SALEM — Salem Five Bancorp has agreed to acquire the parent of Georgetown Bank in a move that will give Salem Five a branch footprint in Southern New Hampshire and an expanded presence in the Merrimack Valley, according to a statement from the bank.
On Thursday, Salem Five Bancorp, the parent of Salem Five Cents Savings Bank, announced an all-cash deal to purchase Georgetown Bancorp Inc. and its subsidiary Georgetown Bank, in a transaction valued at $49.2 million. Salem Five, which has assets of $4 billion, said both banks had signed a definitive agreement for Salem Five to acquire Georgetown Bancorp.
Shareholders of Georgetown Bancorp, which has assets of $300 million, will receive $26 in cash for each share of its common stock, representing an approximately 148 percent of Georgetown Bancorp’s tangible book value as of June 30.
“Salem Five and Georgetown Bank both have longstanding histories as community banks with high standards of integrity, as well as a strong sense of responsibility for the economic vitality of our region,” said Ping Yin Chai, Salem Five Bancorp president and CEO, in a prepared statement. “Their footprint is an area of the North Shore, Merrimack Valley and Southern New Hampshire where we are excited to expand our existing branch franchise and complement Salem Five’s existing retail network.”
Salem Five has 30 retail branches in Essex, Middlesex, Suffolk and Norfolk counties. Georgetown Bank has branches in Georgetown, North Andover, Rowley and Stratham, New Hampshire.
The merger is expected to close during the first quarter of 2017.
After more than 30 years of ferreting out opportunities from fast-growing companies, investment guru Robert Lutts, whose first job was as a newspaper carrier in Salem, decided to put his strategies down on paper.
“The Great Game of Business: Investing to Win” is the 59-year-old’s first book, and it has been published by his company, Cabot Wealth Management Inc. on Essex Street in downtown Salem. Lutts is the founder, president and chief investment officer of the mid-sized wealth management company.
The book aims to give advice and know-how to the novice investor.
It’s also a refresher for seasoned professionals, he says. The book is not long, around 200 pages, and it’s written in Lutts’ plainspoken style, in bites that are far easier to digest than a quarterly earnings statement.
“The book is for anybody interested in business or investing,” Lutts said. “You can’t really separate the issue of running a business from investing. It’s one and the same. A good investment is really someone who is running a business well.”
Lutts learned all about investing around the dinner table, from his late father, Carlton Lutts Jr., who was the author of thousands of investment newsletters called the “Cabot Market Letter.” He taught his son to read an annual report and starting taking him to annual meetings of companies when he was 14.
Robert Lutts got his start by selling his investment services as a “branch out” of his father’s investment newsletter.
“The genesis of why to do it is to share with people, I think, how wealth is made and how wealth is created by entrepreneurs in this country,” Lutts said about why he wrote the book.
“After 33 years of doing something, maybe you think you have a little something to say,” said Lutts, who is also known to viewers as a regular contributor to CNBC’s “Power Lunch.”
Growth companies are Lutts’ real passion — studying entrepreneurs and the innovative part of the economy. His book takes a close look at his growth strategy as he seeks to invest in companies doing “new things.”
That’s opposed to the strategy of a value investor, such as Berkshire Hathaway CEO Warren Buffett, who invests in mature companies, like Coca-Cola, and seeks value in them if they are able to turn things around.
“The problem with it is sometimes you buy into an industry that is actually starting to die,” Lutts said of value investing. “And, you know, we don’t sell buggy whips anymore.” He cites long-gone minicomputer companies such as Wang Labs and Digital Equipment Corp. as examples. “That whole era is gone,” he says.
The challenge with growth investing is simple: “When do you get off the train after it’s growing.”
Salem Five is entering the retail banking market in southern New Hampshire and expanding its North Shore footprint by acquiring the four-branch Georgetown Bank for $49.2 million.
The parent company of Salem Five, one of the largest mutual banks in the state with $3.9 billion in assets, has agreed to buy Georgetown’s parent company (Nasdaq: GTWN) and its approximately $300 million in assets.
The all-cash deal gives Salem Five its first retail branch in New Hampshire, as Georgetown has an office in Stratham, New Hampshire, just south of Portsmouth. The other three branches are in Massachusetts, in Georgetown, Rowley and North Andover. Salem Five already has two offices in North Andover, including one just a few doors down from Georgetown's office. The bank will likely consolidate the offices in the town, according to President and CEO Ping Yin Chai. Salem Five does not currently have branches in Georgetown or Rowley.
As with Salem Five, the largest portion of Georgetown’s loan portfolio is residential mortgages, followed by commercial real estate loans. Georgetown is one of the least profitable banks in the state so far this year, as measured by pre-tax return on assets, though it has performed better on the metric in past years. The bank has recently made investments in technology and personnel that have driven down profitability, according to Chai.
Under the agreement, Georgetown shareholders will receive $26 for each of their shares of common stock. The stock had closed Wednesday at $20.88.
Georgetown will become a mutual bank if and when the deal is approved by regulators and Georgetown shareholders. It is expected to close in the first quarter of 2017.
SALEM — The lack of a sales tax holiday in August hurt sales at stores across the state, the head of the Retailers Association of Massachusetts said Wednesday.
Association President Jon Hurst told business leaders gathered at the North Shore Chamber of Commerce breakfast forum that the state’s decision to bypass the traditional tax-free weekend this year was “penny wise and pound foolish.”
Hurst said retailers reported a 45 percent drop in sales in the second weekend of August this year, as compared to the same period in 2015. Overall, August sales were down 24 percent from 2015.
Association members reported a 3.6 percent drop in the amount of sales tax they collected for August, Hurst said. Stores also brought on fewer workers for what has traditionally been a strong shopping weekend.
The retailers group regularly surveys its 4,000 members to provide a snapshot of the retail industry as a whole, said Hurst, a Beverly resident.
Traditionally, the so-called holiday is meant to help consumers save the sales tax on most purchases. Sales of gasoline, cars, motorboats, meals or a single item that costs more than $2,500 do not qualify.
Leaders in the state House and Senate, worried about sluggish tax collections, passed on the holiday this year.
The end result was not lost on local lawmakers.
“It is a big boon for our local retailers,” said state Sen. Joan Lovely, D-Salem, who attended the event at the Salem Waterfront Hotel.
Like other North Shore lawmakers interviewed, Lovely said she would have voted for the holiday, but the measure never came up for a vote. A sales tax holiday can give a boost to businesses at a slow time of year, and also help consumers who are back-to-school shopping, she said.
Hurst said the state’s 6.25 percent sales tax puts local businesses at a competitive disadvantage.
“It’s particularly acute in Massachusetts because of New Hampshire,” Hurst said, given New Hampshire has no sales tax.
“Online competitors have a 365 day a year sales tax holiday,” Hurst said, “and this year we couldn’t get our two-day holiday.”