Hudson Savings, Westboro Bank in $20.6m merger
No layoffs, no branch closings, and all board members keep seats
Hudson Savings Bank and Westborough Bank have announced their plans to merge into a single, as-yet-unnamed entity. The merger, which is subject to regulatory approval and holding company approvals of both banks, would create a regional bank with $955 million in assets and seven branches. The combined entity will have nine offices in Westboro, Northboro, Shrewsbury, Hudson, Marlboro, Clinton and Leominster. No branch closings or layoffs are planned.
"In this day and age, size does matter. To carry the overhead to give products and service customers want, you’ve got to get bigger," says Joe MacDonough, president of Westborough Bank, the smaller of the two banks with $300 million in assets and 75 employees. "Both of our boards are fully committed to maintaining jobs at the same level." The two banks have committed to resources to retrain employees in redundant job duties.
Mark O’Connell, president of Hudson Savings Bank, and MacDonough describe the process as a "re-mutualization" of the new entity. Hudson Savings Bank, which has $655 million in assets and about 125 employees, is already in a mutual-bank format, but Westborough Bank is a shareholder-owned entity, with 35 percent of its shares held by the public. The other 65 percent is held by Westborough Financial, a Massachusetts-chartered mid-tier holding company and a majority-owned subsidiary of Westborough Bancorp MHC, a Massachusetts-chartered mutual holding company. Under terms of the agreement, Westborough Bancorp MHC will be eliminated and Westborough Bank will merge with Hudson Savings Bank.
MacDonough will serve as one of two executive vice presidents of the new bank, reporting to O’Connell, who will serve as president and CEO. All Westborough Bancorp trustees and corporators will be elected or appointed to the board of trustees and board of corporators of Assabet Valley Bancorp, the mutual holding company for Hudson Savings Bank.
O’Connell says the transition back to a mutual holding company model will allow the bank to be more committed to its communities – and to stay independent.
The banks’ strategy going forward will take advantage of Hudson Savings’ full-service trust department. While Westborough has a relationship with a dealer-broker focusing on retail investments, mutual funds and annuities, the combined entity will be able to focus more on wealth management and wealth transfer as the baby boomer generation ages.
The new entity will also increase its commercial lending activities. Hudson’s commercial portfolio and its lending staff represent "a real plus for our customers," according to MacDonough, who says it would have taken Westborough Bank "more time and expense" to match what Hudson offers.
Citing increased competition from non-bank mortgage companies, credit unions and larger banks, O’Connell and MacDonough say the time for the merger was right. "You’re going to see more of this going forward," he says of the region’s banking industry.
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