BANK STRUGGLES TO STAY AFLOAT
BOSTON — The Bank of New England (BNE), 18th-largest in the country, is still struggling to stay alive. Operating under an FDIC ``cease and desist'' order, BNE has sold several billion dollars' worth of assets; hired a new president, Lawrence Fish; consolidated some regional subsidiaries into the parent bank; closed branches; and laid off thousands of employees.
Still, BNE Friday announced second-quarter losses of $33.3 million, following a $46.6 million loss in the first quarter. Mr. Fish said in a statement that the loss was expected ``because of the continued sluggishness in the region's economy. However, we have made slow but steady progress in a number of key areas of our strategic plan....''
The bank now has total assets of $23 billion; nonperforming assets, mostly real estate loans, total $2.78 billion.
Analysts' evaluations of BNE's future are mixed. The bank ``is doing very well,'' says James Moynihan Jr. of Advest, Inc. The bank has overcome tremendous liquidity problems earlier in the year, he says, mostly by offering aggressive rates on certificates of deposit. He expects that the new ``highly qualified, professional management'' should be able to save the bank.
``They are doing everything that's humanly possible to turn that institution around,'' says Gerard Cassidy of Tucker Anthony. ``What's critical in the success of this turnaround story is the New England economy. If it does not rebound over the near term, it's going to be very difficult for these guys to turn it around.'' The bank's critical challenge is to reduce nonperforming assets, he says.