Chittenden Corp. to Acquire Granite State Bankshares

On November 8, 2002, Chittenden Corp, Burlington, VT, announced it would acquire Granite State Bankshares, Keene, NH, in a cash and stock deal valued at $247 million. While Chittenden plans to have Granite Bank operate as a stand-alone unit under its own name, the company will add Granite's 19 branches to its network of subsidiaries, strengthening the company's position in communities close to the Massachusetts border. In a news release, Chittenden CEO Paul Perrault said the transaction "is an excellent bridge between our existing Vermont and New Hampshire operations, while significantly strengthening our presence in a variety of markets." The deal is subject to regulatory and shareholder approval, and Chittenden expects to complete the transaction in the second quarter of 2003.

As of June 30, 2001, Chittenden Corp had total deposits of $236.5 million and ranked 14th among all commercial banking and thrift institutions in New Hampshire. As of the same date, Granite State Bankshares had total deposits of $701.6 million and ranked 5th. (SNL Bank , Thrift Weekly, 11/11/02; American Banker, 11/11/02)

Branch Openings

Fleet National Bank opened its Mariano Bishop Boulevard branch in Fall River, MA, on August 23, and its Saint James Avenue branch in Springfield, MA, on September 16.

Effective September 30, Naugatuck Savings Bank, Naugatuck, CT, opened a branch located at 75 Tremont Street, Ansonia, CT.

During September and October, Citizens Bank of Massachusetts, Boston, MA, opened 19 Stop , Shop branches. The branches were located in Abington, Worcester (3), Westborough, Danvers, Sturbridge, Brockton, East Weymouth, Somerset, East Springfield, Revere, North Attleboro, Kingston, Dorchester, Raynham, Swampscott, and Framingham (2).

On September 30, Hudson Savings Bank, Hudson, MA, opened its Main Street branch in Clinton, MA.

Centrix Bank and Trust, Bedford, NH, opened a branch located at 41 Hooksett Road, Manchester, NH, on October 2.

Cape Cod Bank , Trust Company, Hyannis, MA, opened a Stop , Shop branch located at 516 Route 134, South Dennis, MA, on October 8.

On November 12, Danvers Savings Bank opened a branch located at 400 West Cummings Park, Worburn, MA.

Also on November 12, Chicopee Savings Bank opened a branch located at 477 Center Street, Ludlow, MA. (Internal Notice, 10/30/02, 11/6/02, 11/13/02, 11/14/02; CT DOB, 11/1/02; NH DOB, 10/31/02)

Bank Address Changes

The Bank of New Canaan, New Canaan, CT, relocated its main office from 156 Cherry Street to 208/212 Elm Street, New Canaan, CT, on October 29.

Effective November 18, People's Bank, Bridgeport, CT, relocated its branch from 81 Fairfield Road to 2075 Hillside Road, Storrs, CT. (CT DOB, 11/1/02, 11/15/02)

New Bank and Trust Companies

On October 7, Boston Common Trust Company, Bedford, MA, a state chartered nondepository institution, opened for business.

Connecticut River Community Bank, Wethersfield, CT, opened for business November 18, as a state bank and trust company. (Internal Notice, 11/18/02, 11/19/02)

Shareholders Approve Mergers

American Financial Holdings, New Britain, CT, announced November 19, that its shareholders have approved the company's sale to Banknorth Group Inc, Portland, ME. On November 21, Warren Bancorp Inc, Peabody, MA, announced that its shareholders had also approved that company's pending sale to Banknorth Group. Both deals were originally announced in August 2002, and are expected to be completed by the beginning of 2003. (SNL Bank , Thrift Weekly, 11/25/02)

Branch Acquisition

Century Bancorp Inc, Medford, MA, announced October 28, 2002, that it will acquire a branch in Chestnut Hill, MA, and most of the retail deposits of a second branch in downtown Boston from Capital Crossing Bank, Boston, MA. Century's CFO, Paul Cusick Jr. said the deal "fits nicely into the territories we've entered, and Capital Crossing's customer base matches the type we serve already." Century opened two Chestnut Hill branches in 2001 and a de novo branch in Boston in April 2002. The deal, which is subject to regulatory approval, is expected to close in the first quarter of 2003.

As of June 30, 2001, Cenutry Bancorp had total deposits of $786.7 million and ranked 24th among all commercial banking and thrift institutions in Massachusetts. As of the same date, Capital Crossing had total deposits of $446.6 million and ranked 48th. (SNL Bank , Thrift Weekly, 11/4/02; American Banker, 10/31/02)

Northeast to Expand in Portland

On October 31, 2002, Northeast Bancorp, Auburn, ME, revealed in a filing with the Securities and Exchange Commission, that it is expanding into the Portland, ME, market by leasing a "prime location" in the city's downtown area. Northeast President and CEO James Delamater said the company is "very excited about our expansion into the greater Portland market area because we believe that this move will allow us to better serve our existing clients within this region and to attract new business as a result of our high level of product and service diversity."

As of June 30, 2001, Northeast Bancorp had total deposits of $274.3 million and ranked 15th among all commercial banking and thrift institutions in Maine. (SNL Bank , Thrift Weekly, 11/4/02)

State Street, Deutsche Bank Reach Deal

State Street Corporation, Boston, MA, announced November 5, that it will acquire significant parts of Deutsche Bank's, Frankfurt, Germany, global securities services business. The deal comes after a summer filled with rumors about a sale and almost two months after State Street and Deutsche Bank disclosed they had entered into exclusive negotiations involving the securities business. The agreement calls for State Street to pay up to $1.5 billion in cash or cash and stock.

Upon completion of the deal, State Street will become the world's largest asset custodian. The company will combine its current holdings of $5.7 trillion of assets under custody with $2.2 trillion from Deutsche Bank, surpassing Bank of New York and J.P. Morgan Chase , Co. In addition to offices in New York and Nashville, State Street will acquire offices in London, Frankfurt, Dublin, Edinburgh, and Singapore. This deal greatly expands State Street's presence around the world, especially in Europe, which CEO David Spina has called the company's fastest growing region. The transaction also includes a number of Deutsche Bank's other businesses, including fund administration, securities lending, benefits payments, and the bank's domestic custody and clearing services in the United States and United Kingdom.

Both parties expect the deal to close within four months, pending regulatory approval. State Street has indicated that it will finance a majority of the purchase with existing resources. In August, it announced plans to sell its corporate trust operations to U.S. Bancorp, Minneapolis, MN, for $725 million. In another sale, State Street announced November 7, that it has agreed to sell selected portfolios from its trade finance business to HSBC Holdings PLC, London, England, for $7.8 million. The HSBC deal includes $590 million of trade finance facilities in London, Hong Kong, Boston, and Los Angeles. (SNL Bank , Thrift Weekly, 11/11/02; American Banker, 11/6/02, 11/8/02)

Fed Issues New Regulations

On October 31, the Federal Reserve Board issued a final version of Regulation W and a final rule revising its discount window program. Regulation W is a comprehensive rule governing transactions between banks and their affiliates, which combines numerous Fed statements on sections of 23A and 23B of the Federal Reserve Act with new requirements from the Gramm-Leach-Bliley Act. The Fed stated that the purpose of the regulation, which was originally proposed in May 2001, is to "limit a bank's risk of loss in the transactions with affiliates and to limit a bank's ability to transfer to its affiliates the benefits arising from its access to the Federal safety net." The regulation will become effective on April 1, 2003.

Stemming from a May 2002 proposal, the Fed amended Regulation A to create new discount window rules establishing primary and secondary discount window credit. The primary credit window replaces adjustment credit and will provide short-term sources of liquidity to qualified institutions at a rate above the target federal funds rate. Fed staff argue that even though the cost of such credit would increase, the stigma associated with discount window use, which grew out of a requirement that banks prove they could not get credit on the open market, will disappear and more institutions will make use of the available credit. Secondary credit will be available to institutions that do not qualify for primary credit at a rate initially set 50 basis points above the primary credit rate. There were no substantial changes to the Board's seasonal credit program. The amendments to Regulation A will take effect on January 9, 2003. (SNL Bank , Thrift Weekly, 11/4/02; American Banker, 11/1/02)

Banks Say Lending Slumping with Demand

According to lending officials polled in the most recent survey released by the Federal Reserve Board on November 12, most bankers blame the decrease in commercial loan volume on a lack of demand. Nearly 75% of the respondents indicated "reduced funding needs of creditworthy borrowers" as the most important factor for the decline in commercial and industrial loans. The bankers did admit that deteriorating credit quality and tightened lending standards have reduced the number of companies deemed to be creditworthy. Most of the respondents said they had kept loan standards steady, but 20% did indicate they had made it somewhat harder for companies to qualify for loans.

Consistent with recent patterns, mortgage lending showed a positive trend. Fifty percent of respondents reported an increase in demand for mortgage loans, while 40% reported steady demand. Many borrowers are using mortgage refinancing to take cash out of their homes, and the responding bankers said that most borrowers are using the money to pay off higher-rate debt. (SNL Bank , Thrift Weekly, 11/18/02; American Banker, 11/13/02)

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.