On Monday, Berkshire Bank and Brookline Bank ramped up activity surrounding their bank merger in Boston when announcing an all-stock, proposed deal valued at $1.1 billion. Characterized by their respective parent companies, Berkshire Hills Bancorp and Brookline Bancorp, as a “merger of equals,” they once merged will control close to $24 billion worth of assets and operate nearly 150 branches.
This combination puts the new company on par with Rockland Trust, which acquired Enterprise Bank, and Eastern Bank, the largest independent retail bank in the state, which recently bought Cambridge Trust. The regional banks have struggled with higher interest rates over the last two years, which has raised the cost of borrowing and cut into their lending.
Brookline Bancorp will be acquired by Berkshire Hills Bancorp, with Brookline’s CEO, Paul Perrault, set to lead the unified institution headquartered in Brookline’s Clarendon Street offices, under the terms of the agreement.
The network for Berkshire spans four New England states and New York, and Brookline maintains branches through Bank Rhode Island and PCSB Bank in Westchester County, N.Y. The new company’s board of directors will comprise eight members from each bank, and Berkshire’s board chair, David Brunelle, will serve as chairman of the board. Significantly, however, Berkshire’s CEO, Nitin Mhatre, will not be part of the future leadership team.
The employment impact of the merger on both banks is still unknown, although the executives did mention potential cost efficiencies during the call. At the end of 2023, Berkshire had about 1,340 full-time equivalent employees, while Brookline employed over 970 full-timers and more than 40 part-timers.
Pursuant to the merger agreement, Brookline shareholders will be issued 0.42 Berkshire stock shares for each share they hold. To raise enough capital for the deal, Berkshire is selling $100 million of its shares this week. The merger will see the ownership at Berkshire stand at 51%, Brookline at 45%, and newly issued investors at 4%.
Until now, the banks have not declared the name of the merged entity. Once the merger is completed in the second half of 2025, subject to shareholder and regulatory approvals, the new entity will be listed on the New York Stock Exchange with a yet-to-be-announced ticker symbol.
