Harvard Opts Not to Invest In N.H. Banks
Harvard Management Company (HMC) has decided not to bid to buy sections of five major New Hampshire banks, according to HMC President Jack R, Meyer.
Three banks and two investment groups filed bids Monday, The Boston Globe reported yesterday, including Fleet/Norstar Financial Group of Providence, which bought the failed Bank of New England earlier this year. But Harvard, which had been looking closely at the New Hampshire banks, opted out.
Harvard Management--which maintains the University's $5 billion endowment--this summer was seriously considering investing in these failing banks, sources said yesterday. However, Harvard did not pursue this possibility because the New Hampshire economy is still too deeply mired in recession.
"We looked at it very hard," Meyer said yesterday. "In the last analysis, we just weren't comfortable with making the bid."
The failing banks rode high on the real estate boom before plunging in the wake of the New England bust. The winning bidders will be influential in determining the flow of money in New Hampshire in years to come.
But the recession in New Hampshire was dire enough to scare away Harvard and another prospector, Bank of Boston, as it may take several years before investors begin to see strong returns.
The bidders for Amoskeag Bank Shares and BankEast--two Manchester, N.H. commercial banks--are Fleet, KeyCorp of Albany and First New Hampshire Banks of the Bank of Ireland, sources told The Globe.
William Craig, a former Shawmut National Corporation executive, leads an investor group that seeks control of three failing savings banks: Dartmouth Savings Bank, New Hampshire Savings Bank and Numerica Savings Bank. Dartmouth Savings chief executive Robert Keller is part of that group, according to The Globe.
One remaining investor group is bidding only for a small part of Amoskeag, but the Federal Deposit Insurance Corporation (FDIC) may not split up the package, The Globe reported.
The FDIC will review the bids and declare the winners within about a month, a source said yesterday. At that time, the FDIC will likely declare the banks failures and then hand them over to the new owners.
The banks' new owners will have the opportunity to leave bad loans behind with the FDIC, essentially beginning anew with a clean loan portfolio.
Fleet is expected to try to acquire all five troubled banks' bad loans, perhaps with the intent of using an in-house company, Recoll Management, to unload troubled assets, The Globe reported.