Buffalo-based M&T Bank will acquire People’s United Bank in a $7.6 billion deal that M&T executives say is more about growth opportunities than cutting expenses.

The parent company of Bridgeport, Connecticut-based People’s United Bank has entered into a definitive agreement to be acquired by M&T Bank in an all-stock transaction. The merger is expected to be completed in the fourth quarter of 2021, and the system conversion would take place in the first quarter of 2022.

René Jones, M&T Bank’s chairman and CEO, will lead the combined company, the bank said in a statement.

“In People’s United, we have found a partner with an equally long history of serving and supporting customers, businesses and communities,” Jones said in the statement. “Combining our common legacies and our complementary footprints will strengthen our ability to serve our communities and customers, and provide solutions that make a difference in people’s lives. I am incredibly excited about this opportunity and look forward to welcoming new customers and team members to our M&T family.”

People’s United’s chairman and CEO, Jack Barnes, will join M&T’s board, along with Senior Executive Vice President Kirk Walters and three other current members of People’s United’s board.

“M&T is a like-minded partner that shares our culture of supporting communities by focusing on building meaningful relationships and providing personalized products, services and local market expertise to customers, while building on our legacy of excellence in service,” Barnes said in the statement. “The merger extends our reach by providing customers access to a larger banking network and an expanded array of services. I am confident our shared community banking philosophies will provide significant long-term value for our shareholders, employees and loyal customers.”

Jones said in a conference call this morning that the merger is about expanding markets for both banks, noting that it was a “growth story” more than a deal to cut expenses.

Once the merger is complete, the combined geographic area will represent 20 percent of the U.S. population and 25 percent of the country’s gross domestic product, Jones said. He added that the footprint will be concentrated, with the geographic center point no more than 300 miles from the furthest branch in each direction.

Combined footprint of M&T Bank and People’s United Bank. Image courtesy of M&T Bank

“When Jack [Barnes] and I were having discussions about whether this made sense or not, one of the things that we both saw was that this creates multiple paths to achieving a scale presence in all of the key New England markets, the fastest path for either one of us to gain share over time,” Jones said during the call. “And that was one of the things that was really compelling for us.”

People’s United’s outsize proportion of core operating accounts makes it among the most attractive franchises in New England, Jones said, and indicates a characteristic of a stable, well run franchise.

The combination would create a bank with approximately $200 billion in assets. M&T Bank is currently the 23rd largest bank in the U.S., and the deal would move it up to the 13th largest bank, analysts from Keefe, Bruyette & Woods said in a note today., adding that the deal would make the combined company the second largest bank in the Northeast and Mid-Atlantic region with 1,135 branches. KBW, which served as People’s United’s lead financial adviser on the transaction, said the deal appears reasonably priced.

The acquisition is the first for M&T Bank since 2015. People’s United has been active in recent years with acquisitions of United Bank, Belmont Savings Bank and Farmington Bank.