Hubco Inc. is scooping up another Connecticut community bank.
The acquisitive Mahwah, N.J., company has agreed to pay $68 million for Westport Bancorp, a $308 million-asset Fairfield County institution that has long been the subject of takeover rumors.
The purchase, coupled with the pending acquisitions of Lafayette- American Bank and Trust Co. and Hometown Bancorp, would give $1.7 billion- asset Hubco a solid foothold in southwestern Connecticut. Hubco would have 24 branches and about $1.2 billion of assets in that wealthy region.
This would be Hubco's 16th acquisition in less than six years in New Jersey and Connecticut. The bank already has a strong market presence in northern New Jersey and is seeking to expand into Westchester and Rockland counties in New York, filling the gap between its two franchises.
"Hubco has become the juggernaut of Northeast banking and has established itself as one of the most attractive franchises in Fairfield County, arguably one of the most attractive banking markets in the country," said John Carusone, president of Bank Analysis Center, Hartford, Conn. "They paid pretty dearly for it, but the wisdom of these acquisitions will be demonstrated in the long run."
As part of the deal, Hubco will exchange 0.3225 share of its stock for each share of Westport, equaling about $6.49 per share. That's about 2.56 times Westport's book value and 10 times last year's earnings.
Westport has six branches and a trust operation with $600 million of assets under management. Kenneth T. Neilson, Hubco's president and chief executive, said the high price was justified by the trust operation and Westport's cheap deposit base, with 30% of deposits in noninterest-bearing accounts.
The deal, which is still subject to shareholder and regulatory approvals, is expected to close in the fourth quarter and add to 1997 earnings. The Lafayette purchase is scheduled to close July 1, while the Hometown deal is to close in August.