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Job Cuts Planned At Lake Sunapee Bank



Valley News Business Writer
Saturday, October 15, 2016

Newport, N.H. — Lake Sunapee Bank, which is being acquired by Bar Harbor Bancshares, has notified an unspecified number of employees that they will be losing their jobs beginning in January when the deal is scheduled to close.

Most of the positions that will be eliminated are at the executive level and among the staffs that support them, such as the human resources, compliance and credit departments, Lake Sunapee Chief Executive Stephen Theroux said in an interview. Theroux, who himself will be leaving in January, declined to say how many people will be losing jobs, explaining the final figure will depend on attrition and retirement.

Lake Sunapee agreed in May to be acquired by Maine-based Bar Harbor Bancshares in a deal valued at $143 million. The bank acknowledged at the time of the announcement that layoffs would be in the offing and said a portion of the $16.9 million in “one-time” costs associated with the sale would be to cover employee severance payments.

News of the job losses comes as Bar Harbor stockholders get ready to vote on the deal at a special stockholders meeting set for Thursday, followed by Lake Sunapee’s stockholder meeting to vote on Oct. 24.

The Newport-based bank, which has 35 local branches throughout south-central New Hampshire and Vermont, had 288 full-time employees, 59 part-time employees and 17 per-diem employees as of the end of 2015, the most recent information available, according to regulatory filings.

Theroux said he expected total employment at Lake Sunapee to level out at “close to 300” after the acquisition is completed, “but it could be 325” depending upon how many internal positions become vacant during the interim which will be filled on a “priority” basis with current employees.

“Most of those who are in at-risk positions are executives as well as support functions,” Theroux said. “Virtually all the corporate structure of the bank is being transferred over to Bar Harbor and their support staff. For the most part, all the foward-facing people in the organization — tellers, those on retail end, mortgage originators — will remain in place.”

None of the bank’s branches are slated for closure, he said.

The sale of Lake Sunapee to Bar Harbor combines two regional banks of approximately the same size in assets and complimentary banking activities. For example, while Lake Sunapee leads in home loans, Bar Harbor has a bigger commercial loan division. Lake Sunapee also is much more prominent in trusts — wealth management — through its Charter Trust Co. unit, which has $1.6 billion under management. Combined, the merged banks will manage about $2 billion in client assets.

The acquisition will also give the Bar Harbor-based bank, which has 14 branches in Maine, its first retail banking presence in New Hampshire and Vermont. Although banks have been closing local branches as more customers shift to online banking, executives at both Bar Harbor and Lake Sunapee foresee the need for walk-in branches not going away anytime soon in rural northern New England.

“In many of our towns, we’re the only bank,” Theroux said.

Theroux said the layoffs will occur in two phases, the first one comprising a minority of the positions in January when the deal closes, and a later one involving a majority of the positions in May. He said that provides most of the effected employees, who he said would be provided “robust” outplacement services, with a long lead time in which to find new employment.

Severance packages will be based on years of service, he added.

“This merger mirrors what’s going on in the banking industry, regulatory pressures as well as costs,” Theroux explained. “It’s a game now where scalability matters. You can do a lot more with fewer people. … You have to.”

One Lake Sunapee C-suite executive who will not be leaving after deal, however, is Bill McIver, senior executive vice president and chief operating officer. McIver, who has been at the bank 17 years and is a former varsity basketball coach at Stevens High School, will become regional vice president overseeing the combined 47 branch offices in three states.

Although Lake Sunapee is the bank being acquired, Lake Sunapee itself has grown steadily by acquiring other local banks, including Randolph National Bank in 2013; The Nashua Bank in 2012; First Brandon National Bank of Brandon, Vt., and First Community Bank of Woodstock, both in 2007; New London Trust in 2001; and Landmark Bank of Lebanon in 1998.

John Lippman can be reached at 603-727-3219 or jlippman@vnews.com.