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Mascoma Acquires Connecticut River Bank

Lebanon — The acquisition of Connecticut River Bank will give Mascoma Savings Bank 11 new branch offices and an expanded presence in northern New Hampshire and south along the Connecticut River Valley.

Mascoma Savings Bank is based in Lebanon and has 18 branches stretching north to Lyme and Chelsea and south to Windsor. The bank also has offices as far east as Canaan and west in Bethel. Once the sale is closed, Mascoma will pick up northern offices in Littleton, N.H., and Lancaster, N.H., and as far south as Keene, N.H. Connecticut River Bank, which is based in Charlestown, also has a branch in Springfield, Vt., and Claremont.

The sale has been approved by both banks’ boards of directors, but it still needs regulatory approval and the OK from Connecticut’s shareholders and Mascoma’s corporators. The acquisition is expected to close during the third quarter of next year.

“The bank was really attractive for us because of the geographic footprint of where they have offices. We fit really well with them. There’s no duplication of locations,” Stephen F. Christy, Mascoma Savings Bank’s president and chief executive officer, said last week.

Connecticut River also is financially sound and has a strong community orientation, Christy said.

“The partnering of these two banks will allow us to better serve the personal and business needs of customers with expanded financial resources and lending capacity, while maintaining a community banking approach to business. In short, together both organizations will be stronger,” he said in the news release announcing the acquisition.

Gary Gray, Connecticut River Bank’s president and chief executive officer, could not be reached for comment last week, but he praised the acquisition as a good step for his bank and its customers in the announcement release.

“Considering the current banking environment, with increased regulatory constraints, income pressures and challenges that lie ahead, our board believes we have found the right partnership with a larger community bank like Mascoma to provide the best value for our shareholders and the best future opportunities for our customers, and employees,” Gray said.

Connecticut River bank, which was chartered in 1864, has assets of about $285 million. Mascoma Savings Bank, founded in 1899, is mutually owned and has no stockholders. Mascoma has $1.1 billion in assets and more than $106 million in capital.

The banks announced Monday evening, after the close of the stock markets, that Mascoma would pay $18.15 a share in cash for the Connecticut River’s 1.47 million shares of outstanding stock, a total of $26.7 million.

On Tuesday, the price of the Connecticut River Bank stock, which trades on the over the counter markets under the symbol CORB, jumped 57.6 percent to $17.49 a share, up from $10.85, on a volume of 36,210 shares. It continued to trade in $17.30 range for the remainder of the week with a daily volume of around 8,000.

Since July, Connecticut River Bank’s directors have been attempting to increase the market for the stock, and during August and September, 57,600 shares traded in the range of $11.01 to $11.58, according to the bank’s third quarter report.

In October, stock sales dropped off with shares trading in the $10 range on little or no volume. Until Tuesday, zero shares had traded since Nov. 13, when 300 shares changed hands. The bank has 1.47 million shares outstanding.

In a letter to stockholders in Connecticut River Bank’s report for the third quarter ended Sept. 30, Gray said the bank’s net income had been hurt by a drop in mortgage volume that resulted in a decline of approximately $200,000 in loan fees.

Mascoma Savings Bank’s net income also was down for the first 11 months of this year, a recently issued consolidated statement says. Although loans increased almost $78 million during the period and total assets were up about $66 million, net interest income dropped just over $3 million.

Christy noted that when a mutually owned bank acquires another institution, the transaction has to be done in cash because there is no stock to trade.

As a result of the cash outlay for Connecticut River bank, Mascoma Savings Bank is not considering future expansions at the moment.

“This one will keep us occupied for a while,” he said.

Warren Johnston can be reached at wjohnston@vnews.com or 603-727-3216.