Decision relative to the application of People's Savings Bank of Brockton, Easton, Massachusetts to close its branch office at 478 Middleboro Avenue, East Taunton
By the Division of Banks
People's Savings Bank ("People's" or the "Petitioner") has petitioned the Division of Banks (the "Division") for permission to close its branch office located at 478 Middleboro Avenue, East Taunton (the "East Taunton Branch"), pursuant to the provisions of Massachusetts General Laws chapter 167C, section 3. During the public comment period on the pending application, the Division received letters and comments in opposition to the closing of the East Taunton Branch. For the reasons stated below, the petition to close the East Taunton Branch is approved.
Notice of the application was published and posted as required by the Division. The time for filing comments ended on October 6, 1997. Accordingly, the Division's review of the application, supporting documents and all related materials received, including public comments, has been completed. The analysis of this record considered the competitive effects of the proposed transaction, the financial and managerial resources of the Petitioner, the convenience and needs of the area served by the branch office and other applicable statutory criteria.
The decision to close a branch office is made initially by a bank. If the bank is chartered by the Commonwealth, as is the Petitioner, it must seek the approval of this Division under a procedure detailed herein and consistent with the applicable statute. In deciding upon an application to close a branch office, the Division, pursuant to Massachusetts General Laws chapter 167C, section 3, must determine that the area served by the branch office will not be adversely affected by the transaction. The statute further states that, in addition to other factors, the availability of credit as well as the convenience and necessity of deposit service must be considered. In rendering a decision, the Division attempts to balance the needs of the petitioning financial institution and the community being served by the branch office. In making a decision, the Division looks to see not only that all financial and statutory requirements are met, but also that adequate banking facilities and services remain available to the public.
The task before the Division thus becomes to analyze this transaction in light of the statutory test that the area served, as reviewed, will not be adversely affected by the proposed branch office closing. Any closing of a banking office can impact the area served particularly as to the inconvenience it will cause some customers. Due to that fact, the multi-faceted test set out in statute, however, is not limited to mere convenience alone. Among other things, it requires the Division to consider the availability of credit in the area and the necessity of deposit services therein. That analysis must be based upon a case by case review of any unique factors and circumstances affecting the banking public and area served by the branch office.
The pending application is not the first filed with the Division to close the East Taunton Branch. In July of 1994 an application was submitted by the Bank of Taunton, A Co-operative Bank (the "Bank of Taunton") to close the East Taunton Branch (the "1994 Application"). That application also received opposition. At that time, the Bank of Taunton was experiencing financial problems which eventually led to a determination by the Division that the Bank of Taunton was significantly undercapitalized. In conjunction with that determination and as part of a multi-step transaction, the Bank of Taunton underwent a supervisory conversion to stock form and was simultaneously acquired by and merged with and into People's. Without that impending transaction, the 1994 Application would likely have been approved. However, as part of the acquisition and merger, People's committed to maintain the East Taunton Branch pending its own review of the performance of that office. (See DECISION RELATIVE TO THE MERGER OF BANK OF TAUNTON, A CO-OPERATIVE BANK, TAUNTON, MASSACHUSETTS WITH AND INTO PEOPLE'S SAVING BANK OF BROCKTON, BROCKTON, MASSACHUSETTS, May 10, 1995). Accordingly, permission was granted to withdraw the 1994 Application on that same date, May 10, 1995.
The current application was filed in late August of 1997. That two-year period has provided People's with sufficient information on its independent operation of the East Taunton Branch. The record set out in the application reflects the continued limited activity at this banking office. As of June 30, 1997, shortly before this application was filed, the East Taunton Branch was credited with total deposits of approximately $4.7 million by the Petitioner. That amount is more than half million dollars less than was reflected in July of 1994 when the Bank of Taunton filed to close this same office. Moreover, according to the application, the East Taunton Branch is open six days a week, for forty hours, and averages less than two hundred transactions a day. The Petitioner further states that this banking office is not profitable and that marketing efforts to spark business have failed to generate any significant improvement. Therefore, after more than two years of operating it, the Petitioner came to the same conclusion as had the Bank of Taunton - to close the East Taunton Branch.
The Petitioner believes it has addressed the issues of convenience and services impacted by the proposed closing. The application notes that People's two remaining Taunton branch offices are open in excess of thirty-five hours a week, have sufficient staffing levels and each has a drive-up window and an automated teller machine. Moreover, all of the services provided at the East Taunton Branch are also available at the Petitioner's other Taunton banking offices and the rest of its office network. Additionally, the application states that if the branch office closing is approved, no action will be necessary by customers for the transfer of their accounts to its Weir Street branch office in Taunton. Personal assistance will also be given to customers who choose to transfer their accounts to another bank. According to the Petitioner there are two other banks with offices about 2.5 miles from the East Taunton Branch.
As with any application, compliance with the Commonwealth' Community Reinvestment Act ("CRA") is a major consideration. The Division's emphasis on CRA's impact on the regulatory approval process is set out in Regulatory Bulletin 2.1-101. It is also specifically addressed in the Division's CRA regulations at 209 CMR 46.19, which implements General Laws chapter 167, section 14. For state-chartered banks a determination of compliance with CRA includes examination by personnel of the Division. The Petitioner's performance under CRA reflects that it has a public rating of "Satisfactory" from the last examination. The Division has also noted that the Petitioner but for a transaction involving the redesignation of its main office, had not closed a branch office in the last four years. Moreover, the Petitioner will retain two branch offices in Taunton and the community will remain within the Petitioner's assessment area. Its CRA commitment to make credit available would remain to the entire city, including East Taunton.
In rendering a decision on this matter the Division must determine that all statutory tests are met and that other appropriate factors are considered. As noted previously, the Division recognizes that the closing of a branch office of any bank is likely to inconvenience some customers of that institution. On the pending application, the lack of activity, the minimal amount of deposits and the availability of other banking options in the general area do not lead to a conclusion that the East Taunton Branch must remain open to insure convenience and deposit services to the area. Similarly, the continued existence of two other banking offices in Taunton by the Petitioner will not diminish it as a provider of credit services within that community. I have also considered the fact that the Bank of Taunton which established the East Taunton Branch also sought to close it as evidenced by the 1994 Application. In conjunction therewith, I have noted that the Petitioner willingly acquired and retained the site as part of the resolution of a troubled institution. Additionally, I am aware that the Petitioner subsequently purchased another branch office in Taunton in the following year. The Petitioner's commitment to continue to serve credit and deposit needs of that city, its residents and businesses remains.
Accordingly, based upon these extended reviews, consideration of comments received and a determination that all requirements of Massachusetts General Laws chapter 167C, section 3 have been fulfilled and that the closing will not adversely affect the area served by the branch office, approval is hereby granted to the Petitioner for the action requested, provided the branch office closing takes place within one year of the date of this decision. The Petitioner shall notify this Division, in writing, of the date on which the closing of the branch office became effective.
| April 29, 1998 Date | Thomas J. Curry Commissioner of Banks |