Merger of Equals
Berkshire Hills Bancorp Inc., the parent company of Berkshire Bank, and Brookline Bancorp Inc., the parent company of Brookline Bank, Bank Rhode Island, and PCSB Bank, recently announced they have entered into a definitive agreement pursuant to which Brookline will merge with and into Berkshire in an all-stock transaction valued at approximately $1.1 billion, or $12.68 per share of Brookline common stock, based on the $30.20 closing price of Berkshire common stock on Dec. 13, 2024.
In conjunction with the planned merger, Berkshire also entered into subscription agreements with investors to raise capital to support the merger. In aggregate, $100 million of Berkshire common stock were issued at $29 per share. The proceeds of the capital raise are expected to support the pro forma bank’s balance sheet and regulatory capital ratios.
Nitin Mhatre, president and CEO of Berkshire Bank, said the merger announcement “marks a transformational milestone in the history of two storied institutions with a strong commitment to serving their clients and communities. The combined organization will be in an even stronger position to deliver exceptional client experience and create greater value for shareholders.”
“Scale and efficiency combined with our shared culture of true community banking is a powerful driver of value for all of our stakeholders.”
Paul Perrault, chairman and CEO of Brookline Bank, noted that “this transaction presents an opportunity to bring together two historic franchises in the Northeast market. By bringing together two complementary cultures and geographic footprints with shared values and client focus, we will be better-positioned to serve our customers, employees, communities and shareholders.”
Berkshire Bank Chairperson David Brunelle added that “this highly compelling combination is a true merger of equals that will create a pre-eminent Northeast financial institution. Scale and efficiency combined with our shared culture of true community banking is a powerful driver of value for all of our stakeholders.”
The creation of a $24 billion franchise with 148 branch offices positions the combined company to benefit from significant economies of scale and capitalize on meaningful growth opportunities through business diversification and improved competitive positioning. Together, the companies will have the scale to enhance investments in clients, employees, and markets, and increase lending capacity.
The combined company promise to preserve and build on the cultures of both Berkshire and Brookline, which include core values centered on respect, teamwork, accountability, and client focus, the press announcement noted, adding that the combined bank will maintain its strong ties with its communities and be better-positioned to elevate its impact through its community banking business model.
The combined company’s board of directors will consist of eight directors from Berkshire and eight directors from Brookline. Brunelle will serve as chairperson of the board of the combined company and the combined bank. Perrault will serve as president and CEO.
The combined bank will be divided into six regions, each led by an experienced local leader who will be responsible for the overall business performance in their market. Three will be from Berkshire and three will be from Brookline. This model will allow the combined company to achieve the efficiencies of operating one bank while maintaining a regional banking structure that enables local market leaders to make autonomous decisions with the support and balance sheet of a larger institution.
The transaction is expected to close by the end of the second half of 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Berkshire and Brookline shareholders.
