Dive Brief:

• Boston-based Eastern Bank announced Wednesday it has agreed to pay $642 million to acquire Medford, Massachusetts-based Century Bank in an all-cash deal set to close in the fourth quarter, pending shareholder and regulator approval.
• The transaction would mark Eastern’s first bank acquisition since it went public in October. The bank said last year the IPO, which valued Eastern at just under $1.8 billion, would allow the company to pursue more mergers and acquisitions and boost its investment in technology.
• The deal would create an entity with about $22.4 billion in assets — Eastern would account for about $16 billion; Century, $6.4 billion — that would become the third-largest New England-based retail bank, behind Providence, Rhode Island’s Citizens Bank ($183 billion) and Waterbury, Connecticut-based Webster Bank (about $30 billion), The Boston Globe reported.

Dive Insight:

The acquisition would be the banking industry’s second in the past two months to center on the Boston market. M&T Bank’s pending $7.6 billion acquisition of Bridgeport, Connecticut-based People’s United Bank would give the Buffalo, New York-based regional a coveted entryway to New England’s hub. People’s United, at $63.2 billion in assets, ranks as the second-largest New England-based retail bank until the M&T deal is final.

The Century purchase would add 27 branches — mostly in and around Boston — to Eastern’s 110-branch footprint, the Globe reported. Century customers would be converted to Eastern’s platform and its branches would operate under the Eastern name under the deal.   

"We’ve admired Century’s success since its founding by Marshall Sloane in 1969 and today they are New England’s largest family-run bank," Eastern CEO Bob Rivers said in a press release Wednesday. "The Century Bank brand has continued to rise in prominence and it was a proud moment for us when they communicated they wanted to partner with Eastern."

Sloane’s son and daughter, Barry Sloane and Linda Sloane Kay, have led Century since Marshall Sloane’s 2019 death. The family has veto power over any takeover attempt, posing a potential complication for an acquisition, the Boston Business Journal reported.

"Both organizations are highly respected as leaders in the community, and we believe Eastern’s focus on innovation and technology will help to further ensure Century customers have greater access to banking products and services that meet their needs where and when they need them," Barry Sloane said in Wednesday’s release.

Century shareholders will get $115.28 for each of their shares, a 26% premium over Century’s closing price Wednesday.

"We are excited for the opportunities this agreement creates and believe our combination will deepen our reach in providing banking services and other support to communities across greater Boston and southern New Hampshire," Rivers said.

The Century deal may represent Eastern’s first purchase of a bank since its initial public offering, but it first tested its buying power by acquiring Sudbury, Massachusetts-based Auburn Insurance Agency less than a week after going public, the Boston Business Journal reported.