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People's United Continues to Expand, Closes BSB Bancorp Buyout

Zacks Equity Research

Recently, People's United Financial, Inc. PBCT, the U.S. regional bank completed the acquisition of Belmont-based BSB Bancorp, Inc. BLMT. The all-stock deal was valued at $327 million when announced in November 2018.

"We are extremely pleased to welcome the customers and employees of Belmont Savings Bank to People's United," said Jack Barnes, chairman and chief executive officer of People's United Financial. "People's United and Belmont have many shared values, including a client-centric approach, a spirit of community giving, and similar workplace cultures. We look forward to enhancing the experience of Belmont customers through our suite of specialized products and services, and access to our personalized technology and expert bankers," Barnes further added.

People's United came up with the expansion plan in Greater Boston last year. This deal is expected to be accretive to earnings by 3 cents, based on fully phased-in cost savings, with an IRR of more than 20% and a tangible book value earn-back within 3.1 years.

Per terms of the deal, shareholders of BSB Bancorp will get 2 shares of People's United for each share. Based on the closing price of People's United's common stock on Nov 26, 2018, per BSB Bancorp share is valued at $32.42. Moreover, these terms have been approved by boards of directors of both companies.

Our Viewpoint

People’s United’s inorganic growth activities reflect capital strength and the bank’s efforts to boost its performance. Also, it has diversified revenue sources, which are likely to keep supporting the bank’s financials. Additionally, the company will benefit from improving conditions in the domestic economy.

Shares of People’s United have gained around 13.8% over the past three months. Currently, People’s United carries a Zacks Rank #3 (Hold).

People's United Financial, Inc. Price

People's United Financial, Inc. Price | People's United Financial, Inc. Quote

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