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The deal will pay each First Litchfield shareholder $15 per share in cash, giving the transaction a value of approximately $35 million.
Reported to be the oldest bank in Connecticut, the FNBL has assets of about $520 million and nine branches in Litchfield and Hartford counties. The company reported $4,105,193 in net income for the last quarter.
With 19 branches in Fairfield, Litchfield and New Haven counties, Union Savings Bank has about $2 billion in assets. The company, which is privately owned, was founded in 1866.
Jay Lent, the executive vice president of Union Savings, said Monday the merger would expand Union Saving's market share in Litchfield and Hartford counties.
"It puts us in the spot where we can deal with the big boys," Mr. Lent said, adding that because Union Savings is a privately owned bank, First National Bank would stay under local control.He said no branches are expected to close as a result of the merger and no employees will be laid off.
If the deal is approved, Union Savings will have about $2.5 billion in assets, $1.7 billion in deposits and 28 branches in Connecticut-13 in Fairfield and Litchfield counties, as well as one in New Haven and Hartford counties.
The merger was approved by the boards at both banks. Tthe deal is subject to approval by shareholders of FNBL, as well as the Office of the Comptroller of the Currency, the Connecticut Department of Banking and the Federal Deposit Insurance Corporation.
Joseph Greco, CEO of FNBL, said the deal would likely close in the first quarter of 2010. "Both banks have a rich history," Mr. Greco said in a release. "The First National Bank of Litchfield is the oldest bank in Connecticut, continuously in business since 1814, while Union Savings Bank was founded in 1866. Union Savings Bank shares our commitment to the community, emphasis on above and beyond customer service, and to helping local businesses grow and prosper."
Mr. Greco went on to say, "Union Savings Bank's commitment to mutuality allows it to focus solely on customers, employees and the community, and with its wide range of products and services for consumers, businesses, not-for-profits, and government entities, I am certain our customers and employees will be well served by this combination. We believe joining forces with Union Savings Bank will allow us to remain locally controlled and focused because of its commitment to mutuality. The combined bank will be a larger and stronger institution which will provide greater opportunities for our employees and more convenience for our customers."
"The merger of The First National Bank of Litchfield with Union Savings Bank will significantly expand our market share in Litchfield County and enables us to extend our presence into Hartford County," said Union Savings Bank President & CEO John Kline. "This acquisition will further our vision of becoming the bank of choice in western Connecticut. We look forward to the opportunity to broaden the reach of our mutual mission which has as its cornerstone a focus on exceeding the expectations of our customers, treating our employees with care and respect, and giving back to the community through generous donations and volunteer time. Because we are not a public company, we can focus on serving our three important constituents-customers, communities, and employees-in the form of great rates and service, donations to the community through Union Savings Bank and the USB Foundation, and generous employee benefits and a great work environment."
Investors greeted the news by pushing up the company's shares by 133 percent Monday, or by $7.75. The stock closed at $13.50 for the day.
