If regulators approve the proposed merger between First New Hampshire Bank and Citizens Financial Group Incorporated, it will be the third merger in a month for major New England banks.
The merger will create New England's third-largest banking institution, and it will be renamed Citizens New Hampshire.
The First New Hampshire Bank will not have many changes at first, according to First New Hampshire Bank spokesman Mark Bodi.
"Once the merger is completed, the bank will look at what expanded services and products it may wish to offer -- but this is a premature time to discuss what changes will occur," he said.
James Dorsey, the senior vice-president and director of corporate affairs at Citizens Financial Group, Inc. said, "There will probably be additional services and a broader array of checking products and loan products."
"Traditionally, younger folks are in college. Their needs are that they can have their money and have ATM machines," he added.
"Citizens' customers should not feel any effects and there is no effect expected from the customers of First New Hampshire," Dorsey said.
The local branch of the First New Hampshire Bank declined to comment on the changes the merger would cause.
Bodi insisted that the recent merger of Shawmut and Fleet had little to do with First New Hampshire's decision to merge.
"Bank consolidation nationwide is a rising trend," Bodi said. "That was the issue the bank considered when it reviewed options for the future and how to remain competitive."
First New Hampshire and Citizens Financial Group signed the merger on December 18, 1995, but it is still pending approval by regulators, according to Bodi.
"We expect approval in the spring," he said. "We anticipate no problems."
In the agreement, Bank of Ireland, which owns First New Hampshire Bank, will receive a 23.5 percent interest in the newly combined organization while the Royal Bank of Scotland, Citizens' owner, will retain 76.5 percent interest in the new company.
Dorsey said, "It was kind of a natural strategy or next step in our growth pattern that made a lot of sense for us."
Until recently First New Hampshire Bank has been struggling, according to Bodi. Over the last three years, the Bank of Ireland has pumped $290 million into the bank to prevent the bank from failing, he said.
"First New Hampshire went through a difficult time," Bodi said. "The First New Hampshire bank, like all financial institutions, was struggling with the recession and the decline of real estate value. First New Hampshire Bank survived these times and emerged to become one of the strongest banks of its size in the country."
First New Hampshire Bank recently announced record earnings. The bank posted a 52 percent increase in profits to $32 million in the six-month period that ended Sept. 30, 1995.
Because of these record earnings, Bodi insisted "today the bank is strong and profitable. The desire to merge had to do with the future of the bank and was not because of any problems in the present."
"Since 1980, 18 banks in New Hampshire have failed," Bodi said. "The Bank of Ireland did bring capital resources to help First New Hampshire, which was beneficial to New Hampshire's banking community. It helped fortify an important bank."
Economics Professor John Menge said the merger between First New Hampshire Bank and Citizens Financial Group Incorporated represents a national rise in bank mergers.
"In the past banks on the verge of collapse merged," he said. "Five or six years ago, the federal government forced banks on the rocks to merge or liquidate. Today, strong banks merge."
