In-state bank mergers typically come with layoffs and branch closures, and that is likely to be true following the completion of Bridgeport’s People’s United Bank’s planned $759 million acquisition of Hartford’s United Financial Bancorp Inc.
The two announced the deal, which still requires regulatory approvals, late Monday.
Last year, after People’s United Bank acquired Farmington Bank for $544 million, it announced 95 layoffs and plans to shutter 15 branches, mostly former Farmington Bank branches in their overlapping Greater Hartford markets. People’s said it has some 6,100 employees — 2,785 of whom are in Connecticut. United Bank has 819 workers total.
On an investor call Monday, People’s United Financial executives confirmed there would be branch closures this time around too, part of an overall plan to eliminate “redundant functions,” which the company expects to produce annual pre-tax savings of $88 million.
“Cost savings will primarily be driven by eliminating redundant functions, executive headcount reductions, branch consolidation and the elimination of public company costs,” said David Rosato, People’s United chief financial officer.
A People’s spokesman said the bank intends no branch-service disruptions before or after the merger, adding that any affected United branch staffers will be offered positions elsewhere within People’s network.
The company said 61 percent of United Bank’s branches are within two miles of a People’s United branch, and that 88 percent are within five miles.
A Hartford Business Journal examination of federal bank-branch data shows that People’s United and United Bank have overlapping branch locations in 17 Connecticut municipalities. And within those cities and towns, they have a combined 51 branches, which means consolidation is likely in those communities.
In some cases, People’s United Bank and United Bank share branches on the same street.
For example, in Bristol, People’s has three branches, while United Bank has two. They both have a branch on Farmington Avenue in Bristol. In Glastonbury, United Bank’s former home, the lenders have a combined six branches, including one branch each on Hebron Avenue.
They each also have branches on Broad Street, in Manchester; on North Main Street, in Southington; and on Linwood Avenue, in Colchester, FDIC data show.
The banks, post merger, would have a combined 472 branches in Connecticut, New York, Massachusetts and Rhode Island, according to FDIC data. Some of People’s United’s branches are housed inside Stop & Shop supermarkets.
Overall, United Bank has $7.3 billion in assets and 60 branches in central Connecticut and western Massachusetts.
People’s United has more than $48 billion in assets and 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management and insurance divisions. People’s counts 157 branches in Connecticut alone.
Another question regarding the deal will be the combined banks’ Hartford presence. United Bank moved its corporate headquarters from Glastonbury to Hartford’s Goodwin Square office tower in 2017, while the People’s Bank has a major corporate presence in the Gold Building.
People’s United CEO Jack Barnes said Tuesday the super-regional lender’s headquarters will remain in Bridgeport, and will look to expand its downtown Hartford presence.
“We remain committed to the state of Connecticut, have been here for more than 175 years and have no plans to move the bank’s headquarters,” Barnes said in an emailed statement. “We currently have a large presence in the Gold Building in downtown Hartford and expect to grow our presence locally. We will work closely with all constituents and take a thoughtful approach to determine how best to structure our Hartford presence moving forward once the acquisition is complete.”
The deal is certainly on Hartford Mayor Luke Bronin’s radar.
“United Bank is a significant employer in the Hartford region, and their move to downtown and their involvement in the community have been important to the city,” Bronin said in a statement Tuesday morning.
“I’ve spoken to senior leaders at both banks, and look forward to partnering closely with People’s United Bank as the merger moves forward.”
People’s United Bank, a subsidiary of People’s United Financial Inc., has been steadily buying banks in the Northeast in recent years. Its most recent deal in Connecticut was the acquisition last year of Farmington Bank.
In April, it closed on its $327 million stock purchase of tiny Boston lender Belmont Savings Bank.
This story has been updated
