News Column

Big Task Ahead For Merged Banks: Deliver On Promises

May 2, 2014

By Kenneth R. Gosselin, The Hartford Courant

May 02--The now-completed merger of two banking competitors has created the largest community bank based in the Hartford-Springfield corridor, with assets of nearly $5 billion and more than 50 branches.

Now, the merged Rockville Bank parent company, Rockville Financial Inc., and West Springfield-based United Financial Bancorp Inc., the parent of United Bank have a big task ahead after they completed their combination Wednesday under the United name.

William H.W. Crawford IV, the chief executive of Rockville and now of the combined banks, said the bank now has to make good on promises that it can provide "the best products and services offered by the big banks" but with the customer service of a community bank.

"Today, we begin a new era where we will deliver on that promise while providing strong shareholder return," Crawford said. "For Rockville customers, although our name will change to United Bank, everything you like about Rockville, you will love about the new United Bank."

The name change was considered a key move for the merged institution to market products and services to a broader regional market. The bank's new market will stretch from New Haven north to West Springfield and over to Worcester.

The merger is expected to bring together Rockville's strength in residential mortgage and commercial real estate lending with United's well-honed approach to customer cross-selling and sophisticated branch technology. As a larger institution, the combined banks also will be permitted to make larger loans.

The merged institutions expect to cut costs by 15 percent, with an undetermined number of layoffs, primarily in back office and administrative functions. About a third of the job cuts, to be phased in over two years, could be reached through attrition, the banks have said. Four branches in overlapping markets will close.

The stock-for-stock deal, announced in November, is valued at $369 million. United Financial shareholders will receive 1.3472 shares in the new United Financial, the former Rockville Financial, for each United share.

The bank will be based in Glastonbury, and United's chief operating officer, J. Jeffrey Sullivan will be president. United's former chief executive and president Richard B. Collins is retiring and will provide consulting services for a year.

Banking experts say the combined banks will have the firepower to challenge the dominance of Webster Bank and People's United Bank in the market.

Both Rockville and United trace their lineage to the mid-1800s, with Rockville being the oldest, founded in 1858. United has expanded through acquisition in recent years, first entering Connecticut last year with the purchase of Enfield-based New England Bank and its 15 branches.

Under Crawford's leadership, Rockville has expanded into new markets, including a major push into commercial lending in New Haven County. A year ago, it opened an administrative office in Glastonbury. United, meanwhile, has marketed itself as the community bank alternative to larger competitors, not nickel-and-diming customers with fees.

Shares in the combined banks started trading under the ticker symbol "UBNK" as of Thursday. At the close of trading Thursday on the Nasdaq Global Select Market, shares were valued at $13.69, up 53 cents.

A "second-step" stock offering in Rockville Financial in 2011 valued the bank's shares at $10 a piece.


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Source: Hartford Courant (CT)