Brookline Bank is bucking the trend among the state’s large stock banks by not seeking out a merger or an acquisition this year. Instead, the bank’s leadership hopes to profit from the disruption.

With three bank mergers now complete – and another acquisition in the region still to come – Greater Boston’s banks have found themselves operating in an altered landscape.

“I’ve never seen anything like it in my banking career, where basically four players in the market have vanished overnight,” said Darryl Fess, president of Brookline Bank.

Even as mergers give the market larger institutions, this new landscape has seen institutions like Brookline Bank take advantage of the changes in a market one analyst said already has growth potential for banks.

“As we look at metro Boston, the market is booming,” said Mark Fitzgibbon, a managing director and research analyst at Piper Sandler. “Right now is like the salad days for community banks, because you have a growing market and you have a lot of dislocation occurring in the market, both in terms of customers and in terms of employees coming out of bigger banks going through these mergers.”

High-Touch Service Touted

When Eastern Bank closed on its acquisition of Medford-based Century Bank and Rockland Trust closed on its own purchase of East Boston Savings Bank earlier this month, both institutions grew to have more than $20 billion in assets. Another deal in July saw Boston Private merge into the parent company of Silicon Valley Bank to become Boston Private – An SVB Company.

And in a deal still awaiting federal regulatory approval, People’s United Bank plans to sell itself to Buffalo-based M&T Bank. A new entry in the Massachusetts market, M&T will have more than $200 billion in assets once its purchase of the Connecticut-based lender is done.

Some customers have already left these banks. Fess said he receives a report each week that shows new customers joining Brookline Bank from one of the merging institutions. While Eastern and Rockland will still service their customers, Fess said, the changes that come with being a larger institution could make it difficult to provide the same kind of high-touch service that customers had experienced previously.

“The customers that were with those other banks were the same clients that we want to have, because they were there for a reason,” Fess said. “They chose to be at a smaller institution because they like it and they like the high touch; they like to know that they can talk to people at the highest levels – I’m always available to meet with customers.”

With about $5.4 billion in assets and 30 Greater Boston branches, Brookline Bank is one of two New England banks held by its publicly traded parent company, Brookline Bancorp. Including the other bank, Bank Rhode Island, Brookline Bancorp has about $8.3 billion in assets.

Positioned to Serve Unique Needs

Piper Sandler has an optimistic outlook for Brookline Bancorp, Fitzgibbon said, noting that across the country, smaller banks that focus on a niche market have been doing well, driving profitability.

While large banks have dominated the consumer market, Fitzgibbon added, smaller banks have gained advantages by focusing on close relationships with business customers – something Fess said Brookline Bank specializes in.

“[Businesses] all have their own unique needs and circumstances, and it takes a lot of hand-holding,” Fitzgibbon said. “Community banks are really well positioned to do that because they know these customers well and they’re in the communities and they work with them for long periods of time.”

While some smaller banks have struggled with the technology and resources needed to stay relevant, Fitzgibbon said Brookline Bank’s parent company has enough size and an extensive branch network to offer a variety of commercial products while remaining nimble with customers.

Pointing out that Brookline Bank competes against smaller banks too, Fess said its size gives it an advantage in attracting staff and resources for technology. The bank has recently been rolling out foreign exchange services for businesses, Fess said, an option smaller banks might not be able to provide.

While Brookline Bank plans to focus on organic growth, the bank has been somewhat constrained by the same hiring challenges facing employers in other industries. He expects some employees from merging institutions to want to make moves in the coming months.

“We’d love to see how things shake out with some of our banking colleagues who may have a new employer,” Fess said. “Maybe they’ll not want to stay there, and maybe they want to look somewhere else.”

Fess also wants staff who can help Brookline Bank reach more customers in minority communities. The bank is focusing on diversity, equity and inclusion initiatives, he said, including hiring from communities where the bank wants to make connections and expand its customer base.

Future Could Include Acquisition

While focusing on organic growth, Brookline Bancorp has not ruled out its own future acquisition.

Diane McLaughlin

“We can keep our ear to the ground; we talk to people,” Brookline Bancorp Chairman and CEO Paul Perrault said in the company’s third quarter earnings call. “We will pursue objectively any reasonable M&A opportunity.”

Fess said he recently spoke with other executives at a conference about the ideal size for a bank to remain independent. While they did not reach a conclusion, some saw the $8 billion to $12 billion range as giving a bank the necessary size to sustain independence.

Fess said independence is also something that needs to be earned

“Our stock has to stay at a price where we’re not a target,” Fess said. “But that’s what we work hard at to make sure that we remain profitable, and that our customers understand that. I say to our employees often, we’re worth something – so we may not be the cheapest bank in town, we’re not the biggest bank in town, but we want to be the best for our customers.”