Salem Five Bank and Stoneham Savings Bank have formed one of the state’s largest bank-based insurance practices, the banks said in a statement this morning.

Effective today, Stoneham’s New England Heritage Insurance is merged with Salem Five’s insurance division. The resulting new division will be known as Salem Five New England Heritage Insurance.

Salem Five acquired Reading-based Argeros Insurance last year.

"This expansion, and our recent acquisition of Argeros Insurance, are part of Salem Five’s defined strategy to aggressively grow our insurance offering," said Joseph Gibbons, Salem Five president and CEO. "We’re proud to have expanded this far, and there will be more to come."

The bank’s agency will offer life, auto and residential insurance to consumers. For commercial customers, it will serve small and middle market insurance needs.

In addition, the new entity also has specific insurance expertise for architects and engineers, contractors, plastic/metal fabrication manufacturing facilities, printers, food wholesalers and restaurants.

Salem Five New England Heritage Insurance’s headquarters will be in Stoneham with offices in Woburn and Danvers.

Under the terms of a transaction agreed upon last July, Stoneham Savings will operate as a division of Salem Five Bancorp for three years before merging fully in 2015.