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June 19, 2018

CT's People's United to acquire Farmington Bank

HBJ Photo | Steve Laschever Farmington Bank Chairman, CEO and President John Patrick Jr.
By Gregory Seay

Bridgeport super-regional lender People's United Bank is acquiring community lender First Connecticut Bancorp Inc., the holding company parent of Farmington Bank, for approximately $544 million.

People’s United on Tuesday said both companies’ boards of directors approved the agreement, which awaits approval from state and federal bank regulators and First Connecticut’s shareholders. The deal is expected to close in the fourth quarter, officials said.

Farmington Bank has 28 branches in Connecticut and western Massachusetts, along with $3.1 billion in assets vs. People’s United’s approximately 400 retail offices in six Northeast states and $44 billion in assets.

Pending with what would be its fourth acquisition in two years, People's United CEO John P. "Jack" Barnes hinted Tuesday that its buying-binge may not yet be over.

"I would expect as we move forward,'' Barnes told HBJ Tuesday, "there will be more opportunities before us." He did not elaborate.

Barnes, who joined People's through its 2008 acquisition of former Vermont lender Chittenden Corp. and became its CEO in July 2010, said he had approached First Connecticut Bancorp and Farmington Bank CEO John Patrick Jr. various times over the years about a possible combination. Patrick rebuffed him each time, but a January call from Barnes started talks between the two institutions.

Patrick will not have a role in the merged organization, Barnes said.

Reached late Tuesday, Patrick confirmed that he will be "pursing other interests" once the transaction closes.

"We've always considered them a very good competitor,'' Barnes said, noting that several former People's United senior lenders are on Farmington Bank's staff. "We like the communities the bank is opening in.''

Indeed, the opportunity to plant People's flag deeper into central Connecticut and western Massachusetts via Farmington Bank was a key attraction of the deal, Barnes said.

Farmington Bank has 28 branches combined in those markets vs. People's United's 36 Hartford County branches --25 of which are housed in Stop & Shop Supermarkets. People's also has 20 branches in western and central Massachusetts. In all, People's has about 400 branches in its Northeast market.

Under their deal with People's United, First Connecticut shareholders will receive 1.725 shares of People’s United stock for each of their shares. The deal is valued at $32.33 per First Connecticut share, based on People’s United June 18 closing price.

If consummated, this will be at least the fourth acquisition for People’s United in the last two years. In April 2017, it purchased Long Island’s Suffolk National Bank. Three months later, it acquired Philadelphia commercial-equipment financier LEAF Capital.

In Nov. 2016, People’s bought New York City investment adviser Gerstein Fisher.

Originally chartered in 1851 as a mutual savings institution, Farmington Bank’s parent, First Connecticut, went public in 2011, raising $172 million in capital.

Keefe, Bruyette & Woods, Inc. served as financial advisor to People's United and Simpson Thacher & Bartlett LLP served as legal counsel to People's United.

Piper Jaffray & Co. served as financial advisor and Hinckley Allen & Snyder LLP served as legal counsel to First Connecticut Bancorp.

This is an updated version of an earlier post.

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