Westfield Financial in Westfield, Mass., has agreed to buy Chicopee Bancorp in Chicopee, Mass.
The $1.3 billion-asset Westfield said in a press release Monday that it will pay $110 million, or $20.42 a share, in stock for the $800 million-asset Chicopee. The deal is expected to close in the fourth quarter.
The company will be renamed Western New England Bancorp after the deal is completed, though Westfield Bank will keep its name. The merger brings together two banks based in Hampden County.
"Although headquartered in the same county, we currently serve two distinct customer bases, which, when combined, will complement each other tremendously," James Hagan, Westfield's president and chief executive, said in the release.
William Wagner, Chicopee's chairman, president and chief executive, will become Westfield's vice chairman and join the company's executive management team. Four additional Chicopee directors will join Westfield's board.
Westfield said it expects the transaction to be 14% accretive to its earnings per share, beginning in the first full year. It should take the company about five years to earn back an estimated 6% dilution to its tangible book value.
Westfield also said it expects to incur about $8.4 million in merger-related charges. The company plans to cut $7 million in annual expenses, or about 15% of both companies’ noninterest expenses, without closing any branches.
Clover Partners, an activist investor, has a large stake in Chicopee.
Griffin Financial Group and Hogan Lovells advised Westfield. Piper Jaffray and Luse Gorman advised Chicopee.