Easthampton Savings Bank to Partner with Hometown Bank

EASTHAMPTON — Easthampton Savings Bank, the wholly-owned subsidiary of ESB Bancorp Inc., and Hometown Bank, the wholly-owned subsidiary of Hometown Community Bancorp Inc., jointly announced they will form a strategic partnership through the merger of their holding companies.

After this transaction is completed, the combined mutual holding company will have more than $1.7 billion in assets and more than $180 million in equity capital, with a branch network of 23 offices located throughout Central and Western Mass. and Northeast Conn.

ESB and Hometown will merge mutual holding companies, but will continue to run their banks independently and autonomously. The announcement follows ESB’s 2015 acquisition of Citizens National Bank in Putnam, Conn.

“We are very pleased to partner with a company that is as strong and successful as we are,” said Michael Hewitt, president and CEO of Hometown Bank. “This is truly about two successful banking entities joining forces in a partnership to better serve our communities. This transaction gives us the size and scale to be competitive and successful for many years to come and expands our market presence.”

Added Matthew Sosik, president and CEO of Easthampton Savings Bank, “we are extremely excited to announce this strategic partnership with an organization with which we share a lot of familiarity and that, like us, has been a top financial performer for so many years.

“Our business models and cultures are very similar,” he added. “Both banks have strong boards and management teams and have long, successful track records. We are going to leverage those strengths by operating our two banks separately underneath the combined mutual holding company, while taking advantage of efficiencies and economies of scale at the holding-company level. We are all very confident that this multi-bank, holding-company model represents the best future for our two banks, as well as for other like-minded community banks in New England that may be attracted to our partnership over time.”

Hewitt noted that “the dynamics of community banking have changed dramatically over the years. Operating costs are under constant pressure, and net interest margins have narrowed, so now more than ever, size truly does matter. For both banks, this transaction creates critical mass, even stronger finances, and a plan to better serve all of our communities for many years to come.”

As a result of this transaction, Hometown Community Bancorp will merge into ESB Bancorp, and Sosik will serve as the merged company’s CEO, while Hewitt will serve as its president. Both Sosik and Hewitt will continue as CEOs of their respective banks. The merged parent holding company is also planning to change its name to Hometown Financial Group to better reflect its strategic positioning as a multi-bank holding company.

“While we are going to change our holding company name, customers should expect no changes, name or otherwise, at either Hometown Bank or Easthampton Savings Bank,” Sosik said. “To the contrary, our customers will continue to see the same great service and level of community commitment that they have come to expect over the years. In fact, as part of this transaction, ESB is funding a $1 million contribution to start a charitable foundation for the communities served by Hometown Bank.”

Both banks operate on identical technology platforms, so there will be no customer disruption, Hewitt added. “This will be entirely seamless to the customers of both banks.”

The boards of directors of both banks have unanimously approved this transaction. The merger is subject to a vote by both bank’s corporators, as well as receipt of customary regulatory approvals. The merger is expected to be completed in the first quarter of 2016.