iStock illustration
The state’s second-biggest mutual holding company, Hometown Financial Group, says it’s converting to a stock bank as part of a deal to buy New Hampshire-based Primary Bank.
The 11-year-old, publicly traded Primary Bank is based in the Manchester, New Hampshire suburb of Bedford and has $743 million in assets and branches in Manchester, Nashua, Derry and Bedford.
Along with the merger, Hometown Financial’s board of trustees has unanimously voted to reorganize from the mutual holding company structure to the stock holding company structure.
“We’re thrilled to welcome Primary Bank’s customers, employees, and communities to Hometown Financial Group and TruNorth Bank,” Hometown Financial CEO Matthew Sosik said in a statement. “This merger is another important step in our strategy to grow with purpose. It increases our presence in southern New Hampshire, and we’re eager to build on the outstanding success of Primary Bank by adding our strength, resources, and community banking commitment to its employees and customers.”
Hometown Financial is made up of three mutual banks TruNorth Bank – formerly North Shore Bank – BankESB and Bank Hometown,each of which will merge under the TruNorth brand in August, if the deal is approved.
Hometown Financial or its component banks had bought or effected holding company mergers with several mutual and stock banks statewide over the last five years as community banks looked to cut costs by sharing back-office services and compete for larger loans.
It now has 55 branches cross Massachusetts, Connecticut, and New Hampshire and $6.9 billion in assets.
The total transaction value is approximately $160 million. Under the terms of the merger agreement, which Hometown said has been unanimously approved by both companies’ boards of directors, Primary Bank shareholders will receive, for each share of Primary Bank common stock, either $33 in cash or $31 in shares of stock issued by Hometown Financial Group Inc. the company that will succeed Hometown Financial, the mutual holding company. This is subject to the requirement that 50 percent of the outstanding shares of Primary common stock be converted into cash and 50 percent be converted into Hometown Financial stock.
Hometown Financial says it will offer for sale shares of its common stock to its existing depositors as of June 30 and “certain insiders.” If that doesn’t produce enough sales, a “community offering”
As part of the conversion, Hometown will establish a new charitable foundation, which will be funded with a number of shares equal to 4% of the shares sold in the stock offering.
The conversion and the merger are expected to be completed concurrently in the first quarter of 2027. The merger is subject to regulatory approval and approval by Primary’s stockholders. The conversion is subject to regulatory approvals and approval by Hometown MHC’s corporators.
