Dive Brief:
- Lebanon, New Hampshire-based Mascoma Bank and Lewiston, Maine-based Androscoggin Bank plan to combine their parent companies into a single mutual holding company, the companies said Monday.
- The companies referred to it as a “partnership,” “not an acquisition.” “Operating the banks under a single mutual holding company expands regional reach, creates operational efficiencies, and positions both organizations to invest more deeply in technology, customer experience, and long‑term innovation,” Mascoma and Androscoggin said in the release.
- Mascoma Bank CEO Clay Adams will serve as CEO of the new ClearNorth Financial Mutual Holding Company, while Androscoggin Bank CEO Neil Kiely will serve as holding company president, according to the release. Both will retain their current roles at each bank.
Dive Insight:
Mascoma, founded in 1899, has about $3 billion in assets, 28 branches and two loan offices throughout northern New England. Androscoggin, founded in 1870, has about $1.8 billion in assets and 10 branches across Maine.
Both will continue to operate with their own names, brands, charters and boards of directors, the companies said.
Mutual banks are owned by depositors; there’s no financial consideration when two mutual banks come together, since there are no stockholders. There are more than 400 mutual savings banks in the U.S., according to Federal Deposit Insurance Corp data from December 2022.
The tie-up requires approval from the Federal Reserve, as well as regulators in Maine and New Hampshire, Adams said. Additionally, each holding company has corporation members – about 60 for Mascoma, and about 40 for Androscoggin – that have to vote in favor of the combination, he said.
Both entities will have equal representation on the new mutual holding company’s board. The companies expect the deal to close at the beginning of the fourth quarter, Adams said.
The merger “allows us to build additional capacity and resilience, while maintaining the local identity and leadership that our customers and communities rely on,” Adams said in the release.
“Scale in banking matters,” Adams said Thursday. “We want to continue to be mutually owned, and we know that through the economies that we’ll gain from this, we'll be able to spread the investments we're making in technology across the broader asset base.”
The holding company will handle shared services of finance, human resources, technology and risk, “and we'll look for other operational efficiencies over time,” Adams said.
He expects there will be an opportunity to consolidate certain platforms, if each bank is using different providers for core processing and digital banking services, for example.
Mascoma has about 440 employees, while Androscoggin has about 180, Adams said. There will be some job cuts with the combination, he said.
“That’s part of the necessity of gaining economies,” he said.
It’s too early to say where there’s role overlap between the two companies, he said. “We’re not taking a ‘no layoff’ policy,” he said.
Adams said he doesn’t anticipate any branch closures, since the two operate in separate markets.
All client-facing functions will remain at the respective banks, said Nicole Haggerty, director of marketing, client solutions and sales enablement at Androscoggin Bank. The combined holding company “helps both banks invest more in technology, tools, and innovative services,” and “supports long‑term stability,” she said in an email.
In a LinkedIn post this week, Kiely said the combination “represents a different path,” “at a time when much of our industry continues to consolidate and move further away from the communities it serves.”
“This is about building a stronger future for mutual banking in Northern New England,” Kiely said in the release. “It positions us to potentially welcome additional bank partners over time, providing a path for likeminded institutions to gain strength, efficiency and stability while maintaining local autonomy.”
