Cambridge Bancorp will merge into Eastern Bankshares in an all-stock deal worth $528 million, the banks announced Tuesday.
Upon approval, the merger will create a $27.1 billion combined company with a strong foothold in the Boston metro area, where they’re both based.
Cambridge CEO Denis Sheahan will join Eastern as CEO; and Eastern President Quincy Miller will take on the role of vice chair, president and chief operating officer. Sheahan and Miller will report to current Eastern CEO Bob Rivers, who will become executive chair and chair of the board of directors.
Three additional Cambridge directors will be elected to Eastern’s board of directors.
“As we set our sights on the future, the enhanced capabilities and financial strength created by this merger will allow us to further position Eastern as the region’s local financial partner of choice, delivering enhanced value for our customers and shareholders, greater support for our communities, and increased opportunities for our colleagues,” Rivers said in a prepared statement.
Cambridge had $5.5 billion in total assets, $4 billion in total loans, $4.4 billion in deposits and $4.4 billion in client assets under management and administration as of June 30. On top of the $27.1 billion in total assets the combined company is expected to have, it will also have $18.0 billion of total loans, $22.6 billion of deposits and $7.6 billion of AUMA when the deal is expected to be completed in the first quarter of 2024.
Following the close, which is subject to both regulatory and shareholder approval, the combined wealth management and private banking divisions will operate under the Cambridge Trust moniker.
Eastern is also offloading its wholly owned subsidiary Eastern Insurance Group to global insurance broker Arthur J. Gallagher & Co., based in Illinois, for $510 million, freeing up capital to then be redeployed in Eastern’s core banking business.
“Gallagher is a proven insurance leader, and I have full confidence that they will continue the strong level of service our insurance customers have come to expect,” Rivers said in a prepared statement. “We look forward to continuing our relationship with Gallagher as our insurance brokerage partner.”
After taxes, the net gain on the sale of Eastern Insurance is expected to be about $260 million.
The sale of Eastern Insurance is expected to close in the fourth quarter. Firm leadership and employees are expected to join Gallagher with the deal, Eastern said.
