Moving to extend its reach eastward, Bridgeport, Conn.-based People's Bank said Thursday it had agreed to buy Norwich Financial Corp. for $164 million in cash and stock.

The deal would bring People's, a $9.5 billion-asset thrift holding company with 110 branches mostly clustered in western Connecticut, 15 branches in New London, Tolland, and Windham counties.

Norwich Financial has assets of about $713 million.

The deal is scheduled to close in the first quarter of 1998.

The company said it expects the transaction to add slightly to 1998 earnings and to add 2% in 1999.

"Norwich has the No. 1 deposit market share and is the leading mortgage originator in New London County," People's president and chief executive officer David E. A. Carson said in an interview.

After several years of economic difficulty due to the decline of the atomic submarine-building industry, New London is now benefiting from tourism and gaming, he added.

Mr. Carson said People's intends to close a few of Norwich's smaller branches and would consolidate the back offices of both organizations. This would result in cost savings of $7 million.

But he said he expects few to lose their jobs. "We'll be looking to find jobs for most of the people within our existing structure," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.