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Charter One, Albank link
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June 15, 1998: 8:28 a.m. ET
Banks combine in $1B deal; Albank board to join Charter's; job cuts seen
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NEW YORK (CNNfn) - Charter One Financial Inc. and Albank Financial Corp. said Monday they had agreed to a $1 billion merger under which Albank will be a wholly owned subsidiary of Charter One.
Under terms of the agreement, the companies will exchange 2.16 shares of Charter One common stock for each Albank share. The companies said approximately 29.6 million new shares of Charter One stock will be issued.
The companies also valued the market capitalization of the combined company at $5.3 billion.
As a result of the merger, Cleveland-based Charter One said it would eliminate redundant operations to cut operating expenses by $20 million to $24 million.
Company officials could not be reached for immediate comment.
Albank is based in Albany, N.Y.
Charter One expects to take a one-time charge of $40 million to $50 million. The companies expect the merger to close in the fourth quarter.
Albank Chairman Herbert Chorbajian said all Albank FSB and Albank Commercial retail banking branches will remain open. He added all existing certificates of deposits and loan contracts would be unchanged and that insured deposits would remain insured by the FDIC.
"This is a tailor-made opportunity for us to continue our market extension efforts in New York," said Charles John Koch, Charter One chairman and chief executive officer. "The addition of Albank gives us one contiguous market that runs from southeastern Michigan through to Springfield, Mass. We have stated all along that we are attracted to areas of similar demographic character as that in Ohio, Michigan and western New York."
Following the acquisition, three Albank directors will join Charter One's board of directors. Chorbajian will join Charter One as a vice chairman.
Charter One (COFI) shares closed Friday at 34-1/16, down 1-5/16. Albank (ALBK) shares finished unchanged at 51-1/2. 
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