NB Bancorp Inc. ("Needham"), the holding company for Needham Bank, and Provident Bancorp Inc. ("Provident"), the holding company for BankProv, announced that they have entered into a definitive merger agreement for Provident to merge with and into Needham in a stock and cash transaction. Needham anticipates that promptly following the merger of Provident into Needham, BankProv will merge with and into Needham Bank.
Under the terms of the merger agreement, which was unanimously approved by both boards of directors, stockholders of Provident will receive for each share of Provident common stock, at the holder's election, either (i) 0.691 shares of Needham common stock (the "Stock Consideration") or (ii) $13.00 in cash (the "Cash Consideration"), subject to allocation procedures to ensure that 50% of the shares of Provident common stock will receive the Stock Consideration. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for Provident stockholders for the Stock Consideration they will receive. Needham anticipates issuing approximately 5.9 million shares of its common stock in conjunction with the merger. The value of the transaction is estimated to be $211.8 million based on Needham's share price of $16.62 at the close of business on June 4, 2025. The transaction dilutes Needham's tangible book value by approximately 6.1% and is expected to have an earn back period of approximately 2.7 years.
The merger is expected to be completed in the fourth quarter of 2025, subject to the satisfaction of various conditions, including the affirmative vote by the holders of a majority of Provident shares and the receipt of required regulatory approvals from applicable state and federal regulators. No vote of Needham stockholders is required. All Provident directors and executive officers have agreed to vote in favor of the merger. As part of the merger, Joseph B. Reilly, President and CEO of Provident, will join the board of directors of Needham and Needham Bank.
The combined organization will operate 18 branches across Metrowest, Greater Boston, the North Shore in Massachusetts and Southern New Hampshire. Total assets at transaction close are expected to be approximately $7.1 billion, with $5.9 billion in total deposits and $6.1 billion in total loans. The pro forma company is expected to be the sixth largest Massachusetts-based bank in the Boston MSA based on deposit market share. Needham will continue to exceed regulatory minimums to be considered well-capitalized and will continue to maintain significant liquidity after the merger.
"This merger allows Needham Bank to expand into attractive market areas on the Massachusetts North Shore and in Southern New Hampshire where we already have a concentration of business clients. While we have a strong record of organic growth, this merger allows us to further leverage the capital we raised in late 2023 and continue to grow and expand our existing client base with branches in new markets," commented Joseph P. Campanelli, Chairman, President and CEO of Needham. He added that "Needham prides itself on being a nimble, future ready organization that takes a relationship approach to the businesses and consumers we serve. BankProv shares that same philosophy, making this a good fit culturally for both organizations."
"Both organizations have a long history of serving our communities with a focus on 'relationships, agility and entrepreneurship' in banking. Combined, we will offer an expanded product line of commercial and consumer products that will provide real value to our market areas. This merger benefits our customers and provides a good return for our stockholders. We look forward to seeing Needham continuing to build on what they have accomplished over the past 133 years," said Reilly.
BankProv was founded in 1828 and conducts business through seven branch locations on the North Shore of Massachusetts and in southern New Hampshire, and a loan office located in Ponte Vedra Beach, Florida. At March 31, 2025, BankProv had $1.6 billion in total assets, $1.2 billion in total deposits and $1.3 billion in gross loans.
Keefe Bruyette & Woods Inc., A Stifel Company, served as financial adviser and Nutter McClennen & Fish LLP served as legal counsel to Needham. Piper Sandler & Co. served as financial adviser and Luse Gorman PC served as legal counsel to Provident.