Vt. bank acquisition adds to N.H. Thrift Bancshares holdings
Details of the $14.4 million purchase of Central Financial Corp., owner of Randolph National Bank, were released in a proxy last week
Newport-based New Hampshire Thrift Bancshares Inc. -- parent company of Lake Sunapee Bank -- has continued its buying spree, acquiring an insurance company, half of a non-depository trust company and two banks.
“We augmented our fundamental footprint, but had enough capital to acquire those assets without the federal money,” said NHTB CEO Stephen R. Theroux. “We leveraged that capital to make $60 million in loans to small business.”
Details of the latest purchase, a $14.4 million all-stock acquisition of Vermont-based Central Financial Corp., owner of Randolph National Bank, were released last week, in a proxy to CFC shareholders who need to approve the deal along with various regulatory agencies.
With that purchase, expected to close at the end of the year, NHTB will become a regional player, with nearly $1.4 billion in assets and 38 branches straddling in two states. The deal will nearly double the bank’s presence in Vermont.
CFC shareholders will receive 8.699 shares for each CFC share.
CFC’s CEO,, Steven H. Dimick, will get a seat on the NHTB board. He also will receive a severance payment of $382,000 – twice his salary. That doesn’t count his compensation as a board member, which in the past has been about $100,000 a year per member.
CFC approached NHTB and four other banks toward the end of 2012. The small bank, with $167 million in assets, was figuring out how it could go on after weathering the Great Recession, an increased regulatory burden and the extensive damage caused by tropical storm Irene in 2011.
Four banks responded, and two, including NHTB, ending up with comparable bids. What sold CFC’s board on NHTB, according to the proxy, was its presence in Vermont (thanks to the acquisition of Brandon Financial Corp. in 2007), its commitment to expand in the state and its recent acquisition of non-bank businesses.
“We didn’t go after them,” Theroux said. “We knew them. They knew us. We’ve built up the reputation of a community bank that gets things done. People sort of call us now.”
NHTB – which started out as state-chartered Newport Savings Bank shortly after the Civil War converted to a federally chartered Lake Sunapee Bank in 1980 -- the first bank to do so in the nation. Since then, it has been buying banks -- Landmark Bank of Lebanon in 1998, New London Trust in 2001 and First Community Bank in Woodstock, Vt., and Brandon in 2007.
In February, NHTB bought half of the Charter Holding Corp, a non-depository trust company with $1.5 billion in assets under management, from Meredith Village Savings Bank for $6.2 million in cash. NHTB was one of the five banks that formed the trust company back in 1984, and it has been buying out its partners ever since.
The acquisitions, “position us as a highly qualified bank that can offer sophisticated products to our customers,” Theroux said.