In a stock deal worth approximately $389 million, West Springfield, Mass.-based United Financial Bancorp (UBNK) will merge with Hartford, Conn.-based Rockville Financial (RCKB) , creating a new regional bank with $4.8 billion in assets.
The newly created bank will sport 50 branches throughout New England, and will move its headquarters to Glastonbury, Conn., making it the third largest banking chain in Connecticut. United has been moving aggressively into the Nutmeg State, having acquired New England Bancshares last year for $91 million.
The day prior to the merger announcement, United Bancorp increased their fourth quarter dividend payout from $.0.07 a share to $0.08 a share, or a 12.5 percent increase. Reasons cited at the time were the company’s strong earnings performance and strong capital position.
United Financial shareholders will receive 1.3472 shares of Rockville Financial for every share of United Financial stock they currently own.
Concerning the merger, Richard B. Collins, United Financial Bancorp, Inc.'s Chairman, President and Chief Executive Officer, said "This transaction creates value for our shareholders, customers and employees… 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.”
Pending shareholder approval, the deal is expected to close sometime in the middle of 2014.
Shares of Rockville Financial slid on the announcement, edging down .73 percent to hit $13.52 a share. United Financial gapped significantly at open, notching a 10.6 percent gain to hit $17.89 a share.
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