The State Capitol building in Concord, New Hampshire. Three Massachusetts banks bought smaller peers in the state in the last two years in search to gain entry into the market. iStock photo

As Massachusetts residents and companies continue to move north to New Hampshire, the Bay State’s banks are viewing the Granite State as a logical and profitable expansion option.

Cambridge Savings Bank recently was the latest Massachusetts-based bank to the state’s northern neighbor. The $7 billion bank will be acquiring First Seacoast Bank for $80.9 million in cash, subject to regulatory and First Seacoast shareholder approval later this year.

It was the latest of three big local names to make acquisitions in the Granite State in the last two years, along with Rockland Trust and Needham Bank. A fourth bank, Maine-based Camden National Bank, also bought a New Hampshire community bank last year.

“What we saw was an opportunity to for us to move into a new market,” Cambridge Savings Bank CFO Dan Carey said. “Given the migration from Massachusetts, certainly the cost of living is different in New Hampshire, and a lot of people have migrated up there. We felt like there was a real opportunity to capitalize on that.”

Over the last 21 years 145,648 more residents swapped New Hampshire for Massachusetts compared to Granite State residents headed south.

For CSB, the move to New Hampshire is made even more attractive thanks to business relationships it already has in the state, and employees who live there.

Where Are the Deposits?

When looking to scale upwards, a Massachusetts bank faces diverging roads. It can continue to increase its presence here, or look to other options nearby. That decision is driven by density of deposits, said Hometown Financial Group CEO Mike Wheeler.

The Easthampton-based mutual holding company has been highly active in the merger and acquisition market in the last five years as it merged with other mutual banks’ holding companies or bought smaller banks. Its most recent such deal: subsidiary TruNorth Bank’s $44 million acquisition of Colonial Federal Savings Bank towards the end of 2025.

“It’s all about deposit play for banks,” he said. “Community banks, in particular, I think have a strong hands-on philosophy, and we tend to look in markets that may have less concentration in community banks.”

While there are some community banks and larger names in the New Hampshire market, compared to Massachusetts there are fewer institutions in the state.

According to FDIC data, 42 banks hold deposits in New Hampshire.

In Massachusetts, 120 local, regional and national banks claim various shares of the state’s deposits.

Banks Seeking NH Businesses

Beyond the migration of ordinary consumers across state lines, CSB saw clear opportunities to add business customers, too.

Thanks to New Hampshire’s favorable tax laws, businesses also have been attracted to the state.

“There’s a lot of businesses that are opening up in New Hampshire, certainly for tax reasons,” Carey said. “We have a large commercial team and our relationship managers were very excited. We have over $200 million in loans in New Hampshire on the commercial side already. We felt like there was a big way to expand that.”

According to the office of New Hampshire Gov. Kelly Ayotte, the Granite State gained six Massachusetts companies and 500 jobs last year. This included the relocation of Analogic, which moved from Peabody to Salem, New Hampshire.

Anecdotally, CEOs in Wheeler’s orbit cite Massachusetts taxes as aiding decisions to move up north.

“You tend to have maybe a wealthier small business population, businesses either moving from Massachusetts into New Hampshire for tax purposes or to avoid the Millionaires Tax,” he said. “We’re definitely seeing companies do that, and I think banks are following them into southern New Hampshire.”

The makeup of New Hampshire’s business community is diverse, said Rockland Trust Regional Commercial Director Peter Rayno. This includes manufacturing, hospitality and homebuilding, all strong commercial customer types for banks.

“All of that really needs a great bank and community banking to be able to service those needs, he said. “It’s a diverse and growing market. I don’t think it’s really consolidated in one industry, and there’s a lot of ancillary needs that come out of that as well.”

Rayno, formerly with Lowell-based Enterprise Bank & Trust since 2004, joined Rockland when it bought his bank last year in a $562 million cash and stock deal that gave it eight branches in the Nashua, Salem and Manchester areas, plus $1.02 billion in New Hampshire deposits.

Factors that Grease the Slipways

Another factor underlying the recent parade of moves: Smaller banks think they have an edge on regional and national competitors already established in New Hampshire.

The New Hampshire deposit market is dominated by TD Bank, Citizens Bank and Bank of America, which hold a collective 52 percent of the state’s deposits, FDIC data shows. The Bank of New Hampshire is the top local bank, in fourth place with 4.64 percent of the state’s $48.71 billion in deposits.

“Community banks in general, we have the flexibility and fluidity in operations to be able to change circumstances much quicker than the larger organizations do,” Wheeler said. “That gives us a leg up over the Chases and the Banks of America, to be much more flexible in entering those marketplaces, and we may be able to adjust our credit criteria to meet that marketplace.”

Carey, of Cambridge Savings Bank, noted that the likes of Chase and PNC can be right next to a small bank such as First Seacoast, helping them be top of mind at the right time.

Relationship-banking is valued by New Hampshire customers, Rayno said.

“I think when we came to New Hampshire, we saw a very vibrant and growing market for banks,” Rayno said. “One that especially appreciated relationships with your banker.”

It mattered that Rockland Trust was able to retain the majority of lenders and branch managers after it bought Enterprise Bank, he said.

“That means that our businesses that have banked with Enterprise and are now banking with Rockland, the name is new, but the people are the same,” Rayno said. “I think that’s absolutely critical when a bank goes through the type of a merger that Enterprise and Rockland did.”

For his part, Carey doesn’t expect Massachusetts lenders to stop looking outside the state for greener pastures.

“I would say we’re at the middle of that trend, and not the beginning,” Carey said. “There’s no mandate to certainly go to another state or another area, but it just has to be what’s the best fit for your bank at that time.”

Editor’s Note: An earlier version of this story misspelled Peter Rayno’s name.