Banker & Tradesman file photo
Eastern Bank executive said they are highly confident the bank’s merger with Cambridge Trust won’t be delayed much longer.
The bank expects to receive regulatory approval for the deal later this quarter and close the deal in “early July,” CFO Jim Fitzgerald told investment analysts during Eastern’s earnings call Friday morning.
“We wish the process was faster but we certainly respect they are doing what they have to do,” Fitzgerald said in response to an analyst’s question. Regulators have “been very clear that they want to support us, I think, and know our timelines for this and have communicated they believe they will put us in a position to meet them.”
If Fitzgerald’s prediction comes to pass, it means the merger will have been delayed by only one quarter.
During the call, Fitzgerald said the banks expects the merger to be even more beneficial to Eastern Bank than originally estimated when the deal was proposed last year.
Post-merger, the bank expects a net interest margin of over 3 percent, compared to the 2.68 percent Eastern reported for the first quarter of this year, and earnings-per-share and cost savings greater than original estimates. The two banks’ combined wealth management operations are expected to earn around $60 million per year with an efficiency ratio in the “low 50 percent range.”
CEO Bob Rivers said the additional time to plan the integration of Cambridge Trust into Eastern’s operations has made the bank “more convinced that the Cambridge trust franchise is the most valuable in our market.”
The bank reported quarterly net income of $38.6 million, a 2.8 percent increase in core deposits to $17.1 billion and a 3.3 percent increase in loans, to $14.1 billion.
The bank had a single office loan, on a building in Boston’s suburbs, that it classified as non-performing during the quarter, and the bank expects the asset backing the to be sold later this year. In total, Fitzgerald said, the bank had only four non-performing loans.
The bank also announced Fitzgerald plans to retire after 12 years at Eastern Bank once a successor has been found. Rivers credited Fitzgerald with being instrumental in tripling the bank’s assets by dollar volume and being a mentor to the rest of the management team and “strategic partner” for him.
