In the matter of the merger of The Massachusetts Co-Operative Bank, Dorchester, Massachusetts with and into Abington Savings Bank, Abington, Massachusetts
By the Division of Banks
Pursuant to the provisions of Massachusetts General Laws chapter 168, section 34D and Massachusetts General Laws chapter 170, section 26D, Abington Savings Bank ("Abington" or the "Petitioner"), Abington, Massachusetts seeks approval to merge with The Massachusetts Co-operative Bank ("Massachusetts Co-operative"), Dorchester, Massachusetts. The merger of Abington and Massachusetts Co-operative is the last step in a series of mergers contemplated by an Amended and Restated Agreement and Plan of Merger (the "Merger Agreement") dated as of April 10, 2002, as amended and restated on May 23, 2002. Under the terms of the Merger Agreement, Massachusetts Co-operative will merge with and into Abington under the charter, by-laws and name of Abington Savings Bank. The three banking offices of Massachusetts Co-operative will become branch offices of Abington. This application is part of a multi-step transaction presently before the Board of Bank Incorporation involving the merger of Massachusetts Fincorp, Inc. with and into Abington Bancorp, Inc. The stockholders of Massachusetts Fincorp, Inc. and Abington Bancorp, Inc. approved the multi-step transaction at meetings held on August 29, 2002.
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.
Abington is a state-chartered stock savings bank. As of March 31, 2002, it had total assets of approximately $849 million. Abington's main office is located in Abington and it operates thirteen branch offices located in Abington, Brockton, Canton, Cohasset, Halifax, Hanson, Holbrook, Hull, Pembroke, Plymouth, Randolph and Whitman. Its deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") and the Deposit Insurance Fund ("DIF") of the Depositors Insurance Fund in excess of the FDIC's insurance limits.
Massachusetts Co-operative is a state-chartered co-operative bank also in stock form. As of March 31, 2002, it had total assets of approximately $124 million. Its main office is located in Dorchester and it operates two banking offices located in Quincy and East Milton. Its deposits are insured by the FDIC and the Share Insurance Fund of The Co-operative Central Bank in excess of the FDIC's insurance limits.
Abington identifies its primary service area as the cities and towns of Abington, Avon, Braintree, Bridgewater, Brockton, Canton, Carver, Cohasset, Dedham, Duxbury, Easton, E. Bridgewater, Halifax, Hanover, Hanson, Hingham, Holbrook, Hull, Kingston, Marshfield, Middleborough, Milton, Norwell, Norwood, Pembroke, Plymouth, Plympton, Quincy, Randolph, Rockland, Scituate, Sharon, Stoughton, West Bridgewater, Westwood, Weymouth and Whitman. Massachusetts Co-operative considers its primary service area to be Dorchester, Milton and Quincy. The only overlap between the primary service areas of the two banks is the cities of Milton and Quincy. There are no cities or towns in which both Abington and Massachusetts Co-operative both have a banking office.
Materials have been submitted to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. Following completion of the transaction, customers of the combined institution will be able to conduct their banking business at seventeen full service branch offices located in a wider geographic area. The Petitioners state that the combined institution, with assets of nearly $1 billion, will be better positioned to compete with other financial institutions particularly in being able to better meet the needs of the many small business operating in the market. 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 will include two directors of Massachusetts Co-operative or Fincorp. The principal officers and directors of Abington will continue to serve as the principal officers and directors of the continuing bank. 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 additional branch offices in its network. Abington has indicated its commitment to continuing to operate the existing branches of Massachusetts Co-operative,including its current main office in Dorchester's Fields Corner neighborhood, following completion of the acquisition. As a significantly larger financial institution, additional products and services will be available to customers of the combined institution including internet banking, corporate cash management, insurance products, SBA-guaranteed loans, insurance products and other non-deposit investment products. In addition, the combined institution will have increased lending limits allowing the institution to better service small and mid-sized businesses. 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 34D of said chapter 168 and section 26D 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 Petitioner has addressed this requirement of statute. As stated in the application, the resulting bank will be in a position to offer a wider range of consumer and business services and offer higher lending limits and SBA-guaranteed to its commercial customers. The existing branches of Massachusetts Co-operative will be retained and the combined institution will continue to evaluate new opportunities to expand its branch operations.
Related to the issue of public convenience and advantage is the record of performance under CRA by the banks which are parties to this transaction. 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 Abington and Massachusetts Co-operative received ratings of "High Satisfactory" and "Satisfactory", respectively, in the most recent examinations of their performances under CRA. Accordingly, the Division's review of factors related to public convenience and advantage are consistent with approval of the Petitioner's application.
As part of the review of this transaction, the Division noted the Petitioner's stated intention to continue the efforts of the Fincorp Charitable Trust Foundation, a Foundation created in December 1998 as part of The Massachusetts Co-operative Bank's conversion from mutual to stock form wherein the bank was authorized to issue up to 5% of the shares issued in the conversion to the Foundation subject to certain Division conditions ( See Conditions set forth in letter from Commissioner of Banks to Muldoon, Murphy & Faucette (December 21, 1998)). The conditions imposed on the Foundation by the Division will continue to be applicable to the resulting bank upon consummation of the merger transaction.
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 Massachusetts Co-operative with and into Abington under the charter, by-laws and name of Abington Savings Bank pursuant to the provisions of said section 34D of chapter 168 and said section 26D 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 three banking offices of Massachusetts Co-operative as branch offices.
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 168, section 34D and chapter 170, section 26D 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;
- that the proposed merger be consummated within one year of the date of this Decision; and
- that the merger may not be consummated until the Division has received notice of satisfactory arrangements for this transaction from the DIF.
| September 6, 2002 Date | Thomas J. Curry Commissioner of Banks |