Eastern Bankshares in Boston has agreed to buy Century Bancorp in Medford, Mass.
The $16 billion-asset Eastern said in a press release Wednesday that it will pay $642 million in cash for the $6.4 billion-asset Century. The deal, which is expected to close in the fourth quarter, priced Century at 175% of its tangible book value.
The announcement comes about six months after Eastern raised about $1.7 billion through its initial public offering.
“We’ve admired Century’s success since its founding by Marshall Sloane in 1969 and today they are New England’s largest family-run bank,” Bob Rivers, Eastern’s chairman and CEO, said in the release.
“The Century Bank brand has continued to rise in prominence and it was a proud moment for us when they communicated they wanted to partner with Eastern,” Rivers added. “We are excited for the opportunities this agreement creates and believe our combination will deepen our reach in providing banking services and other support to communities across greater Boston and southern New Hampshire.”
Century has 27 branches, $3 billion of loans and $5.5 billion of deposits.
Eastern said it expects the deal to be 55% accretive to its earnings. It should take Eastern four years to earn back the expected 9% dilution to its tangible book value.
Eastern plans to cut about 45% of Century's annual noninterest expenses, or roughly $37 million. About 96% of Century's branches are within three miles of one an Eastern location. Eastern expects to incur about $64 million of merger-releated charges.
J.P. Morgan Securities and Nutter McClennen & Fish advised Eastern. Piper Sandler and Goodwin Procter advised Century.
