Big New England Bank Merger Final
Jun. 15, 1985
HARTFORD, Conn. (AP) _ Hard on the heels of a landmark U.S. Supreme Court ruling, the merger of Bank of New England Corp. of Boston and Hartford-based CBT Corp. became final Friday, forming The New Bank of New England Corp.
The high court Monday cleared the way for the merger by ruling Connecticut and Massachusetts regional interstate banking laws, albeit exclusionary of banks out of the region, are constitutional.
The New Bank of New England Corp. has $14 billion in assets, 10,000 employees, and more than 250 offices throughout Connecticut and Massachusetts.
Maine National Corp. of Portland, with 38 offices and 800 employees, is expected to join the new company later this month.
The now-eight Bank of New England component banks, including new members Connecticut Bank and Trust Co., and Maine National Bank, will continue to operate independently, under their own names and with their own management teams and directors, under terms of the mergers.
CBT Chairman Walter J. Connolly Jr. becomes chairman and chief executive officer of The New Bank of New England Corp. Peter H. McCormick, chairman and chief executive officer of Bank of New England, will be president of the new corporation.
The merger is the first transaction to be completed under the new reciprocal banking legislation adopted by Connecticut in 1983 and Massachusetts in 1982.
The laws permit - encourage - mergers of banks within the six New England states but exclude outsiders, such as New York which borders Connecticut, Massachusetts and Vermont.
New York banks, which are eyeing the potentially rich high-technology markets in New England, particularly Connecticut and Massachusetts, challenged the reciprocal legislation but lost the case in the Supreme Court.
Decades-old federal law prohibits interstate banking except where it existed prior to the law, or when states specifically enact two-way legislation, as in Connecticut and Massachusetts.
All is not necessarily lost for the big banks in New York, along with California and Texas.
On Wednesday of this week, the House Banking Committee passed a bill permitting full interstate banking after five years. However, Sen. Jake Garn, R.-Utah, chairman of the Senate Banking Committee, which would also have to approve the measure, later said he had no plans to write any interstate banking legislation this session of Congress.