As a result of Bridgeport-based People’s United Bank’s merger with Farmington Bank, some 27 percent of the latter’s staff will be laid off – while its top executives are due millions of dollars in severance packages.
Announced in June, People’s United Financial Inc., the holding company for People’s United Bank, is set to acquire First Connecticut Bancorp Inc., the holding company for Farmington Bank, in a 100 percent stock transaction valued at approximately $544 million. The deal is expected to win regulatory approval, possibly within the next few weeks.
Farmington Bank has filed a notice with the state Department of Labor that it plans to lay off 95 of the 350 employees at its corporate headquarters in Farmington once the merger is completed. Those cuts are expected to begin Nov. 5 and continue through the end of February.
Also exiting will be Farmington CEO John J. Patrick Jr., whose severance package according to SEC filings could be as high as $6.1 million, including $2.2 million in cash and $3.3 million in retirement benefits, also paid in cash.
Under the deal’s terms, Farmington Executive Vice President, Chief Financial Officer and Treasurer Gregory A. White would be eligible for a combined separation package worth $3.7 million; Executive Vice President and Chief Lending Officer Michael T. Schweighoffer would be eligible for $3.4 million; Executive Vice President and Director of Retail Banking and Marketing Kenneth F. Burns would receive $821,000; and Executive Vice President and Chief Risk Officer Catherine M. Burns would get $793,886.
If the deal does not close on or before June 18, 2019, First Connecticut must pay People’s United Financial a $22.5 million “breakup fee,” according to SEC filings.