Market conditions prompted two banks to drop out of the running to acquire Envision Bank, according to a recent filing with the Securities and Exchange Commission.
Quincy-based Randolph Bancorp, Envision Bank’s parent company, said in its preliminary proxy statement that the bank’s president and CEO, William Parent, had received calls in 2020 and 2021 from other New England banks about a potential combination.
After the bank’s board of directors last fall authorized him to continue gauging whether other CEOs would be interested in acquiring Envision Bank, Parent contacted seven financial institutions in November and December, according to the proxy statement. Four companies, including Easthampton-based Hometown Financial Group, expressed interest.
But after Envision Bank released its first-quarter earnings in late January, Parent reached out to the four companies again to gauge their continued interest.
Three of them were no longer interested in an acquisition. Two of the banks cited market dynamics or conditions as the reason for not pursuing a deal, the proxy said. Another bank said it was not interested due to internal strategic priorities.
Hometown Financial Group, a multi-bank mutual holding company, was still interested and requested an exclusivity agreement to negotiate a deal. Parent had continued to reach out to other financial institutions, the proxy said, but by early February no other banks were interested. The banks entered into an exclusivity agreement in early March, and a deal was announced on March 28.
Hometown Financial Group is acquiring Envision Bank in a cash deal valued at approximately $146.5 million. Randolph Bancorp’s shareholders will receive $27 in cash for each share of Randolph’s common stock. Envision Bank will merge into Abington Bank.
In addition to regulatory approval, the deal must be approved by Randolph Bancorp’s shareholders. The date of the special shareholder meeting was not provided in the preliminary proxy. If approved, the transaction is expected to close in the fourth quarter.
Parent last month told Banker & Tradesman that the effects of evolving technology and changing customer experiences for both retail and business banking had created challenges to remaining relevant in a competitive market.
“You need the resources to compete, to remain relevant in the marketplace,” Parent said. “We had worked very hard to be a relevant factor in the markets that we competed in, but I saw, quite frankly, a dynamic challenge to maintaining that relevance going forward.”