Brookline Bancorp to Merge with Berkshire Hills Bancorp

The US banking has witnessed another merger of two banks – Berkshire Hills Bancorp, the parent company of Berkshire Bank, and Brookline Bancorp, the parent company of Brookline Bank, Bank Rhode Island, and PCSB Bank.

The merger of Brookline Bancorp with Berkshire Hills Bancorp in an all-stock transaction valued at approximately $1.1 billion, or $12.68 per share of Brookline common stock, based on the $30.20 closing price of Berkshire common stock on 13 December 2024.

The transaction is expected to close by the end of the second half of 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Berkshire and Brookline shareholders.

In conjunction with the planned merger, Berkshire also announced that it has entered into subscription agreements with investors to raise capital to support the merger.

In aggregate, $100 million of Berkshire common stock will be issued at $29 per share and the capital raise closed on Thursday (19 December 2024). The proceeds of the capital raise are expected to support the pro forma bank’s balance sheet and regulatory capital ratios.

Nitin J. Mhatre, President and CEO of Berkshire said that the merged marked a transformational milestone in the history of two storied institutions with a strong commitment to serving their clients and communities. The combined organisation will be in an even stronger position to deliver exceptional client experience and create greater value for shareholders, Mhatre said.

Paul A. Perrault, Chairman and CEO of Brookline, said that this transaction presents an opportunity to bring together two historic franchises in the Northeast market. By bringing together two complementary cultures and geographic footprints with shared values and client focus, we will be better positioned to serve our customers, employees, communities and shareholders.

Strategic Benefits

The creation of a $24 billion franchise uniquely positions the combined company to benefit from significant economies of scale and capitalize on meaningful growth opportunities through business diversification and improved competitive positioning.

Together, the companies will have the scale to enhance investments in our clients, employees and markets, and increase lending capacity. Distinct, attractive, complementary geographic footprints across five states with limited overlap will deepen the bank’s reach contributing to a top 10 deposit market share.

Transaction Details

Under the terms of the agreement, which was unanimously approved by the Boards of Directors of both companies, each outstanding share of Brookline common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock.

As a result of the transaction and a $100 million common stock offering announced by Berkshire to support the transaction, Berkshire shareholders will own approximately 51%, Brookline shareholders will own approximately 45%, and investors in new shares will own approximately 4% of the outstanding shares of the combined company.

Berkshire will be the legal acquirer of Brookline, while Brookline is expected to be treated as the accounting acquirer of Berkshire with the assets and liabilities of Berkshire being marked to market at closing.

In connection with the transaction, the existing four bank charters will be consolidated into one, Massachusetts state-chartered bank at closing. Brookline Bank will represent the consolidated bank charter.