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  • Division of Banks

Decision  Decision of June 11, 2012

Date: 06/11/2012
Organization: Division of Banks
  • Petitioner: The First National Bank of Ipswich
  • Respondent: Board of Bank Incorporation

Table of Contents

Decision relative to the conversion of the First National Bank of Ipswich, Ipswich, Massachusetts to a state charter

The First National Bank of Ipswich, ("First Ipswich"), Ipswich, Massachusetts has petitioned the Board of Bank Incorporation (the "Board") to convert (the "Conversion") from a national banking association to a Massachusetts-chartered trust company under the provisions of Massachusetts General Laws chapter 172, Section 36, Subsection A, Clause (3). First Ipswich, which is currently a member of the Federal Reserve System, is also filing an application with the Board of Governors of the Federal Reserve System (the "Federal Reserve") to remain a member of the Federal Reserve. In conjunction with the Conversion, First Ipswich will change its name to "First Ipswich Bank." In its filings First Ipswich states that, upon Conversion, it expects to retain its insurance coverage with the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (the "FDIC"). First Ipswich is a wholly owned subsidiary of Brookline Bancorp, Inc., Brookline, Massachusetts ("Brookline Bancorp") which is a bank holding company registered with the Federal Reserve. As of March 31, 2012, Brookline Bancorp had consolidated assets of approximately $4.9 billion. Brookline Bancorp also owns all of the outstanding capital stock of two other depository institutions: Brookline Bank ("Brookline"), Brookline, Massachusetts which has petitioned the Division, simultaneously herewith, 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, and Bank Rhode Island ("BankRI"), a Rhode Island-chartered bank both of which would also apply to become members of the Federal Reserve. First Ipswich 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 Board. 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 convenience and needs of the communities to be served by First Ipswich, the financial and managerial resources of First Ipswich, and other applicable statutory criteria including its record of performance under CRA.

First Ipswich was chartered in 1892. It has six full-service banking offices in the following communities of Essex and Suffolk Counties in Massachusetts: Boston, Essex, Gloucester, Ipswich, Newburyport and Rowley. The deposits of First Ipswich are insured by the FDIC to the maximum extent allowed by law. As of March 31, 2012, First Ipswich had consolidated assets of approximately $272 million. As described in the submitted documents, First Ipswich 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 First Ipswich 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, First Ipswich, Brookline Bank, Brookline Bancorp, 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; and (c) supervision of First Ipswich and Brookline "by a state regulator, the Massachusetts Division of Banks, which has a unique understanding of the local Eastern Massachusetts banking environment."

Section 36 of chapter 172 of the General Laws sets out extensive provisions for the conversion of a national banking association to a trust company chartered by the Commonwealth. The Board has received notice from the Petitioner that such statutory requirements have been satisfied. The Board has received information on the continued deposit coverage by the FDIC subsequent to the Conversion.

As discussed in the application, the Conversion of First Ipswich, in and of itself, will not result in any significant change in the operation of First Ipswich, the products and services offered or the locations from which it conducts business. Moreover, the financial characteristics of First Ipswich will not be impacted by the transaction. In the application, First Ipswich has discussed certain additional benefits that will result from the transaction. The by-laws of First Ipswich 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 Board 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 of Banks as well as analysis of concerns received from the bank’s community and its response to those issues fairly raised. The Board will also consider a publicly available descriptive rating and evaluation by a federal bank regulatory agency. Upon review, the Board noted that First Ipswich received a rating of "Satisfactory" in its most recent evaluation by the OCC.

Upon review of the application with reference to the relevant statutory and regulatory requirements, approval is hereby granted for First Ipswich, to convert to a Massachusetts-chartered trust company under the provisions of Massachusetts General Laws chapter 172, Section 36, Subsection A, Clause (3) under the name of "First Ipswich Bank."

The approvals granted herein are subject to the following conditions:

  1. that by-laws and an amended and restated charter of First Ipswich Bank are filed in final form with the Division of Banks and that said amended charter is also submitted to the Secretary of State;
  2. that the proposed conversion be completed within one year of the date of this Decision.


Board of Bank

David J. Cotney
Commissioner of Banks

Amy Pitter
Commissioner of Revenue

Steven Grossman
Treasurer and Receiver-General


June 11, 2012

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