Worcester Business Journal

14 Worcester Business Journal | February 3, 2020 | wbjournal.com F O C U S B A N K I N G & F I N A N C E bankHometown & Fidelity Bank were M&A players, but most Central Mass. banks have grown organically BY GRANT WELKER Worcester Business Journal News Editor A decade of growth D eposits were way up for the last decade at banks based in Central Massa- chusetts. e booming economy had a lot to do with it, of course. Growth was almost all organic except for two banks, which became aggressive through mergers and acquisitions: bank- Hometown and Fidelity Bank. Leaders of both banks said they focus primarily on growth through serving their customers in the best way. But when banks find the fit to be right, they said, they've made a move to grow through acquisition and take advantage of greater efficiencies. "e opportu- nities are few and far between," said Robert Morton, bankHometown's president and CEO. "e circumstances and conditions have to be just right." bankHometown's deposits grew more than any other Cen- tral Massachusetts-based bank over last decade – nearly tripling – thanks in large part to a few aggressive moves: taking over Athol-Clinton Cooperative Bank in 2011, adding what at the time was a roughly $300-million bank, and Millbury Savings Bank in 2018, with its roughly $185 million in deposits. bankHometown also took over five Connecticut branches of sister bank Easthampton Savings Bank, which is now known as bankESB and shares the same parent company, Hometown Financial Group, based in Easthampton. bankHometown, now with 15 locations, is building its first Worcester branch to carry the bankHometown name from its opening, joining a Millbury Savings location, which switched names upon the merger. Fidelity Bank – whose deposits more than doubled last decade – has been more active than any other Central Massachusetts-based bank, with three acquisitions in a four-year period. e Leominster bank acquired Barre Savings Bank in 2016, Colonial Co-op- erative Bank from Gardner in 2018 and Family Federal Savings Bank of Fitch- burg in 2019. at comes aer a period in which the bank had only three other mergers since the 1970s. It's not as if Fidelity Bank wasn't previously having discussions with other banks about potential marriages, said Edward Manzi, Fidelity's CEO since 1997. Some potential mergers were abandoned because they didn't feel like the right fit, he said. Quiet on M&A front Most Central Massachusetts banks weren't active with mergers and acquisi- tions over the decade. e largest Central Massachu- setts-based bank, Middlesex Savings Bank of Natick, hasn't acquired or merged with a competitor since 2009 when it took over Strata Bank of Medway. For Avidia Bank, the region's third-largest by deposits, it's been since 2007, when Avidia was formed with the merger of Hudson Savings Bank and Westborough Bank. A share of mergers have been among similar-sized entities – like at Avidia, or with Marlborough Savings Bank and North Middlesex Savings Bank merging in 2017 to form Main Street Bank. A few notable transactions involve a Central Massachusetts bank being folded into another. Worcester-based Com- merce Bank became part of Berkshire Bank in 2017. Berkshire kept the Commerce Bank name on 13 Central Massachusetts loca- tions, but Berkshire's name has otherwise been spreading seemingly everywhere, with the bank moving its headquarters from Pittsfield to Boston, and acquir- ing Savings Institute Bank & Trust of Connecticut in 2019, its ninth merger of the decade. Milford National Bank was acquired in 2018 by another bank that's been quickly growing through mergers: Rockland Trust. Rockland, which is building its first full-service Worcester branch, made eight acquisitions over the decade, largely south of Boston. Consolidations expected to continue A few generations ago, practically each town would have its own savings bank, giving a local flavor to each institution, said George Tetler, a lawyer with the Worcester law firm Bowditch & Dewey, who works with area banks on merger and acquisition issues. "Each town appreciated having its own bank. ere was a sense of pride about it," Tetler said. Nationally, the result of decades of mergers and acquisitions is clear. e Robert Morton, bankHometown Edward Manzi, Fidelity Bank Fidelity opened a branch on Worcester's Front Street in 2018.

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