WATERBURY, Conn.--(BUSINESS WIRE)--Sept. 7, 2004--Webster
Financial Corporation (NYSE:WBS), the holding company for Webster
Bank, National Association, announced today its entry into the health
savings account market through a definitive agreement to acquire
Eastern Wisconsin Bancshares, Inc., the holding company for State Bank
of Howards Grove, headquartered in Howards Grove, Wisconsin. The
acquisition will make Webster one of the largest custodians and
administrators of health savings accounts (HSAs) in the United States.
The purchase price is approximately $26 million in cash. Webster
expects the deal to close in the first quarter of 2005.
"Webster is now well positioned as an early entrant in the rapidly
growing national HSA deposit market," stated Webster Chairman and
Chief Executive Officer James C. Smith. "We gain competitive advantage
by acquiring an established national competitor. As companies and
organizations across the country intensify their search for healthcare
plans offering optimal benefits to their employees at affordable
costs, they increasingly find advantages in tax-free HSAs. By giving
employees greater flexibility in deciding how they want to protect
their families through individual health plans, HSAs offer a
compelling new benefits solution."
The breakthrough Medicare Prescription Drug, Improvement &
Modernization Act of 2003 allows eligible individuals to establish
health savings accounts for taxable years beginning after December 31,
2003. HSAs are established to receive tax-favored contributions by or
on behalf of eligible individuals. HSA contribution amounts may be
accumulated over years or distributed on a tax-free basis to pay or
reimburse qualified medical expenses. HSA accounts are poised to
increase exponentially in the next few years. The Forrester Research
Group projects premiums for consumer-directed health plans will grow
to $413 billion by 2010, representing almost 25% of the total health
benefits market (Consumer-Directed Health Plan Leaders Poised For
Growth, June 2003).
The State Bank of Howards Grove, which also operates under the
trade name HSA Bank, has $163 million in assets and $144 million in
deposits, including $100 million in HSA deposits, and two traditional
retail bank branches in Wisconsin. HSA Bank, one of the leading
servicers of HSAs in the United States, has established professional
relationships with a broad and diverse range of health insurance
carriers, agents, associations, third party administrators and
employers, resulting in a robust pipeline of HSA prospects. The firm
has customers in all fifty states.
HSA Bank provides customers value-added, fully electronic
enrollment that facilitates cost-effective account setup and servicing
and also offers a high level of customer support and services such as
a call center and agent training.
Webster expects to divest State Bank's retail branches and related
loans and deposits and retain the entire staff of the bank's HSA
operation and its HSA deposits. Following the closing, Kirk Hoewisch,
senior vice president of State Bank's HSA operation, will become
president of HSA Bank, a division of Webster Bank.
"Our acquisition of HSA Bank affords an unique opportunity for
Webster to advance its strategic plan by capitalizing on this new,
rapidly growing initiative to gather core deposits and increase income
from fee-based services," stated Webster President and Chief Operating
Officer William T. Bromage. "We expect that HSA deposits will become a
significant portion of our total deposits and will generate attractive
returns on invested capital. In addition, we believe that our presence
in the Connecticut market will prove to be a strategic benefit to
building HSA relationships given the many insurance and third party
providers active in this region."
Bradley O. Yocum, president and CEO of State Bank of Howards Grove
and an officer of Eastern Wisconsin Bancshares, said, "I believe our
HSA customers will welcome their association with one of New England's
largest banks. Webster's strength and resources will provide Kirk
Hoewisch and his associates the resources they need to continue
growing this HSA operation."
Webster expects the merger to have a neutral impact on earnings in
2005 and to be accretive thereafter. After the completion of the deal,
State Bank's HSA operation will operate under the HSA Bank trade name
as a division of Webster Bank.
Webster Financial Corporation is the holding company for Webster
Bank, National Association and Webster Insurance. With $17 billion in
assets, Webster provides business and consumer banking, mortgage,
insurance, financial planning, trust and investment services through
147 banking offices, 268 ATMs, telephone banking and the Internet.
Webster Bank owns the asset-based lending firm Webster Business Credit
Corporation, the insurance premium finance company Budget Installment
Corp., and Center Capital Corporation, an equipment finance company
headquartered in Farmington, Connecticut. For more information about
Webster, including past press releases and the latest Annual Report,
visit the Webster website at www.websteronline.com.
Forward-Looking Statements
This press release contains forward-looking statements by Webster
Financial Corporation within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include, but are not limited to, statements regarding the benefits of
the acquisition by Webster Financial Corporation of Eastern Wisconsin
Bancshares, including future business opportunities and financial
results, and Webster Financial Corporation's intentions with respect
to the combined company. These forward-looking statements, which are
based upon current beliefs and expectations, are subject to business,
economic and other uncertainties and contingencies, many of which are
beyond the control of Webster Financial Corporation and Eastern
Wisconsin Bancshares. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking statements
include, among others, (1) the general risks associated with the
delivery of financial products and services, (2) fluctuating
Investment returns, (3) rapid technological changes, (4) increased
competition, (5) less favorable general economic conditions, either
nationally or in the markets where the entities are or will be doing
business, (6) legislation or adverse changes in regulatory
requirements, (7) the failure to achieve anticipated cost savings or
to achieve such savings in a timely manner, (8) costs, customer loss
and business disruption in connection with the acquisition or the
integration of our companies may be greater than expected, (9) failure
to obtain governmental approvals without adverse regulatory
conditions, (10) difficulties associated with achieving expected
future financial results, and (11) failure of Eastern Wisconsin
Bancshares's stockholders to approve the acquisition. Webster
Financial Corporation assumes no obligation to update the
forward-looking statements contained herein.
Eastern Wisconsin Bancshares will be providing relevant documents
concerning the merger to its shareholders including a proxy statement.
WE URGE EASTERN INVESTORS TO READ THESE DOCUMENTS BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. The directors and executive officers of Eastern
Wisconsin Bancshares may be deemed to be participants in the
solicitation of proxies to approve the merger. Information about the
directors and executive officers of Eastern Wisconsin Bancshares and
ownership of Eastern Wisconsin Bancshares common stock will be set
forth in the proxy statement. Additional information about the
interests of those participants may be obtained from reading the
definitive proxy statement regarding the proposed merger when it
becomes available. EASTERN WISCONSIN BANCSHARES INVESTORS SHOULD READ
THE PROXY STATEMENT CAREFULLY BEFORE MAKING A DECISION CONCERNING THE
MERGER.
For more information about HSA Bank, visit its website at
hsabank.com.
CONTACT: Webster Financial Corporation
Media Contact:
Meghan Thompson, 203-578-2287
mthompson@websterbank.com
or
Investor Contact
Terry Mangan, 203-578-2318
tmangan@websterbank.com
SOURCE: Webster Financial Corporation