People's United adds to Boston operations with BSB purchase
People’s United Financial in Bridgeport, Conn., has agreed to buy BSB Bancorp in Belmont, Mass.
The $47 billion-asset People’s United said in a press release Tuesday that it will pay $327 million in stock for the $3 billion-asset parent of Belmont Savings Bank. The deal, which is expected to close in the second quarter, priced BSB at 160% of its tangible book value.
“We share a similar culture, a customer-centric approach to banking and guiding principles centered on relationships, personalized service and community giving,” Jack Barnes, People’s United’s chairman and CEO, said in the release.
“The acquisition will deepen and expand our presence in the Greater Boston area, particularly in the suburbs west of the city, which are attractive banking markets,” Barnes added.
BSB has six branches in the Boston area, including three inside Star Markets grocery stores.
“Our customers will benefit from People’s United’s broader array of products and services, enhanced digital capabilities and expansive branch network,” Bob Mahoney, BSB’s president and CEO, said in the release. “In addition, People’s United’s success with in-store locations will allow for the seamless integration of our Star Market branches.”
People’s United said it expects the transaction to be accretive to earnings per share. It should take about three years to earn back any dilution to People’s United’s tangible book value.
People’s United plans to cut half of BSB’s annual noninterest expenses, representing about $16 million. The company said it expects to incur about $28 million in merger-related costs.
Keefe, Bruyette & Woods and Simpson Thacher & Bartlett advised People’s United. J.P. Morgan Securities and Luse Gorman advised BSB.