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  • Division of Banks

Decision  Decision of June 11, 2012

Date: 06/11/2012
Organization: Division of Banks
  • Petitioner: Brookline Bank
  • Respondent: Division of Banks

Table of Contents

Decision relative to the conversion of Brookline Bank, Brookline, Massachusetts to a state charter

Brookline Bank, (the "Bank" or "Brookline"), Brookline, Massachusetts has petitioned the Division of Banks ( the "Division") to convert from a federally-chartered savings bank to a state-chartered savings bank under the provisions of Massachusetts General Laws chapter 168, section 38 (the "Conversion"). The Bank is also filing an application with the Board of Governors of the Federal Reserve System (the "Federal Reserve") to become a member of the Federal Reserve. Brookline is a former state-chartered bank which operated under the name Brookline Savings Bank prior to its conversion to a federal charter in 2001. In 2003, Brookline Savings Bank changed its name to "Brookline Bank." The Bank is a wholly owned subsidiary of Brookline Bancorp, Inc. ("Brookline Bancorp") which is a bank holding company registered with the Federal Reserve. As of March 31, 2012, Brookline Bancorp has total assets of approximately $4.9 billion. Brookline Bancorp also owns all of the outstanding capital stock of two other depository institutions: The First National Bank of Ipswich ("First Ipswich") which is applying to the Massachusetts Board of Bank Incorporation simultaneously herewith, to convert from a national bank to a Massachusetts-chartered trust company, and Bank Rhode Island ("BankRI"), a Rhode Island-chartered bank. In conjunction with the proposed conversion First Ipswich will seek Federal Reserve approval to remain a member of the Federal Reserve System, and will change its name to "First Ipswich Bank." Bank RI is also currently applying to become a member of the Federal Reserve. Brookline is now regulated by the Office of the Comptroller of the Currency ("OCC"), a federal agency.

Notice of the application has been posted and published as required by the Division. The time period for interested persons to submit comments has passed and a review of the application, supporting documents and all related materials has been completed. The analysis of this record considered the competitive effects of the proposed transaction, the financial and managerial resources of the Bank, the convenience and needs of the communities to be served by the Bank and other applicable statutory criteria including the Bank’s record of performance under CRA.

As described in the submitted documents, Brookline accepts deposits, makes loans and provides a broad range of retail and commercial banking services to its customers. The primary reasons for the Conversion are the availability of the benefits to Brookline and its sole shareholder, Brookline Bancorp, which are stated in its application as follows: (a) harmonized and streamlined federal regulatory supervision as, after the Conversion, Brookline Bank, Brookline Bancorp, First Ipswich and BankRI will all have the Federal Reserve as their primary federal regulator; (b) certain cost savings derived from the consistency of federal compliance and financial reporting requirements and somewhat lower supervisory fees; (c) the ability to offer Brookline Bank’s customers excess deposit insurance through the Depositors Insurance Fund ; and (d) supervision of Brookline Bank and First Ipswich Bank "by a state regulator, the Massachusetts Division of Banks, which has a unique understanding of the local Eastern Massachusetts banking environment."

Brookline’s deposits are gathered from the general public primarily in the communities in which its banking offices are located. Brookline’s lending activities are concentrated primarily in the greater Boston metropolitan area and eastern Massachusetts. Multi-family and commercial real estate mortgage lending and the origination of one-to-four family residential mortgage loans comprise a significant portion of Brookline’s lending activities. At the time of application, Brookline served its market area from twenty full-service banking offices, of which twelve are located in Middlesex County, seven are located in Norfolk County and one is located in Suffolk County, Massachusetts. Brookline had assets of approximately $2.7 billion as of March 31, 2012.

Section 38 of chapter 168 of the General Laws sets out extensive provisions for the conversion of a federally-chartered savings bank to such a bank chartered by the Commonwealth. One such requirement is that a savings bank become a member of the Depositors Insurance Fund (the "Fund") and thereby have its deposits in excess of those amounts covered by the FDIC insured through the Fund. The Division received notice on May 15, 2012 from the Fund that satisfactory arrangements have been made with it by Brookline for its conversion to a state-charter. The primary deposit insurer for Brookline will remain the FDIC and the Division has received information on the continued deposit coverage by the FDIC subsequent to the Conversion.

As discussed in the application, the Conversion of Brookline, in and of itself, will not result in any significant change in the operation of Brookline, the products and services offered or the locations from which it conducts business. Moreover, the financial characteristics of Brookline will not be impacted by the transaction. In the application, Brookline has discussed certain additional benefits that will result from the transaction. The by-laws of the Bank also have been reviewed and discussed relative to compliance with applicable provisions of Massachusetts law. Based upon these facts and the analysis of the record of this application, considerations relative to competition, public convenience and advantage, as well as financial and managerial resources, are found to be supportive of this application.

Another factor reviewed by the Division on each pending application is the record of performance under the CRA by parties to the transaction. Such review for state-chartered banks includes examination by personnel of the Division as well as analysis of concerns received from the bank’s community and its response to those issues fairly raised. The Division will also consider a publicly available descriptive rating and evaluation by a federal bank regulatory agency. Upon review, the Division noted that Brookline received a rating of "Satisfactory" in its most recent evaluation by the OCC dated January 23, 2012.

Upon review of the application with reference to the relevant statutory and regulatory requirements, approval is hereby granted pursuant to section 38 of said chapter 168 for Brookline Bank to convert to a state-chartered savings bank under the name of Brookline Bank and to maintain and operate all existing banking offices under the provisions of Massachusetts General Laws chapter 167C.

The approvals granted herein are subject to the following conditions:

  1. that by-laws and an amended and restated charter of the Bank are filed in final form with the Division and that said amended charter is also submitted to the Secretary of State;
  2. that all payments required by section 38 of said chapter 168 are made to the Fund; and
  3. that the proposed conversion be completed within one year of the date of this Decision.


June 11, 2012

David J. Cotney
Commissioner of Banks

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