Vol. XXVIII No. 11

Bank Notes

November 1999 November 1999

November 1, 1999

Merger Completion

On October 1, Fleet Financial Group, Boston, MA, completed its acquisition of BankBoston Corporation, Boston, MA. The combined bank will be called Fleet Boston Corporation. The popular name of the bank will be Fleet. As of June 30, 1998, Fleet Financial Group, Inc. had total deposits of $41.8 billion and ranked first among all commercial banking and thrift institutions in New England. As of the same date, BankBoston Corporation had total deposits of $32.7 billion and ranked second. (SNL Weekly BankFax, 10/4; Boston Globe, 10/26/99)

On October 21, Passumpsic Bank, FSB, Littleton, NH, a federal savings bank, opened for business. (Internal Notice, 10/22/99)

On October 1, Bennington Co-operative Savings and Loan Association, Inc., Bennington, VT, changed its title to The Bank of Bennington, and converted from a state to a federal charter. (Internal Notice, 10/4/99)

On October 1, Fleet Boston agreed to sell an additional seven Connecticut branches. This action comes in addition to the combined bank's previous divestiture of 306 branches in Connecticut, Massachusetts, and Rhode Island, with total deposits of $13.2 billion, the largest banking divestiture in U.S. history. The combined bank will be the eighth-largest in the United States, in terms of total deposits. On October 1, Citizens Bank of Massachusetts, Boston, MA, purchased five branches from State Street Bank , Trust Company, Boston, MA. As of June 30, 1998, Royal Bank of Scotland, Edinburgh, Scotland, the parent company of Citizens Bank of Massachusetts, had total deposits of $14 billion and ranked third among all commercial banking and thrift institutions in New England. As of the same date, State Street Bank , Trust Company had total deposits of $12.553 billion and ranked fourth. (SNL Weekly BankFax, 10/4; Internal Notice, 10/6/99)

On October 4, Summit Bancorp, Princeton, NJ, signed a definitive agreement to acquire NMBT Corporation, New Milford, CT, in a stock deal. The deal would nearly double Summit's branch presence in Connecticut. NMBT Corporation has 10 offices in southern Connecticut, an area where Summit has been aggressively expanding; in April, Summit entered Connecticut via its acquisitions of NSS Bancorp, Norwalk, CT, and New Canaan Bank , Trust, New Canaan, CT. As of June 30, 1998, NMBT Corporation had total deposits of $305.6 million and ranked 28th among all commercial banking and thrift institutions in Connecticut. The transaction, which is subject to regulatory and shareholder approval, is expected to be completed in the first quarter of 2000. (American Bkr., 10/29; NY Times, 10/5; SNL Weekly BankFax, 10/11/99)

On October 1, Bar Harbor Bankshares, Bar Harbor, ME, agreed to acquire broker/dealer Dirigo Investments Inc., Ellsworth, ME, for an undisclosed amount. Bar Harbor plans to form a financial services holding company to be called BTI Financial Group, to house Dirigo Investments and other companies. As of June 30, 1998, Bar Harbor Bankshares had total deposits of $245.2 million and ranked 11th among all commercial banking and thrift institutions in Maine. (SNL Weekly BankFax, 10/4/99)

On October 28, Chase Manhattan Corporation, New York, NY, agreed to acquire broker/dealer Hambrecht , Quist Group, San Francisco, CA, for $1.35 billion. Hambrecht , Quist is a specialist in the area of high-technology Initial Public Offerings (IPOs). Chase will completely integrate Hambrecht , Quist, merging the company into its investment banking arm. The deal will enable Chase to offer IPOs for its clients. As of June 30, 1998, Chase Manhattan Corporation had total deposits of $1.9 billion and ranked 15th among all commercial banking and thrift institutions in New England. The transaction, which is subject to regulatory and shareholder approval, is expected to be completed by the end of this year. (SNL Weekly BankFax, 10/4/99)

On October 5, Chase Mortgage Company, a unit of Chase Manhattan Corporation, New York, NY, completed its acquisition of the residential mortgage business of Mellon Bank NA, a unit of Mellon Bank Corporation, Pittsburgh, PA. As of June 30, 1998, Chase Manhattan Corporation had total New England deposits of $1.9 billion and ranked 15th among all commercial banking and thrift institutions in New England. (SNL Weekly BankFax, 10/11/99)

On October 1, Southington Savings Bank, Southington, CT, a subsidiary of Bancorp Connecticut Inc., Southington, CT, completed the sale of its trust department to Trust Company of Connecticut, Hartford, CT. As of June 30, 1998, Bancorp Connecticut Inc. had total deposits of $325.9 million and ranked 26th among all commercial banking and thrift institutions in Connecticut. (SNL Weekly BankFax, 10/4/99)

On October 20, Boston Private Bank and Trust Company, Boston, MA, a subsidiary of Boston Private Financial Holdings, Boston, MA, completed its acquisition of financial-planning firm RINET Company, Boston, MA. As of June 30, 1998, Boston Private Financial Holdings had total deposits of $305.5 million and ranked 50th among all commercial banking and thrift institutions in Massachusetts. (SNL Weekly BankFax, 10/25/99)

On October 1, Brookline Bancorp, MHC, Brookline, MA, and Brookline Bancorp, Inc., Brookline, MA, began engaging in a nonbanking activity through the acquisition of an equity interest in Eastern Funding LLC, New York, NY. (Internal Notice, 10/1/99)

On September 28, the Federal Reserve Board of Governors (Fed) said it will write guidelines that show how protests under the Community Reinvestment Act (CRA) are considered when deciding on large-bank mergers. Fed Chairman Alan Greenspan cited the need to have a written guide addressing the role of public comments in board decisions. (SNL Weekly BankFax, 10/4/99)

On September 28, the Federal Reserve Board of Governors (Fed) warned that loan underwriting standards at U.S. banks have become lax, citing a rise in weak loan volume at some banks. In particular, the Fed cited aggressive or overly optimistic views of borrowers' ability to repay loans as well as favorable economic and financial conditions. Good economic conditions may make banks more content and less critical of borrowers' financial prospects. Overly optimistic institutions should be considered for a downgrade of their supervisory ratings, the Fed said. (Wall Street Journal, 9/29; SNL Weekly BankFax, 10/4/99)

On October 15, The Federal Reserve Board of Governors (Fed) decided to give its examiners increased flexibility in reporting details regarding problem loans. Under the new policy, full write-ups on problem loans are required only if the bank's overall performance rating is going to be low or if bank management disagrees with the criticism. Previously, write-ups were only required if the criticized credits were among the portfolio's largest. The new guidelines give examiners more discretion in reporting on healthier banks. (American Bkr., 10/15; SNL Weekly BankFax, 10/18/99)

On October 14, the Federal Reserve Board of Governors (Fed) and the Treasury Department reached a compromise on regulatory provisions of financial reform legislation. Under the terms of the agreement, banks would be able to expand into securities underwriting through operating subsidiaries, but total assets could not exceed the minimum of 45 percent of the banks' total assets, or $50 billion. The agencies agreed to wait a minimum of five years after the legislation passes before determining the eligibility of banks to engage in insurance underwriting or real estate development. (American Bkr., 10/15; NY Times, 10/15; SNL Weekly BankFax, 10/18/99)

On October 22, the White House and Congressional conferees agreed on the final language of the Financial Services Act of 1999, popularly known as H.R. 10. This bill, if it becomes law, would bring down many of the legal walls separating commercial banks, insurance companies, and securities firms, barriers which were erected by the Glass-Steagall Act and other Depression-era legislation. H.R. 10 allows financial holding companies to buy and sell subsidiary companies, and cross-sell products that were once the exclusive province of specific industries. The new holding companies would be regulated by the Federal Reserve Board of Governors (Fed). (NY Times, 10/23; SNL Weekly BankFax, 10/25/99)

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.