Decision relative to the application of Banknorth Group, Inc., Burlington, Vermont to acquire BNG Interim Bank, N.A. (in organization) 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 Massachusetts General Laws chapter 167A, sections 2 and 4 to acquire direct ownership of BNG Interim Bank N.A.("BNG"), Glen Falls, New York. Banknorth is the holding company for several subsidiary banks including First Massachusetts Bank, N.A., Worcester, Massachusetts. BNG is being established as part of a multi-step transaction in which all of the trust and private banking accounts of Banknorth will be consolidated in one of Banknorth's subsidiaries.
Notice of the petition of 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 23, 1999 and the period for filing comments expired on December 3, 1999. 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 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 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 by a letter dated October 29, 1999 that satisfactory arrangements have been made for this transaction.
This transaction follows a previous transaction approved by the Board. On December 31, 1998 Banknorth, subsequent to the approval of the Board, consummated its merger with Evergreen Bancorp, Inc., Glen Falls, New York. As a result of this merger Evergreen Bank, N.A. ("Evergreen"), Glen Falls, New York became a wholly-owned subsidiary of Banknorth. In addition to its presence in New York through Evergreen, Banknorth owns four subsidiary banks in Vermont, one subsidiary bank in New Hampshire, and one subsidiary bank, First Massachusetts Bank, N.A., in the Commonwealth. Banknorth had consolidated assets of approximately $4.4 billion at June 30, 1999. First Massachusetts Bank, N.A., Worcester, Massachusetts was formed in 1996 to acquire the assets and liabilities as well as to operate thirteen branch offices in central and western Massachusetts being divested by the Shawmut Bank, N.A. as part of its acquisition by Fleet Financial Group. It subsequently acquired eleven branch offices in western Massachusetts from BankBoston, N.A. At June 30, 1999, First Massachusetts Bank, N.A. had total assets of approximately $1.1 billion. Evergreen also had total assets of approximately $1.1 billion at June 30, 1999. Following consummation of the proposed multi-step transaction, each subsidiary bank of Banknorth will continue to offer substantially the same full-line of products and services as are currently offered except for the trust and private banking accounts and operations of Evergreen.
The ultimate purpose of the proposed transaction is to consolidate the trust and private banking accounts and operations of Evergreen into another subsidiary of Banknorth. The establishment of BNG is one step in the accomplishment of this multi-step transaction. The petition indicates that Banknorth determined a number of years ago that in order to provide the best possible customer service and maximizing operational efficiencies, all trust and private banking accounts and operations for customers of Banknorth's subsidiary banks should be consolidated in one subsidiary, The Stratevest Group, N.A., Burlington, Vermont. The Petitioner further states that the reorganization is intended to harmonize the organizational placement of Evergreen's trust operations with Banknorth's existing organizational framework. The Board notes that the directors and principal officers of BNG will consist of the same individuals who now comprise the Board of Directors and principal officers of Evergreen and the Board of Directors and principal officers of Banknorth will be unchanged by the proposed reorganization. Financial aspects of the proposed transaction are also supportive of its approval. At the public hearing, the Board specifically inquired as to the CRA ratings of Banknorth's subsidiary banks.
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. Based on the record of this matter considered in light of all relevant statutory and administrative requirements, the Board finds that public convenience and advantage will be promoted and that competition among banking institutions will not be unreasonably affected and that the records of performance under CRA by the banks involved in this transaction are consistent with its approval. Having considered the record established on this application, the Board has found that the applicable statutory and administrative criteria have been met.
In accordance with the findings expressed herein and pursuant to statute, the Board hereby approves the petition and authorizes the Petitioner to directly control up to 100% of the stock of BNG; provided, that the transaction is completed within one year of the date of this Decision.
| Thomas J. Curry Commissioner of Banks | |
| Frederick A. Laskey Commissioner of Revenue | Board |
| Shannon P. O'Brien Treasurer and Receiver-General | |
| December 17, 1999 Date |