SalemNews.com, Salem, MA

March 26, 2014

Beverly Bank going public

BY ETHAN FORMAN
STAFF WRITER

---- — BEVERLY — There are some subtle banking changes afoot on the North Shore, the latest being the announcement that Beverly Bank is going public.

In recent weeks, North Shore Bank and Saugusbank have agreed to merge under the name North Shore Bank, effectively expanding the reach of both. The holding company of East Boston Savings Bank, which has a large presence on the North Shore, announced it is reorganizing and is holding a second-step stock offering.

Beverly Bank, which traces its history back to 1888, dropped the name “Cooperative” in 2013 to become Beverly Bank. The bank has three offices in Beverly and one in Salem. The name change was an attempt to reflect the bank’s wide range of services, including commercial lending.

On March 19, trustees of Beverly Financial, MHC, the mutual holding company of Beverly Bank, adopted a plan to convert from a mutual holding company to a stock holding company, according to a press release. The bank plans to sell shares of its common stock to the bank’s depositors and investors in a public offering.

“The conversion to stock ownership is one of the most important and exciting events in the history of the bank,” said President and CEO Michael Wheeler in a prepared statement.

The move is being made to raise money to allow the bank and the holding company “to better serve the needs of the local community by remaining competitive in what has always been a highly competitive market,” Wheeler said in the statement.

“The capital we expect to raise will afford us the opportunity to continue to grow our franchise while maintaining our commitment to the communities we serve,” Wheeler said. Federal and state regulators still must approve the conversion, with the expectation those hurdles will be cleared to begin the stock offering in the third quarter of this year.

Wheeler said in an interview that he cannot speak about Beverly Bank going public until its prospectus comes out in early to mid-May.

As for the changes at other North Shore banks, Wheeler said it appears that the cost of doing business in an era of tight regulatory scrutiny means that small banks need to raise money to grow.

“It’s the cost of doing business,” he said. “The need for additional employees, the need to fund an organization ... So, you need growth.”

Wheeler said the North Shore Bank and Saugusbank strategic alliance makes sense for both. In general, mutual banks have few options to raise capital; either they form alliances with each other or they issue stock and go public.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.