WATERBURY, Conn., Sept. 23, 2014 /PRNewswire/ -- Webster
Financial Corporation (NYSE: WBS), the holding company for
Webster Bank, N.A., said today that
it had signed a definitive agreement to acquire the health savings
account (HSA) business from JPMorgan Chase Bank, N.A., a subsidiary
of JPMorgan Chase & Co. (NYSE: JPM).
Under the agreement, approximately 700,000 accounts, including
an estimated $1.3 billion in deposits
and $175 million in investments, will
migrate from JPMorgan Chase Bank to HSA Bank, a division of
Webster Bank and a leading
administrator and depository of health savings accounts, over a
transitional period. The transaction is subject to regulatory
approval and customary closing conditions.
"This acquisition will solidify HSA Bank's position as a leading
provider of health savings accounts with nearly $4 billion in assets under administration in more
than 1.4 million accounts and will accelerate HSA Bank's strategy
to increase penetration of the carrier and large employer markets,"
said James C. Smith, chairman and
chief executive officer of Webster. "HSAs are growing rapidly
and transforming the way consumers use and pay for health care.
HSAs attract long-duration transaction deposits which provide a
stable source of funding for Webster's loan growth."
In the near term, Webster will use approximately 60 percent of
the deposits to pay down short-term borrowings with the remaining
funds invested in securities.
Transaction consideration will be all cash; the purchase price
was not disclosed. Webster expects the transaction to be modestly
accretive to earnings per share and return on equity in the first
year following closing. The transaction is expected to improve
Webster's loan-to-deposit ratio to approximately 80 percent from 87
percent pro forma at June 30,
2014. The company estimates the transaction will have
tangible book value dilution of approximately 3 percent.
JPMorgan Chase has advised Webster that the transaction is
not expected to have a material impact on JPMorgan Chase's
earnings.
Chad Wilkins, president of HSA
Bank, said, "As one of the pioneers in health savings accounts, HSA
Bank has earned a reputation as an expert in the consumer directed
health plan space and for the highest quality customer service. We
look forward to a seamless transition of deposits to HSA
Bank. We are confident that our new accountholders,
employers, and carriers will be delighted with the HSA Bank
experience."
Based in Sheboygan, Wis., HSA
Bank ranks as one of the most experienced HSA providers in the
nation with $2.4 billion in assets
under administration ($1.75 billion
in deposits and nearly $700 million
in investment accounts) as of June
30; 700,000 accounts; 30,000 employer relationships; and
integrations with 15 health plans and third party administrators.
HSA Bank offers broad account capabilities and industry
leading technology to help HSA clients and customers manage their
healthcare funds including:
- Investment options including the ability to select from
thousands of mutual funds, ETFs, stocks, and fixed income products
through integrations with leading investment providers;
- Health Reimbursement Accounts, Flexible Spending Accounts, and
Commuter Benefit Accounts;
- Online investment tools, education, and guidance to help HSA
customers manage their funds and healthcare decision-making;
- myHealth Portfolio, an online dashboard that gives individuals
a consolidated view of their healthcare finances along with the
ability to pay healthcare bills easily and conveniently with online
billpay, debit card, or check; and
- A dedicated, industry leading Call Center in its headquarters
state of Wisconsin.
ABOUT HSAs – First marketed in 2004, HSAs increasingly are
finding favor among employers and consumers. In 2013, the
number of individuals with HSAs rose to 7.2 million from 6.6
million while assets in HSAs increased to $16.6 billion from $11.3
billion, according to the Employee Benefits Research
Institute. HSAs provide a tax-advantaged way for consumers to pay
and save for current and future medical expenses. Besides
being pre-tax, contributions to an HSA are fully portable and can
remain in the account and grow until withdrawn. Eligibility
to participate in an HSA is not subject to an income ceiling.
Annual contributions in 2014 are limited to $3,300 for an individual and $6,550 for a family. Withdrawals to pay for
qualified medical expenses are not taxable as income, and HSAs do
not require accountholders to take minimum annual distributions
upon reaching age 70 nor are they subject to ordinary income taxes
upon death.
Deutsche Bank acted as financial adviser to Webster. J.P.
Morgan Securities, LLC, acted as financial adviser to JPMorgan
Chase. Hogan Lovells acted as legal adviser to Webster, and
Wachtell, Lipton, Rosen & Katz acted as legal adviser to
JPMorgan Chase.
About Webster
Webster Financial Corporation is the holding company for
Webster Bank. With $22 billion in assets, Webster provides business
and consumer banking, mortgages, private banking, trust and
investment services through 166 banking offices; 311 ATMs;
telephone banking; mobile banking; and the Internet. Webster Bank owns the asset based lending firm
Webster Business Credit Corporation; the equipment finance firm
Webster Capital Finance Corporation; and provides health savings
account trustee and administrative services through HSA Bank, a
division of Webster Bank
headquartered in Wisconsin. Member
FDIC and equal housing lender. For more information about Webster,
including past press releases and the latest annual report, visit
the Webster website at www.websterbank.com or follow us on LinkedIn
http://linkedin.com/company/webster-bank and Twitter
https://twitter.com/WebsterBank. For more information on HSA
Bank, visit www.hsabank.com.
Media
Contact
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Investor
Contact
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Bob Guenther,
203-578-2391
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Glenn MacInnes,
203-578-2327
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rguenther@websterbank.com
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Chief Financial
Officer
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gmacinnes@websterbank.com
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SOURCE Webster Financial Corporation