Citizens Financial to Acquire Mellon Banking Business

On July 17, Mellon Financial Corp, Pittsburgh, PA, signed a definitive agreement to sell its consumer, small-business, and certain middle-market banking operations to Citizens Financial Group, Providence, RI, for approximately $2.1 billion in cash. Mellon said that Citizens intends to keep all Mellon branches open. The acquisition adds $13.4 billion in assets and 345 branches in Pennsylvania, Delaware, and New Jersey to Citizens’ U.S. banking franchise. Following the transaction, Citizens will have roughly $47 billion in assets and more than 770 branches across seven states. The purchase includes $11 billion in consumer deposits and $2.4 billion in commercial deposits. The transaction also includes a $6.1 billion diversified, high-quality loan portfolio.

As of June 30, 2000, Royal Bk of Scotland Group, PLC, Edinburgh, UK, parent company of Citizens Financial Group, had total deposits of $21.6 billion and ranked second among all commercial banking and thrift institutions in New England. As of the same date, Mellon Financial Corp had total deposits of $4.8 billion and ranked ninth. (Boston Globe, 7/18; SNL Bank , Thrift Weekly, 7/23/01)

On June 30, Hometown Bank, Moodus, CT, merged with Liberty Bank, Middletown, CT, under the charter and title of Liberty Bank. As of June 30, 2000, Liberty Bank had total deposits of $1.3 billion and ranked tenth among all commercial banking and thrift institutions in Connecticut. As of the same date, Hometown Bank had total deposits of $54.1 million and ranked 69th. (Internal Notice, 7/3/01)

On July 17, Brookline Savings Bank, Brookline, MA, converted from a state-chartered savings bank to a federally chartered savings bank. On the same date, Lighthouse Bank, Waltham, MA, and Brookline Savings Bank, both subsidiaries of Brookline Bancorp, MHC, Brookline, MA, merged under the charter and title of Brookline Savings Bank. (Internal Notice, 7/23; 7/24; SNL Bank , Thrift Weekly, 7/23/01)

On July 2, Lawrence Savings Bank, North Andover, MA, completed its reorganization into a wholly owned subsidiary of newly formed holding company LSB Corp, North Andover, MA. In the reorganization, all outstanding shares and associated preferred stock purchase rights of Lawrence were converted into shares and rights of LSB Corp. (SNL Bank , Thrift Weekly, 7/9/01)

On July 25, Cigna Bank , Trust Company, FSB, Hartford, CT, a federally chartered savings bank, opened for business. On the same date, CG Trust Company, Chicago, IL, merged with Cigna Bank , Trust Company, FSB, under the charter and title of Cigna Bank , Trust Company, FSB. (Internal Notice, 7/25/01)

On June 29, Citizens Bank of MA, Boston, MA, closed seven Massachusetts branches. The branches were located in Boston (2), Burlington, North Quincy, Norwood, Quincy, and Waltham.

On July 12, Fleet National Bank, Providence, RI, closed 32 New Jersey branches. The branches were closed in connection with the March 1 merger between Fleet National Bank and Summit Bank, Hackensack, NJ. On July 27, Fleet National Bank closed 46 branches and one autobank facility in New Jersey in connection with the same merger. On March 23, Fleet announced plans to consolidate 80 branches and one autobank facility in New Jersey. (Internal Notice, 3/1; 7/2; 7/30/01)

On July 2, Citizens Bank of MA, Boston, MA, opened a branch located at 474-552 Washington Street, Boston, MA. (Internal Notice, 7/2/01)

On July 17, Connecticut Bancshares, Inc., Manchester, CT, received all remaining necessary regulatory approvals to acquire First Federal S , L Association of East Hartford, East Hartford, CT. As of June 30, 2000, Connecticut Bancshares, Inc., had total deposits of $940.4 million and ranked 13th among all commercial banking and thrift institutions in Connecticut. As of the same date, First Federal S , L Association of East Hartford had total deposits of $621.8 million and ranked 15th. (SNL Bank , Thrift Weekly, 7/23/01)

On July 12, New York Community Bancorp, Westbury, NY, and Richmond County Financial Corp, Staten Island, NY, received approval for their merger of equals from the Federal Deposit Insurance Corp (FDIC) and the New York State Banking Department.

On July 13, Richmond County Financial Corp said it will decrease its ownership in Pamrapo Bancorp, Inc. to less than 5 percent, according to documents filed with the Securities and Exchange Commission (SEC). The thrift filed an application with the Office of Thrift Supervision (OTS) in March, seeking approval to retain its existing 5.1 percent stake, and requesting authority to acquire up to 9.9 percent of Pamrapo’s outstanding shares.

Although that request was approved, Richmond County said in its most recent filing that it will divest sufficient shares of Pamrapo stock in connection with the regulatory application process for its merger of equals with New York Community Bancorp. The divestiture will occur before completion of the merger in the third quarter.

On June 27, shareholders of Commercial Bank of New York, New York, NY, approved the company’s sale to North Fork Bancorp, Inc., Melville, NY. The deal is expected to be completed in the fourth quarter. (SNL Bank , Thrift Weekly, 7/2; 7/16/01)

On July 19, American Financial Holdings, New Britain, CT, signed a definitive agreement to acquire American Bank of Connecticut, Waterbury, CT, in a combination of cash and stock initially valued at $153 million. The deal would double American Financial’s branch network to 34 and would increase its total assets on a pro forma basis to $2.8 billion.

As of June 30, 2000, American Financial Holdings had total deposits of $1.3 billion and ranked 11th among all commercial banking and thrift institutions in Connecticut. As of the same date, American Bank of Connecticut had total deposits of $585.5 million and ranked 17th. (SNL Bank , Thrift Weekly, 7/23/01)

On July 2, Bank of New York Co., Inc., New York, NY, completed its acquisition of the indenture trust business of Trust Company of Bank of Montreal, Montreal, Canada, a unit of Bank of Montreal, Montreal, Canada. Additionally, the bank announced that it had received Canadian regulatory approval to form BNY Trust Company of Canada, and that it was in the process of applying for provincial approvals. (SNL Bank , Thrift Weekly, 7/9/01)

On July 3, State Street Corp, Boston, MA, completed its acquisition of the portfolio accounting service business of DST Systems, Kansas City, MO. The deal gives State Street control of a system that automates mutual fund accounting and record-keeping. (SNL Bank , Thrift Weekly, 7/9/01)

On July 19, Camden National Corp, Camden, ME, acquired Acadia Trust, NA, a trust company, and Gouws Capital Manage-ment, Inc., an investment advisor, both of Portland, ME. (Actions by the Board, 6/30; Internal Notice, 6/30/01)

On June 27, Boston Private Financial Holdings, Boston, MA, signed a definitive agreement to acquire Borel Bank , Trust Co., San Mateo, CA, a private bank, in a $113.2 million deal.

On June 29, RINET Co., Boston, MA, an investment advisory unit of Boston Private Financial Holdings, agreed to acquire Kanon Bloch Carre, Boston, MA, an investment adviser and mutual-fund rating service. (SNL Bank , Thrift Weekly, 7/2/01)

On June 26, Woronoco Bancorp, Inc., Westfield, MA, signed a definitive agreement to acquire Keyes , Mattson Insurance Agency, Inc., West Springfield, MA. The acquired agency will merge with existing Woronoco sub Agan Insurance Agency, Westfield, MA. The transaction, subject to regulatory approval, is expected to be completed in the fall. (SNL Bank , Thrift Weekly, 7/2/01)

On June 8, the Office of the Comptroller of the Currency (OCC) announced a pilot program intended to address the competitive disparity that exists in states that have higher lending limits for state-chartered institutions than the federal limits available to national banks. National banks are generally allowed to lend no more than 15 percent of their capital on an unsecured basis to a single borrower. Many states have higher limits for the banks they charter.

The three-year pilot program will allow national banks with the highest supervisory ratings to lend up to the state limit -- but no more than 25 percent of capital -- to single borrowers for small business loans and for loans secured by a perfected first-lien security interest in 1-4 family real estate in an amount that does not exceed 80 percent of the property’s appraised value. The program is aimed primarily at community banks; due to the way it is structured, a bank with over $1 billion in assets would not be able to participate. (OCC News Release, 6/8/01)

On June 28, a group of federal regulators completed a study on host state loan-to-deposit ratios. The study, conducted jointly by the FDIC, the Federal Reserve Board of Governors (Fed), and the OCC, will be used to determine when banks are using deposits gathered in out-of-state branches to make loans in their home markets. That activity is prohibited by section 109 of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. Banking companies are considered to be in compliance with section 109 if their statewide loan-to-deposit ratios are at least one-half of the average ratio for that state. If the bank fails that test, regulators must then determine whether the bank is doing its part to meet the credit needs in the out-of-state market it occupies. If a bank fails both tests, it is deemed to be in violation of section 109, and is subject to regulatory sanctions.

According to the study, which uses data as of June 30, 2000, the ratios range from 56 to 123 percent. New York is tied for the fourth-highest ratio, with 108 percent. The ratios for the six New England states (those in the Fed’s First District) range from 81 (New Hampshire) to 97 percent (Maine). (Actions by the Board, 6/28; SNL Bank , Thrift Weekly, 7/2/01)

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.