Bill Crawford had kept a relatively low profile among bankers until he unveiled a deal set to shake up the Northeast.
Since early 2011, Crawford has been president and chief executive of Rockville Financial (RCKB) in Connecticut. Though involved with Rockville's second-step conversion, he had seemed content to quietly post slow and steady growth at the $2.2 billion-asset company.
That changed last month when Rockville agreed to buy United Financial Bancorp (UBNK) in West Springfield, Mass. At $371 million, it was the ninth-biggest deal of 2013 and has been hailed by analysts as the truest merger of equals in years.
The merger will create a $5 billion-asset bank in the Northeast that should become a formidable competitor to other large community banks such as Berkshire Hills Bancorp (BHLB), People's United (PBCT) and Webster Financial (WBS). It should also boost Crawford's profile, assuming he can successfully integrate the merger.
Crawford "is one of the most interesting CEOs to watch in 2014," says Matt Breese, an analyst at Sterne Agee. "He was a relatively unknown player in the Northeast community banking landscape just three years ago. Now he's leading one of the largest and most interesting franchises in the region."
For his part, Crawford realizes that a lot of people will be watching how the companies come together.
"We have already shown our ability to grow organically, and now we have to prove to the market that we're good at delivering on the numbers we promised," Crawford says. "And the regulators will really want to watch how we integrate these companies."
The task could be challenging for Crawford, who admits that he had to bone up on the mutual thrift industry before joining Rockville. His career has largely involved commercial lending posts and market president roles at larger institutions such as SouthTrust, Wachovia and Wells Fargo (WFC).
Still, his background has helped him transform Rockville. Under his leadership, the company built the infrastructure necessary for a big merger, beefing up in risk management and technology. He has hired commercial lenders and added cash management services and a private banking group.
Rockville wasn't looking to buy anything when Crawford received an invitation from Richard Collins, United's CEO, to meet with his company's board. As it turned out, the companies have similar histories. Both were founded in the 1800s as mutual thrifts and each converted in the last six years.
"Our companies have grown organically and primarily bought back stock," Crawford says. "When we were putting together the [merger's] credit marks both sides got the same number pretty quick."
That being said, few mergers of equals work out as planned. Still, Rockville and United have made some early concessions in hopes of having a smooth transition.
Crawford will become the CEO but the company will take United's name and stock symbol. Collins will retire, but J. Jeffrey Sullivan, United's chief operating officer, will become president. The board will be evenly divided.
"Without doubt, the story was well received by the investors with whom we visited," Mark Fitzgibbon, an analyst at Sandler O'Neill, wrote in a note to clients after an early December road show with the companies' executives. "We were also struck by the positive chemistry between these two management teams, which will be critically important."
Chemistry alone will not validate the deal. Management plans to cut nearly $18 million in annual expenses, or roughly 15% of total overhead, with half of the cuts taking place next year. They also expect 18% accretion in earnings per share in 2014 and 35% a year after that. A key systems conversion is expected to take place late next year.
"Next year is obviously going to be noisy because of the integration," Crawford says, adding that 2015 will be more indicative of the company's progress. "I want us to hit the numbers that we told shareholders while doing an extraordinary job for our customers and employees."
For the company's competitors, the scariest part of the deal is the large amount of excess capital Crawford will have after closing the deal. Analysts estimate that United will have enough capital to add $1.5 billion to $2 billion in assets over time.
"If we lever that capital responsibly we can become a much stronger company," Crawford says, adding that acquisitions are unlikely as his team focuses on the integration. "That's what we think about. It is all about being able to return capital" to shareholders.
Crawford is eager to keep hiring lenders; Rockville has poached talent from Bank of America (BAC), Wells Fargo and First Niagara Financial (FNFG). The company is also ready to invest more in technology after hiring a former B of A executive to oversee virtual banking.
"You have to put the branch experience in the customers' hands," Crawford says. "We are never going to catch up with Wells Fargo or Bank of America [with technology] but we'll be fine if we're a half-step behind rather than three steps. We want to be a fast adopter."
A willingness to compromise in order to merge with United will certainly help Rockville meet its objectives faster, Crawford says.
"This deal has moved us ahead five years" with our strategic growth plan, he says. "Imagine how long it would have taken us to double our size organically? It makes all the sense in the world to get scale and be able to reinvest in the business."