Vol. XXX No. 9

Bank Notes

September 2001 September 2001

September 1, 2001

Merger and Acquisition Completions On August 1, New York Community Bancorp, Westbury, NY (NYCB), and Richmond County Financial Corp, Staten Island, NY (Richmond County), completed their merger of equals. Under terms of the deal, Richmond County shareholders will receive 1.02 shares of NYCB for each Richmond County share held. NYCB is the parent company of New York Community Bank, Flushing, NY.

NYCB was formed through the December 1, 2000, merger between Queens County Bancorp, Inc., Flushing, NY (Queens County), and Haven Bancorp, Inc., Westbury, NY (Haven). On December 22, 2000, Queens County Savings Bank, Flushing, NY, then a subsidiary of Queens County, and CFS Bank, Westbury, NY, then a subsidiary of Haven, merged under the title of New York Community Bank.

On August 8, Hudson United Bank, Mahwah, NJ, purchased only the deposits (and not the office space), from First International Bank, Hartford, CT. As of June 30, 2000, Hudson United Bancorp, Mahwah, NJ, parent company of Hudson United Bank, had total deposits of $1.5 billion and ranked eighth among all commercial banking and thrift institutions in Connecticut. As of the same date, First International Bancorp, Inc., Hartford, CT, had total deposits of $273.3 million and ranked 31st.

On September 1, Coastal Bank, Portland, ME, merged with Norway Savings Bank, Norway, ME, under the charter and title of Norway Savings Bank. As of June 30, 2000, First Coastal Corp, Westbrook, ME, parent company of Coastal Bank, had total deposits of $133 million and ranked 26th among all commercial banking and thrift institutions in Maine. As of the same date, Norway Bancorp, MHC, Norway, ME, parent company of Norway Savings Bank, had total deposits of $279.1 million and ranked tenth.

On September 1, First Federal S,L Association of East Hartford, East Hartford, CT, merged with The Savings Bank of Manchester, Manchester, CT, under the charter and title of The Savings Bank of Manchester.

As of June 30, 2000, First Federal S,L Association of East Hartford had total deposits of $621.8 million and ranked 15th among all commercial banking and thrift institutions in Connecticut. As of the same date, Connecticut Bankshares, Manchester, CT, parent company of The Savings Bank of Manchester, had total deposits of $940.4 million and ranked 13th. (Internal Notice, 8/8; 9/4/01; SNL Bank and Thrift Weekly, 12/4/00; 8/6/01; State of CT Dept. of Banking News Bulletin, 6/1/01)

On July 27, Citizens Bank of Massachusetts, Boston, MA, closed a branch located at 105 Broadway, Somerville, MA. On August 17, the Savings Institute, Willimantic, CT, closed a branch located at 66 Route 32, Franklin, CT. (Internal Notice, 7/31; 8/7; 8/29)

On August 3, Bank of New Hampshire, NA, Manchester, NH, opened 3 branches in New Hampshire. The branches are located in Allenstown, Greenville, and Hinsdale.

On August 14, Fleet National Bank, Providence, RI, opened a branch located at 100 Cambridgeside Place, Cambridge, MA.

On August 13, Connecticut River Bank, NA, Springfield, VT, opened a branch located at 37 Monadnock Highway, North Swanzey, NH. (Internal Notice, 8/10; 8/21; 8/24/01)

On August 7, the Connecticut Department of Banking (CT DOB) approved the proposal of First International Bank, Hartford, Connecticut, to convert from a Connecticut bank authorized to accept retail deposits to an uninsured bank. The CT DOB issued, on May 31, a notice of intent not to disapprove the acquisition by United Parcel Service, Inc., of 100 percent of the voting securities of First International Bancorp, Inc., Hartford, CT, and, indirectly, of its subsidiary, First International Bank.

On August 8, First International Bank, Hartford, CT, converted from a state chartered depository to a state chartered, non-depository, uninsured bank. (Internal Notice, 8/8; State of CT Dept. of Banking News Bulletin, 6/1; 8/10)

On July 17, FleetBoston Financial Corp, Boston, MA, sold $171 million of Fleet National Bank Government National Mortgage Association (GNMA) buyout loans to an undisclosed purchaser.

On August 21, Capital Crossing Bank, Boston, MA, acquired $301 million in loans from the U.S. Small Business Administration. (SNL Bank , Thrift Weekly, 7/30; 8/27/01)

On August 6, the Federal Reserve Bank of Boston (FRB Boston) approved the proposal of Danvers Bancorp, Inc., Danvers, MA, to acquire Revere, MHC, Revere, MA, and its subsidiary, Revere Federal Savings Bank, Revere, MA.

As of June 30, 2000, Danvers Bancorp, Inc., had total deposits of $303.9 million and ranked 59th among all commercial banking and thrift institutions in Massachusetts. As of the same date, Revere, MHC had total deposits of $83.2 million and ranked 162nd. (Actions by the Board, 8/11/01)

On August 20, the Connecticut Department of Banking approved the merger of Cargill Bank, Putnam, CT, with and into Park West Bank and Trust Company, West Springfield, MA. The resulting entity will be known as Westbank. Cargill and Park West are subsidiaries of Westbank Corporation, West Springfield, MA. (State of CT Dept. of Banking News Bulletin, 8/24/01)

On August 9, shareholders of First Coastal Corp, Portland, ME, approved the sale of the thrift to Norway Savings Bank, Norway, ME. Under the terms of the deal, Norway Savings will exchange $21 in cash for each share of First Coastal held. (SNL Bank , Thrift Weekly, 8/13/01)

On August 1, Bank of New York Co., Inc., New York, NY, acquired privately held investment advisory firm Greenwich Advisory Associates, Inc., Greenwich, CT. Greenwich Advisory provides customized planning, investment management, and supervisory services primarily to individuals, trusts, foundations, and charitable organizations. The firm has had a longstanding relationship with Putnam Trust, the division of Bank of New York that will service Greenwich Advisory’s accounts. (SNL Bank , Thrift Weekly, 8/6/01)

Mellon Acquires Investment Manager

On July 31, Mellon Financial Corp, Pittsburgh, PA, acquired investment manager Standish, Ayer , Wood, Boston, MA. The company will become part of Mellon’s global investment management division and will be renamed Standish Mellon Asset Management. Standish has more than $41 billion in assets under management, and the acquisition boosts Mellon’s total assets under management to more than $585 billion. (SNL Bank , Thrift Weekly, 8/6/01)

On August 2, Eastern Bank Corp, Boston, MA, acquired commercial mortgage and real estate investment banking firm Fantini , Gorga, Inc., Boston, MA. The bank said it would merge the acquired firm into its own commercial mortgage operation. The combined unit will be named Fantini , Gorga/iCap Realty Advisors. (SNL Bank , Thrift Weekly, 8/6/01)

On July 24, the Securities and Exchange Commission (SEC) agreed to extend the comment period and delay the deadline for compliance with its interim final rules on broker/dealer exemptions for banks and thrifts, following complaints from banks and banking regulators. In the July 24 Federal Register, the SEC said it would not require compliance with its interim final rules until May 12, 2002, and would accept public comments on the rules until Sept. 4, 2001. In the original rules, issued May 11, the SEC had set much earlier deadlines. On June 29, a group of banking regulators - including the Federal Reserve Board of Governors (Board), the Federal Deposit Insurance Corp (FDIC), and the Office of the Comptroller of the Currency (OCC) - sent a letter to the SEC, criticizing the proposed regulations and asking for reconsideration of the date and form of the implementation.

The Gramm-Leach-Bliley Act (GLBA) repealed a full exception for banks to engage in securities activities. However, it specifically allowed banks and thrifts to perform some activities, including trust, custody, and other fiduciary services, that are otherwise restricted to registered broker/dealers - essentially exempting banks and thrifts from the definitions of "broker" and "dealer" when engaged in those services.

The SEC in the interim rules addressed how those activities would be regulated when conducted by depository institutions. The Fed, OCC, and FDIC argued that the SEC’s proposed rules were unfairly restrictive, making the regulation costly and unwieldy and effectively preventing banks from engaging in activities specifically allowed by Congress in the GLB exemptions. Apparently yielding to the criticism, the SEC has now backed off its original deadlines and will revise the interim final rules after additional public commentary. (SNL Bank , Thrift Weekly, 7/30/01)

Fed Adopts Rule for Financial Subsidiaries of Member Banks On August 13, the Federal Reserve adopted a final rule implementing the financial subsidiary provisions of the GLBA for state member banks. The GLBA of 1999 removed prohibitions barring cross-ownership of banks, securities firms, and insurance companies and allowed qualifying banks to "control or have an interest in" a financial subsidiary "which may conduct certain financial activities that are not permissible for the parent bank to conduct directly." Such activities include "general insurance agency activities in any location and travel agency activities," as well as "underwriting, dealing in and making a market in all types of securities."

In March, the Fed established an interim rule that "set forth the criteria that a state member bank must follow to establish a financial subsidiary; and the procedures and restrictions that would apply if a state member bank or any of its depository institution affiliates ceased to continue to meet the requirements of the rule." The Fed said the final rule is "substantially similar" to the interim rule. (SNL Bank , Thrift Weekly, 8/20/01)

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.