Decision relative to the application of Peoples Heritage Financial Group, Inc., Portland, Maine to acquire Atlantic Bank National Association, Portland, Maine
By the Division of Banks
Peoples Heritage Financial Group, Inc. (the "Petitioner" or "Peoples"), Portland, Mainehas petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts GeneralLaws chapter 167A, sections 2 and 4, to acquire Atlantic Bank National Association ("AtlanticBank"), Portland, Maine in a multi-step transaction. As part of this transaction, a wholly-owned subsidiary of the Petitioner will merge with and into Atlantic Bank's parent company, AtlanticBancorp ("Atlantic"), Portland, Maine. After the merger, Atlantic Bank will be merged with andinto the Petitioner's subsidiary, Peoples Heritage Savings Bank ("Peoples Heritage"), Portland,Maine. The Petitioner is the bank holding company for Family Bank, FSB, Haverhill,Massachusetts.
Notice of the petition by Peoples was published as directed by the Board therebyaffording opportunity for interested parties to submit comments. A public hearing relative to thisapplication was held by the Board on September 11, 1997 and the period for filing comments hasexpired. The Board reviewed the application, comments received at the public hearing and allrelated documents in accordance with the statutory criteria of whether competition amongbanking institutions will be unreasonably affected and whether any net new benefits as well aspublic convenience and advantage would be promoted by approval of the proposed transaction.
The record of performance under the Community Reinvestment Act ("CRA") by Peoples' banksubsidiaries and Atlantic Bank were also factors considered by the Board. The additionalrequirements of the Commonwealth's 1996 Interstate Banking and Branching Act were alsosignificant factors considered by the Board in regard to this application.
One provision of law requires the Board to have received notice from the MassachusettsHousing Partnership Fund (the "MHPF") that satisfactory arrangements for the proposedtransaction have been made by the Petitioner pursuant to section 4 of said Chapter 167A andguidelines adopted by the MHPF. The Board has received notice from the MHPF, in a letterdated August 6, 1997, that satisfactory arrangements have been made for this transaction.
As an interstate transaction, the reciprocity of the laws of Peoples' home state must bereviewed. Peoples' home state for determination of applicable law is Maine. UnderMassachusetts law, the determination of the reciprocity of the laws of another state rests solelywith the Commissioner of Banks. The Commissioner has previously ruled in transactionsinvolving Peoples that Maine law is reciprocal and does expressly authorize a similar transactionby a Massachusetts holding company under conditions no more restrictive than those imposed bychapter 167A. Accordingly, the proposed transaction is permissible under the Commonwealth'sInterstate Banking Act and, therefore, the Board will proceed to consider whether other statutoryrequirements are met by this application.
Peoples is a bank holding company within the meaning of both federal law and saidchapter 167A of the General Laws. Peoples currently has three bank subsidiaries, PeoplesHeritage Savings Bank, Portland, Maine; Bank of New Hampshire, Manchester, NewHampshire; and Family Bank, FSB, Haverhill, Massachusetts. On March 31, 1997,Peoples had total consolidated assets of $ 5.6 billion.
Atlantic Bancorp, Portland, Maine is the parent company of Atlantic Bank, Portland,Maine, a national bank chartered by the Office of the Comptroller of the Currency. On March31, 1997, Atlantic Bancorp had total consolidated assets of $ 470.2 million. Atlantic Bankcurrently operates fifteen branches located in southern Maine. Atlantic Bank conducts a generalcommercial banking business and its deposits are insured by the Federal Deposit InsuranceCorporation.
The application, supporting documents and the comments received at the public hearinghave established an extensive record on this petition which has been reviewed consistent withstatutory provisions and the policies of the Board. Analysis has been provided on the impact ofthe transaction on competition in applicable municipalities and markets in Maine and the impactwithin the Commonwealth. Information has also been established in the record on the promotionof convenience and advantage which will result for the banking public in Maine as well ascustomers of all Peoples' bank subsidiaries, including Family Bank, FSB. These factorsalong with the Board's review of financial and managerial factors related to the proposedtransaction weigh in favor of its approval.
Related to the issue of public convenience and advantage is the record of performanceunder 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 orother state bank regulatory agency. The CRA activities of Atlantic Bank and Peoples' banksubsidiaries were specifically discussed at the public hearing. Of particular note to the Board isthe fact that Family Bank has received an Outstanding rating for its performance under CRA.
Based on the record on this matter including the testimony received at the public hearingconsidered in light of all relevant statutory and administrative requirements, the Board finds thatcompetition among banking institutions will not be unreasonably affected, that publicconvenience and advantage will be promoted by consummation of the proposed transaction, andthat records of performance under CRA by the banks involved in this transaction are consistentwith its approval. Therefore, in accordance with these findings and pursuant to the statutory authority cited herein, the Board hereby approves the application and authorizes the Petitioner toacquire 100% of the common stock of Atlantic Bancorp and thereby acquire Atlantic BankNational Association.
The approvals granted herein are subject to the condition that all related transactions arecompleted 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 | |
| September 29, 1997 Date |