People’s bank’s rapid expansion leaves some in state worried
Institution’s expansion has some concerned about community impact
The growing footprint of People’s United Financial in Connecticut has state officials worried about the future effect on communities and jobs.
It’s been a couple weeks since the Bridgeportbased company finalized its deal to absorb United Financial Bancorp, parent company of United Bank in Hartford. With the deal in the books, branch closures are expected to hit both companies throughout Hartford County.
People’s United has not yet announced which branches will stay and go, but there are 42 People’s United Bank branches and 37 United Bank locations in the area.
“My biggest concern — and there is a number of them — lie with the people that work in the branches in my district and in the districts around me,” said state Rep Tom Delnicki, RSouth Windsor.
Delnicki was one of two lawmakers who questioned the merger when it was announced in July, along with state Rep. Jason Doucette, DGlastonbury/Manchester.
Both serve as leaders for Connecticut’s legislative Banking Committee.
“The last thing I want to see is an empty building without a tenant in there … (and) people losing their jobs,” Delnicki said.
There are roughly five branches between the two companies in
South Winsor, while Glastonbury and Manchester have about 10 branches between them.
When People’s United bought First Connecticut Bancorp, parent company to Farmington Bank, almost a year ago, the deal led to 95 jobs being cut. There were also reportedly more than a dozen branch closures following the deal’s completion toward the end of October 2018.
People’s United CEO Jack Barnes has said in past interviews that the company has offered all United Bank branch employees positions under the People’s United banner, but cuts may still happen.
“Where there may be
redundancies in some operational positions as a result of the merger, People’s United Bank offers severance benefits and outplacement assistance to help those impacted transition to new employment,” Barnes had said.
Larger piece of the pie
Connecticut remains the largest and most profitable market for People’s United, according to Barnes, who said the company will continue to increase investments locally.
Following the United Bank merger, a company spokesperson said People’s United Bank ranks second in Hartford County in terms of deposit market share.
The growing market share was also a focus of concern in the earlier stages of the deal, according to Doucette and Delnicki. State officials originally predicted the People’s United deal would have been big enough to call for regulatory intervention.
“You could reach that point where there are too many big banks and not enough small banks to serve the small business people and the average person to provide them that level of care that a community bank gives you,” Delnicki said.
With a larger market share, the pool of physical banking options could decline, which Delnicki said he feared would result in higher fees for consumers with fewer options.
A spokesperson from the state Department of Banking said his office did not find that to be the case.
“The department, along with federal regulators determined that there should be little impact on choice to consumers,” said Matt Smtih, Director of Government Relations and Consumer Affairs for the state Department of Banking.
Ongoing conversations
Doucette and Delnicki said they’ve been having discussions since the summer with People’s United executives regarding the merger and future consolidations.
Both legislators said they are looking for the People’s United to reinvest in the surrounding communities affected by branch closures.
“I want to see more opportunity for our constituents and everybody in Connecticut to be able to have a relationship at a community bank — a smaller bank that is on the ground and involved with employing people in our communities,” Doucette said.
Barnes has said that the company would be committed to building “meaningful relationships” with customers and communities in the state following the merger.
“I think certainly we came away from those meetings feeling a little better about what the impact of the merger was going to be specifically in our geographic area but also in general,” Doucette said. “We had a good discussion and they were pretty forthcoming with what their plans were.”