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Hometown Financial Group has been absorbing banks across Central and Eastern Massachusetts like it’s going out of style. And Tuesday afternoon it announced a new one is joining the mutual holding company.
North Shore Bank, part of Hometown Financial, will buy Quincy-based Colonial Federal Savings Bank in a $44 million deal, Hometown announced.
Colonial Federal partially converted to a stock bank in 2022, and shareholders will get $14.25 in cash for each share of CFSB common stock according to Hometown’s announcement.
If approved by regulators, the deal will close in the fourth quarter of this year. It will leave North Shore Bank with $3.3 billion in assets and 29 branches across the North Shore, South Shore and southern New Hampshire.
“Growing our local markets and providing top-notch customer service are key priorities for us, and this merger of Colonial Federal into North Shore Bank allows us to continue doing just that,” North Shore Bank Executive Chairman Kevin M. Tierney Sr. said in a statement. “It also allows us to partner with a premier bank on the South Shore and to unlock potential for more customers in the region.”
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But perhaps just as importantly, it will give Hometown Financial Group 56 branches, $6.9 billion in assets and $5.31 billion in deposits.
If it was a unitary bank it would be roughly tied with Cambridge Savings Bank for the title of fourth-biggest Massachusetts-based commercial bank by assets, giving it substantial firepower. It would also be in a dead heat with Cambridge Savings and Middlesex Savings Bank for the title of fifth-biggest local bank by deposits.
“We’re thrilled to welcome Colonial Federal’s customers, employees, and communities to the Hometown Financial Group family of banks,” Hometown Financial Chairman and CEO Matthew S. Sosik said in a statement. “This merger will increase our presence in eastern Massachusetts, and we’re eager to share the power and resources of Hometown Financial Group and North Shore Bank with the employees and customers of Colonial Federal.”
Kilpatrick Townsend & Stockton LLP was legal counsel to Hometown Financial Group, Inc. and Luse Gorman, PC was legal counsel for CFSB Bancorp Inc., Colonial Federal’s holding company. Piper Sandler provided strategic consulting.
The merger is Hometown Financial Group’s eighth in the last 10 years. Most recently, North Shore Bank merged its holding company with Hometown Financial while simultaneously acquiring Hometown’s component bank, Abington Bank.
Mutual holding companies’ central pitch to potential merger targets is typically one of back-office cost savings and greater financial firepower while component banks often retain much more independence – and typically, their historical brands – than they would if they instead sold themselves to a larger bank.
“We’re pleased to be joining Hometown Financial Group and North Shore Bank and excited about what’s in store for our employees, customers, and communities on the South Shore,” Colonial Federal President and CEO Michael E. McFarland said in a statement. “This transaction partners two outstanding banking organizations and represents another step for us in ensuring our long-term success. Colonial Federal customers will enjoy enhanced products and services, innovative digital banking tools, and an expanded branch network to help meet their evolving needs.”
The deal is the fifth Massachusetts bank merger in the last six months, a relative flood after a multi-year drought as banks increasingly feel pressured to scale up in the face of competition and see opportunity in the Trump administration’s looser regulatory posture.
