Decision  Decision of June 27, 2011

Date:	06/27/2011
Organization:	Division of Banks

• Petitioner: People's United Bank
• Respondent: Division of Banks

◦Decision relative to the merger of Danversbank, Danvers, Massachusetts with and into People's United Bank, Bridgeport, Connecticut

People's United Bank, Bridgeport Connecticut (the "Petitioner" or the "Bank"), has applied to the Division of Banks (the "Division") for permission to merge with Danversbank, Danvers, Massachusetts pursuant to the provisions of Massachusetts General Laws chapter 168, section 34D under the terms of an Agreement and Plan of Merger dated February 11, 2011 (the "Agreement"). The Agreement provides for the merger of Danversbank with and into the Bank under the charter, by-laws and name of People's United Bank. The main office of the Bank would remain the main office of the continuing institution. All of the banking offices of Danversbank will be retained as branch offices after the merger. The proposed merger is part of a multi-step transaction involving a petition before the Board of Bank Incorporation by the Petitioner's holding company, People's United Financial, Inc., Bridgeport, Connecticut, ("People's United") to acquire Danvers Bancorp, Inc., Danvers, Massachusetts. Peoples's United is the holding company of the Bank and Danvers Bancorp, Inc. is the holding company of Danversbank. Other significant aspects of this multi-step transaction are known to the Division and are detailed in the Board of Bank Incorporation transaction approved in a Decision also dated today.

Notice of the Petitioner's application was published and posted, and the time period for interested parties to comment on the transaction has expired. The Petitioner submitted supplemental filings on May 26, 2011 and June 9, 2011. The Division received the same singular comment from the public as did the Board of Bank Incorporation. All documents and materials related to this transaction have been reviewed. This record has been considered with regard to all applicable statutory standards, which require consideration of, among other things, whether competition among banking institutions will be unreasonably affected by the proposed transaction and whether public convenience and advantage will be promoted. The Division's review of this matter must also take into consideration the involved banks' records of performance under the Community Reinvestment Act ("CRA"), section 14 of Chapter 167 of the General Laws and its implementing regulation 209 CMR 46.00. et seq. The proposed merger is consistent with the Commonwealth's interstate statutes.

People's United Bank, ("the Bank"), a diversified financial services institution, was established as a state-chartered bank in Connecticut in 1842. The Bank reorganized under the mutual holding company structure in 1988. The Bank also converted to a federally-chartered mutual holding company and a federal savings bank charter. In April 2007, People's United completed a conversion from a mutual holding company structure to a full publicly owned stock company. The Bank provides commercial banking, retail and small business banking, as well as insurance, retail investment, wealth management, brokerage and financial advisory and trust services to personal and business customers. It has its main office in Bridgeport, Connecticut and operates through its network of approximately 340 branches in Connecticut, Vermont, New Hampshire, Maine, Massachusetts and New York. On December 28, 2007, People's United acquired Chittenden Corporation, Burlington, Vermont and its six subsidiary banks. In Massachusetts, Flagship Bank and Trust Company, Worcester, and The Bank of Western Massachusetts, Springfield, were subsidiaries of Chittenden and acquired by People's United. After subsequent transactions, those two banks were merged with and into the Bank. On November 30, 2010, as part of the acquisition of its holding company, River Bank, a state-chartered institution located in North Andover, Massachusetts merged with and into the Bank. In April 2010, the Bank acquired certain assets and the deposits of Butler Bank, Lowell, Massachusetts, which was closed by the Massachusetts Commissioner of Banks who appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. At March 31, 2011, the Bank had consolidated assets of approximately $24.4 billion and total deposits of approximately $18.1 billion. Its deposits are insured by the FDIC.

Danversbank is the sole banking subsidiary of Danvers Bancorp, Inc., a Delaware corporation headquartered in Danvers, Massachusetts. Danverbank was founded in 1850 as a Massachusetts-chartered savings bank. It reorganized into a mutual holding company in November, 1998 and subsequently converted to a stock holding company in January, 2008. Danversbank offers a wide range of commercial and retail banking services, including commercial and industrial loans, commercial real estate loans, owner-occupied residential mortgages and consumer loans, treasury management, debit and credit card products, online banking and investment management services. Danversbank operates a total of 28 branches, all in Massachusetts and more than half in Essex County. The deposits in Danversbank are insured by the FDIC with deposits in excess of that coverage insured in full by the Depositors Insurance Fund ("DIF"). At March 31, 2011, Danversbank had consolidated assets of approximately $2.8 billion and total deposits of approximately $2.2 billion.

The Petitioner has submitted materials to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. 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, the Division 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 the 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, as well as on the overall banking structure of the Commonwealth of Massachusetts instead of by variously grouped markets. The Division has considered that the only overlap in the branch office networks of the Bank and Danversbank are in Andover and Boston. Upon review, the Division 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 throughout the affected areas and banking markets served by the continuing institution.

The 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. As stated above, the transaction will permit the Bank and Danversbank to pool their financial resources, to reduce costs, to diversify risk, and to better serve their communities by offering a broader array of products and services to consumers and businesses. Customers of Danversbank will have access to numerous added products and services including but not limited to: brokerage, retirement planning insurance services, as well as expanded commercial loan capacity. Customers of Danversbank will be provided with fee free access to the Bank's network of approximately 500 ATMs.

The Division has also considered the Petitioner's analysis of "net new benefits" related to the transaction with respect to the 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. Testimony by the Petitioner and in response to questions at the public hearing held by the Board addressed the components of the statutory test. However, the Petitioner was required to submit three supplemental filings. A focus of those filings was the impact on jobs and job creation if the transaction was approved. The Bank has stated that the extent to which the proposed transaction results in additional job growth depends on its ability to develop and grow its banking franchise in the market area currently served by Danversbank. The Bank plans to expand its banking facilities in the Commonwealth; increase its commercial lending bankers, as well as its retail lending sales force; and employ additional wealth management staffing. All of those actions, it states, will result directly and/or indirectly in additional jobs in the Commonwealth. An extensive discussion of the Bank's commitment to jobs is included in the June 9 ^th supplemental filing also submitted for the related holding company transaction in this matter.

The Division has considered the application, testimony, and supplemental filings submitted by the Petitioner and finds that consideration of public convenience and advantage including net new benefits weigh in favor of approving the proposed transaction.

Related to the issue of public convenience and advantage is the record of performance under CRA by the banks which are parties to this transaction. Such review for a state-chartered bank includes examination of personnel by the Division as well as analysis of concerns received from the bank's community and its response to those concerns fairly raised. A publicly available descriptive rating and evaluation by a federal bank regulatory agency will also be considered. Upon review, the Division has noted the Bank, has an "Outstanding" rating in its most recent examination of performance under CRA by the OTS conducted as of October 5, 2009. Additionally, the Danversbank received a "Satisfactory" rating by the FDIC and a "High Satisfactory" CRA rating by the Division in the most recent joint examination by the FDIC and the Division which was as of July 14, 2008.

Upon consummation of the merger of Danversbank with and into People's United Bank, a federal savings bank, the excess deposit insurance coverage for Danversbank's deposits by the DIF will end. FDIC insurance coverage will continue for depositors of Danversbank upon the merger. The Petitioner has informed the Division of the procedures it will undertake to make depositors aware of such changes, if the proposed merger is approved. Additionally, the Division is aware that FDIC insurance coverage in 2010 permanently increased from $100,000 to $250,000 per depositor.

Management of the Bank will remain unchanged but for the addition of one director of Danversbank becoming a director of the Bank. Economies and service capabilities which would result from the transaction are set out in the submitted documents. Upon consolidation, the continuing bank will meet all required capital standards. Accordingly, upon review, financial and managerial considerations support the application.

Upon review 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 Danversbank to merge with and into People's United Bank under the charter, by-laws and name People's United Bank pursuant to Massachusetts General Laws chapter 168, section 34D.

The approvals granted herein are subject to the following conditions:

1. that the merger of Danversbank and People's United Bank 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 168, section 34D, or other applicable statute, has been returned;
2. that the proposed transaction shall not become effective until Articles of Merger are filed with the Secretary of State;
3. that the proposed merger shall be consummated within one year of the date of this Decision; and
4. that the merger may not be consummated until the Division has received notice of satisfactory arrangements for this transaction from the DIF.

June 27, 2011
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Date


David J. Cotney
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Acting Commissioner of Banks