Vermont Business Magazine Berkshire Hills Bancorp, Inc(NYSE: BHLB) ("Berkshire") and SI Financial Group, Inc(NASDAQ: SIFI) announced Tuesday that they have signed a definitive merger agreement under whichBerkshirewill acquire SIFI and its subsidiary, Savings Institute Bank and Trust Company, in an all-stock transaction valued at$180 millionbased onBerkshire'sstock price as of the close of business onDecember 10, 2018.Berkshire Hills is the parent of Berkshire Bank with branches in southeastern Vermont.
Berkshire'stotal assets will increase to$13.6 billionincluding the$1.6 billionin acquired SIFI assets. SIFI reported$1.3 billionin loans and$1.3 billionin deposits as ofSeptember 30, 2018. This merger agreement increasesBerkshire'smarket presence with 18 branches in Eastern CT and 5 branches inRhode Island, adding toBerkshire'sexisting 9 Connecticut branches.
"We're pleased to welcome Savings Institute's customers and employees to theBerkshirefamily," saidRichard M. Marotta, Chief Executive Officer of Berkshire. "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 inConnecticutand enter into attractiveRhode Islandmarkets. Savings Institute is a well-established and trusted financial institution with deep client and community relationships. We look forward to expanding those relationships with the depth and breadth of our products and services. This partnership will produce attractive returns for both our existing shareholders and the new shareholders from SIFI joining us in this transaction."
"We're excited to be joining with a successful regional bank that shares our commitment to community and customer service," commentedRheo A. Brouillard, President and Chief Executive Officer 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."
TRANSACTION SUMMARY
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 intoBerkshireoptions.
Following are selected transaction terms and metrics based upon current projections:
- Total transaction value:$180 million
- Price toSeptember 30, 2018tangible book value: 118%
- Tangible book value dilution of$0.53per share or 2.4% with an expected less than 3.0 year earn-back period
- Anticipated to be 5% accretive to earnings per share in 2020, the first full year of integrated operations
- Core deposit premium: 2.6%
- Targeted cost saves: 30%
LEADERSHIP
Under the agreement, SIFI's President and Chief Executive Officer,Rheo A. Brouillard, will be appointed toBerkshire'sBoard of Directors when the merger is completed. Key business leaders from SIFI will remain with Berkshire Bank in continuing leadership roles.
APPROVALS
The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes, and as a result, the shares of SIFI stock exchanged for shares of Berkshire stock are expected to be transferred on a tax-free basis. The definitive agreement has been approved by the unanimous votes of the Boards of Directors of both companies. Consummation of the agreement is subject to the approval of SIFI's shareholders, as well as state and federal regulatory agencies. The merger is targeted to be completed in the second quarter of 2019.
ADVISORS
Berkshirewas advised byPiper Jaffray& Co. and legal counsel was provided byLuse Gorman, PC; SIFI was advised by Keefe, Bruyette & Woods, Inc., and legal counsel was provided byKilpatrick Townsend& Stockton LLP.
INVESTOR PRESENTATION AND CONFERENCE CALL
Berkshirewill conduct a conference call/webcast at10:00 a.m. eastern time on Wednesday, December 12, 2018 to discuss the acquisition of SIFI. Participants should pre-register for the conference call using the following link:http://dpregister.com/10127087.
Participants may also reach the registration link and access the webcast by logging in through the investor section ofBerkshire'swebsite atir.berkshirebank.com. Those parties who do not have internet access or are otherwise unable to pre-register for this event, may still participate at the above time by dialing 1-844-792-3726 and asking the Operator to join the Berkshire Hills Bancorp (BHLB) call. The recorded webcast will be available onBerkshire'swebsite for an extended period of time.
A copy of the investor presentation will be made available prior to the call onBerkshire'swebsite (ir.berkshirebank.com).
ABOUTBERKSHIREHILLS
Berkshire Hills Bancorp, Inc. is the parent of Berkshire Bank. AtSeptember 30, 2018, the Company had approximately$12.0 billionin assets and 115 full service branches inMassachusetts,New York,Connecticut,Vermont,New Jersey, andPennsylvaniaproviding personal and business banking, insurance, and wealth management services. The Company also offers mortgages and specialized commercial lending services in targeted national markets.
ABOUT SI FINANCIAL
SI Financial Group, Inc. is the holding company for Savings Institute Bank and Trust Company. Established in 1842, Savings Institute Bank and Trust Company is a community-oriented financial institution headquartered inWillimantic, Connecticut. Through its 23 branch locations, the Bank offers a full-range of financial services to individuals, businesses and municipalities within its market area. For more information, visitwww.mysifi.com.
SOURCE BOSTON, andWILLIMANTIC, Conn.,Dec. 11, 2018/PRNewswire/ --Berkshire Hills Bancorp, Inc.www.berkshirebank.com