ESB Bancorp is rounding the corner on its merger with Oxford-based Hometown Community Bancorp, the latest step in its plan to become a community banking powerhouse through Central Massachusetts and into Connecticut’s Quiet Corner.

The deal, which is expected to close in the first quarter of 2016, will create a multi-bank holding company with over $1.7 billion in assets, more than $180 million in equity capital and a 23-branch network across Central and Western Massachusetts and Northeast Connecticut.

The two subsidiary banks, Easthampton Savings Bank and Hometown Bank, will continue to operate under their current names. The parent holding company will change its name to Hometown Financial Group.

“The intent out of the gate with the Citizens purchase was trying to build a broader business in that Central Massachusetts-Northeast Connecticut corridor,” said Matthew S. Sosik, president and CEO of Easthampton Savings Bank.

That broader plan began with ESB’s acquisition earlier this year of Citizens National Bank in Putnam, Connecticut. ESB paid about $51.3 million for Citizens in that deal.

While many big banking names are trying to muscle their way into the Greater Boston market, Sosik sees advantages across the Pioneer Valley and down into the Quiet Corner. For one thing, it’s a market he knows well. And for another, he said the demographics are right for a strong community banking franchise like the one he is working to build.

“I think community banking plays really, really well in demographically smaller areas and smaller communities in general. You do need basics of critical mass of population, and you need the right demographic profiles, but I would absolutely make a case that community banking can thrive – and maybe even be more successful – outside of those heavy metropolitan areas,” he said.

While ESB’s purchase of Citizens was a fairly straightforward transaction, Sosik said that some of the frictions typically associated with a mutual-to-mutual transaction were softened with the Hometown Bank deal, largely because of familiarity between the banks at the C-level. Sosik, you see, used to serve as Hometown’s CEO until he decamped to Easthampton Savings Bank in 2013.

Sosik and Michael D. Hewitt, president and CEO of Hometown Bank, will retain their positions as the CEOs of their respective banks. Sosik will become the new mutual holding company’s CEO, while Hewitt will become its president. Each bank’s respective boards will remain intact, and the board for the new MHC will include members from both banks. Finally, all Hometown and Easthampton Savings employees will remain in place.

With the Hometown deal, Sosik ultimately hopes to build a franchise that may be attractive to community banks struggling with cost and margin pressures.

“Our long-term objective is to create something that allows your average smaller bank an opportunity to continue its independence, its autonomy, and survive and remain relevant within our mutual holding company structure. We hope to be attractive to like-minded banks,” he said. “I think there’s a real need for community banks. I live, eat and breathe community banking.”

ESB Bancorp Builds Its Brand In Central Mass., Connecticut

by Laura Alix time to read: 2 min
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