Union Savings Plans Merger, New Botsford Branch Slated For 2010

DANBURY — Union Savings Bank, a Connecticut-chartered mutual savings bank, and First Litchfield Financial Corporation jointly announced this week a definitive agreement for the merger of First Litchfield Financial Corporation and The First National Bank of Litchfield with and into Union Savings Bank.

The Danbury-based financial services company also announced its intent to open a new branch in Botsford in the spring of 2010, according to Marie T. O’Neill, senior vice president of marketing and electronic banking.

Under terms of the agreement, upon completion of the merger, each First Litchfield shareholder will receive $15 per share in cash, giving the transaction a value of approximately $35 million. The definitive agreement has been unanimously approved by the boards of Union Savings Bank, First Litchfield, and The First National Bank of Litchfield.

First Litchfield Financial Corporation, a bank holding company headquartered in Litchfield, is the parent company of The First National Bank of Litchfield, a national bank with assets of approximately $520 million and nine branches in Litchfield and Hartford Counties. First Litchfield’s common stock is quoted on the NASD Over the Counter Bulletin Board by several member firms under the symbol FLFL.OB.

Union Savings Bank is a Connecticut-chartered mutual savings bank headquartered in Danbury, currently with $2.0 billion in assets. Through its branch network in Fairfield, Litchfield, and New Haven Counties, the bank provides financial services to individuals, businesses, not-for-profit organizations, and government entities through its commercial, residential, and consumer lending divisions, corporate services, retail banking, investment management, and trust services.

When the proposed transaction is completed, Union Savings Bank will have approximately $2.5 billion in assets, $1.7 billion in deposits and 28 branches in Connecticut: 13 branches in Fairfield County, 13 branches in Litchfield County, and one each in New Haven and Hartford Counties.

“The merger of The First National Bank of Litchfield with Union Savings Bank will significantly expand our market share in Litchfield County and enables us to extend our presence into Hartford County,” said Union Savings Bank President and CEO John Kline. “Because we are not a public company, we can focus on serving our three important constituents — customers, communities, and employees — in the form of great rates and service, donations to the community through Union Savings Bank and the USB Foundation, and generous employee benefits and a great work environment.”

Jay Lent, executive vice president and COO of Union Savings Bank, stated, “This will be a perfect strategic fit as Union Savings Bank seeks to grow its community banking footprint in contiguous markets. Together, we will be better able to serve the personal and business needs of First National Bank’s customers with expanded financial resources and lending capacity, but with the same community banking approach. The two banks will fit together perfectly from a branch location standpoint, overlapping only in New Milford where First National has a branch and Union Savings Bank has two branches. We do not expect any branch closures as a result of the transaction and anticipate offering employment to all employees of First National Bank.”

First Litchfield President and CEO Joseph Greco echoed those sentiments by saying, “Both banks have a rich history. The First National Bank of Litchfield is the oldest bank in Connecticut, continuously in business since 1814, while Union Savings Bank was founded in 1866. Union Savings Bank shares our commitment to the community, emphasis on above and beyond customer service, and to helping local businesses grow and prosper.”

The transaction is subject to approval by the shareholders of First Litchfield, as well as customary regulatory approvals including the Office of the Comptroller of the Currency, State of Connecticut Department of Banking, and the Federal Deposit Insurance Corporation. The transaction is expected to close in the first quarter of 2010.

Ms O’Neil said the new Newtown branch is planned for the new Plaza South shopping center, just south of the Sand Hill Plaza on South Main Street.