Decision relative to the merger of Chart Bank, A Cooperative Bank, Waltham, Massachusetts with and into Benjamin Franklin Bank, Franklin, Massachusetts
By the Division of Banks
Benjamin Franklin Bank, formerly known as Benjamin Franklin Savings Bank, ("Benjamin Franklin" or the "Petitioner"), Franklin, Massachusetts has applied to the Division of Banks (the "Division") for authority to merge with Chart Bank, A Cooperative Bank ("Chart"), Waltham, Massachusetts pursuant to the provisions of Massachusetts General Laws chapter 168, section 34D and under the terms of an Agreement and Plan of Merger (the "Agreement") dated as of September 1, 2004. The Agreement provides for the merger of Chart with and into Benjamin Franklin under the name, charter and by-laws of Benjamin Franklin. The banking offices of Chart will become branch offices of Benjamin Franklin. The merger is part of a multi-step transaction whereby the holding company for Benjamin Franklin, Benjamin Franklin Bancorp, M.H.C. will acquire the stock of Chart. The acquisition application is before the Commonwealth's Board of Bank Incorporation. Also, in connection with this transaction, Benjamin Franklin, M.H.C. will convert from a mutual holding company governed by Massachusetts General Laws chapter 167H to a stock holding company.
Notice of the application was posted as directed by the Division thereby affording opportunity for interested parties to submit comments. The period for filing comments has expired. The Division reviewed the application 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"), Massachusetts General Laws chapter 167, section 14 and the Division's regulation, 209 CMR 46.00 et seq. also were factors considered by the Division.
Benjamin Franklin is the subsidiary banking institution in stock form resulting from its 1996 reorganization into a mutual holding company, Benjamin Franklin Bancorp, M.H.C. It operates from six banking offices in Bellingham, Foxboro, Franklin (2), Medfield and Milford. Benjamin Franklin's primary business is accepting deposits, making residential mortgage loans, consumer loans, and other commercial loans. At September 30, 2004, it had total assets of approximately $518.2 million.
Chart is a cooperative bank in stock form. It operates three banking offices located in Waltham (2) and Newtonville. Chart's primary business consists of accepting deposits, making residential and commercial mortgage loans, construction loans, and other commercial and consumer loans. Chart had total assets of $256.8 million at September 30, 2004.
Materials have been submitted to address the issue of whether competition among banks will be unreasonably affected by the proposed transaction. Some of that analysis is detailed according to various tests relative to the size of each institution and its competitors within delineated markets used by federal agencies. According to the Petitioner, there is very little overlap and the proposed merger will have a de minimis effect on competition. Upon review, the Division's analysis of the competitive impact of this transaction does not preclude its approval.
The Division has also considered whether public convenience and advantage will be promoted by this transaction. As described in the filed documents, Benjamin Franklin believes the statutory test is met in a number of ways. Two new services to be offered to Chart customers are investment and financial services and savings bank life insurance. The combined branch office network will also allow business to be conducted over a significantly larger geographic area. Additional services and proposed programs are set out in the application and provide the basis for determining that this statutory test and a showing of net new benefits has been met.
The record of performance under CRA by the banks involved in a transaction is also a consideration by the Division. For financial institutions not directly under the jurisdiction of the Commonwealth, the Division 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 Benjamin Franklin and Chart 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 Division is aware that both banks have a "Satisfactory" rating in their most recent examination of performance under CRA. Accordingly, the Division's view of this factor is consistent with approval.
The application states that upon consummation of the transaction, six current directors of Chart will be added to the Board of Directors of the stock holding company of Benjamin Franklin. Economies and service capabilities which would result from the transaction are set out in the submitted documents. Following consummation of all parts of the transaction, which includes the conversion of Benjamin Franklin Bancorp, M.H.C., all regulatory capital standards will continue to be met. Upon review, financial and managerial considerations support the petition.
Based on the record on this matter including the testimony received at the public hearing considered in light of all relevant statutory and administrative requirements, the Division 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 Division hereby approves the application and authorizes Chart Bank to merge with and into Benjamin Franklin Bank. Approval is also granted for Benjamin Franklin to maintain the three banking offices of Chart as branch offices under General Laws chapter 167C, section 3.
The approvals granted herein are subject to the following conditions:
- That no merger shall become effective until a certificate signed by the Presidents and Clerks or other duly authorized officers of the banks involved in the merger indicating that each such institution has complied with the provisions of Massachusetts General Laws chapter 168, section 34D and chapter 170, section 26D, or other applicable statute 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; and
- that the proposed merger shall be consummated within one year of the date of this decision.
| March 30, 2005 Date | Steven L. Antonakes Commissioner of Banks |