NORSTAR &lt;NOR>, FLEET &lt;FLT> OUTLINE MERGER

  Fleet Financial Group said
  that its board and the board of Norstar Bancorp have agreed to
  merge the two bank holding companies in a transaction which
  would create a 23 billion dlr asset bank holding company.
      Under terms of the transaction, each Norstar shareholder
  will receive 1.2 shares of Fleet common stock based on the
  number of Fleet shares after giving effect to a previously
  announced April one Fleet stock split.
       The two-for-one stock split will increase Fleet's
  currently 25.7 mln outstanding shares to 51.5 shares. There are
  about 34.9 mln Norstar shares outstanding.
      Fleet said the deal is expected to be completed by July one
  1988, the date on which the nationalization of Rhode Island's
  interstate banking law takes effect.
      For the full year ended december 31, Fleet, a Rhode Island
  based bank holding company, reported net income of 136.7 mln
  dlrs and assets of 11.7 billion dlrs. Norstar, an Albany N.y.
  holding company, reported net income of 104.8 mln dlrs and
  assets of 11.1 billion dlrs.
       Fleet comptroller Irv Goss said it is estimated that the
  transaction will result in minimal dilution in Fleet/Norstar
  earnings per share. It is the intention of both companies that
  cash quarterly dividends following the combination not decline
  for either company's stock holders, the company said.
      For 1986, Norstar issued 1.31 dlrs annually in cash
  dividends on its common stock. Fleet's current annual
  distibution on a pre-split basis would be equivalent to 1.68
  dlrs a share.
      In addition, Fleet and Norstar have each granted the other
  an option to purchase such number of authorized buy unissued
  shares of common stock, that will constitute 24.99 pct of the
  fully diluted shares outstanding.
      The transaction is subject to both regulatory and
  shareholder approval.
      The companies said that after the proposed merger, the
  combined banking holding wil be among the 25 largest in the
  country.
  

