Decision relative to the application of Banknorth Group, Inc., Burlington, Vermont to acquire Evergreen Bancorp, Inc., Glen Falls, New York
By the Division of Banks
Banknorth Group, Inc. ("Banknorth" or the "Petitioner"), Burlington, Vermont has petitioned the Board of Bank Incorporation (the "Board") pursuant to the provisions of Massachusetts General Laws chapter 167A, sections 2 and 4 to acquire Evergreen Bancorp, Inc., Glen Falls, New York and its wholly owned subsidiary, Evergreen Bank, N.A. As structured in the various agreements, Evergreen Bancorp, Inc. will merge with and into Banknorth. Upon consummation, Evergreen Bank, N.A. would be retained as a separate subsidiary of the Petitioner. In the Commonwealth, Banknorth is the holding company for First Massachusetts Bank, N.A., Worcester. Additional related authorities requested are specified in the application.
Notice of the petition by Banknorth was published and posted as directed by the Board thereby affording opportunity for interested parties to submit comments. A public hearing relative to the application was held by the Board on November 10, 1998 and the period for filing comments expired on November 20, 1998. The Board reviewed the application and the oral testimony received at the public hearing. All such information has been considered in accordance with the statutory criteria of whether competition among banking institutions will be unreasonably affected and whether public convenience and advantage, including net new benefits, will be promoted by approval of the proposed transaction. The record of performance under the Commonwealth's Community Reinvestment Act ("CRA") by the bank subsidiaries involved in the transaction are 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.
One provision of the law required 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 Banknorth 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 September 23, 1998, that satisfactory arrangements had been made for this transaction.
As an interstate transaction, the reciprocity of the laws of Banknorth's state must be considered. Under Massachusetts law, the determination of reciprocity of the laws of another state rests solely with the Commissioner of Banks. The Commissioner has previously ruled, in transactions involving Banknorth, that Vermont 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. That ruling remains in effect. 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.
Banknorth is the parent company for and directly or indirectly owns all of the outstanding voting stock of five subsidiary banks headquartered in Vermont; one subsidiary bank located in New Hampshire; and First Massachusetts Bank, N.A. in the Commonwealth. It also operates several nonbank subsidiaries which provide various financial services. At June 30, 1998, Banknorth had approximately $3.0 billion in consolidated assets. First Massachusetts Bank, N.A. was formed in connection with the sale of assets and thirteen branch offices in central and western Massachusetts resulting from the acquisition of Shawmut Bank, N.A. by Fleet Financial Group, Inc. The acquisition of assets and branch offices was consummated in 1996. It had consolidated assets of approximately $797 million at June 30, 1998. First Massachusetts Bank, N.A. recently acquired ten branch offices of BankBoston, N.A. in Berkshire County.
Evergreen Bancorp, Inc. is the stock holding company for Evergreen Bank, N.A. At June 30, 1998 it had total assets of approximately $1.1 billion. Evergreen Bancorp, Inc. operates one nonbank subsidiary, a real estate investment trust. Evergreen Bank, N.A. has twenty-eight branch offices located in eight counties in eastern New York.
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 and the lack of a direct impact within the Commonwealth. Although there is no overlap in the branching network of Banknorth's subsidiary banks and Evergreen Bank, N.A., the Board discussed at the public hearing the extent of any competition which may occur with Evergreen Bank, N.A. and the newly acquired banking offices in Berkshire County of First Massachusetts Bank, N.A. Information has also 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 bank subsidiaries of Banknorth. The authority for each bank subsidiary to act as agent for each other and thereby allow customers of all such banks to conduct a wide variety of banking services at any subsidiary bank's offices in four states was specifically mentioned. The Board's review of these factors are supportive of the application. Additionally, the Board's consideration of financial and managerial factors related to the proposed 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 another state's banking regulatory agency. The CRA activities of Banknorth's bank subsidiaries were specifically discussed at the public hearing. The Board is aware that all such banks have a CRA rating of "Satisfactory" or better with the exception of First Massachusetts Bank, N.A. which has not yet been examined. The CRA rating for Evergreen Bank, N.A. is also "Satisfactory".
Based on the record of 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 the 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 approves the application and authorizes Banknorth to directly acquire up to 100% of the stock of Evergreen Bancorp, Inc. and Evergreen Bank, N.A.
The approvals granted herein are subject to the condition that all related transactions are completed
| Thomas J. Curry Commissioner of Banks | |
| Bernard Crowley Acting Commissioner of Revenue | Board |
| Joseph D. Malone Treasurer and Receiver-General | |
| December 7, 1998 Date |