Boston, MA -- Citizens Bank and the Statewide Community Advisory Committee on Corporate Mergers (CAC) signed a Community Reinvestment Act (CRA) agreement at a ceremony held at Citizens Bank Corporate Office, on November 29th. This binding agreement where Citizens Bank has offered commitments ensuring access to capital and resources for low/moderate-income and minority communities has been hailed by the CAC as a success.

"This agreement denotes good business sense on behalf of Citizen’s Bank," stated Senator Dianne Wilkerson (D-Boston). "Citizens should be commended for their efforts on working with the community. It is refreshing to see in the era of corporate mergers an affirmation that one could do well and do good at the same time."

Thomas Hollister, C.E.O. & President of Citizens Bank of Massachusetts, and State

Senator Dianne Wilkerson, founder and convener of the CAC which represents about 50 community-based organizations that work both locally and throughout the state were the signatories for the agreement. Senator Wilkerson who signed on behalf of the CAC which members represent organizations who are engaged in affordable housing, economic development, civil rights advocacy, and issues affecting minority and women-owned businesses.

"Today’s ceremony is the culmination of much hard work and commitment, affirmed Thomas Hollister. "From Citizens perspective we are deeply gratified to be formalizing our partnership with the Community Advisory Committee and look forward to working with Senator Wilkerson and members of the CAC with the implementation of this historic agreement."

The groundbreaking agreement includes commitments regarding affordable home mortgages, rental housing financing, diversity of bank staff and board, contracts with minority and women-owned businesses, and charitable giving. The agreement was reached in a spirit of cooperation and represents a major step forward in bank-community relations.

"Citizens is making a particularly aggressive commitment to the development of affordable rental housing which is critically needed in this time of rising rents," stated Marc Draisen Executive Director, of Mass. Association of Community Development Corporations (MACDC) and a member of the CAC. "With this contribution, Citizens is demonstrating unparalleled willingness to use their fullest capacity to support community development as a central part of their business."

Highlights of the agreement are as follows:

• Citizens agrees to partner with community representatives and create a partnership committee which will monitor the implementation of a five-year CRA agreement.

• Citizens will not close any branches in low or moderate income (LMI) communities for one year (with the exception of immediately approximate branches to be closed in association with the merger). They will also consult with the committee and community groups if they decide to close any LMI branches during the term of the agreement.

• Citizens will fully implement existing home mortgage commitments made by both banks, and agrees to continue to develop new programs.

• Citizens will voluntarily convert to grant approximately $22.4 million in loan obligations to the Massachusetts Housing

• Partnership Fund, yielding approximately $2.5 million in flexible grant funds for affordable housing development. This includes conversion not only of the legal obligation stemming from this merger, but also the unexpended portion of USTrust's current commitment to the MHP Fund, stemming from UST's previous mergers. In addition, Citizens has agreed to set aside $5 million in unexpended Citizens MHP commitments for non-profit developers. The set aside will be available at the interest rate of Treasury plus 25 basic points, a current savings of about 44 basis points below current rates, with a 12 month free rate lock.

• Citizens agrees to a goal of increasing Basic Banking accounts by 10% annually over current Citizens performance. (Currently, they open about 10,000 new Basic Banking accounts per year. At the end of five years, this number should increase to 16,100 new accounts annually.) They have agreed to excellent terms for both their checking and savings accounts.

• Citizens has agreed to target 25% of small business loans in LMI areas, 55% of small business loans to businesses earning less than $1 million in revenues, and 57% of small business loans for amounts of under $100,000. (The percentage figures are the average performance levels of both UST and Citizens per public data available through the FFIEC.) Citizens will continue to offer a low interest rate loan to businesses in the Boston Empowerment Zone at favorable terms, as well as maintain UST's low interest rate loan for businesses who receive technical assistance from community development corporations.

• Citizens will continue the two banks' level of equity investments to community-based small business finance providers such as CDFIs, CDCs, and collaboratives which in 1998 totaled $1.12 million. They will assume USTrust's role in the design and funding of MHIC's Neighborhood Commercial Revitalization Program.