Massachusetts mutuals agree to merge, form multibank holding company

Gary Hider/Gary L Hider - stock.adobe.com

Two mutual bank companies in Massachusetts — the parent firms of Cape Cod 5 in Hyannis and Fidelity Bank in Leominster — have agreed to merge into a multibank company called Mutual Bancorp. 

Cape Cod 5 and Fidelity said in a joint press release Thursday that they would operate independently, maintaining their respective names and brands. The combined entity would benefit from its bigger size, shared services and pooled resources, according to the release.

It's the second bank M&A deal in Massachusetts this week. The $21.6 billion-asset Eastern Bankshares in Boston agreed Tuesday to acquire the $5.5 billion-asset Cambridge Bancorp in Massachusetts for $528 million in stock. That was one of the biggest bank deals announced this year.

The $5.5 billion-asset Cape Cod 5 has 26 branches across Cape Cod, Martha's Vineyard, Nantucket and other parts of southeastern Massachusetts, while the $1.5 billion-asset Fidelity has 13 branches in eastern and central Massachusetts.  

Matt Burke would remain chairman and CEO of Cape Cod 5 and lead Mutual Bancorp. Edward Manzi Jr. would stay as chairman and CEO of Fidelity Bank and serve as vice chairman and chief strategy officer of Mutual Bancorp. 

Once the deal is finalized, Mutual Bancorp would have combined assets of more than $7 billion, the companies said.  

"Fidelity Bank and Cape Cod 5 are both long-standing institutions with very similar cultures and values. We both focus on personalized service to consumers and businesses, and a commitment to making a positive impact in our communities," Burke said in the release.  

"This partnership will strengthen Mutual Bancorp and enable us to utilize shared resources and best practices so that each bank can grow in size, strength and offerings to customers," Burke added.   

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Financial terms of the deal and a target closing date were not disclosed in the release.  

As part of the partnership agreement, Fidelity Bank would form a $5 million charitable foundation to provide ongoing support to nonprofit organizations, causes and events in Massachusetts.   

Dorothy Savarese, who stepped down this year as president and CEO of Cape Cod 5 after leading the bank for 17 years, was one of American Banker's Most Powerful Women in Banking in 2022. She had made the list the 10 prior years, as well.  

The mutual merger continues a recent uptick in bank M&A activity.  

Eighteen banks announced plans to sell themselves in August, according to S&P Global Market Intelligence. Last month was the most active month for bank deals since July 2022. August deals accounted for the majority of the 26 deals unveiled in the first two months of the third quarter. There were 20 deals involving bank targets in the first quarter and 25 in the second quarter. 

The 71 bank transactions announced through August translates to a full-year pace of 108. The total value of deals announced this year was $35 billion as of Aug. 31.