Mt. Washington Cooperative Bank has been acquired by Meridian Interstate Bancorp, Inc., a holding company which owns East Boston Savings Bank, the Reporter has learned. Under terms of the purchase, the two banks will retain their identities, with Mt. Washington becoming an operating division of Meridian Interstate headed by Edward J. Merritt, current Mt Washington President and CEO.
The merged operation of the two banks will result in some 18 full service banking offices with more than $1.5 billion in assets. Mt Washington has been headquartered in South Boston, and in recent years opened offices in Dorchester and Jamaica Plain. The twelve East Boston Savings offices are located East Boston, Winthrop, Everett, Lynn, Saugus, Revere, Melrose, Wakefield and Peabody.
The banks issued a joint press release on Monday, July 20 announcing what it termed a "merger agreement."
It read:"Meridian Interstate Bancorp, Inc. ("Meridian Interstate") (NASDAQ: EBSB), the holding company for East Boston Savings Bank, and Mt. Washington Cooperative Bank ("Mt. Washington"), today jointly announced the signing of a definitive merger agreement. Mt. Washington operates seven offices in Suffolk County, Massachusetts, and, at March 31, 2009 had assets of $516 million, deposits of $372 million and retained earnings of $32 million.
"Under the terms of the merger agreement, Mt. Washington will merge with and into East Boston Savings Bank, with East Boston Savings Bank surviving the merger. Depositors of Mt. Washington will become depositors of East Boston Savings Bank, and will have the same rights and privileges in Meridian Financial Services, Inc., the mutual holding company parent of Meridian Interstate, as if their accounts had been established in East Boston Savings Bank on the date established at Mt. Washington. The merger agreement and the related merger transactions are subject to the approval of Mt. Washington's depositors, regulatory approvals, and other customary closing conditions.
"As part of the transaction, Meridian Interstate will issue additional shares of its common stock to Meridian Financial Services, Inc., in an amount based on the average of two independent valuations of the fair value of Mt. Washington. These shares are expected to be issued immediately prior to completion of the merger. In addition, Meridian Interstate will contribute capital to East Boston Savings Bank following the merger if necessary for East Boston Savings Bank to remain well-capitalized under applicable regulatory capital standards.
"The transaction is expected to increase East Boston Savings Bank's deposits from $859 million to $1.2 billion. Mt. Washington's approximately $373 million in deposits in Suffolk county will increase East Boston Savings Bank's market share ranking from 9th to 5th in the county, and 2nd in the county amongst institutions headquartered in Massachusetts.
"Each Mt. Washington branch office will become a branch office of East Boston Savings Bank, and such branch offices are expected to operate under the name 'Mt. Washington Bank, A Division of East Boston Savings Bank.' The parties do no expect to close or consolidate any branch offices in connection with the transaction. Following completion of the transaction, Meridian Interstate or one of its affiliates will make a contribution of $250,000 to the Mt. Washington Charitable Foundation."
Richard J. Gavegnano, Chairman and Chief Executive Officer of East Boston Savings Bank, stated that, "We are very pleased to incorporate Mt. Washington into our franchise. Mt. Washington's operating philosophy, approach to customer service and their branch network fit extremely well with our operations and geographic footprint. Mt. Washington's customers can look forward to an enhanced array of products and services delivered with the same high level of service Mt. Washington consistently provides. We also look forward to welcoming the hard working Mt. Washington employees and building a better franchise together."
Edward J. Merritt, President and Chief Executive Officer of Mt. Washington, who will continue as President, Mt. Washington Division following the transaction, commented, "We are very pleased to be merging with East Boston Savings Bank in a transaction that will benefit our customers, our employees and our community. The breadth of East Boston's product offerings, capital stength and scale will allow us to maintain, expand and enhance services and products for our customers, and the combined institution will provide a larger, more convenient branch network for both institutions customers."
About Meridian Interstate- Meridian Interstate and East Boston Savings Bank are headquartered in East Boston, Massachusetts. Founded in 1848, East Boston Savings Bank operates 12 full-service branch locations and one loan center in the greater Boston metropolitan area. At March 21, 2009, Meridian Interstate had $1.129 billion in total assets. Meridian Interstate common stock is traded on the Nasdaq Global Select Market under the symbol "EBSB." For more information, please visit Meridian Interstate's website at www.ebsb.com.
About Mt. Washington Bank- Mt. Washington Bank has been serving its communities for over 115 years. In addition to offering a full range of products and services for consumers and businesses, Mt. Washington Bank also prides itself on providing excellent service to their customers. Mt. Washington Bank currently has six banking offices (three in South Boston, two in Dorchester and one in Jamaica Plain) and a loan office in South Boston.