Key Highlights:
- Merger creates $22 billion combined franchise and solidifies
Eastern’s leading position in Boston and Eastern
Massachusetts
- Financially compelling transaction with 55% EPS accretion on
a fully synergized basis
- Eastern announces 33% increase to quarterly
dividend
Eastern Bankshares, Inc.
(“Eastern”) (Nasdaq Global Select Market: EBC), the stock holding
company for Eastern Bank, and Century Bancorp, Inc. (Nasdaq: CNBKA)
(“Century”), the stock holding company for Century Bank and Trust
Company (“Century Bank”), today jointly announced they have entered
into a definitive all-cash merger agreement with an aggregate
transaction value of $642 million. This in-market transaction comes
less than six months after Eastern’s initial public offering that
raised approximately $1.7 billion in equity capital.
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Under terms of the merger agreement, which has been unanimously
approved by both boards of directors, Century shareholders will
receive $115.28 in cash for each share of Century Bancorp, Inc.’s
common stock. The acquisition is expected to close in the fourth
quarter of 2021, subject to certain conditions, including the
receipt of required regulatory approvals, shareholder approval, and
other standard conditions. Century’s directors and executive
officers and certain of their affiliates have agreed to vote in
favor of the merger. Upon closing, Eastern intends to merge Century
into Eastern with Eastern continuing as the surviving entity and
concurrently merge Century Bank into Eastern Bank and convert
Century customers to the Eastern platform with Century Bank
branches assuming the Eastern Bank name.
“We’ve admired Century’s success since its founding by Marshall
Sloane in 1969 and today they are New England’s largest family-run
bank. Under the leadership of Barry R. Sloane and Linda Sloane Kay,
the Century Bank brand has continued to rise in prominence and it
was a proud moment for us when they communicated they wanted to
partner with Eastern,” said Bob Rivers, Chief Executive Officer and
Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank.
“We are excited for the opportunities this agreement creates and
believe our combination will deepen our reach in providing banking
services and other support to communities across Greater Boston and
southern New Hampshire.”
“Our complementary business models and shared values make this
partnership a natural fit,” said Barry R. Sloane, Chairman,
President & CEO of Century Bank. “Both organizations are highly
respected as leaders in the community, and we believe Eastern’s
focus on innovation and technology will help to further ensure
Century customers have greater access to banking products and
services that meet their needs where and when they need them.”
The $642 million purchase price represents 1.75 times Century’s
tangible book value* as of December 31, 2020. Eastern expects the
transaction to be approximately 55% accretive to earnings on a
fully synergized basis and to have an IRR of approximately 17%.
Eastern will fund the purchase price with cash on hand from its
balance sheet.
Eastern also announced a 33% increase to its quarterly dividend
to $0.08 per share as part of its overall capital management
strategy.
Bob Rivers commented, “Our pro forma capital levels remain
robust post-merger and we remain ready to continue to strategically
deploy our capital and deliver shareholder value. The increase in
our dividend, which was initiated just last quarter, is further
evidence of that commitment.”
Eastern has approximately $16 billion in assets, the largest
deposit market share in both the Boston MSA and Massachusetts of
any bank headquartered in Massachusetts, and owns the third largest
insurance agency in Massachusetts. Century Bank, with $6.4 billion
in assets, is the third largest Massachusetts headquartered bank in
the Boston MSA.
J.P. Morgan Securities LLC served as financial advisor and
Nutter McClennen & Fish LLP provided legal counsel to Eastern.
Piper Sandler & Co. served as financial advisor and Goodwin
Procter LLP provided legal counsel to Century.
Dividend Announcement
Eastern’s Board of Directors declared a quarterly cash dividend
of $0.08 per common share, payable on June 15, 2021, to
shareholders of record as of the close of business on June 3, 2021.
Eastern expects to continue paying quarterly dividends, the
declaration, timing and amounts of which remain subject to the
discretion of Eastern’s Board of Directors.
Conference Call and Investor Presentation
Information
Robert Rivers, CEO and Chair of the Board, and James Fitzgerald,
Chief Administrative Officer, Chief Financial Officer and
Treasurer, will hold a conference call for investors on April 8,
2021 at 10:00 a.m. Eastern Time to discuss the transaction. An
investor presentation with an overview of the proposed transaction
will be available on Eastern’s Investor Relations website at
investor.easternbank.com. Dial-in numbers: U.S. (833) 670-0716;
International (236) 714-2932. Participants should reference
conference ID: 2198784 and join 10 minutes before the scheduled
start of the call.
The conference call will be simultaneously webcast. Participants
may join the webcast on Eastern’s Investor Relations website at
investor.easternbank.com. A replay of the webcast will be made
available on demand on this site.
About Eastern Bankshares, Inc. and Eastern
Bank
Eastern Bankshares, Inc. is the stock holding company for
Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more
than 110 locations serving communities in eastern Massachusetts,
southern and coastal New Hampshire, and Rhode Island. As of
December 31, 2020, Eastern Bank had approximately $16 billion in
total assets. Eastern provides banking, investment and insurance
products and services for consumers and businesses of all sizes,
including through its Eastern Wealth Management division and its
Eastern Insurance Group LLC subsidiary. Eastern takes pride in its
outspoken advocacy and community support that includes $240 million
in charitable giving since 1994. An inclusive company, Eastern
employs approximately 1,900 deeply committed professionals who
value relationships with their customers, colleagues, and
communities. For investor information, visit
investor.easternbank.com.
About Century Bancorp, Inc. and Century
Bank and Trust Company
Century Bancorp, Inc. (Nasdaq: CNBKA) is the stock holding
company for Century Bank and Trust. Century Bank and Trust Company
is a $6.4 billion state-chartered full service commercial bank,
operating twenty-seven branches in the Greater Boston area, with a
full range of business, personal and institutional services.
Century Bank and Trust Company’s corporate headquarters is located
at 400 Mystic Avenue in Medford, MA. Branches are located in
Allston, Andover, Beverly, Boston, Braintree, Brookline,
Burlington, Cambridge, Everett, Lynn, Malden, Medford, Newton,
Peabody, Quincy, Salem, Somerville, Wellesley, Winchester and
Woburn. For more information, visit CenturyBank.com.
Non-GAAP Financial Measures
* Denotes a Non-GAAP Financial Measure.
Each company presents tangible book value, a non-GAAP financial
measure, which excludes the impact of goodwill and other intangible
assets, as their respective management believes this financial
measure provides investors with the ability to further assess the
applicable company’s performance, identify trends in its core
business and provide a comparison of its capital adequacy to other
companies. For a reconciliation of Century’s tangible book value to
its total stockholders’ equity, please see the table at the end of
this press release.
This non-GAAP financial measure should not be considered an
alternative or substitute for financial results or measures
determined in accordance with GAAP. An item which a company’s
management considers to be non-core and excludes when computing
this non-GAAP financial measure can be of substantial importance to
such company’s results for any particular period. In addition, a
company’s management’s methodology for calculating a non-GAAP
financial measure may differ from the methodologies employed by
other banking companies to calculate the same or similar
performance measures, and accordingly, a company’s reported
non-GAAP financial measure may not be comparable to the same or
similar performance measures reported by other banking
companies.
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements include statements regarding anticipated
future events and can be identified by the fact that they do not
relate strictly to historical or current facts. They often include
words such as “believe,” “expect,” “anticipate,” “estimate,” and
“intend” or future or conditional verbs such as “will,” “would,”
“should,” “could,” or “may.” Forward-looking statements, by their
nature, are subject to risks and uncertainties. Factors relating to
the proposed merger that could cause or contribute to actual
results differing materially from expected results include, but are
not limited to, the possibility that revenue or expense synergies
or the other expected benefits of the transaction may not
materialize for Eastern in the timeframe expected or at all, or may
be more costly to achieve; that the transaction may not be timely
completed, if at all; that prior to the completion of the
transaction or thereafter, Eastern’s or Century’s businesses may
not perform as expected due to transaction-related uncertainty or
other factors; that Eastern is unable to successfully implement
integration strategies; that required regulatory, shareholder or
other approvals are not obtained or other closing conditions are
not satisfied in a timely manner or at all; that the timing of
completion of the proposed merger is dependent on various factors
that cannot be predicted with precision at this point; reputational
risks and the reaction of the companies’ customers to the
transaction; the inability to implement onboarding plans and other
consequences associated with mergers; and diversion of management
time on merger-related issues.
These forward-looking statements are also subject to the risks
and uncertainties applicable to our businesses generally that are
disclosed in Eastern’s and Century’s 2020 Annual Reports on Form
10-K. Eastern’s and Century’s SEC filings are accessible on the
SEC's website at www.sec.gov and on their respective corporate
websites at investor.easternbank.com and investors.centurybank.com.
These web addresses are included as inactive textual references
only. Information on these websites is not part of this document.
For any forward-looking statements made in this press release,
Eastern and Century claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Except as required by law, each
company specifically disclaims any obligation to update any
forward-looking statements as a result of developments occurring
after the date of this press release, even if its estimates change,
and you should not rely on those statements as representing either
company’s views as of any date subsequent to the date hereof.
Annualized, projected and estimated numbers are used for
illustrative purpose only, are not forecasts and may not reflect
actual results.
Additional Information and Where to Find
It
This press release is not a solicitation of any vote or approval
of Century shareholders and is not a substitute for the proxy
statement or any other documents which Century may send to its
shareholders in connection with the proposed merger. In connection
with the proposed merger, Century will send to its holders of Class
A Common Stock and holders of Class B Common Stock a proxy
statement, as well as other relevant documents concerning the
merger. BEFORE MAKING ANY VOTING DECISION, CENTURY SHAREHOLDERS ARE
URGED TO CAREFULLY READ THE ENTIRE MERGER PROXY STATEMENT REGARDING
THE PROPOSED MERGER WHEN IT BECOMES AVAILABLE, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Century
shareholders may obtain a free copy of the merger proxy statement
(when available) at Century’s website at centurybank.com or by
directing a request to Century Bancorp, Inc., 400 Mystic Avenue,
Medford, MA 02155, attention: Secretary.
Participants in Solicitation
Eastern and Century and their respective directors, executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies of Century
shareholders in connection with the proposed transaction. You can
find information about Eastern and Century’s respective executive
officers and directors in the materials filed by Eastern and
Century, respectively, with the Securities and Exchange Commission.
Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction and a description of their direct and indirect
interests, by security holdings or otherwise, may be obtained, with
respect to Eastern, by reading Eastern’s April 1, 2021 proxy
statement for its 2021 annual meeting of shareholders filed by
Eastern with the Securities and Exchange Commission on April 1,
2021 and other relevant documents regarding the proposed merger to
be filed with the Securities and Exchange Commission, and, with
respect to Century, by reading the Annual Report on Form 10-K filed
by Century with the Securities and Exchange Commission on March 10,
2021 and other relevant documents regarding the proposed merger to
be filed with the Securities and Exchange Commission.
Century Bancorp, Inc. and
Subsidiaries
(unaudited, dollars in thousands)
Reconciliation of Non-GAAP Financial
Measure:
Tangible book value:
December 31, 2020
Total stockholders’ equity (GAAP)
$370,409
Less: goodwill
2,714
Tangible book value (non-GAAP)
$367,695
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Eastern Bankshares, Inc. and Eastern Bank:
Investor contact: Jill Belliveau
Eastern Bankshares, Inc. InvestorRelations@easternbank.com
781-598-7920
Media contact: Andrea Goodman
Eastern Bank a.goodman@easternbank.com 781-598-7847
Century Bancorp, Inc. and Century Bank:
Investor and Media Contact: Barry
R. Sloane, Chairman, President & CEO BSloane@CenturyBank.com
781-393-4150
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