P.M. BRIEFING : Mellon Bank Buys 54 Philadelphia Meritor Branches

Mellon Bank Corp. said today that it agreed to acquire 54 branch offices from a subsidiary of Meritor Savings Bank for around $335 million.

The agreement to buy the offices of PSFS was approved by the boards of directors of Mellon Bank (East), the Mellon unit purchasing the branches, and by Philadelphia-based Meritor.

Mellon will assume deposits of about $5.2 billion and acquire assets of $4.9 billion from PSFS.

The purchase price, subject to certain adjustments, is expected to be about $335 million, but no less than $309 million, Mellon said. It said it expects to finance the purchase by issuing a combination of common stock, preferred stock and debt.

After the transaction is completed, Mellon Bank (East) plans to change its name to “Mellon PSFS” and operate all its Philadelphia area branches under that name, Mellon said.

The transaction will increase Mellon’s deposit market share from about 5% to about 14% in the Philadelphia market, Mellon said.