Chicopee Bancorp, Inc., a Massachusetts corporation, was formed on March 14,
2006 by Chicopee Savings Bank (the “Bank” or “Chicopee Savings
Bank”) to become the holding company for the Bank upon completion of the
Bank’s conversion from a mutual savings bank to a stock savings bank. The
conversion and the offering were completed on July 19, 2006.
The Bank, a Massachusetts stock savings bank, was organized in 1845 under the
name Cabot Savings Bank and adopted its present name in 1854. The Bank is a
full-service, community oriented financial institution offering products and
services to individuals and businesses through nine offices located in Western
Massachusetts. The Bank’s deposits are insured by the Federal Deposit
Insurance Corporation (“FDIC”) and Depositor’s Insurance Fund
(“DIF”) of Massachusetts. The Bank is also a member of the Federal
Home Loan Bank of Boston (“FHLB”) and is regulated by the FDIC and
the Massachusetts Division of Banks. Chicopee Savings Bank’s business
consists primarily of making loans to its customers, including residential mortgages,
commercial real estate loans, commercial loans, consumer loans and home equity
loans, and investing in a variety of investment securities. The Bank funds these
lending and investment activities with deposits from the general public, funds
generated from operations and borrowings. The Bank also sells residential one-to-four
family real estate loans to the secondary market to reduce interest rate risk.
The Bank’s revenues are derived from the generation of interest and fees
on loans, interest and dividends on investment securities, fees from its retail
banking operation, and investment management. The Bank’s primary sources
of funds are deposits, principal and interest payments on loans and investments,
advances from the FHLB and proceeds from loan sales. The Bank also provides
access to insurance and investment products through its Financial Services Division.
We offer fixed-rate residential real estate loans secured by one-to-four family
residences with terms between 10 and 30 years. Management establishes the loan
interest rates based on market conditions. Interest rates and payments on our
adjustable-rate mortgage loans generally adjust annually after an initial fixed
period that ranges from one to ten years. Interest rates and payments on our
adjustable-rate loans generally are adjusted to a rate typically equal to 3.50
percentage points above the one-year constant maturity Treasury index. The maximum
amount by which the interest rate on our adjustable-rate mortgage loans may
be increased or decreased is generally 2 percentage points per adjustment period
and the lifetime interest rate cap is generally 6 percentage points over the
initial interest rate of the loan. We also offer adjustable-rate mortgage loans
that adjust every three years after an initial three-year fixed period and adjustable-rate
mortgage loans that adjust every five years after an initial six-year fixed
period. Interest rates and payments on these adjustable-rate loans generally
are adjusted to a rate typically equal to 3.50 percentage points above the three-
and five-year constant maturity Treasury index.
Chicopee Funding Corporation. Chicopee Funding Corporation was incorporated
in Massachusetts in 2006. Chicopee Bancorp, Inc. contributed funds to Chicopee
Funding Corporation to enable it to make a 20-year loan to the employee stock
ownership plan to allow it to purchase shares of the Company’s common
stock as part of the initial public offering. The Employee Stock Ownership Plan
purchased 595,149 shares in the initial public offering, or 8% of the 7,439,368
shares issued in connection with the Bank’s mutual-to-stock conversion.
The following are descriptions of Chicopee Savings Bank’s wholly-owned
subsidiaries:
CSB Colts, Inc. CSB Colts, Inc. was formed in 2003 as a Massachusetts corporation
to engage in buying, selling and holding securities on its own behalf. As a
Massachusetts securities corporation, the income earned on CSB Colts’
investment securities is subject to a lower state tax rate than that assessed
on income earned on investment securities maintained at Chicopee Savings Bank.
CSB Investment Corp. CSB Investment Corp. was formed in 2003 as a Massachusetts
corporation to engage in buying, selling and holding securities on its own behalf.
As a Massachusetts securities corporation, the income earned on CSB Investment’s
investment securities is subject to a lower state tax rate than that assessed
on income earned on investment securities maintained at Chicopee Savings Bank.
Cabot Realty L.L.C. Cabot Realty L.L.C. was formed as a Massachusetts limited
liability company to hold other real estate owned (“OREO”). Cabot
Realty’s net loss for the year ended December 31, 2015 was $297,000. Cabot
Management Corporation, a wholly owned subsidiary of Chicopee Savings Bank,
has a 1% membership interest in, and Chicopee Savings Bank has a 99% membership
interest in, Cabot Realty.
Cabot Management Corporation. Cabot Management Corporation was formed in 1979
as a Massachusetts corporation to acquire and manage interests in real property
and to acquire, construct, rehabilitate, lease, finance and dispose of housing
facilities.
Deposits, borrowings and loan repayments are the major sources of our funds
for lending and other investment purposes. Loan repayments are a relatively
stable source of funds, while deposit inflows and outflows and loan prepayments
are significantly influenced by general interest rates and money market conditions.
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