People’s United Financial, the holding company for People’s United Bank, will acquire First Connecticut Bancorp and its subsidiary Farmington Bank in a 100% stock transaction valued at approximately $544 million.
People’s United expects the transaction to be $0.05 accretive to earnings per common share based on fully phased-in cost savings, with a tangible book value earn-back of approximately 3.5 years and an IRR of approximately 18%. First Connecticut shareholders will receive 1.725 shares of People’s United Financial stock for each First Connecticut share.
“We are excited to welcome Farmington Bank to People’s United,” said Jack Barnes, CEO of People’s United Financial. “They have a long-standing relationship-based approach to serving their customers and complementary commercial and retail capabilities. This, coupled with their experienced team and similar culture, will strengthen our well-established presence in the region.”
Both boards of directors approved the transaction. Completion is subject to customary closing conditions, including receipt of regulatory and First Connecticut shareholder approvals. Closing is expected during Q4/18.
Keefe, Bruyette & Woods served as financial advisor and Simpson Thacher & Bartlett was legal counsel to People’s United. Piper Jaffray served as financial advisor and Hinckley Allen & Snyder was legal counsel to First Connecticut.
Founded in 1842, People’s United Bank is a community-based, regional bank in the Northeast offering commercial and retail banking, as well as wealth management services through a network of nearly 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.
Established in 1851, Farmington Bank is a community bank with 28 branches throughout Central Connecticut and Western Massachusetts and $3.1 billion in assets.