MountainOne Financial's merger of Hoosac, South Coastal banks to include layoffs, CEO says
NORTH ADAMS -- MountainOne Financial Partners plans to lay off 20 employees, the majority at Hoosac Bank, as it merges Hoosac and South Coastal Bank under a single charter, President and CEO Thomas S. Leavitt said Thursday.
Leavitt said 60 percent of the total staff reductions involve Hoosac Bank employees, while 40 percent are employed at South Coastal, which operates three branches on Boston's South Shore. He declined to be more specific.
Some of the affected employees are tellers, Leavitt said, but he said the layoffs affect all levels of employment.
"They reach from the upper level of functions in the company to the front line," Leavitt said. "They're not concentrated in one area."
Some of the employees will be laid off this month. The rest will be let go when the two banks officially merge this summer, Leavitt said. The merger is expected to go into effect on July 19. Following the merger, South Coastal's branches will retain their name in the Boston area, but Hoosac's branches will be known as MountainOne.
After Hoosac Bank merged with Williamstown Savings Bank in 2012, MountainOne announced in December that it planned to consolidate Hoosac and South Coastal under a single charter this year. Leavitt said the employees of both banks were not specifically told they would be laid off then, but were notified that MountainOne would be conducting an organizational review as part of the consolidation process. Part of the review included finding "efficiencies" within both organizations, a process that included the layoffs.
"This is really about positioning our resources for growth," said Leavitt, who succeeded the retired Stephen Crowe as MountainOne's president and CEO at the end of 2012. "We have an opportunity to grow this company and be responsive to our markets.
"We found that we have some unique opportunities on the South Shore where South Coastal has a strong presence, and good asset opportunities," Leavitt said. "We have some similar opportunities in Berkshire County. We wanted to have one platform, one set of products, and one culture."
Headquartered in North Adams, MountainOne Financial Partners is a mutual holding company with combined assets of $800 million and 200 employees. Williamstown Savings Bank, Hoosac Bank, and South Coastal Bank are three of the organization's seven partners, but are the only banks who belong to the partnership. Williamstown Savings Bank is now referred to as a division of Hoosac Bank.
Several bank mergers have taken place within the Berkshires since 2011, but Leavitt stressed that the layoffs involved with the current consolidation plan are not an indication that MountainOne is in financial trouble.
"What we're doing here is obviously advancing the company, working toward growth," Leavitt said. "The idea that we're in some kind of dire straits is not going on today."
MountainOne is also planning to merge the boards of Hoosac Bank, South Coastal Bank, and MountainOne Financial Partners into one entity, Leavitt said. The three banks combined have 25 members on their separate boards, but the single board will contain only 15, Leavitt said. Some members currently sit on more than one board.
Voting to seat the 15 trustees and directors of the new board will take place on April 29 at MountainOne's annual meeting of corporators.
Leavitt declined to comment on the types of severance packages the employees who will be let go will receive.
"People were treated with a lot of respect, sensitivity, and a lot of support," he said.
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