BNC Financial Group purchases Wilton Bank

The Wilton Bank, an independent financial institution in town, will be independent no longer.

BNC Financial Group Inc., the holding company for the Bank of New Canaan and the Bank of Fairfield, has a definitive merger agreement to acquire the Wilton Bank for approximately $5 million. Wilton Bank will be renamed and merged into the Bank of New Canaan once the deal goes through, which is expected later this year.

The acquisition would add to BNC Financial Group (OTC Bulletin Board: BNFI) about $75.1 million in assets, bringing its total assets to $700 million, according to a BNC press release. The transaction would expand BNC Financial Group’s presence in Fairfield County, where it currently has five branches and one loan production office.

“This is our first acquisition,” Peyton R. Patterson, the president and chief executive financial officer, told The Bulletin’s sister paper The New Canaan Advertiser. But BNC Financial Group hopes it is just the beginning.

“We are going to continue to do acquisitions that allow us to grow the bank not only in Fairfield County but also into Westchester and New Haven counties,” Ms. Patterson said.

And Wilton Bank, she said, was a great place to start. “What was a perfect fit with the Wilton Bank is it is a like-minded bank one town over. We have worked with them before. A number of our directors live in Wilton.”

Under the terms of the merger agreement, stockholders of Wilton Bank could receive $13.50 in cash — subject to adjustment under certain conditions — for each share of the Wilton Bank. BNC Financial Group expects no tangible book value dilution at close, officials said.

While New Canaan customers likely won’t see much of a change in services — other than having another ATM and branch in Wilton, Wilton Bank customers will get more services.

Among those new services are enhanced online and mobile banking and increased lending capabilities.

While WIlton Bank will be renamed, Ms. Patterson stressed the bank’s history of being an important part of the Wilton community would not change. “One thing I want to underscore is our commitment to the communities we serve,” she said. “One of the things we noticed right away was the extraordinary outreach (Wilton Bank) plays in that community ... We would do, at a minimum, what they do today — and even add more in the way of philanthropic commitment to the community.”

The bank name will be changing — and not just in Wilton. “We are going to be announcing a total rebranding of our organization next week,” Ms. Patterson said.

Charles F. Howell, the president, treasurer and chief executive of Wilton Bank, reiterated Ms. Patterson’s comments on the bank’s commitment to community. Mr. Howell also said his customers should see a seamless transition.

“The board decided to partner with a community bank which had a similar philosophy and track record to our own,” he said. “We believe we selected a bank which is in tune with the vision the board imagined when they first opened the bank. There will still be the local, personal touch, but with a broader range of services.”

Community banks such as Wilton Bank profit on a basic principle called “net interest margin,” he said. Net interest margin is the difference between the amount of interest a bank pays to depositors, and the amount of interest it takes in as profit on loans.

The “current environment of low-interest rates,” he said, has caused this margin to compress to a size that “requires a larger size of bank,” especially in areas such as Fairfield County where the cost of operating a business is traditionally high.

“The cost of running a small, community bank today is very high,” he said in an interview Monday. “There are increased levels of difficulty due to regulatory requirements and IT costs.”

In many cases, Mr. Howell said, small banks incur the same operating costs as larger institutions, but lack the scale to spread them out. Noting a hypothetical example, he said the manpower cost of annually underwriting a $10-million loan is the same as underwriting a $400,000 loan. But, the larger loan provides a much higher level of profit, and small community banks cannot often offer that kind of high-level loan.

Mr. Howell said Wilton Bank’s board of directors considered all options, and realized that partnering with a local bank was their best course of action.


Currently, Wilton Bank’s maximum lending level is $2.4 million. After the acquisition, Ms. Patterson said, it will grow to $9 million. “On the lending side,” she said, “we bring a healthy lending culture.”

Following the transition, Mr. Howell will resign his post as CEO to retire after a long career that included extended stints at Norwalk Savings Society and Patriot National Bank. He began his banking career in Wilton in the late 1960s, he said, and was happy to retire from a post that gave him the opportunity to “come back to an area that I really enjoyed.”

Mr. Howell may not be the only one to leave The Wilton Bank and Ms. Patterson said there may be some layoffs in Wilton.

“There’s always a concern about job losses,” Ms. Patterson said. “Obviously we are here to support the local economies and clearly The Wilton Bank has a little over 20 employees. Whenever there is a merger there is typically some job loss in the back office. We want to be sure that we give any job applicants an opportunity to apply anywhere in our footprint. We want this to be about building on the opportunity.”

Ms. Patterson noted that BNC Financial Group is an “extraordinarily healthy company. We are well capitalized and we have been growing by loans and deposits by 30% per year.”

She said in the first quarter of 2013, BNC Financial Group made as much money as it made in all of 2012. By partnering with a similar type of community bank, it grows shareholder value, Ms. Patterson said.

And that growth is part of BNC’s five-year strategic plan, which includes growing into new territories.

The Wilton transaction, which has been unanimously approved by the boards of directors of both BNC Financial Group and Wilton Bank, is expected to close in the fourth quarter of 2013.

The transaction closing is subject to certain conditions, including the approval by Wilton Bank’s stockholders and customary regulatory approvals. BNC Financial Group plans to establish a Wilton Advisory Board in an effort to promote continuity and maintain the positive legacy The Wilton Bank has established in the community.

BNC Financial Group, created in 2007, is a federally regulated bank holding company in New Canaan. It operates two state chartered commercial bank subsidiaries, Bank of New Canaan, founded in 2002, and Bank of Fairfield. The Bank of New Canaan operates a division in Stamford under the name Stamford First Bank, founded in 2010. Each bank is FDIC-insured and provides a full range of banking services to commercial and consumer customers, primarily located within its community and the surrounding area.

The Wilton Bank is a state-chartered commercial bank in Wilton, whose deposits are insured by the FDIC. It also provides a full range of banking services to commercial and consumer customers, primarily located within its community and the surrounding area.

— Bulletin reporter Christopher Burns contributed to this article.