First Federal Savings Bank of America, based in Fall River, will have $2.7 billion in assets, up from $1.7 billion, when its acquisition of People’s Savings Bank in Brockton is complete.
The mega-mergers in the banking industry over the past few years have been accompanied by at least some degree of consumer backlash. It is not surprising, then, that the Oct. 1 announcement that FirstFed America Bancorp was to acquire People’s Bancshares came with a strong message from bank officials involved: The deal is between two community banks and will not change their basic focus on customer satisfaction.
That sentiment was repeated more than once by Robert F. Stoico, chairman, president and chief executive officer of Swansea-based FirstFed, the parent company of First Federal Savings Bank of America. The bank has branches in Attleboro, New Bedford, Seekonk, Somerset, Swansea, Taunton and several towns in Rhode Island.
The two institutions specialize in mortgage banking but in addition to traditional banking services, FirstFed also owns an insurance agency, FirstFed Insurance. “As a result of that, all of our branch offices end up being insurance offices also,” said Stoico. Additionally, FirstFed owns a trust company that offers asset management and trust services which will be extended to the People’s Savings Bank of Brockton network of branches in Brockton, Dartmouth Township, Mansfield, Mattapoisett Center, South Easton, Stoughton and Taunton.
“[Customers] are really not going to see any changes other than the name on the building. People’s does a lot of things we do and vice versa. In addition, they have the same values of customer service we do. We’re very excited about this,” said Stoico.
In looking for an acquisition, Stoico said ensuring that personalities were compatible was very important. “I’ve known Dick [People’s President and Chief Executive Officer Richard S. Straczynski] a number of years and we get along great. We have a great relationship and it has a lot to do with the fact that the cultures are identical,” he said.
“We believe that this transaction is an excellent opportunity for our shareholders and our customers,” said Straczynski.
‘Tremendous Opportunities’
Under the agreement, FirstFed will acquire People’s for approximately $72 million in cash and stock. As a result, FirstFed’s assets will increase to $2.7 billion from $1.7 billion. The number of offices will increase from 15 to 27 and the number of loan origination centers will increase to 15 from five.
“This merger represents a natural extension of our franchise and will give us the largest deposit market share among community banks in Bristol County, Mass. When combined with our ongoing expansion in Rhode Island, the transaction further solidifies FirstFed’s position as one of the region’s premier community banks,” said Stoico.
At least one other community financial institution expressed some concern about facing a larger competitor in the area, and Stoico acknowledged the change.
“There’s no question that FirstFed is a big player now and will become an even bigger player. It will affect our competition, but we love competition and we welcome it. But in some ways, it does make us a more powerful force to handle a bigger customer base and add additional customers. It’s going to give our customers tremendous opportunities,” said Stoico.
The merger should be completed in the first quarter of 2002. Although the final decisions haven’t yet been made, Stoico said that personnel changes would be made “in the best interest of everybody involved,” with the understanding that a bigger bank needs more people to run it.
Stoico highlighted one FirstFed feature to be extended to People’s customers as something he’s particularly proud of, the charitable foundation first established when FirstFed went public in January of 1997. Eight percent of the stock was dedicated to the foundation at that time. Currently $10 million to $12 million is available for charitable giving each year, he said.
Although the merger creates a larger entity in the area, Stoico said customers should experience a seamless transition and be satisfied with the end result. “We’re a community bank in all ways, and so is People’s,” he said.
“People’s customers will benefit from the addition of the extensive network of FirstFed offices and ATMs, and they will have access to a greater selection of services including trust and asset management services, as well as a full array of insurance products,” said Straczynski.
When the merger is completed, former shareholders of People’s will own about 23 percent of FirstFed’s outstanding shares.
People’s had been the working under an agreement with the Federal Deposit Insurance Corp. to decrease what the FDIC deemed as a too-heavy investment in trust-preferred securities. The acquisition, however, should satisfy investors who have been trying to convince shareholders to sell the beleaguered bank. Straczynski, who recently became president, is held in high regard for what he’s managed to accomplish with inherited problems, according to industry watchers. Straczynski’s position in the merged entity has not yet been announced.
