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FIRST FIDELITY BANCORP., FIDELITY BANK N.A. ON FITCHALERT -- FITCH FINANCIAL WIRE --

 NEW YORK, Dec. 29 /PRNewswire/ -- First Fidelity Bancorp.'s "BBB-" preferred stock rating and Fidelity Bank N.A.'s "BBB+" senior debt rating have been placed on FitchAlert with positive implications. Fitch will review First Fidelity's overall financial condition, the stability of the real estate markets and economy in its operating region, as well as the company's proposed acquisition of Northeast Bancorp, announced yesterday.
 The acquisition of Northeast Bancorp will be First Fidelity's first foray into the Connecticut market. The acquisition will add approximately $2.8 billion of assets and 68 branches with $2.5 billion of deposits to First Fidelity's franchise. Northeast Bancorp's business is centered on consumer banking, commercial middle-market lending and personal trust.
 Northeast Bancorp has been plagued by severe problems in its real estate lending portfolio. At Sept. 30, 1992, Northeast reported nonperforming loans and other real estate owned (OREO) of $236 million or 12.6 percent of total loans and OREO. Importantly, a condition attached to the merger agreement calls for Northeast Bancorp to dispose of approximately $135 million of its nonperforming assets (NPAs) contemporaneously with the merger. As a result, First Fidelity expects to acquire less than $100 million of NPAs in the merger.
 First Fidelity will exchange common stock having a value of $4 per share for each Northeast Bancorp share and has agreed to infuse approximately $135 million into Northeast Bancorp's Union Trust Co. unit upon completion of the transaction. Funding will be provided by existing holding company cash resources and cash proceeds from the exercise by Banco Santander of warrants and options it holds in First Fidelity.
 On a pro forma basis, First Fidelity's leverage ratio is expected to be 6.52 percent, down slightly from the level of 6.76 percent reported by the company at Sept. 30, 1992. Asset quality ratios will not be materially impacted by the acquisition and loan loss reserves will continue to cover over 100 percent of nonperforming loans.
 -0- 12/29/92
 /CONTACT: Scott J. O'Donnell, 212-908-0531, or Christopher M. Siedman, 212-908-0524, both of Fitch/


CO: First Fidelity Bancorp; Fidelity Bank N.A.; Northeast Bancorp ST: New York, Connecticut IN: FIN SU: RTG

GK -- NY037 -- 0423 12/29/92 16:56 EST
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Publication:PR Newswire
Date:Dec 29, 1992
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