Webster to acquire deposit-management platform

STAMFORD — Webster Bank announced Monday that it agreed to acquire deposit-management platform interLINK, a deal that highlights the bank’s ongoing growth after merging earlier this year with Sterling National Bank.

The acquisition of interLINK from StoneCastle Partners would provide Stamford-based Webster with access to “core deposit funding” and add another “technologyenabled channel” to Webster’s deposit-focused operations, which include its commercial and consumer banking businesses, HSA Bank and BrioDirect, Webster officials said in a news release.

InterLink administers more than $9 billion of deposits from Federal Deposit Insurance Corp.insured cash sweep programs between banks and broker-dealers and clearing firms, serving approximately 520,000 retail brokerage accounts.

“The acquisition complements our strategy to build a bank with diverse funding capabilities and technology-enabled businesses,” Webster CEO and President John Ciulla said in a statement. “InterLINK is a unique deposit channel that provides a scalable source of liquidity for the company.”

InterLINK has operated as a subsidiary of StoneCastle, which develops businesses focused on banking and related technologies and whose products are used by more than 1,000 banks. InterLINK would continue to operate and serve its broker-dealer and clearing-firm clients as it does today, according to the agreement.

The transaction, whose financial terms were not disclosed, is expected to close in the first quarter of 2023.

Cash-sweep services are widely offered. Investopedia defines a sweep account as “a bank or brokerage account that automatically transfers amounts that exceed, or fall short of, a certain level into a higher interest-earning investment option at the close of each business day. Commonly, the excess cash is swept into a money market fund.

Webster, which completed in February a $10 billion merger with Pearl River, N.Y.-based Sterling National, comprises one of the largest banks headquartered in New England. As of Sept. 30, it held approximately $69 billion in consolidated assets, No. 1 among Connecticut-headquartered banks, according to FDIC data.

As a result of the merger, Webster relocated its headquarters from Waterbury to Stamford, but it committed to keeping offices in Waterbury as part of a “multicampus presence.”