A minority-owned bank in Boston is making an aggressive bid for 18 of the branches Fleet Financial Group is divesting.
Boston Bank of Commerce, a closely held, $108 million-asset institution, has made an offer for branches with about $600 million of deposits, according to sources familiar with the situation. If its bid succeeds, the bank would balloon to about $700 million of assets, making it the largest black-owned financial institution in the nation.
To win regulatory approval of their $16 billion merger, Fleet and BankBoston Corp. are expected to divest about 292 branches and $12.5 billion of deposits in four states. Though observers said they expect the lion's share of these branches to go to one large bidder, political dealmaking in recent weeks has apparently reserved a small portion of them for community banks.
Boston Bank of Commerce officials confirmed that a bid was submitted but declined to comment on its specifics because of a confidentiality agreement with Fleet.
Asked how it would pay for the branches, Robert Patrick Cooper, general counsel for the community bank, said, "Financing will not be an issue." The Boston Globe reported last week that the bank had obtained a line of credit to fund the bid.
The small bank's bid has some high-profile backers. At a Federal Reserve Board hearing on the Fleet/BankBoston merger this month, the Rev. Al Sharpton, a well-known New York activist, urged the merger partners to accept Bank of Commerce's proposal.
And in an April letter to the Department of Justice, both Massachusetts senators asked that part of the divested assets be sold to "a minority- owned community development financial institution." Mr. Cooper said Boston Bank of Commerce is the only such institution in Massachusetts.
The bank is not the only small-bank bidder, however. A group of nine community institutions, called the New England Branch Acquisition Consortium, has bid on about 10% of the divestiture.
Ken Ehrlich, a Boston lawyer representing the group, said there is room for both his coalition and Boston Bank of Commerce.
"We have been led to believe that as much as 15% of the divestitures might be made available to community banks," said Mr. Ehrlich, who is with the Peabody & Arnold law firm.
There is little doubt that Boston Bank of Commerce has ambitions to grow. Kevin Cohee, chief executive officer, has repeatedly stated his intention to use acquisitions to create a nationwide black-owned business.
Since March, the Boston bank has made two unsolicited bids for Carver Bancorp, a New York thrift company that is the nation's largest black-owned financial institution.
Carver, with $420 million of assets, rejected both bids. Boston Bank of Commerce, however, has bought 7% of Carver's stock and continues to push for a deal.