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The parent company of Hartford-based United Bank announced last week that it will acquire six branches from Waterbury-based Webster Bank, a move that will allow it to increase its presence in existing coverage areas and expand into new markets.
United Bank will pay an undisclosed amount for $120 million in deposits from two branches in Connecticut, three branches in Western Massachusetts and one branch in Rhode Island, the bank’s first branch in the Ocean State.
The two Connecticut branches are in Waterford and Groton. The Three Western Massachusetts branches are in Springfield, West Springfield and East Longmeadow.
As United Bank already has a strong presence in Western Massachusetts, the bank said it would consolidate its current branches at 459 Main St. in Springfield, 95 Elm St. in West Springfield and 94 Shaker Road in East Longmeadow into the Webster branches it plans to buy in each of the prospective markets.
The purchase for United Bank comes at a time when deposit pressure is ramping up, partly due to rising interest rates and a competitive market. United Bank’s parent company reported in the first quarter that the net interest margin lost eight basis points from the linked quarter and 11 basis points year-over-year, settling at 2.9 percent. United executives attributed this fall to a higher cost of deposits and deposit pressure in their market, which also prompted the bank to reverse its strategy.
“Given the current environment we are pulling back on previously planned investment and expense growth,” Crawford said at the time. “Overall, we are taking a more conservative path to our financial improvement targets.”
Webster Bank has been trying to reduce its overall physical footprint recently; the bank closed nine branches in 2017 and then trimmed another 4 percent of its overall square footage in the first quarter of 2018.
The transaction is expected to close in the fall of 2018, pending regulatory approval.
