• This page, Decision of November 8, 2018, is   offered by
  • Division of Banks

Decision  Decision of November 8, 2018

Date: 11/08/2018
Organization: Division of Banks

The Incorporators (or the “Petitioners”) of the proposed New Valley Bank & Trust (the “Bank”) have submitted an application with related documents to the Board of Bank Incorporation (the “Board”) for the issuance of a certificate that public convenience and advantage will be promoted by the establishment of the proposed Bank in Springfield, Massachusetts.  The Petitioners seek to establish the Bank as a trust company under the provisions of Massachusetts General Laws chapter 172.  The Bank’s deposits will be insured by the Federal Deposit Insurance Corporation (“FDIC”).  The name of the proposed bank was initially designated as Green Apple Bank & Trust, but was subsequently changed during the application process.  Some filed documents refer to the original name.

Notice of the application, affording opportunity for interested persons to submit comments, has been published in accordance with the requirements of section 6 of said chapter 172 of the General Laws and the procedures of the Board.  A public hearing was held on the application pursuant to chapter 172 of the General Laws on Wednesday, September 5, 2018, to receive comments from interested parties.  The time for filing comments and supplementary materials after the hearing has passed.  The Board reviewed the application and the testimony received at the public hearing.  The application and testimony have been considered in accordance with the statutory criteria, set forth in section 6 of said chapter 172, of whether public convenience and advantage will be promoted by the establishment of the proposed banking institution.  The requirements of said chapter 172 relative to the formation of the Bank, as described herein, have also been considered by the Board.  The Petitioners’ proposal for compliance with the Commonwealth’s Community Reinvestment Act (“CRA”) is also a factor considered by the Board. 

The establishment of a state-chartered trust company by statute involves a two-step procedure before the Board.  The first phase is the petition now pending while the second step is the issuance of a certificate to transact business.  In determining whether to issue a certificate that public convenience and advantage will be promoted by the establishment of a new trust company, the Board has reviewed the statutory criteria of the adequacy of banking facilities in the area, the convenience and needs of the community to be served, the general character of the Bank's management, and the adequacy of the Bank’s proposed capital structure.  The Petitioners’ oral testimony at the public hearing has addressed each of these matters in conjunction with the application to establish the Bank.  It is noted that a significant number of the Bank’s proposed directors and senior management attended the Board’s public hearing. 

In order to receive the second certificate from the Board authorizing the corporation to begin transacting the banking business, a proposed bank must, among other things, comply with the provisions of section 9 of chapter 172 of the General Laws.  Those requirements include raising the required capital, identifying satisfactory members of its Board of Directors and operating management, complying with all requirements of law, and submitting other documentation.  The proposed bank must also obtain deposit insurance from the FDIC.  As set forth in section 6 of said chapter 172, the proposed bank has one year from the issuance of the Certificate of Public Convenience and Advantage to complete its organization and to obtain the second certificate from the Board.

The Bank will be established as a trust company with its proposed main office in Springfield, Massachusetts and a branch office that will also be located in Springfield, Massachusetts.  According to the application, the Bank also anticipates opening a third branch within Hampden County during the first year of operations.  The Bank’s primary service area will be western and central Massachusetts.  The application and the Petitioners’ testimony at the public hearing addressed the criterion of the adequacy of banking facilities in the proposed service area.  Referencing the reduction in the number of community banks in Massachusetts due to a trend of mergers and acquisitions that extends beyond the last decade, the Petitioners assert that the impact of this trend can be observed in the Springfield metro area in the loss of four locally operated banking institutions in the past three years.  Believing that this consolidation has left certain segments of the community underserved, the Petitioners state that there is a need for a locally owned and operated banking institution that will provide the level of service needed by small-to-medium sized businesses in the area.  The Petitioners contend that by offering competitively priced deposit and loan products, combined with the Bank’s personalized banking services, the Bank will be able to serve the small-to-medium sized business community in a manner that is not adequately addressed by existing institutions operating in the market.  The Bank’s incorporators and investors were selected based upon their familiarity with, and relationships in, the Springfield metro area.  The information provided relative to the adequacy of banking facilities in the area supports the approval of the application.

In assessing whether the convenience and needs of the community will be served by the establishment of the trust company, the Board considers, among other items, the products and services to be offered as well as the delivery systems that will be implemented to conduct the banking business.  The Bank will offer a range of retail and commercial banking services with a focus on commercial lending and commercial real estate lending.  The Bank intends to emphasize personalized banking services that will be directed primarily to small-to-medium sized businesses as well as to the employees and owners of such businesses.  The Bank will offer a competitive line of retail deposit products such as checking and savings products, money market, certificate of deposit, and IRA accounts.  The Bank’s commercial banking loan products will include commercial mortgages, construction loans, and commercial loans and lines of credit.  The Bank intends to develop the technology platform to optimize the delivery of banking services to the Bank’s customers, using mobile and online banking, online transfers, remote deposit capture, and to pursue online, third party partnerships to expand the range of services to be offered in the future.  The Board’s analysis supports a finding that public convenience and advantage would be promoted by the transaction.

The proposed Bank’s President and Chief Executive Officer, Chief Financial Officer, and other senior officers have been identified to the Board.  The Petitioners state that the character and experience of the incorporators will further assist the Bank in identifying and fulfilling the needs of the community to be served by the proposed Bank.  Several of the Bank’s incorporators have prior experience serving on bank boards of directors.  As part of the process to establish a new bank, the Board reviews the general character of all the incorporators and the qualifications of the proposed management since proper management is critical to the organization and initial operation of a new bank.  The information on the proposed management structure of the Bank submitted by the Petitioners is sufficient for the Board to make a determination on this petition.

Another statutory criteria to be considered by the Board is the adequacy of the capital structure of the proposed Bank.  The Board has determined, as policy, that a minimum initial capitalization of $8 million, net of organizational expenses, must be obtained. The Petitioners state that they intend to raise initial capital between $25 million to $30 million to capitalize the Bank.  The initial capital will be raised in a private placement offering in which investments will be sought from accredited investors whereby the Petitioners intend to produce a broad base of Bank ownership within the local community.  The capital adequacy and growth projections will continue to be the subject of extensive review during the regulatory examination process by both the Commonwealth’s Division of Banks (the “Division”) and federal bank regulators if the Bank completes its organization.  The Petitioners' growth projections indicate that the proposed Bank would meet all regulatory capital requirements from their initial capital contribution. 

For purposes of the Community Reinvestment Act (“CRA”), the Bank has designated its assessment area as Hampden County, Massachusetts.  The proposed bank intends to direct the commercial lending operations to originate a higher number of loans within the assessment area than those made outside the assessment area.  The Bank intends to maintain an average loan-to-deposit ratio in excess of 80% with a loan distribution that is reflective of the demographics of the assessment area.  During the initial years of operation, the proposed bank does not intend to engage directly in retail lending operations and has indicated the Bank would enter into third party origination agreements with other community banks to address the retail lending needs of the Bank’s customers.  The application adequately cites the Bank's intentions for meeting local credit needs, including offering innovative deposit products, developing products intended to address the banking needs of the unbanked and underbanked populations, and by participating in community development service opportunities.  The assessment area to be served is considered reasonable for the proposed bank.

Having considered the record established by the Petitioners on the adequacy of banking facilities in the area, the convenience and needs of the community to be served, the general character of the Bank's management, and the adequacy of the Bank’s proposed capital structure, the Board has found that the applicable statutory and administrative criteria have been fulfilled and that the establishment of the proposed bank is in the public interest.  In accordance with the Board's findings, this application is approved and a certificate that public convenience and advantage will be promoted by the establishment of New Valley Bank & Trust is hereby issued. 

Both the Petitioners and the general public are advised that the proposed Bank must fulfill its statutory obligations to obtain a certificate to transact business according to the provisions of Massachusetts General Laws chapter 172, section 9.  These preconditions for initiating transactions at this new Bank must be completed within one year from this approval date.  If the proposed Bank does not complete its organization within that period then, by operation of law, as set out in section 6 of said chapter 172, this certificate of public convenience and advantage is revoked. 

The approval granted herein is subject to the following additional conditions:

  1. During the organization period the proposed Bank shall be referred to in all public materials as “in organization”;
  2. All organization documents, including Articles of Organization, must be submitted to the Board for review;
  3. All materials related to any stock offering, or a private placement, including the prospectus and marketing materials, must be submitted to the Board for review; and
  4. No material change in the business plan submitted to the Board may occur within the organization period and for a period of three years commencing on the date the Bank opens to transact business without the prior written approval of the Division of Banks.


Board of Bank Incorporation
November 8, 2018

Terence A. McGinnis
Commissioner of Banks

Donald Twomey
Designee of the Commissioner of Revenue

Deborah B. Goldberg
Treasurer and Receiver-General

    Table of Contents

    Help Us Improve Mass.gov  with your feedback

    Please do not include personal or contact information.