Bank of New York said Monday it has agreed to purchase the corporate trust business of Baltimore-based Mercantile-Safe Deposit and Trust Co. The price was not disclosed.
The acquisition is Bank of New York's fourth of this kind in nine months. All together these deals should help boost corporate trust business at the $52 billion-asset bank by 15%, from $261 billion to $300 billion in outstanding securities.
Prior to the Mercantile agreement, Bank of New York acquired the corporate trust businesses of Barnett Banks Inc., Central Fidelity National Bank, and Toronto Dominion Bank.
Bank of New York vice chairman Thomas Renyi said the nation's oldest and 15th-largest bank will not end its buying spree just yet. "We continue to actively evaluate opportunities for these kinds of securities processing acquisitions," he said.
As a result of the transaction, Bank of New York will get $22 billion in securities from Mercantile's 550 corporate trust relationships.
Analysts said small regionals like Mercantile, which has only $2.2 billion in assets, are selling off these businesses because they can't take advantage of any economies of scale. For Bank of New York "the system is already in place, so there is very little marginal cost" with expansion, said David Berry, an analyst with Keefe. Bruyette & Woods Inc.
The terms of the deal were not disclosed, but analysts said it was probably worth no more than two million dollars and would not impact the bank's earnings expectations.