Now, even after Century was subsumed into Eastern this fall, Rivers would still have two-thirds of that pot to roll out, making him more of a player to watch in the Boston trading scene.
It really confirms why we went public and increased the capital, to build a scale, Rivers said in an interview. There was no way we could do this deal as a mutual.
Rivers said he planned to do more banking acquisitions, with the next target likely to be in eastern Massachusetts or southern New Hampshire, or neighboring areas, such as the Worcester area.
Eastern will still not be the size of FleetBoston Financial, the Boston banking giant created by the merger of several large regional banks in the 1990s, which was ultimately sold to Bank of America in 2004 for $ 47 billion.
But Eastern will be much larger than any other local retail bank in the state. And with $ 22 billion in assets, it would be New England’s third-largest independent bank, after Citizens and Webster. (Another big independent, Peoples United, is in the process of being acquired by M&T Bank of Buffalo.)
Boston has always been a banking center, but has lost weight with the sale of fleets. While several key Boston executives remain at Bank of America, including Managing Director Brian Moynihan and Vice President Anne Finucane, the center of gravity of the huge national bank is far from here.
For much of the past decade, two Connecticut players, Peoples United, Bridgeport, and Webster in Waterbury, were New England’s biggest independents. Then, Citizens Financial separated from the Royal Bank of Scotland, creating a large independent bank in Providence. Meanwhile, Spanish giant Santander has made Boston its beachhead in the United States.
While Rivers won’t speak about how the Century deal came about, the leaders of the East and Century know each other well. They compete for the same business clients and support some of the same charities. Rivers had even been a neighbor in Needham of Barry Sloane, who became president of Century after the death of his father, founder Marshall Sloane, in 2019 (Sloane is not expected to stay with Eastern after the deal was struck and disappeared. named Century.)
The closures of some bank branches are inevitable. Almost all of the Centurys 27 branches are within 3 miles of an eastern branch; Together, the two banks have 116. Century, which is based in Medford, employs around 400 people, compared to 1,900 for Eastern, which is headquartered in the Financial District. Eastern expects to cut costs by $ 37 million per year from the consolidation, indicating there could be job losses ahead.
The Century deal made Eastern the biggest financier in the emerging marijuana industry, as the smaller bank embraced a sector that Eastern and most others had diligently avoided. Meanwhile, Century clients will have access to broader wealth management and insurance services under Eastern.
Professional clients will have a more muscular lending partner. For now, the biggest home loans in the East are up to $ 25 million, which is expected to increase as the bank grows. Rivers also argues that Eastern is better equipped to stay on top of expensive technological advancements, especially with mobile banking, as a larger institution.
For their first deal, this deal makes a lot of sense, said Damon DelMonte, analyst at Keefe, Bruyette & Woods investment bank. This will allow customers in the Greater Boston area to access more products and services.
During his four-plus years as Managing Director, Rivers used Eastern to pursue his interest in civic affairs and public service. He has deployed banking resources to support causes such as LGBTQ rights, black-owned businesses, and economic development in gateway cities such as Lawrence and Brockton. His latest project: To launch a business coalition to boost early childhood education in Massachusetts.
As a public bank accountable to shareholders, Eastern cannot donate as much of its annual profits to its charitable arm as before. So, at the time of the IPO, Eastern endowed its foundation with 7.5 million shares, to load it first with money. The Eastern Bank Charitable Foundation now has around $ 280 million, more than double its level a year ago.
There was a time when investors might have discouraged such acts of civic largesse as potentially costly distractions. But Wall Street now often hails good deeds, with investors seeking out companies with strong environmental, social, or corporate governance backgrounds known in industry jargon as ESG investing. .
Our social positions are not agreed by everyone, Rivers said. But in the investment community, there is more and more a receptivity towards it, there is a point of differentiation. There is no reason to stop this. Now we have even more firepower.
But there is another reality of being a publicly traded company: the independence of the East could be compromised, eventually. The bank can be sold to another buyer, according to state rules, three years after the IPO. But Rivers, 56, said he had no plans to go anywhere after this period of detention was over.
Small banks can be personal, problems are easier to solve. But Rivers wants to argue that bigger can be better in banking.
There’s an opportunity for a [major] The Boston bank in this market, Rivers said. We want to be the one who fills it.
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