Needham to acquire BankProv for $212M

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Needham Bank's holding company, NB Bancorp, will acquire Massachusetts lender BankProv through a stock-and-cash deal valued at about $212 million, according to a news release Thursday.
Acquiring Amesbury-based BankProv through the merger with its holding company, Provident Bancorp, will give $5.2 billion-asset Needham an additional $1.6 billion in assets, $1.2 billion in deposits and $1.3 billion in gross loans.
BankProv, founded almost two centuries ago, also adds seven branches, giving the combined bank 18 branches across greater Boston and the adjoining area to the west, the North Shore in Massachusetts and southern New Hampshire. It's expected to be the sixth-largest Massachusetts-based bank in the Boston area based on deposit market share, Needham said.
When the transaction closes – expected to occur in the fourth quarter – 133-year-old Needham is set to have about $7.1 billion in assets, $5.9 billion in deposits and $6.1 billion in loans.
With the purchase, Needham expects to issue about 5.9 million shares of its common stock. The deal is valued at $211.8 million based on Needham's closing price from Wednesday of $16.62 per share.
As part of the deal, shareholders of Provident Bancorp, BankProv's holding company, can choose either 0.691 shares of Needham common stock or $13 in cash for each Provident share they own. The choice, though, is subject to allocation procedures ensuring half of Provident's shares of common stock will receive the stock consideration, the bank noted in the release.
'This merger allows Needham Bank to expand into attractive market areas on the Massachusetts North Shore and in Southern New Hampshire where we already have a concentration of business clients,' said Needham CEO Joseph P. Campanelli. 'While we have a strong record of organic growth, this merger allows us to further leverage the capital we raised in late 2023 and continue to grow and expand our existing client base with branches in new markets.'
With the acquisition, Joseph B. Reilly, Provident's CEO, will join Needham's board. Reilly was named co-CEO in December 2022, after former CEO Dave Mansfield's exit. BankProv, a month earlier, disclosed that its lending exposure to the crypto mining industry would result in a quarterly loss of about $28 million. The lender then distanced itself from the sector, no longer issuing loans secured by digital assets or cryptocurrency mining rigs.
Reilly became the bank's sole CEO in February 2024, according to a securities filing.
'Both organizations have a long history of serving our communities with a focus on 'relationships, agility and entrepreneurship' in banking,' Reilly said. 'Combined, we will offer an expanded product line of commercial and consumer products that will provide real value to our market areas. This merger benefits our customers and provides a good return for our stockholders.'
It's the latest in a string of Boston-area bank deals. Two were announced in December: Boston-based Berkshire Bank said it was acquiring Brookline for $1.1 billion, and Rockland, Massachusetts-based Independent Bank said it was acquiring Lowell-based Enterprise in a $562 million deal. And in April, Boston-based Eastern Bank said it will merge with Brockton, Massachusetts-based HarborOne in a $490 million transaction.
In December 2023, Needham raised nearly $410 million through an initial public offering connected to its conversion from mutual holding company to stock holding company.
The transaction dilutes Needham's tangible book value by about 6.1% and is expected to be earned back in less than three years, the release said.
Needham said it plans to continue to exceed regulatory minimums to be considered well-capitalized and maintain 'significant' liquidity after the merger, according to the release.
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