TD Banknorth Financial
Group and Commerce
Bancorp Merger Completed
On
March 31, 2008, TD Banknorth
Financial Group (C$435
billion) of Toronto, Canada, completed its acquisition
of Commerce Bancorp ($49.26 billion)
of Cherry Hill, NJ. The deal received federal
regulatory approval on March 13, 2008. While the two
bank holding companies have merged, the operational
merger of the individual banks is scheduled to occur
later this spring.
The new bank’s legal name
will be TD
Bank, but
it plans to use the brand name, “TD Commerce
Bank.” Current Commerce Bank branches
will be rebranded during 2008, while TD Banknorth branches
are expected to be rebranded during 2009.
The announced value, at
completion, was $9.17 billion (U.S.D.), making this
one of the largest bank mergers in the past two years.
With over 2,000 branches in North America, TD Commerce
will have a particularly strong presence along the
eastern seaboard. (SNL
Bank & Thrift Daily 3/17/08;
TD Banknorth press release 3/31/08)
Mergers and Acquisitions
Eastern
Bank Corp. ($6.8 billion) of Boston,
MA, has signed a definitive agreement to acquire MASSBANK Corp. ($801.8
million) of Reading, MA, for approximately $170 million. The deal will provide Eastern
Bank, New England’s
largest independent, mutually owned commercial bank,
with 89 branch locations and 100 ATMS across eastern
Massachusetts.
The merger, Eastern’s third in the past four years, is subject
to shareholder and regulatory approval and is expected to close during the
second half of 2008. (SNL Bank & Thrift Daily, Northeastern Edition,
3/17/08; Eastern Bank press release, 3/10/08)
Machias Savings Bank of Camden, ME, purchased the
Rockland, ME, branch of Camden
National Bank of Camden,
ME, on March 8, 2008. (Internal sources, 3/10/08)
Passumpsic Savings Bank ($501.7 million)
of Saint Johnsbury, VT, a unit of Passumpsic
Bancorp, will acquire
Lancaster National Bank ($54.8 million)
of Lancaster, NH, under an agreement signed on February
27, 2008. In October 2006, Passumpsic acquired
a 10 percent interest in Lancaster National Bank through
an acquisition of Siwooganock Holding Company, and
is slated to acquire the remaining 90 percent of Lancaster’s
common stock. The transaction is expected to be completed
by June 30, 2008. (SNL Bank & Thrift
Weekly, Northeastern Edition, 3/10/08)
Rockland Trust Company ($2.77 billion) of Rockland,
MA, completed its acquisition of Slades
Bank ($610.2
million) of Somerset, MA, on March 1, 2008. The
transaction adds nine branches along Massachusetts’ south
coast to Rockland Trust’s 69 retail branches
in southeastern Massachusetts. In a related deal, Slades
Ferry Bancorp merged into Independence Bank Corp.,
the parent company of Rockland Trust. (Internal
sources, 3/10/08; Rockland Trust
press release, 3/01/08)
The Savings Institute Bank and
Trust Company of Willimantic,
CT, purchased a New London, CT, branch of The
Bank of Southern Connecticut of New Haven, CT, on March
1, 2008. (Internal sources, 3/10/08)
Superior Savings of New England,
NA of Branford, CT,
merged into Capital One, NA of McLean, VA, on March
8, 2008. (Internal Sources, 3/10/08)
Structural Changes
Auburn
Bancorp Inc. of Auburn, ME, filed papers
on March 14, 2008, to convert to a public company
with a mutual holding company structure. The company
will offer between 225,675 and 305,324 shares for
a price of $10.00 per share, bringing in estimated
proceeds of $1.7 million to $2.5 million. The
shares will represent 45 percent of the company in
common stock following the offering. Under the deal,
Auburn Bancorp MHC, a holding company for Auburn
Savings Bank FSB of Auburn, ME, will be formed. The new
bank will own 55 percent of the outstanding common stock. (SNL
Bank & Thrift
Daily, 3/17/08)
Boston Private Financial Holdings,
Inc. of Boston,
MA, announced on March 19, 2008, that it intends to
restructure the equity of its affiliate, Westfield
Capital Management Co. LLC of Westfield, MA.
Under the plan, the equity of Westfield Capital Management
will be restructured into two classes of equity. The
first equity will be retained completely by Boston
Private. Of the second class of equity, one-third
will be issued to Boston Private, with the other two-thirds
to be distributed among members of Westfield’s
management team. (SNL Bank & Thrift Daily, 3/20/19; Boston Private
Press Release, 3/18/08)
De Novo Opens
Quinnipiac
Bank & Trust Co., of Hampden, CT, opened for
business on March 6, 2008. Quinnipiac Bank
will offer the Greater New Haven community a full
suite of business and personal services. In
particular, the bank aims to offer capital to small,
local businesses. Quinnipiac plans to open a New
Haven branch later this year and one in North Haven
in 2009. (SNL De novo Watch, 3/18/08; Quinnipiac
Bank press release, 3/10/08)
Financial Institution Relocation
Dedham
Town Employees Federal Credit Union of Dedham, MA,
relocated from 450 Washington Street to 202 Bussey
Street on March 4, 2008. (Internal sources, 3/14/08)
New Branches
Marlborough Savings Bank, a unit of Marlborough
Bancshares of Marlborough, MA, opened a branch at 21 East Main
Street in Westborough, MA, on March 17, 2008. (SNL
Bank and Merger Weekly, 3/23/08)
Rockland Trust Company of Rockland, MA, opened a branch
at 301 Quincy Avenue in Quincy, MA, on December 20,
2007. (Internal sources, 3/03/08)
FFIEC Issues Updated Business
Continuity Planning Booklet
On March 19,
2008, the Federal Financial Institutions Examination
Council (FFIEC) issued updated guidance for examiners,
financial institutions, and technology service providers
to identify business continuity risks and evaluate
controls and risk management practices for effective
business continuity planning. Electronic versions
of the booklet are available at www.ffiec.gov/ffiecinfobase/html_pages/It_01.html. (Federal
Reserve Supervision and Regulation Letter 08-3, 3/19/08)
Reserve Board Proposes Changes to Payments
System Risk Policy
On February 28, 2008, the Federal Reserve Board requested
comments on proposed changes to its Payments System
Risk (PSR) policy that intend to loosen intraday liquidity
constraints and reduce operational risks in financial
markets and the payments system. The Board proposes
a new strategy to provide intraday credit to depository
institutions and encourage these institutions to collateralize
their daylight overdrafts.
The Board proposes a policy of supplying intraday
balances to healthy depository institutions predominantly
through explicitly collateralized daylight overdrafts. To
avoid significant operational disruptions to the payments
system and decrease cost burdens on the large number
of institutions that incur small daylight overdrafts,
the policy would let depository institutions voluntarily
pledge collateral to secure daylight overdrafts.
The proposed policy would involve changes to other
policy provisions, eliminate the current deductible
for daylight overdraft fees, and increase the penalty
daylight overdraft fee for ineligible institutions.
Comments on the proposal are requested by June 4,
2008. To help institutions assess the proposed changes,
a fee calculator is available so institutions can estimate
their daylight overdraft fees under the proposal. The
calculator, full announcement, and instructions on
submitting comments, are available online at www.federalreserve.gov/newsevents/press/other/20080228a.htm. (Reserve
Board press release, 2/28/08)
Reserve Board Issues Guidance on Subprime
Loss Mitigation Activities
On March 13, 2008, the Federal Reserve Board issued
Supervision and Regulation (SR) Letter SR 08-2/CA 08-2,
which encourages financial institutions that service
subprime mortgage loans to report their loss mitigation
activities consistent with uniform standards. Financial
institutions also are urged to consider using the “HOPE
NOW” alliance’s loan modification reporting
standards for their service loans.
HOPE
NOW is
an alliance of counselors, mortgage market participants,
and mortgage servicers to create a unified, coordinated
plan to reach and help as many homeowners in distress
as possible. The Department of the Treasury and the
Department of Housing and Urban Development encouraged
the formation of the HOPE NOW alliance.
The letter builds on previous statements issued by
the Federal Reserve and other federal banking agencies
to encourage financial institutions to work constructively
with residential borrowers who are financially unable
to make contractual payment obligations on their home
loans.
The complete text of SR 08-2/CA 08-2 is online at www.federalreserve.gov/boarddocs/srletters/2008/SR0802.htm. (Internal
sources, 3/04/08)
Federal Reserve Banks Announce Restructuring
Schedule Changes as Electronic Check Processing Continues
to Accelerate
On March 31, 2008, the Reserve Banks announced modifications
to their schedule for check processing infrastructure
changes. The schedule has been accelerated as consumers
and businesses continue to shift from paper checks
to electronic payments, and because financial institutions
are rapidly adopt electronic check processing.
In June 2007, the Reserve Banks selected Philadelphia,
PA, Cleveland, OH, Atlanta, GA, and Dallas, TX, as
regional check processing sites that will provide a
full range of paper check processing services for the
entire United States.
The revised schedule begins with seven check sites
being relocated in 2008, as opposed to the five sites
that were originally scheduled. The new schedule
includes the transfer of the Windsor Locks,
CT, check processing site during the third quarter
of 2008, rather than the first quarter of 2009.
In
addition, the overall transition schedule has been
shortened and will conclude in early 2010 instead of
early 2011. Reserve Banks will continue to review
their check infrastructure annually to respond to further changes in our nation's
payments system and to meet statutory requirements for long-term cost recovery.
“The
transition in consumer and business preferences from paper checks to electronic
payments is moving at a very brisk pace. The revised schedule… enables
the Reserve Banks to continue to provide high-quality check processing services
to depository institutions throughout the country… (and) also supports
our business strategy to use the authority provided by Check 21 to collect more
checks electronically,” said Gary Stern, chairman of the Reserve Banks'
Financial Services Policy Committee and president of the Federal Reserve Bank
of Minneapolis.
To help New England financial institutions adjust
to the change, the Boston Reserve Bank will hold informational
sessions this summer to meet with customers to discuss
what they can expect as, and after, First District
check operations move to Philadelphia. The Reserve
Board’s full announcement can be
viewed at www.federalreserve.gov/newsevents/press/other/20080331a.htm. (Internal
sources, 3/31/08)
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