Norwich Financial Corp., Norwich, Conn.; has announced a definitive agreement to acquire the Bank of Mystic.
Norwich will merge the $68 million--asset bank into its wholly owned subsidiary, the Norwich Savings Society, which has $590 million of assets.
Like many New England institutions, Norwich has spent the past several quarters recovering from the area's recession, said analyst Frank J. Barkocy, a senior vice president with Advest in New York City.
"It's a very strongly capitalized institution," Mr. Barkocy said.
"Profitability ratios still have a way to go," he said, but "they financially have turned the corner. Now they are in a position to grow the franchise."
And, he says, at Norwich's size, "It's grow or disappear. I think they'll ba making these selective acquisitions to add critical mass."
Norwich Said it will continue to focus on residential mortgage production and to enhance the quality of its loan portfolio.
Under the terms of the acquisition, Bank of Mystic shareholders would receive $2.40 in cash and $5.60 worth of Norwich common stock for each share of outstanding Bank of Mystic stock.
The merger, slated to be completed by the end of the year, is subject to approval by regulators and Bank of Mystic shareholders.
It also is subject to satisfactory completion of a due diligence review by Norwich Financial Corp. and the Bank of Mystic.