In a move that Envision Bank’s President and CEO William Parent said would provide the resources to compete with larger institutions, the bank’s parent company has agreed to sell itself to Easthampton-based Hometown Financial Group Inc.
The banks said in a joint statement on Monday that Hometown, a multi-bank holding company, would acquire Randolph Bancorp Inc., Envision Bank’s parent company, in a cash deal valued at approximately $146.5 million.
The deal will see Envision Bank merge into Abington Bank, one of Hometown’s three banks. Hometown will decide later the name of the combined bank, according to Envision Bank’s website.
The transaction, which has been approved by the board of directors at both banks, is expected to close in the fourth quarter. In addition to regulatory approval, the deal will need approval from Randolph Bancorp’s shareholders and Hometown’s corporators.
Randolph shareholders will receive $27 in cash for each share of Randolph common stock. In a separate statement yesterday, Parent said the price was “highly attractive,” a 29.4 percent increase over the stock’s March 25 closing price of $20.86.
Parent in his statement called the announcement “bittersweet,” noting the bank’s level of success while acknowledging the challenges with being profitable in the competitive marketplace.
“Larger, more diversified competitors with a lower cost of funds and greater scale are able to support necessary investments in future products demanded by the marketplace,” Parent said. “In this challenging growth environment, we would be unable to produce the financial returns expected from our investors and invest in new initiatives that allow us to remain relevant in the marketplace.”
Envision Bank, previously known as Randolph Savings Bank, had converted from a mutual to a publicly traded stock bank in 2016. The bank experienced losses in 2017 and 2018 before seeing positive earnings the past three years. Despite the positive net income in 2021, Envision Bank’s earnings had declined as mortgage demand dropped off.
Parent, who joined Envision Bank two years ago, was previously head of Blue Hills Bank when it was acquired by Rockland Trust in 2019.
Envision Bank has about $803 million in assets, giving Abington Bank about $1.4 billion in assets once the merger is complete. The combined bank will have 11 branches in Abington, Avon, Braintree, Cohasset, Holbrook, Marion, Randolph and Stoughton and mortgage lending centers in North Attleborough and Quincy.
Hometown, which is also the mutual holding company for Easthampton-based bankESB and Oxford-based bankHometown, said it will have consolidated assets of approximately $4.4 billion following the acquisition and a branch network of 38 full-service offices in Massachusetts and Northeastern Connecticut.
Hometown in recent years has acquired Connecticut-based Citizens National Bancorp Inc., Pilgrim Bank, Abington Bank and Millbury Savings Bank.
“Our holding company structure brings the best of both worlds to our customers, employees, and communities,” Matthew S. Sosik, CEO of Hometown Financial Group, said in the statement announcing the merger. “Each bank has deep roots in the neighborhoods they call home, so each can operate independently to harness its own local branding power while taking advantage of our extensive shared resources that take advantage of size, scale, and efficiency.”
Sosik added that Hometown would continue to look for opportunities for acquisitions and partnerships with other financial institutions.
This is the second bank Greater Boston bank merger announced in 2022. East Cambridge Savings Bank announced last month that it had agreed to acquire Woburn-based Patriot Community Bank.
