Worcester Business Journal

6 Worcester Business Journal • December 7, 2015 www.wbjournal.com Capital Campaign As we close the book on 2015, it's a great time to think about your tax deductible gift to the Shrewsbury Public Library. A three year pledge is a great way to maximize your tax savings and increase your gift! *Gifts and pledges of $5,000 and more will be recognized on our donor wall* www.campaign4ShrewsburyLibrary.net 508.414.5449 214 Lake Street • Shrewsbury, MA 01545 Lhogan@townisp.com Knowledge + Experience + Trusted Advice. It all adds up. Large enough to serve the needs of most businesses and individuals; small enough to offer the personal attention you expect and deserve. Greenberg, Rosenblatt, Kull & Bitsoli, PC Certified Public Accountants 306 Main Street, Suite 400 • Worcester, MA 01608 508.791.0901 • www.grkb.com Banks combining power, keeping identities C ommunity banks -- striving to compete against multi-billion conglomerates while maintaining their strong local ties -- are taking a cre- ative approach to combine their power while retaining their identities. By merging holding companies as opposed to the banks, the organizations are able to retain their name and man- agement while getting much of the cost- savings and the size associated with a traditional merger. The technique moves much of the work that is done during a traditional merger to the holding com- pany level, where finances and oversight of the two holding companies come together, but community banks retain their same front-facing relationship to customers. "Ultimately this is about two banks getting together to form a partnership so that the sum can be more than our parts," said Matthew Sosik, Easthampton Savings Bank president and CEO. "Size has really taken a priority in the world of banking, not because bigger is better, but scale is critical with the cost pressures community banking is facing … scale has become critical to the longer-term view." This has been instituted in October by SpencerBANK and Southbridge Savings Bank. The combined mutual holding company will have close to $1 billion in assets and $108 million in equity and represent a branch network of 15 offices located throughout C entral Massachusetts. Despite this, the banks will remain separate entities. Merging holding compa- nies will expand bank depos- its and lending abilities, thus making both banks more competitive, said Todd Tallman, president and CEO of Southbridge Savings Bank. Hometown Bank and Easthampton Savings Bank also undertook a merger of their holding companies in September. The merger of ESB Bancorp Inc. with Hometown Community Bancorp will create a mutual holding company with more than $1.7 billion in assets, more than $180 million in equity capital, and a combined branch network of 23 offices in Central and Western Massachusetts and Northeast Connecticut. This will place the new holding company among the top 10 larg- est banks in Central Massachusetts when ranked by assets. To the customer, there will be no tran- sition, Sosik said. This is especially true because there was no geographic overlap between the banks, leaving no branches to be shut down. There are numerous benefits from merging these holding companies, including the bank's lending power, said Michael Hewitt, Hometown Bank president and CEO. Hometown Bank, for exam- ple, had a legal lending limit of $9 million. Once the hold- ing company merger is com- pleted early next year, the bank can loan a customer up to $35 million. Hewitt sees this model as a potential boon for other industries as well. "I can see companies find- ing ways to streamline and save costs and keep their iden- tity and deliver better services for their customers and employees," he said. The benefits also extend to eliminat- ing redundancies and reducing the expense of essential back office duties such as government reporting. Before the holding company merger, Hometown Bank was preparing to cre- ate a call center and dedicated technol- ogy center. Now, it can make use of BY SAM BONACCI Worcester Business Journal Digital Editor those that Easthampton already has in place while retaining the services cus- tomers have become accustomed to. Michael Hewitt, Hometown Bank president and CEO

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