The mutual holding companies for Newburyport Bank and Pentucket Bank plan to combine, but the two banks will not merge.
The banks said in a joint statement Friday that the move would “help support and sustain the mutual community banking model – particularly against the backdrop of financial services industry consolidation.”
“The ability for Newburyport Bank and Pentucket Bank to invest and work in tandem under one holding company will create a unique opportunity to build a dominant, sustainable, independent, and full-service mutual community banking partnership in the Northeastern Massachusetts and Southern New Hampshire markets,” the statement said.
Newburyport Bank has 11 locations and over $1.5 billion in assets. Pentucket Bank has more than $960 million in assets and six branches.
The banks operate in adjacent markets in the Greater Seacoast and Merrimack Valley regions, and both banks have Massachusetts and New Hampshire branches. No branches will close, the statement said, and no employees will be laid off. The banks will consolidate back-office operations and systems.
Lloyd Hamm, Newburyport Bank’s president and CEO, will be CEO of the combined holding company, and Pentucket Bank’s president and CEO, Jonathan Dowst, will be president and then succeed Hamm at his retirement, the statement said.
“We believe independent community banks will survive but they face strategic challenges to thrive,” Hamm said in the statement. “Sharing operational costs and resources is a way to scale and stay competitive in the marketplace. This partnership is in the best interests of our customers, employees, and communities. Both Banks will continue to have strong, independent presences as highly successful and competitive community banks.”
Even with one holding company, the banks will have their own brands, headquarters, retail and lending organizations, management, charitable foundations and boards.
“To remain relevant to customers, employees, and communities, scale becomes paramount,” Dowst said in the statement. “It’s necessary to attract top talent employees, to deliver innovative technology, operations, products, and services to customers, and to enhance the quality of life in our communities.”
The banks also plan to adopt charter provisions to ensure they both remain mutual savings banks “for many years to come,” the statement said.
“Since both banks are mutuals, operating solely for the benefit of their customers, employees, and communities, the partnership should sustain Newburyport Bank and Pentucket Bank as community banking institutions for future generations, while serving as a model for other mutual banks across New England and beyond,” the statement said.
The banks added that other local banks could join the mutual holding company in the future.
Another Massachusetts-based mutual bank holding company with multiple bank charters is Easthampton-based Hometown Financial Group, parent company of Abington Bank, bankHometown and bankESB. New Hampshire Mutual Bancorp also has three mutual banks within its mutual holding company.