BOARD OF GOVERNORS

OF THE
FEQERAL RESERVE SYSTEM
WASHINGTON, 0. C. 2055!

SCOTT G. ALVABEZ
GENERAL COUNSEL

March 17, 2017

Edward H. Seksay, Esq.
General Counsel

Independent Bank Corp.

2036 Washington Street
Hanover, Massachusetts 02339

Dear Mr. Seksay:

This is in response to your letter to the Federal Reserve Bank of Boston,
dated and received on March 7, 2017, requesting a waiver from an application
requirement under the Bank Holding Company Act of 1956, as amended (“BHC Act”),!
for Independent Bank Corp. (“Independent”), Hanover, Massachusetts, a bank holding
company, to acquire Island Bancorp, Inc. (“Island”), a bank holding company, and
Island’s wholly owned subsidiary, The Edgartown National Bank (“Edgartown Bank”), a
national banking association, both of Edgartown, Massachusetts.

The purpose of the proposed transaction is to facilitate the merger of
Edgartown Bank with and into Independent’s wholly owned subsidiary, Rockland Trust
Company (“Rockland Trust”), Rockland, Massachusetts, a state nonmember bank. The
transaction would occur as follows: (1) Island would merge with and into Independent,
with Independent as the surviving entity; and (2) immediately thereafter, Edgartown
Bank would merge with and into Rockland Trust, with Rockland Trust as the surviving
entity (“Bank Merger”). You have indicated that the transaction steps would occur in
immediate succession and that Independent would not operate Edgartown Bank as a
separate entity.

Section 3 of the BHC Act and the Board’s Regulation Y require the
approval of the Board before the merger or consolidation of bank holding companies and
before a bank holding company may acquire direct or indirect ownership or control of

1 12 U.S.C. § 1841 et seq.


more than 5 percent of the voting shares of a bank.? Through the transaction described
above, Independent would merge with Island and acquire control of Edgartown Bank.
Accordingly, Independent would be required to obtain the Board’s approval under section
3 of the BHC Act and Regulation Y.

Th certain circumstances, however, in order to avoid duplication of
regulatory review by federal banking regulators, the Board’s rules provide that a bank
holding company seeking to merge with another bank holding company or acquire
control of a bank need not obtain the Board’s prior approval. Specifically, section
225.12(d)(2) of the Board’s Regulation Y provides that a bank holding company need not
receive the Board’s approval if the transaction is subject to review by a federal banking
agency under section 18(c) of the Federal Deposit Insurance Act (the “Bank Merger
Act”),3 and meets certain other criteria.4 Your proposal meets all of the applicable
criteria, and Independent has provided all necessary information.

The proposed merger of Edgartown Bank with and into Rockland Trust
requires the prior approval of the Federal Deposit Insurance Corporation (“FDIC”) under
the Bank Merger Act.> In acting on the merger proposal, the FDIC must consider the
impact the acquisition would have on competition, the financial and managerial resources
and future prospects of the combined organization, the convenience and needs of the
communities served by Edgartown Bank and Rockland Trust, the institutions’ records of
performance under the Community Reinvestment Act, the institutions’ effectiveness in
combating money laundering activities, and risks to the stability of the United States
banking or financial system.° These criteria are substantially similar to the criteria the
Board would consider under section 3 of the BHC Act.’

Additionally, at no time would Edgartown Bank operate as a separate
subsidiary of Independent. Following the transaction, the separate corporate existence of
Edgartown Bank would cease, and Rockland Trust would continue to operate as a state
nonmember bank. Under these circumstances, review of the transaction under section 3

2 12 U.S.C. § 1842(a); 12 CFR 225.11,
3 12 U.S.C. § 1828(c).
4 12 CFR 225.12(d)(2).

5 12 U.S.C. § 1828(c). Rockland Trust filed a Bank Merger Act application dated
December 16, 2016, with the FDIC, requesting prior approval of the Bank Merger.

5 12 U.S.C. §§ 1828(c)(5) and (11), 2902(3)(E), 2903(a)(2).
7 See 12 U.S.C. § 1842(c); 12 CFR 225.13.


of the BHC Act would be duplicative of the review under the Bank Merger Act.

Based on a review of these and other facts presented, the Legal Division
believes that no regulatory purpose would be served by requiring Independent to file a
formal application under section 3 of the BHC Act. The Legal Division, therefore, would
not recommend that the Board take action to require a filing of a formal application by
Independent in connection with the transaction described above. This opinion is subject
to the receipt by Independent, Rockland Trust, Island, and Edgartown Bank of all other
necessary regulatory approvals and compliance with any terms and conditions that may
be imposed upon approval of the proposal.

This opinion is based on all the facts and representations presented to
Federal Reserve staff. Any material change in those facts or representations should be
communicated immediately to Federal Reserve staff and may cause this opinion to be
reconsidered. This opinion is limited to this proposal and does not apply to any other
transaction.

If you have any questions regarding this matter, please contact
Keisha Patrick at (202) 452-3559 or Jason Shafer at (202) 728-5811, of my staff.

Sincerely, ,

224
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ce: Federal Deposit Insurance Corporation