Decision relative to the application of Westbank Corporation, West Springfield, Massachusetts to acquire Cargill Bancorp, Inc., Putnam, Connecticut
By the Division of Banks
Westbank Corporation ("Westbank" or the "Petitioner"), West Springfield, Massachusetts 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 Cargill Bancorp, Inc. ("Cargill"), Putnam, Connecticut and its wholly owned subsidiary, Cargill Bank. As structured, Cargill will merge with and into Westbank. Upon consummation, Cargill Bank would be retained as a separate subsidiary of the Petitioner. Westbank is the holding company for Park West Bank and Trust Company ("Park West"), West Springfield, Massachusetts. Additional related authorities requested are specified in the application.
Notice of the petition by Westbank 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 January 5, 1999 and the period for filing comments expired on January 11, 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 as well as 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 subsidiary 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. The record of this application reflects that the shareholders of Cargill voted overwhelmingly in favor of this transaction on December 16, 1998.
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 Westbank 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 December 11, 1998, that satisfactory arrangements had been made for this transaction.
Westbank operates Park West which has three nonbank subsidiaries. At June 30, 1998, Westbank had total consolidated assets of approximately $351 million. Park West is a state-chartered trust company with twelve banking offices in seven communities in Massachusetts. It is a full service commercial bank with a trust department.
Cargill is a savings and loan holding company subject to the jurisdiction of the Office of Thrift Supervision. It operates Cargill Bank. Neither Cargill nor Cargill Bank have any subsidiaries. At June 30, 1998, Cargill had total consolidated assets of approximately $48 million. Cargill Bank operates three banking offices in three communities in Connecticut. It is a Connecticut chartered stock savings and loan association. Cargill Bank offers a variety of deposit account and loan products.
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. There is no overlap in the branching network of Westbank's subsidiary bank and Cargill Bank. Moreover, neither bank derives deposits or loans from the other bank's primary service area. Accordingly, the Board finds that competition will not be unreasonably affected.
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 the bank subsidiaries of Westbank and Cargill. As stated in the application and in testimony at the public hearing, the Petitioner states that its control of Cargill Bank will expand the financial products offered by Cargill Bank. The application documents reflect numerous additional deposit, loan and banking services which are offered by Park West which, in time, will become available to customers of Cargill Bank. In particular, the trust services of Park West will become available to the customers of Cargill Bank. The Board's review of these factors are supportive of the application.
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 Westbank's bank subsidiary were specifically discussed at the public hearing. The Board is aware that Park West has a CRA rating of "Satisfactory". The CRA rating for Cargill Bank is also "Satisfactory".
The application documents and testimony indicate that Westbank is well capitalized. Following the transaction, all regulatory capital standards will continue to be met. The pooling of resources and cost savings measures resulting from the transaction will result in operating efficiencies according to the Petitioner. As noted previously, there is no merger of Park West and Cargill Bank as part of this proposal and Cargill Bank will operate as a separate subsidiary. Changes to the Boards of Directors of Westbank and Cargill Bank as a result of this transaction were detailed at the public hearing. Upon review, financial and managerial considerations support approval of the application.
Both Park West and Cargill Bank has addressed the year 2000 ("Y2K") century date change issue. It was stated that the transaction will not effect the ongoing compliance effect. Westbank's actions on Y2K was specifically raised at the public hearing and the response is supportive of this acquisition.
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 Westbank to directly acquire up to 100% of the stock of Cargill Bancorp, Inc. and Cargill Bank.
The approvals granted herein are subject to the condition that all related transactions are completed within one year of the date of this Decision.
| Thomas J. Curry Commissioner of Banks | |
| Bernard Crowley Acting Commissioner of Revenue | Board |
| Joseph D. Malone Treasurer and Receiver-General | |
| January 14, 1999 Date |