WILLIMANTIC — Berkshire Hills Bancorp Inc. and SI Financial Group Inc. announced Tuesday that they have signed a merger agreement in which Berkshire will acquire SIFI and its subsidiary, Savings Institute Bank and Trust Company, in an all-stock transaction valued at $180 million. The Willimantic-based bank has 18 branches in Connecticut, including one in Pawcatuck, and five in Rhode Island, including those in Weserly and Wakefield.
The transaction is valued at Berkshire's stock price as of the close of business on Dec. 10.
With the deal, Berkshire's total assets will increase to $13.6 billion. SIFI reported $1.3 billion in loans and $1.3 billion in deposits as of Sept. 30.
Berkshire has nine branches in Connecticut, and last year relocated its headquarters from Pittsfield, Mass., to Boston, as part of an agreement to acquire the parent of Commerce Bank, of Worcester, Mass., adding 16 branches in Eastern Massachusetts.
Richard M. Marotta, Berkshire CEO, said the new acquisition "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 in Connecticut and enter into attractive Rhode Island markets."
Rheo A. Brouillard, president and CEO of SIFI, said, "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." Brouillard will join Berkshire's board when the merger is completed.
Under the terms of the 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 into Berkshire options.
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. 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.
Berkshire will conduct a conference call/webcast at 10 a.m. Wednesday, Dec. 12, to discuss the acquisition of SIFI. Participants should pre-register for the conference call using the following link: http://dpregister.com/10127087.
As of Sept. 30, Berkshire had 115 full-service branches in Massachusetts, New York, Connecticut, Vermont, New Jersey, and Pennsylvania. The company also offers mortgages and commercial lending services in selected national markets.