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Berkshire Bank, Pittsfield, Massachusetts ("Berkshire Bank" or the "Petitioner") has applied to the Division of Banks (the "Division") for permission to merge with The Factory Point National Bank of Manchester Center ("Factory Point Bank"), Manchester Center, Vermont pursuant to the provisions of Massachusetts General Laws chapter 168, section 34D under the terms of a an Agreement of Merger (the "Agreement") executed as of June 19, 2007. The Agreement provides for the merger of Factory Point Bank with and into Berkshire Bank under the charter and by-laws and name of Berkshire Bank. The main office of Berkshire Bank would remain the main office of the continuing institution. All of the offices of Factory Point Bank will become branch offices of Berkshire Bank. This transaction is part of a multi-step transaction which included an application before the Board of Bank Incorporation in which Berkshire Hills Bancorp, Inc., Pittsfield, Massachusetts will acquire Factory Point Bancorp, Inc., Manchester Center, Vermont. Berkshire Hills Bancorp is the holding company of the Petitioner and Factory Point Bancorp is the holding company of Factory Point Bank. The Board of Bank Incorporation approved the transaction in its Decision of this same date.
Notice of the application has been posted and published. The time period for interested persons to submit documents has ended on August 30, 2007. Accordingly, all documents and materials related to this multi-step transaction have been reviewed. The record has been considered with regard to the financial and managerial resources of each bank, the competitive effects of the proposed transaction, the convenience and needs of the communities to be serviced by the continuing institution, the record of performance under the Community Reinvestment Act ("CRA") of the banks involved in the transaction and other applicable criteria.
Berkshire Bank is the sole banking subsidiary of Berkshire Hills Bancorp. It was chartered as a mutual savings bank in 1846. It reorganized into the mutual holding company form of organization in 1996. The mutual holding company converted to a stock holding company in June of 2000. As of March 31, 2007, Berkshire Bank had total consolidated assets of approximately $ 2.2 billion. Berkshire Bank operates approximately 30 branch offices serving communities in Western Massachusetts and Eastern New York. Since Berkshire Bank's initial entrance into New York in 2004, it has opened nine other branches in the northeastern area of that state. Through its banking offices, Berkshire Bank offers a range of financial products and services for consumers and businesses. It also provides trust and investment management services as well as financial planning services. Berkshire Bank has a number of subsidiaries including subsidiaries which are engaged in financial planning and securities. Additionally, Petitioner owns directly or indirectly subsidiaries engaged in insurance. Berkshire Bank's deposits are insured to allowable limits by the Federal Deposit Insurance Corporation ("FDIC") and deposits in excess of those are insured by the Depositors Insurance Fund ("DIF").
Factory Point Bank is the sole banking subsidiary of Factory Point Bancorp. As of March 31, 2007, Factory Point Bank had total consolidated assets of approximately $339 million. Factory Point Bank operates 7 full service community banking offices in the Vermont towns of Arlington, Dorset, Ludlow, Manchester and Rutland. Factory Point Bank's primary lines of business include residential real estate lending and small business loans, as well as a variety of consumer loan and deposit services. Factory Point Bank also offers trust and investment services in the markets it serves. Factory Point Bank's deposits are insured to allowable limits by the FDIC.
The Petitioner has submitted information to address the issue that competition among banks will not be unreasonably affected by the proposed transaction. It is the position of this 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 instead of by variously grouped markets. The Division's review recognizes that there is no overlap in the banking office networks of Berkshire Bank with Factory Point Bank or the existing operations of the Petitioner. For that reason and other factors, the Board finds that competition among banking institutions will not be unreasonably affected.
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 new products and services, including insurance products to customers of Factory Point Bank, certain indirect consumer loans, as well as cash management and other related services. Factory Point Bank's customers as well as customers of Berkshire Bank will also benefit from the larger lending limit available through the combined institution. Customers of both banks will benefit through a larger network of branches and ATMs which cover the continuing bank's service area in Western Massachusetts, Eastern New York and if this application is approved, Southern Vermont. Noteworthy is the fact that no branches of either bank are anticipated to be closed as a result of the merger. The Petitioner also emphasized its increase in jobs over the last two years. It recognized some job loss resulting from the transaction, but indicated its continued growth will result in job growth in Massachusetts since its headquarters will remain in Pittsfield. Additionally, Berkshire Bank states that the larger combined institution will reduce its vulnerability to local economic cycles. Based on the foregoing, and on the entire record of this matter, the Division finds that the public convenience and advantage will be promoted by the proposed transaction, and that the criteria for net new benefits has been established.
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 Massachusetts state-chartered bank includes examination by personnel of 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. Both Berkshire Bank and Factory Point Bank have received "Outstanding" ratings at their last examinations of performance under CRA.
The financial aspects of the structure of the transaction were also reviewed and considered. Management factors reviewed were also found supportive of approval. Additionally, all other requirements of statute relating to a bank merger transaction have been met.
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 Factory Point Bank to merge with and into Berkshire Bank under the charter, by-laws and name Berkshire Bank pursuant to Massachusetts General Laws chapter 168, section 34D.
The approvals granted herein are subject to the following conditions:
September 19, 2007
Steven L. Antonakes
Commissioner of Banks