Merger Announcement

On January 27, Andover Bancorp, Inc., Andover, MA, signed a definitive agreement to acquire GBT Bancorp, Gloucester, MA. The transaction, which is subject to regulatory approval, is expected to be completed during the second quarter. As of June 30, 1999, Andover Bancorp, Inc., had total deposits of $906.3 million and ranked 14th among all commercial banking and thrift institutions in Massachusetts. As of the same date, GBT Bancorp had total deposits of $96.3 million and ranked 146th. (SNL Weekly BankFax, 1/31/00)

On January 24, Urban Financial Group, New York, NY, agreed to acquire three Connecticut branches from FleetBoston Financial Corporation B*B, Boston, MA. The branches, with $88 million in deposits, are located in Hartford, Bridgeport, and Bloomfield. Peter Hurst, the head of Urban Financial Group, said the group plans to apply for a state bank charter. 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. On February 25, Merrill Merchants Bancshares, Bangor, ME, completed its acquisition of the Holden, ME, branch of First National Bank of Bar Harbor, Bar Harbor, ME. As of June 30, 1999, Merrill Merchants Bancshares, Bangor, ME, 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, Bar Harbor, ME, had total deposits of $113.2 million and ranked 28th. (SNL Weekly BankFax, 1/31; SNL Weekly BankFax, 2/28/00)

On January 28, shareholders of Peoples Heritage Financial Group, Portland, ME, and Banknorth Group Inc., Burlington, VT, announced that they will meet separately on March 7 to vote on the pending merger between the two institutions. On June 1, the companies separately agreed on final terms, and the companies made a public announcement of the proposed merger on June 2. 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. (SNL Weekly BankFax, 1/31/00)

On February 18, FleetBoston Financial Corporation B*B, Boston, MA, announced plans to allow Sovereign Bancorp, Wyomissing, PA, to extend the timetable for its acquisition of divested FleetBoston branches. Reasons cited for the extension include the fact that the final details of Sovereign's financing plan have yet to be resolved, and the minimization of integration risk. Currently, Sovereign plans to buy 90 BankBoston branches in Rhode Island and Connecticut by March 24; 95 Fleet branches in Massachusetts by June 20; and 97 Fleet branches in Massachusetts and New Hampshire by July 28. (American Bkr., 2/18; SNL Weekly BankFax, 2/22/00)

On February 10, shareholders of JSB Financial Inc., Lynbrook, NY, and Reliance Bancorp Inc., Garden City, NY, approved their thrifts' acquisitions by North Fork Bancorp, Melville, NY. The transactions are expected to be completed by the end of February. On February 22, North Fork Bancorp, Melville, NY, completed its acquisition of Reliance Bancorp Inc., Garden City, NY. (SNL Weekly BankFax, 2/14; 2/28/00)

On February 8, shareholders of Dime Bancorp, Inc., New York, NY, and Hudson United Bancorp, Mahwah, NJ, announced that they will meet separately on March 15 to vote on the institutions' merger of equals. (SNL Weekly BankFax, 2/14/00)

On February 15, Citigroup Inc., New York, NY, purchased a 5 percent stake in Bank Handlowy, Warsaw, Poland, in an off-the-bourse transaction. In addition, Citigroup agreed to acquire a 33 percent stake in Bank Handlowy from Poland's largest insurer, The General Insurance Company of Poland (PZU), Warsaw, Poland, for an undisclosed amount. The 33 percent stake would be composed of 7 million shares of Handlowy's common stock and 21.4 million bonds convertible into shares. (SNL Weekly BankFax, 2/22/00)

On February 1, BNY Clearing Services LLC, New York, NY, a unit of Bank of New York Co., New York, NY, signed a definitive agreement to acquire the correspondent clearing business of SG Cowen Securities Corporation, New York, NY, for an undisclosed amount. Separately, Bank of New York agreed to acquire the corporate trust businesses of Bank of Montreal, Montreal, Canada, and Harris Trust and Savings Bank, Chicago, IL, for undisclosed amounts. The transactions, which are subject to regulatory approval, are expected to be completed during the first and second quarters of 2000. (SNL Weekly BankFax, 2/22/00)

On February 16, Chase Manhattan Mortgage Corporation, New York, NY, a unit of Chase Manhattan Corporation, New York, NY, was the third party that agreed to acquire a $9 billion mortgage servicing portfolio from Colonial BancGroup Inc., Montgomery, AL. (SNL Weekly BankFax, 2/22/00)

On February 4, eight states--Iowa, Connecticut, New York, West Virginia, Nevada, Oregon, Washington, and Minnesota-- co-signed a legal brief led by California Attorney General Bill Lockyear. The brief argues that federal law does not take precedence over ordinances banning ATM surcharges in Santa Monica, CA. (SNL Weekly BankFax, 2/7/00)

On January 28, the American Banker announced that an attempt by the Federal Deposit Insurance Corporation (FDIC) to make subprime lenders increase capital levels could affect at least 21 commercial banking and thrift organizations. Those institutions could be required to increase their capital, on average, by $11 million per institution. However, according to a draft proposal, 107 other institutions already have more than enough capital to satisfy the proposal's most difficult standard. (SNL Weekly BankFax, 1/31/00)

On February 23, the American Banker announced that the Office of the Comptroller of the Currency (OCC) has received 27 letters of comment on its proposal to require the nation's 100 largest banks to issue highly rated long-term debt in order to operate a financial subsidiary. Many bankers objected, on the grounds that floating the debt would be very costly. Instead, bankers suggested that the OCC should allow a ratings agency to certify that, if long-term debt were issued, it would be highly rated. (SNL Weekly BankFax, 2/28/00)

On February 8, Federal Reserve (Fed) Governor Laurence Meyer told the House Subcommittee on Banking and Financial Services that bank failures may increase in 2000, because even in the midst of strong economic conditions, small pockets of lax standards, excesses, or fraud can cause significant losses to the insurance fund. Meyer added that the Fed is currently taking steps to address problems that may lead to bank failures. On February 4, FDIC Chairman Donna Tanoue told the committee that the FDIC is currently discussing its subprime lending proposal with other agencies, which would more closely harmonize capital requirements for subprime lenders. The proposal would require certain banks with concentrations of subprime loans to hold more capital. (SNL Weekly BankFax, 2/14/00)

On February 17, the Fed, FDIC, OCC, and Office of Thrift Supervision (OTS) released their version of a risk-based capital rules proposal for the treatment of recourse and direct-credit substitutes. The proposal, identical to the one released by the FDIC on February 9, would establish a five-tier capital requirement system based on a financial institution's risk exposure. The degree of exposure would be determined by credit ratings issued by "nationally recognized rating agencies." (SNL Weekly BankFax, 2/22/00)

On February 3, the United States Senate overwhelmingly confirmed Alan Greenspan for a fourth four-year term as chairman of the Fed. Greenspan was first appointed by President Reagan, reappointed by President Bush, and has twice been reappointed by President Clinton. The 89-4 vote made clear the nearly unanimous support for the 73-year-old chairman. Liberal Democrats who cast the four votes against Greenspan have criticized him for being too concerned with the mere prospect of inflation, thus limiting the American economy's growth potential. Most senators disagreed with these assertions, praising Greenspan's performance in helping the American economy achieve its longest expansion in history. (SNL Weekly BankFax, 2/7; NY Times, 2/4/00)

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.