With the acquisition of Putnam Trust, Bank of New York Co. is taking its first step into the lucrative Connecticut private banking market.

Many observers are smiling about the coupling of Bank of New York's strength in serving the personal needs of New York's corporate executives with Putnam Trust's success in the more profitable niche of serving higher-net-worth individuals, many of whom have inherited their wealth.

"If you're trying to build yourself into the more profitable end of the affluent individual business, an acquisition of Putnam Trust is a dynamite piece," said David R. Palmer, a New York-based consultant.

The stock deal, which was valued at $140 million, was completed last Friday while many of Putnam's wealthy clients were vacationing.

Michael M. Cassell, president of Greenwich, Conn.-based Putnam Trust, expects they'll notice few immediate changes.

Putnam Trust, which had $686 million in assets before its acquisition, will retain its name and, therefore, its strong brand identity among its clients, Mr. Cassell said.

Less than an hour away by commuter rail from midtown Manhattan, Putnam Trust has prospered in the shadow of some of the nation's largest banks.

"Putnam Trust has thrived in the middle of the most hotly contested banking market in the country" by emphasizing customer relationships over transactional business, Mr. Cassell said.

The bank held 35% of total deposits in Greenwich, Conn., in 1994, according to its annual report - up 4% from the previous year. Discretionary and nondiscretionary trust assets at the eight-branch bank stand at $2.4 billion.

Although the Bank of New York private banking unit has successfully catered to senior corporate executives, that business often serves more as an inducement to capture corporate loan business than to generate fee- income from the management of the individual's assets, Mr. Palmer said.

"Bank of New York ought to be congratulated" for pulling off the merger, he added. "Because now they get into the established money, the inherited money, the entrepreneurial money around Greenwich as well as the high-end corporate executive business."

Wall Street concurs.

"The deal made sense because of the trust assets Bank of New York is acquiring and the presence it gave them in Fairfield County," said Ronald I. Mandle, a banking analyst at Sanford C. Bernstein & Co., New York. Fairfield County ranks as the fifth-richest in the nation as measured by per capita income.

Mr. Cassell said he looks forward to tapping the Bank of New York's technological expertise to enhance customer service. He expects to add telephone banking and consolidated statements soon.

The fact that Mr. Cassell will be staying on as president bodes well for the continued health of the bank's robust trust and private banking business, Mr. Palmer said.

"In my book, he's one of the most accomplished guys" in private banking, he said.

Mr. Cassell joined Putnam Trust when Chemical Bank acquired Manufacturers-Hanover, where he headed private banking.

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