Pilgrim Bancshares is the parent company of Pilgrim Bank, a $263 million Massachusetts-chartered cooperative bank with branches located in the Massachusetts communities of Cohasset and Marion.
Under the terms of the agreement, shareholders of Pilgrim Bancshares will receive $23.00 in cash per share. The total transaction value is approximately $53.9 million. The merger consideration represents an estimated 151% of Pilgrim Bancshares tangible book value as of March 31, 2018.
The transaction is expected to close early in the first quarter of 2019. Hometown Financial Group will maintain Pilgrim Bank as a separate banking subsidiary and does not expect to close any Pilgrim Bank branch offices in connection with the transaction.
The transaction will expand Hometown Financial Group’s market presence into eastern Massachusetts. Following the completion of the transaction, Hometown Financial Group will have consolidated assets of approximately $2.4 billion and a branch network of 26 full-service offices.
The transaction is expected to be accretive to Hometown Financial Group’s earnings in the first year of combined operations.
“We see the Pilgrim Bank franchise as a great first step into eastern Massachusetts,” said Matthew S. Sosik, President and CEO of Hometown Financial Group.
“With our established presence in central and western Massachusetts through our bankHometown and bankESB franchises, Hometown Financial Group is actively looking to expand into new markets which offer attractive growth opportunities. The Pilgrim Bank franchise fits nicely into our growth plans. We look forward to welcoming Pilgrim Bank into our family of banks.”
Once complete, this transaction will be the third strategic merger for Hometown Financial Group in the last three years. In 2015, the company acquired Citizens National Bancorp., Inc. based in Putnam, Connecticut, and then merged with Hometown Community Bancorp, MHC, the holding company for Hometown Bank in 2016. Following the Pilgrim Bancshares acquisition, Hometown Financial Group will have a franchise with banks headquartered in each of the three major regions of Massachusetts.
“We think our holding company model works well for our customers, communities and employees,” Sosik said. “Our structure allows our banks to operate independently in their core markets, while taking advantage of shared centralized resources. Our model is scalable and efficient allowing our bankers to focus their efforts on serving customers and growing market share,” Sosik said. Hometown Financial Group will continue to seek out additional strategic acquisitions and partnerships with like-minded financial institutions.
Francis E. Campbell, Chairman, President and Chief Executive Officer of Pilgrim Bancshares, Inc. stated, “This transaction provides excellent value to our shareholders. We are excited to become part of the mutually-owned Hometown Financial Group and we believe that this partnership will also be beneficial to our employees, customers and communities.
The operating model and financial strength of Hometown Financial Group will provide for an expanded array of products and services, as well as the resources for Pilgrim Bank to continue to offer high quality banking solutions. We are excited for the opportunities created by this transaction. Hometown Financial Group is a great organization that will provide long-term value for our customers and employees.”
The merger is subject to regulatory approval and the approval of the shareholders of Pilgrim Bancshares.
Keefe, Bruyette & Woods, a Stifel Company, acted as financial advisor to Pilgrim Bancshares, Inc. and rendered a fairness opinion to the Board of Directors of Pilgrim Bancshares, Inc. in conjunction with this transaction.
Nutter McClennen & Fish LLP served as legal counsel to Hometown Financial Group, Inc. and Luse Gorman served as legal counsel to Pilgrim Bancshares, Inc.
Source: Company Press Release
