Recently, People’s United Financial (PBCT - Free Report) completed the acquisition of First Connecticut Bancorp and its wholly owned subsidiary, Farmington Bank. The all-stock-deal was announced in June with a view to fortify its presence in Connecticut, particularly in the Hartford region and expand banking capabilities.
"We are extremely pleased to welcome the employees and customers of Farmington Bank to People's United," said Jack Barnes, chairman and chief executive officer of People's United Financial. "They have an experienced team and a similar culture that will strengthen our well-established presence in Connecticut, particularly in the Hartford region. We look forward to enhancing the experience of Farmington Bank customers with our complimentary array of products and services, and access to our technology and digital capabilities," Barnes further noted.
Last month, this merger was approved by shareholders of the to-be-acquired entity, at a special meeting. Along with this, the companies announced the receipt of all the necessary regulatory approvals for the transaction.
During the announcement, People’s United had noted that the deal was worth nearly $544 million. Also, the company expects it to be accretive to earnings, going forward.
This merger is another one of the bank’s strategic acquisitions, aided by its strong balance sheet which is expected to strengthen fee income. First Connecticut’s acquisition will likely be a low-risk transaction which shall give a solid boost to People’s United’s deposits balance.
Per the agreement, First Connecticut will be absorbed into People’s United. Further, Farmington Bank will merge with and into People’s United Bank — National Association.
In addition, shareholders of First Connecticut will be receiving 1.725 shares of People’s United’s common stock for each share held. Notably, First Connecticut stockholders have also approved an advisory proposal regarding the compensation that may be paid or become payable to certain First Connecticut executive officers in connection with the merger.
People’s United’s inorganic growth activities reflect capital strength and its efforts to bolster performance. Also, it has diversified revenue sources, which are likely to support the bank’s financials. Additionally, the company will benefit from improving conditions in the domestic economy.
Shares of People’s United have lost 9.9% over the past six months compared with the 7.5% decline witnessed by the industry it belongs to.
Currently, People’s United carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
LPL Financial Holdings Inc. (LPLA - Free Report) has been witnessing upward estimate revisions for the past 60 days. Also, the company’s shares have gained nearly 11.6%, year to date. It sports a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Greenhill & Co., Inc. (GHL - Free Report) has been witnessing upward estimate revisions for the past 60 days. Moreover, this Zacks #1 Ranked stock has rallied more than 35% year to date.
First Financial Bankshares, Inc. (FFIN - Free Report) has been witnessing upward estimate revisions for the past 90 days. Additionally, the stock has jumped around 28.7% year to date. It currently carries a Zacks Rank #2.
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