AP NEWS

Under Barnes, Bridgeport bank on doorstep of $50B target

January 21, 2019

With the addition of Farmington Bank, People’s United Financial is on the threshold of crossing the $50 billion mark its CEO identified nearly four ago as the company’s goal — and continues to scout deals that could push it over the top.

People’s United reported earnings last week of $132.9 million for the fourth quarter of 2018 and $468 million for the year, a record amount for the Bridgeport-based company.

After acquiring Farmington Bank parent First Connecticut Bancorp entering October for $544 million, People’s United closed the year with $47.7 billion in assets.

In 2015, CEO Jack Barnes created an internal “B50B” program to prepare People’s United for reaching the milestone, with banks having $50 billion in assets undergoing intensified scrutiny by the Federal Reserve Bank.

As of September, People’s United ranked 40th nationally for assets, according to the Fed, among New England-based retail banks trailing only Citizens Bank in Providence, R.I.

Rhode Island is the lone New England state where People’s United lacks branch offices. The company is in the process of acquiring Belmont Savings Bank and its handful of branches west of Boston, and Barnes expects to complete by the end of January the conversion of Farmington Bank accounts to the People’s United platform.

People’s United has also made two deals in the past year for equipment finance companies Vend Lease and VAR Technology Finance, the latter only last week. Located outside Dallas, VAR focuses on financing the purchase of software and other information technology systems.

“Clearly, the Farmington deal would demonstrate that we’re still interested in Connecticut, but we just had the opportunities that came up from Belmont and … VAR,” Barnes said last Thursday. “That Connecticut middle-market has been one of our best growing portfolios; (we) continue to enjoy the strength that comes from Connecticut.”

Across its Northeast footprint, People’s United incurred fourth-quarter increases in problem loans for home mortgages and commercial real estate, but reduced them in other areas including business loans including equipment leases. The VAR IT financing portfolio is focused mostly on large, stable corporations, Barnes said.

Barnes did not rule out additional acquisitions of Northeast banks in the coming year, particularly those that have a similar profile to its own as it approaches the $50 billion asset milestone.

“Our first preference is for commercial banks that operate in a very similar manner to us -- relationship-oriented, commercial banks,” Barnes said. “We are open-minded to looking at others, but that would be the starting point. We like in-market deals across our footprint, but we are willing to look at adjacent markets as well.”

Alex.Soule@scni.com; 203-842-2545; @casoulman

AP RADIO
Update hourly