Decision relative to the petition of FIRSTFED America Bancorp, Inc., Swansea, Massachusetts to acquire People's Bancshares, Inc., New Bedford, Massachusetts

By the Division of Banks

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FIRSTFED AMERICA BANCORP, INC. (the "Petitioner" or "FIRSTFED AMERICA"), Swansea, Massachusetts has petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4 to acquire People's Bancshares, Inc., New Bedford, Massachusetts and its subsidiary bank, People's Savings Bank of Brockton ("People's"), South Easton, Massachusetts. FIRSTFED AMERICA is a unitary thrift savings and loan holding company. The Petitioner is the holding company for First Federal Savings Bank of America ("First Federal"), Swansea, Massachusetts. The application before the Board is part of a multi-step transaction involving the merger of the holding companies and the subsequent merger of People's with and into First Federal pursuant to an Agreement and Plan of Merger dated October 1, 2001. The merger between the subsidiary banks will be done under federal law.

Notice of the application was published and posted as directed by the Board, thereby affording opportunity for interested parties to submit comments. Other standard procedures informing the public of this matter before the Board were implemented. The Board held a public hearing on the petition of FIRSTFED AMERICA on January 9, 2002. The comment period on the proposed transaction ended February 6, 2002. The shareholder votes were taken on February 4, 2002 and were in favor of the transaction.

The Board has reviewed the application and oral testimony received at the public hearing. That review focused on the statutory and administrative criteria which includes, among other things, whether competition among banking institutions will be unreasonably affected; whether public convenience and advantage would be promoted; and the record of performance under the Community Reinvestment Act ("CRA") by the involved subsidiary banks. The additional statutory requirements set out in sections 2 and 4 of said chapter 167A were also significant factors in the Board's deliberations on the matter before it. All such requirements are specifically addressed in the application documents.

One such statutory provision requires the Board to have received notice from the Massachusetts Housing Partnership Fund (the "MHPF") that satisfactory arrangements have been made by the Petitioner consistent with statute and the MHPF's various affordable housing loan programs. In the application documents, the Petitioner informed the Board of its contact with the MHPF in order to meet this requirement. The Board received notice from the MHPF that arrangements satisfactory to it had been made for this transaction in a letter dated January 23, 2002.

FIRSTFED AMERICA is the one-bank holding company for First Federal, a federal savings bank regulated by the Office of Thrift Supervision ("OTS"). At September 30, 2001, FIRSTFED AMERICA had assets of $1.7 billion. It operates three non-bank subsidiaries, one of which provides fiduciary services while another provides insurance products.

First Federal has its main office in Swansea with full service branch offices in Fall River, New Bedford, Seekonk, Somerset, Attleboro and Taunton as well as five branch offices in Rhode Island. First Federal reorganized into a holding company structure in 1997. All of its stock is owned by FIRSTFED AMERICA. First Federal conducts a general banking business.

People's Bancshares, Inc. had assets of $928.5 million at September 30, 2001. Its primary activity is to hold the stock and serve as the parent company of People's. People's is a state-chartered stock savings bank with its main office in South Easton, Massachusetts. It operates twelve branch offices and has a mortgage company subsidiary. These branch offices are located in Brockton, Easton, Mansfied, Mattapoisett, New Bedford, South Dartmouth, Stoughton and Taunton.

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 used by federal agencies. The analysis demonstrates that consummation of the transaction will not result in undue concentration of banking resources in the specified banking markets in Massachusetts. Traditionally, however, this Board has not limited its review to those previously cited federal standards in its consideration of whether competition will be unreasonably affected. Rather it is the position of this 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 instead of by variously grouped markets. Upon review, the Board does not believe the transaction will unreasonably affect competition for the reasons cited as well as the fact that a number of diverse bank and financial institutions will continue to provide competitive deposit and credit services in the areas served by the subsidiary banks to be merged.

The Board has considered whether public convenience and advantage will be promoted by this proposed transaction. The acquisition of People's and the subsequent merger of its subsidiary banks will, according to the application, enhance the ability of the Petitioner's continuing bank subsidiary to better serve the public and the communities in which it operates. The application and the testimony at the public hearing cited several benefits which will result from the transaction. Such benefits include, among other things, community banking oriented products and services on a greater scale and a larger branch office network. It was also stated that the customers of People's will have access to bilingual customer service representatives to serve the substantial Portuguese-speaking population in the communities to be served by the continuing bank. Additionally, First Federal's Sales & Service Center provides operational assistance and customer support, and on-line banking and other services. Trust and estate planning services as well as insurance products will also become available to customers of People's. The Board is satisfied that customers of People's will be adequately informed of the loss of excess deposit insurance upon the merger of the two bank subsidiaries. The Board's review of factors related to public convenience and advantage support approval of the application.

Related to the issue of public convenience and advantage is the record of performance under the CRA by the subsidiary banks which are the parties to this transaction. Such a review for a state-chartered bank includes examination by personnel of the Board as well as analysis of concerns received by the bank's community and its response to those concerns fairly raised. For other institutions, the Board looks to a publicly available descriptive rating and evaluation by a federal or state bank regulatory agency. The matter was specifically addressed at the public hearing. The Board has noted that the Petitioner's subsidiary bank, First Federal has a "Satisfactory" rating in its most recent examination of performance under CRA by the OTS. The Board has noted that People's has a "Satisfactory" rating. The Board's review of factors related to public convenience and advantage are consistent with approval.

The Board has considered the Petitioner's analysis of "net new benefits" related to the transaction. The term includes initial capital investments, job creation plans, consumer and business services, and commitments to maintain and open branch offices, among other factors. The Petitioner has addressed this requirement. According to the Petitioner, the acquisition will enhance the continuing bank's financial capability to invest in community banking oriented products and services for its customers on a greater scale. Although it is anticipated that three existing branch offices will be consolidated with branch offices in close geographic proximity, the continuing bank will be maintaining the remaining branch office network of each institution. Moreover, the larger subsidiary banking institution will have the financial resources available to develop new products, services and branch office locations as conditions warrant.

The financial aspects and any tax consequences from the structure of the transaction were also considered by the Board. As noted in the application materials People's had entered into agreements with bank regulatory agencies to reduce the level of its investment in trust preferred securities and to achieve and maintain certain capital ratios. The Board is aware that each of those issues are being addressed. Management factors reviewed were also found supportive of approval. Additionally, all other requirements of statute relating to a bank holding company have been met.

The application, supporting documents, the supplemental filing 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 record of performance under CRA by the subsidiary 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 FIRSTFED AMERICA to acquire People's Bancshares, Inc. and People's provided that the transaction is 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
February 19, 2002 Date