News Summary
Eastern Bankshares, Inc. and HarborOne Bancorp, Inc. have announced a definitive merger agreement worth approximately $490 million. This strategic partnership aims to enhance customer offerings, with shareholders given options for compensation in stock or cash. The merger, expected to close in Q4 2025, will create significant synergies and is projected to increase Eastern’s earnings. Leadership changes are anticipated, and an investor presentation will provide more insight into the merger’s objectives.
Boston, MA – Eastern Bankshares, Inc. and HarborOne Bancorp, Inc. Announce $490 Million Merger Agreement
Eastern Bankshares, Inc., the holding company for Eastern Bank, and HarborOne Bancorp, the holding company for HarborOne Bank, have officially entered into a definitive merger agreement valued at approximately $490 million. Under the terms of the agreement, HarborOne will merge into Eastern in a stock and cash transaction, aimed at enhancing customer offerings and creating significant synergies.
The boards of directors for both institutions have unanimously adopted the merger agreement. As part of the transaction, shareholders of HarborOne will have the flexibility to choose between two options for compensation: either receive 0.765 shares of Eastern common stock for each share of HarborOne common stock (referred to as Stock Consideration), or a cash payment of $12.00 per share (termed Cash Consideration). A procedural allocation will facilitate a balance, ensuring that Stock Consideration represents between 75% to 85% of the total outstanding shares of HarborOne before the merger finalizes.
The transaction is structured to qualify as a tax-free reorganization for federal income tax purposes, allowing greater financial efficiency for stakeholders. Eastern predicts the issuance of approximately 25.2 million shares of its common stock in conjunction with $99 million in cash payments as part of the merger.
Based on Eastern’s stock price of $15.48 as of April 23, 2025, the overall value of the merger is projected to be around $490 million. The merger is expected to close in the fourth quarter of 2025, contingent upon regulatory approvals and necessary shareholder votes from HarborOne. It is important to note that a vote from Eastern’s shareholders is not required for this merger, as all directors and executive officers from HarborOne have pledged their support for the agreement.
Strategic Implications and Leadership Changes
Post-merger, it is anticipated that Joseph Casey, HarborOne’s CEO, along with one additional director from HarborOne, will be elected to Eastern’s Board of Directors. This change reflects the desire for an integrated leadership approach that will align with the strategic vision of the unified entity.
Company Profiles and Market Position
Currently, Eastern Bank boasts $25 billion in assets and holds the largest deposit market share in both the Boston Metropolitan Statistical Area (MSA) and Massachusetts among banks headquartered there. Additionally, Eastern is recognized as the largest bank-owned independent investment advisor in the state, managing approximately $8.4 billion in assets.
On the other hand, HarborOne Bank, which has operated since 1917, manages $5.7 billion in assets and maintains 30 banking centers across Massachusetts and Rhode Island. The bank also oversees HarborOne Mortgage, a subsidiary that provides mortgage services across New England and beyond.
Expected Financial Outcomes
This merger is projected to generate a 16% earnings accretion for Eastern, along with a tangible book value earnback estimated at 2.8 years. The financial implications of this merger signify a positive step towards greater market competitiveness and enhanced service offerings for existing customers.
Advisors and Legal Representation
The financial advisory role for Eastern was fulfilled by J.P. Morgan Securities LLC, while Raymond James & Associates, Inc. acted as the financial advisor for HarborOne. Legal counsel for Eastern is being provided by Nutter McClennen & Fish LLP, whereas Goodwin Procter LLP represents HarborOne in this transaction.
Future Discussions
An investor presentation and conference call regarding the merger are scheduled for April 25, 2025, at 9:00 a.m. Eastern Time. This conference will provide further insights into the merger’s objectives and expected benefits.
As the merger process unfolds, both Eastern Bank and HarborOne Bank are preparing to leverage their combined strengths to enhance banking service quality and market presence.
Deeper Dive: News & Info About This Topic
- NBC Boston
- Business Wire
- Banking Dive
- Wikipedia: Mergers and Acquisitions
- Google Search: Eastern Bank HarborOne merger
