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Independent Bank Corp. (the "Petitioner" or "Independent"), Rockland, Massachusetts has petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4 for approval to acquire ownership and control of Slade's Ferry Bancorp ("Slade's Ferry") Somerset, Massachusetts and its subsidiary bank, Slade's Ferry Trust Company d/b/a Slades Bank ("Slades Bank"), Somerset, Massachusetts. The Petitioner is the bank holding company for Rockland Trust Company ("Rockland Trust"), Rockland, Massachusetts. The merger of the subsidiary banks, Slades Bank with and into Rockland Trust, by statute, is subject to the approval of the Commissioner of Banks.
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 Independent on January 24, 2008. The stockholders of Slade's Ferry approved the transaction on January 17, 2008. The Petitioner submitted a supplemental filing in response to the Board's request on January 30, 2008. The comment period on the proposed transaction ended January 31, 2008.
The Board has reviewed the application, oral testimony received at the public hearing and the supplemental filing of the Petitioner. 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 two 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.
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. The Board received notice from the MHPF that arrangements satisfactory to it had been made for this transaction in a letter dated February 6, 2008.
Independent is a Massachusetts corporation and is registered with the Federal Reserve as a bank holding company under the Bank Holding Company Act of 1956, as amended. Independent's principal asset is 100% of the capital stock of Rockland Trust, a state-chartered trust company. Rockland Trust has its main office in Rockland and operates 52 banking offices (including 51 full service branches), nine commercial lending centers, three investment management offices and five mortgage banking centers, all of which are located in Plymouth, Norfolk, Bristol and Barnstable Counties. Rockland Trust plans to open two additional branches, one in Norfolk County and one in Bristol County. As of December 31, 2007, Independent, Rockland Trust's holding company, had consolidated assets of $2.8 billion. Rockland Trust's deposits are insured by the Bank Insurance Fund administered through the Federal Deposit Insurance Corporation ("FDIC"). Rockland Trust was formed as a Massachusetts-chartered trust company in 1907 and offers a full range of community banking services throughout Southeastern Massachusetts and on Cape Cod.
Slade's Ferry is a Massachusetts corporation and is registered with the Federal Reserve as a bank holding company under the Bank Holding Company Act of 1956, as amended. Its primary activity is acting as a holding company for Slades Bank, a Massachusetts-chartered trust company. Like Rockland Trust, the deposits of Slades Bank are insured through the Bank Insurance Fund administered by the FDIC. Slades Bank offers banking services through its network of nine full-service banking offices in southern Massachusetts. As of December 31, 2007, Slade's Bancorp, the bank's holding company, had consolidated assets of $610 million. Slades Bank engages in a broad range of banking activities and offers its services to numerous communities in Southeastern Massachusetts and contiguous areas in Rhode Island.
The Petitioner has submitted materials to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. There is no overlap in any community of the banking offices of Rockland Trust and Slades Bank. The application contained an analysis utilizing the 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. Rockland Trust plans to open two additional branches, one in Norfolk County and one in Bristol County. 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 financial institutions will continue to provide competitive deposit and credit services in the affected areas.
The Board has considered whether public convenience and advantage will be promoted by this proposed transaction. Petitioner states that the enhanced financial strength of the combined banks will ensure that the resulting institution will be able to offer financial products and services at competitive rates. The transaction will permit Rockland Trust and Slades Bank to pool their financial resources, reduce costs, diversity risk, and better serve their communities by offering a broader array of products and services to consumers and businesses. Current customers of Slades Bank will experience substantial improvement in access to banking services. As a larger institution, Rockland Trust offers a greater variety of products and services than Slades Bank. The products and services offered by Rockland Trust, which are not currently offered by Slades Bank, include investment management services, remote deposit capture and cash management services, section 1031 like-kind exchange services, business services, and new markets tax credit loan program. Rockland Trust, with a larger lending limit, will have the ability to offer larger commercial loans, which will enhance market competition.
Independent has no current plans to merge, consolidate or close any branch offices of either bank in connection with the transaction. The existing bank branch locations of Rockland Trust and Slades Bank do not overlap and are complementary. Therefore, customers of both banks will be able to conduct their banking business at a greater number of locations over a much larger geographic area.
Petitioner addressed the effect of the transaction on Slades Bank employees in its testimony, in response to an inquiry from the Board, and in its supplemental filing to the Board. Petitioner stated that a significant portion of Slades Bank employees will be employed by Rockland Trust following the merger of the subsidiary banks and other employees are being encouraged to apply for open positions within Rockland Trust. In addition, transitional assistance, in a variety of forms, will be provided to those employees impacted by the merger.
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 Division of Banks 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 Board has noted that the Petitioner's subsidiary bank, Rockland Trust, has an "Outstanding" rating in its most recent examination of performance under CRA. The Board has noted that Slades Bank has a "Satisfactory" rating at its most recent FDIC examination.
The Board has considered the Petitioner's analysis of "net new benefits" related to the transaction including its supplemental filing on this statutory criteria. 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 described in its application the anticipated initial capital investments following the consummation of the transaction and also anticipates future capital expenditures relative to bank facilities. With respect to job creation, Petitioner states it anticipates continuing its organic expansion into the communities it serves along with the concurrent hiring of additional employees. As described herein, Petitioner states that the transaction will allow Rockland Trust to provide substantial new benefits to customers of the combined institution, particularly current Slades Bank customers, and to the communities that the combined institution will serve. The banks will pool their financial resources, reduce costs, diversity risk, and better serve their communities by offering a broader array of products and services to consumers and businesses. The Board has considered the application and testimony submitted by the Petitioners and finds that consideration of public convenience and advantage including net new benefits weighs in favor of approving the proposed transaction.
The financial aspects and any tax consequences from the structure of the transaction were also considered by the Board. Management factors reviewed were also found supportive of approval.
The application, supporting documents, and the testimony received at the public hearing have established a comprehensive 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 Independent to acquire Slades's Ferry Bancorp and Slade's Ferry Trust Company d/b/a Slades Bank provided that the transaction is completed within one year of the date of this Decision.
February 26, 2008
Steven L. Antonakes
Commissioner of Banks
Commissioner of Revenue
Timothy P. Cahill
Treasurer and Receiver-General