Worcester Business Journal

12 Worcester Business Journal | March 9, 2026 | wbjournal.com FOCUS B A N K I N G & F I N A N C E BY ERIC CASEY WBJ Managing Editor M ergers and acquisitions in the banking indus- try are hardly a new phenomenon. Between 1984 and 2020, the number of U.S. banks decreased by 70%, according to the Fed- eral Reserve Bank of St. Louis, with the main reason for the decline being M&A. rough October, 133 bank M&A deals were announced across the coun- try in 2025, matching the entire number of announced deals seen in the entirety of 2024, according to data from Angel Oak Capital Advisors in Atlanta. In Central Massachusetts, the past three years have seen a number of high-profile mergers featuring a wide variety of banks and credit unions. e deals range from the now completed $29-billion merger between Marlbor- ough-based Digital Federal Credit Union and California-based First Tech Federal Credit Union to Marlbor- ough-based St. Mary Credit Union announcing in August its intent to join with MetroWest Community Federal Credit Union, a Framingham firm with 12 employees and a single branch. "It becomes out of necessity, not just a desire to achieve scale," said Matt Sosik, CEO at Hometown Financial, the Easthampton-based holding company of Oxford-based bankHometown. "Organic growth is so difficult in a low- growth or no-growth environment like Massachusetts. at's kind of an under- played part of the story is what drives M&A from the highest of levels." While M&A activity is now a fact of life in the banking industry, it is not right for every institution. Cen- tral Massachusetts banking and credit union leaders are still carefully weighing whether joining forces with others is the right move. "Increased M&A activity will have mixed results for the industry," Dana Neshe, chair, president and CEO of Middlesex Savings Bank, wrote in an email to WBJ. "Mergers may provide very small banks, which are burdened with increased expenses, the ability to come together and continue to operate in their communities. However, there are communities that are losing their local institutions to mergers." Growth through M&A Hometown Financial Group has completed eight strategic mergers over the past decade. Its latest, the acqui- sition of CFSB Bancorp, the holding company of Quincy-based Colonial Federal Savings Bank, brings the com- pany to $6.9 billion in assets. Banking is a low-margin business, and growth usually comes hand-in- hand with growth of the local economy, Sosik said. With Massachusetts' GDP and the country's GDP both slowing, according to research from the Mass Donahue Institute, M&A activity allows for financial institutions to grow. e most challenging part of making deals happen is figuring out who gets what title and how power is shared post-merger, Sosik said. "A lot of these transactions, on paper, look like a Harvard business case study. ey look wonderful," Sosik said. "But there's oen what we call the social issues of: How do we put these boards of directors together efficiently? How do we merge officer groups? Who's going to be the CEO of the combined company? "ey're not necessarily financial decisions. ey can be the most diffi- cult, because there's emotion involved, sometimes politics and those are the hard ones," he said. Littleton-based Hanscom Federal Credit Union wrapped up a merger with Maryland-based e People's Bank in January, and then the credit union announced its intent to merge with Alden Credit Union in Chicopee. With its roots in serving U.S. Air Force personnel, Hanscom CEO and President Peter Rice sees the orga- nization as driven by its mission, not geography. Its membership is all over the country, and Rice saw the People's Bank deal as a chance to expand the credit union's physical footprint and the services it offers in one move, as the Maryland-based firm had its own insurance agency subsidiary. "e People's Bank [has] a very successful insurance company called Fleetwood Insurance, who also do boat insurance," Rice said. "We have about 4,000 members in Florida and 10,000 members in New Hampshire, and that kind of fits in with a lot of our members' lifestyles." ADOBE STOCK | YALCINSONAT To merge, or not to merge? Hanscom Federal Credit Union's Peter Rice (left) and Hometown Financial's Matt Sosik have led their institutions through recent mergers... ...while Dana Neshe of Middlesex Savings Bank (left) and Brian Westerlind of Webster Five have focused on organic growth. ? As the banking industry consolidates, some Central Mass. CEOs see M&A as the path forward, while others prefer organic growth

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