In the matter of the merger of Charlestown Co-Operative Bank, Charlestown, Massachusetts with and into Roslindale Co-Operative Bank of Boston, Roslindale, Massachusetts
By the Division of Banks
Pursuant to the provisions of Massachusetts General Laws chapter 170, section 25, Roslindale Co-operative Bank of Boston ("Roslindale" or the "Petitioner"), Roslindale, Massachusetts seeks approval to merge with Charlestown Co-operative Bank ("Charlestown"), Charlestown, Massachusetts. Under the terms of the Agreement and Plan of Merger (the "Merger Agreement") dated as of April 22, 1998, Charlestown will merge with and into Roslindale under the charter and by-laws of Roslindale and name of The Co-operative Bank. The sole banking office of Charlestown will become a branch office of the continuing bank.
Notice of the application 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, the interests of the depositors of each bank, the future prospects of the institutions and the convenience and needs of the communities to be served by the consolidated entity as well as the performance of each bank under the Commonwealth's Community Reinvestment Act ("CRA"), General Laws chapter 167, section 14 and its implementing regulation, 209 CMR 46.00 et seq. Roslindale is a state-chartered co-operative bank in mutual form. As of April 30, 1998, it had total assets of approximately $114.2 million. Roslindale has two banking offices: its main office located in the Boston neighborhood of Roslindale and its branch office located in West Roxbury, another Boston neighborhood. It has two subsidiaries, RCB-A Securities Corporation and RCB-B Securities Corporation.
Charlestown is a state-chartered co-operative bank also in mutual form. As of April 30, 1998, it had total assets of $17.9 million. Its sole banking office is located in the Boston neighborhood of Charlestown. Charlestown has no subsidiaries.
Roslindale identifies its primary service area as Roslindale and West Roxbury, the communities in which its banking offices are located. Additionally, Roslindale includes these two communities and the adjoining Boston neighborhoods of Hyde Park and Jamaica Plain in it CRA assessment area. Similarly, Charlestown's primary service area covers the location of its sole banking office, Charlestown. The combined bank's primary service area will continue to cover the communities where its banking facilities are located: Charlestown, Roslindale and West Roxbury. Moreover, the amount of deposit and loan activity from the other bank's service area is for both banks minimal. Accordingly, the review of the transaction's impact on competition does not raise any concerns which would preclude its approval.
The application notes that the continuing institution's Board of Directors will consist of all of the persons occupying such positions with Roslindale immediately prior to the consummation of the merger, three persons currently serving as directors of Charlestown and the current President and Chief Executive Officer of Roslindale. The management of the combined bank is also detailed in the application documents. The applicant bank argues that the combined institution will produce some economies and service capabilities. Upon consolidation, the continuing bank will meet all required capital standards. Accordingly, upon review, financial and managerial considerations support the application.
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. The continuing bank will have an extended branch office network. In particular, customers of Charlestown will now have access to banking offices in Roslindale and West Roxbury. Additionally, customers of Roslindale will have access to a banking office in Charlestown. Moreover, there are some products and services currently offered by Roslindale to its customers that are not presently available to customers of Charlestown. As described in the application, such services include some types of consumer loans as well as commercial loans, ATM/debit card services and Treasury, Tax and Loan business deposit accounts. The Division considered these reasons and others cited in the submitted documents in determining that public convenience and advantage will be promoted by approval of this transaction.
In determining whether or not to approve a petition under the statutory criteria, the Commissioner is also required to consider a showing of "net new benefits" related to the transaction. That term as set out in section 25 of said chapter 170 includes initial capital investments, job creation plans, consumer and business services and commitments to maintain and open branch offices, among other factors, which the Commissioner may deem necessary. The applicant bank has addressed this requirement of statute. In particular, the application states that the resulting bank will retain the sole banking office and all employees of Charlestown. Moreover, the merger would enable the continuing bank to expand both Roslindale's and Charlestown's efforts to meet customer and community credit needs.
Another factor which must be considered in the review of this application is the compliance of each depository institution with the statutory provisions of the CRA. Such review for state-chartered banks includes examination of personnel by the Division as well as analysis of concerns received from the bank's community and its response to those concerns fairly raised. A publicly available descriptive rating and evaluation by a federal bank regulatory agency will also be considered. Upon review, the Division has noted that Roslindale and Charlestown received ratings of "Satisfactory" and "Outstanding", respectively, in the most recent examinations of their performances under CRA.
As part of the review of this transaction, the continuing bank's compliance with the Year 2000 ("Y2K") issue was considered. The matter was specifically discussed with Roslindale and reflected in the Division's independent analysis. According to Roslindale, the merger has enhanced its Y2K program by causing additional focus on its systems at this time.
Upon review of the application with reference to the relevant statutory and regulatory requirements, this Division has concluded that the consummation of the proposed consolidation would be in the public interest. On the basis of these considerations, approval is granted to merge Charlestown with and into Roslindale under the charter and by-laws of Roslindale and name of The Co-operative Bank pursuant to the provisions of said section 25 of chapter 170 of the General Laws. In accordance with General Laws chapter 167C, section 3, approval is also granted for the continuing bank to maintain the sole banking office of Charlestown as a branch office.
The approvals granted herein are subject to the following conditions:
- that the proposed merger shall not become effective until a Certificate signed by the Presidents and Clerks or other duly authorized officers of each bank indicating that each institution has complied with the provisions of Massachusetts General Laws chapter 170, section 25 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 be consummated within one year of the date of this Decision.
| September 14, 1998 Date | Thomas J. Curry Commissioner of Banks |