UST to Sell Conn. Unit To Investor
UST Corp. said it has signed an agreement to sell its $128 million-asset Connecticut unit to a local investor, in a move designed to build capital and focus on its core market of Massachusetts.
Separately, the Federal Deposit Insurance Corp. has extended by two weeks the due date for bids on Citytrust Bancorp and Mechanics and Farmers Savings Bank, two insolvent institutions in Bridgeport, Conn.
UST did not provide details of its agreement, but said the sale price will be based on the book value of Brideport-based UST Bank/Connecticut on the day of closing. The deal is expected to be completed by yearend.
The acquirer is Rafic Rasamny, a Fairfield, Conn., investor and former owner of a textile company.
An Indicator of the Price
If the transaction had been completed on June 30, UST would have received about $7.8 million in cash, a company statement said. The price will be less if the company posts a loss in the third quarter.
UST Bank/Connecticut has six offices in the Bridgeport area. Analysts said the sale was an encouraging sign for the local banking market, which has been hit hard by real estate loan losses. Several local banks are on the verge of failure.
Prospective acquirers of Citytrust and Mechanics now have until Aug. 12 to enter bids.
The FDIC has asked interested parties to bid on both institutions, which have combined assets of $3.25 billion.
Sources said that the bid date was extended to accomodate the number of companies that requested a look at the books of both companies. At least 10 companies had expressed interest, including Shawmut National Corp., Bank of Boston Corp., and Bank of New York Corp.