First NH's Bid Wins 2 Banks, A Source Says
First NH Bank, a subsidiary of Bank of Ireland, has won the bidding for two failed New Hampshire banks held by the Federal Deposit Insurance Corp., a source close to the deal has confirmed.
The failed banks are Amoskeag Bankshares and BankEast Corp., both based in Manchester. Together, they hold about $2.2 billion in assets.
First NH has itself been racked by problem real estate loans, the same ailment that caused the collapse of Amoskeag and BankEast. First NH lost $115 million last year. However, it was determined to win the bidding against larger rivals such as Fleet/Norstar Financial Group and KeyCorp in order to keep out-of-state competitors out of its market, analysts said.
Avoiding Lesser Status
"It would have turned them into a second-rate player," said Gerard Cassidy, an analyst for Tucker, Anthony in Portland, Maine.
Amoskeag and BankEast are in a group of five large New Hampshire institutions being sold by federal regulators. The others are thrifts -- Dartmouth Bancorp, New Hampshire Savings Bank Corp., and Numerica Financial Corp.
An FDIC source confirmed press reports that the three thrifts will be taken over by an investment group led by former Shawmut Bank vice chairman William Craig and Dartmouth president Robert Keller.
Exceeding Antitrust Lid
The acquisition of Amoskeag and BankEast would give First NH Banks 25% of the deposits in New Hampshire, five percentage points more than the state's antitrust law allows.
First NH Banks, which has $2.9 billion in assets, will probably have to divest some of the acquired banks' branches, analysts said.
A report of First NH's victory first appeared Wednesday in The Boston Globe.