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Eastern Bank set to expand into N.H.

CEO Richard Holbrook said Eastern was willing to pay a premium for Centrix Bank.

Bill Greene/Globe Staff/File

CEO Richard Holbrook said Eastern was willing to pay a premium for Centrix Bank.

Eastern Bank, the largest community bank in Massachusetts, is expanding into New Hampshire for the first time, paying $134 million in cash for a small commercial lender north of the border.

Eastern said Tuesday that it would offer stockholders of Centrix Bank & Trust of Bedford, N.H., $41 a share, a 49 percent premium over the Monday closing price of $27.50.

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Richard Holbrook, Eastern’s chief executive, said that is on the higher end, but Eastern was competing with other suitors.

Holbrook pointed out that Eastern offered double the share price when it acquired Wainwright Bank & Trust Co., of Boston, in 2010. “It was a competitive environment,” he said.

Eastern has been looking to enter Southern New Hampshire, and Centrix, with $907 million in assets and expertise in business and nonprofit lending, was a good fit, Holbrook said.

Eastern has $8.7 billion in assets.

Southern New Hampshire weathered the recent recession well, and its economy is growing, Holbrook said, which provides a good opportunity for Eastern to expand its brand. Centrix is just 15 years old but its profitshave grown steadily, to $7.7 million last year.

“It’s a natural extension,” Holbrook said.

Centrix has seven branches and about 130 employees.

Pressured by increasing overhead costs, including compensation, health care, and meeting regulatory requirements, the bank’s board of directors decided this would be a good time to sell, said Joseph Reilly, Centrix’s chief executive. “We really like this partnership, and the attractive return it provides to our shareholders,” he said in a statement.

The deal, which still needs shareholder and regulatory approval, is expected to close in the fall.

Reilly will remain with the merged organization as president of Eastern’s New Hampshire division. Eastern plans to keep Centrix’s lending and branch staff, but will look to consolidate administrative departments, such as operations and finance, Holbrook said.

Bank analysts have said that the time is ripe for bank mergers and acquisitions, as smaller institutions try to regain their footing after the financial crisis and larger banks make attractive offers. So far this year, the median premium paid by publicly traded banks has been 32 percent above the stock price, according to analysis by SNL Financial, a financial data firm based in Virginia.

Also on Tuesday, the state’s second-largest credit union, Metro Credit Union, announced it had completed its takeover of Newton Municipal Credit Union.

Metro will keep Newton’s branch in City Hall as it negotiates a deal for a more central office location in the city. Newton’s 1,000 members have been converted to Metro Credit Union members, said Robert Cashman, the president and chief executive of Metro.

The acquisition will allow Metro to better serve its existing 170,000 members, many of whom live in Newton and surrounding municipalities, Cashman said.

Deirdre Fernandes
can be reached at deirdre.fernandes@globe.com. Follow her on Twitter @fernandesglobe.
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