After operating exclusively in Massachusetts for more than a century, United Financial Bancorp (UBNK) in West Springfield is making the leap across the state line.
The $1.7 billion-asset company announced Thursday that it is acquiring New England Bancshares (NEBS) in nearby Enfield, Conn., in an all-stock deal valued at $91 million.
It would be United's first acquisition since 2009 and by far the largest in its 130-year history. United, the parent of United Bank, would gain roughly $727 million of assets, $582 million of deposits and 15 branches in four Connecticut counties.
"This combination presents a tremendous opportunity to expand our presence in Connecticut, where United Bank does not currently maintain any branches," Richard B. Collins, United's chairman, president and chief executive, said in a news release. "Connecticut is an attractive and growing banking market and one we have had our eye on for some time. Like us, New England Bancshares has deep roots in the communities it serves, and we look forward to introducing our brand of banking to this region."
United is the second bank based in western Massachusetts to strike a deal in Connecticut in recent months. In April, Berkshire Hills Bancorp (BHLB) in Pittsfield acquired Connecticut Bank & Trust in Hartford for about $30 million. Like United, Berkshire Hills previously had no branches in Connecticut.
United said it would pay the equivalent of $15.89 per share for each share New England Bank's stock, or a 62% premium above New England's closing price Wednesday. The price works out to 1.63 times New England's tangible book value and represents a 7.4% premium over New England's deposits.
New England's shares were up nearly 28% in early trading Thursday, to $12.50, while United's shares were down more than 8%, to $13.64. The sale is expected to close in the fourth quarter.