Slade’s, Independent call deal a ‘perfect marriage’

CEOs Mary Lynn Lenz and Chris Oddleifson became friendly when both were appointed to head their respective Massachusetts banks about five years ago.
Lenz, the top executive at Somerset-based Slade’s Ferry Bancorp, and Oddleifson, who holds the same position at Rockland-based Independent Bank Corp., parent company of Rockland Trust, talked frequently about running community banks.
So to Lenz, it made sense that Oddleifson should be the first person she approached with this question: Are you interested in buying Slade’s Ferry?
Oddleifson didn’t have to give his answer much thought.
“It had all the outward appearances of being an absolutely perfect marriage,” he recalled.
Independent Bank Corp., the biggest publicly traded commercial bank based in Massachusetts, announced on Oct. 11 that it had agreed to acquire Slade’s Ferry Bancorp, parent company of the nine-branch Slades Bank, for about $105 million in cash and shares.
Lenz said that while the bank was continuing to turn a profit, interest rate trends had dampened earnings, and the board of directors decided it was time to look for a potential suitor.
There was no pressure from investors, Lenz said, but the negotiated price represented a return for Slade’s Ferry shareholders that was too good to pass up. “We have a responsibility to our shareholders,” Lenz said.
The purchase agreement calls for 75 percent of the outstanding shares of Slade’s Ferry Bancorp. to be converted to Independent Bank Corp. shares at the rate of .818 shares for each Slade’s Ferry share, and the other 25 percent of outstanding Slade’s common stock to be purchased for $25.50 a share.
Already approved by the boards of directors of both companies, the deal is still subject to the approval of Slade’s Ferry shareholders.
The deal, expected to close early next year, will give Rockland Trust an instant presence in the Fall River-New Bedford area. All Slades Bank branches will be and converted to Rockland outlets, according to Oddliefson.
Once completed, the acquisition will allow Rockland to more easily expand into Rhode Island. Oddliefson said the bank is already conducting commercial business with Rhode Island-based companies through its Attleboro lending center.
“We’re going to have a branch right next to the border [in Seekonk],” Oddliefson said. “It will give us more heft and presence in Rhode Island.”
Independent is already poised to complete its previously announced purchase of a Lincoln-based investment advisor, O’Connell Investment Services, on Nov. 1. In an interview after announcing the agreement with Slade’s Ferry, Oddliefson didn’t hide his desire to establish a branch presence in Rhode Island.
“We’re interested in expanding in a number of directions, and Rhode Island is one of them,” he said.
Both Lenz and Oddliefson said the acquisition will result in layoffs, particularly in back-office areas such as finance, accounting and loan processing, where merging the banks’ departments would create some redundancies.
To offset some of those layoffs, Oddliefson said displaced Slade’s Ferry employees would be given preferential treatment in filling opening at Rockland Trust.
One area of the payroll that will remain untouched: the commercial lending staff. “Those relationships, which really is the power of a banking franchise, will be maintained and enhanced,” Oddliefson said.
Lenz, once named one of the country’s 25 most powerful women in banking by a national trade publication, said she expects to leave the bank once the deal is completed.
The deal garnered praise from analysts.
“It’s a good strategic fit and it’s a good logical step for them,” said David Darst, who covers Independence for FTN Midwest Securities Corp. in Nashville, Tenn.
Meg McMullen, president and CEO of New England Research & Management Inc., called the acquisition “a natural fit” for Independent.
“It was masterful because it connects the Rockland area to the New Bedford area to the Cape,” said McMullen, whose firm is a longtime Independent shareholder. “They had a hole there.”
Lenz said Slade’s Ferry, which has assets of $628 million, sought the deal after the board of directors recently decided to explore “a potential partnership with a larger bank.” With 51 offices, 784 employees and $2.7 billion in assets, Independent fit the bill. •