![]() ![]() ''Looking at the landscape, we feel we're in a good position vis-a-vis our competition.'' Shareholder Pressureīut competition between banks is not the only reason for the current merger mania most banks admit that shareholder pressure has a lot to do with it. Indeed, Southold has announced its acquisition of Chemical branches in Southport and Eastport, Manhattan-based Chemical having sold them as a part of its downsizing to bolster its reserves. ''Many of our competitors are the big money center banks, like Chemical and Manufacturers Hanover, that have a considerable amount of Third World debt and other activities that will reduce their income under new regulations,'' he said. North Fork's chief financial officer, Frank Dell'Aglio, believes this is a good time for the bank to become more aggressive. Its move to acquire Southold is an example of what is going on throughout the banking industry that is, a desire to offer one-stop banking with everything from trust banking to home mortgages and insurance in one institution. Southold's new parent, North Fork, is a commercial bank and not a savings institution. ''Either you steal customers from each other or you merge.'' The merger increases Southold's branch network from 5 to 28 in Nassau and Suffolk Counties. Southold Savings merged last summer with the North Fork Bank Corporation of Mattituck. Terry Jr., president of the Southold Savings Bank. ''In order to support those networks, we'll have to go through mergers that create super regionals,'' said Raymond W. Mergers and acquisitions provide the growth in the balance sheet needed to engage in such activities. Many of these institutions want to woo customers by selling additional financial services, like money market funds and commercial loans. Others, particularly in the relatively stable economies of the Northeast, have moved to consolidate so as to compete more effectively. Some thrifts, like those in some Southwest areas that have gone from boom to bust, took too much investment risk and went under. Since 1982, Federal and local government deregulation has given a broad range of new powers to thrift institutions, including authorization to issue stock and offer commercial loans and adjustable-rate mortgages. ''Consolidations now are reflective of banks going out to the marketplace, attracting a lot of capital and competing on a citywide or larger basis,'' Mr. In the early 1980's, rising interest rates and regulatory caps, such as New York State's usury law, which imposed an 8.5 percent limit on the rates savings banks could offer, forced many struggling banks to merge with healthy ones. ''The rate of consolidation now is no greater than in the past, but it's happening for different reasons,'' said Nick Ketcha, regional director for New York of the Federal Deposit Insurance Corporation, which regulates most savings banks. By going public, they can accumulate capital (shareholders' equity), and in essence buy their growth through mergers or acquisitions. However, faced with competition from big banks that offer more products at often hard-to-beat rates, traditional savings banks find it difficult to attract new customers.
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