Decision relative to the application of Citizens Financial Group, Inc., Providence, Rhode Island And certain related entities to acquire Woburn National Corporation, Woburn, Massachusetts

By the Division of Banks

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Citizens Financial Group, Inc., Providence, Rhode Island and its indirect owner, the Royal Bank of Scotland Group, plc, Edinburgh, Scotland (the "Group") and other related entities of the Group as well as the Governor and Company of the Bank of Ireland ("Bank of Ireland"), Dublin, Ireland (hereafter referred to collectively as the "Petitioners" or "Citizens") have petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4, to acquire Woburn National Corporation ("Woburn"), Woburn, Massachusetts and its wholly-owned banking subsidiary, Woburn National Bank, in a multi-step transaction. As part of this transaction, Citizens' wholly-owned subsidiary, Citizens Bank of Massachusetts ("Citizens Bank"), will establish an interim wholly-owned Massachusetts subsidiary corporation for the sole purpose of facilitating this acquisition. That subsidiary will merge with and into the surviving entity, Woburn, resulting in Woburn and Woburn National Bank becoming direct and indirect subsidiaries of Citizens Bank. After the merger, Woburn will be dissolved and Woburn National Bank merged with and into Citizens Bank. This merger transaction is within the sole jurisdiction of the Division of Banks. Upon consummation of this multi-step transaction Citizens will control a single Massachusetts-chartered bank.

Notice of the petition by Citizens 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 9, 1998, and the period for filing comments 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 as well as 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 Petitioners and Woburn also were factors considered by the Board.

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 16, 1998, that satisfactory arrangements have been made for this transaction.

As an interstate transaction, the reciprocity of the laws of Citizen's home state must be reviewed. Citizen's home state for determination of applicable law is Rhode Island. Under Massachusetts law, the determination of the reciprocity of the laws of another state rests solely with the Commissioner of Banks. The Commissioner previously has ruled in transactions involving Citizens that Rhode Island 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.

Citizens is a bank holding company within the meaning of both federal law and said chapter 167A of the General Laws. Citizens currently has four bank subsidiaries, Citizens Bank of Massachusetts, Boston, Massachusetts; Citizens Bank of Rhode Island, Providence, Rhode Island; Citizens Bank of New Hampshire, Manchester, New Hampshire; and Citizens Bank of Connecticut, New London, Connecticut. As of March 31, 1998, Citizens had total consolidated assets of $16.8 billion. Citizens is owned by the Group with total consolidated assets of approximately $127.3 billion as of March 31, 1998, and by the Bank of Ireland which has total consolidated assets of approximately $53.9 billion as of March 31, 1998. The Group holds 76.5% of Citizens' outstanding common stock, while the Bank of Ireland holds 23.5% of such stock.

Woburn National Corporation is the parent holding company for Woburn National Bank, a national banking association, with its main office in Woburn, Massachusetts, established in 1853. As of March 31, 1998, Woburn National Corporation had total consolidated assets of $166.3 million. Woburn National Bank currently operates three branch offices located in Woburn and one in Winchester, Massachusetts. Woburn National Bank conducts a general commercial banking business and its deposits are insured by the Federal Deposit Insurance Corporation.

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 the Commonwealth. The Board has noted that there is no overlap in the branch network involved in the transaction. Information also has been established in the record on the promotion of convenience and advantage which will result for the banking public as well as customers of all Citizens' bank subsidiaries. The authority for each bank subsidiary to act as agent for each other and thereby allow customers of each bank to conduct most basic banking services at any subsidiary bank's offices in four New England states was mentioned specifically in the application. The additional banking locations within Greater Boston for Woburn National Bank customers also is cited. The application also lists various deposits and credit products, not currently offered by Woburn National Bank, which will become available to its customers as a result of the transaction. These factors weigh in favor of 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 Woburn National Bank and Citizens' Bank subsidiaries were discussed specifically at the public hearing. The "Outstanding" rating of Citizens Bank was noted particularly in the application.

The financial structure of the transaction was reviewed and addressed at the public hearing. The financial aspects as impacted by the tax consequences on the proposed corporate structure of the transaction also were considered by the Board. The resulting capital ratios and projections for the Petitioner are satisfactory. Management factors reviewed in consideration of the proposed transaction before the Board also are supportive of its approval. All other requirements of the statute relating to a bank holding company acquisition have been met, including those relative to net new benefits.

Citizens has addressed the Year 2000 issue by dedicating senior personnel and funds to the task. Moreover, ongoing system conversions are being done for compliance with Year 2000 requirements. It was stated that this transaction will not effect that compliance effort. The Year 2000 matter specifically was raised at the public hearing and the response is supportive of the acquisition.

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 that competition 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:

1. authorizes Citizens through its subsidiary Citizens Bank of Massachusetts to acquire up to 100% of the common stock of Woburn National Corporation and Woburn National Bank; and
2. for the Group and the Bank of Ireland to indirectly acquire Woburn National Corporation and Woburn National 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 Acting Commissioner of Revenue	Board of Bank Incorporation
Joseph D. Malone Treasurer and Receiver-General
August 7, 1998 Date