Decision relative to the merger of Woburn National Bank, Woburn, Massachusetts with and into Citizens Bank of Massachusetts, Boston, Massachusetts
By the Division of Banks
Citizens Bank of Massachusetts ("Citizens" or the "Petitioner"), Boston, Massachusetts has applied to the Division of Banks for authority to merge with Woburn National Bank, ("Woburn"), Woburn, Massachusetts pursuant to the provisions of Massachusetts General Laws chapter 168, §34D and under the terms of an Agreement and Plan of Merger (the "Agreement") dated as of April 6, 1998. The Agreement provides for the merger of Woburn with and into Citizens under the name, charter and by-laws of Citizens. The banking offices of Woburn will become branch offices of Citizens.
Notice of the applications 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, including the Commonwealth's Community Reinvestment Act ("CRA"), Massachusetts General Laws chapter 167, § 14 and its implementing regulation, 209 CMR 46.00 et seq.
Citizens is a state-chartered savings bank in stock form with its main office in Boston, Massachusetts and approximately 95 branch offices throughout Massachusetts. As of March 31, 1998 Citizens had total assets of $5.268 billion. Citizens is an indirect subsidiary of the Royal Bank of Scotland Group plc, the Royal Bank of Scotland plc and the Governor and Company of the Bank of Ireland, and a direct subsidiary of Citizens Financial Group, Inc., Providence, Rhode Island, a bank holding company incorporated in Delaware.
Woburn is a federally-chartered national banking association with its main office and three branch offices in Woburn, Massachusetts and one branch office in Winchester, Massachusetts. As of March 31, 1998, Woburn had total consolidated assets of $165.6 million. It is a wholly-owned subsidiary of Woburn National Corporation.
The Petitioner has submitted materials to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. Much of that analysis is detailed according to various tests relative to the size of each institution and its competitors within delineated markets used by federal agencies. That analysis demonstrates that consummation of the transaction will not result in undue concentration of banking resources in the banking markets in Massachusetts in which Woburn and Citizens are located. The Division, however, also looks to the primary service area of the bank which is being merged with and into another financial institution to analyze the banking options which will remain for the public in those communities. The Division's review has focused on the communities in which Woburn operates banking offices, Woburn and Winchester, Massachusetts. Upon review, the Division notes the high concentration of other banking offices in the Greater Boston area, including Winchester, which will also remain available to both commercial and consumer customers. The Division's analysis of these facts and materials indicate that no significant adverse impact on competition within Woburn's primary service area would result from this consolidation.
The Division has also considered whether public convenience and advantage will be promoted by this proposed transaction. The application delineates some of the benefits which will result from the merger of Woburn into Citizens. In general, Citizens asserts that the conversion of all of Woburn's office into Citizens operating systems will benefit customers of both institutions by an increased branch office presence in Woburn and Winchester, while benefitting Woburn's customers with access to a much larger branch network and to products and services previously unavailable. Such banking services provided by Citizens include Circle Checking, Performance Business Checking 200, home equity lines of credit, Companion Basic Savings Accounts, Tiered-Rate Passbook Savings, combined statements, retail brokerage through Corelink Financial, Inc., trust services, and international banking services. Furthermore, upon the consummation of this transaction, Citizens will operate a branch network comprised of approximately 100 banking offices. Citizens also asserts in the application that this consolidation will strengthen Citizens' ability to compete with larger banking institutions.
Related to the issue of public convenience and advantage is the record of performance under the Community Reinvestment Act ("CRA") by the banks which are parties to this multi-step transaction. Such review for a state-chartered bank includes examination by personnel of the Division as well as analysis of concerns received from the bank's community and its response to those concerns fairly raised. The application and records of the Division reflect that Citizens received an "Outstanding" and Woburn received a "Satisfactory" rating in their most recent examinations of performance for CRA compliance. Accordingly, the Division's review of factors related to public convenience and advantage is consistent with approval of the Petitioner's application.
The financial structure of the transaction was reviewed and addressed. The resulting capital ratios and projections for Citizens are satisfactory. Management factors reviewed in consideration of the proposed transaction are also supportive of its approval. Additionally, all other requirements of statute relating to a merger have been met.
Upon review of this application with reference to the relevant statutory and regulatory criteria, the Division has concluded that all such requirements have been met and that consummation of the proposed merger would be in the public interest. On the basis of these considerations approval is granted for Woburn to merge with and into Citizens. Approval is also granted for Citizens to maintain the five banking offices of Woburn as branch offices under General Laws chapter 167C, section 3.
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 the merger indicating that each such institution has complied with the provisions of Massachusetts General Laws chapter 168, section 34D 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 proposed merger shall be consummated within one year of the date of this decision.
| August 7, 1998 Date | Thomas J. Curry Commissioner of Banks |