Banknorth Group Continues Streak Of Acquisitions Banknorth Group, Portland, ME, continues to show why it is New England's fastest growing bank. The month of August brought news on three deals directly in line with the bank's goal of accumulating $30 billion in assets by 2005. The company's strategy is to find markets where it can become the largest or second largest bank and then buy as many local entities as necessary.

On August 8, 2002, Banknorth Group announced that it has agreed to acquire Warren Bancorp Inc, Peabody, MA, for $122.6 million in cash and stock. The deal will be Banknorth's fourth acquisition in Massachusetts in the last year. The bank previously completed purchases of Andover Bancorp and Metrowest Bank in November 2001 and Ipswich Bancshares in July 2002. Banknorth Massachusetts Chief Executive Chris Bramley indicated that the six branches to be acquired from Warren Bancorp will complement the bank's other deals in the Commonwealth, saying, "we get good market extension in the North Shore, which kind of fills in a couple of our other deals." Company officials anticipate that the deal will be completed by yearend.

As of June 30, 2001, Banknorth Group had total deposits of $3.1 billion and ranked sixth among all commercial banking and thrift institutions in Massachusetts. As of the same date, Warren Bancorp had total deposits of $393.2 million and ranked 51st.

In a Form 8-K filed with the Securities and Exchange Commission on August 15, 2002, Bancorp Connecticut Inc, Southington, CT, stated that its shareholders approved the company's sale to Banknorth Group, Portland, ME. The Office of the Comptroller of the Currency approved the sale on July 15, while the Connecticut Department of Banking granted approval on July 25.

On August 22, Banknorth Group announced it had entered into a definitive agreement to acquire American Financial Holdings, New Britain, CT, in a cash and stock transaction valued at $709 million. Banknorth Group will acquire all the branches of American Savings Bank, a unit of American Financial, which doubled its number of branches to 34 by purchasing American Bank of Connecticut in January 2002. William Ryan, Banknorth Group's chairman and CEO, commented on the deal, saying, "American Financial has the kind of deep community banking roots that we seek in our acquisitions." The deal, which is subject to regulatory and shareholder approval, is expected to close in the first quarter of 2003.

As of June 30, 2001, Banknorth Group had total deposits of $260.4 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, and American Financial had total deposits of $1.2 billion and ranked 11th.

Upon completion of the deals announced this year, Banknorth Group will rank as one of the top five holders of deposits in Maine, Massachusetts, Connecticut, New Hampshire, and Vermont. While discussing the American Financial acquisition, Ryan indicated that Banknorth Group is not done expanding; however, the bank will wait until these deals are complete before announcing any new acquisitions. He said, "our work is not over in Connecticut, and our plans are to continue to expand in Connecticut and Massachusetts, although I think it's unlikely that we'll do anything else this year." (SNL Bank , Thrift Weekly, 8/12/02, 8/19/02, 8/26/02; Boston Globe, 8/9/02, 8/16/02, 8/23/02; American Banker, 8/9/02)

Branch Openings Cape Cod Bank and Trust Company, Hyannis, MA, opened two branches in July 2002. On July 11, the bank opened a Stop , Shop branch located at 3848 Falmouth Road, Marston Mills, MA. On July 15, the bank opened a branch located at 350 Front Street, Marison, MA.

Effective July 31, The North American Bank and Trust Company, Waterbury, CT, opened a branch located at 1160 Silas Deane Highway in Westerfield, CT.

On August 12, Weymouth Co-operative Bank, Weymouth, MA, opened a branch located at 83 Summer Street, Kingston, MA.

Effective August 19, Southern New Hampshire Bank and Trust Company, Salem, NH, opened a branch located at 1589 Elm Street, Manchester, NH.

People's Bank, Bridgeport, CT, opened two branches on August 22. A limited service branch was opened at 4531 North Main Street, Bridgeport, CT, and a full service branch was opened at 81 Fairfield Road, Storrs, CT.

Mt. Washington Co-operative Bank, South Boston, MA, opened a branch located at 501 Southampton Street, South Boston, MA, effective opening of business August 29, 2002. (Internal Notice, 8/26/02, 8/29/02; State of CT Dept of Banking News, 8/23/02)

Branch Closings At the close of business July 26, Fleet National Bank, Providence, RI, closed nine branches. Eight branches were closed in the New Jersey towns of Hazlet, Edgewater Park, Wall Township, Milleville, Browns Mills, Linden, Kearny, and Phillipsburg. The ninth branch was located in Bethlehem, PA. (Internal Notice, 8/5/02)

Application Approved On July 24, 2002, the Massachusetts Division of Banks granted permission to Randolph Savings Bank, Randolph, MA, to establish a mutual savings bank, Randolph Interim Mutual Bank, and a stock savings bank in conjunction with Randolph Savings Bank's multi-step reorganization into a mutual holding company.

As of June 30, 2001, Randolph Savings Bank had total deposits of $242.2 million and ranked 83rd among all commercial banking and thrift institutions in Massachusetts. (Massachusetts Division of Banks Activity Report, 8/6/02)

Boston Bank Of Commerce to Acquire Los Angeles Thrift On July 22, 2002, Boston Bank of Commerce (BBOC), Boston, MA, signed a definitive agreement to acquire Family Savings Bank, Los Angeles, CA. Family Savings Bank previously rejected a sale to BBOC in favor of a deal with FBOP Corp, Oak Park, IL, however, African-American-owned BBOC submitted a second proposal after a number of politicians and community groups asked minority-owned Family Savings to reconsider the sale to FBOP Corp. The deal is expected to close early in 2003. Financial terms were not disclosed.

The deal would create the largest African-American-owned bank in the country, putting BBOC just ahead of Carver Federal Savings Bank, New York, NY. Buying Family Savings will move BBOC closer to its goal of becoming a nationwide full-service provider of financial services to urban markets across the country. In May 2001, BBOC purchased Founder National Bank of Commerce, Los Angeles, CA, and in 1999, BBOC acquired two Miami branches of People's National Bank of Commerce, Miami, FL. BBOC's Chief Executive Kevin Cohee has expressed an interest in acquiring more banks in markets such as Atlanta, Chicago, and Detroit, as well as acquiring insurance and investment companies owned by African-Americans. (Boston Globe, 7/31/02; American Banker, 8/1/02; SNL Bank , Thrift Weekly, 8/5/02)

Woronoco to Sell Three Branches Woronoco Bancorp Inc, Westfield, MA, announced August 27, 2002, that it has entered agreements to sell three branches located in Big Y World Class Supermarkets. The West Springfield and Amherst branches will be sold to Southbridge Savings Bank, Southbridge, MA, and the Springfield branch will be sold to BPABank, Newark, NJ. The deals include the assumption of deposits and transfer of physical assets, however, there will be no transfer of loans. Pending regulatory approval, Woronoco expects the transactions to be completed by the first quarter of 2003.

As of June 30, 2001, Woronoco Bancorp had total deposits of $336.8 million and ranked 61st among all commercial banking and thrift institutions in Massachusetts. As of the same date, Southbridge Savings Bank had total deposits of $207.8 million and ranked 97th. (SNL Bank , Thrift Daily, 8/28/02; Woronoco Press Release, 8/27/02)

State Street to Sell Corporate Trust Unit State Street Corp, Boston, MA, announced August 13, that it has agreed to sell its corporate trust unit to US Bancorp, Minneapolis, MN, for up to $725 million in cash. US Bancorp would pay $650 million at closing and, based on customer retention, as much as $75 million after one year.

The importance of State Street's corporate trust business has decreased over the past few years; it contributes only 3% of the bank's total revenue. The sale is expected to allow State Street to focus on its core businesses of investment services and investment management for global investors, as well as to pursue acquisitions in the custody and asset management industry. State Street CEO David Spina commented that the deal would enable the bank "to further match our resources to opportunities where we can best leverage our global presence and competitive advantage."

The deal, which is still subject to regulatory approval, is expected to close by the end of the fourth quarter. (SNL Bank , Thrift Weekly, 8/19/02; Boston Globe, 8/14/02; American Banker, 8/14/02)

Webster Financial Acquires Credit Corp. Webster Financial Corp, Waterbury, CT, said that it had completed its purchase of IBJ Whitehall Business Credit Corp, New York, NY, a unit of The Industrial Bank of Japan Trust Co, New York, NY, on August 5, 2002. The business will operate under the name Whitehall Business Credit Corp, as a subsidiary of Webster Bank. With the closure of the deal, which was announced May 20, Webster obtained approximately $500 million of outstanding loans and letters of credit, a significant portion of which are to customers in the Northeast.

As of June 30, 2001, Webster Financial had total deposits of $6.9 billion and ranked third among all commercial banking and thrift institutions in Connecticut. (SNL Bank , Thrift Weekly, 8/12/02)

OTS Announces Thrift Earnings The Office of Thrift Supervision (OTS) announced August 26, that earnings for the nation's thrift industry totaled $2.86 billion in the second quarter of 2002. The figure is a 14% increase over the second quarter of 2001, but a 6% decrease from the first quarter of 2002. OTS Director James Gilleran said in a news release, "although off from recent record-setting quarters.the industry is enjoying robust levels of earnings and profitability, attributable to a favorable interest rate environment." The industry's net interest margin decreased slightly to 311 basis points in the second quarter from 318 in the previous quarter, however it is still well above the 282 basis point spread from the second quarter of 2001.

The total number of thrifts in operation declined by 12 to 995 during the period, which included two conversions to the thrift charter. Total thrift assets declined for the first time since 1996. The amount fell to $964 billion from $998 billion in the first quarter, mainly resulting from a charter conversion by Charter One Financial, Cleveland, OH. (OTS Press Release 02-35, 8/26/02; SNL Bank , Thrift Daily, 8/28/02)

Banks Tightening Loan Standards The August 2002 Senior Loan Officer Survey from the Federal Reserve indicated that banks continue to tighten standards and terms for commercial and industrial (C,I) loans. Of the respondents, 23.2% tightened credit standards for C,I loans or credit lines to large and middle-market firms, while 75% indicated no change, and 1.8% eased. Standards for commercial real estate loans showed a similar pattern, with 25.5% of respondents tightening standards, 0% easing, and 74.5% reporting no change. The survey also indicated that 80% of the respondents reported less than 1% of their C,I loans were made to companies who have materially changed their prior-period financial statements or whose accounting practices are under investigation. (SNL Bank , Thrift Weekly, 8/26/02; Federal Reserve Senior Loan Officer Survey, 8/19/02)

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.