latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/geography-and-mortgage-banking-growth-drove-massachusetts-mutual-bank-deal-69621701 content esgSubNav
In This List

Geography, mortgage banking growth drove Massachusetts mutual bank deal


Banking Essentials Newsletter May 29th Edition


Managed Services Insights: The client lifecycle management solution


Technology & Automation Insights: Elevating KYC and onboarding efficiency


Banking Essentials Newsletter: May 15th Edition

Geography, mortgage banking growth drove Massachusetts mutual bank deal

Hometown Financial Group MHC is pursuing greater scale and an expanded mortgage banking operation in its acquisition of Randolph Bancorp Inc., executives at both companies said.

Following the transaction's close, Randolph subsidiary Envision Bank will merge with Hometown subsidiary Abington Bank to create a $1.4 billion bank with 11 Massachusetts retail locations.

Envision's robust commercial and residential lending divisions made the company an attractive target, Hometown CEO Matthew Sosik said in an interview.

"They've got a residential lending machine they've built, and we're going to bolt right onto that," Sosik said.

The transaction will bring Hometown's consolidated assets to about $4.4 billion, and Sosik said scale was an important factor in the decision to acquire Randolph.

"We're really excited about the residential lending platform and we're really excited about their commercial lending team, their product base and the smart talented people they have working for them, but ultimately this is about relevancy and viability in the long term," he said.

Bill Parent, Randolph's president and CEO, said in an interview that the combined company will have a greater commercial lending capacity, adding that Randolph's current total assets of $800 million limited opportunities for Envision's commercial lenders.

"In a competitive marketplace, it can be hard to really build and expand relationships with sponsors in the commercial space, so this is a huge enhancement for them," he said.

Sosik said Envision's footprint "dovetails perfectly" with Abington's, and Parent said the south shore of eastern Massachusetts was an appealing market for Hometown because its density and demographics offer opportunities for continued growth.

Parent and Sosik said there could be future M&A opportunities in Massachusetts in the future, and Parent suggested that Hometown may look outside of eastern Massachusetts to other parts of the state. Hometown's holding structure will continue to attract mutual banks seeking to retain local management and branding power, while the company's target size for banks with stock ownership structures will likely be smaller, Sosik said.

"We're very much focused on solid, organic growth, but we like to take these leaps using M&A to sensibly grow our business," he said. "We see a continuation of that dual organic growth, supplemented with leaps forward using mergers and acquisitions."