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Two mutual banks that merged in the last year said the mergers offer natural paths to growth.
A pair of mergers between four Massachusetts banks are opening new doors for growth, their leaders say, despite the challenges they faced in merging cultures amid the COVID-19 pandemic.
Cambridge Savings Bank announced it would acquire Melrose Bank in December 2019 and completed the transaction June 1. Raynham-based Bridgewater Savings Bank and Mansfield Bank completed their merger in October 2020, after announcing the deal at the end of 2019.
“It’s not like 20 or 30 years ago where you could have a strategy and be successful at acquiring one, maybe two banks a year,” said Wayne Patenaude, president and CEO of Cambridge Savings Bank. “That said, I do think that the industry is continuing to consolidate, and we think we’ll be in good position to benefit from that.”
Shared Cultures Aid Tie-Up
While Bridgewater Savings Bank was the surviving bank, the combination with Mansfield Bank came with a new name: Bluestone Bank. The combined bank has $1.2 billion in assets and 12 full-service branches. With adjacent markets that had little overlap, Bluestone Bank had no staff reductions resulting from the merger, said Peter Dello Russo, who previously led Bridgewater Savings Bank and is now CEO of the combined bank.
Dello Russo said one reason for the merger was to find a way to remain as a mutual bank, something that the boards of directors at both banks wanted.
“We are very strong believers in mutuality at the bank,” Dello Russo said. “The merger gives us size to do some things, to be very effective and continue to be a viable partner to our community.”
Meg McIsaac, formerly Mansfield Bank’s leader and now president of the combined bank, said the merger helped Mansfield Bank expand its footprint and support an increased investment in technology while remaining a community bank.
Some aspects of the merger needed to be put on pause during the pandemic, Dello Russo said, as the combination originally planned for the second quarter was delayed until Oct. 1. He added that the pandemic saw staff members thinking outside the box in managing the details of the merger while working remotely, and he credited the staff for their roles in getting the transaction done.
The two banks had similar cultures as community banks, which helped as employees collaborated to combine the banks, McIsaac said. But even with similar values, she said bringing the two cultures together during the pandemic has been challenging since they have not been able to come together in person.
McIsaac said that because the banks were compatible, they have been able to build off each bank’s successes and create what she called a better organization.
“We really see the success of the merger between Mansfield and Bridgewater into Bluestone Bank as almost a model for other mutual banks that may be thinking about their futures and what their path forward looks like, given all of the challenges in today’s banking environment, whether it’s technology investment or net interest margins or how to make sure you’re relevant in your community,” McIsaac said.
Collaboration Powered Integration
When $5.19 billion-asset Cambridge Savings Bank decided to acquire $337 million-asset Melrose Bank, which had just a single branch, the bank saw the deal as a natural extension of its existing market with opportunity for growth with consumers and small businesses, Patenaude said. He also saw a merger as a better option than opening a new branch there.
Patenaude decided to approach the acquisition by reaching out to the bank’s employees and directors, as well as the Melrose community, getting to know the smaller bank’s culture. Even with the size difference between the banks, Patenaude said he found Melrose Bank to have a similar relationship-centered approach with customers.
Melrose’s nine front-line branch staff were given an opportunity to remain at the branch, and six accepted while two retired. Patenaude that Cambridge Savings Bank retained 97 percent of Melrose Bank’s customers, and deposits have grown since the acquisition.
As part of the acquisition plans, Cambridge Savings Bank took a collaborative approach by putting together nearly a dozen teams with employees from both banks to map through the process. The bank has also created an advisory board with former Melrose Bank directors and executive officers.
Diane McLaughlin
Cambridge Savings Bank has become involved in the community as well, Patenaude said, including with the Melrose Chamber of Commerce and other centers of influence. As part of the acquisition, Cambridge Savings Bank donated $100,000 to eight charities after receiving 1,200 nominations for how to use the funds.
The bank also sponsored Small Business Saturday and continued a program Melrose Bank had established called First Stop Melrose, which provided gift certificates to Melrose residents to shop locally even as the pandemic has ravaged the retail sector.
Going forward, Cambridge Savings Bank plans to use the approach it took with Melrose when considering acquisitions in adjacent markets offering opportunities with consumers and small businesses. The bank also will look into expanding its branch footprint. Its new location in Somerville’s Assembly Row opens in a few months.
