Needham Bank has filed a plan with the U.S. Securities and Exchange Commission to go public. It is seeking to raise $390 million via an initial public offering (IPO), which was filed on June 9.

The bank’s decision to go public was initially viewed in banking and business circles as somewhat unexpected, given the slowdown of IPOs this year and the recent turmoil in the banking industry following three regional bank failures.

But to Bob Mahoney, former CEO and president of Citizens Bank, the decision was the logical progression in more than a decade of sustained growth by what is now one of the 25 largest banks in Massachusetts.

“I think this is a perfectly reasonable time,” said Mahoney. “They can use the capital, they’re growing nicely, they’re in a great market. Why not?”

Other analysts and experts believe Needham Bank is taking advantage of larger banks hunkering down after recent bank failures, some seeing this as a good opportunity for a bank to raise capital.

Mahoney has seen this movie before. During his time at Citizens Bank, it grew from a community bank with $600 million in assets to a regional player with more than $160 billion. After Citizens, he took over as President and CEO of Belmont Savings Bank in 2010.  The following year, he led the conversion of the 130-year-old institution from a mutual bank to a stock-ownership holding company. 

Needham Bank, formerly Needham Co-Operative Bank, has been on a similar path. Founded in 1892, the bank embarked on an ambitious growth plan when it merged with Dedham Cooperative Bank in 2007 and officially changed the name of the combined banks to Needham Bank.

By 2009 the bank’s total assets reached $1 billion. By 2019, it had become a $2 billion bank when management persuaded depositors to vote in favor of reorganizing from a mutual co-operative bank to a mutual holding company.

Four years later, Needham Bank has grown into a $3 billion bank on the verge of going public. Mahoney says initial skepticism of the planned IPO may have been based on residue from the demise of Silicon Valley Bank and other institutions highly exposed to the high tech sector  — a nationwide problem that required intervention by the Federal Reserve.

“Needham (Bank) doesn’t have big exposure to that,” Mahoney said. “They have a pretty clean balance sheet. They’re not really subject to those kinds of problems.

“They’re just a good, old-fashioned community bank that takes in deposits and makes loans to businesses and consumers. The home mortgage business isn’t going down the tubes; business banking isn’t going down the tubes.”

There also have been 46 applications for bank branch closures in Massachusetts since the start of the year —but 33 were from one institution, Santander Bank, which plans to close one of its two Needham branches.

According to its SEC filing, Needham Bank plans to use the proceeds from the offering in part to support increased lending, grow its commercial real estate portfolio, to add more branches,  and to pursue mergers and acquisitions.

“There’s a helluva lot of work to be done,” said Mahoney. “You have to put that capital to work. It’s not easy.”

If Needham Bank continues to mirror Belmont Savings, a future sale or merger is also a possibility. Seven years after Belmont Bank converted to a stock-ownership structure, the bank was sold to Connecticut-based People’s Bank for $327 million in a stock transaction.

While the IPO is pending, customers will see no immediate impact.

Needham Bank officials were unable to comment for this story due to SEC “quiet period” restrictions following their filing.  During this period a company’s management and marketing teams cannot share opinions or additional information about the firm.

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