Middletown's Liberty Bank says it is paying $11 million for struggling New Haven lender The Bank of Southern Connecticut, a deal that will allow Liberty to bolster its presence in the Elm City and surrounding county, authorities say.
The merger is expected to be completed in the second quarter pending regulatory approval, officials said Thursday.
Liberty Bank, a mutual savings lender with $3.5 billion in assets and 44 branches, is paying about $3.76 per share in cash to acquire Southern Connecticut Bancorp's four-branch network in New Haven, North Haven and Branford.
"The merger of The Bank of Southern Connecticut with Liberty Bank will significantly expand our branch network and market share in New Haven County" Liberty Bank CEO Chandler Howard said in a statement.
Southern Connecticut Bancorp, parent of The Bank of Southern Connecticut, has $120 million in assets.
The bank had been wrestling for years with losses due to bad loans.
Last summer, the Federal Deposit Insurance Corp., banks' principal regulator, issued a consent order against Southern, raising flags about the community lender's banking practices relating to management, capital, earnings, and asset quality.
A few years ago, it also failed to complete an $18.2 million merger bid with a nearby rival.