Berkshire Hills Bancorp signed a definitive merger agreement to acquire SI Financial Group and its subsidiary, Savings Institute Bank and Trust, in an all-stock transaction valued at $180 million, based on Berkshire’s stock price as of the close of business on December 10, 2018.
The merger agreement will increase Berkshire’s total assets to $13.6 billion, including the $1.6 billion in acquired SIFI assets. It will also expand its market presence with 18 branches in Eastern Connecticut and 5 branches in Rhode Island, adding to Berkshire’s existing 9 Connecticut branches.
“We’re pleased to welcome Savings Institute’s customers and employees to the Berkshire family,” said Richard M. Marotta, Berkshire CEO. “This transaction is a natural fit and brings with it a stable, longstanding deposit base with leading market position. The Savings Institute franchise strengthens our Northeast presence, as we gain scale in Connecticut and enter into attractive Rhode Island markets.”
“We’re excited to be joining with a successful regional bank that shares our commitment to community and customer service,” said Rheo A. Brouillard, president and CEO of SIFI. “Like Savings Institute, Berkshire Bank was established in the mid to late 1800s and has grown over the years as a result of that commitment. The combination of our two banks will provide greater convenience and a broader array of products to our customers who will continue to have the personalized service they have come to expect.”
Under the terms of the merger agreement, each outstanding share of SIFI common stock will be exchanged for 0.48 shares of Berkshire Hills common stock. Upon closing, any outstanding SIFI options will be vested and converted into Berkshire options. At close, Brouillard will be appointed to Berkshire’s board of directors, while key business leaders from SIFI will remain with Berkshire Bank in continuing leadership roles.
Berkshire anticipates the merger to be 5% accretive to earnings per share in 2020, the first full year of integrated operations.
Both companies’ boards of directors have approved the agreement. Closing is targeted for the second quarter of 2019, subject to the approval of SIFI’s shareholders and state and federal regulatory agencies.
Berkshire was advised by Piper Jaffray & Co., with legal counsel provided by Luse Gorman. SIFI was advised by Keefe, Bruyette & Woods, with legal counsel provided by Kilpatrick Townsend & Stockton.
