Magazine article American Banker

Fleet to Buy NBB Bancorp in Mass. for $420 Million

Magazine article American Banker

Fleet to Buy NBB Bancorp in Mass. for $420 Million

Article excerpt

Fleet Financial Group moved to build its Massachusetts market share on Monday by agreeing to acquire NBB Bancorp, the parent of New Bedford Institution for Savings, for $420 million in cash and stock.

The purchase will boost Fleet's share of deposits dramatically in Bristol County, Mass., and will add to its existing branch networks on Cape Cod and in Rhode Island.

Providence, R.I.-based Fleet Financial has $46 billion in assets, including $8.1 billion in Massachusetts. NBB has $2.5 billion in assets.

Fleet's bid apparently disappointed the stock market, which knocked $2.125, or 4.4%, off NBB's price, to $46. Fleet was off 25 cents to $36.625.

1.7 Times Book Value

Fleet Financial said it would pay $48.50 a share, half in stock and half in cash - a premium equal to 1.7 times the New Bedford-based thrift's tangible book value.

As a sweetner, NBB shareholders will also receive warrants for 2.5 million Fleet shares. Fleet will give 0.277 warrant for each NBB share, with a strike price of $43.88 and a term of six years, exercisable one year after closing. The deal is expected to be completed early next year. Analysts viewed the price as reasonable, given NBB's strong asset quality and capital position.

"You're down to a fairly small set of acquisition prospects in New England," said Nancy Bush of Brown Brothers Harriman in New York. "As we've seen over the last year, they don't come cheap."

Fleet agreed last October to poay $125 million, or 1.87 times book, for Waltham, Mass.-based Sterling Bancshares. …

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