FLEET &lt;FLT> AIMS TO SPEED MERGER WITH NORSTAR
  Fleet Financial Group hopes its
  proposed merger with Norstar Bancorp &lt;NOR>, ranked as the
  largest U.S. banking merger, can be completed by the beginning
  of 1988, according to an executive of Fleet.
      Robert Lougee, director of corporate communications for
  Rhode Island-based Fleet, told Reuters the company is exploring
  the possiblity of seeking a change in the national trigger date
  for the state's reciprocal bank law to Jan 1, 1988 from July
  one. The decision is up to the Rhode Island legislature.
      The merger plan was announced in a midday news release that
  said the deal, worth about 1.3 billion dlrs, would be
  consummated July one when Rhode Island barriers to interstate
  banking outside of New England come down. "If we can consummate
  the deal earlier that would be better for all concerned,"
  Lougee said. He said to the best of his knowledge a change in
  the Rhode Island law would not be a hardship for any other
  banking institution in the state.
      He said Fleet is optimstic Connecticut law, which only
  permits interstate banking mergers within New England, can be
  amended. Fleet owns First Connecticut Bancorp.
      If the Connecticut law is not amended in time, Lougee said,
  an option would be to spin off that unit with repurchase
  provisions.
      The New England reciprocal banking laws have excluded New
  York as a means of protecting regional banks from being gobbled
  up by the money center giants.
      Wall Street analysts said the merger accord between Fleet
  and Albany, N.Y.-based Norstar demonstrates the rapid pace of
  interstate banking mergers since state legislatures begain
  permitting regional mergers on a reciprocal basis. The U.S.
  Supreme Court decided in mid-1985 to permit the mergers.
      Fleet and Norstar in a joint statement billed the proposed
  merger as "a partnership of two companies." Both will continue
  to operate existing headquarters after the merger.
      Norstar holders will receive 1.2 Fleet shares for each one
  of theirs following Fleet's previously announced two-for-one
  split. Fleet shares closed today at 59-1/2, up 1/8, giving the
  deal an indicated value of 1.3 billion dlrs.
      That topped the proposed merger of Los Angeles-based
  Security Pacific Corp &lt;SPC> and Seattle's Rainier Bancorpartion
  &lt;RBAN>. The West Coast deal, announced about four weeks ago, is
  worth an estimated 1.2 billion dlrs.
      Chemical New York Corp's &lt;CHL> acquisition of Texas
  Commerce Bancshares last year was valued at about 1.2 billion
  dlrs, making it similar in size to the Security Pacific-Rainer
  deal. The California combination of Wells Fargo and Co &lt;WFC>
  and Crocker National Corp last year was worth 1.1 billion dlrs
  and there have been several bank mergers in the southeast
  valued in the 700-800 mln dlr range.
      "It's a merger of equals," said analyst John Rooney of
  Moseley Securities Corp. He said Norstar had a book value at
  the end of 1986 of 19.63 dlrs per share, while Fleet's book
  value was 28.02 dlrs.
      Rooney noted that Norstar chairman Peter Kiernan is in his
  60's while Fleet's Terrence Murray is in his late 40's. He said
  Kiernan would probably head the combined company until his
  retirement then Murray could assume the top post.
      Analyst Thaddeus Paluszek of Merrill Lynch and Co said
  Fleet's earnings would have been diluted about two pct in 1986
  on the basis of the merger terms announced today.
      He noted that Fleet has a "teriffic reputation" after
  having diversified in a number of financial areas. Fleet has
  established consumer banks in the southeast and is known as an
  innovator in securitization of mortgages.
      The merged banks would have assets in excess of 25 billion
  dlrs and be one of the 25 largest banks in the U.S.  Norstar
  operates in most of New York state but not in New York City.
      Lougee said at some point in the future banking operations
  that both Norstar and Fleet operate in the state of Maine would
  be combined.
      The agreement between Norstar and Fleet includes a
  "lock-up" option designed to deter other acquirers. Each
  granted the other an option to purchase authorized but unissued
  shares amounting to 24.99 pct of the fully diluted shares
  outstanding.
  

