People's United Switching to a National Bank, Opening Second Manhattan Branch

The largest thrift in New England is converting to a national bank.

Jack Barnes, the president and chief executive at People's United Bank in Bridgeport, Conn., said Thursday that $28 billion-asset bank has submitted an application to the Office of the Comptroller of the Currency to switch from a federally chartered thrift to a national bank as part of a broader plan to bulk up in commercial lending.

People's has acquired four banks and an equipment leasing company in the last three years and it recently announced plans to expand its asset-based lending to commercial clients with credit needs in the $3 million to $25 million range.

"The conversion to a national bank charter will enhance our ability to achieve our financial goals as our commercial growth will no longer be limited by the thrift lending test," Barnes said in a conference call with analysts and investors. "Further, we will benefit from the OCC's deep understanding of and experience in supervising large commercially oriented financial institutions."

Barnes also announced Thursday that People's United has signed a lease to open its first de novo branch in Manhattan, at 47th and Park Avenue in midtown. The bank has one branch in Manhattan, which it inherited when it bought the Bank of Smithtown in New York late last year.

Also on Thursday People's parent company, People's United Financial Inc., reported earnings of $52.9 million, or 15 cents per share, more than double what it earned in the same period last year. The performance was aided by three acquisitions it has made since last year's third quarter. Compared with the second quarter of this year, profits rose 3.3%.

In late morning trading Friday, People's United shares were down 2.4% from Thursday's close, to $12.04.