When Abington Bancorp Inc. named James K. Hunt - a longtime Massachusetts banker who had played a key role in the sales of his four previous employers - as chief financial officer in April, many viewed it is a signal that the company was in play.
It seemed the only questions were when it would sell and who would buy the $850 million-asset parent of Abington Bank, one of Massachusetts' oldest thrifts.
Those questions were answered Tuesday when Seacoast Financial Services Corp. of New Bedford, Mass., announced that it had agreed to buy Abington for $139.5 million in cash and stock.
Seacoast president and chief executive officer Kevin G. Champagne said the deal would fill a gap in the branch network of Seacoast's primary bank subsidiary, the $4 billion-asset CompassBank, and create a 64-branch franchise covering the length of southeastern Massachusetts, from Boston to Cape Cod. (Seacoast also owns the $458 million-asset Nantucket Bank, which has three branches on Nantucket Island.)
The merged company would have assets of $5.4 billion, deposits of $3.6 million, and shareholder equity of $511 million.
For all but the past few months of its 148-year history, Seacoast has confined its operation to the southeastern corner of Massachusetts. In May, though, it completed its $138 million acquisition of Bay State Bancorp Inc. of Brookline, which gave it six branches in and around Boston but left a long stretch of territory - between the Boston suburbs and Seacoast's southern base - where Seacoast had no presence.
"This deal fills in the map nicely," Mr. Champagne said Tuesday. "We've viewed Abington as a desirable company for a number of years."
Southeastern Massachusetts has been a hotbed of mergers and acquisitions the past three years. Twelve banks there have been bought since the beginning of 2001, and another six deals, including Seacoast-Abington, are pending. Among the companies said to be still shopping are Citizens Financial Group Inc. of Providence, R.I.; Banknorth Group Inc. of Portland, Maine, and Sovereign Bancorp in Wyomissing, Pa.
Seacoast may itself be a target, given its recent expansion.
Mr. Champagne said that the Abington purchase, which is expected to close late in the first quarter or early in the second, would make Seacoast more alluring to those potential buyers, since none of the region's remaining independent community banks can equal Seacoast's reach.
"To get the same presence we have, you would have to put two or three banks together," Mr. Champagne said. "That makes us more attractive. With us, it would be one-stop shopping."
Jared Shaw, an analyst with Keefe, Bruyette & Woods Inc. in New York, agreed that Seacoast could be viewed as a seller but said he doubts Seacoast would go on the block anytime soon.
"If you're an acquirer looking at that geography, your best bet would be Seacoast," Mr. Shaw said Tuesday.
Seacoast plans to merge Abington into CompassBank, and since they are not in-market competitors, the combination is not expected to result in any branch closings or layoffs, Mr. Champagne said.
Mr. Hunt said he has agreed to serve as a strategic consultant to help with the integration - not to arrange for Seacoast's eventual sale.
"I've been involved in a number of integrations," he said Tuesday. "I think both companies felt there was some value added by continuing my role."
Mr. Hunt has a track record of engineering sales of banking companies shortly after joining them, and his appointment as Abington's CFO was welcome news to investors. Despite Abington's recent financial troubles, its stock rose 69% in the six months between his arrival and Oct. 20, and rose another 1.96% Tuesday, to $33.22, on news of the sale.
Seacoast's stock fell 1.79%, to $23.10.
In April, on the same day it announced the hiring of Mr. Hunt, Abington announced that it was restating its earnings for 2001 and 2002 because it had incorrectly accounted for the amortization of premiums on its mortgage-backed securities.
James P. McDonough, Abington's president and CEO, is to become CompassBank's president and Mr. Champagne is to remain CEO of the bank and president and chief executive of the holding company.
Mr. Champagne said Mr. McDonough is a good friend of his and would be a good addition to Seacoast's management team.
"Our structure as a $4.5 billion-asset company is the same as it was when this was a $700 million-asset company," Mr. Champagne said. "A lot of things are getting beyond my ability to keep up with, so I'm pleased I can pass on some of that responsibility" to Mr. McDonough.
