Buyout Deal Dead, Mass. Thrift Plans a New Hampshire Start-Up

Less than two weeks after an attempt to buy its way into New Hampshire flopped, a Massachusetts holding company is trying to start a subsidiary in the Granite State.

Andover Bancorp is seeking state and federal regulatory approval to charter a bank in nearby Salem, N.H., where its proposed subsidiary, Andover Bank N.H., would be based.

The company hopes to open the branch by the end of September, said Gerald T. Mulligan, president and chief executive of $1.1 billion-asset Andover. No other facilities have been planned, he said.

The application came only 10 days after a merger agreement with Finest Financial Corp., Pelham, N.H., fell through following a shareholder revolt at Finest. The opposition to the $21 million merger was led by the Fineman family, which founded the bank. Family members maintained that the price wasn't high enough, and they wanted the institution to remain independent anyway.

Mr. Mulligan said Andover had planned for some time to file the application for the subsidiary but delayed when Finest officials proposed the merger last year.

"This bank has been strategizing for a long time about how to get to New Hampshire," he said. "We would already have been there, but for the call I got from (Finest). That sort of diverted us, and now we're getting back to it."

Andover officials consider southern New Hampshire a natural extension of their current market in eastern Massachusetts. Mr. Mulligan noted that New Hampshire residents have 4,000 Andover deposit accounts totaling more than $22.5 million and 2,000 loans totaling $100 million.

One of the thrift's branches, in Methuen, Mass., even has its parking lot in New Hampshire, he said.

"Their market certainly extends into southern New Hampshire, and I think they will improve the value of the franchise by getting into" that market, said James Moynihan, senior vice president of Advest Group.

He noted that New Hampshire is the only state in New England that has completely recovered from the recession. "I think you ought to go where the economic conditions are the healthiest."

Opening the subsidiary would also let Andover bid on New Hampshire branches divested by Providence, R.I.-based Fleet Financial Group, he said.

"I think in the long run this is better for Andover and its shareholders," he said.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER