WESTFIELD – Westfield Bank is now the largest locally managed bank in the county.
Westfield Bank CEO James Hagan announced yesterday a merger with Chicopee Savings Bank, and the creation of a new joint holding company named Western New England Bancorp.
The merger creates the second largest bank in terms of deposit market share in Hampden County. The combined company will have total assets of $2.1 billion, tangible equity of over $215 million and 21 branch locations serving customers throughout western Massachusetts and northern Connecticut.
“We are excited to combine with such a strong partner as Chicopee,” said Hagan. “As we have gotten to know Bill Wagner and his team over time, we have been pleased at the commonality of our cultures, operating models and the customer service focus of our two institutions.”
Although headquartered in the same county, Westfield Bank and Chicopee Savings currently two distinct customer bases, which, when combined, Hagan said would “complement each other tremendously.”
“A merger of our two banks will be extremely favorable for the shareholders, customers, employees and communities of both institutions, Hagan said.
Under the terms of the agreement, Chicopee shareholders will be entitled to receive 2.425 shares of Westfield common stock for each share of Chicopee common stock, equal to $20.42 per share, based on the closing price for Westfield common stock on April 4, 2016. The common stock options of Chicopee will be converted into Westfield options with the same relative economic value and expiration date.
Upon closing, Westfield shareholders will own approximately 59 percent of stock in the combined company, and Chicopee shareholders will own approximately 41 percent. The transaction is valued at approximately $110 million in the aggregate, based on the closing price for Westfield common stock on April 4, 2016.
Hagan will be president and CEO of the combined company and Donald A. Williams will be chairman of the board. William J. Wagner, chairman, president and CEO of Chicopee, will join the executive management team of Westfield, and will become vice chairman of the Westfield Bank Board of Directors.
Four additional board members of Chicopee will also join the board of Westfield. Following closing, the combined bank will do business under the Westfield Bank name, and the holding company will have the Nasdaq trading symbol WNEB. The Chicopee Savings Bank Charitable Foundation will remain in place with its original philanthropic mission in the greater Chicopee area unchanged.
“Westfield is the ideal partner for Chicopee,” said Wagner. “This is the first in-market merger our community has seen in over 25 years, and as such, will not result in a significant outflow of resources or shift the focus of our franchise elsewhere, but rather will intensify and strengthen our combined ability to serve our local markets, consumers and businesses that make both Westfield and Chicopee successful. I look forward to our future together as a combined institution and to the substantial impact our bank will have in Western New England.”
Wagner said Westfield has a strong reputation in commercial business lending to large scale customers that he believes will enhance Chicopee’s lending platform and ability.
“Moreover, the larger lending limit, breadth of product mix and deep and sophisticated support functions will allow our bank to be a major competitor in Western New England for years to come,” said Wagner.
Closing is anticipated to occur during the fourth quarter of 2016, subject to approval by the shareholders of both companies, receipt of required regulatory approvals and other customary closing conditions.
