Boston, MA 09/24/2014 (wallstreetpr) – According to reports, Webster Financial Corporation (NYSE:WBS) has agreed to acquire health saving account business from JPMorgan Chase & Co. (NYSE:JPM). The company has signed a definitive agreement with JPMorgan Chase Bank, N.A, a wholly owned subsidiary of JPM.
Insights of agreement:
As soon as the acquisition takes place, almost 700,000 accounts with $175 million in investments and $1.3 billion in deposits will transfer from JPM to HSA bank, which is a division of WBS. HSA is a well-known name in depository and administering services of health savings accounts. The successful execution of this transaction will depend upon customary closing conditions and regulatory approvals. The entire management of Webster Financial Corporation (NYSE:WBS) including the CEO and President James C. Smith is very pleased after the announcement. According to Smith, the acquisition deal will strengthen the market leadership position of HSA bank in coming months as it will have close to 1.4 million accounts and $4 billion in assets under administration. With the help of this portfolio, the penetration of the HSA will increase in major employer markets.
Smith thinks that health saving accounts carry a nice concept; as a result of which they are transforming the way people pay for health care needs and treatments. HSAs require the customers to put their money for long term; hence, they can provide a stable source of funding to WBS operations. Recently during a press conference, he said that initially 60% of total deposits would be used by WBS to pay short-term borrowings and the rest 40% would be invested in different securities. Although he didn’t disclose the purchase price of health saving account business, but he indicated that it would be an all cash transaction. WBS expects that this deal will further enhance the earnings per share and return on equity of Webster Financial Corporation (NYSE:WBS).
