Rockville Financial Inc. and United Financial Bancorp, Inc. on Friday announced they have entered into a definitive merger agreement in a stock-for-stock transaction valued at $369 million.
The price is based on on the closing price of Rockville Financial, Inc. common stock on Nov. 14. The companies are the parents of Both Rockville Bank and United Bank, respectively.
The combination will create, "the largest community bank based in the Hartford – Springfield market," the banks said in a joint news release. The spreadsheets will tally $4.8 billion in assets, more than 50 branches and a top-five deposit market share in each metropolitan statistical area, according to a news release.
In the merger, United Financial Bancorp, Inc. shareholders will receive 1.3472 shares of Rockville Financial Inc. common stock for each share of United Financial Bancorp, Inc. common stock.
Upon closing, Rockville Financial, Inc. shareholders will own approximately 49 percent of stock in the combined company.
United Financial Bancorp, Inc. shareholders will own approximately 51 percent.
The merger is expected to generate approximately $17.6 million in fully phased-in annual cost savings - approximately 15 percent of the expected combined expense total, according to a news release.
Additionally, the merger is expected to be, "approximately 30 percent accretive to the stand-alone 2015 earnings of both entities, excluding the impact of the potential revenue enhancement opportunities," according to a news release.
“We are very pleased to announce the combination of these two great community banks," said William H. W. Crawford IV, president and chief executive officer of Rockville Financial, Inc. "This merger is a significant step in our strategy to expand our footprint. Our complementary branch networks provide both greater market density and unique franchise scarcity value. The combined company will create a top-performing New England community bank that has the scale, product depth and efficiency to compete effectively and deliver strong returns to our shareholders and an expanded product suite to our customers.”
"This transaction creates value for our shareholders, customers and employees," said Richard B. Collins, United Financial Bancorp Inc.'s chairman, president and CEO. "We are uniting two strong community banks and creating a dominant player in the New England banking market with greater competitive strength, growth potential and profitability. United Bank has a history of growth through mergers of equals dating back to our days as a co-operative bank. It is fitting that today we announce this merger of equals and celebrate the new United Bank.”
As far as leadership will go, the new company will be governed by a 20-member board of directors consisting of an equal number of Rockville and United directors, according to a news release.
Rockville Bank’s Crawford will serve as CEO, United’s J. Jeffrey Sullivan as president, and Rockville’s Eric R. Newell will be the chief financial officer.
United's Robert A. Stewart Jr. will serve as chairman of the board of directors, while Raymond H. Lefurge Jr. from Rockville will be appointed as the vice chairman of the board, according to a news release.
Other key executive positions will be drawn from the executive management teams of both organizations. United’s Collins will retire and provide consulting services for one year, according to a news release.
“I am excited to join Bill Crawford and the members of our combined management team to lead the combined company,” Sullivan said. “Individually we are each very good banks. Together we have the critical mass to drive efficiency and growth, to take advantage of advancements in technology and to deliver the best banking experience for our customers.”
The new brand name is to be United Bank with headquarters in Glastonbury, and maintain regional offices in Enfield and South Windsor in Connecticut and in West Springfield and Worcester in Massachusetts, according to a news release.
Upon closing, Rockville Bank will adopt the United name and the holding company will be United Financial Bancorp, Inc. Trading will continue on the NASDAQ Global Select Market under the symbol UBNK.
“United’s name dates back to 1882 and is highly respected in its markets. The United Bank name reflects the same independent minded community banking spirit that the Rockville Bank name has represented in our communities for the last 155 years,” Crawford said. “Rockville and United both share a long history of financial stability and commitment to the communities they serve, and while the Rockville name may be changing, the service provided to our customers will only improve with the ability to provide product enhancements and technology services Rockville could not efficiently provide on its own. Adopting the United name enables us to extend our brand to a broader regional market."
According to a news release, the company has set up an "integration management office comprised of executive management of both Rockville and United to aid with the transition. The IMO will create "working groups" to focus on integrating key areas and action teams for narrower, more specific projects. The IMO will be responsible for reporting to executive management, the board and regulatory bodies.
The transaction is expected to close by mid-year 2014. The transaction is subject to approval by shareholders from both companies, regulatory approval and other customary closing conditions.
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