Note 8. Loans Payable
In 2005, the ESOP entered into a term loan agreement with the Company (Plan Sponsor) to borrow enough to purchase up to 699,660 shares of the
Companys common stock. Through 2006, the plan borrowed $7,884,254 and the proceeds of the loan were used to purchase 699,659 shares of the Companys common stock. Unallocated shares were collateral for the loan. The agreement provided for
the loan to be repaid over ten years. The loan bore interest at the prime rate plus one percentage point as published in the Wall Street Journal. At December 31, 2014, prime plus one was 4.25%. This loan matured and was paid in full on
December 31, 2014.
On March 3, 2011, the Company completed the second step conversion from a mutual holding company
structure to a stock holding company structure. The Plan borrowed $7,071,039 from the Company to purchase 684,395 shares of common stock in the open market. Unallocated shares were collateral for the loan. The loan bore interest at the prime rate
plus one percentage point as published in the Wall Street Journal. This loan was scheduled to mature on December 31, 2040. At December 31, 2019 and 2018, prime plus one was 5.75% and 6.50%, respectively. The balance on this note was
$5,899,851 at December 31, 2018. The loan was fully repaid during 2019 in connection with the merger and termination of the Plan.
Note 9. Plan Termination
The Bank has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set
forth in ERISA. The Plan was terminated effective October 27, 2019.
Note 10. Federal Income Tax Status
The Internal Revenue Service has determined and informed the Bank by a letter dated May 26, 2017, that the Plan and related trust were
designed in accordance with the applicable regulations of the Internal Revenue Code. Although the Plan has been amended since receiving the determination letter, the Plan administrator and the Plans tax counsel believe that the Plan is
designed, and is currently being operated, in compliance with the applicable requirements of the IRC and, therefore, believe that the Plan is qualified, and the related trust is tax-exempt. Therefore, no
provision for income taxes has been included in the Plans financial statements. In accordance with U.S. GAAP, the Plan Administrator has evaluated the Plans tax positions and concluded that the Plan has taken no uncertain tax positions
that require adjustments to or disclosures in these financial statements. The Plan is subject to routine audits by tax authorities; however, there are currently no audits for any tax periods in progress.
Note 11. Related Party Transactions
The Trustees manage certain Plan investment options. These transactions qualify as exempt party-in-interest transactions.
The Plan holds common shares of Peoples United Financial,
Inc. and United Financial Bancorp, Inc., the Plan sponsor at December 31, 2019 and 2018, respectively. These transactions qualify as exempt party-in-interest
transactions. Notes receivable from participants also qualify as exempt party-in-interest transactions.
Note 12. Subsequent Events
The Trustee of the Plan has evaluated subsequent events through June 26, 2020, which represents the date that the financial statements
were available to be issued.
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