People’s United Financial Inc., the holding company for People’s United Bank, plans to acquire First Connecticut Bancorp Inc., the holding company for Farmington Bank, in a 100 percent stock transaction valued at approximately $544 million.
Under the terms of the agreement, which has been approved by both companies’ boards of directors, First Connecticut Bancorp Inc. shareholders will receive 1.725 shares of People’s United Financial stock for each First Connecticut Bancorp Inc. share. The transaction is valued at $32.33 per First Connecticut Bancorp Inc. share, based on the closing price of People’s United’s common stock on June 18.
Completion of the transaction is subject to customary closing conditions, including receipt of regulatory approvals and the approval of First Connecticut Bancorp shareholders. The transaction is expected to close during the fourth quarter of this year.
Established in 1851, Farmington Bank is a community bank with 28 branches throughout Central Connecticut and Western Massachusetts. With $3.1 billion in assets, the bank has focused on commercial and retail banking.
Jack Barnes, CEO of Bridgeport-based People’s United, noted, “As with the People’s United Community Foundation, Farmington Bank has a strong commitment to community giving. With our shared focus, we will continue to positively impact the lives of individuals, families and businesses throughout Hartford County.”
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 internal rate of return of approximately 18 percent.