March 15 Deadline Set for Bank of New England Bids

Moving quickly to find potential buyers for the failed Bank of New England, the Federal Deposit Insurance Corp. on Friday set a March 15 deadline for interested bidders.

FDIC Chairman L. William Seidman said bids will be accepted for three subsidiary banks in Massachusetts, Connecticut and Maine, or the entire franchise.

But Seidman has said previously that it is likely the three subsidiaries will be sold as an entire unit, and the sale could be announced within a few weeks of the bidding deadline.

“We would like to have these banks returned to the private sector as soon as possible,” Seidman said.

The amount of time in selecting a winner will depend on the number and complexity of the bids, said Jay Rosenstein, an FDIC spokesman.

Robert Litan, a banking analyst at the Brookings Institution in Washington, said Seidman recently indicated to him that he would like the matter resolved in three months.

Among the banks expressing interest in Bank of New England’s assets are BankAmerica Corp. of San Francisco, the nation’s second-largest bank, and Banc One Corp. of Columbus, Ohio.

Fleet-Norstar Financial Group Inc. of Providence, R.I., has shown interest in Maine National Bank, the subsidiary headquartered in Portland, Maine.

The FDIC seized Bank of New England on Jan. 6, after the bank was crushed by heavy losses from bad real estate loans. The FDIC pumped $750 million into the subsidiaries, but projected that the overall cost of the bailout could exceed $2 billion.

Seidman indicated last month that about a half-dozen suitors were interested in all or parts of the bank.

The FDIC will assess the financial conditions of the bidders and what type of management they would bring, Rosenstein said.