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FLEET/NORSTAR BANKS IN CONNECTICUT, MAINE AND MASSACUSETTS FINALIZE AGREEMENT WITH FDIC TO PURCHASE ESTIMATED $400 MILLION OF LOANS

FLEET/NORSTAR BANKS IN CONNECTICUT, MAINE AND MASSACUSETTS FINALIZE
 AGREEMENT WITH FDIC TO PURCHASE ESTIMATED $400 MILLION OF LOANS
 BOSTON, Jan. 30 /PRNewswire/ -- Fleet/Norstar Financial Group's (NYSE: FNG) banks in Connecticut, Maine and Massachusetts have executed the definitive agreement paving the way for the purchase of an estimated 1,000 commercial loans, expected to total approximately $400 million, from the Federal Deposit Insurance Corp. (FDIC), it was announced today by Terrence Murray, Fleet/Norstar's chairman and chief executive officer.
 "The loan purchase program, although not the first of its kind entered into by the FDIC, is unprecedented in its scope," Murray said. Both the number and value of the loans to be purchased may be larger than current estimates, he said, because loans will continue to be reviewed between now and the program's starting date of Jan. 31. In addition, reviews will continue until the end of the initial 120-day period.
 The program also allows the three banks to purchase loans that become eligible to be transferred to the FDIC to be managed by Boston-based RECOLL Management Corp., the Fleet/Norstar subsidiary established last year to service the classified assets of the former Bank of New England banking franchise on behalf of the FDIC, after Jan. 31st until the program's completion on April 30, 1994. The loans to be purchased, all classified but current, are presently being managed by RECOLL for the FDIC.
 Murray said, "Our purchase of these problem loans will be an extremely positive action, not only for the borrowers but also for New England's economy. By bringing these assets back into our banks, we will be better able to work with creditworthy borrowers in an effort to help them survive the recession, and perhaps even save the jobs of hundreds of New Englanders that otherwise might be lost."
 He said Fleet/Norstar has confidence in the long-term prospects for the region's economy, and he praised the FDIC for supporting this transaction.
 The estimated state-by-state breakdown for the loan purchase program is as follows:
 BANK QUANTITY $ VALUE
 Fleet Bank, Connecticut 300 $100 million
 Fleet Bank, Maine 65 $6 million
 Fleet Bank, Massachusetts 650 $300 million
 The figures for Maine include only loans of the former Maine National Bank. Efforts are underway to purchase loans of the former Maine Savings Bank, the franchise which was acquired by Fleet Bank of Maine in February 1991, in a similar arrangement.
 Murray said, "I would like to reiterate a key point I made in November, when we originally announced plans to purchase loans from the FDIC. All of the loans we plan to purchase are classified, which means they are substandard for one or more reasons. Purchasing the loans will not amount to a panacea, because it will not take care of all the substandard loans in RECOLL's portfolio. However, the purchase of some 1,000 or more loans valued at more than $400 million will be a major step in the right direction. We hope these loans will work and the businesses they represent succeed. With continuous cooperative efforts on the part of the borrowers, we intend to do our best to achieve that goal."
 All of the loans to be purchased by the Fleet/Norstar banks will be current or less than 30 days past due. They will be purchased following individual reviews by Fleet/Norstar and must meet the following criteria to be included in the program: current or past due less than 30 days; collateral securing the loan must be at least 75 percent of the balance owed, based on current market value appraisal; no litigation is pending or likely and there are no environmental issues; the borrower and/or guarantor may not have a related loan in the special asset pool being managed by RECOLL, and the borrower must have the capacity to keep the loan current and must demonstrate a reasonable capacity to repay it over time. Commercial real estate loans under $100,000 that are not associated with an operating business will be excluded.
 Loans accepted into the program can be put back to the FDIC for any reason prior to July 1994.
 Fleet/Norstar Financial Group is a diversified financial services company listed on the New York Stock Exchange with approximately 1,300 offices nationwide. Its lines of business include commercial and consumer banking, mortgage banking, consumer finance, asset-based lending, trust banking and student loan processing.
 -0- 1/30/92
 /CONTACT: Robert W. Lougee, Jr., 401-278-5879; Bruce P. Crooks, 401-278-6241; Charles T. Conway, Jr., 401-278-6240, or Thomas L. Lavelle, 617-573-7733 all of Fleet/Norstar/
 (FNG) CO: Fleet/Norstar Financial Group ST: Rhode Island IN: FIN SU:


DD-EG -- NE014 -- 5336 01/30/92 14:41 EST
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Publication:PR Newswire
Date:Jan 30, 1992
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