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The Incorporators (or the "Petitioners") of the proposed Nuvo Bank and Trust Company (the "Bank") have submitted an application with related documents to the Board of Bank Incorporation (the "Board") for the issuance of a certificate that public convenience and advantage will be promoted by the establishment of the proposed Bank in Springfield, Massachusetts. The Petitioners seek to establish the Bank as a trust company under the provisions of Massachusetts General Laws chapter 172. The Bank's deposits will be insured by the Federal Deposit Insurance Corporation ("FDIC"). The name of the proposed bank initially was TriVista Bank and Trust Company and subsequently changed. Some filed documents refer to the original name.
Notice of the application, affording opportunity for interested persons to submit comments, has been published and posted in accordance with the requirements of section 6 of said chapter 172 of the General Laws and procedures of the Board. A public hearing was held on the application pursuant to chapter 172 of the General Laws on Tuesday, December 12, 2006 to receive comments from interested parties. The time for filing comments and supplementary materials after the hearing has passed. The Board reviewed the application and the testimony received at the public hearing. The application and testimony have been considered in accordance with the statutory criteria, set forth in section 6 of said chapter 172, of whether public convenience and advantage will be promoted by the establishment of the proposed banking institution. The extensive oral testimony received at the public hearing addressed this issue as well as other matters which the Petitioner's offered in support of the application. The requirements of said chapter 172 relative to the formation of the Bank, as described herein, have also been considered by the Board. The Petitioners' proposal for compliance with the Commonwealth's Community Reinvestment Act ("CRA") is also a factor considered by the Board.
As requested by the Board, supplemental information was filed by the Petitioners on February 13, 2007 (the "Supplemental Filing"). The information was submitted after telephone discussions in late December and January. The focus of those discussions was the relationship between consultant groups and the proposed organizers of the bank. The consultants were based in California and Wisconsin, and assisted by a law firm from Texas. The Board's interest was not centered on the fact that the consultants were located out-of-state. The focus was on the process that initiated the formation of the organizing group for the proposed Bank. This organization process is a case of first impression to the Board.
The Supplemental Filing clearly states that the California consultant "sought to determine whether there was local interest in the formation of a new financial institution in the Springfield, Massachusetts area." Moreover, the California consultant used the Wisconsin consultant to determine "if there was sufficient interest among local senior financial service executives to participate in assessing the banking prospects within Springfield." The Supplemental Filing concludes that "'there is no violation of Massachusetts or Federal law or regulation" in the proposed structure or formation of the proposed bank. The Board acknowledges that no such violations exist.
The Board has a well established record of supporting local groups seeking to establish a community bank within their own neighborhood. This record is evidenced by the Board's granting, in numerous transactions, the first Certificate that public convenience and advantage would be promoted by the formation of a bank. However, unlike all those previous transactions, this proposal was initiated outside the local community. Although the Board will monitor the extent of this form of de novo bank development in the Commonwealth, it does recognize that at least in this petition and at this time, the incorporators are local to the Springfield community and, more importantly and perhaps more telling, will seek to raise capital for the proposed Bank from that community.
The establishment of a state-chartered trust company by statute involves a two-step procedure before the Board. The first is the petition now pending while the second step is the issuance of a certificate to transact business. In determining whether to issue a certificate that public convenience and advantage will be promoted by the establishment of a new trust company, the Board has reviewed the statutory criteria of the adequacy of banking facilities in the area, the general character of the Bank's management, the adequacy of its proposed capital structure and the convenience and needs of the community to be served. The Petitioners' oral testimony at the public hearing has addressed each of these matters in conjunction with the application to establish the Bank. It is noted that a significant number of the Bank's proposed directors and senior management attended the Board's public hearing.
In order to receive the second certificate from the Board authorizing the corporation to transact banking business, a proposed bank must, among other things, comply with the provisions of section 9 of chapter 172 of the General Laws. Those requirements include raising the required capital and doing so consistent with the manner previously described to the Board, identifying satisfactory members of its Board of Directors and operating management, complying with all requirements of law, and submitting other documentation. The proposed bank must also obtain deposit insurance from the FDIC. As set out in section 6 of said chapter 172, the proposed bank has one year from the issuance of the Certificate of Public Convenience and Advantage to complete its organization and obtain the second certificate.
The proposed Bank will be established as a trust company with its main office in Springfield, Massachusetts. As set out in the application the primary service area will be Springfield and the areas of Hampden County within a five mile radius of the Bank's main office which is proposed for Main Street in Springfield. The application and testimony addressed the criterion of the adequacy of banking facilities in the proposed service area. Among other matters, the Petitioner cites the lack of independent community banks in the area as well as the fact that no new bank has been chartered there for twenty years. As a local bank rather than branch offices of larger financial institutions the Petitioners contend that the proposed Bank can create relationships with and service the local business community in a manner not adequately provided for by existing institutions. The Board is aware that during the pending of this application, a state-chartered trust company located in West Springfield merged with and into a Connecticut chartered bank. The information provided on this statutory test on the adequacy of banking facilities in the area weighs in favor of approval of the application.
A major factor to be considered by the Board in its analysis of an application to establish a new bank is the public convenience and advantage that will be served by its operation. That review included the products and services to be offered as well as the means by which such banking business will be provided. It is the intention of the Bank to emphasize personalized banking services to individuals, business owners, real estate owners, professionals, and individual consumers. Lending services will include consumer loans and commercial loans to small and medium-sized businesses and professionals. The Bank will offer a broad array of deposit products such as checking and savings products, money market, certificate of deposit and IRA accounts. For the convenience of its customers, the Bank will also offer additional services such as credit and debit cards, automatic transfers, travelers' checks, domestic and foreign wire transfers and cashier's checks. The Bank expects to offer its products through a variety of delivery systems including full service offices, ATM access, debit card access, telephone banking and internet banking. Testimony at the public hearing offered that technology is expected to play a significant role in the proposed bank's products and services delivery systems. The Board notes that the Bank believes that the local community will welcome a locally owned and managed bank as an alternative to what it categorized as less personal service offered by many larger banks. The Board is satisfied that this condition has been met and that public convenience and advantage would be promoted by the proposed Bank.
The proposed Bank's Chief Executive Officer, President, Chief Credit Officer, and Deposit Operations Officer have been identified to the Board. The senior officer positions identified will be held by individuals who have previously held senior positions at state-chartered and federally-chartered financial institutions. The application offers that the character and experience of the incorporators will further assist the Bank in identifying and fulfilling the needs of the community to be served by the proposed Bank. Several of the Bank's incorporators have prior experience serving on bank boards of directors. Testimony at the public hearing emphasized that the organizers, Board of Directors and senior management were a significant strength of the proposed Bank. As part of the process to establish a new bank, the Board reviews the general character of all the incorporators and the qualifications of the proposed management since proper management is vital to the organization and initial operation of a new bank. The information on the proposed management structure of the Bank submitted by the Petitioners is sufficient for the Board to make a determination on this petition.
Another statutory criteria to be considered by the Board is the adequacy of the capital structure of the proposed Bank. The Board has determined, as policy, that a minimum initial capitalization of $8 million, net of organizational expenses, must be attained. The Petitioners state that they intend to raise initial capital between $15 million and $25 million to capitalize the Bank. According to the application, the Petitioners plan to implement a capital campaign designed to broadly place the proposed Bank's stock with 400 to 800 professionals as well as small to mid-sized business owners within its market area. They will seek a broad and local shareholder base of people and businesses that will not only invest but also do business with the proposed Bank. The capital adequacy and projections will continue to be the subject of extensive review during the regulatory examination process by both the Commonwealth's Division of Banks (the "Division") and federal bank regulators if the Bank completes its organization. The Petitioners' growth projections indicate that the proposed Bank would meet all regulatory capital requirements from their initial capital contribution.
For purposes of the Community Reinvestment Act ("CRA"), the Bank has designated its assessment area as a five mile radius from the Bank's main office in downtown Springfield. The proposed bank intends to make about 60 percent of it loans within that area. The application adequately cites the Bank's intentions for meeting local credit needs and promoting community involvement by the Bank. The proposed areas to be served are determined to be reasonable.
Having considered the record established by the Petitioners on the adequacy of the banking facilities in the area, the general character of its management, the adequacy of its capital structure and the convenience and needs of the community to be served, the Board has found that the applicable statutory and administrative criteria have been fulfilled and that the establishment of the proposed Bank is in the public interest. In accordance with the Board's findings, this application is approved and a Certificate that Public Convenience and Advantage will be promoted by the establishment of Nuvo Bank and Trust Company is hereby issued.
Both the Petitioners and the general public are advised that the proposed Bank must fulfill its statutory obligations to obtain a certificate to transact business according to the provisions of Massachusetts General Laws chapter 172, section 9. These preconditions for initiating transactions at this new Bank must be completed within one year from this approval date. If the proposed Bank does not complete its organization within that period then, by operation of law, as set out in section 6 of said chapter 172, this Certificate of Public Convenience and Advantage is revoked.
The approval granted herein is subject to the following additional conditions:
April 27, 2007
Steven L. Antonakes
Commissioner of Banks
Alan L. LeBovidge
Commissioner of Revenue
Timothy P. Cahill
Treasurer and Receiver-General
The Board of Bank Incorporation constituted under the provisions of Massachusetts General Laws chapter 26, section 5, and acting under the powers conferred upon it by chapter 172, section 6 of said General Laws, hereby certifies that public convenience and advantage will be promoted by the establishment of a trust company in Springfield, in the Commonwealth to be known as
NUVO BANK AND TRUST COMPANY
The Certificate shall be deemed to be revoked if the applicants therefore do not become incorporated and begin business, in accordance with the provisions of section 6 of said chapter 172, within one year after the date of the issuance of this Certificate.
IN TESTIMONY WHEREOF the members of the Board hereby affix their names at Boston this 27 th day of April, Two Thousand and Seven.