WASHINGTON -- Fleet/Norstar Financial Group and KeyCorp emerged as the leading candidates to acquire five troubled New Hampshire institutions as signs grew that the Federal Deposit Insurance Corp. is getting ready to pull the trigger on a deal.
The agency's board met Tuesday in closed session, and one item onthe agenda was New Hampshire's five largest independent banks, which have total assets of $4.6 billion.
The FDIC has been actively seeking buyers for the institutions, which are casualties of New England's economic downturn.
In the Running
Four bidders are believed to be competing: Fleet, based in Providence, R.I.; KeyCorp of Albany, N.Y.; First New Hamshire Banks, which is owned by Bank of Ireland; and an investment group headed by William Craig, a former vice chairman of Shawmut National Corp.
But sources in Washington and New Hampshire reported Tuesday that Fleet and KeyCorp have the inside track.
Fleet is seen as the likely winner of three savings banks: Dart-mouth Bank, with $976 million in assets; New Hampshire Savings Bank, with $670 million in assets; and Numerica Financial Corp., with $985 million in assets.
KeyCorp is expected to win the bidding for the bank subsidiaries of the other two, which are commercial banks: Amoskeag Bank, with $1 billion in assets, and BankEast, with $878 million in assets. All five institutions are based in Manchester except New Hampshire Savings, which is based in Concord.
Workout Contract to Fleet?
Fleet is also seen as likely to win the contract to work out the troubled assets of all five institutions.
An FDIC official confirmed that the agency's board would discuss the issue Tuesday but said it was not clear it would be resolved then.
People familiar with the bidding said Fleet and KeyCorp were aggressively pursuing the institutions.
"Fleet views this as a once-in-a-lifetime opportunity," said a source close to the company. He asserted that Fleet, which in April acquired three failed Bank of New England units from the FDIC, made a relatively large bid.
KeyCorp., a on the other hand, is known to view New Hampshire as a logical extension for its franchise. "It matches very well with their market," said a person representing one of the New Hampshire banks.
Several sources also noted that the FDIC typically works with banks rather than investment groups and that both KeyCorp and Fleet have enough equity to recapitalize the troubled banks.
"They are the strongest capital sources," said an executive at one of the New Hampshire institutions.
Spokesmen for Fleet and KeyCorp declined to comment.
There was speculation that regulators could seize the institutions and turn them over to the buyers as early as this weekend.