FleetBoston Acquires Summit
On October 2, FleetBoston Financial Corporation, Boston, MA, signed a definitive agreement to acquire Summit Bancorp, Princeton, NJ. Summit Bancorp is the parent company of banks Summit Bank, Hackensack, NJ, and Summit Bank, Bethlehem, PA, and thrift Summit Bank, Norwalk, CT. With the purchase of Summit Bancorp, FleetBoston would acquire the highest deposits market share in New Jersey, add to its presence in Connecticut, and establish a presence in Pennsylvania. FleetBoston expects to divest approximately $250 million in deposits related to the acquisition, primarily in Southern New Jersey, in order to ease antitrust concerns. Company officials said there would be some employee losses, primarily in overlapping regions, but declined to say how many job cuts.
FleetBoston Financial Corporation was formed by the October 1, 1999, merger of holding companies Fleet Financial Group, Inc., Boston, MA, and BankBoston Corporation, Boston, MA. As of June 30, 1999, Fleet Financial Group, Inc., Boston, MA, had total deposits of $42.2 billion and ranked first among all commercial banking and thrift organizations in New England. As of the same date, BankBoston Corporation, Boston, MA, had total deposits of $34.6 billion and ranked second. As of the same date, Summit Bancorp, Princeton, NJ, had total deposits of $594.7 million and ranked 47th. (Cnn Financial Network, 10/2/00)
On October 2, Fleet Bank of Maine, Portland, ME, merged with Fleet National Bank, Providence, RI, under the charter and title of Fleet National Bank. The transaction is a merger between subsidiaries of FleetBoston Financial Corporation, Boston, MA. (Internal Notice, 10/3/00)
On October 2, New Milford Savings Bank, New Milford, CT, changed its title to NewMil Bank. The name change is intended to convey to customers that the thrift offers expanded non-savings services. NewMil Bank is a subsidiary of NewMil Bancorp, Inc., New Milford, CT. (Internal Notice, 10/3; SNL Weekly BankFax, 10/2/00)
On October 25, shareholders of NewMil Bancorp, Inc., New Milford, CT, approved the acquisition of Nutmeg Federal S&LA, Danbury, CT. Nutmeg's shareholders approved the deal on October 18. The transaction, which has received regulatory approval, is expected to be completed in early November. As of June 30, 1999, NewMil Bancorp, Inc. 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 S&LA had total deposits of $88.5 million and ranked 65th. (SNL Weekly BankFax, 10/30/00)
On September 28, North Fork Bancorporation, Melville, NY, announced that it had dropped its hostile bid for Dime Bancorp Inc., New York, NY, ending a bitter six-month takeover battle between the two institutions. In a news release, North Fork said it would not extend its cash and stock offer, which expired on September 29. (SNL Weekly BankFax, 10/2/00)
On October 10, Webster Financial Corporation, Waterbury, CT, announced that it will sell two New Hampshire branches, to Granite State Bankshares, Inc., Keene, NH. The branches will become a part of Granite State's subsidiary, Granite Bank, Keene, NH, a state-chartered commercial bank. Webster acquired the branches with the December 1, 1999, purchase of New England Community Bancorp, Windsor, CT. The transaction, subject to regulatory approval, is expected to be completed by the end of 2000. (SNL Weekly BankFax, 10/9/00)
On October 27, FleetBoston Financial Corporation, Boston, MA, completed its acquisition of NYSE specialist firm M.J. Meehan & Co., LLC. M.J. Meehan was merged with Fleet unit Fleet Specialist, Inc., New York, NY, under the title of Fleet Meehan Specialist, Inc. The newly formed firm will handle an estimated 18 percent of the New York Stock Exchange (NYSE) order flow. (Business Wire, 10/27; SNL Weekly BankFax, 10/30/00)
On September 28, Banknorth Group, Inc., Portland, ME, announced that it will enter the insurance agency business in Connecticut with the purchase of Watson Group, Wethersfield, CT. The acquisition will be made by Banknorth subsidiary Morse, Payson & Noyes Insurance, South Portland, ME (MPN). Banknorth has owned MPN since 1997. (SNL Weekly BankFax, 10/2/00)
On October 5, BSB Bancorp, Binghamton, NY, and NBT Bancorp, Norwich, NY, terminated their proposed merger. While neither bank would specify a reason for the termination, the termination of the deal comes after BSB said in a statement that it "expects to incur significant provisions for loan losses" exceeding approximately $17.3 million for the quarter ended September 30. BSB said the increased provisioning, coupled with merger expenses of approximately $2 million, would result in a $1.7 million loss for the quarter. (SNL Weekly BankFax, 10/2; 10/9/00)
As of October 12, WingspanBank.com, Wilmington, DE, a subsidiary of Bank One Corporation, Charlotte, NC, NetBank Inc., Alpharetta, GA, and yet-to-be-launched Juniper Financial, Wilmington, DE, were all negotiating deals to enable their customers to make deposits at tens of thousands of ATMs owned by physical institutions. Such a service has long been technologically possible but has not been widely implemented "due to competitive issues and a lack of demand." Interchange deposits have not been as popular as interchange withdrawals, largely because many Americans never see their paychecks because of electronic direct deposits. (SNL Weekly BankFax, 10/16/00)
On September 27, the Federal Deposit Insurance Corporation (FDIC) released its quarterly analysis of regional economic trends, which found that banks and thrifts have built risky concentrations of commercial real estate loans. The regulator pointed to bank failures in the 1980s and early 1990s that stemmed from a real estate crisis, and warned that many metropolitan markets are on the verge of overdevelopment. The FDIC is primarily concerned that community banks with less than $1 billion in assets may not have the resources to survive an economic downturn and the resulting commercial real estate loan charge-offs. (SNL Weekly BankFax, 10/2/00)
On October 5, FDIC Chairman Donna Tanoue said that she wants banks to receive Community Reinvestment Act (CRA) credit for investing in minority-owned institutions outside of their assessment areas, according to the American Banker. Because of the rarity of minority-owned financial institutions, few banks have the opportunity to invest in ones within their CRA assessment area. A change in policy would make it easier for banks to receive CRA credit while benefiting minority-owned banks and thrifts, according to Tanoue. Community Reinvestment regulations are not up for review until 2002, but Tanoue hopes to implement her proposed changes sooner. (SNL Weekly BankFax, 10/9/00)
On September 28, the Federal Reserve Board of Governors (Fed) published a final rule amending Regulation Z, which implements the Truth in Lending Act, to revise the disclosure requirements for credit and charge card solicitations and applications. Under the final rule, disclosures must be in a readily understandable form and readily noticeable to consumers. The annual percentage rate (APR) for purchase transactions must be in 18-point type. Cash advance and balance transfer APRs must be included in the table. Balance transfer fees also must be disclosed. Additional guidance is provided on the requirement that the table be prominently located and on the level of detail about cost information required or permitted in the table. The revisions are effective immediately, and compliance is mandatory as of October 1. (SNL Weekly BankFax, 10/2/00)
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.