In a financial climate that has seen hundreds of bank failures across the nation and large banks, rightly or wrongly, being viewed as the villains of the economic downturn, Bridgeport-based People”™s United Bank is striving to buck that trend and become a major player in the banking industry in the Northeast.
On Dec. 1, People”™s United Financial Inc., the parent of People”™s United Bank, announced it had completed the acquisition of LSB Corp. of North Andover, Mass., and Smithtown Bancorp of Smithtown, N.Y. The move continues an aggressive policy that People”™s United has implemented over the last several years.
“We are pleased to expand the People”™s United Bank franchise in the greater Boston and New York markets,” Jack Barnes, president and chief executive officer of People”™s United Financial, said in a statement. “The seven former River Bank branches are an excellent fit with our existing footprint in Massachusetts and southern New Hampshire, considering our FDIC-assisted purchase of Butler Bank in Lowell earlier this year, and our two new branches in downtown Boston. The former Bank of Smithtown branches are a natural extension of our Westchester County and Fairfield County markets and an exciting expansion of our franchise into the New York Metro area.”
LSB Corp.”™s subsidiary is River Bank, which operates seven branches, five in northern Massachusetts and two in southern New Hampshire. Bank of Smithtown operates 31 branches, 30 on Long Island and one in New York City.
The LSB acquisition is an all-cash transaction valued at $94.8 million. The Smithtown Bancorp Inc. acquisition is valued at about $56.4 million, with approximately 53 percent being paid in cash and the balance in the form of shares of People’s United Financial common stock.
People”™s United Financial began its campaign of expansion when it acquired Chittenden Corp. of Burlington, Vt., on Jan. 1, 2008. That move gave People”™s United Bank a presence in Vermont, Maine and Hampshire. Another Chittenden subsidiary was Flagship Bank of Worcester, Mass., which allowed the Bridgeport bank to gain a foothold in the lucrative Bay State consumer banking market.
The recent acquisition now puts People”™s United in every New England state except Rhode Island, and also in Westchester County, Long Island and New York City. The purchases increase the total number of People”™s United branches to more than 330.
If the bank continues to grow, this can only be good news for the city of Bridgeport. Looking at the acquisitions through rose colored glasses, the addition of 38 more bank branches will mean more support is needed, which should translate into more jobs at People”™s United Main Street corporate headquarters.
And a larger work force in Bridgeport means more business for the downtown merchants who need all the support they can get.
Of course, People”™s United”™s strong position could attract interest from larger banks, meaning that one of the Park City”™s biggest taxpayers and a fine corporate neighbor could find itself rife for acquisition in its own right.
Once the acquisitions were completed, People”™s United stock rose 36 cents a share, a significant increase. Whether that upward trend continues, of course, remains to be seen.
Still, the news of People”™s United”™s aggressive action in spite of the economic climate is impressive and certainly good news for Bridgeport Mayor Bill Finch and the folks at City Hall.
There have been few cities hit harder by the recession than Bridgeport and any positive financial indicators are especially welcome here. So in keeping the rose colored glasses in place, Bridgeporters can”™t be blamed for viewing the People’s United expansion as an early holiday gift.
Rob Sullivan is the publisher and executive editor of the Bridgeport Banner daily website and monthly print edition. The website can be accessed at www.bridgeportbanner.typepad.com. He lives in the Black Rock section of Bridgeport.
