People's United Financial Inc. in Bridgeport, Conn., is close to making an acquisition, Philip Sherringham, its president and chief executive officer, said on an earnings conference call Friday.
The number of prospective sellers is rising now, because the weak economy is putting capital pressure on more banks, Sherringham said. And the $20.8 billion-asset People's, which has been eagerly seeking deals for a while, has undertaken more due diligence on potential targets in the third quarter than it did in the second quarter.
"We do feel we're getting closer to executing one or more well-priced acquisitions as we grow into our capital base," Sherringham said.
He would not be pinned down on specifics: People's is open to buying operating banks, failed ones, or nonbanks such as finance companies or asset managers. It favors the Northeast, but could go far afield for the right opportunity. It prefers large deals, given that it has $2.5 billion of excess liquidity, but is flexible about the size of its targets. And yes, it could even buy a bank that is larger than People's.
People's has long said it is scouting the Northeast, from Maine to Washington, but Sherringham said Friday that it also would consider deals elsewhere. People's intends to evaluate failed banks in particular because such deals can be very attractive, and few failures are available in the Northeast.
Pressed about which regions it might consider for buying failures, Sherringham kept his options open, saying he would be comfortable stretching even to the other side of the country, because People's already operates in multiple states, making for little difference "in terms of driving time versus jumping on airplanes." He said a loss-sharing agreement from the Federal Deposit Insurance Corp. would minimize the risk of entering an economically distressed area.
With its capital cushion, People's can afford to take on up to $40 billion more of assets, and Sherringham said he would not rule out buying a bank that exceeds People's in size.