Cod, Rockland (Mass.) Trust Co. is finally entering the coveted Cape market by purchasing 12 Fleet Financial Group branches.
Rockland Trust, a $1.5 billion-asset thrift, this week became the latest beneficiary of Fleet's merger-induced divestiture, announcing a deal to buy 10 branches on Cape Cod and two in Brockton, Mass. Thrift officials said the resort region fits nicely with its 34-branch network, spread over three counties south of Boston.
"Cape Cod has a great deposit base and borders markets where we already have a strong presence," said Richard J. Seaman, Rockland Trust's chief financial officer. "It is a very attractive market that we want to be in."
Rockland Trust, the lone banking subsidiary of Independent Bank Corp., has made several attempts to gain a toehold on the Cape in the past 18 months.
In February 1998, a bidding war broke out over Sandwich Bancorp, a $519 million-asset thrift on the Cape. Shortly after Sandwich announced a deal to be sold to New Bedford, Mass.-based CompassBank, three other suitors -- including Rockland Trust -- expressed interest in the company.
Rockland Trust backed off soon afterward, saying the number of interested parties was driving the price for Sandwich too high.
Since then the thrift has explored other options to get onto the Cape. Mr. Seaman said Rockland Trust decided that buying branches from Fleet would be the most cost-effective.
"Going down there de novo would have required us to start at zero and work our way up, which can be very expensive," Mr. Seaman said. "This is a one-time opportunity to get branches, customers, and, most importantly, employees who know those customers."
Of course, the expansion comes at a price: Independent agreed to pay Fleet about $32 million -- a 12% premium -- for the $269 million of deposits and $37 million of loans it will acquire with the branches. The company also will buy $113 million of commercial real estate loans from Fleet.
"It's still a healthy premium," said Robert Powers, a Providence, R.I.-based bank consultant. "It wasn't too long ago branches went for 4%."
Mr. Powers, a principal at Compass Consulting Group, said the deal still looks good for Rockland Trust. He said the thrift is wise in wanting to get onto Cape Cod.
"It's a good market to sell trust services, too, which is an important part of what they do," he said. "Buying these branches also allows them to stay in touch with their Boston customers who vacation or retire to the Cape. It makes sense for them to be there."