PITTSFIELD, Mass. and
EAST SYRACUSE, N.Y., May 31, 2012 /PRNewswire/ -- Berkshire Hills
Bancorp, Inc. ("Berkshire")
(NASDAQ: BHLB) and Beacon Federal Bancorp, Inc. ("Beacon") (NASDAQ:
BFED) announced today that they have signed a definitive merger
agreement under which Berkshire
will acquire Beacon in a transaction valued at approximately
$132 million. Under the
agreement, Beacon's subsidiary bank, Beacon Federal, will be merged
into Berkshire Bank, America's Most Exciting Bank(SM).
(Logo:
http://photos.prnewswire.com/prnh/20120131/NE44966LOGO )
Beacon is headquartered in East
Syracuse, New York and operates seven full service offices
with deposits totaling $677 million
at March 31, 2012. The majority
of its business is concentrated in the Syracuse market, as well as the Rome/Utica
market which Berkshire entered
last year with the acquisition of Rome Bancorp. When the
merger is completed, Berkshire
will have a total of ten branches serving these markets, with
approximately $700 million in
deposits and third position in market share among regional
banks. Additionally, Berkshire will add Beacon's Chelmsford, Massachusetts office located north
of Boston, which will be
Berkshire's first Eastern Massachusetts full service branch
office, complementing the ten residential and commercial lending
offices that Berkshire presently
operates in Central/Eastern
Massachusetts.
Under the terms of the merger agreement, 50% of the outstanding
Beacon shares will be exchanged for Berkshire shares at a fixed exchange ratio of
0.92 shares for each Beacon share, while the remaining 50% of
Beacon shares will be exchanged for cash in the amount of
$20.50 per share. The
transaction is valued at $20.35 per
Beacon share, based on the $21.96
Berkshire closing stock price on
May 30, 2012. This represents
111% of Beacon's tangible book value per share and a 3.4% premium
to core deposits based on financial information for the period
ended March 31, 2012.
Michael P. Daly, Berkshire's President and Chief Executive
Officer, stated, "We are very pleased to extend our presence in
Central New York in this
partnership with Beacon. Our New York expansion last year
exceeded our expectations in terms of financial return, customer
retention, and business development opportunities. I am
confident that our Beacon partnership will also prove to be a solid
success for all of our constituencies. This merger will bring
our total Central and Eastern New
York branch count to 26 offices, with total deposits
exceeding $1.4 billion. With
our regional bank product set, community involvement, and our
engaging brand and culture, we are well positioned to continue to
build market share as the preferred personal and commercial banking
partner."
Mr. Daly continued, "We expect that this business combination
will produce approximately $0.22 per
share in core earnings accretion in 2013, which is a 10% increase
to $2.37 per share over the current
consensus analyst estimate. It further represents combined
growth of 24% over the 2012 consensus estimate. This reflects
the benefits of our combined strategies for organic growth, de novo
branching, team recruitment, and disciplined business
combinations. The metrics of this merger demonstrate that it
is fairly priced and will produce strong capital generation and an
attractive return to investors. Our goal is that the higher
earnings and return on equity will enhance the value of our stock
for both existing shareholders and for new shareholders from Beacon
joining us in this transaction."
Ross J. Prossner, Beacon's
President and Chief Executive Officer, stated "We are excited to be
joining forces with the dynamic Berkshire Bank team.
Our customers will benefit from Berkshire's resources in banking, wealth
management and insurance. Our combined operations will
position us well to further increase market share in the
Central New York market.
This transaction produces a very attractive immediate return to our
shareholders and we are pleased that 50% of the merger
consideration will be in the form of Berkshire stock."
Each Beacon shareholder will have the right to elect the form of
consideration, subject to proration procedures to maintain the
overall 50%/50% mix of stock and cash consideration. The
transaction is intended to qualify as a reorganization for federal
income tax purposes, and as a result, the shares of Beacon common
stock exchanged for shares of Berkshire common stock are expected
to be transferred on a tax-free basis. The definitive agreement has
been approved by the unanimous vote of the Boards of Directors of
both Berkshire and Beacon.
Consummation of the agreement is subject to the approval of
Beacon's shareholders, as well as state and federal regulatory
agencies. The merger is expected to be completed in the
fourth quarter of 2012. One Beacon director will be
appointed to Berkshire's board of
directors. Berkshire
anticipates that it will divest Beacon's modest sized Tennessee operations in conjunction with the
consummation of this merger.
Sandler O'Neill & Partners, L.P. served as the financial
advisor to Berkshire, and Keefe,
Bruyette & Woods, Inc. served as the financial advisor for
Beacon. Luse Gorman Pomerenk &
Schick, P.C. served as outside legal counsel to Berkshire, while Kilpatrick Townsend & Stockton LLP served as
outside legal counsel to Beacon.
CONFERENCE CALL
Berkshire will conduct a
conference call/webcast with investors and the financial community
at 9:00 A.M. eastern time on
Friday, June 1, 2012 to discuss the
merger. Participants should dial-in to the call a few
minutes before it begins. Information about the conference
call follows:
Dial-in: 866-843-0890
Elite Entry Number: 5762559
Webcast: www.berkshirebank.com
(investor relations link)
An information presentation with additional information about
the merger will be made available prior to the call at
www.berkshirebank.com (investor relations link).
A telephone replay of the call will be available through
June 10, 2012 by calling 877-344-7529
and entering access code: 10014754. The webcast and a podcast
will be available at Berkshire's
website above for an extended period of time.
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank -
America's Most Exciting Bank(SM). Including the recently
acquired operations of CBT, Berkshire has $4.3
billion in assets and 68 full service branch offices in
Massachusetts, New York, Connecticut, and Vermont providing personal and business
banking, insurance, and wealth management services. Berkshire
Bank provides 100% deposit insurance protection for all deposit
accounts, regardless of amount, based on a combination of FDIC
insurance and the Depositors Insurance Fund (DIF). For more
information, visit www.berkshirebank.com or call
800-773-5601.
Beacon Federal Bancorp, Inc., through its bank subsidiary,
Beacon Federal, offers banking and related financial services to
both individual and commercial customers. The Bank is
headquartered with a full-service branch in East Syracuse, New York, along with six other
full-service branches in East
Syracuse, Marcy and
Rome, New York, Smartt and
Smyrna, Tennessee, and
Chelmsford, Massachusetts.
For more information, visit www.beaconfederal.com or call
888-256-3800.
FORWARD LOOKING STATEMENTS
This document contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
about the proposed merger of Berkshire and Beacon. These statements include
statements regarding the anticipated closing date of the
transaction and anticipated future results. Forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts. They often include words
like "believe," "expect," "anticipate," "estimate," and "intend" or
future or conditional verbs such as "will," "would," "should,"
"could" or "may." Certain factors that could cause actual results
to differ materially from expected results include delays in
completing the merger, difficulties in achieving cost savings from
the merger or in achieving such cost savings within the expected
time frame, difficulties in integrating Berkshire and Beacon, increased competitive
pressures, changes in the interest rate environment, changes in
general economic conditions, legislative and regulatory changes
that adversely affect the business in which Berkshire and Beacon are engaged, changes in
the securities markets and other risks and uncertainties disclosed
from time to time in documents that Berkshire files with the Securities and
Exchange Commission.
ADDITIONAL INFORMATION FOR STOCKHOLDERS
In connection with the proposed merger, Berkshire will file with the Securities and
Exchange Commission ("SEC") a Registration Statement on Form
S-4 that will include a Proxy Statement of Beacon and Prospectus of
Berkshire, as well as other
relevant documents concerning the proposed transaction.
Stockholders are urged to read the Registration Statement and the
Proxy Statement/prospectus regarding the merger when it becomes
available and any other relevant documents filed with the SEC, as
well as any amendments or supplements to those documents, because
they will contain important information. A free copy of the Proxy
Statement/Prospectus, as well as other filings containing
information about Berkshire Hills and Beacon, may be obtained at
the SEC's Internet site (http://www.sec.gov). You will also be able
to obtain these documents, free of charge, from Berkshire Hills
Bancorp at www.berkshirebank.com under the tab "Investor Relations"
or from Beacon Federal Bancorp by accessing Beacon's website at
www.beaconfederal.com and selecting the "Investor Relations"
link.
Berkshire and Beacon and
certain of their directors and executive officers may be deemed to
be participants in the solicitation of proxies from the
stockholders of Beacon Bancorp in connection with the proposed
merger. Information about the directors and executive officers of
Berkshire Hills Bancorp is set forth in the proxy statement for
Berkshire Hills Bancorp's 2012 annual meeting of stockholders, as
filed with the SEC on a Schedule 14A on March 30, 2012. Information about the
directors and executive officers of Beacon is set forth in the
proxy statement for Beacon Federal Bancorp's 2012 annual meeting of
stockholders, as filed with the SEC on a Schedule 14A on
April 16, 2012. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be
obtained by reading the Proxy Statement/Prospectus regarding the
proposed merger when it becomes available. Free copies of this
document may be obtained as described in the preceding
paragraph.
Contact:
Berkshire Hills Bancorp, Inc.: Michael P.
Daly, President and Chief Executive
Officer
Telephone: 413-236-3194
Beacon Bancorp, Inc.: Ross J.
Possner, President and Chief Executive
Officer
Telephone: 888-256-3800
SOURCE Berkshire Hills Bancorp, Inc.