The Bank Slate


Cambridge Bancorp to buy Northmark Bank

Cambridge Bancorp in Massachusetts has agreed to buy Northmark Bank in North Andover, Mass.

The $5 billion-asset Cambridge said in a press release Monday that it will pay $63 million in stock for the $442 million-asset Northmark. The deal, which is expected to close in the fourth quarter, priced Northmark at 118% of its tangible book value. 

The deal is expected to be 5.8% accretive to Cambridge’s 2023 earnings per share, excluding merger-related expenses. It should take about two years for Cambridge to earn back an estimated 1.7% dilution to its tangible book value. 

Cambridge expects to incur $10.7 million of merger-related expenses. The company plans to cut 35% of Northmark’s annual noninterest expenses. 

Northmark has three branches, $314 million of loans and $381 million of deposits. 

Jane Walsh, Northmark’s president and CEO, will join Cambridge’s board. 

“Since Northmark’s founding in 1987, the management team and board have created a franchise that provides exceptional service to its clients in locations where Cambridge currently does not have banking offices,” Denis Sheahan, Cambridge’s chairman, president and CEO, said in the release.

“Northmark’s dedication to providing individuals and businesses with customized attention and tailored financial solutions will greatly complement our broad range of products and services,” Sheahan added.

Cambridge bought the $1 billion-asset Wellesley Bancorp in 2020 and the $556 million-asset Optima Bank & Trust in 2019. 

“We believe financial metrics for this acquisition appear reasonable and expansion in strategically adjacent Merrimack Valley markets should add shareholder value assuming key relationship officers from Northmark … transition to” Cambridge, Jake Civiello, an analyst at Janney Montgomery Scott, wrote in a note to clients.

“Revenue synergies such as larger commercial lending capacity and wealth management should materialize over time,” Civiello added.

Piper Sandler and Hogan Lovells US advised Cambridge. Griffin Financial Group and Goodwin Procter advised Northmark.

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