In a state dominated by large out-of-state banks, one New Hampshire bank company is becoming a home-grown banking power.
Within the past three months CFX Corp., a bank and thrift holding company based in Keene, has announced acquisitions of two New Hampshire community bank companies-Community Bankshares in Concord and Portsmouth Bank Shares. The planned purchases would firmly entrench CFX as the largest independent bank in the Granite State, with $2.7 billion of assets.
The majority of New Hampshire's 48 banks and thrifts have fewer than $250 million of assets. The majority of deposits are held by out-of-state banks, with Citizens Bank, Providence, R.I.; Fleet Bank, Boston; and Peoples Heritage Bank, Portland, Maine, maintaining top market share.
CFX Bank, the company's New Hampshire bank subsidiary, holds fourth place with 5.09% deposit market share as of Dec. 31. And analysts say CFX can survive in the somewhat stagnant New Hampshire market only if it adheres to its strategy to grow through acquisition and continues to venture into other New England states.
"CFX has some dynamic growth plans that will take them to the year 2000 and beyond," said Gerard Cassidy, senior vice president at Tucker Anthony Inc. in Portland, Maine. "Peter Baxter is assembling a very meaningful franchise in New Hampshire."
Mr. Baxter, CFX's chief executive officer, said now that the bank is poised to enter most of New Hampshire's lucrative markets, Massachusetts will become its next focus. CFX already owns two Bay State institutions, Orange (Mass.) Savings Bank and Safety Fund National Bank, Fitchburg.
"There isn't an awful lot of growth for us other than our normal growth in New Hampshire," Mr. Baxter said.
Until CFX started to flex its acquisition muscle, New Hampshire's banks had gained the reputation as being targets rather than acquirers. So CFX's growth is getting some praise.
"There's certainly concern expressed occasionally by elected leaders that we are seeing a diminishing of the population of community-based financial institutions in the state," said Gerard H. Little, president of the New Hampshire Bankers Association. "Folks are wary of that and rightly so."
Mr. Little, who lives in Concord, said locals were concerned when word surfaced that Community Bankshares, parent of Centerpoint Bank and Concord Savings Bank, was for sale.
But the local residents' fear was quelled after CFX's March 24 announcement, Mr. Little said.
"CFX has held on to its tight relationships in the communities it operates in," he said.
The growth spurt began in 1987 after CFX, then Cheshire County Savings Bank, converted from a mutual thrift to a stock institution. The conversion left the company with a 25% capital to asset ratio.
Mark Gavin, CFX's chief operating officer and executive vice president, said the bank's goal is not to reach a particular size, but rather to improve its return on equity-13.5% at yearend. It is aiming for an ROE above 15%, he said.
Mr. Gavin said CFX, which also made two acquisitions last year, plans no further deals in 1997. But Mr. Baxter acknowledges that the company intends to be an active acquirer.
