Shawmut National Corp. said it is likely to bid on the failed Old Stone Bank of Providence, R.I., later this month.
Hartford- and Boston-based Shawmut, with $27 billion in assets, has the smallest presence in Rhode Island of the major New England banks. It will have 16 branches there as of Monday, June 13, with the closing of its deal for Northeast Savings.
The Resolution Trust Corp. has set the end of June as the cutoff for bids on Old Stone, a $1.2 billion-asset thrift that went into receivership in January 1993.
A Lot of Interest Shown
Old Stone, which has $1 billion in deposits - down from $1.4 billion a year ago - has 26 branches, all in Rhode Island. The institution has been conserved intact, said managing agent Robert Black. Assets at the thrift are also down, from $1.7 billion a year ago.
Mr. Black said the thrift had elicited interest from "a goodly number of institutions." Only one other failed New England bank, HomeBank Federal Savings Association, Gilford, N.H., remains under RTC control.
The RTC expects to make its decision in early July.
"Yes, we're interested" in Old Stone, said James Schepker, a spokesman for Shawmut. "That institution would strengthen our position in Rhode Island, and we're interested in growing our franchise."
Fleet Leads in R.I.
Shawmut has not yet submitted a bid, Mr. Schepker said. Fleet Financial Group is the dominant bank in Rhode Island with 48 branches in the state, followed by Bank of Boston, whose Rhode Island Hospital Trust unit has 28 branches.
Wall Street analysts also named Bank of Boston, Citizens Financial Group, and First Fidelity Bancorp. as potential bidders.
Spokespersons for First Fidelity and Bank of Boston declined to comment on Old Stone.
Also expected to bid is a private investment group headed by Old Stone's former chairman James Rosati.
"I'd expect First Fidelity, Shawmut, and Keycorp to bid. Bank of Boston and Fleet have too much overlap already," said James Moynihan, regional bank analyst and senior vice president of Advest Group, Boston.
Mr. Moynihan, who helped develop the plan for Mr. Rosati's investment group, said he expects one of the banks, and not the investment group, to win the bid.
"This was a $50 million to $75 million deal six months ago, but it's worth much more than that now," he said. "The banks are much healthier now."
