The recent acquisition of FleetBoston Financial by North Carolina-based Bank of America has been touted as the national bank’s first foray into the New England market. Unbeknownst to many, however, Bank of America has had a presence throughout the region for almost 10 years in the mortgage origination and lending industry, albeit on a relatively small scale.
Given that BoA already had a quiet presence here, the notion it eventually would step up its efforts to crack the Massachusetts market was not surprising, said Daniel Forte, president of the Massachusetts Bankers Association, who traced BoA’s interest in the region back to big bank mergers of the late 1990s.
“BoA has been looking at New England for a long time and we always wondered when” it would acquire a local bank, said Forte. “They were one of the final bidders going back to the Bank of New England deal with the Federal Deposit Insurance Corp. Were it not for Fleet outbidding them, BoA had a very good shot at acquiring Bank of New England,” said Forte.
As the mega-bank moves its retail and small business banking franchise into what was Fleet’s territory, the transition will also involve Bank of America merging its existing mortgage refinancing and origination operation with Fleet’s.
“One of the little-known facts is that Bank of America has been up in Massachusetts for almost 10 years, from a lending perspective,” explained Forte. “For their customers – their existing customers and new Fleet customers – this increases the convenience factor and gives them a real opportunity to consolidate their customer base. It’s a good deal for Fleet, Fleet stockholders and Bank of America customers, from that perspective.”
According to statistics compiled by The Warren Group, parent company of Banker & Tradesman, Bank of America’s combined lending activity with Fleet Bank across New England positions BoA as one of the top lenders in the area.
Dean Caso, president of Newton-based Homevest Mortgage, said Bank of America’s mortgage presence is bound to increase as all the Fleet loan branches take on the BoA ownership mantle.
“[Bank of America] has a very active [mortgage] broker presence in Massachusetts. They will also have a retail presence now … the thought process is to have a retail [lending] presence where you have retail [bank] branches,” said Caso.
In Massachusetts, Fleet was the top mortgage lender, holding 6.37 percent of the total mortgage market share, with total loan volume of $5.2 billion through mid-August in 2003. Fleet completed $333 million in purchase-money originations and $4.9 billion in refinancing during that time, according to The Warren Group’s statistics. In comparison, Bank of America is the 16th ranked lender overall in Massachusetts, holding 0.92 percent of mortgage market share through mid-August 2003 – $640 million was in purchase-money originations and $1.1 billion in refinancing.
“You’re going to see Bank of America being much more active in the direct consumer loan [process] in Massachusetts,” said Caso. “When you’ve got a big bank that has those advertising dollars, it makes it more difficult for the other lenders in the area to compete.”
Melanie Nayer may be reached at mnayer@thewarrengroup.com.
