Webster Financial To Buy Health Savings Account Business From JPMorgan

(RTTNews) - Webster Financial Corp. (WBS), the holding company for Webster Bank, N.A., said that it had signed a definitive agreement to acquire the health savings account or HSA business from JPMorgan Chase Bank, N.A., a subsidiary of JPMorgan Chase & Co. (JPM). Transaction consideration will be all cash; the purchase price was not disclosed.

As per the agreement, about 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.

The transaction is subject to regulatory approval and customary closing conditions.

In the near term, Webster will use about 60 percent of the deposits to pay down short-term borrowings with the remaining funds invested in securities.

Webster said it 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.