Webster Financial Corp., a Connecticut thrift company that has been trying to become more bank-like, announced a $220 million deal to buy a bank holding company in its home state.

Waterbury-based Webster announced the stock deal for New England Community Bancorp of Windsor on Wednesday. The price is 2.9 times the target's book value and 17.7 times its estimated 1999 earnings.

New England Community, which has a strong reputation as a commercial lender, has $800 million of assets. Webster has $9.3 billion.

"This partnership expands Webster's franchise in three Connecticut counties and significantly strengthens our business banking presence," said James C. Smith, Webster's chairman and chief executive officer.

Analysts said the deal would help Webster's balance sheet.

"New England Community is a nice commercial franchise with very healthy margins," said Kevin T. Timmons, analyst with First Albany Corp. in upstate New York. "This is a great deal for Webster."

Shares of Webster fell 1.25% to $27.125 on Wednesday, while New England Community stock rose 2.57% to $27.4375.

James M. Ackor, an analyst with Tucker Cleary Inc. in Portland, Maine, said the deal's high price might be hurting Webster's stock. "They are buying a very good franchise, and they are paying up for it," he said.

But the drop in Webster's stock price will probably be short, Mr. Ackor said. "This is an in-market deal for a good company, and Webster has an impeccable track record making these deals work," he said.

The thrift said it expects to cut 55% of New England Community's expenses, partly by closing branches.

The deal would give Webster its first presence outside Connecticut. New England Community, which has three affiliates and 16 branches in Connecticut, also owns Olde Port Bank and Trust in New Hampshire.

Midsize New England companies have made a string of deals since Fleet Financial Group announced a blockbuster merger agreement with BankBoston Corp. in March.

On June 2, Peoples Heritage Financial Group of Portland, Maine, announced plans to buy Banknorth Group Inc. of Burlington, Vt. Three weeks later Citizens Financial Group of Providence, R.I., and Boston's UST Corp. announced their merger deal.

"I think it is fair to say the midsize institutions in New England have pretty full plates," said John S. Carusone, president of Bank Analysis Center in Hartford, Conn.

All these banks, including Webster, are thought to have bid for some of what Fleet and BankBoston are divesting to clear regulatory hurdles to their merger. Analysts speculated that this wave of deals is motivated by rumors that most of the Fleet spoils will go to one out-of-region bidder.

"The thinking has evolved that the big bulk of it is going to one large player," Mr. Timmons said. "Webster, like Peoples Heritage, has come to the conclusion that their odds are not good at getting just a chunk of the package at a reasonable price."

Mr. Smith of Webster said his company "remains interested" in winning deposits from Fleet.

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