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Webster Bank has acquired medical funds custodian Ametros Financial Corp. for $350 million in cash, which will give the bank access to a source of long-term, low-cost deposits.

The bank signed a definitive agreement to acquire Ametros, a custodian and administrator of medical funds from insurance claim settlements from funds managed by Long Ridge Equity Partners.

Webster Bank said the acquisition of Ametros will provide a fast-growing source of low-cost and long-duration deposits, provide new sources of noninterest income and enhance Webster’s healthcare financial services business.

This acquisition is also in line with the bank’s niche in the medical field with its HSA Bank, as well as comments Webster executives made during the bank’s earnings call in the second quarter that it has focused on servicing the medical field, and reduced its non-medical-related office debt exposure.

“This acquisition closely aligns with our strategic focus on building a diverse and unique funding base,” John Ciulla, president and CEO of Webster, said in a statement. “Ametros’ market position and value proposition for its clients and partners underpin a robust growth trajectory for this highly complementary business. Ametros builds on Webster’s history of developing non-traditional deposit verticals with a favorable financial profile, including HSA Bank and interLINK.”

Webster Bank’s press release noted Ametros deposits have an average cost of less than 10 basis points with near-zero deposit beta, an average duration of more than 20 years, FDIC coverage and are projected to grow at a five-year compound annual growth rate of approximately 25 percent.

Ametros has over 24,000 members and $804 million in deposits under custody, which will become deposits of Webster following the closing of the transaction. Its deposits under custody have more than doubled in the past three years, while the average deposit balance per account was $33,000, Webster’s press release said.

“Webster is the perfect growth partner for our unique business,” Ametros CEO Porter Leslie said in a statement. “We are thankful for our clients and members who continue to place their trust in us and are excited for this next phase of growth together.”

The bank said the acquisition, which will close in the first quarter of 2024 following regulatory approval, will add to its 2025 earnings and generate an internal rate of return of over 25 percent.