Decision relative to Hoosac Bank, North Adams, Massachusetts and Williamstown Savings Bank, Williamstown, Massachusetts

By the Division of Banks

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Hoosac Financial Services, Inc. ("Hoosac" or the "Petitioner"), North Adams, Massachusetts has petitioned the Board of Bank Incorporation (the "Board") to become a bank holding company under the provisions of General Laws chapter 167A, sections 2 and 4. The multi-step transaction would result in the continuing mutual holding company controlling two state-chartered savings banks, Hoosac Bank and Williamstown Savings Bank. Hoosac is the mutual holding company resulting from the reorganization of Hoosac Bank into such a structure pursuant to the provisions of General Laws chapter 167H. MountainOne Financial Partners, Inc. ("MountainOne"), North Adams, Massachusetts is being formed as part of the multi-step transaction as a mid-tier bank holding company. Williamstown Mutual Holding Company ("Williamstown MHC") will be the mutual holding company for Williamstown Savings Bank ("Williamstown Savings") upon its reorganization into that structure. The Board approved that reorganization in December 2001. This multi-step transaction also involves the merger of the two mutual bank holding companies. Under the proposal, Hoosac would merge with and into Williamstown MHC under the name of MountainOne Financial Partners, MHC ("MountainOne MHC"). That application is solely before the Division of Banks (the "Division").

Notice of the petition by Hoosac 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 5, 2001 and the period for filing comments expired on December 14, 2001. The Board reviewed the application, comments received at the public hearing, subsequent filings, 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 Commonwealth's Community Reinvestment Act ("CRA") by the banks involved in the transaction also were factors considered by the Board.

One provision of law requires the Board to have received notice from the Massachusetts Housing Partnership Fund (the "MHPF") that satisfactory MHPF arrangements for the proposed transaction have been made by Hoosac pursuant to section 4 of chapter 167A of the General Laws and guidelines adopted by the MHPF. The Board has received notice from the MHPF, in a letter dated March 11, 2002 that arrangements satisfactory to it have been made for the transaction.

Hoosac was organized in March 1998 upon the reorganization of Hoosac Bank into a mutual holding company structure. Hoosac's primary business is as the holding company of Hoosac Bank. It has several subsidiaries including one engaged as an insurance broker specializing in property and casualty insurance and one engaged as a broker-dealer registered with the National Association of Dealers, Inc. Hoosac Bank operates from its main office and one branch office in Williamstown. At December 31, 2001 Hoosac Bank had assets of approximately $270 million. As the subsidiary banking institution of a mutual holding company, it is a stock savings bank. MountainOne will be the direct bank holding company for Hoosac Bank and Williamstown Savings. It is being organized in conjunction with this proposed transaction.

Williamstown MHC will be the parent company upon the reorganization of Williamstown Savings Bank into a mutual holding company structure. Williamstown Savings operates from its sole banking office in Williamstown. At December 31, 2001 Williamstown Savings had assets of approximately $165 million. As the subsidiary banking institution of a mutual holding company, it will be a stock savings bank.

The proposed merger of the two mutual holding companies, Hoosac and Williamstown MHC is before the Division. The multi-step transaction, unlike most before the Board, does not involve a merger of the two banks. The reasons for this choice of organizational structure was the subject of discussion at the public hearing. The Board has also noted that although MountainOne is being formed as a mid-tier stock holding company, no issuance of minority shares will be made in conjunction with the transaction.

The Petitioner has addressed the issue of whether competition among banks will be unreasonably affected by the proposed transaction. Part 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 Commonwealth. The Board's review, however, is not limited to such federal standards. It is the position of the 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. At the public hearing and in written testimony the unique economic and demographic aspects of Berkshire County were described to the Board. Those aspects exist in an environment of increasing competition among financial institutions. The Board has noted that Hoosac has a branch office in Williamstown. Upon review, the Board does not find that the transaction will unreasonably affect competition since a number of diverse bank and financial institutions will continue to provide competitive deposit and credit services in the service area of the continuing banks.

The Board has also considered whether public convenience and advantage will be promoted by this transaction. The Petitioner argues that the proposed corporate structure will enhance the continuing mutual entity as a holding company and provide greater ability to be responsive to the diverse banking needs of Berkshire County. In particular the Petitioner cites the ability to expand loan offerings to include more complex commercial credit products. The Petitioner also cites the opportunity for each institution to continue their competitive pricing strategy as well as allowing customers of each institution to conduct banking services at the offices of either bank. Additional investments in technology are also offered in support of the transaction's benefit to the banking public. Upon review, the Board's analysis of the public convenience and advantage as well as net new benefits weigh in favor of the transaction.

The record of performance under CRA by the subsidiary banks in a bank holding company transaction is also a consideration by the Board. 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. Such review for state-chartered banks such as Hoosac and Williamstown Savings includes examination by personnel of the Division as well as analysis of concerns received from a bank's community and a bank's response to those concerns fairly raised. The Board has noted that Hoosac Bank and Williamstown Savings each has a "Satisfactory" rating in their most recent examination of performance under CRA. Accordingly, the Board's view of this factor is consistent with approval.

The Board's consideration of this transaction reflects the changed corporate structure of the MHC and the mid-tier holding company. At the time of the Board's hearing those two entities were to be federally chartered holding companies regulated by the Office of Thrift Supervision. The reasons for that structure were discussed in detail at the hearing. That structure raised certain issues which would have been addressed by the Petitioner. However, subsequent to the hearing, the Petitioner filed with the Federal Reserve Board with the awareness that the Federal Reserve Bank of Boston would analyze the competitive effects of the transaction in Berkshire County consistent with its recently redefined Pittsfield Banking Market. The redefinition of that market eliminated the concerns of the parties for filing this transaction with and maintaining the continuing mutual holding company under the jurisdiction of the Federal Reserve. The parties to the transaction informed the members of this Board of these changes and the reasons supporting them in a letter dated March 11, 2002.

Based on the record on this matter including the testimony received at the public hearing and subsequent filing on changes in the structure of the transaction 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. Therefore, in accordance with these findings and pursuant to the statutory authority cited herein, the Board hereby approves the application and authorizes Williamstown MHC and MountainOne to become bank holding companies and to indirectly and directly own and control the stock of Hoosac Bank and Williamstown Savings. As noted herein, the name of the continuing mutual holding company will be MountainOne Financial Partners MHC. It will also continue to be subject to the provisions of chapter 167H of the General Laws and the applicable regulations within 209 CMR 33.00 et seq.

The approvals 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
Alan L. LeBovidge Commissioner of Revenue	Board of Bank Incorporation
Shannon P. O'Brien Treasurer and Receiver-General
April 25, 2002 Date