Eastern in Boston to buy neighboring HarborOne Bancorp
Eastern Bankshares in Boston has agreed to buy HarborOne Bancorp in Brockton, Mass.
The $25 billion-asset Eastern said in a press release that it will pay $490 million in cash and stock for the $5.7 billion-asset HarborOne. The deal, which is expected to close in the fourth quarter, priced HarborOne at 100% of its tangible book value.
HarborOne has 30 branches, $4.8 billion of loans and $4.6 billion of deposits in Massachusetts and Rhode Island. It also owns HarborOne Mortgage.
“We are excited about this partnership, which bolsters our already strong and long-standing presence in Greater Boston and expands our footprint into Rhode Island,” Bob Rivers, Eastern’s chairman and CEO, said in the release. “HarborOne is a highly recognized institution in our local market, and we share a deep commitment to customers, colleagues and communities.”
Joseph Casey, HarborOne’s president and CEO, and one other director will join Eastern’s board.
The deal is expected to be 16% accretive to Eastern’s 2026 earnings per share. It should take less than three years to earn back an estimated 7% dilution to Eastern’s tangible book value.
Eastern plans to cut about 40% of HarborOne’s annual noninterest expense, or $55 million, while incurring $65 million of merger-related expenses.
Eastern plans to sell HarborOne’s securities and pay down FHLB borrowings. About 5% of non-brokered deposits are expected to run off. About $6 million of annual interchange fees are expected to be lost due to the Durbin Amendment.
J.P. Morgan Securities and Nutter McClennen & Fish advised Eastern. Raymond James & Associates and Goodwin Procter advised HarborOne.