Consolidation activity in New England could pick up again, bankers at a conference in New York said.

Though some panelists at the CIBC World Markets E-Financial Service and Banking Conference Nov. 15 said acquisitions might not be the best way to grow in the region, several attendees said a number of banks are considering buyouts to catch up to FleetBoston Financial Corp.

Peter J. Verrill, chief operating officer and chief financial officer at BankNorth Group of Portland, Maine, said building internally is still a viable option for regional banks. They can target the small-business and retail customers that other banks ignore, he said.

BankNorth is trying to diversify its loan portfolio and boost fee income through insurance and asset management but has not ruled out growth through acquisition, Mr. Verrill said. BankNorth is one of the two New England banking companies with the potential to make acquisitions, the other being Citizens Financial Group of Providence, R.I., he said.

Sovereign Bancorp of Wyomissing, Pa., has made several acquisitions in recent years and was mentioned as a likely candidate to challenge Fleet for New England business.

Arthur H. Meehan, chairman, president, and chief executive officer of Medford Bancorp in Medford, Mass., said he doubts there are suitable takeover targets in the region. "All that's left are former savings banks and mutuals," which are not diversified enough for Medford's taste, he said.

Walter E. Gregg Jr., vice chairman of PNC Financial Services Group Inc. of Pittsburgh, said acquisitions have become expensive. He said he does "not want to pay high multiples for something that might not even fit culturally."

William A. Osborn, chairman and chief executive officer of Northern Trust Corp. in Chicago, said in his keynote lunch speech that all of his company's growth has been achieved organically, including a 40% increase of net new trust business since 1995.

John A. Kanas, chairman, president, and CEO of North Fork Bancorp, said acquisition seems to be a good route but is not the only one.

North Fork has bought several thrift companies in recent years, and Mr. Kanas said he will pursue more deals. The Melville, N.Y., company, which has "$5 billion in assets and too much capital," is conducting a "Manhattan Project" to pick up deposits overlooked by the likes of Chase Manhattan Corp. and Citigroup Inc., he said.

North Fork holds 0.1% of the deposits in Manhattan (compared with Chase Manhattan Bank's 37.4% and Citibank's 16.1%), but its deposits there are growing 100% a year, Mr. Kanas said.


From Our Archive:

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.