The state’s banking industry will soon crown a new king.
Rockland Trust chief executive Chris Oddleifson just inked a nearly $730 million deal to buy Blue Hills Bank, making Rockland the biggest retail bank based in Massachusetts. Rockland will whiz past longtime titleholder Eastern Bank, though it still will have a smaller market share than out-of-state giants such as Bank of America and Citizens.
This will be the biggest deal by far for Hanover-based Rockland (known on Wall Street as Independent Bank Corp.), both in terms of the transaction value and the acquired bank’s assets ($2.7 billion, in Blue Hills’ case).
The move gives Oddleifson additional traction within the city of Boston, having only just arrived in 2015 with the Peoples Federal Savings Bank purchase. It brings Rockland into Hyde Park, at one end of the city, and the Seaport at the other.
Plus, Rockland becomes the latest bank to win the high-profile naming rights for the concert pavilion overlooking Boston Harbor. Blue Hills’ contract for the name lasts through the 2020 season. You might want to start getting used to Rockland Trust Pavilion.
Blue Hills CEO Bill Parent turned what was once a sleepy mutual bank called Hyde Park Savings into a major regional player. The Norwood-based bank hit the stock market in 2014 to raise capital that helped fuel that growth. But the IPO also made it an acquisition target after the obligatory three-year waiting period expired.
Oddleifson says Parent reached out to him a few months ago about doing a deal. Rockland is offering a mix of cash and stock to Blue Hill shareholders — a nearly 10.5 percent premium based on the closing prices of both banks’ stocks on Thursday.
The merger will combine 11 Blue Hills branches with Rockland’s 85 (soon to be 88, with another Rockland deal pending). One or two branches could eventually close in places with overlap.
Oddleifson says his goal isn’t to become the biggest local bank just for the title. Instead, it’s about building scale to more profitably handle costs and regulatory burdens — including new ones triggered for passing the $10 billion-in-assets mark. (Rockland will have more than $11 billion.)
Berkshire Bank might soon challenge Rockland’s supremacy. Berkshire signaled its ambitions recently by moving from Pittsfield to Boston. And it’s already bigger than Rockland, when out-of-state assets are included.
For now, though, it’s Rockland’s time to brag. The Blue Hills acquisition is expected to close in the first half of 2019 — just in time for concert season.Jon Chesto can be reached at firstname.lastname@example.org. Follow him on Twitter @jonchesto.