By CHRIS LINDAHL
@cmlindahl
EASTHAMPTON — Easthampton Savings Bank announced Thursday that it plans to merge with a small Connecticut bank.
Under the agreement, which needs regulatory approval, the bank’s parent company, ESB Bancorp, will acquire Citizens National Bancorp, the holding company for the Citizens National Bank, in a transaction valued at approximately $51.3 million, according to a release.
Should a majority of Citizens shareholders approve the merger and the transaction be OK’d by regulators, ESB Bancorp will have consolidated assets totaling more than $1.3 billion.
A transaction involving the merger of two banks generally requires approval from the Federal Reserve Board as well as the Massachusetts Board of Bank Incorporation, which would approve the merger of the two holding companies, according to Amie O’Hearn, director of communications for the Massachusetts Office of Consumer Affairs and Business Regulation.
Because the transaction involves institutions in two states, the Office of the Comptroller of the Currency as well as the Massachusetts commissioner of banks must also issue a state charter to Citizens, now a nationally chartered commercial bank and publicly traded company. Easthampton Savings Bank is a mutual bank, owned by its depositors.
The Easthampton bank expects to complete the merger early in the third quarter of 2015.
Citizens National Bank is based in the northeast Connecticut town of Putnam, 10 miles from the Massachusetts border, and operates branches in the neighboring towns of Brooklyn, Killingly, Thompson and Woodstock. Easthampton Savings Bank is headquartered in Easthampton, and has additional branches in Agawam, Belchertown, Hadley, Northampton, South Hadley, Southampton and Westfield.
“We are very excited to grow through an expansion into the northeast Connecticut and central Massachusetts markets,” Easthampton Savings Bank president and CEO Matthew S. Sosik said in a release.
After the merger, Easthampton Savings Bank plans to operate Citizens National Bank under its current name.
Ben Branch, a professor of finance at the University of Massachusetts Amherst, said he was somewhat surprised by the transaction.
“I don’t see this as having any competitive effects,” he said of the deal. “I doubt if it will adversely affect customer service.”
He added that, although there is a possibility that an account holder at one bank could use the services at another, the fact that the two banks’ service areas don’t overlap means that will be of limited benefit to consumers.
Sosik could not be reached for comment Thursday.
