PITTSFIELD, MA--Berkshire Bank has bought 20 branch offices of Bank of America around this region including the three in Columbia County--Hudson, Chatham and New Lebanon. The deal is scheduled to be completed in the first quarter of 2014, and needs the approval of the Federal Deposit Insurance Commission and Massachusetts regulators before it is finalized.
Berkshire Bank is a subsidiary of Berkshire Hills Bancorp, Inc. (NYSE: BHLB), headquartered in Pittsfield. The company announced the "purchase and assumption agreement" last Wednesday, July 24 and corporate officers discussed it briefly the following day during a conference call with financial analysts and others. The press release on purchase says the acquired Bank of America branches have approximately $640 million in total deposits and $5 million in loans.
Berkshire will pay $14.4 million for the branches, which is 2.5% of the deposits, according to a Berkshire Bank spokesman.
The release says that Berkshire "intends to offer continued employment to branch associates who are on staff when the acquisition is completed." A company spokesman confirmed that Berkshire plans to retain the Bank of America employees once the transfer of ownership takes place. The company said it has "no plans at this stage" to close any of the branches it is acquiring from Bank of America.
In addition to Bank of America branches in Columbia County, the other branches Berkshire is acquiring include two in Greene County and several in Utica, Rome and Amsterdam in the Mohawk Valley and some in the southern Adirondacks. The company says all the branches are in areas contiguous to places where the bank already has offices.
A spokeswoman for Bank of America at company headquarters in Charlotte, NC, said that after the sale Bank of America would still have 325 "banking centers" in New York state and 960 ATMs in the state. Several branches not included in the sale are in Albany and the surrounding area.
The spokeswoman said that while checking and savings accounts and services like safe deposit boxes would automatically switch from Bank of America to Berkshire Bank when the sale is completed, other services will be excluded from the sale. Bank of America will continue to manage credit cards, mortgages, business banking, middle market and large corporate accounts and Treasury Management services, as well as Investment and Brokerage accounts, U.S. Trust and Merrill Lynch Wealth Management personal and small business deposit accounts.
She said Bank of America sold the 20 branches to Berkshire, which it describes as a community bank, rather than closing them "to preserve as many jobs as possible and ensure these communities will continue to be served with convenient local branches."
At the same time as Berkshire announced the acquisition of the Bank of America branches, Berkshire CEO Michael Daly said in a conference call to discuss second-quarter results that the company's performance during the second three-month period of the year was "lower than expected," missing the projected earnings target by about seven cents a share. He described this as a sidestep and said the company was "restructuring" by looking at the whole organization.
Mr. Daly said that the acquisition of the new branches would provide Berkshire with a "significant new source of funding" for the company. "The metrics of this acquisition are good and so is the payback," Mr. Daly said. He said Berkshire has acquired four other banks in the last two years.
The deal for the 20 new branches will bring the number of Berkshire Bank branches in New York state to 37, giving it 94 branches overall.
Ray Smith, the assistant vice president for marketing at Berkshire Bank's headquarters, said the bank was "very excited" about having a branch in New Lebanon because the bank is a "significant sponsor" of the Lebanon Valley Speedway.
Berkshire Hills Bancorp has approximately $5.2 billion in assets and 74 branch offices in Massachusetts, New York, Connecticut and Vermont providing personal and business banking, insurance, and wealth management services.
For more go to www.berkshirebank.com.