Decision relative to the merger of Haymarket Co-Operative Bank, Boston, Massachusetts with and into Century Bank and Trust Company, Boston, Massachusetts and related transactions
By the Division of Banks
Century Bank and Trust Company ("Century Bank" or the "Petitioner"), Somerville, Massachusetts has applied to the Division of Banks for authority to merge with Haymarket Co-operative Bank, ("Haymarket"), Boston, Massachusetts pursuant to the provisions of Massachusetts General Laws chapter 172, section 36 and under the terms of an Agreement and Plan of Merger (the "Agreement") dated as of December 10, 1997. The Agreement provides for the merger of Haymarket with and into Century Bank under the name, charter and by-laws of Century Bank. The banking offices of Haymarket will become branch offices of Century Bank. In conjunction with and prior to this transaction, an application has also been made for a merger of Century Interim Trust Company, in organization, with and into Haymarket. Citizens Interim Trust Company is being formed as a wholly owned subsidiary of Century Bank. It has received a Certificate of Public Convenience and Advantage, under General Laws chapter 172, section 6 from the Massachusetts Board of Bank Incorporation as part of this multi-step transaction.
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 transactions 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"), section 14 of Chapter 167 of the General Laws and its implementing regulation, 209 CMR 46.00 et seq.
Century Bank is a state-chartered trust company in stock form. As of December 31, 1997 it had total assets of $631 million, total deposits of $523 million and net loans of $312 million. Century Bank is headquartered in Somerville, Massachusetts while operating fifteen branch offices in Eastern Massachusetts. Century Bank is a subsidiary of Century Bancorp, Inc., Medford, Massachusetts.
Haymarket is a state-chartered co-operative bank in stock form headquartered and operating two banking offices in Boston, Massachusetts. The deposits of Haymarket are insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation and by the Co-operative Central Bank Share Insurance Fund in excess of the FDIC's insurance limits. As of December 31, 1997, Haymarket had total assets of $142 million, total deposits of $125 million and net loans of $79 million. Haymarket also has three wholly owned subsidiaries: Haymarket Security Corporation; HCB Corp.; and Haymarket Affordable Housing Corp.
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 specified banking markets in Massachusetts. 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 Haymarket operates banking offices. Particular analysis was given to downtown Boston and the North End due the fact that Century Bank also has a branch office located within the same business area. Upon review, the Division notes the high concentration of other banking offices in downtown Boston 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 Haymarket'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 documents provide examples of the benefits which will result from the merger of Century Interim Trust Company and Haymarket and Haymarket into Century Bank. In general, Century Bank cites several products and services which will now become available to customers of Haymarket such as benefits under the transaction. Additionally, a more comprehensive and convenient branch network will result for Haymarket customers while customers of Century Bank will have two additional locations in downtown Boston at which to conduct their banking business.
Related to the issue of public convenience and advantage is the record of performance under 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 records of the Division reflect that both Century Bank and Haymarket received a "Satisfactory" rating in their most recent examinations of performance under CRA. Accordingly, the Division's review of factors related to public convenience and advantage are consistent with approval of the Petitioner's application.
The financial structure of the transaction was reviewed and addressed. The financial aspects as impacted by the tax consequences on the proposed corporate structure of the transaction were also considered in light of the merger of Century Interim Trust Company into Haymarket. The resulting capital ratios and projections for Century Bank 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.
The application filed concerning the merger of Century Interim Trust Company and Haymarket was submitted under a similar statute that governed the Century Bank and Haymarket merger. A record has also been established relative to that part of this multi-step transaction. Pursuant to those same provisions of law and policies of the Division, this merger, in which Haymarket will be the continuing entity until its subsequent merger with and into Century Bank, has been reviewed under the same considerations detailed previously herein.
Upon review of these applications with reference to the relevant statutory and regulatory criteria, the Division has concluded that all such requirements have been met and that consummation of these proposed mergers would be in the public interest. On the basis of these considerations approval is granted for Century Interim Trust Company to merge with and into Haymarket and subsequent to that consolidation, for Haymarket to merge with and into Century Bank. Approval is also granted for Century Bank to maintain the banking offices of Haymarket as branch offices under General Laws chapter 167C, section 3.
The approvals granted herein are subject to the following conditions:
- that prior to any merger, Century Interim Trust Company obtain a certificate to transact business from the Board of Bank Incorporation;
- 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 each particular merger indicating that each such institution has complied with the provisions of Massachusetts General Laws chapter 170, section 26D and chapter 172, section 36, or other applicable statute has been returned with my endorsement thereon;
- that the proposed mergers shall not become effective until Articles of Merger with my endorsement thereon are filed with the Secretary of State; and
- that all such mergers shall be consummated within one year of the date of this decision.
| May 28, 1998 Date | Thomas J. Curry Commissioner of Banks |