June 1, 2000
Vol. XXIX, No. 6

FleetBoston Merger Completions

On May 1, Fleet Bank-NH, Manchester, NH, merged with Fleet National Bank, Providence, RI, under the charter and title of Fleet National Bank. As of June 30, 1999, Fleet Financial Group, Boston, MA, had total deposits of $42.2 billion and ranked first among all commercial banking and thrift institutions in New England. As of the same date, BankBoston Corporation, Boston, MA, had total deposits of $34.6 billion and ranked second.

The transaction is a component of FleetBoston Financial Corporation’s integration of subsidiaries.
(Internal Notice, 5/2/00)

On April 24, Peoples Heritage Financial Group, Portland, ME, received approval from the Federal Reserve Board of Governors (Fed) to acquire Banknorth Group Inc., Burlington, VT. Peoples Heritage agreed to divest a Wolfeboro, NH, branch with approximately $28.1 million in deposits, in order to ease competitive concerns in the Wolfeboro banking market.

The Fed noted that the combined institution will control 33.5 percent of market deposits in the Portsmouth-Dover-Rochester, NH, market, and that the HHI would increase 229 points to 1967. However, the regulator determined that the “number of competitors, the structure of the market, and the attractiveness of the...market mitigate potential anticompetitive effects of the transaction.” The transaction is expected to be completed by May 9. As of June 30, 1999, Peoples Heritage Financial Group, Portland, ME, had total deposits of $8.4 billion and ranked fifth among all commercial banking and thrift institutions in New England. As of the same date, Banknorth Group Inc., Burlington, VT, had total deposits of $2.6 billion and ranked 13th.

On May 10, Peoples Heritage Financial Group, Portland, ME, completed its acquisition of Banknorth Group Inc., Burlington, VT. The combined entity will be known as Banknorth Group and will retain the “BKNG” stock symbol. Peoples Heritage Financial Group is the parent company of commercial banks Bank of New Hampshire, Manchester, NH, and Glastonbury Bank & Trust Company, Glastonbury, CT, and thrifts Peoples Heritage Savings Bank, Portland, ME, and Family Bank, FSB, Haverhill, MA. Banknorth Group Inc. is the parent company of commercial banks The Howard Bank, National Association, Burlington, VT; Franklin-Lamoille Bank, St. Albans, VT; Granite Savings Bank and Trust Company, Barre, VT; Farmington National Bank, Farmington, NH; Evergreen Bank, National Association, Glens Falls, NY; First Vermont Bank and Trust Company, Brattleboro, VT; and First Massachusetts Bank, National Association, Worcester, MA.

On May 13, Family Bank, FSB, Haverhill, MA, merged into First Massachusetts Bank, National Association, Worcester, MA, under the charter and title of First Massachusetts Bank, National Association. The main office will be in Worcester, MA.

On May 13, Glastonbury Bank & Trust Company, Glastonbury, CT, merged into First Massachusetts Bank, National Association, Worcester, MA, under the charter and title of First Massachusetts Bank, National Association.

On May 13, Farmington National Bank, Farmington, NH, merged into Bank of New Hampshire, Manchester, NH, under the charter of Farmington National Bank and the title of Bank of New Hampshire, National Association.
(Internal Notice, 5/15; SNL Weekly BankFax, 5/1; 5/15/00)

On April 28, Dime Bancorp, Inc., New York, NY, and Hudson United Bancorp, Mahwah, NJ, announced separately their mutual agreement to terminate their merger deal first announced in September 1999. Dime’s release called the unsolicited bid of North Fork Bancorporation, Inc., Melville, NY, for Dime, an “initial triggering event,” without specifying the reasons for terminating the merger agreement. Dime agreed to pay Hudson between $50 million and $92 million if Dime is acquired before October 28, 2001; a lesser amount if Dime sells a significant subsidiary before that date; and $15 million if neither of the two previous conditions is met. As of June 30, 1999, Hudson United Bancorp, Inc. had total deposits of $1.6 billion and ranked eighth among all commercial banking and thrift institutions in Connecticut. As of the same date, North Fork Bancorporation, Inc., Melville, NY, had total deposits of $363.3 million and ranked 24th.

On May 15, North Fork Bancorporation, Inc., Melville, NY, released FleetBoston Financial Corporation, Boston, MA, from a standstill agreement that prevented FleetBoston from bidding for Dime Bancorp, Inc., New York, NY. FleetBoston had agreed to invest $250 million in North Fork to help finance North Fork’s bid for Dime. As part of the original pact, FleetBoston agreed not to interfere with North Fork’s takeover attempt.

On May 15, the Department of Justice (DOJ) served a civil investigative demand (subpoena) to both North Fork Bancorporation, Inc., Melville, NY, and Dime Bancorp, Inc., New York, NY, asking for additional information so that it can study the antitrust implications of North Fork’s hostile bid for Dime. The authorities are seeking information on arrangements between North Fork and its financial backer, FleetBoston Financial Corporation, Boston, MA, which has agreed to invest $250 million in North Fork to help finance that institution’s $1.8 billion bid for Dime. It is unknown whether FleetBoston was also served with a subpoena.
(American Bkr. Notes, 5/22; Boston Globe, 5/23; NY Times, 5/18; SNL Weekly BankFax, 5/1; 5/30/00)

On May 17, Independent Bank Corporation, Rockland, MA, agreed to acquire four branches from Sovereign Bancorp, Inc., Wyomissing, PA. The branches, which contain $95 million in deposits, are in Hyannis, West Dennis, North Eastham, and Chatham, MA, all of which are in the lucrative Cape Cod, MA, banking market. The sale of the branches will occur simultaneously with Sovereign’s acquisition of them from FleetBoston Financial Corporation, Boston, MA. The transaction is expected to be completed by August 4.

Sovereign had previously been obligated to purchase the branches on June 16 from FleetBoston as part of a record-setting divestiture following the merger between Fleet Financial Group, Boston, MA, and BankBoston Corporation, Boston, MA. Independent is already scheduled to acquire twelve Massachusetts branches, containing $300 million in deposits, as part of the divestiture. As of June 30, 1999, Independent Bank Corporation, Rockland, MA, had total deposits of $1.1 billion and ranked 12th among all commercial banking and thrift institutions in Massachusetts.
(SNL Weekly BankFax, 5/22/00)

On April 12, Brookline Bancorp, MHC, Brookline, MA, received Office of Thrift Supervision (OTS) approval to launch its Internet Banking unit Lighthouse Bank, Waltham, MA.

On May 22, Lighthouse Bank, Waltham, MA, a state-chartered Internet savings bank, opened for business. Brookline Bancorp, MHC, Brookline, MA, will provide the unit with $25 million in capital. Lighthouse Bank expects to begin offering products and services to the public in the second quarter.
(Internal Notice, 5/22; SNL Weekly BankFax, 5/8/00)

On May 8, @Bank, Framingham, MA, a subsidiary of Marsh & McLennan Companies, New York, NY, received a federal thrift charter from the OTS. @Bank is the eighth Internet institution the OTS has chartered.
(American Bkr., 5/9/00)

On April 25, Washington Trust Bancorp Inc., Westerly, RI, signed a definitive agreement to acquire Phoenix Investment Management Co., Providence, RI, in a pooling-of-interests transaction valued at approximately $17.3 million. Phoenix is Rhode Island’s largest independent investment advisory firm, with assets under management in excess of $1 billion. The purchase will increase the volume of investments managed by Washington Trust Bancorp to just over $2 billion.
(PR Newswire, 4/25; Providence Journal, 4/26; SNL Weekly BankFax, 5/1/00)

On May 22, Bank of New York Co., New York, NY, completed its acquisition of the issuer, agency, and depository services business of Barclays Bank, PLC, London, England.
(SNL Weekly BankFax, 5/30/00)

On May 1, the Fed approved the proposed merger between Charles Schwab Corporation and U.S. Trust Corp, New York, NY. The proposed union of brokerage and specialty banking is noteworthy from a regulatory perspective, in that it represents the first major transaction to take advantage of the Gramm-Leach-Bliley Act, the financial modernization legislation passed in 1999.
(SNL Weekly BankFax, 5/1; 5/8/00)

On May 2, the Fed’s supervision director, Richard Spillenkothen, in a letter to his colleagues at the 12 Federal Reserve Banks, outlined a broadened list of reasons state banks may be targeted for special regulatory attention. New to the list are the following criteria, effective June 30: poor community reinvestment records, low-to-average performance ratings with an emphasis on management talent, and low scores on any of three specialty exams, including an information technology review.
(American Bkr., 5/4/00)

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.