January 1, 2002
Vol. XXXI, No. 1

Merger Completions

On November 30, Boston Private Financial Holdings, Inc., Boston, MA, acquired Borel Bank & Trust Company, San Mateo, CA.

On December 1, The Royal Bank of Scotland Group, PLC, Edinburgh, Scotland (RBSG), acquired Citizens Bank of Pennsylvania, Philadelphia, PA, and Citizens Bank, Wilmington, DE (both in formation). The nucleus of the two new bank subsidiaries would be the existing mid-Atlantic retail branch network and other banking operations of Mellon Financial Corp, Pittsburgh, PA. The $2.1 billion deal included 345 bank branches in Pennsylvania, New Jersey, and Delaware. As of September 30, 2001, Citizens Financial Group, Providence, RI, a subsidiary of RBSG, ranked 32nd among US bank holding companies with $32.3 billion in total assets.
(Citizens Bank Press Release, 12/1;
Internal Notice, 11/30; SNL Bank & Thrift Weekly, 12/10/01)

Branch Acquisition

On December 15, Compass Bank for Savings, New Bedford, MA, purchased one branch, located in Hyannis, MA, from Charter Bank, Waltham, MA. Compass Bank for Savings purchased only certain assets and deposits, but not the office space. Compass is a subsidiary of Seacoast Financial Services Corp, New Bedford, MA. 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, Charter Bank had total deposits of $163.1 million and ranked 126th.
(Internal Notice, 12/17/01)

Fleet Branch Closings

In December, Fleet National Bank, Providence, RI, closed 16 branches in Massachusetts. On December 1, Fleet closed four branches located in Attleboro, Dartmouth, Hingham, and Quincy. On December 5, Fleet closed four branches located in Chicopee, Springfield, Holyoke, and Westfield. On December 8, Fleet closed four branches located in Gardner, Greenfield, Hadley, and Northampton. On December 12, Fleet closed four branches located in Lexington, Peabody, Revere, and Westboro.
(Internal Notice, 12/3; 12/6; 12/11; 12/14/01)

Branch Openings

On December 6, People’s Bank, Bridgeport, CT, opened a Super Stop & Shop branch located at 215 East Main Street, Clinton, CT. On December 7, The First National Bank of Ipswich, Ipswich, MA, opened a branch located at 23 Orchard View Drive, Londonderry, NH. On December 12, Torrington Savings Bank, Torrington, CT, opened a branch located at 235 Dibble Street, Torrington, CT. On December 17, Easthampton Savings Bank, Easthampton, MA, opened a branch located at 605 Granby Road, Route 202, South Hadley, MA.
(State of CT DOB News Bulletin, 12/14; Internal Notice, 12/20/01)

Brookline Bancorp Reduces Stake in Medford

On November 29, Brookline Securities announced in a filing with the Securities and Exchange Commission (SEC) that it dropped its stake in Medford Bancorp, Inc., Medford, MA, to 4.95%. Brookline Bancorp (MHC), Brookline, MA, owns 56.7% of Brookline Securities. Brookline Securities originally reported ownership of 5.1% of Medford’s common stock in March 2000, after receiving approval from the Federal Reserve in November 1999 to acquire up to 9.9% of the thrift’s common stock - an approval that came over Medford’s objection. At the time, Brookline committed not to acquire, influence or otherwise control Medford. As of June 30, 2001, Brookline Bancorp (MHC) had total deposits of $644.4 million and ranked 30th among all commercial banking and thrift institutions in Massachusetts. As of the same date, Medford Bancorp had total deposits of $1 billion and ranked 14th.
(SNL Bank & Thrift Weekly, 12/3/01)

Banks Receive Regulatory & Shareholder Approvals

On November 27, shareholders of Dime Bancorp, Inc., New York, NY, approved its acquisition by Washington Mutual, Inc., Seattle, WA (WaMu). On December 21, WaMu received approval from the Office of Thrift Supervision (OTS) for its acquisition of Dime Bancorp. The deal is expected to close on January 4, 2002.

On November 29, American Financial Holdings, Inc., New Britain, CT, announced that it had received regulatory approval for its acquisition of American Bank of Connecticut, Waterbury, CT. American Financial expects the deal to close in mid-January 2002. On December 12, shareholders of American Bank approved the company’s sale to American Financial. Under the terms of the deal, American Bank shareholders can elect to receive $30 per share in cash, 1.304 shares of American Financial per share, or a combination of cash and stock. As of June 30, 2001, American Financial Holdings had total deposits of $1.2 billion and ranked 11th among all commercial banking and thrift institutions in Connecticut. As of the same date, American Bank of Connecticut had total deposits of $745.8 million and ranked 13th.
(SNL Bank & Thrift Weekly, 12/3; 12/17; 12/24/01)

State Banking Departments Approve Proposals

On November 8, the Massachusetts Division of Banks (MA DOB) approved the proposal by Westfield Mutual Holding Company, Westfield, MA, to issue up to 47% of the common stock of an intermediate holding company, Westfield Financial, Inc., Westfield, MA. Westfield Bank, Westfield, MA, a subsidiary of Westfield Mutual, would become a direct subsidiary of the intermediate holding company. On November 13, the MA DOB approved the proposal by the organizers of Navis Bank to establish a new trust company in Gloucester, MA.

On December 11, the Connecticut Department of Banking (CT DOB) issued a temporary certificate of authority to the organizer of Higher One Bank for the purpose of conducting the business of a bank and trust company in New Haven, CT, to operate as a community bank.
(State of CT DOB News Bulletin, 12/14; State of MA DOB Notice, 11/30/01)

NE Banks Acquire Nonbanking Operations

On December 3, Woronoco Bancorp, Inc., Westfield, MA, acquired Keyes & Mattson Insurance Agency, West Springfield, MA. Keyes & Mattson has annual premiums of more than $8 million. Upon closing, Woronoco merged its existing insurance unit, Agan Insurance, Westfield, MA, into Keyes & Mattson; both agencies will now operate under the Keyes & Mattson name. Approximately 60% of the acquired agency’s business is personal insurance, with the balance coming from commercial and other insurance products. Woronoco Bancorp acquired Agan Insurance Agency on January 31, 2000.

On December 3, The Advest Group, Inc., Hartford, CT, a wholly-owned subsidiary of the MONY Group, New York, NY, acquired full-service investment firm Lebenthal & Co., New York, NY. Lebenthal & Co. specializes in municipal bonds and has client assets of $5.1 billion. The MONY Group currently has $55 billion in assets under management and administration.
(Advest Press Release, 12/3; SNL Bank & Thrift Weekly, 2/7/00; 12/10/01)

Fed Approves Nonbanking Proposals

On December 14, the Federal Reserve Bank of Boston (FRB Boston) approved the proposal by Fleet National Bank, Providence, RI, to establish Fleet Overseas Capital, LLC, as an Agreement corporation.

On December 14, the Federal Reserve Board of Governors (Fed) approved the proposal by Citigroup, Inc., New York, NY, to establish CitiStreet International, LLC, Quincy, MA, as an Agreement corporation, and for CitiStreet International to invest in CitiStreet Australia.
(Actions by the Board, 12/15/01)

Ambanc Shareholders Approve Merger

On December 10, shareholders of Ambanc Holding Co., Amsterdam, NY, approved the sale of the company to Hudson River Bank & Trust Co., Hudson, NY, a subsidiary of Hudson River Bancorp, Hudson, NY. All Ambanc stockholders will have the right to convert shares of outstanding common stock into $21.50 in cash. The merger, subject to regulatory approval, is expected to close in the first quarter of 2002.
(SNL Bank & Thrift Weekly, 12/17/01)

TCNJ to Acquire NYCB Branches

On December 3, New York Community Bancorp, Westbury, NY (NYCB), signed a definitive agreement to sell seven in-store branches to Trust Co. of New Jersey, Jersey City, NJ (TCNJ). NYCB expects the deal to close in the second quarter of 2002. Five of the branches are located in central and northern New Jersey, with the other two located in Rockland County, NY. All seven branches were acquired by NYCB in its November 30, 2000, purchase of Haven Bancorp, Inc., Westbury, NY. The seven branches have aggregate deposits of $75 million.
(SNL Bank & Thrift Weekly, 12/10/01)

Fed Aligns Treatment of Certain Assets with Other Agencies

On November 27, the Fed announced that it intends to change its risk-based capital requirements to align treatment of disallowed deferred tax assets with that of other federal regulatory agencies. As Fed guidelines currently stand, tier 1 capital must be calculated net of goodwill and certain other intangible assets when used by banks in determining elements of qualifying total capital and supplementary capital. However, the agency currently does not require disallowed deferred tax assets to be deducted from tier 1 capital, a deduction currently required in the guidelines of the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp, and the OTS. The Fed has therefore proposed to begin requiring the deduction of disallowed deferred tax assets from tier 1 capital levels in determining total and supplementary capital levels.
(SNL Bank & Thrift Weekly, 12/3/01)

Congress Considers HMDA Parallel for Small-Business Lending

On December 4, Rep. James McGovern, D-MA, announced that he is sponsoring a bill in the U.S. House of Representatives designed to unearth potential discriminatory practices in small-business lending. The bill, H.R. 3372, or the Access and Openness in Small Business Lending Act of 2001, would amend the Equal Credit Opportunity Act and would require depository lenders, including banks, credit unions, and thrifts, to collect race and gender information for small business borrowers. None of the lender’s loan underwriters, officers, employees, or affiliates involved in the credit-approval process would have access to the information, and borrowers could elect not to disclose the information. The data would be submitted annually to federal regulators. The legislation is modeled after the Home Mortgage Disclosure Act (HMDA), which requires lenders to report demographic data on home-mortgage lending. The legislation would effectively eliminate the Fed’s Regulation B, which prohibits lenders from collecting data regarding an applicant’s gender or race.
(SNL Bank & Thrift Weekly, 12/10/01)

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.