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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

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Merrimack County Savings Bank

September 20, 1999

The Board of Directors
Merrimack County Savings Bank
89 North Main Street
Concord, New Hampshire 03301

Subject: Merrimack County Savings Bank Concord. New Hampshire

Dear Board Members:

We have reviewed your application to continue an activity indirectly through a wholly owned subsidiary, MECO Trust Services ("Subsidiary"), that may not be permissible for a subsidiary of a national bank. Merrimack County Savings Bank ("Bank") is seeking the FDIC's consent to retain indirectly an equity investment through its majority-owned subsidiary in Charter Holding Corporation ("CHC"). The Bank has owned the stock of CHC, or its predecessor, since 1984, and examinations of the Bank have disclosed no adverse effect of the investment. The Bank's investment in CHC is less than one percent of its consolidated Tier I capital, and the Bank is well capitalized. The continued ownership of shares of CHC does not pose a significant risk to the deposit insurance fund. Approval is subject to the following conditions:

(1) That the investment in the stock of CHC be held indirectly through a single, majority-owned subsidiary organized for the purpose of holding such investments;

(2) That neither the Bank nor the majority-owned subsidiary may enter into any transaction with the Bank's executive officers, directors, principal shareholders, or related interests of such persons which relate to the majority-owned subsidiary's activities unless.the transactions are on terms and conditions that are substantially the same as those prevailing at the time for comparable transactions with persons not affiliated with the Bank; and,

(3) That in the event the facts and circumstances presented or otherwise known to the FDIC in connection with this request changes significantly, the FDIC retains the ability to alter, suspend, or withdraw its approval.

The Bank's conformance with the conditions included in the Order will be reviewed at each regular safety and soundness examination conducted by the FDIC. Should you have any questions regarding this matter, please contact Regional Director Patrick J. Rohan in our Boston Regional Office at (781) 794-5500.


Michael J. Zamorski
Deputy Director

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