Decision relative to the application of CFX Corporation, Keene, New Hampshire and certain related entities to acquire Portsmouth Savings Bank, Portsmouth, New Hampshire, Concord Savings Bank, Concord, New Hampshire and Centerpoint Bank, Bedford, New Hampshire
By the Division of Banks
CFX Corporation (hereinafter referred to as the "Petitioner" or "CFX"), Keene, New Hampshire has petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4, to acquire indirect ownership and control of Portsmouth Savings Bank, Portsmouth, New Hampshire ("Portsmouth"); Concord Savings Bank ("Concord"), Concord, New Hampshire; and Centerpoint Bank ("Centerpoint"), Bedford, New Hampshire in a multi-step transaction. As part of this transaction, the Petitioner will merge with Portsmouth's holding company, Portsmouth Bank Shares, Inc., Portsmouth, New Hampshire, and Community Bankshares, Inc., Concord, New Hampshire, the holding company of Concord Savings Bank and Centerpoint Bank. After the merger, Portsmouth, Concord and Centerpoint would all merge with and into CFX Bank, the Petitioner's subsidiary which is a New Hampshire-chartered savings bank. Upon consummation of this multi-step transaction CFX will control a single New Hampshire-chartered savings bank. CFX is also the bank holding company for both Orange Savings Bank, Orange, Massachusetts, and Safety Fund National Bank, Fitchburg, Massachusetts.
Notice of the petition by CFX was published as directed by the Board thereby affording opportunity for interested parties to submit comments. A public hearing relative to this application was held by the Board on July 10, 1997 and the period for filing coments 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 of public convenience and advantage would be promoted by approval of the proposed transaction. The record of performance under the Community Reinvestment Act ("CRA") by the bank subsidiaries of the Petitioner, Portsmouth Bank Shares, Inc. and Community Bankshares, Inc. were also factors considered by the Board. The additional requirements of the Commonwealth's 1996 Interstate Banking and Branching Act were also significant factors considered by the Board in regard to this application.
One provision of law requires the Board to have received notice from the Massachusetts Housing Partnership Fund (the "MHPF") that satisfactory arrangements for the proposed transaction have been made by Citizens pursuant to section 4 of said Chapter 167A and guidelines adopted by the MHPF. The Board has received notice from the MHPF, in a letter dated July 18, 1997, that satisfactory arrangements have been made for this transaction.
As an interstate transaction, the reciprocity of the laws of CFX's home state must be reviewed. CFX's home state for determination of applicable law is New Hampshire. Under Massachusetts law, the determination of the reciprocity of the laws of another state rests solely with the Commissioner of Banks. The Commissioner has previously ruled in transactions involving CFX that New Hampshire law is reciprocal and does expressly authorize a similar transaction by a Massachusetts holding company under conditions no more restrictive than those imposed by chapter 167A. Accordingly, the proposed transaction is permissible under the Commonwealth's Interstate Banking Act and, therefore, the Board will proceed to consider whether other statutory requirements are met by this application.
CFX is a bank holding company within the meaning of both federal law and said chapter 167A of the General Laws. CFX currently has three bank subsidiaries, Safety Fund National Bank, Fitchburg, Massachusetts; Orange Savings Bank, Orange, Massachusetts; and CFX Bank, Keene, New Hampshire. At December 31, 1996, CFX had total consolidated assets of $ 1.547 billion.
Portsmouth is a New Hampshire-chartered savings bank which has deposits insured by the Federal Deposit Insurance Corporation. As of March 31, 1997, Portsmouth had total assets of $ 259.4 million. Portsmouth currently operates three branches.
Concord is a New Hampshire-chartered savings bank which has deposits insured by the Federal Deposit Insurance Corporation. As of March 31, 1997, Concord had total assets of $ 463.7 million. Concord currently operates six branches.
Centerpoint is a New Hampshire-chartered commercial bank which has deposits insured by the Federal Deposit Insurance Corporation. As of March 31, 1997, Centerpoint had total assets of $ 119 million. Centerpoint currently operates four branches, two of which are to be closed as a result of this transaction.
The application, supporting documents and the comments received at the public hearing have established an extensive record on this petition which has been reviewed consistent with statutory provisions and the policies of the Board. Analysis has been provided on the impact of the transaction on competition in applicable municipalities and markets in New Hampshire and the impact within the Commonwealth. Information has also been estalished in the record on the promotion of convenience and advantage which will result for the banking public in New Hampshire as well as customers of all CFX's bank subsidiaries, including its Massachusetts subsidiaries, Orange Savings Bank and Safety Fund National Bank. These factors along with the Board's review of financial and managerial factors related to the proposed transaction weigh in favor of its approval.
Related to the issue of public convenience and advantage is the record of performance 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 CRA activities of Portsmouth, Concord, Centerpoint and CFX's bank subsidiaries were specifically discussed at the public hearing.
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 thatcompetition 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. Therefore, in accordance with these findings and pursuant to the statutory authority cited herein, the Board hereby approves the application and authorizes CFX to acquire up to 100% of the common stock of Portsmouth Bank Shares, Inc. and Community Bankshares, Inc. and thereby indirectly acquire Portsmouth Savings Bank, Concord Savings Bank and Centerpoint Bank.
The approvals granted herein are subject to the condition that all related transactions are completed within one year of the date of this Decision.
| Thomas J. Curry Commissioner of Banks | |
| Mitchell Adams Commissioner of Revenue | Board |
| Joseph D. Malone Treasurer and Receiver-General | |
| May 13, 1997 Date |