The parent company of Needham Bank has agreed to acquire another Boston-area lender in a transaction that provides an entry point to Southern New Hampshire, where the buyer has a large and growing customer base but no physical presence.
Under the deal's terms, NB Bancorp, the holding company for the 133-year-old Needham Bank, agreed to pay $212 million in cash and stock for Provident Bancorp.
The deal would put to use a substantial portion of the more than $400 million that NB Bancorp raised in a 2023 mutual-to-stock conversion.
Provident's bank subsidiary, the 197-year-old BankProv, operates New Hampshire branches in Bedford, Portsmouth, Exeter and Seabrook. It also has three branches in Massachusetts' North Shore region. Needham's 11 branches are situated west of Boston in the Bay State's MetroWest region.
Like Needham, Provident operated as a mutual bank throughout most of its history. Its mutual-to-stock conversion in 2019 raised $102 million.
Over the past few years, a number of Needham clients have moved to Southern New Hampshire, drawn by a tax rate and cost of living that's lower than Boston's. "We've already built a $350 million presence up there," NB Bancorp CEO Joseph Campanelli told American Banker. "It's a natural extension and accelerates" the bank's expansion.
In a research note Friday, Piper Sandler analyst Mark Fitzgibbon characterized the acquisition as "easily digestible" for the $5.2 billion-asset NB. Provident, which is based in Amesbury, Massachusetts, has $1.6 billion of assets.
For Provident, the deal comes nearly three years after it reported approximately
"They had some problems that are gone now," Campanelli said. "They've cleaned it up, so it's not a turnaround. … I'm 100% confident we can do in that market what we've done in our market, accelerate that growth curve."
As Campanelli indicated, Needham is on something of a growth tear. It reported a $12.7 million first-quarter profit, including year-over-year growth in loans and deposits of 13% and 154%, respectively.
The $212 million purchase price is slightly less than Provident's tangible book value. NB is projecting cost savings totaling 35% of Provident's noninterest expense base and a 19% boost to earnings per share in 2026.
The pro forma company will hold $6.1 billion of loans and $5.9 billion of deposits. NB is forecasting a fourth–quarter 2025 closing date.
The planned acquisition of Provident marks the fourth deal involving Boston-area banks since December.
In December, Boston-based Berkshire Hills Bancorp
"I've always believed you have to earn the right to be an acquirer," Campanelli said during a Friday interview. "There're a lot of banks selling or merging because they lost their organic growth strategy."
Needham Bank has no plans to slow its organic growth push as it gears up to absorb Provident, Chief Operating Officer Christine Roberts told American Banker.
"We're able to take our project management office and create a transition team," Roberts said. "Our goals are not changing. Our budget is not changing. We are still projecting 12% to 15% growth this year. … This isn't a distraction. It's an addition."
Even with the discount to Provident's tangible book value, the proposed purchase price works out to a 8% premium to the selling company's share price, based on Wednesday's $11.35 close.
"This merger benefits our customers and provides a good return for our stockholders," Provident CEO Joseph Reilly said Thursday in a press release. "We look forward to seeing Needham continuing to build on what they have accomplished over the past 133 years."
Reilly is slated to join Provident's board as soon as the deal closes.
