Two Massachusetts community banks are merging.
Hometown Financial Group in Easthampton has agreed to buy North Shore Bancorp in Peabody for an undisclosed price.
The $4.7 billion-asset Hometown, a highly acquisitive multibank holding company whose units include Abington Bank near Boston, said the deal was part of an ongoing effort to bulk up in the heavily populated eastern Massachusetts region.
North Shore, the holding company for the $1.7 billion-asset North Shore Bank, serves a coastal region between Boston and New Hampshire. The agreement calls for Hometown's Abington Bank unit to merge into North Shore Bank. It would create a $3 billion-asset division of Hometown with 25 retail branches across Massachusetts' North and South Shore regions. The South Shore extends south and east of Boston.
The transaction is expected to close in the second half of 2024. Hometown said no branch closures or staff reductions were anticipated.
"This merger will more than double our presence in eastern Massachusetts in terms of locations and assets," Hometown Chairman and CEO Matthew Sosik said in a release late Thursday announcing the deal.
The acquisition would mark the seventh for Hometown in the last nine years. In 2022, it
Should the acquisition of North Shore Bancorp close as planned, Hometown would have assets of $6.4 billion, nearly 700 employees and a branch network of 52 offices across Massachusetts, northeastern Connecticut and southern New Hampshire.
The branches in the South Shore area would continue to operate under the Abington Bank brand as a division of North Shore Bank, led by Kevin Tierney Sr., the current CEO of North Shore Bank. He would take on the additional role of president of Hometown.
Michael Wheeler, currently president and chief operating officer of North Shore Bank, would also become the COO of Hometown. Longtime Abington Bank President and CEO Andrew Raczka plans to retire after the deal is finalized.
Bank M&A has been busier this year after an
There were 10 bank deals announced in January, according to S&P Global Market Intelligence, putting the industry on pace for 120 transactions this year. That would eclipse the 98 deals announced in 2023, the fewest this century.
"Fewer conversations drove the number of announced bank deals in 2023 to the lowest level in over 30 years," said Piper Sandler analyst Mark Fitzgibbon.
Piper Sandler early this year surveyed bank CEOs and, among other questions, asked about their M&A expectations for 2024.
"Last February when we asked that question, only 14% of CEOs had seen a pick-up in M&A conversations," Fitzgibbon said. This year "more than half of the CEOs surveyed said that M&A talks have recently begun to heat up again. Earnings headwinds for smaller banks" in the face of high rates – "and the increasing need for scale are likely catalysts for why talks have intensified."
