Massachusetts-based Newburyport Five Cents Bancorp MHC, the holding company of Newburyport Five Cents Savings Bank, and Pentucket Bank Holdings MHC, the holding company of Pentucket Bank, on Dec. 16 agreed to merge to become a single mutual holding company.
The combined mutual holding company will have two independent community banks with over $2.5 billion in assets, according to a Dec. 16 release.
The two banks will operate under one holding company while maintaining their respective names, brands, headquarters, retail and lending organizations, management, charitable foundations, and boards.
Lloyd Hamm, president/CEO of Newburyport Bank, has been named CEO of the newly formed holding company.
Jonathan Dowst, president/CEO of Pentucket Bank, will serve as president of the combined entity and succeed Hamm at his retirement.
Corporators will serve as corporators of the combined company. Additionally, a board of advisers will be established for each bank that corporators serve currently.
To ensure the independence of the two banks, each bank will be instituting charter provisions to ensure that they each remain a mutual savings bank in the future. There will be no layoffs or branch closures due to the merger.
On completion, the combined company will operate 10 branches in Essex County, Mass., to be ranked eighth with a 4.72% share of approximately $33.51 billion in total market deposits, will operate six branches in Rockingham County, N.H., to be ranked ninth with a 3.35% share of approximately $11.74 billion in total market deposits and will operate one branch in Strafford County, N.H., to be ranked tenth with a 1.28% share of approximately $2.47 billion in total market deposits.
S&P Global Market Intelligence valuations for bank and thrift targets in the Northeast region between Dec. 16, 2021, and Dec. 16, 2022, averaged 142.18% of book and 149.17% of tangible book and had a median of 15.44x last-12-months earnings, on an aggregate basis.
There is potential for other local banks to join the mutual holding company in the future.
Newburyport Five Cents Bancorp, MHC retained Loomis & Co. to provide financial advice for the transaction and K&L Gates LLP to provide legal advice. Pentucket Bank Holdings, MHC retained Luse Gorman, PC to provide legal advice.
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