ANDOVER - When customers walk into the Butler Bank branch at 16 North Main St. today they'll find out the institution got new owners and a new name virtually overnight, and that their money is safe.
The Lowell-based Butler Bank with branches in Andover and Marlborough yesterday became the first bank in the state to fail in 16 years. Federal and state regulators took over the bank at 6 p.m. yesterday and immediately sold it to People's United Bank of Bridgeport, Conn.
A notice on the Butler Bank Web site last night said, "On Friday, April 16, 2010, Butler Bank, Lowell, MA was closed by the Massachusetts Division of Banks. Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named receiver. No advance notice is given to the public when a financial institution is closed."
Massachusetts Commissioner of Banks Steven L. Antonakes said Butler was "critically undercapitalized" after investing aggressively in the commercial real estate. Efforts to help the Lowell-based bank failed, forcing state regulators to close it and the Federal Deposit Insurance Corp. to arrange the sale to People's United.
People's United will receive approximately $237 million of assets and has assumed approximately $243 million in liabilities, of which $229 million are deposits. Butler customers will not experience any loss and should expect little or no disruption of service, regulators said.
The acquisition "represents an excellent opportunity for People's United Bank to expand into attractive, high-density markets in the greater Boston area...," said Philip R. Sherringham, President and Chief Executive Officer of People's United Bank.
"We are looking forward to working with our new colleagues in the Lowell, Andover and Marlborough areas to serve our customers, build businesses and support communities in the greater Boston market," Sherringham said in a statement. "Our new customers can count on seeing the same familiar faces at their branches as our objective is to grow this organization."
Representatives from People's United will be on location at each of the former Butler branches beginning today.
Depositors will be able to access their money by writing checks, using ATMs or debit cards, as usual. Checks drawn on Butler Bank will continue to be processed, as normal.
The last Massachuetts bank to fail was Ludlow Savings Bank, in October 1994.
People's United Bank has approximately $22 billion in assets and nearly 300 branches in Connecticut, Vermont, New Hampshire, Massachusetts, Maine and New York.
In addition to Butler Bank, federal regulators yesterday shut down another seven banks - three in Florida, two in California, and one each in Michigan and Washington — putting the number of U.S. bank failures this year at 50.
