WASHINGTON - BSB Bancorp of Binghamton, N.Y., plans to sell its Norwich branch so that federal antitrust authorities will approve its merger with NBT Bancorp of Norwich.

The Justice Department said Tuesday that both bank holding companies have agreed to the sale of the branch, which has $58 million of deposits, to a competitor. Approval by Justice would be required.

The sale was prescribed after the government determined the proposed $4.7 billion merger would have reduced competition for banking services in Chenango County, N.Y., because both banks have branches in Norwich.

In addition, the Justice Department said, NBT agreed not to prevent other financial institutions from leasing or purchasing any of their branches that may close in Broome, Chenango, and Tioga counties because of consolidation.

The proposed merger would create one of the largest independent community banks in upstate New York, serving 12 counties with more than 55 offices and more than 100 automated teller machines. It still awaits approval from the Office of the Comptroller of the Currency.

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