Market Overview

Berkshire Hills To Buy First Choice Bank For Stock Transaction Worth $117 Million


Berkshire Hills Bancorp, Inc. (NYSE: BHLB) and First Choice Bank revealed Monday that they reached a definitive merger agreement. Accordingly, First Choice Bank would merge into Berkshire Bank and its subsidiary and that First Choice Loan Services Inc., would become a subsidiary of Berkshire Bank. The transaction would be through an all-stock valued at about $111.7 million.

Berkshire said that merger agreement terms provided each outstanding share of First Choice common stock to be exchanged for 0.5773 shares of Berkshire Hills common stock. Before closing the merger transaction, First Choice might pay a per share dividend of a maximum of 35 percent of any core earnings above and beyond a $14.22 tangible book value per share.

As a result of the transaction, Berkshire's total assets would get a boost to $8.9 billion. That included the $1.1 billion in acquired First Choice assets. The company believes that this is a market-expanding merger and offered entry into attractive markets with strong demographics, and includes six branches near Princeton, New Jersey and two in the greater Philadelphia, Pennsylvania area.

The company's CEO, Michael, Daly, said, "We are pleased to welcome First Choice customers and employees to America's Most Exciting Bank. This partnership builds on Berkshire's commitment to create a strong regional platform for serving our customers, while diversifying our revenue streams, improving profitability and increasing shareholder value."

He added, "The First Choice franchise builds on markets where we presently manage commercial relationships, and adds a well-positioned deposit base, a best in class home lending operation and enthusiastic new teams that complement our current culture. After integration, the transaction is expected to be accretive to Berkshire's earnings per share, return on equity and return on assets, liquidity and capital. We have a strong track record of execution and our collective teams are positioned to complete this integration flawlessly."

First Choice's net loans was $436 million, excluding loans held for sale, and holds $906 million in deposits at the end of the first quarter. Its total mortgage production in 2015 was $2.5 billion.

Following the transaction, Berkshire would have a pro forma market cap of about $905 million and 101 branches, serving customers and communities across the Northeast.

Posted-In: M&A News


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