Compass Sells Stake in Mayflower On May 29, Compass Bank for Savings, New Bedford, MA, a unit of Seacoast Financial Services Corp, New Bedford, MA, announced that it had sold all of its shares of Mayflower Co-operative Bank. At July 13, 2001, Seacoast owned 9.82% of Mayflower's common stock outstanding, making it the company's largest shareholder. As of June 30, 2001, Seacoast Financial Services Corp had total deposits of $2.1 billion and ranked ninth among all commercial banking and thrift institutions in Massachusetts. As of the same date, Mayflower Co-operative Bank had total deposits of $139.1 million and ranked 134th. (SNL Bank , Thrift Weekly, 6/3/02)

Branch Closings During June, Fleet National Bank, Providence, RI, closed 16 Massachusetts branches. On June 1, four branches were closed in Lynn, Natick, New Bedford, and Quincy. On June 8, four branches were closed in Allston, Beverly, Fall River, and Milford. On June 15, four branches were closed in Franklin, Malden, Stoughton, and West Springfield. On June 22, four branches were closed in Agawam, Medford, Norwood , and Watertown. (Internal Notice, 6/12; 6/13; 6/18/02)

Branch Openings On May 28, Fleet National Bank, Providence, RI, opened two branches in the Massachusetts towns of Beverly and Stoughton. In June, Fleet National Bank opened four Massachusetts branches. On June 3, a branch was opened in West Springfield. On June 10, three branches were opened in Franklin, Malden, and Milford. On June 11, Beverly Co-operative Bank, Beverly, MA, opened a branch located at 108 Cherry Hill Drive, Beverly, MA. (Internal Notice, 6/4; 6/12; 6/13; 6/18/02)

Holding Company Formation On June 6, South Coastal Holdings Mutual Holding Company, Inc., Rockland, MA, became a mutual bank holding company through the acquisition of South Coastal Bank, Rockland, MA. The Federal Reserve Bank of Boston (FRB Boston) approved the proposal on May 2. (Actions by the Board, 5/4; Internal Notice, 5/3; 6/14/02)

Merger Announcements On June 13, Citizens Financial Group, Providence, RI, a subsidiary of Royal Bank of Scotland Group, PLC, Edinburgh, Scotland, signed a definitive agreement to acquire Medford Bancorp Inc., for $283.6 million in cash. Medford Bancorp shareholders will receive $35 in cash for each share held. Upon completion, the deal will still leave Citizens as number three in Massachusetts in deposit market share behind FleetBoston Financial Corp, Boston, MA, and State Street Corp, Boston, MA, with an 8.65% share of deposits. As of June 30, 2001, Royal Bank of Scotland Group had total deposits of $23.5 billion and ranked second among all commercial banking and thrift institutions in New England. As of the same date, Medford Bancorp had total deposits of $1 million and ranked 27th. On May 31, Banknorth Group, Inc., Portland, ME, and its wholly-owned subsidiary Banknorth, National Association, Portland, ME, filed an acquisition statement and applications with the State of Connecticut Department of Banking for Banknorth Group, Inc. to acquire Bancorp Connecticut, Inc., Southington, CT, and its wholly-owned subsidiary Southington Savings Bank, Southington, CT, and for the subsequent merger of Southington Savings Bank with and into Banknorth, National Association. As of June 30, 2001, Banknorth Group had total deposits of $260.42 million and ranked 36th among all commercial banking and thrift institutions in Connecticut. As of the same date, Bancorp Connecticut had total deposits of $394.2 million and ranked 25th. (SNL Bank , Thrift Weekly, 6/17; State of CT Dept of Banking News, 5/31/02)

FRB Boston Approves Proposal On May 23, FRB Boston approved the proposal by Port Financial Corp., Brighton, MA, to increase its share ownership in Cambridge Bancorp, Cambridge, MA, up to 9.9% of the outstanding voting shares of Cambridge Bancorp. (Internal Notice, 5/24/02)

Bank of NY in Nonbanking Activity On June 3, Bank of New York Co., New York, NY, acquired Beacon Fiduciary Advisors, Chestnut Hill, MA, a private asset management firm. The seller manages about $700 million in assets for high-net-worth individuals in the Boston area and nationwide. On June 19, BNY ESI , Co., New York, NY, a unit of Bank of New York Co., Inc., New York, NY, acquired institutional trading firm Francis P. Maglio , Co. A member of the New York Stock Exchange, FPM , Co. is a direct-access brokerage firm for listed securities and will become part of Bank of New York's brokerage and clearing services division. (SNL Bank , Thrift Weekly, 6/10; 6/24/02)

FRB Boston Approves RBSG Nonbanking Activity On June 20, FRB Boston approved the proposal by Royal Bank of Scotland Group, PLC, Edinburgh, Scotland (RBSG), to acquire 100% of WorldPay Limited, which is located on the English Channel Island of Jersey and engages in the processing of online credit and debit card payment transactions conducted on the Internet. RBSG has been very focused on online payment activities this year. On April 30, the company made an indirect investment in Digital Signature Trust Company, Salt Lake City, UT (DSTC). DSTC acts as a certification authority and repository for certificates used to verify digital signatures that are used to conduct online financial transactions. (Internal Notice, 5/3; 6/21/02)

Fleet in Subsidiary Sales On June 10, Associated Computer Services Inc. completed its acquisition of consumer finance company AFSA Data Corp from FleetBoston Financial Corp, Boston, MA. The deal was announced on May 17. On June 20, FleetBoston Financial Corp, Boston, MA, signed a definitive agreement to work with the management of its investment banking unit, Robertson Stephens, toward a final buyout agreement. The management-led buyout team from Robertson Stephens is hoping to pay for the unit by forgoing approximately $100 million in deferred compensation owed by FleetBoston. The sale of Robertson Stephens could save the unit from liquidation, but about half of its employees could be laid off. In April, FleetBoston said it planned to shift its focus to its core businesses, a move that included a decision to sell various subsidiaries, including AFSA Data Corp and Robertson Stephens, to stop investing in Latin America, and to reduce its investment portfolio to $2.5 billion from $3.5 billion over the next two years. (NY Times, 4/17; SNL Bank , Thrift Weekly, 5/20; 6/17; 6/24/02)

Analysts Estimate Banks' Exposure to WorldCom On June 27, the New York Times reported that WorldCom owes its lenders $2.65 billion. Among American banks, lenders to WorldCom include FleetBoston Financial Corp, J. P. Morgan Chase , Co., Citigroup, Inc., and Mellon Financial Corp. According to research released by bank analysts June 26, none of the banks are thought to be owed much more than $100 million, with some owed substantially less. WorldCom's banks may still be willing to lend money, but they will probably require the loans to be secured by WorldCom assets, and may also prefer that any additional financing be part of a bankruptcy filing. (NY Times, 6/27/02)

Fed Amends Reg C On June 3, the Federal Reserve Board of Governors (Fed) amended Regulation C (Home Mortgage Disclosure), resetting the thresholds lenders must use to determine whether to report pricing information. Institutions will report the rate spread (between the annual percentage rate on a loan and the yield on comparable Treasury securities) if the spread equals or exceeds 3 percentage points for first-lien loans, and 5 percentage points for subordinate-lien loans. Institutions will also report the lien status of applications and originated loans. Finally, the amended regulation now requires lenders to ask applicants their ethnicity, race, and sex in connection with telephone applications, thus conforming the telephone application rule to the rule applicable to mail and Internet applications. (Fed Press Release, 6/21/02)

Regulators Amend Rule on Out-of-State Deposit Generation On June 5, the Federal Deposit Insurance Corporation (FDIC), Fed, and the Office of the Comptroller of the Currency (OCC) issued final regulations, effective October 1, amending their rules that currently prohibit interstate branches from being used primarily for deposit production. The Riegle-Neal Interstate Banking and Branching Efficiency Act prohibits any bank from establishing or acquiring a branch outside of its home state primarily for the purpose of deposit production. Section 106 of the Gramm-Leach-Bliley Act expands this prohibition to include any branch of a bank controlled by an out-of-state bank holding company. To conform their regulations to this statutory change, the agencies have amended their rules so that the prohibition against deposit production offices also applies to any bank or branch of a bank controlled by an out-of-state bank holding company. On June 24, a group of federal regulators completed a study on host state loan-to-deposit ratios. The study, conducted jointly by the FDIC, the 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 this year's study, which used data as of June 30, 2001, the statewide ratios range from 58 to 130 percent. The ratios for the six New England states (those in the Fed's First District) range from 77 (Rhode Island) to 92 percent (Maine), while New York has a ratio of 90 percent. In last year's study, which used data as of June 30, 2000, the ratios ranged from 56 to 123 percent. The ratios for the six New England states ranged from 81 (New Hampshire) to 97 percent (Maine), while New York had a ratio of 108 percent. (Actions by the Board, 6/28/01; FDIC Press Release, 6/5; 6/24/02; 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.