Magazine article American Banker

Vt.'s Chittenden Grabs for Bigger N.H. Share

Magazine article American Banker

Vt.'s Chittenden Grabs for Bigger N.H. Share

Article excerpt

Chittenden Corp.'s deal to acquire New Hampshire's largest independent bank would make the buyer one of New Hampshire's largest banking companies and give it a much higher profile in some of the state's biggest and wealthiest communities.

The Burlington, Vt., company announced the $247 million cash and stock deal for $1.1 billion-asset Granite State Bankshares Inc. on Thursday night. It would add 19 branches and $769 million of deposits in southern New Hampshire to Chittenden's holdings, including eight communities near the Massachusetts border, where it would be No. 1 or No. 2 in market share.

The deal would give $5 billion-asset Chittenden 6% of the state's $16 billion deposit market over all and make it New Hampshire's fourth-largest banking company. Chittenden, the holding company for five community banks, currently is 12th in New Hampshire, with a 1.6% market share.

Chittenden chairman and chief executive officer Paul A. Perrault has made plain that the company wants to bulk up in New Hampshire.

Buying Granite would fill the gap between Chittenden's Vermont franchise and its Ocean National Bank subsidiary, Mr. Perrault said.

"We feel that Granite's franchise is an excellent bridge between our existing Vermont and New Hampshire operations," he said. Buying it would "significantly strengthen our presence in a variety of markets."

Charles W. Smith, Granite State's chairman and CEO, said his board considered a number of potential merger partners.

But Chittenden has "been around a long time," Mr. Smith said Friday. "They're an old-line bank and a great company. From our standpoint, if we were going to merge we couldn't have picked a better partner."

Analysts' reaction was mixed.

Gary B. Townsend of Friedman, Billings, Ramsey & Co. Inc. in Arlington, Va., said that though the deal would "provide Chittenden with mass in New Hampshire's strongest markets" and make it more accessible to Boston's suburbs, the price is high. …

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