Portsmouth-based Optima Bank & Trust Company and Cambridge Bancorp, the holding company for Cambridge Trust Company, have entered into a definitive agreement where Optima will merge with and into Cambridge Trust in a stock and cash transaction.
According to a joint statement, while Cambridge Trust has provided wealth management services in NH since the 1990s, it has lacked comprehensive banking services. This merger will expand Cambridge’s southern NH presence with the addition of six full-service branch locations to complement Cambridge’s three existing wealth management offices here. Cambridge currently manages $1.1 billion of wealth assets for NH-based clients, and this merger will allow the firm to offer both locally-based banking and wealth options.
As of September 30, 2018, Optima had approximately $524 million of total assets, $466 million of loans and $489 million of deposits. Based on financials on that date, the combined company will have over $2.5 billion in assets, $1.9 billion in gross loans, $2.2 billion in deposits, and $3.2 billion of wealth management assets upon completion of the transaction.
According to a statement, under the terms of the agreement, each share of Optima common stock will be exchanged for either 0.3468 shares of Cambridge common stock, or $32 in cash, subject to customary pro-ration procedures, which will result in an aggregate stock/cash consideration mix of 95 percent/5 percent. The transaction is presently valued at about $67 million in the aggregate, based upon Cambridge Bancorp’s closing price of $85.61 as of December 4. On a pro forma basis, the transaction is expected to be approximately 3.6 percent accretive to Cambridge’s 2020 earnings per share and approximately 3.8 percent dilutive to tangible book value per share with an earnback period of approximately 3.4 years.
“Our merger with Optima Bank is a natural fit and consistent with our growth strategy to become the premier private bank and wealth management company throughout Greater Boston and Southern New Hampshire,” said Denis Sheahan, CEO of Cambridge Trust. “By joining forces, we’ll be able to provide our wealth management clients in New Hampshire with access to a full suite of private banking services and convenient office locations, while clients of Optima Bank will benefit from Cambridge Trust’s comprehensive investment management, wealth planning, and trust services.”
Daniel Morrison, chairman, president and CEO of Optima, and other key members of the Optima team will remain with Cambridge to help drive the combined company’s future growth.
“Through the combined organization, we will be well-positioned to offer differentiated, high-touch private banking and wealth management services to clients and prospects in Southern New Hampshire,” says Morrison. “Cambridge Trust has been in our market since 1996 and has amassed over $1 billion in New Hampshire-based wealth management assets. I look forward to working with the Cambridge Trust team to accelerate our combined growth in New Hampshire."
The transaction has been approved by the boards of directors of both companies and is expected to be completed during the second quarter of 2019, subject to regulatory approval, approval by Optima’s shareholders, and other customary closing conditions. Effective at the closing of the transaction, Morrison will join the board of directors of both Cambridge Bancorp and Cambridge Trust Company.