The approval of the merger of Suffolk Bancorp with People’s United Financial was announced yesterday by the Federal Reserve Board of Governors.
The Fed board approved the merger in a unanimous vote Monday in an order that took effect yesterday.
Under the board’s order, the merger may not be consummated before the 15th calendar day after the March 16 effective date of the order and no later than three months after the effective date.
The Federal Reserve Board’s approval was the last regulatory hurdle the Bridgeport, Connecticut-based bank had to clear in its bid to acquire Suffolk Bancorp, the parent company of Suffolk County National Bank. The Office of Comptroller of the Currency approved the merger application on Feb. 2.
People’s United and Suffolk announced last June an agreement for the purchase of Suffolk in a 100-percent stock transaction valued at approximately $402 million. At the time, People’s said the transaction was expected to close late in the fourth quarter of 2016. Under the terms of that agreement, which has subsequently approved by both companies’ shareholders — after the settlement of several Suffolk shareholder lawsuits seeking to stop the merger — Suffolk Bancorp shareholders will receive 2.225 shares of People’s United Financial stock for each Suffolk Bancorp share.
The “integration process” will ultimately result in layoffs of Suffolk County National Bank employees, though the extent and timing of the layoffs is not yet known. In November, Suffolk said 76 employees in its administrative offices in Riverhead would be laid off, beginning in January.
SCNB president and CEO Howard Bluver, who was hired by Suffolk in 2012 to turn things around, will join People’s as New York market president.
Suffolk in 2010 had been determined by federal regulators to be in “troubled condition” and in 2011 was threatened with delisting by NASDAQ for failing to meet SEC filing deadlines as it re-examined its financial records. Bluver’s hiring was part of a major shakeup at the bank’s upper management level. In 2011 and 2012 Suffolk Bancorp, in addition to replacing its president and chief executive officer, named a new chief lending officer, a new chief financial officer, a new chief information officer, and new heads of its loan administration and residential lending departments.
It is not yet known whether People’s will close any of Suffolk’s branches — or which ones might be subject to closure. Sixty-four percent of Suffolk’s branches — including two in Riverhead — are within two miles of a People’s United branch, People’s United CEO Jack Barnes said in a June conference call announcing the proposed merger to shareholders. People’s United says the acquisition of Suffolk will give the bank a greater presence in the New York market, particularly on the East End, but there is some overlap among existing branches of the two banking institutions.
People’s United Financial, Inc. is a diversified financial services company with over $40 billion in assets. People’s United Bank, founded in 1842, is a regional bank in the Northeast offering commercial and retail banking and wealth management services through a network of nearly 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine.
SCNB, founded in 1890 and headquartered in Riverhead, is a community bank with 28 branches on Long Island. It has total assets of over $2 billion.
Both bank announced positive year-end results for 2016. People’s had net income of $281 million, or $0.92 per common share in 2016, up 8 percent over 2015. Suffolk reported net income of $19.8 million, or $1.66 per diluted common share for 2016, up 12.1 percent over 2015.
