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  • Division of Banks

Decision  Decision of September 20, 2013

Date: 09/20/2013
Organization: Division of Banks
  • Petitioner: Mutual Federal Savings Bank of Plymouth County
  • Respondent: Division of Banks

Table of Contents

Decision relative to the conversion of Mutual Federal Savings Bank of Plymouth County, Whitman, Massachusetts to a state charter

Mutual Federal Savings Bank of Plymouth County, (Bank or Mutual), Whitman, Massachusetts has petitioned the Division of Banks (Division) to convert from a federally-chartered savings association to a state-chartered co-operative bank under the provisions of Massachusetts General Laws chapter 170, section 29 (the Conversion).  The Bank is also filing an application with the Board of Governors of the Federal Reserve System (Federal Reserve) to become a member of the Federal Reserve.  Mutual is a federal savings association whose primary regulator is the Office of the Comptroller of the Currency (OCC).   As of December 31, 2012, Mutual had total assets of approximately $403 million.  It operates two wholly-owned subsidiaries, MFSB Securities Corporation and Legion Parkway Securities Corporation, which operate and qualify as securities corporations under Massachusetts General Laws chapter 63, section 38B.

Notice of the application has been posted and published as required by the Division.  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 financial and managerial resources of the Bank, the convenience and needs of the communities to be served by the Bank and other applicable statutory criteria including the Bank’s record of performance under CRA.  

As described in the submitted documents, Mutual 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 Mutual which are stated in its application as follows: (a) a local regulator charged with regulation and supervision of Massachusetts financial institutions and licensees;  (b) more efficient approval procedures with respect to certain expansionary activities; (c) parity with national banks and savings and loan associations under Massachusetts law; (d) excess deposit insurance from The Co-operative Central Bank; and (e) possible intangible benefits of membership in The Co-operative Central Bank.

 Mutual’s deposits are gathered from the general public primarily in the communities in which its banking offices are located.  Mutual’s lending activities are concentrated primarily in Plymouth County.  Residential real estate mortgage lending and automobile financing comprise a significant portion of Mutual’s lending activities although it also offers construction and commercial loans and home equity lines of credit.   At the time of application, Mutual served its market area from nine full-service banking offices, all of which are located in Plymouth County. It plans to open a new branch office in Whitman during the third quarter of 2013. Mutual had assets of approximately $403 million as of December 31, 2012.

Section 29 of chapter 170 of the General Laws sets out extensive provisions for the conversion of a federally-chartered savings bank to such a co-operative bank chartered by the Commonwealth.  One such requirement is that the bank become a member of The Co-operative Central Bank (Central Bank) and thereby have its deposits in excess of those amounts covered by the FDIC insured through the Fund.  The Division received notice on September 3, 2013 from the Central Bank that satisfactory arrangements have been made with it by Mutual for its conversion to a state-charter.  The primary deposit insurer for Mutual will remain the FDIC and the Division has received information on the continued deposit coverage by the FDIC subsequent to the Conversion through a certification by Mutual’s President and Chief Operating Officer.

As discussed in the application, the Conversion of Mutual, in and of itself, will not result in any significant change in the operation of Mutual, the products and services offered or the locations from which it conducts business.  Moreover, the financial characteristics of Mutual will not be impacted by the transaction. In the application, Mutual has discussed certain additional benefits that will result from the transaction.  The by-laws of the Bank also have been reviewed and discussed relative to compliance with applicable provisions of Massachusetts law.  The 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 all found to be supportive of this application by the Division.

Another factor reviewed by the Division on each pending application is the record of performance under the CRA by parties to the transaction.  Since Mutual is presently a federally-chartered bank, the Division will also consider a publicly available descriptive rating and evaluation by a federal bank regulatory agency.  Upon review, the Division noted that Mutual received a rating of “Outstanding” in its most recent evaluation by the OCC dated January 22, 2013.

Upon review of the application with reference to the relevant statutory and regulatory requirements, approval is hereby granted pursuant to section 29 of said chapter 170 for Mutual Federal Savings Bank of Plymouth County to convert to a state-chartered co-operative bank under the name of Mutual Bank and to maintain and operate all existing banking offices under the provisions of Massachusetts General Laws chapter 167C.

The approvals granted herein are subject to the following conditions:

  1. the by-laws, and an amended and restated charter of the Bank, are filed in final form with the Division and that said amended charter is also submitted to the Secretary of State;
  2. that all payments required by section 29 of said chapter 170 are made to the Co-operative Central  Bank; and
  3. the proposed conversion be completed within one year of the date of this Decision.

September 20, 2013

David J. Cotney
Commissioner of Banks

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