8-K/A: Eastern & HarborOne Merger: Shareholder Election Forms Mailed

Eastern Bankshares and HarborOne Bancorp announced the distribution of election forms to HarborOne shareholders for their merger consideration choice.

Summary

• Eastern Bankshares, Inc. (Eastern) and HarborOne Bancorp, Inc. (HarborOne) jointly announced the mailing of election materials to HarborOne common stock holders.
• HarborOne shareholders can elect to receive Eastern common stock, cash, or a combination upon completion of the previously announced merger.
• The merger involves Eastern acquiring HarborOne and HarborOne Bank, with Eastern and Eastern Bank as the surviving entities.
• HarborOne shareholders approved the Merger Agreement on August 20, 2025.
• Eastern anticipates all required approvals and closing conditions will be met by October 31, 2025.
• The Holdco Merger and Bank Merger are expected to become effective on November 1, 2025, at 12:01 a.m. and 12:02 a.m. respectively.
• The election deadline for HarborOne shareholders is anticipated to be 5:00 P.M. (Eastern Time) on October 28, 2025.
• HarborOne ESOP and 401(k) plan participants have an earlier election deadline of 5:00 P.M. (Eastern Time) on October 23, 2025.
• Merger consideration options include 0.765 shares of Eastern common stock per HarborOne share (Stock Consideration) or $12.00 cash per HarborOne share (Cash Consideration), or a combination.
• The allocation and proration provisions ensure that 75% to 85% of aggregate HarborOne common stock will receive Stock Consideration, with the remainder receiving Cash Consideration.
• Shareholders who do not make a proper election by the deadline will have their shares exchanged based on other shareholders' elections and proration procedures.
• Continental Stock Transfer & Trust Company is the exchange agent, and Innisfree M&A Incorporated is serving as the information agent for the Shareholder Election Process.

Sentiment

Score: 7

Explanation: The filing indicates steady progress on a major merger, with key shareholder approval already secured and a clear timeline for completion. While standard risks associated with regulatory approvals and integration are noted, there are no new negative developments or delays. The distribution of election forms is a procedural step towards closing, reflecting positive momentum.

Positives

• The merger process is progressing as planned with the distribution of election materials, indicating continued momentum towards completion.
• HarborOne shareholders have already approved the Merger Agreement, removing a significant condition for closing.
• Eastern anticipates all regulatory approvals and closing conditions will be satisfied by October 31, 2025, with an effective date of November 1, 2025, providing a clear timeline.
• HarborOne shareholders are offered flexibility with a choice between stock, cash, or a combination for their merger consideration.

Negatives

• Eastern cannot provide assurance that all required regulatory approvals, waivers, or consents will be obtained, when they will be obtained, or whether there will be burdensome conditions in the approvals or any litigation challenging the approvals.
• The timing of completion of the proposed Merger Transaction is dependent on various factors that cannot be predicted with precision.
• HarborOne shareholders might receive consideration not consistent with their election due to the allocation and proration provisions in the Merger Agreement.

Risks

• Revenue or expense synergies or other expected benefits of the Merger Transaction may not materialize in the timeframe expected or at all, or may be more costly to achieve.
• The Merger Transaction may not be timely completed, if at all.
• Prior to the completion of the Merger Transaction or thereafter, Eastern or HarborOne may not perform as expected due to Merger Transaction-related uncertainty or other factors.
• Eastern may be unable to successfully implement its integration strategies.
• Required regulatory or other approvals are not obtained or other closing conditions are not satisfied in a timely manner or at all.
• Reputational risks and the reaction of the companies' customers to the Merger Transaction.
• Inability to implement onboarding or transition plans and other consequences associated with the merger.
• Continued pressures and uncertainties within the banking industry and Eastern and HarborOne's markets, including changes in interest rates and deposit amounts and composition, adverse developments in the level and direction of loan delinquencies, charge-offs, and estimates of the adequacy of the allowance for loan losses.
• Increased competitive pressures, asset and credit quality deterioration.
• Legislative, regulatory, and fiscal policy changes and related compliance costs.
• Diversion of management time on Merger Transaction-related issues.

Future Outlook

Eastern anticipates that all required approvals will be received and all other closing conditions will be satisfied by October 31, 2025, with the Holdco Merger and Bank Merger becoming effective on November 1, 2025. However, Eastern cannot provide any assurance regarding the timing or conditions of regulatory approvals or potential litigation challenging these approvals.

Management Comments

• Eastern continues to anticipate, as of the date of this Current Report on Form 8-K/A, that all required approvals will be received and all of the other closing conditions will be satisfied by October 31, 2025, and the Holdco Merger and the Bank Merger will become effective as of 12:01 a.m. and 12:02 a.m., respectively, on November 1, 2025.
• Eastern cannot provide any assurance that all required regulatory approvals, waivers or consents will be obtained, when they will be obtained, or whether there will be burdensome conditions in the approvals or any litigation challenging the approvals.

Industry Context

This merger reflects ongoing consolidation within the banking industry, particularly among regional banks, driven by factors such as competitive pressures, the need for increased scale, and regulatory compliance costs. The focus on integrating operations and achieving synergies is a common theme in such transactions, aiming to enhance market presence and operational efficiency.

Comparison to Industry Standards

• The merger consideration structure, offering both stock and cash, is a common approach in bank mergers, allowing shareholders flexibility while managing dilution and cash outflow for the acquiring entity.
• Eastern Bank's asset size of $25.5 billion and its Cambridge Trust Wealth Management division with $8.7 billion in AUM position it as a significant regional player, comparable to other mid-sized banks in the Northeast seeking growth through acquisition.
• The charitable giving record of over $240 million since 1994 highlights a strong community focus, which is often a differentiator for regional banks compared to larger national institutions, aligning with community banking values.

Legal Proceedings

• Potential litigation challenging regulatory approvals is mentioned as a risk factor that could affect the merger's completion or conditions.

Stakeholder Impact

• Shareholders (HarborOne): Will receive either Eastern common stock, cash, or a combination, subject to allocation and proration, converting their investment into consideration from Eastern.
• Shareholders (Eastern): Will experience potential dilution from new share issuance and benefit from the expanded scale and market presence of the combined entity.
• Customers (HarborOne & Eastern): The merger aims to create a larger, more comprehensive banking institution, potentially offering a broader range of services and an expanded branch network.
• Employees (HarborOne & Eastern): Integration of operations may lead to changes in roles, responsibilities, or workforce adjustments, though not explicitly detailed in this filing.
• Regulatory Authorities: Involved in reviewing and approving the merger, ensuring compliance with banking regulations.

Next Steps

• HarborOne shareholders to submit their election forms for merger consideration by October 28, 2025 (or October 23, 2025 for ESOP/401(k) participants).
• Eastern and HarborOne intend to announce the definitive election deadline at least 5 business days (but not more than 15 business days) prior to the Election Deadline.
• Eastern to receive all required regulatory approvals and satisfy all other closing conditions by October 31, 2025.
• The Holdco Merger and Bank Merger to become effective on November 1, 2025.

Key Dates

Recommendation

The filing confirms the merger is on track, which is generally positive for both companies as it reduces uncertainty. However, the completion is still subject to regulatory approvals, which carry inherent risks of delays or burdensome conditions. For existing shareholders, the decision to elect cash or stock depends on individual investment goals and tax implications. For new investors, this is a procedural update, not a new investment thesis. Therefore, a 'hold' recommendation is appropriate as the core investment decision was likely made when the merger was announced, and this filing primarily confirms procedural progress rather than introducing new fundamental value drivers or significant risks.

Keywords

Merger, Acquisition, Banking, Financial Services, Eastern Bankshares, HarborOne Bancorp, Shareholder Election, Stock Consideration, Cash Consideration, Regulatory Approval, Integration, M&A