Randolph Bancorp, Inc. operates as the bank holding company for Envision Bank that provides financial services to individuals, families, and small to mid-size businesses.
The company operates through its five full-service banking offices located in Norfolk County, Massachusetts, its four loan production offices and lending centers located throughout Massachusetts and southern New Hampshire, and its digital channels via its mobile application and website. The company’s business consists primaril...
Randolph Bancorp, Inc. operates as the bank holding company for Envision Bank that provides financial services to individuals, families, and small to mid-size businesses.
The company operates through its five full-service banking offices located in Norfolk County, Massachusetts, its four loan production offices and lending centers located throughout Massachusetts and southern New Hampshire, and its digital channels via its mobile application and website. The company’s business consists primarily of accepting deposits from the general public and investing those deposits, together with funds generated from operations, brokered deposits and borrowings, in one- to four-family residential mortgage loans, commercial real estate loans, home equity loans and lines of credit, commercial and industrial loans, construction loans, consumer loans, and investment securities. The company offers a full range of deposit accounts, including statement savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts, and IRAs. The company’s digital banking services through its mobile banking site and the internet provide the ability for customers to use a variety of mobile devices to check balances, track account activity, pay bills, search transactions, deposit checks, and set up alerts for text or e-mail messages for changes in their account. The company is also actively involved in the sale and servicing of residential mortgage loans in the secondary market and to other financial institutions.
Market Area
The company’s primary deposit-taking market is Norfolk County, Massachusetts. The company’s primary lending market is more broadly based in Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk and Worcester counties in Massachusetts; Kent, Newport, Providence, and Washington counties in Rhode Island; and Hillsborough County in New Hampshire.
Lending Activities
The company’s primary lending activities are the origination of real estate secured loans, including one- to four-family residential mortgage loans, commercial real estate loans, home equity loans and lines of credit and construction loans and to a lesser extent, commercial and industrial loans and consumer loans, predominantly in its core market areas in Massachusetts, Rhode Island, southern New Hampshire and via the company’s digital banking services through its mobile application and the internet. The company sells in the secondary market the majority of the fixed rate conforming one- to four-family residential mortgage loans that it originates. The company also sells a portion of the non-conforming one- to four-family residential mortgage loans it originates, primarily jumbo and adjustable-rate mortgage loans (ARMs), to other financial institutions.
One- to Four-Family Residential Mortgage Loans: The company offers mortgage loans to enable borrowers to purchase homes or refinance loans on existing homes, most of which serve as the primary residence of the owner.
The company offers fixed-rate and adjustable-rate residential mortgage loans with terms up to 30 years. Generally, the company’s fixed-rate loans conform to Fannie Mae and Freddie Mac (together, GSEs) underwriting guidelines and are originated with the intention to sell. The company’s adjustable-rate mortgage loans generally adjust annually after an initial fixed period that ranges from three to ten years. Interest rates and payments on its current origination of adjustable-rate loans are adjusted to a rate equal to a specified percentage above the one year Constant Maturity Treasury rate. Historically, the company has also used the London Interbank Offered Rate (LIBOR) as a reference rate for adjustable-rate loans but have ceased doing so as LIBOR is set based on interest rate information reported by certain banks which will stop doing so after June 2023. As of December 31, 2021, 61% of residential adjustable-rate mortgages re-price based on LIBOR. Depending on the loan type, the maximum amount by which the interest rate may be increased or decreased is generally 2.0% per adjustment period and the lifetime interest rate caps range from 5.0% to 6.0% over the initial interest rate of the loan.
In an effort to provide financing for first-time home buyers, the company offers adjustable- and fixed-rate loans to qualified individuals and originate the loans using programs with more flexible underwriting guidelines, loan conditions, and reduced closing costs.
Commercial Real Estate Loans: The company originates fixed- and adjustable-rate commercial real estate loans for terms generally up to ten years, though on an exception basis commercial real estate loans will be granted with terms up to twenty years.
Interest rates and payments on the company’s adjustable-rate loans adjust every three, five or seven years and generally are adjusted to a rate equal to a specified percentage above the corresponding Federal Home Loan Bank of Boston (FHLBB) classic borrowing rate and, to a lesser extent, LIBOR. Most of the company’s adjustable-rate commercial real estate loans adjust every five years and amortize over a 25-30 year term.
The company has historically focused its commercial real estate origination efforts on small- and mid-size owner occupants and investors in its market area seeking loans between $500,000 and $5.0 million.
The company’s commercial real estate loans are generally secured by properties used for business purposes, such as industrial, flex, office buildings, warehouses, retail facilities and apartment buildings. In addition to originating these loans, it also participates in commercial real estate loans with other financial institutions.
Home Equity Loans and Lines of Credit: The company offers home equity loans and lines of credit, which are secured by one- to four-family residences. Home equity lines of credit have monthly adjustable rates of interest with 15-year draw periods, which are then amortized over 10 years. These loans are indexed to the prime rate and generally are subject to an interest rate floor. The company’s home equity loans generally have a fixed interest rate. The company offers home equity loan and lines of credit with cumulative loan-to-value ratios generally up to 80.0%, when taking into account both the balance of the home equity loan and first mortgage loan. Any home equity loan or line of credit made with a loan-to-value ratio exceeding 80.0% is made as a policy exception.
Construction Loans: The company originates construction loans only in its market area of Massachusetts, southern New Hampshire and Rhode Island. The company primarily originates construction loans to contractors and builders, and to individuals, to finance the construction of residential dwellings. The company also makes construction loans for commercial development projects, including small industrial buildings, as well as apartment, retail and office buildings. The company’s construction loans generally are floating-rate, interest-only loans that provide for the payment of interest only during the construction phase, which is usually 12 months. Construction loans generally can be made with a maximum loan-to-value ratio of 75.0% of appraised market value for commercial construction and 80.0% of appraised market value for owner-occupied residential construction loans estimated upon completion of the project.
The company’s commercial loan policy requires a minimum equity contribution by the borrower of 10% to 30% depending on the loan type. The company generally requires personal guarantees on all construction loans. Advances are only made following an inspection of the property confirming completion of the required progress on the project and an update to the title completed by a bank approved attorney.
Commercial and Industrial Loans: The company makes commercial and industrial loans primarily in its market area to a variety of professionals, sole proprietorships and small businesses. Commercial lending products include term and time loans and revolving lines of credit. Commercial and industrial loans and lines of credit are generally made with variable rates of interest. The company focuses on small- to medium-sized, privately held companies with local or regional businesses that operate in its market area. In addition, commercial and industrial loans (excluding loan participations) are generally made only to existing customers having a business or individual deposit account and new borrowers are expected to establish appropriate deposit relationships with the company if not already a depositor.
Consumer Loans: The company originates loans secured by passbook or certificate accounts, unsecured personal loans and overdraft loans. The company also purchases consumer loans. The company expanded its purchases of consumer loans in 2017 to include refinanced student loans and automobile loans. The company originates one- to four- family residential mortgage loans for sale in the secondary mortgage market or to other financial institutions.
Mortgage Banking Activities
The company originates residential mortgage loans for its portfolio, for sale into the secondary market and for sale to other financial institutions. The company generally underwrites its residential mortgage loans to conform to government-sponsored enterprises (GSE) standards. The company determines whether loans will be held for investment or held for sale at the time of loan commitment. The company may subsequently change its intent to hold loans for investment and sell some or all of its ARMs or fixed-rate mortgages as part of its asset/liability management function.
Investment Activities
The company has legal authority to invest in various types of liquid assets, including the U.S. Treasury obligations, securities of various government-sponsored enterprises and municipal governments, deposits at the FHLBB, certificates of deposit of federally insured institutions, investment grade corporate bonds and marketable equity securities. The company also are required to maintain an investment in FHLBB stock.
Deposit Accounts: Deposits are attracted from within the company’s market area by sales efforts of its retail, business development and commercial lending officers, advertising (including direct mail), and through its website. The company offers a broad selection of deposit instruments, including noninterest-bearing demand deposits (such as checking accounts), interest-bearing demand accounts (such as NOW and money market accounts), savings accounts, and certificates of deposit. The company also utilizes brokered, listing and other wholesale deposits to help fund loan growth.
Business Banking: The company also offers a variety of deposit accounts designed for businesses. The company’s business banking deposit products include a commercial checking account and checking accounts specifically designed for small businesses. The company also offers remote deposit capture products for business customers to meet their online banking needs. Additionally, the company offers money market accounts for businesses and it offers a limited suite of cash management solutions directly or through third parties, including ACH origination, wire transfer, positive pay and account reconciliation.
Subsidiaries
The bank’s wholly-owned subsidiaries include Cabot Security Corporation, which is a Massachusetts securities corporation formed to hold certain of its investment securities for tax purposes; Randolph Investment Company, Inc. that is a Massachusetts corporation formed to hold certain real estate owned.; and Prime Title Services, Inc., which is a Massachusetts corporation that provides mortgage loan closing services.
Supervision and Regulation
The bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (FDIC) and by the Depositors Insurance Fund, a private industry-sponsored insurance fund, for amounts in excess of the FDIC insurance limits. The bank is subject to extensive regulation by the Massachusetts Commissioner of Banks, as its chartering agency and state regulator, and by the FDIC, as its federal regulator and deposit insurer.
The bank is required to file reports with, and is periodically examined by, the FDIC and the Massachusetts Commissioner of Banks concerning its activities and financial condition. The bank must also obtain regulatory approvals prior to entering into certain transactions, including but not limited to, mergers with or acquisitions of other financial institutions. The bank must comply with consumer protection regulations issued by the Consumer Financial Protection Bureau (the CFPB). The bank is a member of and owns stock in the Federal Home Loan Bank of Boston (FHLBB).
As a bank holding company, the company is subject to examination and supervision by, and is required to file certain reports with, the Board of Governors of the Federal Reserve System (the Federal Reserve). The company is also subject to the rules and regulations of the Securities and Exchange Commission (the SEC) under the federal securities laws.
The company is a bank holding company within the meaning of the Bank Holding Company Act of 1956 (the BHCA). As such, the company is registered with the Federal Reserve and subject to regulations, examinations, supervision, and reporting requirements applicable to bank holding companies.
The bank received a ‘Satisfactory’ CRA (the Community Reinvestment Act) rating in its federal examination. The bank’s authority to extend credit to its directors, executive officers, and 10.0% or greater shareholders, as well as to entities controlled by such persons, is governed by the requirements of Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O of the Federal Reserve.
The bank’s operations are also subject to state and federal laws applicable to credit transactions, such as the Home Mortgage Disclosure Act; Equal Credit Opportunity Act; Fair Credit Reporting Act; Biggert-Waters Flood Insurance Reform Act of 2012; and rules and regulations of the various federal agencies charged with the responsibility of implementing such federal laws.
The operations of the bank are also subject to the Right to Financial Privacy Act; Truth in Savings Act; Electronic Funds Transfer Act and Regulation E promulgated thereunder; Check Clearing for the 21st Century Act (also known as Check 21); USA PATRIOT Act; and Gramm-Leach-Bliley Act.
The company’s common stock is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
History
Randolph Bancorp, Inc. was founded in 1851. The company, a Massachusetts corporation, was incorporated in 2016.
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