Worried that large acquirers will reap most of what Fleet Boston divests, New England community banks are considering banding together to vie for the spoils.
UST Corp. in Boston, for example, has spoken to "more than a dozen" other banking companies of various sizes during the past few weeks about joint bids, according to Timothy J. Hansberry, president and chief operating officer of $6 billion-asset UST.
"We have maps of our branches and maps of the branches we think they might sell, and we are running all sorts of numbers," Mr. Hansberry said. "The list of options we are talking about is quite lengthy."
And at Eastern Bank Corp. in Lynn, Mass., officials are looking at what could be available on Boston's south shore and western suburbs while talking to other small banks that could want market share elsewhere.
Fleet Financial Group and BankBoston Corp. said last week that they plan to divest 292 branches in four states to win approval of their planned $16 billion merger. Their preference is to package the branches into three groups, by state.
The largest bundle is the 209 Massachusetts and New Hampshire branches, , which have $8.7 billion of deposits and $1.8 billion of loans-too much for any community bank to handle.
There is still a chance the Massachusetts divestitures will be broken into smaller groups, which could eliminate the need for partnerships. UST could afford to take in about $3 billion of deposits without raising more capital, while $2.7 billion-asset Eastern could swallow $1 billion.
But by trying to build consortiums they are hedging their bets.
"The next couple of weeks should be very interesting," said Stanley J. Lukowski, Eastern's president and chief executive. "Nobody is ruling anything out right now."
A consortium could be composed of one larger bank that agrees to sell certain branches to smaller partners and keep most for itself. Or a group of similar-size banks could go in together with an investment banker and split the price and the branches as they see fit.
But such arrangements sometimes look better on paper. Consortium efforts organized in Florida after Bank of America Corp.'s purchase of Barnett Banks Inc. fell apart, reportedly because of squabbling among small-bank partners. What's more, regulators might prefer a buyer capable of competing with Fleet Boston.
Mr. Hansberry said UST was approached weeks ago by a group of smaller banks, and was asked to lead a consortium. His company declined to get involved with that group, in part because of fears that the small banks would not be acceptable to regulators, he said.
Even companies once rumored to be interested in the entire bundle acknowledge that they have been talking to others.
Peoples Heritage Financial Group in Portland, Maine, has held informal discussions with other large community banking companies in the region, according to Brian Arsenault, vice president. The $12.6 billion-asset company will not make a decision on partnering until it hears the final divestiture plans, he said.
One thing is certain: Peoples Heritage will not try to win all of what Fleet Boston will sell.
"We thought about it, and analyzed it a lot," Mr. Arsenault said. "But I think doubling the size of the company this way would not be realistic."
