NEWPORT, N.H. — A plan for the parent company of Bar Harbor Bank & Trust to acquire a New Hampshire-based banking group took a step forward this week as shareholders of both companies approved the merger agreement.
Shareholders of Lake Sunapee Bank Group gave their nod in a special meeting at the company’s headquarters Monday. The proposal received 92 percent support.
Shareholders of Bar Harbor Bankshares were even more enthusiastic when they met Thursday, Oct. 20, at the bank’s headquarters in Bar Harbor, with 96 percent of shares voting in favor of the agreement.
“We have all of our regulatory approvals in hand,” Bar Harbor Bankshares CEO Curtis Simard said Tuesday. “Now we have our shareholder votes. We have more listing application work with the Securities and Exchange Commission [SEC] to do, but we are on schedule for a close in early January, which we’re very excited about.”
The two banks first announced the agreement May 5. The plan is for Bar Harbor Bankshares to acquire Lake Sunapee Bank Group in an all-stock transaction valued at about $143 million. The deal received unanimous approval from the boards of directors of both companies.
The merger agreement calls for each outstanding share of Lake Sunapee stock to be exchanged for 0.4970 shares of Bar Harbor Bankshares common stock. Upon closing, Bar Harbor Bankshares shareholders will own approximately 59 percent of the combined company’s stock, while Lake Sunapee shareholders will own approximately 41 percent.
Since the announcement in May, Simard said, Bar Harbor’s stock has traded up, but the exchange rate for the merger was locked in May 5 to protect Lake Sunapee shareholders from risk.
“We’ll give them $17 per share for their stock, to be paid using our stock,” he said. “We did an average of our price over a period of time. After that, their stock really became immune to their performance.”
Lake Sunapee’s earnings are still important, though, he said. “They’re continuing to perform at historic levels. That shows our stockholders they’re getting what they thought they would.”
West Lebanon, N.H., newspaper Valley News reported earlier this month that some Lake Sunapee employees have been notified their jobs will be eliminated in the merger.
Simard called the concern about layoffs “a natural one,” but stressed that there are no plans to close any bank branches. “The customer-facing people, the ones who are the lifeblood of the community bank, will stay put.”
The agreement assumes a 20 percent cost savings by putting the companies together, he said, but the management team has not yet determined whether that will come through salaries, eliminating positions or other changes. “It’s a little bit of a moving target,” he said.
Stephen Theroux, Lake Sunapee’s president and chief executive officer, will retire from the bank’s staff but join Bar Harbor Bankshares’ board of directors. He, along with three other Lake Sunapee directors added to Bar Harbor’s board, will bring the total membership of the Bar Harbor Bankshares board to 15.
Theroux has Maine ties, having graduated from Bowdoin College.
William J. McIver, currently the chief operating officer at Lake Sunapee, will continue with the combined company as executive vice president/regional president, New Hampshire and Vermont markets, Simard said. McIver also will be in charge of all the retail franchises for the combined companies.
“We have put our teams together, and we’re really excited about how it’s coming together,” Simard said. “The teams are getting along. It’s everything we thought it would be and more.”
According to Securities and Exchange Commission filings, Bar Harbor Bankshares had 6,047,419 shares of common stock eligible to be voted at their meeting, and 4,394,930 shares were represented in person or by proxy at the meeting. The proposal to approve the agreement and plan of merger passed with a vote of 4,224,383 shares in favor, 118,463 opposed and 52,084 abstained.
Lake Sunapee Bank Group had 8,387,716 shares of stock eligible to be voted, of which 4,997,145 shares were represented. The proposal to approve the merger passed with 4,593,771 shares in favor, 252,628 shares against and 150,745 abstained.
A separate proposal “to approve the compensation payable to the company’s named executive officers in connection with the merger” also passed with a comfortable margin.
The majority of the votes were cast ahead of time by proxy, Simard said. A joint proxy statement/prospectus was filed with the SEC and sent to shareholders in September.
Bar Harbor Bank & Trust has 15 branch locations from Lubec to Topsham, while Lake Sunapee Bank has 35 branches in west-central New Hampshire and central Vermont.
While those 35 branches are expected to continue operating under the Lake Sunapee brand following the merger, Simard said Bar Harbor Bankshares will serve as the parent company and sole reporting institution for those branches as well as Bar Harbor Bank & Trust’s branches.
The Lake Sunapee name “means a lot to their customers and their employees – and it’s a terrific brand,” Simard said. “Their name means as much to them as our name means to us.”
At closing, the combined institution is expected to have approximately $3.3 billion in assets, $2.4 billion in net loans, $2.2 billion in deposits and more than $2.0 billion in assets under management (Lake Sunapee’s wealth management subsidiary, Charter Trust Co., manages more than $1.6 billion in assets.).
Simard said the merger stands to elevate Bar Harbor to the fifth-largest community bank in New England in terms of assets.
As of market close Tuesday afternoon, Bar Harbor Bankshares stock was trading at 36.85, down slightly from Monday’s high of 37.20. It peaked at 37.68 in July. Lake Sunapee Bank Group stock closed Tuesday at 17.99. It also peaked in July at 18.68.
Reporter Steve Fuller contributed to this story.
CORRECTION: An earlier version of this story misstated the vote counts for Bar Harbor Bankshares.