Bank MHC

Connecticut MHC to Acquire Stock Bank for $13m

2005-10-17T19:41:00.000-07:00

Nutmeg Financial MHC, the mutual holding company for Naugatuck Savings Bank, Naugatuck, CT, has reached an agreement to purchase Castle Bank & Trust Company, Meriden, CT, a stock bank, for $13 million in cash, the parties announced today. Following the acquisition, Castle will operate as a separately incorporated subsidiary of the mutual holding company. Naugatuck, with 11 branches has total assets of $649 million on $88 million in capital. Castle, founded in 1999, operates two branches and posts assets of $74 million on $6 million in capital. The acquisition is expected to close in the first quarter of 2006, subject to approval by state and federal regulators and Castle Bank stockholders. A "no lay-offs" policy has been adopted in connection with the acquisition. Source: Michael C. Bingham for the Connecticut Business News Journal, Contact.com 10/17/05 (link attached).

Fed Proposes Increase in "Small BHC" Limit to $500m.

2005-09-23T14:49:00.000-07:00

On September 7, 2005, the Federal Reserve Board published for comment a proposal to amend its policy statement on small bank holding companies. The proposal would increase from $150 million to $500 million the maximum asset size for companies to be eligible for "small bank holding company" treatment. Under the Fed's policy statement, "small bank holding companies" are permitted to have debt-to-equity ratios as high as 300% and are exempt from the Fed's requirement that bank holding companies comply with regulatory risk-based capital guidelines on a consolidated basis. The primary purpose of the policy statement is to permit the use of holding company debt to facilitate transfers of ownership of small, often closely held banking organizations. Adoption of the proposal should benefit mutual holding companies by permitting a greater number of them to use of holding company debt to finance acquisitions of stock-form banks. The Fed has established a 60-day period for receipt of public comments on the proposal.

Connecticut MHC Announces Dividend on Minority Shares

2005-09-23T06:57:00.000-07:00

SI Financial Group, Inc., a subsidiary of SI Bancorp MHC, Willimantic, CT, announced a dividend of $0.03 per share to be paid October 28, 2005 to holders of its outstanding common stock as of October 7, 2005. The company simultaneously announced that its parent mutual holding company plans to waive receipt of the dividend. SI Financial Group, Inc. is the parent holding company of Savings Institute Bank and Trust Company, Willimantic, Connecticut.

Salem Five Holding Company Application Withdrawn

2005-09-12T14:15:00.000-07:00

The Federal Reserve Bank of Boston announced on its website (see link) that the application of Salem Five Bancorp, Salem, Massachusetts, to become a mutual holding company and to acquire Salem Five Cents Savings Bank was "withdrawn" August 25, 2005.

Hearings on Salem 5, Monson & Florence MHCs

2005-09-08T09:37:00.000-07:00

Hearings were conducted this morning before the Massachusetts Board of Bank Incorporation on three pending mutual holding company reorganization applications -- those of Salem Five Cents Savings Bank, Salem, Monson Savings Bank, Monson, and Florence Savings Bank, Florence, Massachusetts. Only representatives of the applicants appeared to testify on the applications. Commissioner of Banks Steven L. Antonakes chaired the hearing panel. Also presiding at the hearings were Timothy Brooks, representing State Treasurer, Timothy Cahill and Donald Twomey, representing Commissioner of Revenue Alan LeBovidge.

In each case, the applicant's president and CEO spoke in favor of the application, describing the applicant and its reasons for forming a mutual holding company. In each case, Commissioner Antonakes asked about the bank's current CRA rating and regarding the adequacy of the bank's policies and procedures to combat money laundering. In the hearing on Florence Savings Bank's application, Donald Twomey asked Florence Savings Bank president and CEO John Heaps to what he attributed Florence Savings Bank's business success competing in western Massachusetts. Customer service, lower fees, and loss of market share by BankAmerica and its predecessors was the essence of Heaps' response.

Only one of the applicants -- Monson Savings Bank, the smallest of the three -- proposes to form a mid-tier holding company as part of its reorganization. One can only wonder what the reasons for this additional organizational complexity might be. At the hearing, Monson Savings Bank President and CEO Roland G. Desrochers seemed to suggest that this was to enable the mutual holding company to raise capital through an offering of trust preferred securities, although he indicated that Monson has no immediate plans to make any securities offering. Of course, a mid-tier holding company is not necessary for a mutual holding company to offer trust preferred securities, and in addition to cumbersome organizational complexity, in Massachusetts offers the additional disadvantage of another layer of state tax to be paid whenever capital is transferred by dividend or otherwise from the subsidiary bank to the parent mutual holding company. Curious . . .

The period for submission of public comments on all three applications ends September 12, 2005.

Mass. BBI Hearings on MHC Formations

2005-09-07T10:49:00.000-07:00

The Massachusetts Board of Bank Incorporation will hold hearings Thursday, Sept. 8, at 10:30 a.m., 11:00 a.m., and 11:20 a.m., respectively, on the applications of Salem Five Cents Savings Bank, Monson Savings Bank, and Florence Savings Bank to form mutual holding companies. The hearings will be conducted in Hearing Room A on the Fifth Floor at One South Station, Boston, Massachusetts.

At the hearings, which are open to the public, representatives of the three banks are expected to testify regarding their reasons for reorganizing in mutual holding company form as well as their immediate business plans for the new holding companies.

Anyone opposing the holding company formations will also be afforded an opportunity to testify, and to submit a written statement on or before the close of the public comment period on the applications, Sept. 12, 2005.

The Board of Bank Incorporation ("BBI")is the official body empowered under Massachusetts law to charter new state chartered banking institutions and to approve holding company acquisitions. The BBI consists of the Commissioner of Banks, the Massachusetts State Treasurer and the Commissioner of Revenue, and is chaired by the Commissioner of Banks. Ordinarily, the State Treasurer and Commissioner of Revenue do not attend BBI hearings personally, but send top aids to sit in their stead.

Three More Massachusetts Savings Banks Forming MHCs

2005-08-25T14:54:00.000-07:00

This August 22nd Banker & Tradesman article, Three Local Banks Have Mutual Goals, documents the trend of Massachusetts mutual banks forming mutual holding companies to assist them in "forming new business alliances, raising capital and diversifying business activity." The three banks named in the article are: Salem Five Cents Savings Bank, Florence Savings Bank, and Monson Savings Bank. Subscribers to Banker & Tradesman can read the full article here. Or download a reprint here.

Announcing Launch of Bank MHC blog

2005-08-25T09:43:00.000-07:00

Kevin Handly of the Boston Office of Gallagher Callahan & Gartrell, P.C. launches Bank MHC blog to provide an accessway and focal point for information, developments and viewpoints regarding bank mutual holding companies throughout the United States.

The blog will provide a link to the Bank MHC Resource, a web page devoted to the compilation of reference documents, information and web links related to bank mutual holding companies.

In addition, the blog will provide current news and commentary about deals, legislation, regulations and regulatory actions involving or affecting mutual bank holding companies.

Initially, the blog will focus on mutual holding company developments in the New England states, reflecting the authors' Boston, Concord, and Augusta office locations. Over time, the blog's coverage will expand to cover developments in other states in which mutual bank holding companies operate.

Comments and contributions of articles and information sources are welcome, and may be directed to handly@gcglaw.com