Less than two months after completing its purchase of Farmington Bank in Connecticut, the parent company of People’s United Bank is shopping again.
The company announced this morning it would acquire the parent company of Belmont Savings Bank in an all-stock transaction valued at $327 million.
Under the terms of the agreement, BSB Bancorp stockholders will receive two shares of People’s United Financial 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 Nov. 26, 2018. Shares of BSB Bancorp stock are trading $4.14 higher today following the announcement of the acquisition, up more than 14 percent from yesterday.
“We are pleased to welcome Belmont Savings Bank to People’s United,” Jack Barnes, chairman and CEO of People’s United Financial, said in a statement. “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, particularly in the suburbs west of the city, which are attractive banking markets. As such, our Boston MSA deposit market share rank will increase from No. 13 to No. 8 on a pro-forma basis.”
The purchase of Belmont Savings Bank comes after years of speculation over when the bank would be bought.
The bank hired President and CEO Bob Mahoney, the former executive vice chairman of Citizens Financial Group, in 2010, and then issued an IPO in 2011. Since that time, the bank has grown immensely.
Between the third quarter of 2011 and the third quarter of this year, Belmont Savings has grown from roughly $688 million in assets to nearly $3 billion, according to the FDIC. Last year, the company twice received national recognition for its organic growth.
“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,” Mahoney said in a statement. “Our customers will benefit from People’s United’s broader array of products and services, enhanced digital capabilities and expansive branch network. In addition, People’s United’s success with in-store locations will allow for the seamless integration of our Star Market branches.”
Experts consider Belmont an attractive acquisition for a bank looking to deepen its franchise in the Greater Boston market. The company should be a good match for People’s United and is similar to the Farmington acquisition.
Like Farmington, Belmont Savings has close to $3 billion in assets. It also offers the potential for cost savings because People’s, which has 47 branches in Massachusetts, according to its website, has branches in some of the same communities as Belmont Savings, including in Cambridge and Waltham. It also has a branch in nearby Lexington.
Belmont Savings has six branches in total; in addition to the two in Cambridge and Waltham, it also has two in Belmont and one each in Watertown and Newton.
On its most recent earnings call, People’s announced that it was hiring three new bankers in the Boston market, one of which would help bulk up the bank’s nonprofit business, an area in which Belmont Savings has done well over the years.
It is unclear at this time if there will be branch closings or layoffs, although People’s did close Farmington branches in markets in which it also had a branch. The transaction is expected to close in the second quarter of 2019.
This article has been updated to clarify BSB Bancorp’s stock price at the time of publication.
