March 1, 1998
Vol. XXVII, No. 3

Merger Completions

On February 24, The Norwich Savings Society, Norwich, CT merged with People's Bank, Bridgeport, CT under the charter and title of People's Bank. As of June 30, 1997, People's Mutual Holdings, Bridgeport, CT, parent company of People's Bank, had total deposits of $5.6 billion and ranked second among all commercial banking and thrift organizations in Connecticut. As of the same date, Norwich Financial Corporation, parent company of Norwich Savings Society, Norwich, CT, had total deposits of $611.9 million and ranked 16th.

(American Bkr., 2/25; Internal Notice, 2/24/98)

Compass Bank for Savings, New Bedford, MA has entered into a definitive agreement to acquire Sandwich Bancorp, Sandwich, MA. Following this announcement, three additional banks have made competing bids to acquire Sandwich Bancorp: Cape Cod Bank & Trust, Hyannis, MA, Independent Bank Corporation, Rockland, MA, and FirstFed America Bancorp, Fall River, MA. As of June 30, 1997, The 1855 Bancorp, New Bedford, MA, parent company of Compass Bank for Savings, had total deposits of $925.5 million and ranked 12th among all commercial banking and thrift organizations in Massachusetts. As of the same date, Sandwich Bancorp, parent company of Sandwich Co-operative Bank, Sandwich, MA, had total deposits of $403.2 million and ranked 37th.

New England Community Bancorp, Windsor, CT has entered into a definitive agreement to acquire Olde Port Bank and Trust, Portsmouth, NH for $13.8 million in stock. Olde Port will operate as an independent subsidiary. The deal, which is expected to close by the end of the second quarter, will be accounted for as a pooling of interest. As of June 30, 1997, New England Community Bancorp, parent company of New England Bank and Trust Company, Windsor, CT, Equity Bank, Wethersfield, CT, and Community Savings Bank, Bristol, CT, had total deposits of $385.1 million and ranked 70th among all commercial banking and thrift organizations in New England. As of the same date, Olde Port Bank and Trust had total deposits of $36.2 million and ranked 393rd.

(American Bkr., 2/13, 2/25; Boston Globe, 2/4, 2/23, 2/25; N.Y. Times, 2/3; SNL Weekly BankFax, 2/9, 2/17, 2/23/98)

Shareholders of CFX Corporation, Keene, NH and Peoples Heritage Financial Group, Portland, ME have approved the proposed acquisition of CFX by Peoples Heritage. As of June 30, 1997, Peoples Heritage Financial Group, parent company of Peoples Heritage Savings Bank, Portland, ME, Bank of New Hampshire, Manchester, NH, and Family Bank, FSB, Haverhill, MA, had total deposits of $4.3 billion and ranked sixth among all commercial banking and thrift organizations in New England. As of the same date, CFX Corporation, parent company of CFX Bank, Keene, NH, Safety Fund National Bank, Fitchburg, MA, and Orange Savings Bank, Orange, MA, had total deposits of $1.3 billion and ranked 20th.

(SNL Weekly BankFax, 2/17/98)

On February 13, New Milford Bank & Trust Company, New Milford, CT changed its title to NMBT. As of June 30, 1997, NMBT Corporation, New Milford, CT, parent company of New Milford Bank & Trust, had total deposits of $282.9 million and ranked 33rd among all commercial banking and thrift organizations in Connecticut.

(Internal Notice, 2/24/98)

Fleet Financial Group, Boston, MA has announced that it will open a new line of business dedicated to small business banking services. Approximately 25 percent of Fleet's branches will offer these Business Solution Centers. The project involves traditional banking services and products, as well as a streamlined loan program, online access to accounts and business accounting software, phone access to small business specialists, a payroll and electronic tax-filing payment service, and a touch-tone phone payment system for taxes.

(American Bkr., 2/24; SNL Weekly BankFax, 2/23/98)

BankBoston Corporation, Boston, MA has closed the Private Equity Portfolio Fund to new investors. The fund, which has approximately $150 million under management, invests in funds managed by outside firms. The fund's 175 clients each invested at least $500,000, and cannot redeem shares of the fund for at least ten years.

(American Bkr., 2/23/98)

Fleet Financial Group, Boston, MA has completed its acquisition of Quick & Reilly Group, Inc., Palm Beach, FL, a discount retail brokerage firm, effective January 30. As of June 30, 1997, Fleet Financial Group had total deposits of $37.2 billion and ranked first among all commercial banking and thrift organizations in New England.

(SNL Weekly BankFax, 2/9/98)

Fleet Financial Group, Boston, MA has completed its acquisition of the consumer credit card business of Advanta Corporation, Spring House, PA. Fleet paid approximately $500 million above the asset value of the portfolio. Fleet will merge Advanta's credit card business with its own, creating the ninth-largest issuer of credit cards, with approximately $15 billion in receivables.

(Boston Globe, 2/24/98)

BankBoston Corporation, Boston, MA has completed its acquisition of Deutsche Bank Argentina S.A. for $255 million in cash. The transaction involves only Deutsche Bank Argentina's retail businesses, excluding corporate lending, pension fund, insurance, and investment banking businesses. The acquisition was first announced on September 29, 1997. As of June 30, 1997, BankBoston Corporation had total deposits of $32.5 billion and ranked second among all commercial banking and thrift organizations in New England.

(SNL Weekly BankFax, 2/2/98)

BankBoston Corporation, Boston, MA has announced the formation of U.S. Capital Markets, a new subsidiary combining BankBoston's high yield securities group, private finance, and asset securitization operations. The new subsidiary will provide a range of subordinated debt and structured finance options to non-investment-grade issuers.

(SNL Weekly BankFax, 2/9/98)

Revere Federal Savings & Loan Association, Revere, MA has announced plans to undertake a mutual holding company conversion. The reorganization will form a mutual holding company to be named Revere, MHC, Revere, MA and a mid-tier holding company to be called RFS Bancorp, Revere, MA. As of June 30, 1997, Revere Federal Savings & Loan had total deposits of $54.6 million and ranked 192nd among all commercial banking and thrift organizations in Massachusetts.

(SNL Weekly BankFax, 2/9/98)

South Shore Community Bank & Trust, Braintree, MA, a not-yet-operating bank, plans to hold an Initial Public Offering by March 1 to raise start-up funds. State regulations require Massachusetts chartered banks to raise $8 million in capital before they can commence business. The bank plans to target small businesses as customers and wants to raise approximately $12 million by selling 1.2 million shares at $10 per share.

(SNL Weekly BankFax, 2/9/98)

First Chicago NBD Corporation, Chicago, IL, BankBoston Corporation, Boston, MA, and State Street Corporation, Boston, MA are creating the nation's largest stock transfer services company, to be named Equiserve. Currently, BankBoston and State Street jointly operate Boston Equiserve, Canton, MA. Stock transfer, which is highly specialized and technology-dependent, includes maintaining shareholder records for publicly traded companies, distributing dividends, mailing and tabulating proxies, supporting mergers and acquisitions, and managing employee and direct stock-purchase plans. The banks will share ownership with the technology supplier DST Systems Inc., Kansas City, MO. The new company is scheduled to open in the second quarter, subject to regulatory approvals.

(American Bkr., 2/11; SNL Weekly BankFax, 2/17/98)

The Federal Deposit Insurance Corporation (FDIC) has revised its guidelines for repurchase agreements ("repos"). Repos are contracts to sell and subsequently repurchase securities at a specified date and price. Banks use repos to raise short- and medium-term funds. The FDIC made several additions to the terms that should be spelled out in repo contracts. For example, agreements should specify what types of collateral are acceptable, the rights and obligations of each party in case of default, and required disclosures for transactions in which the seller retains custody of the purchased securities.

(American Bkr., 2/23/98)

The Federal Deposit Insurance Corporation (FDIC) has issued a new rule for state-chartered banks seeking to pay interest on demand deposits. On April 1, when the Federal Reserve Board of Governors begins exempting banks that it supervises from rules banning interest on checking and other demand accounts, banks regulated by the FDIC will immediately get the same benefits. The FDIC oversees insured branches of foreign banks and state banks that do not belong to the Federal Reserve System.

(American Bkr., 2/20/98)

NOTE: Items in this publication focus on developments affecting banking structure in New England. The items are condensations of articles from a selected group of daily newspapers and press releases of federal and state financial regulatory agencies. Their reproduction does not imply our endorsement of the accuracy, opinions or policies reflected in the subject matter. BankNotes is available without charge. To be added to the electronic mailing list or to the paper distribution list, send an e-mail message to Boston.BankNotes@bos.frb.org. If unable to do so, call (617) 973-2860. To access BankNotes on the Web, check the Boston Fed's web site at www.bos.frb.org/economic/banknote/index.htm. For updated banking structure information, check the Boston Fed's web site at www.bos.frb.org/bankinfo/struct/index.htm.