New Jersey's Hubco is making merger waves in Connecticut, beating out rival acquirers there for the second time in three months.
The Mahwah-based banking company has agreed to buy Hometown Bancorp., Darien, for about $17.75 per share. The $31 million deal is worth about 176% of Hometown's March 31 book value.
Hubco had agreed in February to acquire $720 million-asset Lafayette- American Bank and Trust Co., Bridgeport. Both deals are expected to close by the end of the third quarter.
With these two quick moves, Hubco is sending a message to the banks in Connecticut that it's there to stay and eager to grow. And officials are hoping that other small banks will see Hubco as an alternative to larger banks, and a company worth joining.
"Given their druthers, it seems like other community institutions would like to join us and be a part of what we're building," said Hubco president and chief executive Kenneth T. Neilson. "What it says is that other banks like the way we do community banking and feel that there is a void in the Connecticut marketplace for a strong midsize commercial bank."
"Pretty impressive," said Peter J. Ostrowski, managing director of New York-based Ostrowski & Co., referring to the two deals that will give Hubco almost $1 billion in assets in Connecticut, with a solid position in wealthy Fairfield County.
"If you forget about the state borders and look at it purely from an economic market standpoint, it's starting to be a pretty interesting franchise."
Through the two deals, the $1.7 billion-asset Hubco, whose current branch network extends throughout northern New Jersey, has also quickly stolen the thunder from other acquirers in Connecticut, including larger regional banks.
During the past year, for example, Lafayette had spurned offers from Fleet Financial Group, UJB Financial Corp., and First Fidelity Bancorp., according to industry sources.
And Hubco's deal for $210 million-asset Hometown takes the wind out of an effort by Norwalk Savings Society to get its hands on the small Darien bank. The $542 million-asset thrift last month revealed that it holds a 9.51% stake in Hometown and had planned to seek a merger despite Hometown's opposition.
"Hubco has proven that it can be a white knight of choice," said John S. Carusone, president of Bank Analysis Center in Hartford.
Officials at Norwalk Savings, which scored a big return on its investment, say they don't anticipate making a rival bid for Hometown.
But Hometown Bancorp. officials insist they weren't searching for a white knight to rescue them from Norwalk.
"Hubco's got a wonderful track record of acquiring community banks but maintaining the level of community service," said Kevin E. Gage, Hometown president and chief executive. "Connecticut is missing a middle-market bank right now and Hubco is filling that void."
The latest acquisition continues Hubco's rapid expansion throughout northern New Jersey and the greater New York area in recent years.
The Hometown deal would be Hubco's 15th acquisition overall since 1990. The company also attempted to gain a foothold in upstate New York last year, but its bid for Goshen-based MSB Bancorp failed.