Depositor-owned banks’ merger extends Boston consolidation trend

Two Boston-area depositor-owned banks, both founded in the 1880s, will combine to create a $1.2 billion-asset community bank. 

Reading Cooperative Bank and Wakefield Cooperative Bank announced the planned merger Thursday. Both are headquartered in Middlesex County, the Bay State’s most populous jurisdiction. The combined institution, which will retain the Reading brand, will have about a 1% share of the $83.2 billion-asset Middlesex deposit market, according to Federal Deposit Insurance Corp. statistics. 

Reading’s and Wakefield’s combination continues a consolidation trend in the Boston market. It’s the third transaction announced since the start of December.

On Dec. 16, the $11 billion-asset Brookline Bancorp and the $11.6 billion-asset Berkshire Hills Bancorp, both headquartered in Boston, announced a $1.1 billion merger-of-equals that would create a “preeminent” hub institution with nearly $24 billion in assets. That deal, among the largest in 2024, is expected to close before the end of 2025. A week earlier, the $19.4 billion-asset Independent Bank Corp. in Rockland, Massachusetts, struck a deal to acquire the $4.7 billion-asset Enterprise Bancorp in Lowell, Massachusetts, for $562 million in cash and stock.  

Massachusetts has also seen several mutual bank tie-ups in recent months. The $900 million-asset Rollstone Bank & Trust in Fitchburg agreed to join River Run Bancorp in Newburyport in October, creating a pro forma company with three bank subsidiaries and $3.5 billion of assets. Two mutual bank holding companies, PeoplesBancorp in Holyoke and SSB Community Bancorp in Worcester, announced a planned merger in June. 

Massachusetts’ Division of Banks approved the Peoples-SSB Community deal Dec. 23. Rollstone and River Run expect to complete their union in the first half of 2025.

Mutual banks, like the rest of the community banking industry, are grappling with technology costs and the seemingly ever-increasing burden of regulatory compliance, Reading Cooperative CEO Julie Thurlow said Friday in an interview with American Banker. “Compliance costs don’t add to the bottom line, they subtract from it,” Thurlow said.

The deal between Reading and Wakefield was driven by a desire to take advantage of the economies of scale and operational efficiencies available to a bigger bank, according to Thurlow.

“If you put our vendor lists side-by-side, you’ll see a lot of the same names,” Thurlow said. “We can do things together and save on operating costs.” At the same time, Reading will be able to leverage its more extensive product set across the Wakefield customer base, Thurlow said. 

Despite their proximity, Reading and the $313.4 million-asset Wakefield don’t share any markets, said Thurlow, who will lead the merged company as CEO. “We want to assure customers that no branches will be closed as part of this transaction,” she said. “Customers can expect to continue to be served by their favorite employee.” Wakefield’s three branches, in Wakefield, Melrose and Lynnfield, will connect the Reading’s legacy footprint with two North Shore branches, in Lynn and Nahant, that Reading acquired in 2021, Thurlow added. 

Wakefield CEO Jeffrey Worth will serve as president of the enlarged Reading. While Wakefield was profitable earlier in the decade, the increase in interest rates in 2022 and 2023 led to a sharp rise in interest expenses that resulted in a $794,000 loss in 2023. Through the first nine months of 2024, Wakefield reported losses totaling $591,000. Reading has fared better. It earned $1.15 million in 2023 and $1.17 million through the first nine months of 2024. 

“Together, we will create a bank with greater size and scale, allowing us to provide even more relevant and innovative services for the future,” Thurlow and Worth said Thursday in a press release.

Thurlow chaired the American Bankers Association during the year ended October 2024.

Cooperative banks are mutual institutions that follow a one-person-one-vote governance model. In Massachusetts, the charter dates back to 1877, when the Co-operative Savings Fund and Loan Association, known today as the $610.2 million-asset Haverhill Bank in Haverhill, Massachusetts, was founded. 

Reading and Wakefield expect to complete their merger during the second quarter of 2025. The transaction is structured as a pure combination, with no cash changing hands.

Reading Cooperative Bank was founded in 1886. Wakefield opened its doors the following year.