Rockville Financial (RCKB) in Rockville, Conn., will merge with United Financial Bancorp (UBNK) in West Springfield, Mass.
Rockville will pay $369 million in stock for United, creating a company with $4.8 billion in assets and more than 50 branches. While Rockville is issuing stock, United's shareholders will own 51% of the company when the transaction closes in mid-2014. The company, which will keep United's name and stock symbol, will be based in Glastonbury, Conn.
The companies said Friday that the merger should generate about $17.6 million in annual cost savings, or roughly 15% of their combined expenses. The merger is expected to be about 30% accretive to the combined 2015 earnings of both companies.
"This merger is a significant step in our strategy to expand our footprint," William Crawford, Rockville's president and chief executive, said in a press release "Our complementary branch networks provide both greater market density and unique franchise scarcity value. The combined company will create a top-performing New England community bank that has the scale, product depth and efficiency to compete effectively and deliver strong returns to our shareholders and an expanded product suite to our customers."
Rockville and United will each have 10 directors. Crawford will become CEO and J. Jeffrey Sullivan, United's chief operating officer, will become president. Eric Newell from Rockville will serve as chief financial officer, and Robert Stewart from United is set to become chairman. Richard Collins, United's chairman, president and CEO, will retire.
RBC Capital Markets advised Rockville and Hinckley, Allen & Snyder was the company's legal counsel. Sandler O'Neill is rendering a separate fairness opinion. Sterne Agee & Leach is United's financial adviser; Kilpatrick Townsend & Stockton is the company's legal counsel.