Banker
The country’s oldest and largest mutual bank has decided to go public.
Boston-based Eastern Bank said in a statement that its board of directors had unanimously approved a plan to convert to a fully public stock holding company known as Eastern Bankshares Inc.
The public offering of common is planned for later this year. Eastern Bank said it expects the stock conversion will increase its capital by approximately $1.3 billion to $1.7 billion.
“The capital raised in the offering will enable Eastern to better serve its customers and communities by making additional loans to businesses and consumers, investing in new technology and delivery systems to enhance existing or the development of new products and services, and supporting the advancement of its employees,” the bank said in a statement.
Eastern also plans to use the additional capital to pursue growth opportunities, including acquiring other banking and insurance agency businesses, according to the statement.
“We are proud of Eastern Bank’s history as the oldest and largest mutual bank in the United States and our enduring commitment to our customers, colleagues and communities,” Bob Rivers, Eastern Bank’s chair and CEO, said in a statement.
Rivers added that the conversion would provide an opportunity to build on the commitment of depositors, employees, corporators and community partners.
“We want to express our greatest appreciation to them and look forward to making this offering available,” Rivers said. “I am confident that Eastern’s dedication to building lasting relationships with our customers, colleagues and communities will remain as strong as ever after the conversion.”
A subscription offering will be made to qualifying Eastern Bank depositors, Eastern tax qualified employee plans and Eastern employees, directors and corporators. Depositors with qualifying deposits on March 29, 2019, will have priority, and those with qualifying deposits on March 31, 2020, will have second priority, according to the statement.
The general public may also be able to buy shares still available after the subscription offering, with a preference given to residents of the communities served by Eastern Bank.
As part of the conversion, Eastern intends to give the Eastern Bank Charitable Foundation a 4 percent equity interest in Eastern Bankshares.
Based upon the mid-point of the $1.3 billion to $1.7 billion valuation range, the donation is expected to increase the size of the Foundation’s endowment by approximately 50 percent to nearly $180 million, the statement said.
The foundation in 2019 gave approximately $9.5 million in 1,500 grants toward employment, education, health care, housing, childcare and other basic human services. The foundation this year has provided $8 million in community support related to COVID-19.
“Through this stock donation to the Eastern Bank Charitable Foundation, we create a significantly larger base by which the foundation will be able to positively impact the communities we serve,” Rivers said. “We remain dedicated to supporting our nonprofit partners and convening others to spur innovation and change around social justice.”
Eastern Bank had $12.341 billion in total assets as of March 31, second to only Berkshire Bank among Massachusetts-based community banks and slightly more than Rockland Trust. Eastern’s footprint extends into New Hampshire and Rhode Island.
