PROVIDENCE – HarborOne Bancorp Inc. is from Massachusetts, Coastway Bancorp Inc. is from Rhode Island, but the two banks – now slated to become one – are more similar than different.
“In some ways, they paved the way for us,” said James Blake, president and CEO of the Brockton, Mass.-based parent of HarborOne Bank with $2.7 billion in assets.
Both banks started as credit unions, converted to banks and became publicly traded companies. On Wednesday, HarborOne announced an agreement to purchase Coastway for an estimated $125.6 million.
The deal is the result of both banks looking to grow, and the gain of $739 million in assets, along with nine new branches in Rhode Island, gives HarborOne a significant boost in the regional financial services industry.
William A. White, president and CEO of Coastway, however, said the deal really clicked early on because of the similarities between the two banks.
“As we got down the road in talking about a deal, the common denominators were much more prevalent than the differences,” White said.
HarborOne was founded as the Brockton Credit Union in 1917. The credit union converted to a bank in 2013 and launched an initial public offering in 2016.
Coastway, founded in the 1920s as the Telephone Workers Credit Union and converted to a bank in 2009. It launched its own IPO in 2014.
White said the Warwick-based bank, with $739 million in assets, was realizing rapid growth and needed a partner to sustain its trajectory. HarborOne, meanwhile, entered the Rhode Island market in 2015, opening a commercial lending office in Providence.
The office has since generated about $300 million in business, which emboldened Blake’s opinion of the local market. He said the deal represents an opportunity for HarborOne to expand its overall geographical footprint and strengthen its foothold in the Ocean State.
Rhode Island is also much closer than many other densely populated areas, he added.
“If you look at Coastway, there can be a misconception about the deal because it’s in another state,” Blake said. “But if you look geographically, Coastway is 27 miles form our headquarters. If we were to go to Worcester, that’s 42 miles away. If we went to Lowell, it’s 41 miles, and to the Cape would be 48 miles away.”
The deal, contingent on various approvals from shareholders and state and federal agencies, is expected to close in the second half of this year. As part of the deal, White will stay on as director of Rhode Island banking.
Coastway branches will assume the HarborOne logos, although customers shouldn’t expect any disruption in services, according to the banks. Once completed, the deal will decrease the total number of Rhode Island-based banks to eight from its current nine.
Coastway is currently the 6th largest Rhode Island-based bank based on assets.
White doesn’t anticipate a big reduction in jobs, but does expect some consolidation where there is duplication, particularly in backoffice services.
“By and large, this is an opportunity to expand, so we’re not going to make cuts just to produce profits,” he said.
HarborOne estimates the deal will make it the 12th-largest publicly traded New England community bank based on assets, with 65 locations in Massachusetts, Rhode Island, New Hampshire and Maine.
When asked whether to expect more acquisitions in the future, Blake didn’t dismiss the idea, but said it was too early to tell.
“This is a pretty big bite of the apple, so we need to digest,” he said. “Once that’s completed, we’ll certainly look around. … We see this as an opportunity to build a new bank. We’re excited about the transaction and look forward to doing a great job in the Rhode Island market.”
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
