Barre Savings Bank in Barre, Mass., has agreed to merge with Fidelity Bank in Leominster, Mass.

Fidelity Bank will be the surviving entity, the mutuals announced in a Thursday press release. The financial terms of deal, which is expected to be completed in the second quarter of 2016, were not disclosed.

"These are challenging times for smaller community banks," Guy Boyer, president and chief executive of the $153 million-asset Barre Savings, said in the release. "The new combined institution will allow us to make the investments necessary to stay competitive and deliver services, while never forgetting our community bank values."

The $615 million-asset Fidelity said it will establish a $1.5 million community foundation to provide support to nonprofits in the Massachusetts communities of Barre, Paxton and Princeton.

Edward Manzi Jr. will remain chairman and chief executive, and Boyer will retire three months after the merger is completed. Three members of Barre Savings' board of trustees will become Fidelity directors.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.