Decision relative to the merger of National Bank of Fairhaven, Fairhaven, Massachusetts with and into Slade's Ferry Trust Company, Somerset, Massachusetts
By the Division of Banks
Slade's Ferry Trust Company, Somerset ("Slade's Ferry" or the "Petitioner") and National Bank of Fairhaven ("Fairhaven"), Fairhaven, Massachusetts have applied to the Commissioner of Banks to merge pursuant to the provisions of Massachusetts General Laws chapter 172, section 36 and under the terms of a Merger Agreement. This Agreement provides for a merger of Fairhaven with and into Slade's Ferry under the name, charter, and by-laws of Slade's Ferry. The two banking offices of Fairhaven will become branch offices of the continuing bank. The proposed merger is the final act of a multi-step transaction which involves the acquisition of Fairhaven's holding company, Fairbank, Inc. by Slade's Ferry and its holding company, Weetamoe Bancorp. That acquisition, by law, was approved by the Commonwealth's Board of Bank Incorporation on August 5, 1996.
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 and the convenience and needs of the communities to be served by the continuing institution and other applicable statutory criteria.
As of March 31, 1996, Slade's Ferry had consolidated assets of approximately $232 million. Slade's Ferry operates from seven banking offices with two each in Fall River, Somerset and Swansea with its remaining branch office in Seekonk. Slade's Ferry also operates two subsidiaries which hold real estate and certain securities of the bank. Slade's Ferry is a state-chartered trust company which provides full banking services to consumers and small businesses.
As of March 31, 1996, Fairhaven had total assets of $64 million. In addition to its main office, Fairhaven operates one branch office in New Bedford. It provides a wide array of deposit and credit products to consumers and businesses within the communities it serves.
The Petitioner has submitted materials to address the statutory criteria of whether competition among banks will not be unreasonably affected by the proposed transaction. Although Slade's Ferry and Fairhaven do have some deposit and credit customers from each other's service area, the banks do not have banking offices in the same community. Moreover, submitted documents indicate a number of financial institutions will continue to provide competitive banking services in the areas where both Slade's Ferry and Fairhaven derive customers. The review of the transaction's impact on competition, with particular emphasis on the communities served by the banking offices of Slade's Ferry and Fairhaven, does not raise any concerns which would preclude its approval.
The Petitioner indicates that the banking public will benefit in several ways by the merger of Fairhaven into Slade's Ferry. Those benefits include, among other things, an extended branch network and higher lending limit for the combined bank. The application also details the wider array of products now offered by Slade's Ferry that will become available to Fairhaven's current customers. Among these products are mortgage loans, adjustable rate mortgage loans, student loans and recreational vehicle loans. Slade's Ferry, as the continuing bank, will also now offer the fishing vessel mortgage product currently offered by Fairhaven. The Petitioner also states that the combined bank will be a larger more active competitor in Southeastern Massachusetts and particularly in the areas now served by Fairhaven.
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 as set out in subsection A of section 36 of said chapter 172 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. The Petitioner has addressed this requirement of statute. In particular, it states that all employees of Fairhaven have been offered continued employment at their present compensation levels with Slade's Ferry after the merger. The maintenance of Fairhaven's two banking offices as branch offices of the continuing bank as well as certain new deposit and credit products to be offered after the transaction are also cited by the Petitioner as support for meeting this criteria.
Related to this issue of public convenience and advantage is the record of performance under the Community Reinvestment Act ("CRA") by the banks involved in the transaction. Such review for state-chartered banks includes examination by personnel of the Division of Banks as well as analysis of concerns received from the bank's delineated community or assessment area and its response to those concerns fairly raised. For other institutions, a publicly available descriptive rating and evaluation by a federal or state bank regulatory agency is considered. Both Slade's Ferry and Fairhaven have "Satisfactory" ratings under CRA.
The review of all such considerations relative to public convenience and advantage as well as CRA are consistent with approval of this transaction.
The financial and managerial aspects of the proposed transaction have also been reviewed. The resulting impact to the capital ratios of Slade's Ferry and plans for increasing those ratios subsequent to the transaction were considered. The areas whereby cost savings from the transaction would be generated were also presented. The submitted documents also addressed the continuing management of the combined organization. The analysis of these financial and managerial factors are supportive of the transaction.
Upon review of this application with reference to the relevant statutory and regulatory criteria, this Division has concluded that all such requirements have been met and that consummation of this proposed merger would be in the public interest. On the basis of these considerations, and pursuant to the applicable statutes referenced herein, approval is granted for (1) Fairhaven to merge with and into Slade's Ferry under the name, charter, and by-laws of Slade's Ferry; and (2) for Slade's Ferry to maintain the two banking offices of Fairhaven as branch offices.
The approvals granted herein are subject to the following conditions:
- 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 each particular merger indicating that each such institution has complied with the provisions of Massachusetts General Laws chapter 172, section 36, as applicable, has been returned with my endorsement thereon;
- that the proposed merger shall not become effective until Articles of Merger with my endorsement thereon are filed with the Secretary of State; and
- that the merger be consummated within one year of the date of this decision.
| August 7, 1996 Date | Thomas J. Curry Commissioner of Banks |