Two mutual holding companies for community banks in the Boston area agreed to merge in a bid for scale to better compete with larger lenders.
1831 Bancorp MHC in Dedham, Massachusetts, said in a press release after markets closed Tuesday that it would combine with neighboring South Shore Bancorp MHC in South Weymouth, Massachusetts. Financial terms of the deal were not disclosed in the release.
Should the deal close as planned later this year — the companies did not set a more specific target date — the two institutions would operate under the parent company 1831 Bancorp. The companies' two banks, however, will continue to operate independently. 1831 Bancorp is the mutual holding company of the $2.1 billion-asset Dedham Institution for Savings, while South Shore Bancorp is the parent of the $2.1 billion-asset South Shore Bank.
Peter Brown will remain CEO and president of Dedham Institution for Savings and become chairman and CEO of the combined company. Jim Dunphy will continue as CEO of South Shore Bank and assume the role of president of the merged company. Upon Brown's planned retirement in three years, Dunphy would take over as CEO, according to the release.
"One of the most appealing things that I see from this opportunity is that we are two strong institutions that are coming together without the pressure to unnecessarily cause immediate disruption to our core businesses or markets the way many mergers do," Brown said in the release. "We are both disciplined organizations that value our heritage as mutual banks and we will continue to operate that way."
Dunphy said the merger would create a more competitive bank. "The ability to have two organizations with similar assets and culture come together positions us well in a highly competitive market and gives us a tremendous opportunity to deploy capital in more ways than we could independently," he said in the release. "This will enable us to be smart about our investments and to retain our great employees while best serving clients with whom we have built strong relationships over the years."
Keefe Bruyette & Woods was the financial adviser on the merger. Luse Gorman served as the legal counsel to 1831 Bancorp, and Updike Kelly & Spellacy PC was the legal counsel to South Shore Bancorp.
