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In an effort to expand its presence in New England, the parent company of HarborOne Bank in February purchased Portland, Maine- based Cumberland County Mortgage. Now, the Brockton-based bank is at it again.
HarborOne announced yesterday that it would purchase the parent of Warwick, Rhode Island-based Coastway Bank in an all-cash transaction valued at $125.6 million. Coastway stockholders will receive $28.25 per share, which is almost $6 higher than shares were trading before the deal was announced yesterday.
The deal gives HarborOne more than $741 million in assets, as of the end of 2017, and nine branches in the greater Providence area, as well as three mortgage lending offices.
With HarborOne’s $2.65 billion in assets, as of the end of 2017, the new entity will be nearly $3.4 billion in assets, catapulting it to the 12th largest publicly traded bank in Massachusetts, a major mortgage lender in New England and the number one mortgage lender in Rhode Island.
“This is a strategic acquisition for HarborOne, and a great fit with our growth plan. The Rhode Island market is incredibly attractive to us, and Coastway’s established position provides a natural extension of our successful commercial lending business in Rhode Island,” James Blake, president and CEO of HarborOne Bancorp, said in a statement. “This is a unique opportunity for HarborOne to access excellent customer demographics and grow our business.”
About five years ago, HarborOne was a credit union; the organization transitioned to a bank in June 2013. It acquired Merrimack Mortgage Co. Inc. of Manchester, New Hampshire, in April 2015, marking its first major acquisition since its 2013 conversion to a bank charter.
The bank reorganized into a mutual holding company and issued a partial IPO in March of 2016. Earlier this year, the bank acquired Cumberland County Mortgage, but the purchase of Coastway Bank is the first stock bank acquisition HarborOne has done since becoming a bank.
Over the years, HarborOne’s model has changed significantly. Despite acquisitions, its mortgage business has struggled due to declines in mortgage originations, but the company has greatly increased profits thanks to a robust commercial real estate portfolio.
With Coastway, HarborOne gets a bank that is heavy in one- to four-family unit residential mortgages, with more than $413 million in total volume at the end of 2017, according to FDIC data. Coastway also had a very high loan-to-deposit ratio at the end of 2017, but reported profits of $2.65 million on the year.
All Coastway branches as of now will remain open.
The transaction is expected to close in the second half of 2018 and is subject to customary closing conditions, including the approval of the stockholders of Coastway and required regulatory approvals.
