BoA Buying Fleet for $47B

Bank of America, Charlotte, N.C., the nation's fifth-largest residential lender, is buying FleetBoston Financial for almost $47 billion in stock, a move that will expand BoA's presence in New England and create the nation's second-largest bank.However, BoA's purchase of Fleet will not dramatically alter the residential mortgage landscape. Two years ago FleetBoston jettisoned its mortgage subsidiary, Fleet Mortgage Group, selling it to Seattle-based Washington Mutual for $660 million. (Included in the FMG sale was $138 billion in servicing rights.) After the sale of its mortgage affiliate, FleetBoston continued to originate loans under the Fleet name (mostly in the bank's imprint) and in 2002 funded $23.1 billion in product, ranking 23rd nationwide, according to National Mortgage News' Home Mortgage Disclosure Act database. Besides being the fifth-largest residential originator, BoA is also the fifth-largest servicer, with a portfolio of $250 billion in receivables (at June 30). BoA will pay $45 per share for Fleet, or 41.5% above Fleet's closing price on Oct. 24. BoA is the No. 3-ranked commercial bank in terms of assets, with $737 billion, while Fleet ranks seventh with $196 billion. The combined bank will employ 180,000 full-timers and will have 5,700 banking offices in the United States and in foreign countries.