CNTRY BNC Item 8.01 Other Events
OnApril 7, 2021 ,Century Bancorp, Inc. ("Century"), the holding company ofCentury Bank and Trust Company , and Eastern Bankshares, Inc. ("Eastern"), the holding company of Eastern Bank, entered into an Agreement and Plan of Merger by and among Eastern,Clarion Acquisition Corp. (the "Merger Sub"), Century, andCentury Bank and Trust Company (the "Merger Agreement"). Pursuant to the Merger Agreement, Century will merge with and into the Merger Sub, with Century as the surviving entity (the "Merger"). Immediately after the Merger, Century will merge with and into Eastern, with Eastern as the surviving entity. In connection with the proposed Merger, Century filed with theSecurities and Exchange Commission onJune 3, 2021 a definitive proxy statement for Century's special meeting of shareholders to be held onJuly 7, 2021 , to consider matters and transactions relating to the Merger (the "Proxy Statement"). Since the filing of the Proxy Statement, two purported shareholders of Century sent demand letters (the "Demand Letters") to Century, alleging that the Proxy Statement omits material information and demanding that Century provide additional disclosures in an amendment or supplement to the Proxy Statement. Century believes that the allegations in the Demand Letters are meritless and no additional disclosure is required in the Proxy Statement. However, in order to avoid nuisance, cost and distraction, and to preclude any efforts to delay the closing of the Merger, Century hereby voluntarily amends and supplements the Proxy Statement with the supplemental disclosures (the "Supplemental Disclosures") set forth below in this Current Report on Form 8-K (this "Report"). Century and the Century board of directors deny any liability or wrongdoing in connection with the Proxy Statement, and nothing in this Report should be construed as an admission of the legal necessity or materiality under applicable laws of any of the Supplemental Disclosures.
SUPPLEMENTAL DISCLOSURES TO THE PROXY STATEMENT
The Supplemental Disclosures should be read in conjunction with the Proxy Statement, which should be read in its entirety and is available free of charge on theSEC's Internet site (http://www.sec.gov). Page number references below are to page numbers in the Proxy Statement, and capitalized terms used but not defined herein have the meanings set forth in the Proxy Statement. To the extent the information in the Supplemental Disclosures differs from or conflicts with the information contained in the Proxy Statement, the information set forth in the Supplemental Disclosures shall be deemed to supersede the respective information in the Proxy Statement. New text is underlined, and deleted text is stricken through.
The disclosure on page 19 of the Proxy Statement is hereby supplemented by amending and restating the fifth full paragraph as follows:
OnFebruary 22 and 23, 2021, Century and Goodwin negotiated the terms of non-disclosure agreements with each of Eastern andCompany A , each of which included a one-year "don't-ask, don't waive" standstill provision and customary obligations to preserve the confidentiality of information provided by Century. The non-disclosure agreements were executed onFebruary 23, 2021 . Eastern andCompany A were then granted access to an electronic data room, which included a confidential information memorandum requesting a non-binding expression of interest no later thanMarch 9, 2021 .
The disclosure on page 20 of the Proxy Statement is hereby supplemented by amending and restating the first full paragraph as follows:
OnMarch 16, 2021 , Century executed the non-binding expression of interest with Eastern and entered into an exclusivity agreement with Eastern. The exclusivity agreement provided that for a period of 30 days, Century agreed to negotiate exclusively with Eastern and not to solicit or take any other action designed to facilitate, or that could reasonably be expected to result in, a business combination or sale of substantially all of Century's assets. Neither the non-binding expression of interest submitted by Eastern onMarch 8, 2021 nor the executed expression -------------------------------------------------------------------------------- of interest onMarch 16, 2021 , included a proposal by Eastern to enter into continuing employment arrangements with any of Century's senior officers in the combined company other than the change in control agreements detailed in the section of this proxy statement titled "Interests of Century Directors and Executive Officers in the Merger - Change in Control Agreements."
The disclosure on pages 27 and 28 of the Proxy Statement under the heading "Comparable Company Analyses" is hereby supplemented by amending and restating the following:
Piper Sandler used publicly available information to compare selected financial information for Century with a group of financial institutions selected by Piper Sandler based on its experience and professional judgment. The Century peer group included major exchange-traded (NYSE, NYSEAM, and NASDAQ) banks and thrifts headquartered in theNew England region with total assets between$1B and$10B , but excluded targets of announced merger transactions andNew England banks with differentiated business models (the "Century Peer Group ").The Century Peer Group consisted of the following companies identified in the table below. The analysis compared publicly available financial information for Century with corresponding data for theCentury Peer Group as of or for the year endedDecember 31, 2020 (unless otherwise noted) with pricing data as ofApril 5, 2021 . The table below sets forth the data for Century, theCentury Peer Group , and the median, mean, low and high data for theCentury Peer Group . Century Comparable Company Analysis Non- Tangible LTM LTM Price Price/ performing common CRE / Return Return LTM Price/ /LTM 2021 Assets¹ / equity/ Tier 1 Total Total on on Net LTM Tangible Earnings Estimated Current Total Loans / Total Tangible Leverage RBC RBC average average interest Efficiency book per earnings Dividend Market assets Deposits Assets assets Ratio Ratio Ratio assets equity margin ratio value share per share Yield value Company ($mm) (%) (%)² (%) (%)³ (%)4 (%)5 (%) (%) (%) (%) (%) (x) (x)6 (%) ($mm)Century Bancorp, Inc. 6,359 54.9 0.10 5.78 6.64 13.43 27.9 0.70 11.96 2.00 55.16 143 12.4 12.0 0.8 525 Brookline Bancorp, Inc. 8,942 105.2 0.63 8.86 8.92 13.51 344.2 0.55 5.09 3.17 56.35 154 25.3 14.5 3.0 1,187 Meridian Bancorp, Inc. 6,620 108.5 0.07 11.32 11.60 - 472.4 1.01 8.76 3.12 46.17 132 14.6 12.6 2.1 944 Washington Trust Bancorp, Inc. 5,713 95.8 0.46 8.22 8.95 13.51 308.8 1.22 13.54 2.40 54.37 195 13.1 14.3 4.0 907 Camden National Corporation 4,899 80.4 0.22 8.99 9.13 15.40 217.1 1.23 11.81 3.09 52.20 168 12.3 13.5 3.0 726 HarborOne Bancorp, Inc. 4,484 99.7 1.03 14.11 14.48 19.94 206.3 1.05 6.55 3.06 63.61 127 16.9 14.3 1.4 733 Enterprise Bancorp, Inc. 4,014 86.6 1.20 8.20 7.52 14.62 269.3 0.82 9.95 3.59 62.76 120 12.5 - 2.2 391 Cambridge Bancorp 3,949 92.7 0.26 8.91 8.89 13.93 317.8 0.91 9.09 3.65 56.23 169 16.9 12.7 2.6 590 Bar Harbor Bankshares, Inc. 3,726 88.2 0.33 7.90 8.12 13.56 243.3 0.88 8.17 3.09 60.54 160 14.0 - 2.9 456 Hingham Institution for Savings 2,857 117.5 0.31 10.25 10.59 13.75 427.3 1.88 18.96 3.22 24.87 210 12.4 - 0.7 616 Western New England Bancorp, Inc. 2,366 94.6 0.75 8.99 9.34 14.65 261.3 0.48 4.86 2.95 68.84 101 18.7 14.1 2.4 207 The First Bancorp, Inc. 2,361 80.1 0.72 8.27 8.49 14.82 147.1 1.21 12.35 2.94 49.82 167 11.8 - 4.2 322 Bankwell Financial Group, Inc. 2,254 88.8 1.82 7.73 8.34 13.30 494.1 0.28 3.35 2.77 66.91 125 NM 11.6 2.0 215 Provident Bancorp, Inc. 1,506 107.7 1.80 1 15.66 12.37 14.60 130.4 0.89 5.05 4.23 57.92 120 22.4 23.1 0.8 253 Salisbury Bancorp, Inc. 1,294 92.2 0.92 8.62 8.90 13.57 181.8 0.96 9.99 3.29 59.40 115 10.6 9.6 2.6 125 Union Bankshares, Inc. 1,094 77.5 0.44 7.20 7.31 13.87 335.2 1.33 16.87 3.54 62.64 174 10.7 - 4.3 137 High 8,942 117.5 1.82 15.66 14.48 19.94 494.1 1.88 18.96 4.23 68.84 210 25.3 23.1 4.3 1,187 Mean 3,739 94.4 0.73 9.55 9.53 14.50 290.4 0.98 9.63 3.21 56.18 149 15.2 14.0 2.6 521 Median 3,726 92.7 0.63 8.86 8.92 13.90 269.3 0.96 9.09 3.12 57.92 154 13.6 13.8 2.6 456 Low 1,094 77.5 0.07 7.20 7.31 13.30 130.4 0.28 3.35 2.40 24.87 101 10.6 9.6 0.7 125
1 Nonperforming assets defined as nonaccrual loans and leases, renegotiated loans
and leases, and real estate owned.
2 Bank level financial data shown for Provident Bancorp, Inc.
3 Bank level financial data shown for Provident Bancorp, Inc. and Salisbury
Bancorp, Inc.
4 Bank level financial data shown for Provident Bancorp, Inc. and Salisbury
Bancorp, Inc.
5 Bank level financial data shown for Western New England Bancorp, Inc., The
First Bancorp, Inc., Bankwell Financial Group, Inc., Provident Bancorp, Inc.,
Salisbury Bancorp, Inc., and Union Bankshares, Inc.
6 As provided by Century senior management for Century; Peer projected earnings
per share data reflects median street consensus estimates per S&P Global Market
Intelligence.
The disclosure on pages 28 and 29 of the Proxy Statement under the heading "Analysis of Precedent Transactions" is hereby supplemented by amending and restating the following:
Piper Sandler reviewed two groups of selected merger and acquisition transactions, including a regional and nationwide group, based on its experience and professional judgment. The regional group consisted of bank and thrift transactions announced betweenJanuary 1, 2018 andApril 5, 2021 where the target was headquartered inNew England and had total assets between$500 million and$10 billion at announcement but excluded Merger of Equals transactions (the "Regional Precedent Transactions"). The nationwide group consisted of nationwide bank and thrift transactions announced betweenJanuary 1, 2019 andApril 5, 2021 where the target's total assets were between$2 billion and$10 billion at announcement, but excluded Merger of Equals transactions and transactions with acquirers or targets not headquartered in the continentalUnited States (the "Nationwide Precedent Transactions"). Regional Precedent Transactions Transaction Transaction Transaction Price / Price / Price / Tangible Book LTM Estimated Tangible Value 1-Day Deal Earnings Earnings Book Value Premium to Market Acquiror Target Value Per Share Per Share Per Share Core Deposits Premium Company Company ($M) (x) (x)1 (%) (%) (%) Eastern Century 642 15.2 14.6 175 5.5 22.2 SVB Boston Private Financial Financial Holdings, Inc. Group 943 21.5 27.1 115 2.2 29.5 LendingClub Radius Bancorp, Inc. Corporation 188 35.4 - 179 9.4 - Cambridge Wellesley Bancorp, Inc. Bancorp 121 17.4 - 159 8.1 37.0 Centreville PB Bancorp, Inc. Bank 116 25.4 - 145 11.4 33.2 People's United Financial United Bancorp, Inc. Financial, Inc. 754 13.2 14.7 125 4.4 4.5 Berkshire SI Financial Group, Inc. Hills Bancorp, Inc. 182 27.3 - 118 2.6 13.2 Cambridge Optima Bank & Trust Bancorp Company 65 28.5 - 198 10.0 - People's BSB Bancorp, Inc. United Financial, Inc. 317 14.9 - 160 7.3 20.7 Independent Blue Hills Bancorp, Inc. Bank Corp. 725 35.0 25.2 178 19.2 12.0 People's First Connecticut United Bancorp, Inc Financial, Inc. 552 29.9 19.4 187 13.0 24.3 HarborOne Coastway Bancorp, Inc. Bancorp, Inc. 124 44.1 - 174 13.8 27.0 High 943 44.1 27.1 198 19.2 37.0 Mean 372 26.6 21.6 158 9.2 22.4 Median 188 27.3 22.3 160 9.4 24.3 Low 65 13.2 14.7 115 2.2 4.5 Nationwide Precedent Transactions Transaction Transaction Transaction Price / Price / Price / Tangible Book LTM Estimated Tangible Value 1-Day Deal Earnings Earnings Book Value Premium to Market Acquiror Target Value Per Share Per Share Per Share Core Deposits Premium Company Company ($M) (x) (x)1 (%) (%) (%) Eastern Century 642 15.2 14.6 175 5.5 22.2 WSFS Financial Corporation Bryn Mawr Bank Corporation 990 29.8 17.8 229 13.6 14.2 SVB Financial Group Boston Private Financial Holdings, Inc. 943 21.5 27.1 115 2.2 29.5 Provident Financial Services, Inc. SB One Bancorp 212 9.2 8.8 121 3.3 23.4 Pacific Premier Bancorp, Inc. Opus Bank 1,031 16.6 16.2 141 5.1 0.7 FB Financial Corporation Franklin Financial Network, Inc. 588 40.3 - 149 7.0 14.5 United Bankshares, Inc. Carolina Financial Corporation 1,119 16.3 15.2 207 27.5 15.7 Northwest Bancshares, Inc. MutualFirst Financial, Inc. 362 16.0 15.9 178 12.6 25.7 Sandy Spring Bancorp, Inc. Revere Bank 461 14.8 14.1 173 12.9 27.9 CIT Group Inc. Mutual of Omaha Bank 1,000 10.9 - 125 3.2 - Simmons First National Corporation. Landrum Company 447 14.3 - 181 8.4 - WesBanco, Inc. Old Line Bancshares, Inc. 497 14.0 13.6 177 12.5 12.7
People's United Financial, Inc.
754 13.2 14.7 125 4.4 4.5
Valley National Bancorp Oritani Financial Corp. 735 13.7 14.2 138 9.7 0.5
Prosperity Bancshares LegacyTexas Financial Group 2,057 12.7 13.3 216 20.8 9.3
High 2,057 40.3 27.1 229 27.5 29.5
Mean 800 17.4 15.5 163 10.2 14.9
Median 744 14.6 14.7 161 9.0 14.3
Low 212 9.2 8.8 115 2.2 0.5
1 As provided by Century senior management for Century; Peer projected earnings
per share data reflects median street consensus estimates per S&P Global
Market Intelligence.
Using the latest publicly available information prior to the announcement of the relevant transactions, Piper Sandler reviewed the following transaction metrics: deal value, transaction price to last-twelve-months earnings per share, transaction price to estimated earnings per share, transaction price to tangible book value per share, core deposit premium, and one-day market premium for the Regional Precedent Transactions group as well as the Nationwide Precedent Transaction group. Piper Sandler compared the indicated transaction metrics for the transaction to the median, mean, low and high metrics of the Regional Precedent Transactions group as well as to the median, mean, low and high metrics of the Nationwide Precedent Transactions group.
The disclosure on page 29 of the Proxy Statement under the heading "Net Present Value Analyses" is hereby supplemented by amending and the following:
Piper Sandler performed an analysis that estimated the net present value of Century common stock assuming Century performed in accordance with certain internal financial projections for the year endingDecember 31, 2021 , as well as annual long-term earnings per share and balance sheet growth rates for the years endingDecember 31, 2022 throughDecember 31, 2025 and estimated dividends per share for Class A Common Stock and -------------------------------------------------------------------------------- Class B Common Stock for the years endingDecember 31, 2021 throughDecember 31, 2025 , as provided by the senior management of Century. To approximate the terminal value of a share of Century common stock atDecember 31, 2025 , Piper Sandler applied price to 2025 earnings multiples ranging from 10.0x to 17.5x and multiples of 2025 tangible book value ranging from 110% to 185% based on Piper Sandler's professional judgment and experience. The terminal values were then discounted to present values using different discount rates ranging from 10.0% to 13.0%, which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of Century common stock. As illustrated in the following tables, using stock price as ofApril 5, 2021 and approximately 5,568,000 of shares outstanding in 2025, the analysis indicated an imputed range of values per share of Century common stock of$56.16 to$110.50 when applying multiples of earnings and$66.30 to$125.78 when applying multiples of tangible book value.
The disclosure on page 30 of the Proxy Statement is hereby supplemented by amending and restating the second full paragraph as follows:
Piper Sandler noted that the net present value analysis is a widely used valuation methodology, but the results of such methodology are highly dependent upon the numerous assumptions that must be made, and the results thereof are not necessarily indicative of actual values or future results. The following table describes the discount rate calculation prepared by Piper Sandler for Century common stock. In its normal course of business, Piper Sandler employs the Duff &Phelps Cost of Capital Navigator in determining an appropriate discount rate in which the discount rate equals the sum of the risk free rate, the equity risk premium, the size premium and the industry premium. Risk Free Rate 1.70% Per Duff & Phelps Normalized Rate Equity Risk Premium 7.15% Per Duff & Phelps Cost of Capital Navigator Size Premium 1.42% Per Duff & Phelps Cost of Capital Navigator Industry Premium 1.29% Per Duff & Phelps Cost of Capital Navigator Discount Rate 11.56%
Important Information About the Merger and Where to Find It
A full description of the terms of the Merger is provided in the Proxy Statement. Century urges its investors, shareholders and other interested persons to read the Proxy Statement as well as other documents filed with theSEC because these documents will contain important information about Century, Eastern and the Merger. The Proxy Statement was mailed on or aboutJune 8, 2021 to Century shareholders of record as of the close of business onMay 27, 2021 . A free copy of the Proxy Statement, as well as other filings containing information about Century and Eastern, when they become available, may be obtained at theSEC's Internet site (http://www.sec.gov). Copies of the Proxy Statement may also be obtained, free of charge, from Century's website at https://investors.centurybank.com/, or by contacting Century's Investor Relations at400 Mystic Avenue ,Medford, MA , Attention:William P. Hornby , Telephone: (781) 391-4000.
Certain Information Regarding Participants
Century and Eastern and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies of Century shareholders in connection with the proposed transaction. You can find information about Century's executive officers and directors in the materials filed by Century with theSEC . Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained, with respect to Century, by reading the Proxy Statement filed by Century with theSEC onJune 3, 2021 , the Annual Report on Form 10-K filed by Century with theSEC onMarch 10, 2021 , and other relevant documents regarding the proposed merger to be filed with theSEC and, with respect to Eastern, by reading Eastern's proxy statement for its 2021 annual meeting of shareholders filed by Eastern with theSEC onApril 1, 2021 and other relevant documents regarding the proposed merger to be filed with theSEC . Free copies of these documents may be obtained as . . .
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