Related to:
Decision

Decision Decision of November 4, 2013

Date: 11/03/2013
Organization: Division of Banks
  • Petitioner: Rockland Trust Company
  • Respondent: Division of Banks

Decision relative to the application of Mayflower Co-operative Bank, Middleborough, Massachusetts to merge with Rockland Trust Company, Rockland, Massachusetts

Rockland Trust Company, Rockland, Massachusetts (the “Petitioner” or “Rockland Trust”) has applied to the Division of Banks (“Division”) for authority to merge with Mayflower Co-operative Bank (“Mayflower Bank”), Middleborough, Massachusetts pursuant to the provisions of Massachusetts General Laws chapter 170, section 26D and Massachusetts General Laws chapter 172, section 36 under the terms of an Agreement and Plan of Merger (the “Agreement”) dated May 14, 2013.  The Agreement provides for the merger of Mayflower 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.  The banking offices of Mayflower Bank will become branch offices of Rockland Trust except for the branch offices at 5 Scotland Blvd., Bridgewater; 166 County St., Lakeville; 57 Obery St., Plymouth; and 396 Onset Ave., Wareham which will be closed.  Rockland Trust has also petitioned the Division to close its own branch office at 8B Station St., Middleborough, Massachusetts, stating that the former Middleborough branch office of Mayflower Bank will continue to be operated as a Rockland Trust branch office after the acquisition.  The proposed merger is part of a multi-step transaction which included a petition before the Board of Bank Incorporation (the “Board”) by the Petitioner’s holding company, Independent Bank Corp. (“Independent”), Hanover, Massachusetts to acquire Mayflower Bancorp, Inc., Middleborough, Massachusetts and its sole subsidiary bank, Mayflower Co-operative Bank, Middleborough, Massachusetts.  The Board approved the holding company transaction in its Decision of this same date.

Notice of the application has been posted and published as directed thereby affording opportunity for interested parties to submit comments.  The time period for interested persons to submit comments ended on September 27, 2013.  The Division reviewed the application and all documents and materials related to this multi-step transaction 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. Independent is a Massachusetts corporation that was formed in 1985 and is registered with the Federal Reserve System as a bank holding company under the Bank Holding Company act of 1956, as amended.  As of June 30, 2013, Rockland Trust had total assets of approximately $6 billion. Petitioner operates 78 branch offices as well as commercial lending centers and investment management offices, all of which are located in Plymouth, Norfolk, Bristol, Barnstable, Middlesex, and Worcester counties and Providence, Rhode Island.  Rockland Trust's deposits are insured up to allowable limits by the Federal Deposit Insurance Corporation (“FDIC”). 

Mayflower Bank is a Massachusetts chartered co-operative bank established in 1889 and headquartered in Middleborough, Massachusetts.  As of June 30, 2013, Mayflower Bank had total assets of approximately $249 million.  Mayflower Bank operates eight full service branch offices serving communities in Plymouth County in Bridgewater, Lakeville, Middleboro, Plymouth (2), Rochester, Wareham, and West Wareham.  Mayflower Bank's deposits are insured up to allowable limits by the FDIC.  However, as a state-chartered co-operative bank, Mayflower’s deposits in excess of FDIC coverage limits are insured in full by the Share Insurance Fund. 

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, the analysis demonstrates that consummation of the transaction will not result in undue concentration of banking resources in the specified banking markets in Massachusetts.  In addition to that analysis, the Division considers the competitive impact of the proposed transaction on a community-by-community basis, as well as on the overall banking structure of the Commonwealth.  There are four communities, including Middleborough, Bridgewater, Plymouth, and Wareham, in which both Rockland Trust and Mayflower Bank operate offices.  As part of this multi-step transaction, Rockland Trust has petitioned the Division to close the branch offices of Mayflower Bank in Bridgewater, Plymouth, and Wareham, where Rockland Trust also maintains banking offices.  Rockland Trust has also petitioned the Division to close its own branch office in Middleborough, stating that the Middleborough branch office of Mayflower Bank will continue to be operated after the acquisition.  Rockland Trust has also petitioned the Division to close the branch office of Mayflower Bank in Lakeville.  The Division has noted that, in addition to the presence of existing Rockland Trust branches in several of these communities, there are numerous other banks with banking offices located in the combined primary service area of the merging banks.  Therefore, customers of Mayflower Bank will continue to be able to choose from a variety of banking options.  Accordingly, the Division's analysis of the competitive impact of the merger weighs in favor of the proposed transaction.

The application states that, in connection with the merger, the continuing institution’s Board of Directors and senior management will consist of individuals currently serving as directors and senior management of Rockland Trust.  After consolidation, the continuing bank will meet all required capital standards.  Accordingly, financial and managerial considerations support the application.

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 are not currently available to Mayflower Bank customers. Such products and services include enhanced commercial lending; a broad range of business and cash management services to its commercial and non-commercial customers including: lock box services; zero balance lending; account reconciliation, sweep investments accounts; and online banking and bill pay, extended hours; asset based lending; and investment management services among others.  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 Massachusetts General Laws chapter 172, section 36 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.  Although Petitioner expects immediate reduction of staff levels, continued growth resulting from the merger could also lead to further growth in staff levels at Rockland Trust.  Transitional assistance, in a variety of forms, will be provided to those employees impacted by the merger.  Additionally, Rockland Trust will maintain several of the banking offices of Mayflower Bank as branch offices.  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.  For other institutions, the Division looks to a publicly available descriptive rating and evaluation by a federal or state bank regulatory agency.  The Division has noted that Rockland Trust has an “Outstanding” rating in its most recent CRA performance examination by the Division and the FDIC.  The Division has noted that Mayflower Bank also received an “Outstanding” rating in its most recent CRA performance examination conducted by the Division.

Upon review of the record of this application with reference to the relevant statutory and regulatory criteria, the Division concludes 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, and subject to the conditions set forth below, approval is granted for Mayflower Bank to merge with and into Rockland Trust under the charter, by-laws and name of Rockland Trust in conformity with the Agreement and pursuant to Massachusetts General Laws chapter 170, section 26D and Massachusetts General Laws chapter 172, section 36.  In accordance with General Laws chapter 167C, section 3, approval is also granted for Rockland Trust to close branches located at 8B Station St., Middleborough, Massachusetts; 5 Scotland Blvd., Bridgewater, Massachusetts; 166 County St., Lakeville, Massachusetts; 57 Obery St., Plymouth, Massachusetts; and 396 Onset Ave., Wareham, Massachusetts and for Rockland Trust to maintain the remaining existing banking offices of Mayflower Bank as branch offices.

The approval granted herein is subject to the following conditions:

  1. That the merger of Mayflower Co-operative 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 170, section 26D and 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 the Commonwealth of Massachusetts with my endorsement thereon; and
  3. That the proposed merger shall be consummated within one year of the date of this Decision.

November 4, 2013
_____________
Date


David J. Cotney
____________________
Commissioner of Banks

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