Lebanon-based Mascoma Bank and the Lewiston, Maine-based Androscoggin Bank plan to combine parent companies into a single mutual holding company, officials from both banks announced earlier this week.
The partnership is pending approval from several parties, including members from both banks’ holding companies.
The two banks plan to keep their names, brands, charters and boards of directors, and customers will continue to use their current bank, the announcement said. But the banks will form a new shared holding company called ClearNorth Financial Mutual Holding Company.
“This partnership allows us to build additional capacity and resilience, while maintaining the local identity and leadership that our customers and communities rely on,” Mascoma Bank President and CEO Clay Adams said in an announcement on the bank’s website.
The board of ClearNorth will have equal representation from both banks. Adams will serve as Chief Executive Officer, while Neil Kiely, president and CEO of Androscoggin Bank, will serve as president, the announcement said. They will both continue their current roles at their respective banks.
“This is about building a stronger future for mutual banking in Northern New England,” Kiely said in the announcement. “It positions us to potentially welcome additional bank partners over time, providing a path for like-minded institutions to gain strength, efficiency and stability while maintaining local autonomy,” he said.
The decision to partner was precipitated by the desire to “spread investment over a larger base,” Adams said in a phone interview.
The partnership will make it possible for the banks to invest in digital technologies such as online banking and fraud prevention, Adams said.
Both institutions are mutual banks, meaning they’re owned by depositors, as opposed to shareholders. That model is in keeping with how Mascoma Bank started in 1899, when a group of Lebanon residents pooled their money to create the initial capital for the bank, Adams said.
Today, Mascoma Bank has $2.99 billion in assets and 28 branches and two loan offices across northern New England, its website says. Upper Valley locations include Claremont, Enfield, Hanover, Hartland, New London, Norwich, White River Junction and Windsor.
Androscoggin Bank, established in 1870, has $1.8 billion in assets with 10 branches across Maine.
Adams hopes the partnership will be made official in early fall, but the plan must still be approved by the Federal Reserve Bank, the New Hampshire Banking Department, which supervises financial services, and its Maine equivalent.
The corporations’ members must also vote in favor of the partnership, Adams said. Mascoma’s corporation has about 60 members, 11 of whom comprise the board, Adams said. The other 50 or so are responsible for approving the partnership.
Factors the members will assess include the banks’ financial health, whether their markets overlap and whether they can continue to serve the credit needs of their respective communities.
Adams has a “high level of confidence” that the partnership will be approved, he said. “Knock on wood.”
