Hartford National, Shawmut Plan Big Regional Bank Merger

BOSTON —  Shawmut Corp. of Boston and Hartford, Conn.-based Hartford National Corp. have agreed to merge in a stock swap that will create a new $25-billion bank holding company, the companies announced Wednesday.

The transaction was the latest in a recent series of mergers designed to create “super-regional” bank holding companies with the resources to compete with giant money center banks as interstate banking barriers continue to erode.

The two companies agreed to merge into a new entity, Shawmut National Corp. It will rank as the nation’s 21st-largest bank holding company.

Hartford National shareholders will receive one Shawmut National share for each of their common shares, and Shawmut shareholders will get 1.8 Shawmut National shares. The merger is subject to approval by banking regulators and shareholders of the two companies.

Hartford National stock fell $2 to $29.12 a share, and Shawmut rose $3.87 to $50.12 in national over-the-counter trading Wednesday.

Based on its 40.5 million common shares outstanding, Hartford National had a market value of about $1.18 billion at Wednesday’s closing price. Shawmut, with about 16.1 million outstanding common shares, had a market value of about $807 million.

Shawmut, with $10 billion in assets, has 15 commercial banking subsidiaries and 15 additional subsidiary and affiliate companies with offices in 42 cities in the United States, London and Hong Kong.

Hartford National, with $14 billion in assets, is the holding company for Connecticut National Bank, its principal subsidiary, and eight other banks in Connecticut, Massachusetts and Rhode Island. It also has a New England banking franchise of 250 offices.

The new company will maintain joint headquarters in Boston and Hartford.