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People's United To Buy Danversbank - Future Of Danverbank's Reward Checking?

Thursday, January 20, 2011 - 6:31 PMDanversbank
This acquisition of Danversbank was just announced in a press release today. According to the press release, the transaction is expected to close late in the second quarter of 2011.

This might be bad news for Danversbank's reward checking account customers. In April 2010, Butler Bank failed and was acquired by People's United. Butler Bank had long offered a competitive reward checking account. I don't see any signs that this reward checking account was continued by People's United.
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Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Thursday, January 20, 2011 - 10:26 PM
I don't see anything that resembles Reward Checking at People's United.   

https://www.peoples.com/portal/site/peoples/menuitem.0a6a29b29b1a5a92b6121d10085001ca/?vgnextoid=621efcca357aa110VgnVCM100000800510acRCRD&vgnextfmt=default

 
5
pearlbrownpearlbrown1,436 posts since
Nov 2, 2010
Rep Points: 6,264
2. Friday, January 21, 2011 - 6:54 AM
Bye Bye to my best account, $100k Max on Rewards Checking. Guessing they can't touch existing CD rates? Danvers has been good about giving me higher than listed rates, Have opened 4 Jumbos at 3% for 36 months in the last year. Biggest concern now is they will no longer have DIF coverage and I'm way over FDIC limits and the way my accounts are titled in my trust can't get get additional FDIC. I think this could allow me to close CDs with no penalty but as of now the rate is to good, will see how things look when deal completes and drop DIF 
3
scottjscottj30 posts since
Jun 5, 2010
Rep Points: 799
3. Friday, January 21, 2011 - 7:07 AM
I've never seen a bank that acquired a non-failed bank which did not honor existing CD rates. So my guess is that your Danversbank CDs should last until maturity.

That's a good point about DIF coverage. People's United is based in Connecticut, and DIF only applies to MA-chartered banks. So it looks like your accounts will lose DIF coverage.
5
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
4. Friday, January 21, 2011 - 9:23 AM
The situation is a bit different for Danversbank from that of Butler Bank.  This one is a very healthy acquisition. 

No urgency for gloom an doom.  The worst case would be the loss of reward checking accounts (it is at the un-attractive 3.01% interest rate anyway).  There might even be a slight chance that PU will keep the profitable Danversbank business as it is for a while after the acquisition. 

People just love to join in the disaster and suffering theory, I beg to differ.   

I will take a wait-and-see approach until the RCA situation becomes more clear.  The branch manager told me that it is a six-month process.  So we are relatively safe (with RCA) for at least that duration (most likely longer).  No need to get all nervous now and jump off the ship:D
7
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
5. Tuesday, February 1, 2011 - 6:31 AM
The CEO of People's United Bank, Jack Barnes, answered some questions about his bank's acquisition of Danversbank in this Salem News article. Some excerpts that should be of interest to Danversbank's depositors:
Asked about the possibility of layoffs, Barnes said "some support services would be consolidated" when Danversbank converts to the People's United system before the end of this year.

[...]


Barnes said he could not promise that there would be no fee increases, "but in the grand scheme of things people can expect things to look and feel very similar."




4
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
6. Tuesday, February 1, 2011 - 10:45 AM
Have not been able to get a straight answer on what will happen with DIF. A few years ago I had accounts with Eastern Bank in MA and as they grew they decided to drop DIF, They were required to give account holders one year notice before terminating DIF.  Wondering if the same will happen here? I would think if they could no longer insure my accounts I could close with no penalty, as of now the 3% rate I have is good so guess I will look at environment when they do drop DIF
2
scottjscottj30 posts since
Jun 5, 2010
Rep Points: 799
7. Tuesday, June 28, 2011 - 9:45 AM
Danversbank News:

"People's United Financial, Inc. (NASDAQ: PBCT) and Danvers Bancorp, Inc. (NASDAQ: DNBK) today (6/28/11) announced that their proposed merger was approved by the Office of theMassachusetts Commissioner of Banks and the Massachusetts Board of Bank Incorporation on June 27, 2011.  The transaction was previously approved by Danvers Bancorp shareholders on May 13 and by the Office of Thrift Supervision on May 16. The closing of the merger is expected to occur on June 30, 2011."

I expect the actual change of flag be on 7/1/11.
5
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
8. Friday, July 1, 2011 - 4:46 PM
All the Danversbank branches officially become People's United Today.  However, the Danversbank computer system is not integrated with People's United yet. 

I found out the hard way when I visited the newly-opened Lexington (MA) People's United branch.  They took my deposit to Danversbank, but it will be depoisted into the Danvers system tonight. 

The Lexington Branch Manager told me that the RCA accounts will be "grandfathered" for about a year, according to People's United Merger history/style (Butler Bank, etc.).  Thus it is "graceful" transition.  This (if true) is good news to me.
3
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
9. Friday, July 1, 2011 - 4:57 PM
Grandfathered with our $100k max? Also sucks they will be losing DIF.
2
scottjscottj30 posts since
Jun 5, 2010
Rep Points: 799
10. Friday, July 1, 2011 - 7:41 PM
Grandfathered with our $100k max? Also sucks they will be losing DIF.

It was RCAs in general, meaning no immediate changes, hoping that we get to keep our $100K accounts for a while.

2
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
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