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Rockville Financial, United Financial Bancorp Announce Strategic Merger of Equals

Rockville Financial, United Financial Bancorp Announce Strategic Merger of Equals

Rockville Financial, Inc. (“Rockville”)  (NASDAQ: RCKB) and United Financial Bancorp, Inc. (“United”) (NASDAQ: UBNK) announced today they have entered into a definitive merger agreement in a stock-for-stock transaction valued at $369 million, based on the closing price of Rockville Financial, Inc. common stock on November 14, 2013.
 
Rockville Financial, Inc. (“Rockville”)  (NASDAQ: RCKB) and United Financial Bancorp, Inc. (“United”) (NASDAQ: UBNK) announced today they have entered into a definitive merger agreement in a stock-for-stock transaction valued at $369 million, based on the closing price of Rockville Financial, Inc. common stock on November 14, 2013. The combination will create the largest community bank headquartered in the Hartford – Springfield market with $4.8 billion in assets, over 50 branches and top five deposit market share in each metropolitan statistical area.
 
In the merger, United Financial Bancorp, Inc. shareholders will receive 1.3472 shares of Rockville Financial, Inc. common stock for each share of United Financial Bancorp, Inc. common stock. Upon closing, Rockville Financial, Inc. shareholders will own approximately 49% of stock in the combined company; United Financial Bancorp, Inc. shareholders will own approximately 51%. The merger is expected to generate approximately $17.6 million in fully phased-in annual cost savings or approximately 15% of the expected combined expense total. Additionally, the merger is expected to be approximately 30% accretive to the stand-alone 2015 earnings of both entities, excluding the impact of the potential revenue enhancement opportunities.
“We are very pleased to announce the combination of these two great community banks," said William H. W. Crawford, IV, President and Chief Executive Officer of Rockville Financial, Inc. "This merger is a significant step in our strategy to expand our footprint. Our complementary branch networks provide both greater market density and unique franchise scarcity value. The combined company will create a top-performing New England community bank that has the scale, product depth and efficiency to compete effectively and deliver strong returns to our shareholders and an expanded product suite to our customers.”
"This transaction creates value for our shareholders, customers and employees," said Richard B. Collins, United Financial Bancorp, Inc.'s Chairman, President and Chief Executive Officer. "We are uniting two strong community banks and creating a dominant player in the New England banking market with greater competitive strength, growth potential and profitability. United Bank has a history of growth through mergers of equals dating back to our days as a co-operative bank. It is fitting that today we announce this merger of equals and celebrate the “new” United Bank.”
Leadership
The new company will be governed by a 20-person Board of Directors consisting of an equal number of Rockville and United directors. The leadership team of the combined company will be assembled from both organizations with Rockville’s William H. W. Crawford, IV serving as Chief Executive Officer, United’s J. Jeffrey Sullivan as President, and Rockville’s Eric R. Newell serving as Chief Financial Officer. United Financial Bancorp, Inc.'s Robert A. Stewart, Jr. will serve as Chairman of the Board of Directors while Raymond H. Lefurge, Jr. from Rockville will be appointed as the Vice Chairman of the Board of Directors. Other key executive positions will be drawn from the executive management teams of both organizations. United’s Richard Collins will retire and provide consulting services for one year.
“I am excited to join Bill Crawford and the members of our combined management team to lead the combined company,” said J. Jeffrey Sullivan, EVP and Chief Operating Officer. “Individually we are each very good banks; together we have the critical mass to drive efficiency and growth, to take advantage of advancements in technology and to deliver the best banking experience for our customers.”
Brand Name to be United Bank/Headquarters in Connecticut
Upon closing, Rockville Bank will adopt the United name and the holding company will be United Financial Bancorp, Inc. Trading will continue on the NASDAQ Global Select Market under the symbol “UBNK.”
“United’s name dates back to 1882 and is highly respected in its markets. The United Bank name reflects the same independent minded community banking spirit that the Rockville Bank name has represented in our communities for the last 155 years,” continued William H. W. Crawford, IV. “Rockville and United both share a long history of financial stability and commitment to the communities they serve, and while the Rockville name may be changing, the service provided to our customers will only improve with the ability to provide product enhancements and technology services Rockville could not efficiently provide on its own. Adopting the United name enables us to extend our brand to a broader regional market."
The organization will be headquartered in Glastonbury, Connecticut. It will maintain regional offices in Enfield and South Windsor, Connecticut and in West Springfield and Worcester, Massachusetts.
Integration
The company has set up an Integration Management Office ("IMO") comprised of executive management of both Rockville and United to aid with the integration of both companies. The IMO will create working groups to focus on integrating key areas and action teams for narrower, more specific projects. The IMO will be responsible for reporting to executive management, the Board and regulatory bodies.
Approvals
The transaction is expected to close by mid-year 2014. The transaction is subject to approval by shareholders from both companies, regulatory approval and other customary closing conditions.
Advisors
RBC Capital Markets, LLC is serving as the lead financial advisor to Rockville Financial, Inc. and rendered a fairness opinion in connection with the transaction. Sandler O’Neill + Partners, L.P. is rendering a fairness opinion in connection with the transaction.  Hinckley, Allen & Snyder LLP is acting as Rockville's legal counsel. Sterne Agee & Leach, Inc. is serving as the exclusive financial advisor to United Financial Bancorp, Inc. and rendered a fairness opinion in connection with the transaction. Kilpatrick Townsend & Stockton LLP is acting as United’s legal counsel.