Cambridge Bancorp (Nasdaq: CATC) (the “Company” or “Cambridge“), the holding company for Cambridge Trust Company (“Cambridge Trust”), and North Andover Massachusetts-based Northmark Bank (“Northmark”) are pleased to jointly announce that Cambridge, Cambridge Trust and Northmark have entered into a definitive agreement pursuant to which Northmark will merge with and into Cambridge Trust in an all-stock transaction. Under the terms of the agreement, each share of Northmark common stock will be exchanged for 0.9950 shares of Cambridge common stock. Based upon Cambridge’s closing price of $79.94 as of May 20, 2022, the transaction is valued at $79.54 per share of Northmark common stock, or approximately $63 million in the aggregate. On a pro forma basis, the transaction is projected to be 5.8% accretive to Cambridge’s mean consensus analyst 2023 earnings per share (excluding transaction costs) and approximately 1.7% dilutive to tangible book value per share, with an anticipated earnback period of approximately 2.25 years.
This merger will expand Cambridge’s presence in Massachusetts through the addition of Northmark’s three full-service banking offices in the attractive communities of North Andover, Andover and Winchester, Massachusetts. Cambridge and Northmark share similar conservative business models that emphasize exceptional personal and customized service to both individuals and businesses, delivered by highly skilled professionals. The combined company will be well positioned to benefit from a deepened focus on future growth opportunities. Jane Walsh, Founder, President and CEO of Northmark will join Cambridge Bancorp and Cambridge Trust as a Director.
As of March 31, 2022, Northmark had approximately $442 million of total assets, $314 million of gross loans and $381 million of deposits. Based on financial metrics as of March 31, 2022, the combined company is expected to have $5.5 billion in assets, $3.7 billion in gross loans and $4.9 billion in deposits, along with Cambridge’s $4.7 billion of wealth management assets.
Denis Sheahan, Chairman, President and CEO of Cambridge Trust, commented, “We are pleased to announce the strategic combination of Cambridge Trust and Northmark Bank. Since Northmark’s founding in 1987, the management team and board have created a franchise that provides exceptional service to its clients in locations where Cambridge currently does not have banking offices. These locations are a logical extension of our market. Northmark’s dedication to providing individuals and businesses with customized attention and tailored financial solutions will greatly complement our broad range of products and services, including private banking and wealth management.” Sheahan added, “We look forward to welcoming the talented Northmark team to Cambridge Trust.”
“We are excited about the opportunity to partner with Cambridge Trust,” said Ms. Walsh. “Cambridge Trust’s strong commitment to its clients, employees and communities closely align with Northmark’s focus on relationships and civic and corporate responsibility. Together we will build a premier private banking and wealth management company within Massachusetts and New Hampshire.”
The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to be completed during the fourth quarter of 2022, subject to regulatory approval, approval by Northmark shareholders, and other customary closing conditions.
The merger of Cambridge Trust with Northmark is a continuation of Cambridge’s strategy of combining with high-quality financial institutions in targeted, attractive markets. In 2020, Cambridge acquired Wellesley Bancorp, Inc. ($1.0 billion in assets), headquartered in Wellesley, Massachusetts, with offices throughout Boston. In 2019, Cambridge acquired Optima Bank & Trust ($556 million in assets), headquartered in Portsmouth, New Hampshire, with banking offices throughout southeastern New Hampshire. These markets provide significant growth opportunity through the introduction of Cambridge’s broad range of products and services, including private banking and wealth management.
Piper Sandler & Co. served as financial advisor to Cambridge and Hogan Lovells US LLP served as its legal counsel. Griffin Financial Group served as financial advisor and provided a fairness opinion to Northmark and Goodwin Procter LLP served as its legal counsel.
An investor presentation regarding the merger is available on the investor relations section of the Company’s website: http://ir.cambridgetrust.com or within the hyperlink provided below. Click here to download.
Cambridge will conduct a conference call/webcast at 8:30 a.m. Eastern Time on Tuesday, May 24, 2022, to discuss the merger. Participants are encouraged to pre-register for the conference call using the following link: https://dpregister.com/sreg/10167347/f2d1672677.
Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the call. Participants may pre-register at any time prior to the call and will immediately receive simple instructions via email. Additionally, participants may reach the registration link and access the webcast by logging in through the investor section of the Company’s website at http://ir.cambridgetrust.com.
Those parties who do not have internet access or are otherwise unable to pre-register for this event may still participate at the above time by dialing 1-866-777-2509 and asking the operator to join the Cambridge Bancorp (CATC) call. Participants are requested to dial-in a few minutes before the scheduled start of the call. The webcast will be archived on our investor relations website at http://ir.cambridgetrust.com.
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