Originally posted in Boston Business Journal
In one of the largest proposed mergers in Boston banking in years, Rockland Trust’s parent company has agreed to acquire the parent of Blue Hills Bank in a deal valued at $727 million.
The combination would boost Rockland Trust (Nasdaq: INDB) to more than $11 billion in assets, putting it alongside Eastern Bank and Berkshire Bank (Nasdaq: BHLB) as the largest banks headquartered in Massachusetts. Santander Bank is based in Boston, but its parent company is in Spain.
Blue Hills (Nasdaq: BHBK) became legally eligible for a sale a little over a year ago, when it hit the three-year mark as a publicly traded company. Bankers and analysts had speculated that a large out-of-town institution might swoop in to buy the $2.7 billion bank, but on Thursday Rockland Trust announced it had reached a deal.
“Blue Hills is a really high-quality bank,” Rockland Trust CEO Christopher Oddleifson
said. “They have a nice, diversified balance sheet. They have a really nice core deposit franchise in some of the markets we’ve been really interested in.”
Largest local bank deal since 2011
Rockland Trust has been one of the state’s most acquisitive banks over the past decade, but Blue Hills is the largest bank it will have ever purchased. A deal to acquire The Milford National Bank & Trust Co., a bank with about $366 million in assets, was announced less than four months ago
and is still pending.
Blue Hills is the largest Massachusetts-based bank to be acquired since Connecticut-based People’s United purchased Danversbank in 2011.
Several of Rockland Trust’s recent acquisitions have expanded its geographic footprint into new areas. Blue Hills has 11 branches, most of them in Boston or just south of the city — areas in which, broadly speaking, Rockland Trust is well-established already. But the deal would fill in pockets of that geography where Rockland Trust is not, like Hyde Park, Dedham and Milton, Oddleifson said.
First presence in Seaport District
Rockland Trust and Blue Hills have branches near one another in West Roxbury and Norwood. While nothing’s official yet, the bank will evaluate closing a branch in each of those places, Oddleifson said. He admits that some layoffs are a possibility, but expressed hope that with Blue Hills employing 245 people and Rockland Trust hiring nearly that many a year, Blue Hills employees whose jobs will be eliminated can land somewhere at Rockland Trust.
The deal would give Rockland Trust its first presence in Boston’s Seaport District. Blue Hills opened a branch there in 2016, and it’s collected over $76 million in deposits in the two years since. The Seaport is also home to the Blue Hills Bank Pavilion, the 5,000-seat outdoor amphitheater whose naming rights Blue Hills secured in 2014. Its contract runs through 2020.
“I’d certainly like to have a conversation about changing the name” of the pavilion after the acquisition closes, Oddleifson said. “Whether we continue after that, that’s something we’d have to evaluate.”
The acquisition would also give Rockland Trust even more of a presence on the Cape and Islands, a focus of its growth in recent years. Blue Hills has three branches on Nantucket from its 2014 acquisition of Nantucket Bank. Rockland Trust is one of the largest banks operating on Cape Cod and Martha’s Vineyard, and it is now poised to enter Nantucket for the first time.
As part of the deal, Rockland Trust’s parent has agreed to add three directors from Blue Hills to its board. Blue Hills CEO Bill Parent
will not have an executive role at Rockland Trust, but he will be considered for one of the board spots, according to Oddleifson.
The transaction would cap off a period of rapid change at Blue Hills. When Parent took over as CEO in 2010, the institution was known as Hyde Park Savings Bank and had less than $1 billion in assets. Parent changed the name, pursued an initial public offering, and transformed it from a bank that relied heavily on securities holdings and residential mortgages to a much more diversified institution with sizable commercial banking operations.
The deal is expected to close in the first half of 2019. It still must receive the approval of regulators and the shareholders of each banking company.