Merger Completion

On January 11, Citizens Financial Group, Boston, MA, completed its acquisition of UST Corporation, Boston, MA. The deal makes Citizens the second largest commercial banking and thrift institution in New England. As of June 30, 1999, Royal Bank of Scotland Group Plc, Edinburgh, Scotland, the parent company of Citizens Financial Group, had total deposits of $14.5 billion and ranked third among all commercial banking and thrift institutions in New England. As of the same date, UST Corporation had total deposits of $4.3 billion and ranked eighth. (SNL Weekly BankFax, 1/18; Boston Globe, 1/12; Internal Notice, 1/13/00)

On January 3, Merrill Merchants Bancshares, Bangor, ME, has agreed to acquire the Holden, ME, branch of First National Bank of Bar Harbor, Bar Harbor, ME, for an undisclosed amount. The branch has $6.8 million in deposits. As of June 30, 1999, Merrill Merchants Bancshares had total deposits of $158.8 million and ranked 22nd among all commercial banking and thrift institutions in Maine. As of the same date, FNB Bankshares, Bar Harbor, ME, parent company of First National Bank of Bar Harbor, had total deposits of $113.2 million and ranked 28th. On January 14, FleetBoston Financial, Boston, MA, a subsidiary of Fleet Boston Corporation B*B, Boston, MA, agreed to sell three Connecticut branches to an investor group led by Hurst Capital Partners Inc. president Peter Hurst, Jr., for an undisclosed amount. The investor group will form Urban Financial Group Inc., a state-chartered bank holding company, as part of the transaction. The company, Hurst said, would be led and managed by minority executives. The branches, which contain a total of $88 million in deposits, are located in Bloomfield, Bridgeport, and Hartford. As of June 30, 1999, Fleet Financial Group, Inc. had total deposits of $21.6 billion and ranked second among all commercial banking and thrift institutions in New England, and BankBoston Corporation had total deposits of $28.9 billion and ranked first. The deal is subject to regulatory approval. (SNL Weekly BankFax, 1/10; SNL Weekly BankFax, 1/18/00)

On December 30, Summit Bancorp, Princeton, NJ, received approval from the Federal Reserve Board of Governors (Fed) to acquire NMBT Corporation, New Milford, CT. As of June 30, 1999, Summit Bancorp had total deposits of $594.7 million and ranked 17th among all commercial banking and thrift institutions in Connecticut. As of the same date, NMBT Corporation had total deposits of $314 million and ranked 29th. (SNL Weekly BankFax, 1/3/00)

On January 10, Sovereign Bancorp, Wyomissing, PA, pushed back its schedule for opening the 292 branches it acquired through the Fleet-BankBoston divestiture. The thrift had planned to assume control of all the branches around April, but now plans to begin opening branches in March and finish sometime in the fall. Specifically, Sovereign plans to assume the Rhode Island and Connecticut branches in late March, then establish control over the Massachusetts branches over the summer. John Hammill, the new chairman and chief executive of Sovereign New England, said the new timetable will better enable Sovereign to assimilate the technological systems used by Fleet and BankBoston. Sovereign still plans to formally complete the acquisition in April. (Boston Globe, 1/11/00)

Over the weekend of January 21-23, Citizens Financial Group, Boston, MA, notified the newly acquired customers of UST Corporation, Boston, MA, that they would face new minimum balance requirements and fees. Minimum balances will be calculated differently, higher minimum balances will be applied to some accounts, and an ATM fee will be assessed for customer use of other banks' ATM machines. Free checking accounts will be phased out after approximately one year, while other accounts will have fees waived until April 19. (Boston Globe, 1/25/00)

On January 20, BankBoston Retail Finance, Boston, MA, a subsidiary of Fleet Boston Corporation B*B, Boston, MA, announced a new name for itself, Fleet Retail Finance Inc. Ward Mooney, president of the division, stressed that Fleet Retail Finance Inc. will continue to operate as a separate subsidiary, and said, "The Fleet merger is an extra positive for our group," and that the merger will provide "more opportunities to attract new customers." (Boston Globe, 1/21/00)

On January 10, North Fork Bancorp, Melville, NY, received approval from the Fed to acquire JSB Financial Inc., Lynbrook, NJ, and Reliance Bancorp, Inc., Garden City, NJ. Addressing the concerns of a community group regarding the Community Reinvestment Act (CRA) compliance of North Fork, the Fed said in a release that "the CRA performance records of North Fork Bank and Reliance Savings Bank are consistent with approval." The transactions, subject to approval by the shareholders of Reliance and JSB, are expected to be completed in the first quarter. (SNL Weekly BankFax, 1/18/00)

On January 3, Bank of New York Company, New York, NY, acquired a 91 percent stake in Credibanco SA, Sao Paulo, Brazil, for an undisclosed amount. On January 4, BNY ESI & Co., New York, NY, a subsidiary of Bank of New York Company, New York, NY, completed its acquisition of Institutional Securities Trading LLC, Savannah, GA, a division of Investment Performance Services LLC, Savannah, GA. (SNL Weekly BankFax, 1/3/00)

On January 7, consumer watchdog group New Jersey Citizen Action filed a challenge with the Fed, attempting to block the planned merger between Dime Bancorp Inc., New York, NY, and Hudson United Bancorp, Mahwah, NJ. The group alleges that Hudson's record of low-income and minority lending is poor. (SNL Weekly BankFax, 1/3/00)

On December 18, Citigroup Inc., New York, NY, announced that it will acquire the investment banking operations of Schroders Plc, London, England, for 1.35 billion British pounds, or $2.21 billion. The newly acquired assets will be combined with Citigroup's Salomon Smith Barney Holdings unit, under the new name, Schroders Salomon Smith Barney. Citigroup chairman and co-CEO Sandy Weill said that the Schroders acquisition doubles Citigroup's size in Europe, and that "the weak link in our investment bank was Europe and this helps us fill that gap." (SNL Weekly BankFax, 1/24/00)

On January 13, Charles Schwab Corporation agreed to acquire U.S. Trust Corporation, New York, NY. The transaction represents the first test of the Gramm-Leach-Bliley Act of 1999, which reformed laws barring mergers between financial services firms in different industries. Schwab, the leading discount brokerage in the United States, would become a financial holding company subject to oversight by the Federal Reserve Board of Governors (Fed). The deal, subject to regulatory approval, is expected to be completed in July. (American Bkr., 1/14/00)

On January 2, lawyers in the banking industry said that a recent written agreement between the Fed and Foxdale Bank raises new questions regarding Regulation B. Foxdale had been accused of knowingly buying discriminatory loans from car dealers, and signed an agreement with the Fed, agreeing to find and compensate affected borrowers. Andrew Sandler, a partner at one firm, said the agreement "says that any time a bank purchases a loan from a retailer, it is responsible for the terms of the loan." Sandler predicted future court battles between the Fed and other institutions which engage in indirect lending. (SNL Weekly BankFax, 1/10/00)

On January 3, some of the $80 billion distributed to banks, thrifts, and credit unions during the fourth quarter of 1999 was returned via armored transportation to the Federal Reserve. The funds were allocated partly to meet Y2K-related liquidity concerns. However, Fed officials say, some of the extra currency could have been requested for reasons unrelated to Y2K, such as the satisfaction of bank customers' holiday shopping needs. (Boston Globe, 1/4/00)

On January 3, President Clinton renominated Fed Chairman Alan Greenspan to another four-year term, well ahead of the expiration date of his current term, June 20. After a senate confirmation hearing on January 26, Senate Banking Committee chairman Phil Gramm said he expected the full Senate to approve the nomination on February 1. Greenspan, who has held the position since 1987, established himself most notably by his handling of the 1987 stock market crash and his help in containing the 1998 global financial crisis. He has been elevated to celebrity status by the American public, and widely praised during the reconfirmation process as one of the chief figures who have helped to sustain what will probably become the longest peacetime expansion in American history. (Boston Globe, 1/27; NY Times, 1/5; 1/27; SNL Weekly BankFax, 1/10/00)

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.