People’s United Financial, the holding company for People’s United Bank, agreed to acquire BSB Bancorp and its subsidiary, Belmont Savings Bank, in a 100% stock transaction valued at approximately $327 million.
“We are pleased to welcome Belmont Savings Bank to People’s United,” said Jack Barnes, chairman and CEO, People’s United Financial. “Together, we share a similar culture, a customer-centric approach to banking and guiding principles centered on relationships, personalized service and community giving. The acquisition will deepen and expand our presence in the greater Boston area. Our Boston MSA deposit market share rank will increase from #13 to #8 on a pro-forma basis.”
Established in 1885 and headquartered in Belmont, MA, Belmont is a community-focused bank which provides a range of retail and commercial products and services. With $3 billion in assets, Belmont is a 2018 Fortune 100 “Fastest Growing Company,” and has six branches in the greater Boston area.
“People’s United Bank and Belmont share a rich history in the Northeast, and many synergies that will create significant value for both customers and stockholders,” said Bob Mahoney, BSB president and CEO. “Our customers will benefit from People’s United’s broader array of products and services, enhanced digital capabilities and expansive branch network.”
People’s United expects the transaction to be approximately $0.03 accretive to earnings per common share based on fully phased-in cost savings, with a tangible book value earn-back of 3.1 years and an IRR of over 20%. Under the terms of the agreement, which has been approved by both companies’ boards of directors, BSB Bancorp stockholders will receive 2.0 shares of People’s United stock for each BSB share. The transaction is valued at $32.42 per BSB share, based on the closing price of People’s United’s common stock on November 26, 2018.
Closing is expected by the second quarter of 2019. Completion of the transaction is subject to customary closing conditions, including receipt of regulatory approvals and the approval of BSB stockholders.
Keefe, Bruyette & Woods served as financial advisor to People’s United, while Simpson Thacher & Bartlett served as its legal counsel. J.P. Morgan Securities served as BSB’s financial advisor, while Luse Gorman acted as its legal counsel.
Founded in 1842, People’s United Bank is a diversified financial services company with $47 billion in assets and over 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.