Hibernia Savings Bank is issuing an affinity card for the town of Hanover, Mass., population 12,600.
The bank said Hanover is Massachusetts' first municipality to offer an affinity card. Such cards have been popular in New Jersey in programs initiated by Valley National Bank.
The no-fee Hanover card sports the town's seal and date of incorporation. Each time it is used, 1% of the transaction will go to Hanover, which will earmark the funds to one or more organizations each quarter.
For $365 million-asset Hibernia, which has only 640 cards and $630,000 in outstandings, the program is partly community service and partly a way to generate customers and revenue, said Dennis Myers, senior lending officer.
"The card will probably have a pretty narrow profit margin, but we still can make some money," Mr. Myers said.
Residents can apply for a gold or standard MasterCard; both carry a prime-plus-3% interest rate. Cardholders can transfer balances at an 8.99% rate.
The state-chartered stock savings bank has mailed brochures to 5,000 households.