Citizens, First NH Announce Merger Plans
PROVIDENCE, R.I. (AP) _ Citizens Financial Group, Inc. is acquiring control of First NH Bank, a combination of two foreign-owned institutions that will create New England’s third-largest banking business.
After the deal is completed, Bank of Ireland, which owns First NH, will have a 23.5 percent stake of the new company. The Royal Bank of Scotland, Citizens’ parent company, will hold 76.5 percent.
The Bank of Ireland will receive $245 million in cash and notes in the transaction, the companies said.
The merged company will retain the Citizens’ name, with First NH becoming Citizens New Hampshire and keeping its headquarters in Manchester, the companies said Monday.
The merger will create a 5,000-employee institution with $14 billion in assets and 219 branches in Rhode Island, New Hampshire, Massachusetts and Connecticut.
Lawrence Fish, Citizens’ chairman, president and chief executive officer, will hold the same titles after the merger. He said Citizens is interested in additional acquisitions.
L. Douglas O’Brien, First NH’s president and chief executive officer since 1992, plans to retire early next year.
The merger is the third in a month for major New England banks and is part of a national consolidation, Banks are combining to better compete with industrial companies that offer credit cards and financing and brokerages that offer bank-like services.
``This was the logical third shoe to drop,″ said Michael Burd, director of financial institutions for First Albany Corp. in Boston. ``I don’t see any major bank mergers beyond this for the next six months or so in New England.″
The Citizens and First NH combination awaits regulatory approval, which the companies said they expect by June.
Citizens’ assets have increased 132 percent in the last three years, and it earned a record $79.8 million in the fiscal year ended Sept. 30, up 51 percent from $52.7 million in 1994.
In January, Citizens bought Quincy Savings Bank, an $800 million company headquartered in Massachusetts. Last year, Citizens purchased four banks with assets totaling $4.2 billion.
First NH had struggled until recently. Bank of Ireland was forced to pump $290 million into it over three years to prevent a failure and stockholders threatened to sue the investment bank that worked on the purchase.
With New Hampshire’s real estate stabilized and the banking industry rebounding, Bank of Ireland announced last month that First NH improved its six-month performance by 52 percent, producing a $32 million profit for the period ending Sept. 30.
Because Citizens had no presence in New Hampshire, no branch closings are expected. Some employees in other areas, such as data processing, will lose their jobs, but how many it not known, Fish said.