The merger of People’s United Financial PBCT and First Connecticut Bancorp FBNK announced in June 2018 has been approved by shareholders of the to-be-acquired company at a special meeting held on Sep 25. Along with this, the companies announced the receipt of all the necessary regulatory approvals for the buyout, which is expected to close on Oct 1.
At the time of announcement, People’s United had said that the deal was worth nearly $544 million. Also, the company expects it to be accretive to earnings, going forward.
This merger is another one of the bank’s strategic acquisitions on the back of its strong balance sheet that is expected to strengthen fee income. First Connecticut’s acquisition is expected to be a low risk transaction that would give a solid boost to People’s United’s deposits balance.
Per the agreement, First Connecticut will be absorbed into People’s United. Further, Farmington Bank will merge with and into People’s United Bank, National Association.
Also, shareholders of First Connecticut will be receiving 1.725 shares of People’s United’s common stock for each share held. Notably, First Connecticut stockholders also approved an advisory proposal regarding the compensation that may be paid or become payable to certain First Connecticut executive officers in connection with the merger.
People’s United’s acquisition streak has helped it expand operations and improve financials. Its progress on strategic efforts to grow reflects capital and liquidity strength. Moreover, an improving environment for U.S. banks in the form of rising interest rates, lower tax rates and softer regulations, is likely to support the company’s financials in quarters ahead.
Shares of People’s United have lost 5.4% over the past three months compared with the 2.5% decline witnessed by the industry it belongs to.
Currently, People’s United carries a Zacks Rank #2 (Buy).
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