Decision relative to the application of Benjamin Franklin Savings Bank, Franklin, Massachusetts to acquire The Foxboro National Bank of Foxborough, Foxborough, Massachusetts

By the Division of Banks

---

Benjamin Franklin Savings Bank ("Benjamin Franklin"), Franklin, Massachusetts and Benjamin Franklin Bancorp, M.H.C. ("Bancorp"), its parent mutual holding company operating under Massachusetts General Laws chapter 167H, have petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4 to become bank holding companies, and to acquire direct or indirect ownership and control of The Foxboro National Bank of Foxborough ("Foxboro"), Foxborough, Massachusetts in a multi-step transaction. As part of this transaction, Benjamin Franklin will establish BFSB Interim Trust Company, Franklin, Massachusetts ("Interim Bank"), a wholly-owned Massachusetts trust company subsidiary for the sole purpose of facilitating the acquisition. Interim Bank will merge with and into the surviving entity, Foxboro and subsequently, Foxboro will merge with and into Benjamin Franklin. Upon consummation of this multi-step transaction, Benjamin Franklin Bancorp, M.H.C. will control a single Massachusetts-chartered savings bank, Benjamin Franklin. The merger transactions are within the sole jurisdiction of the Division of Banks which has approved such transactions as of this same date.

Notice of the petition by Benjamin Franklin 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 December 22, 1997 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 Benjamin Franklin and Foxboro were also factors considered by the Board.

Benjamin Franklin Bancorp, M.H.C. is the mutual holding company for Benjamin Franklin, a Massachusetts-chartered stock savings bank with total consolidated assets of $282.61 million as of September 30, 1997. Benjamin Franklin has its main office in Franklin and has one branch office in each of the towns of Bellingham, Medfield and Milford. It has one wholly-owned subsidiary for securities investments. Foxboro is a federally-chartered commercial bank with total consolidated assets of $73.3 million as of September 30, 1997. Foxboro currently has one wholly-owned direct subsidiary, FNB Securities, Inc. for securities investments. It conducts banking operations from its main office and one branch office which is in Franklin, Massachusetts. Both banks are full service institutions and provide a wide array of consumer and commercial services.

The Petitioner's application and testimony at the public hearing addressed the criterion of whether competition among banking institutions would be adversely effected by the proposed transaction. Much of that analysis is detailed according to various tests used by federal agencies. That analysis demonstrates that consummation of the transaction will not result in undue concentration of banking resources in the specified banking markets or on a county basis in Massachusetts. Traditionally, however, this Board has not limited its review to those previously cited federal standards in its consideration of whether competition will be unreasonably affected. Rather it is the position of this Board to consider a transaction in light of its impact on the citizens, communities and banking structure in the Commonwealth on a community by community basis instead of by variously grouped markets. The Board gave particular review to the effect this transaction would have on the town of Franklin, the only community in which each bank has an office. The Board noted that among other facts, there are five banking offices of three other banks within Franklin. Accordingly, the review of the transaction's impact on competition does not raise any concerns which would preclude its approval.

Information has also been established in the record on the promotion of convenience and advantage which will result for the banking public in Massachusetts. In particular, all branches of both banks will remain open for customers convenience. In addition, upon the consummation of the transaction customers of Foxboro will obtain the benefit of excess of deposit insurance and additional services such as savings bank life insurance, securities and annuity products, and telephone banking services, as well as greater resources and broader community contacts. Moreover, the Petitioner states that its commercial lending capability will be greatly enhanced by the acquisition of Foxboro's experienced commercial lending department. Benjamin Franklin also will dedicate additional resources to the commercial lending program in order to position itself as another lending option to businesses in its service area. These factors weigh in favor of approval of the transaction.

Related to the issue of public convenience and advantage is the record of performance ratings 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 ratings of Benjamin Franklin and Foxboro were specifically discussed at the public hearing. The most recent public rating of Benjamin Franklin was Satisfactory, while Foxboro was also Satisfactory.

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 were also 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 are also supportive of its approval. Additionally, all other requirements of statute relating to a bank holding company acquisition have been met including those relative to net new benefits.

The Board has reviewed similar criteria and supporting documents for the establishment of BFSB Interim Trust Company under the provisions of chapter 172 of the General Laws and determined that all applicable provisions of law have been met.

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. In addition, the Board was notified, in a letter dated December 5, 1997, that satisfactory arrangements have been made with the Massachusetts Housing Partnership Fund under section 4 of Massachusetts General Laws chapter 167A for this transaction. The Board notes that this transaction is possible due to the mutual holding company structure of Benjamin Franklin, which resulted in it being a subsidiary bank in stock form of Bancorp. Therefore, in accordance with its findings and pursuant to the statutory authority cited herein, the Board hereby approves the applications, and

1. issues a certificate that public convenience and advantage will be promoted by the establishment of BFSB Interim Trust Company;
2. authorizes Bancorp and Benjamin Franklin to become bank holding companies upon the issuance of a certificate to transaction business to the Interim Bank which authority shall remain in effect until the consummation of the merger between Benjamin Franklin Savings Bank and The Foxboro National Bank of Foxborough, Massachusetts; and
3. authorizes Benjamin Franklin Savings Bank and its parent Benjamin Franklin Bancorp, M.H.C., to acquire directly or indirectly up to 100% of the common stock of The Foxboro National Bank of Foxborough, Massachusetts.

The approvals granted herein are subject to the conditions that:

1. all required actions are taken for the organization of Interim Bank; and
2. that the transactions related to these applications are completed within one year of the date of this Decision.

Thomas J. Curry Commissioner of Banks
Mitchell Adams Commissioner of Revenue	Board of Bank Incorporation
Joseph D. Malone Treasurer and Receiver-General
February 19, 1998 Date