the exemption level to determine the frequency and detail of deposit reporting. (SNL Weekly BankFax, 11/20/00)

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.