Eastern Bankshares EBC, the Boston bank-holding company that went public in October, agreed to pay $115.28 a share cash, or $642 million, for Century Bancorp.
The accord boosted the shares of Century Bancorp, Medford, Mass. At last check they were 25% higher at $114.15. Eastern Bankshares was off 1.6% at $18.90 a share.
Eastern Bankshares operates Eastern Bank. Century Bancorp is the parent of Century Bank & Trust Co.
Eastern also lifted its quarterly dividend by a third to 8 cents a share, payable June 15 to holders of record June 3.
The deal extends Eastern's reach in communities across greater Boston and southern New Hampshire, the company's chairman and chief executive, Bob Rivers, said in a statement. He called the combined companies' capital level "robust."
Eastern Bankshares has $16 billion of assets, including its banking and insurance operations. Century Bank's assets total $6.4 billion.
Eastern said it would fund the purchase with cash on hand.
The companies expect to close the deal in the fourth quarter, subject to conditions including regulatory clearances and shareholder approval.
Eastern's IPO at $10 a share raised some $1.7 billion. The stock has been trading around its life high of $20.15, set in mid-March.
The deal price is more than double Century Bancorp's 52-week low of $54.76, set almost a year ago.
JPMorgan Chase provided financial advice to Eastern Bankshares. Piper Sandler advised Century Bancorp.