Webster aims to bolster health savings account business with latest deal

Webster Financial, one of the largest participants in the health savings account market, has agreed to buy a cloud-based HSA platform provider.

The $65 billion-asset bank expects to finalize its acquisition of Bend Financial before the end of March, it said Wednesday. Financial terms were not disclosed.

Bend, which was founded in 2017 and is based in Boston, provides a digital platform to help individuals and employers track and manage their health savings accounts.

Over time, Webster Financial plans to extend the digital capabilities of the company it is acquiring to its HSA Bank subsidiary.

Once the deal closes, Bend will continue to serve its clients as usual, Webster said. Over time, Bend’s digital capabilities will be extended to HSA Bank, a Webster subsidiary that has 3 million customers and $7.4 billion of deposits, or roughly 12% of the national HSA deposit market.

Acquiring Bend “demonstrates Webster’s commitment to enhance HSA Bank’s client experience through strategic technology investments,” Webster Chairman and CEO John Ciulla said in a press release.

Last month, Ciulla told analysts that Webster plans to launch a “new digital experience” for employers that use HSA Bank.

The deal “accelerates” Webster’s ongoing efforts to offer a better digital user experience to consumers who use HSA Bank, Chad Wilkins, the president of HSA Bank, said in the release.

Bend’s 30 employees, including both executives and developers who will expand HSA Bank’s digital capabilities, are expected to stay on board post-acquisition, a Webster spokeswoman said.

Webster, of Stamford, Connecticut, has been investing in the HSA business for years.

In 2015, it acquired the HSA business of JPMorgan Chase, which more than doubled the size of Webster’s footprint in the market.

In 2021, HSA deposits at Webster grew 4% from the previous year, according to the company’s most recent earnings report. In addition to deposits, the bank’s HSA business had $3.7 billion of assets under administration through linked investment accounts at the end of last year.

Webster’s latest M&A deal comes 15 days after it completed the acquisition of Sterling Bancorp in Pearl River, New York. That $5.1 billion transaction was announced last April and approved by the Federal Reserve in December.

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