South County banks to merge fully, rebrand
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Cornerstone Bank's Worcester headquarters
SpencerBANK and Southbridge Savings Bank have taken the merger of their holding companies one step further. Last month, the banks announced they would merge as one institution and rebrand as Cornerstone Bank.
The merger will close June 12, pending regulatory approvals. Michael Robbins, CEO of SpencerBANK, will be chairman and CEO of Cornerstone, while Southbridge's CEO, Todd Tallman, will be president and treasurer.
Originally, the plan was to merge the holding companies and have each bank maintain its independence, said Lori Kowal, vice president of marketing for SpencerBANK. As time went on, the benefits of merging became apparent.
“As a financial partner to many, we knew that individually we were dedicated to making a positive difference in the lives of the individuals who live and those who do business in our communities, and by joining together we could make a real impact,” said Kowal.
Becoming the Cornerstone
At the time of the holding company merger in May, the combined entity had $1 billion in assets and $108 million in equity. With all of that in place, the combined bank will offer its employees more opportunities for growth and continue its good will in the communities it serves, Kowal said.
The name Cornerstone Bank was picked after a branding survey.
“We are financially strong, locally focused banks with a strong brand loyalty and local roots that go back over a century,” said Kowal. “The name emphasizes the foundation of our mutual commitment to our customers and best embodies our culture while promoting the value of integrity and trust that our banks were built on.”
After everything is finalized, customers will be able to use the combined 15 branches of either bank.
Efficiencies, for the future
Deciding to either merge banks entirely, or just combine holding companies, is a complicated question with a lot of variables, said Bruce Spitzer, director of communications at the Massachusetts Bankers Association. Banks usually merge to create efficiencies, particularly in the back office and forming a mutual holding company can help streamline management.
Combining two banks under one brand can be complicated as it takes away name recognition, he said, but whether two banks combine brands might not get ironed out right away.
“Sometimes, later on, the board and management might decide to officially combine the separate brands for even more cost savings, in which case either one of the existing brands survives, or they create an entirely new name and focus on promoting that,” said Spitzer.
The ultimate decision a bank makes can depend on a variety of things, including market forces, history, competition, and how customers and the community will react, he said.
“It's not just about cost savings, it's projecting into the future and a desire to continue to be a fixture and force in the local community,” said Spitzer.
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