Decision relative to the application of Century Bancorp, Inc., Medford Massachusetts to acquire Haymarket Co-Operative Bank, Boston, Massachusetts

By the Division of Banks

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Century Bank and Trust Company ("Century Bank"), Somerville, Massachusetts and its parent holding company, Century Bancorp, Inc., Medford, Massachusetts ("Century Bancorp" and collectively "the Petitioners"), have petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4 to become bank holding companies and acquire direct or indirect ownership and control of Haymarket Co-operative Bank ("Haymarket"), Boston, Massachusetts in a multi-step transaction. As part of this transaction, Century Bank will establish Century Interim Trust Company, ("Century Interim"), a wholly-owned Massachusetts trust company subsidiary solely for the purpose of facilitating the acquisition. Century Interim will merge with and into the surviving entity, Haymarket, which will subsequently merge with and into Century Bank. Upon consummation of this multi-step transaction, Century Bancorp will control a single Massachusetts-chartered bank, Century Bank and Trust Company. The merger transaction is within the sole jurisdiction of the Division of Banks which has approved such transaction as of this same date.

Notice of the petition by Century Bancorp was published as directed by the Board therebyaffording opportunity for interested parties to submit comments. A public hearing relative to this application was held by the Board on April 28, 1998 and the period for filing comments has expired. The Board reviewed the application, comments received at the public hearing and all related documents in accordance with the statutory criteria of whether competition among banking institutions will be unreasonably affected and whether any net new benefits as well as public convenience and advantage would be promoted by approval of the proposed transaction. The record of performance under the Community Reinvestment Act ("CRA") by Century Bank and Haymarket were also factors considered by the Board.

Century Bancorp is the holding company for a single Massachusetts-chartered bank, Century Bank. Century Bank currently operates fifteen branches in Eastern Massachusetts, including one in the North End neighborhood of Boston, and has four wholly-owned non-bank subsidiaries including, Century Financial Services, Inc., Century Subsidiary Investments, Inc., Century Associates Realty Trust, and Millenium Corporation. The deposits of Century Bank are insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation. As of December 31, 1997, Century Bank had total assets of $631 million, total deposits of $523 million and net loans of $312 million.

Haymarket is a state-chartered stock co-operative bank which operates its main office and one branch office in Boston, Massachusetts. Haymarket owns three non-bank subsidiaries, including Haymarket Security Corporation, HCB Corp. and Haymarket Affordable Housing Corp. As of December 31, 1997, Haymarket had total assets of $142 million, total deposits of$125 million and net loans of $79 million. Both banks are full service institutions and provide a wide array of consumer and commercial services.

The Petitioner's application and testimony at the public hearing addressed the criterion of whether competition among banking institutions would be adversely effected by the proposed transaction. Much of that analysis is detailed according to various tests used by federal agencies. That analysis demonstrates that consummation of the transaction will not result in undue concentration of banking resources in the specified banking market. Traditionally, however, this Board has not limited its review to those previously cited federal standards in its consideration of whether competition will be unreasonably affected. Rather it is the position of this Board to consider a transaction in light of its impact on the citizens, communities and banking structure in the Commonwealth on a community by community basis instead of by variously grouped markets. Accordingly, the review of the transaction's impact on competition in the downtown Boston area where Haymarket has its banking offices does not raise any concerns which would preclude its approval, nor does it adversely impact competition in the other communities served by Century Bank.

Information has also been established in the record on the promotion of convenience and advantage which will result for the banking public in Massachusetts. In particular, all branches of both banks will remain open for customer convenience. In addition, upon the consummation of the transaction customers of Haymarket will obtain the benefit of additional services such as cash and investment management, lock box access, leasing and other products currently offered by Century Bank, as well as greater resources for establishing new products. Moreover, Century Bank states that it will preserve its community-oriented focus while expanding its branch network in downtown Boston. Additional use of technology to conduct banking business will also become available to customers of Haymarket.

Related to the issue of public convenience and advantage is the record of performance ratings under CRA. For financial institutions not directly under the jurisdiction of the Commonwealth, the Board initially looks to the publicly available descriptive rating and evaluation by a federal or other state bank regulatory agency. The most recent public CRA ratings received by both Century Bank and Haymarket were "Satisfactory". The CRA activities of Haymarket and Century Bank's continued CRA performance were specifically discussed at the public hearing.

Century Bank has addressed the Year 2000 issue by establishing a task force and contracting with a software company to convert its systems to be Year 2000 compliant by September 1998. On the date of consummation of the proposed transaction, Haymarket intends to convert to Century Bank's present systems and will thereafter be part of Century Bank's Year 2000 conversion in September 1998. This matter was specifically raised by the Board at the public hearing and the response is supportive of the acquisition.

The financial structure of the transaction was reviewed and addressed at the public hearing. The financial aspects as impacted by the tax consequences on the proposed corporate structure of the transaction were also considered by the Board. The resulting capital ratios and projections for the Petitioner are satisfactory. Management factors reviewed in consideration of the proposed transaction before the Board are also supportive of its approval. Additionally, all other requirements of statute relating to a bank holding company acquisition have been met including those relative to net new benefits.

The Board has reviewed similar criteria and supporting documents for the establishment of Century Interim under the provisions of chapter 172 of the General Laws and determined that all applicable provisions of law have been met.

Based on the record on this matter including the testimony received at the public hearing considered in light of all relevant statutory and administrative requirements, the Board finds that competition among banking institutions will not be unreasonably affected, that public convenience and advantage will be promoted by consummation of the proposed transaction, and that records of performance under CRA by the banks involved in this transaction are consistent with its approval. In addition, the Board was notified in a letter dated April 3, 1998, that satisfactory arrangements have been made with the Massachusetts Housing Partnership Fund under section 4 of Massachusetts General Laws chapter 167A for this transaction. Therefore, in accordance with its findings and pursuant to the statutory authority cited herein, the Board hereby approves the applications, and

1. issues a certificate that public convenience and advantage will be promoted by the establishment of Century Interim Trust Company;
2. authorizes Century Bancorp, Inc. and Century Bank and Trust Company to become bank holding companies upon the issuance of a certificate to transact business to Century Interim Trust Company which authority shall remain in effect until the consummation of the merger between Century Bank and Trust Company and Haymarket Co-operative Bank; and
3. authorizes Century Bank and Trust Company and its parent Century Bancorp, to acquire directly or indirectly up to 100% of the common stock of Haymarket Co-operative Bank.

The approvals granted herein are subject to the conditions that:

1. all required actions are taken for the organization of Interim Bank; and
2. that the transactions related to these applications are completed within one year of the date of this Decision.

Thomas J. Curry Commissioner of Banks
Frederick A. Laskey for Commissioner of Revenue	Board of Bank Incorporation
Joseph D. Malone Treasurer and Receiver-General
May 28, 1998 Date