$200 million buyback from 2009 stock deal
WATERBURY — Wall Street investment house Warburg Pincus is selling nearly half its stake in super-regional lender Webster Bank, with the bank planning to buy about a quarter of the Warburg stake.
The bank and its parent, Webster Financial Corp., announced December 7 that ten million Webster shares in Warburg's portfolio were to be offered publicly at $20.10 apiece, or about $201 million, before commissions and fees.
Following the sale, which was due to close in mid-December, Warburg will still own about 13.6 percent of Webster's common stock, down from the current 22.5 percent, according to bank officials.
In addition, Webster announced that its board of directors had authorized a $100 million common stock repurchase program under which shares may be repurchased from time to time in open market or privately negotiated transactions, subject to market conditions and other factors.
In connection with the common stock repurchase program, Webster will purchase approximately 2.5 million shares of its common stock in the offering at a price per share equal to the price per share being paid by the underwriter to Warburg Pincus in the offering.
In July 2009 Warburg invested $115 million in the bank a year after Webster received a $400 million federal bailout in the wake of the autumn 2008 near-collapse of the global financial system.
To accommodate Warburg, Webster shareholders first had to amend the bank holding company's incorporation certificate to allow ownership of more than 10 percent of Webster's outstanding shares without the approval of holders of two-thirds of the outstanding common stock.
Also, shareholders agreed to the issuance of Webster common shares and the conversion of preferred shares and warrants to buy as many as 11.3 million shares as called for as part of the Warburg Pincus deal.
Webster Chairman and CEO James Smith said he understands Warburg's business decision to harvest fruit from its investment.
"Warburg's investment in Webster has been extraordinarily successful,'' Smith said in a statement, "so it's natural that they would lighten up and return some capital to their partners three and a half years into the relationship.''
GCC, Community Foundation among honorees
ROCKY HILL — The Connecticut Economic Resource Center ha s recognized the top economic development projects, programs and leaders from around the state at its annual Celebrate CT! event.
Recognition was given locally to Gateway Community College for its downtown campus, which opened in August, and to the Community Foundation for Greater New Haven. The Community Foundation was singled out for its support of workforce training, financial literacy and public transportation.
The city of Waterbury’s anti-blight program was cited for its reduction of blighted properties to turn around neighborhoods and improve the city’s image. Policies under the new program hold property owners accountable; the city is even considering a proposal that would enact criminal penalties for failure to comply with city blight ordinances.
The Naugatuck River Greenway in Beacon Falls had its ribbon cutting in September, which came after 13 years of local, regional and national efforts to reclaim a lane of old Route 8 as a multi-use path along the Naugatuck River. It was cited by CERC for its beautification of downtown and potential to attract visitors to the town center. The greenway is part of a proposed 44-mile greenway trail to connect towns along the river from Torrington to Derby.
Other honorees included optical fiber and fiber laser manufacturer Nufern of East Granby; the Connecticut-Israel Technology Summit in Hartford; Yarde Metals in Southington; the Hospital of Central Connecticut Cancer Center in New Britain; gas turbine manufacturer Alcoa Howmet in Winsted; property managers Torrington Downtown Partners, LLC; pharmaceutical company Boehringer Ingelheim, and manufacturer Kimchuk Inc., both of Danbury; baker Pepperidge Farm, headquartered in Norwalk; Stamford’s Vita Health and Wellness District; GKN Aerospace Services Structures Corp. in Cromwell; the Middletown Summer Youth Empowerment Program; Lawrence + Memorial Hospital in New London; historical war observance OpSail CT 2012; Quinebaug Manufacturing Technology Center at Quinebaug Community College in Danielson; and the Coventry Regional Farmers’ Market.
Recipients of the Celebrate CT! awards were recognized for how the project or program increased employment, changed the character of the community, civic engagement and overall regional growth.
NEW HAVEN — The Governor’s Prevention Partnership has recognized First Niagara Bank with its Partner in Prevention Award. The bank was cited for its commitment to youth mentoring through financial support, employee participation and other resources. That Partner in Prevention Awards recognize corporations that make significant contributions statewide and in local communities that promote mentoring and the prevention of underage drinking, drug abuse, violence and risky behavior.
Last year First Niagara, through its charitable foundation, contributed $100,000 to strengthen mentoring initiatives. The bank partnered with the Boys & Girls Club of New Haven, WTNH-TV and CBS Radio to produce and air public-service announcements emphasizing the positive impact that mentoring can have on children’s lives.
Connecticut's slow recovery from the economic recession is hampering the state's construction industry even as firm in other New England states and the nation begin to thrive.
From July to August this year, Connecticut ranked 49th out of 50 states in construction job creation, according to the monthly report from the Associated General Contractors of America.
As of September, Connecticut had 52,100 construction jobs, a loss of 1,100 jobs (2.1 percent) from September 2011, according to the AGC report dated October 30. The only area of the state that gained construction jobs was Fairfield County.
Connecticut's economy is hurting worse than other states because Wall Street investment hasn't played as big of a role in the state since the downturn started in 2007, Anirban Basu of the accounting firm Marcum told the Hartford Business Journal. Coupled with a reputation for having an unfriendly business environment, Connecticut has lagged behind states such as Massachusetts, New Hampshire and Vermont in obtaining the private investment needed to stimulate construction.
"There are other New England states considered to be more business friendly, and that attracts more private investment," Basu said.
Bank underwrote $14M in 7(a) loans in FY 2012
NEW HAVEN — First Niagara Financial Group has been recognized by the U.S. Small Business Administration’s (SBA) Connecticut District Office as one of the recipients of the organization’s 2012 Eagle Award for Top Dollar 7(a) Lender in Connecticut.
The 7(a) loan program is the SBA’s primary lending program to help start-up and existing small businesses secure financing when they might not be eligible for business loans through traditional lending channels.
“First Niagara has built upon the success of its predecessor, NewAlliance, by working closely with the SBA to offer 7(a) loans to businesses throughout the state,” said SBA District Director Bernard Sweeney. “Small-business growth is vital to Connecticut’s economic recovery, and we’re pleased that First Niagara is playing a leading role in that recovery by offering this product to small business owners.”
In 2010, First Niagara’s predecessor, NewAlliance Bank, recorded $6 million in 7(a) loans to Connecticut small businesses. First Niagara continued to grow its SBA business following its acquisition of NewAlliance. As a result, First Niagara’s SBA loan total rose to $8,040,000 in 2011 and, in 2012, the bank saw dramatic growth to more than $14 million — an 83.5-percent increase over 12 months.
SBA lending in Connecticut totaled nearly $229 million during the federal government’s 2012 fiscal year ending September 30.
“The exponential growth of our SBA lending business is a strong indicator of the strength and resilience of small businesses in Connecticut, and across our footprint,” said First Niagara SBA Department Manager Chris Earle. “First Niagara is proud to be the top dollar lender for SBA 7(a) loans in Connecticut, and we look forward to continuing to provide small businesses in the region with products and services that meet their needs and allow them to thrive in the state.”
Locally, Harty Press, a family-owned, 100-year-old commercial printer and mailer in New Haven, secured SBA financing from First Niagara in May and moved all of its operational accounts over to the bank as well. “From early conversations through our closing, the loan process was completely transparent and every person and department we dealt with at First Niagara was responsive and professional,” said Harty Controller Bob Graham.
In addition, Trumbull dentist Jason Oberhand was able to acquire a dental practice with more than 4,000 patients and 11 staff as a result of SBA funding from First Niagara. The practice, Jason Oberhand ,DDS Family Dentistry, opened in July.
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