Fidelity Bank Chairman & CEO Edward F. Manzi Jr. (left) and Colonial Co-operative Bank President Joseph D. Guercio (right).
Leominster-based Fidelity Bank will add a new branch in Winchendon and greatly expand its customer base in Gardner after announcing plans Tuesday to merge with Gardner-based Colonial Co-operative Bank.
The merged institution plans to continue under the Fidelity Bank brand and would have a total asset size of roughly $870 million. The boards of both banks have approved the plans.
“This is a tremendous opportunity for Colonial Co-operative Bank and our stakeholders,” Colonial Co-operative Bank President Joseph D. Guercio said in a statement. “These are challenging times for smaller community banks. The complexities of today’s banking business can be hard for an institution the size of Colonial Co-operative Bank. This partnership will allow us to stay competitive and fulfill our commitment to our communities, while maintaining our community bank values.”
“Colonial Co-operative Bank has long been committed to being a great community bank,” Fidelity Bank Chairman and CEO Edward F. Manzi Jr. added in a statement. “We are honored and excited to have the opportunity to partner with Colonial to ensure this commitment carries on for years to come.”
Fidelity has 10 branches in Central Bank, while Colonial has two. Because both banks have a branch in Gardner, the merged institution will consolidate its Gardner business into the current Colonial branch at 6 City Hall Avenue, after making a significant renovations.
Fidelity Bank Spokesperson Deborah Colbert told Banker & Tradesman that no other branches at either bank will be impacted. While there are no plans at this time, whether or not the merger will result in staffing reductions is still to be determined, she said.
Manzi will serve as chairman and CEO of the merged institution, and Christopher McCarthy, current president and COO of Fidelity Bank, will continue in that role with the merged institution.
Guercio is planning to retire but will serve as president of the Colonial division for at least three months after the merger to assure a seamless transition.
In addition, two members of the Colonial Co-operative Bank board of directors will join the Fidelity Bank board of directors.
The second smallest bank in the state, Colonial Co-operative has lost ground over the past year.
At the end of June, the bank had seen a $2 million dip in assets, dropping it below $70 million in total assets. The bank has barely turned a profit this year, with a net income of $29,000 through the first six months of the year, down from $63,000 one year ago, and a return on assets of just .08 percent.
The bank did have a net interest margin of 3.76 percent, but that number is also down slightly from one year ago.
Fidelity, on the other hand, is in better shape. The bank grew its assets and deposits between the end of June in 2016 and the end of June this year, and has a net income close to $2 million through the first six months of the year.
As part of the merger, Fidelity Bank is committing $500,000 in increased contributions and investments to the Gardner and Winchendon communities that will support non-profit organizations and small business.
The Colonial Bank Loan Fund will be facilitated by the Gardner Area and North Central Chambers of Commerce.
Colbert said she expects the merger to be completed by the second quarter of 2018.
