Independent to buy Meridian Bancorp for $1.2 billion

Independent Bank in Rockland, Mass., has agreed to buy Meridian Bancorp in Peabody, Mass.

The $13.8 billion-asset Independent said in a press release Thursday that it will pay nearly $1.2 billion in stock for the $6.5 billion-asset parent of East Boston Savings Bank. The deal, which is expected to close in the fourth quarter, priced Meridian at 150% of its tangible book value.

“This merger is consistent with our strategy of acquiring banks in overlapping and adjacent markets who share our relationship-focused style of banking,” Christopher Oddleifson, Independent’s president and CEO, said in the release.

“In addition to the market leading commercial lending capabilities, this acquisition will further enhance our core deposit franchise value and allow for the expansion of [our] broad financial product set to an expanded business and consumer customer base,” Oddleifson added.

East Boston Savings has 42 branches, three loan centers, $5.3 billion of loans and $5.1 billion of deposits.

The deal is the latest in a series of acquisitions involving Boston-area banks.

SVB Financial Group in Santa Clara, Calif., agreed in January to buy Boston Private Financial Holdings, and Eastern Bankshares plans to buy Century Bancorp. People’s United Financial, which has significant operations in Boston, agreed in February to sell to M&T Bank.

The Independent-Meridian deal is expected to be 7.9% accretive to Independent’s tangible book value and 23% accretive to its 2022 earning per share, taking into account planned cost savings.

Independent plans to cut 45% of Meridian’s annual noninterest expenses, or roughly $45 million. The company said it expects to incur $64 million of merger-related expenses.

Richard Gavegnano, Meridian’s president and CEO, will serve as a business consultant to Independent for three years after the deal closes.

Keefe, Bruyette & Woods and Wachtell, Lipton, Rosen & Katz advised Independent. Raymond James and Luse Gorman advised Meridian.

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