Hiring challenges spurred Salisbury Bancorp in Lakeville, Conn., to start looking for a buyer last fall.
The $1.5 billion-asset company agreed to sell itself to NBT Bancorp in Norwich, N.Y., in December for $204 million.
Salisbury’s board also factored in limited growth opportunities, economic uncertainty and the state of consolidation when it decided to gauge the market for selling, according to a regulatory filing tied to the sale to NBT.
Richard Cantele Jr., Salisbury’s president and CEO, first met with John Watt, his counterpart at the $11.5 billion-asset NBT, in 2017. More meetings took place between 2020 and 2021, though a merger wasn’t discussed.
Cantele met with the presidents of several banks, including NBT, in April 2021. Watt, during an April 28 meeting, expressed an interest in discussing a deal. This led to Cantele having more meetings with Watt and other NBT executives over the course of several months.
Cantele discussed potential deals with other bank presidents between July and September 2021. Meetings between Cantele and Watt continued.
In late 2021, Watt met with the president of a smaller community bank to discuss a possible merger.
Though Salisbury’s board had been open to a merger, it determined during a December 2021 meeting that the company could grow organically and through acquisitions. There was also concern about completed a merger during the pandemic.
Salisbury’s board remained committed to staying independent during the first half of 2022. However, during an August 2022 meeting, the board directed Cantele and the company’s investment bank to contact five financial institutions to gauge their interest in a deal.
Watt told Cantele during an Aug. 20 conversation that NBT was willing to execute a confidentiality agreement and begin due diligence. A confidentiality agreement was signed on Sept. 12.
Another bank entered into a confidentiality agreement on Sept. 13. The other banks that were contacted were not interested in a deal at that time.
NBT’s initial offer, submitted on Sept. 27, valued Salisbury at $33 to $35 a share, or roughly $191 million to $202 million based on shares outstanding, with at least 90% of the consideration consisting of stock.
The other potential suitor told Salisbury in October that it was unable to devote the necessary time and resources to explore a deal. It did not submit an offer.
The first draft of the merger agreement was sent to Salisbury on Nov. 9. During a Nov. 9 call, NBT indicated that it was willing to pay $34 a share, or about $197 million, in an all-stock transaction.
Salisbury’s board successfully pressed for $35 a share. The company’s directors unanimously approved the merger on Dec. 4 and the deal, which is expected to close in the second quarter, was announced the next day.
“The organizational values upheld by the Salisbury team align very well with those of NBT,” Watt said in a press release announcing the acquisition.
Cantele will join NBT’s executive management team, serving as executive vice president of strategic integration, according to the latest filing.
NBT plans to establish a regional operations center in Lakeville. One Salibury director will join NBT’s board.