LEXINGTON, Mass. - Lexington Savings Bank and Main Street Community Bancorp of Waltham have agreed to merge under a new holding company, Affiliated Community Bancorp.

According to the agreement, Lexington and Main Street's Federal Savings Bank would be subsidiaries of the new company. Each would have its own name, franchises, and board of directors.

Each outstanding share of both thrifts would be exchanged for one share of Affiliated common stock, so the transaction would be tax-free.

Officials expect Affiliated to pay an initial quarterly dividend of 12 cents per share, equivalent to Lexington's but much larger than Main Street's.

The agreement is subject to shareholder and regulatory approval.

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