Berkshire Hills Bancorp, the parent company of Berkshire Bank, and Brookline Bancorp, the parent company of Brookline Bank, Bank Rhode Island and PCSB Bank, 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._x000D_
_x000D_
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 will be issued at $29.00 per share. The capital raise is expected to close on December 19, 2024. The proceeds of the capital raise are expected to support the pro forma bank’s balance sheet and regulatory capital ratios._x000D_
_x000D_
Nitin J. Mhatre, president and CEO of Berkshire, stated, “Today 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.”_x000D_
_x000D_
Paul A. Perrault, chairman and chief executive officer of Brookline, commented, “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.”_x000D_
_x000D_
Berkshire Chairperson David Brunelle added, “This highly compelling combination is a true merger of equals that will create a preeminent 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.”_x000D_
_x000D_
Strategic Benefits of the Merger_x000D_
_x000D_
Increased scale and capabilities: The creation of a $24 billion franchise uniquely 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 our clients, employees and markets, and increase lending capacity. Distinct, attractive, complementary geographic footprints across five states with limited overlap will deepen the bank’s reach contributing to a top 10 deposit market share in 14 of 19 pro forma MSAs._x000D_
_x000D_
Enhanced performance and operational strength: The management team of seasoned industry veterans from Brookline and Berkshire will help minimize integration risk and drive enhanced operational performance, strong risk management practices and create shareholder value. The business is targeted to deliver top tier peer operating and return metrics._x000D_
_x000D_
Shared values, client and community focus: The combined company will preserve and build on the strong cultures of both Berkshire and Brookline including core values centered on respect, teamwork, accountability and client focus. The bank will maintain its strong ties with its communities and will be better positioned to elevate its impact through its community banking business model._x000D_
_x000D_
Governance and Leadership_x000D_
_x000D_
The combined company’s Board of Directors will consist of eight directors from Berkshire and eight directors from Brookline. David Brunelle, Chairperson of Berkshire’s Board of Directors, will serve as Chairperson of the Board of the combined company and the combined bank._x000D_
_x000D_
Each of the executives below will serve in their capacities at the combined company and the combined bank at closing._x000D_
- _x000D_
- Paul A. Perrault, the current Chairman and Chief Executive Officer of Brookline, will serve as President and Chief Executive Officer.
- Carl M. Carlson, the current Co-President and Chief Financial and Strategy Officer of Brookline, will serve as Chief Financial and Strategy Officer.
- Jacqueline Courtwright, the current Chief Human Resources & Culture Officer of Berkshire, will serve as Chief Human Resources Officer.
- Sean Gray, the current Chief Operating Officer of Berkshire and President of Berkshire Bank, will serve as Chief Operations Officer.
- Michael McCurdy, the current Co-President and Chief Operating Officer of Brookline, will serve as Chief Banking Officer.
- Mark Meiklejohn, the current Chief Credit Officer of Brookline, will serve as Chief Credit Officer.
- Wm. Gordon Prescott, the current General Counsel & Corporate Secretary of Berkshire, will serve as General Counsel.
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
Combined Bank Structure_x000D_
_x000D_
The combined bank will be divided into six regions. Each of those regions will be led by an experienced local leader who will be responsible for the overall business performance in their markets. 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 six Regional Presidents and their current role are:_x000D_
- _x000D_
- Darryl Fess, who currently serves as the President and Chief Executive Officer of Brookline Bank.
- Michael Goldrick, who currently serves as the President and Chief Executive Officer of PCSB Bank.
- James Hickson, who currently serves as the Senior Managing Director – Middle Market and Regional President of Berkshire Bank.
- Elizabeth Mineo, who currently serves as the Managing Director – Private Banking of Berkshire Bank.
- James Morris, who currently serves as the Market President of New York and Managing Director – Commercial Real Estate of Berkshire Bank.
- William Tsonos, who currently serves as the President and Chief Executive Officer of Bank Rhode Island.
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
Transaction Details_x000D_
_x000D_
Under the terms of the definitive agreement, which was unanimously approved by the Boards of Directors of both companies, each outstanding share of Brookline common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock. As a result of the transaction and a $100 million common stock offering announced by Berkshire today to support the transaction, Berkshire shareholders will own approximately 51%, Brookline shareholders will own approximately 45%, and investors in new shares will own approximately 4% of the outstanding shares of the combined company._x000D_
_x000D_
Berkshire will be the legal acquirer of Brookline, while Brookline is expected to be treated as the accounting acquiror of Berkshire with the assets and liabilities of Berkshire being marked to market at closing._x000D_
_x000D_
In connection with the transaction, the existing four bank charters will be consolidated into one, Massachusetts state-chartered bank at closing. Brookline Bank will represent the consolidated bank charter._x000D_
_x000D_
Name, Branding, Headquarters and Markets_x000D_
_x000D_
The combined company will trade on the New York Stock Exchange and will announce a new name and ticker symbol prior to closing. The combined bank will also operate under a new name to be announced prior to closing._x000D_
_x000D_
The executive headquarters for the combined company will be located at 131 Clarendon Street in Boston, with operations centers located throughout the Northeast._x000D_
_x000D_
Timing and Approvals_x000D_
_x000D_
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._x000D_
_x000D_
For additional information about the proposed merger of Brookline with and into Berkshire, shareholders are encouraged to carefully read the definitive agreement that will be filed with the Securities and Exchange Commission (“SEC”)._x000D_
_x000D_
Advisors_x000D_
_x000D_
Raymond James & Associates, Inc. acted as exclusive financial advisor to Berkshire and delivered a fairness opinion to the Board of Directors of Berkshire. Raymond James & Associates, Inc. also served as a placement agent on the private placement. Luse Gorman, PC served as legal counsel to Berkshire._x000D_
_x000D_
Hovde Group, LLC acted as exclusive financial advisor to Brookline in the transaction and delivered a fairness opinion to the Board of Directors of Brookline. Hovde Group, LLC also served as a placement agent on the private placement. Goodwin Procter LLP served as legal counsel to Brookline._x000D_
_x000D_
Kilpatrick Townsend & Stockton LLP served as legal counsel to both Raymond James & Associates, Inc. and Hovde Group, LLC on the private placement._x000D_
_x000D_
