Decision  Decision of January 20, 2015

Date:	01/20/2015
Organization:	Division of Banks

• Petitioner: Rockland Trust Company
• Respondent: Division of Banks

Decision relative to the merger of Peoples Federal Savings Bank, Brighton, Massachusetts with and into Rockland Trust Company, Rockland, Massachusetts

Rockland Trust Company, Rockland, Massachusetts ("Petitioner" or "Rockland Trust") has applied to the Division of Banks ("Division") for permission to merge with Peoples Federal Savings Bank, Brighton Massachusetts ("Peoples Bank”) pursuant to the provisions of Massachusetts General Laws chapter 172, section 36 under the terms of an Agreement and Plan of Merger ("Agreement") dated August 5, 2014. The Agreement provides for the merger of Peoples Bank with and into Rockland Trust under the charter, by-laws and name of Rockland Trust. The main office of Rockland Trust would remain the main office of the continuing institution. All of the banking offices of Peoples Bank would become branch offices of Rockland Trust. This transaction is part of a multi-step transaction which included an application before the Board of Bank Incorporation (“Board") in which Independent Bank Corp. ("Independent”), Rockland, Massachusetts will acquire Peoples Federal Bancshares, Inc. (“Peoples Bancshares”), Brighton, Massachusetts.  Independent is the holding company for the Petitioner and Peoples Bancshares is the holding company for Peoples Bank. The Board approved the holding company transaction in its Decision of this same date.

Notice of the application has been posted and published. The time period for interested persons to submit comments ended on December 11, 2014 and no comments were received on the transaction. The Division reviewed the application and all documents and materials in accordance with the statutory criteria of whether competition among banking institutions will be unreasonably affected and whether public convenience and advantage as well as net new benefits 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 its implementing regulation, 209 CMR 46.00 et seq. also were factors considered by the Division.

Rockland Trust is a Massachusetts chartered trust company, established in 1907.  As of June 30, 2014, Rockland Trust had consolidated assets of approximately $6.3 billion.  Petitioner operates 75 branch offices serving communities in eastern Massachusetts, and its commercial lending centers and investment management offices in eastern Massachusetts and Providence, Rhode Island.  Rockland Trust's deposits are insured up to allowable limits by the Federal Deposit Insurance Corporation (“FDIC”).

Peoples Bank is a federal savings bank with its main office in Brighton, Massachusetts.  As of June 30, 2014, Peoples Bank had total assets of approximately $605 million.  Peoples Bank operates nine full service banking offices serving communities in Suffolk, Norfolk and Middlesex counties.  Peoples Bank's deposits are insured up to allowable limits by the FDIC.

The Petitioner has submitted information to address the issue that competition among banks will not be unreasonably affected by the proposed transaction.  In analyzing the impact of a proposed transaction on banking competition, the Division considers, but does not rely exclusively on, the guidelines used by federal authorities to review bank mergers.  Essentially, these guidelines define relevant markets and measure concentration, which is considered an important indicator of competitiveness.  The starting point in the federal analysis is the Herfindahl-Hirschman Index (“HHI”), an arithmetic measure of market concentration that synthesizes the distribution of market shares and the number of banks in an affected market into a single value.  In this case, there will be a de minimis change in the HHI for the geographical areas analyzed.  It is the position of this Division 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 and Peoples Bank have only one community where both banks have a banking office, Newton. The Division has noted that there are numerous other banks with banking offices located in the combined primary service area of the merging banks.  Therefore, customers of Peoples Bank will continue to be able to choose from a variety of banking options.  For these reasons and other factors, the Division finds that competition among banking institutions will not be unreasonably affected.

The Division has also considered the record of this application to determine whether public convenience and advantage will be promoted by this transaction. Under the proposed merger, the Petitioner states it will be able to offer several products and services that have not currently been available to Peoples Bank customers. Such products and services include business/cash management services, asset-based lending and commercial lending programs, and mobile banking.  Customers of both banks will also benefit from a wider network of branches and ATMs. 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 36 of said chapter 172 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 in its filings. The Petitioner intends to maintain all of the Peoples Bank banking offices. Although Petitioner expects some immediate reduction of staff levels, continued growth resulting from the merger could also lead to further growth in staff levels at Rockland Trust.  Customers would find additional convenience to conduct their banking business from a larger branch office network.  Moreover, customers of both banks will benefit from a broad array of products and services including the aforementioned products and services of Rockland Trust. These and other factors are also cited as support for meeting such criteria.

Related to the issue of public convenience and advantage is the record of performance under the CRA by the banks which are parties to this transaction. Such a review for a state-chartered bank includes examination by personnel of the Division as well as analysis of concerns received by the bank's community and its response to those concerns fairly raised. The Division has noted that Rockland Trust has an "Outstanding" rating in its most recent examination of performance under CRA by the Division and the FDIC. The Division has noted that Peoples Bank has an "Outstanding" rating at its most recent examination conducted by the Office of the Comptroller of the Currency.

The application states that, in connection with the merger, the continuing institution's Board of Directors will consist of all of the persons currently serving on Rockland Trust’s Board of Directors, with the addition of one existing director from Peoples Bancshares, as selected by Independent. Senior management of the continuing institution will consist of the same current individuals serving as officers of Rockland Trust.  Economies and service capabilities which would result from the transaction are set out in the submitted documents. After consolidation, the continuing bank will meet all required capital standards. Accordingly, financial and managerial considerations support the application.

Upon review of the record of this application with reference to the relevant statutory and regulatory criteria, the Division has concluded that all such requirements have been met and that consummation of the proposed merger would be in the public interest. On the basis of these considerations, approval is granted for Peoples Federal Savings Bank to merge with and into Rockland Trust Company under the charter, by-laws and name of Rockland Trust Company pursuant to Massachusetts General Laws chapter 172, section 36.

The approval granted herein is subject to the following conditions:

1. that the merger of Peoples Federal Savings Bank and Rockland Trust Company shall not 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 172, section 36 has been returned for my endorsement thereon;
2. that the proposed transaction shall not become effective until Articles of Merger are submitted to the Secretary of State with my endorsement thereon; and
3. that the proposed merger shall be consummated within one year of the date of this Decision.

January 20, 2015
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Date


David J. Cotney
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Commissioner of Banks