By the Division of Banks

DECISION
RELATIVE TO THE MERGER OF
ROXBURY-HIGHLAND CO-OPERATIVE BANK, JAMAICA PLAIN, MASSACHUSETTS
WITH AND INTO
MT. WASHINGTON CO-OPERATIVE BANK, SOUTH BOSTON, MASSACHUSETTS


Mt. Washington Co-operative Bank ("Mt. Washington" or the "Petitioner"), South Boston, Massachusetts has applied to the Division of Banks (the "Division") for authority to merge with Roxbury-Highland Co-operative Bank ("Roxbury-Highland"), Jamaica Plain, Massachusetts pursuant to the provisions of Massachusetts General Laws chapter 170, section 25 under the terms of a Merger Agreement dated as of December 28, 2007. The Merger Agreement provides for the merger of Roxbury-Highland with and into Mt. Washington under the charter, by-laws and name of Mt. Washington Co-operative Bank. The sole banking office of Roxbury-Highland will be retained as a branch office after the merger.

Notice of the application has been posted and published. The time period for interested parties to submit comments has passed. Accordingly, all documents and materials related to this transaction have been reviewed. That record has been considered with regard to the financial and managerial resources of each bank, the competitive effects of the proposed transaction, the interests of the depositors of each bank, the future prospects of the institutions and convenience and needs of the communities to be served by the consolidated entity as well as the performance of each bank under the Commonwealth's Community Reinvestment Act ("CRA"), General Laws chapter 167, section 14 and its implementing regulation, 209 CMR 46.00 et seq.

Mt. Washington is a state-chartered co-operative bank in mutual form. As of December 31, 2007, it had total assets of approximately $509.3 million. The main office of Mt. Washington is located in South Boston. Additionally, Mt. Washington has two branch offices in South Boston, as well as two branch offices in Dorchester. The deposits of Mt Washington are insured by the Federal Deposit Insurance Corporation ("FDIC") and the Share Insurance Fund of The Co-operative Central Bank for deposits in excess of the FDIC's insurance limits.

Roxbury-Highland is a state-chartered co-operative bank in mutual form with its sole banking office in Jamaica Plain. As of December 31 2007, Roxbury-Highland had assets of approximately $25.5 million. The deposits of Roxbury-Highland are insured by the FDIC and the Share Insurance Fund of The Co-operative Central Bank for deposits in excess of the FDIC's insurance limits.

The primary service areas of both banks are the neighborhoods within Boston, Massachusetts in which the banking offices of the banks are located, as well a few surrounding neighborhoods also within Boston. While Mt. Washington indicates that its primary service area includes the neighborhoods of South Boston and Dorchester, Roxbury-Highland considers its primary service area as Jamaica Plain, Roxbury and Roslindale. The continuing bank intends to continue to serve the combined primary service area of both banks.

Materials have been submitted to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. On the issue of whether banking competition will be unreasonably affected by the proposed transaction, the Division considers, but does not rely exclusively on, the guidelines used by federal authorities to review bank mergers. Essentially, these guidelines define relevant markets and measure concentration, which is considered an important indicator of competitiveness. The starting point in the federal analysis is the Herfindahl-Hirschman Index ("HHI"), an arithmetic measure of market concentration that synthesizes the distribution of market shares and the number of banks in an affected market into a single value. In this case, there will be a de minimis increase in the HHI. In addition to that analysis, the Division considers the competitive impact of the proposed transaction on a community-by-community basis, as well as on the overall banking structure of the Commonwealth. Specifically, the Division has considered the fact that Roxbury-Highland operates from only one banking office and has only approximately $25.5 million in assets as of December 31, 2007. Additionally, it is noted that a diverse number of banks operate banking offices within the combined primary service area of the merging banks. Therefore, customers will be able to choose from a number of banking options. Accordingly, the review of the transaction's impact on competition does not raise concerns which would preclude its approval.

The application notes that, at the time of the merger, the continuing institution's Board of Directors will consist of all of the persons currently serving as directors of Mt. Washington and one director of Roxbury-Highland. The management of the combined bank is also detailed in the application documents. Economies and service capabilities which would result from the transaction are set out in the submitted documents. Upon consolidation, the continuing bank will meet all required capital standards. Accordingly, upon review, financial and managerial considerations support the application.

As a result of the merger, Mt. Washington indicates that the banking public will benefit in several ways. According to the application, such benefits include an expanded branch office network and a broader range of products and services which will include all of the products presently offered by both Mt. Washington and Roxbury-Highland. Customers of Roxbury-Highland will benefit from the wider array of loans, deposits, non-deposit products and internet banking services which will become available to them upon the merger. Mt. Washington customers also will benefit from the anticipated development of new products by the combined institution. The Division considered these reasons and others cited in the submitted documents in determining that public convenience and advantage will be promoted by approval of this transaction.

In determining whether or not to approve a petition under the statutory criteria, the Commissioner is also required to consider a showing of "net new benefits" related to the transaction. That term includes initial capital investments, job creation plans, consumer and business services, and commitments to maintain and open branch offices, among other factors, which the Commissioner may deem necessary. As discussed in the application, the continuing bank intends to provide the aforementioned products and services to customers, as well as make capital investments in the form of improvements for the Roxbury-Highland office. According to the Petitioner, the merger will enhance the continuing bank's financial capability to invest in the communities it serves and to develop new products and services for its customers. Also noted is the statement by the continuing bank that it has the ability to provide future employment opportunities, especially in the communities within the combined primary service area of the continuing bank. Moreover, as noted herein, Mt. Washington will maintain the current main office of Roxbury-Highland as a branch office. These and other factors are also cited as support for meeting such criteria.

Related to the issue of public convenience and advantage is the record of performance under the CRA by the banks which are parties to this transaction. Such review for a state-chartered bank includes examination of personnel by the Division as well as analysis of concerns received from the bank's community and its response to those concerns fairly raised. A publicly available descriptive rating and evaluation by a federal bank regulatory agency will also be considered. Upon review, the Division has noted that both Mt. Washington and Roxbury-Highland received "Satisfactory" ratings in their most recent CRA performance examinations.

Other matters related to this transaction were the subject of telephone conversations or written communications. Certain of these matters were resolved by the submission of supplemental filings dated April 4, 2008 and April 25, 2008, which supersedes a letter of April 15, 2008.

Upon review of this application with reference to the relevant statutory and regulatory criteria, the Division has concluded that all such requirements have been met and that consummation of the proposed merger would be in the public interest. On the basis of these considerations, approval is granted for Roxbury-Highland to merge with and into Mt. Washington under the charter, by-laws and name of Mt. Washington Co-operative Bank pursuant to Massachusetts General Laws chapter 170, section 25. Approval is also granted for Mt. Washington to maintain the sole banking office of Roxbury-Highland as a branch office. The approvals granted herein are subject to the following conditions:

  1. that no merger shall become effective until a certificate signed by the Presidents and Clerks or other duly authorized officers of the banks involved in the merger indicating that each such institution has complied with the provisions of Massachusetts General Laws chapter 170, section 25 has been returned for my endorsement thereon;
  2. that the proposed merger shall not become effective until Articles of Merger with my endorsement thereon are filed with the Secretary of State; and
  3. that the proposed merger shall be consummated within one year of the date of this decision.

April 30, 2008
_____________
Date


Steven L. Antonakes
____________________
Commissioner of Banks