Meridian Interstate Bancorp Inc., the holding company for East Boston Savings Bank, and Mt. Washington Cooperative Bank, have signed a definitive merger agreement.  

Mt. Washington Cooperative operates seven offices in Suffolk County. On March 31, the bank had assets of $516 million, deposits of $372 million and retained earnings of $32 million.

Under the terms of the merger agreement, Mt. Washington will merge with and into East Boston Savings Bank, with East Boston Savings Bank surviving the merger.

Depositors of Mt. Washington will become depositors of East Boston Savings Bank.

The merger agreement and the related merger transactions are subject to the approval of Mt. Washington’s depositors, regulatory approvals and other customary closing conditions, Meridian Interstate said in a statement.

As part of the transaction, Meridian Interstate will issue additional shares of its common stock to Meridian Financial Services Inc., in an amount based on the average of two independent valuations of the fair value of Mt. Washington.  These shares are expected to be issued immediately prior to completion of the merger.

In addition, Meridian Interstate said it will contribute capital to East Boston Savings Bank following the merger if necessary for East Boston Savings Bank to remain well-capitalized under applicable regulatory capital standards.

Each Mt. Washington branch office will become a branch office of East Boston Savings Bank, and are expected to operate under the name "Mt. Washington Bank, A Division of East Boston Savings Bank."  The parties do not expect to close or consolidate any branch offices in connection with the transaction, the bank said.

Edward J. Merritt, president and chief executive officer of Mt. Washington, will continue as president of the Mt. Washington division, following the transaction.

In connection with this transaction, Sterne Agee & Leach Inc. acted as financial advisor to Meridian Interstate. Luse Gorman Pomerenk & Schick PC represented Meridian Interstate as legal counsel, while Foley Hoag LLP represented Mt. Washington.