BayCoast Bank - Decision and Order - (19BK001)

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

DEPARTMENT OF BUSINESS REGULATION DIVISION OF BANKING 1511 PONTAIC AVENUE CRANSTON, RI 02920

DECISION AND ORDER

IN RE:

APPLICATION OF BAYCOAST BANK TO ESTABLISH AN INTERSTATE BRANCH OFFICE AT 85 SOCKANOSSET CROSS ROAD CRANSTON, RHODE ISLAND 02920

I. JURISDICTIONAL STATEMENT AND TRAVEL OF THE CASE

This matter came before the Department of Business Regulation ("Department"), Division of Banking ("Division") upon the application of BayCoast Bank, a Commonwealth of Massachusetts savings bank with a principal office at 1 BayCoast Place, Swansea, Massachusetts 02777 (the "Applicant"), for approval to establish an interstate branch office to be located at 85 Sockanosset Cross Road, Cranston, Rhode Island 02920 (the "Application"), pursuant to R. I. Gen. Laws § 19-2-11 and 19-7-9 and for the issuance of a certificate of public convenience and advantage in connection therewith.

The Application was filed with the Division on October 18, 2018. Applicant published notice of the filing of the Application during three consecutive weeks, beginning on August 30, 2018 in The Providence Journal, a newspaper of general circulation in the State of Rhode Island and in The Herald News, a newspaper of general circulation in Fall River, Massachusetts. Additionally, the Division posted notice of the filing of the Application on the Department's website from October 29, 2018 until November 16, 2018. The Application was available for public inspection and comment in the office of the Division from October 29, 2018 through November 16, 2018. No letters of comment or objection were received by the Division in connection with the Application during the comment period.

II. APPLICABLE LAW

a. Public Convenience and Advantage Standard

The Director of the Department, or the Director’s designee (the "Director"), is expressly authorized by R. I. Gen. Laws §§ 19-2-3, 19-2-11 and 19-7-9 to issue a certificate of public convenience and advantage with respect to the establishment of a branch for a Rhode Island regulated institution upon consideration of factors consistent with the creation of a regulated institution and upon compliance with other applicable provisions of R. I. Gen. Laws Title 19. Although R. I. Gen. Laws Title 19 does not expressly delineate the factors that must be considered by the Director with respect to the standard of public convenience and advantage, it is the policy of the Director, and the Division under the supervision of the Director, to consider such factors as (a) the benefits to the community or communities to be served, such as the products and services to be provided by the proposed branch, and (b) the effects of the proposal on the public interest, such as the effect on employment, the economy and the tax base of the State. In addition, the Director considers the safety and soundness of the regulated institution making application and the effect of the proposal on the strength and stability of the financial community as a whole.

Under applicable law, therefore, the Director, or the Director’s designee, may issue a certificate upon a finding that the benefits flowing from the applicant's proposed activities will run to the public, that the applicant's proposed activities are fitting or suited to the public and will result in a gain or benefit to the public, that the proposed activity will not materially adversely affect the safety and soundness of the regulated institution, and that the application is in conformance with applicable law.

b. Community Reinvestment Act Standard

It has been the policy of the Director, in reviewing applications from state chartered institutions, to determine whether an applicant will adhere to Community Reinvestment Act ("CRA") standards. The principles inherent in CRA require institutions to address the credit needs of the communities they serve. Both the federal CRA, 12 U.S.C. § 2901 et seq, and the state CRA, R. I. Gen. Laws §19-9-4, are applicable. The Director believes that CRA factors are relevant and important in determining whether a certificate of public convenience and advantage should be issued.

c. Insurance of Deposits

R. I. Gen. Laws § 19-4-10 requires that any regulated institution permitted by law to receive deposits, except a regulated institution prevented from accepting deposits by its by-laws or agreement to form, must maintain federal deposit insurance.

d. Reciprocity with Home State

R. I. Gen. Laws §19-7-9 expressly authorizes the Director, or the Director’s designee, to approve an application for a branch within Rhode Island by an out-of-state bank if the law of the state in which the out-of-state bank is principally located authorizes a Rhode Island financial institution to establish a branch in that state under conditions not substantially more restrictive than those imposed by the laws of Rhode Island, as determined by the Director.

III. FINDINGS OF FACT

Evidence was submitted to the Division in support of the Application that included responses to questions contained in the Application and various documents attached as exhibits to the Application.

Specifically, information was provided on the Applicant and the proposed branch. The Applicant provided a statement that described the means by which the proposed branch would promote the public convenience and advantage of the community to be served as well as information on the benefits of the proposed branch to the community to be served and the impact on the safety and soundness of the Applicant. Based upon the documentary evidence filed with the Division, the Department hereby makes the following findings of fact:

1. The Division received from BayCoast Bank the Application pursuant to R. I. Gen. Laws §§ 19-2-11 and 19-7-9 on October 18, 2018.

2. The Applicant published a Notice of Application Filed during three consecutive weeks, beginning on August 30, 2018 in The Providence Journal in accordance with R. I. Gen. Laws § 19-1-3 and in The Herald News. In addition, the Notice of Application was published on the Department's website from October 29, 2018 until November 16, 2018.

3. The public inspection and comment period for the Application extended from October 29, 2018 through November 16, 2018 during which time the Application was available for public inspection and comment in the office of the Division. No letters of comment or objection were received by the Division in connection with the Application during the comment period, therefore no public hearing was held.

4. Applicant is an out-of-state bank, as defined in R.I. Gen. Laws § 19-7-1, chartered by the Commonwealth of Massachusetts.

5. The service area for the Applicant's proposed branch will be the community of Cranston, Rhode Island.

6. Approval of the Application will benefit local consumers and businesses by providing banking services in a location recently vacated by Citizens Bank N.A., a National Association regulated by the Office of the Comptroller of the Currency.

7. The Division has reviewed the Applicant's latest CRA Performance Evaluation which evidences its intent to comply with CRA and non-discrimination laws and regulations and to address the communities' credit needs. The Applicant received a “High Satisfactory” performance evaluation from the Massachusetts Division of Banks on September 5, 2017 and a "Satisfactory" CRA performance evaluation rating from the Federal Deposit Insurance Corporation ("FDIC") on April 22, 2014, when the last CRA Performance review was performed.

8. In review of Applicant's financial information, the Applicant adequately demonstrates the financial strength with respect to safety and soundness issues.

9. The Federal Deposit Insurance Corporation ("FDIC") was notified of the filing of the Application. By letter dated September 17, 2018, the FDIC notified the Applicant of its approval of the establishment of the proposed branch as of September 17, 2018.

IV. CONCLUSIONS OF LAW

Based upon the documentary evidence filed with the Division, the Department hereby makes the following conclusions of law:

1. R. I. Gen. Laws §§ 19-2-3, 19-2-11 and 19-7-9 authorize the Director, or the Director’s designee to issue the certificate of public convenience and advantage in connection with the Application.

2. The Notice of Application Filed satisfies the requirements of R. I. Gen. Laws § 19-1-3 with respect to the publication of notice for the proposed branch.

3. The proposed branch is in the public interest; will promote the convenience and advantage of the communities to be served by the proposed branch; will have a beneficial effect on the economy and on the citizens of the communities to be served by the proposed branch; all consistent with safe and sound banking practices and with the requirements of Rhode Island law and the standard for issuing the certificate sought by the Applicant.

4. The Application complies with the spirit and intent of R. I. Gen. Laws § 19-9-4 regarding credit needs of local communities.

5. The Applicant's deposits at the proposed branch will have federal deposit insurance.

V. DECISION AND ORDER

Upon review and consideration of the documentary evidence in the record presented in this matter, it is hereby ORDERED:

That the application of BayCoast Bank to establish a full-service branch office including the operation of an additional electronic device (ATM), and for the issuance of a certificate of public convenience and advantage in connection therewith, is hereby approved in accordance with, and with the general effect provided for in R. I. Gen. Laws § §19-2-11 and 19-7-9, subject to the following condition:

1. That the Applicant opens the proposed branch within one (1) year of the date of this Decision and Order; if it has not opened the branch within one (1) year, it must promptly return the certificate of public convenience and advantage to the Division for cancellation unless good cause is demonstrated for an extension.

ENTERED AS ADMINISTRATIVE ORDER NUMBER 19 BK 001 OF THE DEPARTMENT OF BUSINESS REGULATION AS OF THIS 4th DAY OF JANUARY 2019

Elizabeth Kelleher Dwyer, Superintendent of Banking State of Rhode Island Department of Business Regulation

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

DEPARTMENT OF BUSINESS REGULATION DIVISION OF BANKING

CERTIFICATE OF PUBLIC CONVENIENCE AND ADVANTAGE

WHEREAS, application was made to the Department of Business Regulation for a certificate that public convenience and advantage will be promoted by establishing a branch office of

BayCoast Bank

at

85 Sockanosset Cross Road, Cranston, Rhode Island 02920

WHEREAS, notice of application was published from October 29, 2018 through November 16, 2018.

WHEREAS, the Department of Business Regulation finds that public convenience and advantage will be promoted by establishing the branch.

THEREFORE, the Department of Business Regulation authorizes operation of the branch.

Effective, January 4, 2019

Elizabeth Kelleher Dwyer, Superintendent of Banking State of Rhode Island Department of Business Regulation