FEDERAL DEPOSIT INSURANCE CORPORATION

RE: North Adams Hoosac Savings Bank North Adams, Massachusetts

Application for Federal Deposit Insurance and for Consent to Merge

ORDER AND BASIS FOR CORPORATION APPROVAL

Pursuant to Section 5 and 18(c) and other provisions of the Federal Deposit Insurance Act (the Act), applications for federal deposit insurance have been filed on behalf of Hoosac Financial Services Savings Bank, North Adams, Massachusetts, a newly-formed, Bank Insurance Fund member, state-chartered mutual savings bank; and Hoosac Bank, North Adams, Massachusetts, a newly-formed, Bank Insurance Fund member, state-chartered stock savings bank.

An application has also been filed for the Corporation's consent to the merger of Hoosac Bank, North Adams, Massachusetts with North Adams Hoosac Savings Bank, North Adams, Massachusetts, a Bank Insurance Fund member, state-chartered mutual savings bank with total resources of $181,413,000 and total deposits of $148,346,000, as of September 30, 1997.

These transactions are the result of North Adams Hoosac Savings Bank's plan of reorganization from a mutual savings bank to a mutual holding company/stock savings bank structure, which includes:

1. The formation of a de novo mutual savings bank to be named Hoosac Financial Services Savings Bank.

2. The immediate reorganization of Hoosac Financial Services Savings Bank as a state chartered mutual holding company to be named Hoosac Financial Services, Inc., North Adams, Massachusetts.

3. The formation by Hoosac Financial Services. Inc. of a new stock savings bank subsidiary, which will be named Hoosac Bank.

4. The merger of Hoosac Bank and North Adams Hoosac Savings Bank, with the resultant institution retaining the charter and name of Hoosac Bank.

As a result of the merger transaction. North Adams Hoosac Savings Bank will transfer substantially all of its assets and all of its liabilities to Hoosac Bank, which will be a wholly owned subsidiary of Hoosac Financial Services, Inc. The principal office of the resultant bank will be at 93 Main Street, North Adams. Massachusetts, the present location of North Adams Hoosac Savings Bank. Notice of the proposed transaction, in a form approved by the Corporation, has been published pursuant to the FDI Act.

A review of available information. including the Community Reinvestment Act (the "CRA") Statements of the proponent, discloses no inconsistencies with the purposes of the CRA. The post-merger institution is expected to continue to meet the credit needs of its entire community, consistent with the safe and sound operation of the institution.

In connection with the merger application, the Corporation has also taken into consideration the financial and managerial resources and future prospects of the proponent banks and the resultant bank, and the convenience and needs of the community to be served. Having found favorably on these statutory factors and having considered other relevant information, including any reports on the competitive factors furnished by the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Director of the Office of Thrift Supervision and the Attorney General, it is the Corporation's judgement that the application should be and hereby is approved.

Favorable findings have been accorded to all factors required to be considered pertinent to each application. Accordingly, it is the Corporation's judgment that the applications should be and hereby are approved subject to the following conditions:

1. That federal deposit insurance shall not become effective unless and until the applicant has been established as a stock savings bank by the State authority and its mutual holding company, Hoosac Financial Services, Inc., has received approval to become a mutual holding company from the Massachusetts Banking Commissioner and the Federal Reserve System;

2. That Hoosac Bank (the resultant stock bank) shall not issue minority shares without prior written notification to and non-objection from the FDIC;

3. That Hoosac Financial Services, Inc. shall provide written notification to the Corporation prior to any conversion to stock form and provide the Corporation with copies of all documents filed with state and federal banking and securities regulators in connection with any proposed conversion of the mutual holding company to stock form;

4.That, should any, shares of stock be issued to persons other than Hoosac Financial Services. Inc., any dividends waived by Hoosac Financial Services, Inc. must be retained by Hoosac Bank and segregated, earmarked, or otherwise identified on its books and records, such amounts must be taken into account in any valuation of Hoosac Bank and Hoosac Financial Services, Inc. and factored into the calculation used in establishing a fair and reasonable basis for exchanging bank shares for holding company shares in any subsequent conversion of Hoosac Financial Services, Inc. to stock form; such amounts shall not be available for payment to or the value thereof transferred to minority shareholders of the bank by any means, including through dividend payments or at liquidation;

5. That the transaction shall not be consummated sooner than fifteen calendar days after the date of this Order nor later than six months after the date of this Order unless such period is extended for good cause by the Corporation; and

6. That until the conditional commitment herein granted becomes effective, the Corporation shall have the right to alter, suspend, or withdraw the said commitment should any interim development be deemed to warrant such action.

By Order of the Associate Director of the Division of Supervision, acting pursuant to delegated authority of the Board of Directors of the Corporation.

Dated at Washington, D.C., this 24th day of February, 1998.

Mark S. Schmidt
Associate Director
Division of Supervision