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Concerns about upcoming executive retirements and the need to recruit commercial lenders helped drive Salisbury Bank and Trust’s parent company to seek a merger.
Lakeville-based Salisbury Bancorp agreed in December to sell itself to Norwich, New York-based NBT Bancorp Inc. in an all-stock deal valued at approximately $204 million.
In its preliminary proxy statement filed with the Securities and Exchange Commission, Salisbury cited several factors driving the merger, including challenges and risks associated with filling expected executive-level vacancies in the near future. The bank also pointed to the needs of its commercial lending team.
“In addition to key operational vacancies, it was anticipated that Salisbury would require recruitment of critical commercial lending personnel particularly in the Hudson Valley markets within the next one to three years,” the bank said in the preliminary proxy.
The $1.5 billion-asset Salisbury Bank has 14 branches Northwest Connecticut, the Hudson Valley region of New York and Berkshire County in Massachusetts.
Salisbury’s board expected the bank to remain independent, the proxy said, but since 2017, President and CEO Richard Cantele Jr. did discuss possible business combinations with multiple CEOs, including with the president of a small community bank in late 2021.
The bank’s strategy changed in 2022.
“Beginning in the early third quarter of 2022, Salisbury’s board of directors and management began to reevaluate Salisbury’s strategy in light of the challenges that were beginning to emerge, which could affect Salisbury’s growth opportunities in its current and proximate markets,” the bank said in the proxy. “Such challenges included, among other things, limited human capital resources, which made it more difficult to recruit and retain talent in the market area and further limited Salisbury’s ability to grow in these market areas.”
Salisbury Bank’s board in August 2022 authorized Cantele and the bank’s financial adviser to contact five financial institutions about a possible merger. NBT was one of those institutions. Cantele had first met NBT’s CEO John Watt in 2017, and they spoke by phone about a possible merger two days after the board meeting.
Three other institutions were not interested in a merger with Salisbury. A fifth institution was interested in a possible deal. But in early October, this institution said it could not devote time and resources toward exploring a combination and did not submit a proposal.
NBT had expanded into Connecticut with commercial lending in 2019 and opened its first retail branches in the state in 2021. Salisbury and NBT began due diligence reviews in October 2022 before finalizing the merger agreement in early December.
Salisbury has not yet released the date when shareholders will vote on the proposed merger.
