BOSTON, and WILLIMANTIC, Conn., Dec. 11, 2018 /PRNewswire/ -- Berkshire
Hills Bancorp, Inc. (NYSE: BHLB) ("Berkshire") and SI Financial Group, Inc.
(NASDAQ: SIFI) ("SIFI") announced today that they have signed a
definitive merger agreement under which Berkshire will acquire SIFI and its
subsidiary, Savings Institute Bank and Trust Company ("Savings
Institute"), in an all-stock transaction valued at $180 million based on Berkshire's stock price as of the close of
business on December 10, 2018.
Berkshire's total assets will
increase to $13.6 billion including
the $1.6 billion in acquired SIFI
assets. SIFI reported $1.3
billion in loans and $1.3
billion in deposits as of September
30, 2018. This merger agreement increases
Berkshire's market presence with
18 branches in Eastern CT and 5 branches in Rhode Island, adding to Berkshire's existing 9 Connecticut
branches.
"We're pleased to welcome Savings Institute's customers and
employees to the Berkshire
family," said Richard M. Marotta,
Chief Executive Officer of Berkshire. "This transaction 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. Savings Institute is a well-established and trusted
financial institution with deep client and community relationships.
We look forward to expanding those relationships with the depth and
breadth of our products and services. This partnership will
produce attractive returns for both our existing shareholders and
the new shareholders from SIFI joining us in this transaction."
"We're excited to be joining with a successful regional bank
that shares our commitment to community and customer service,"
commented Rheo A. Brouillard,
President and Chief Executive Officer of SIFI. "Like Savings
Institute, Berkshire Bank was established in the mid to late 1800s
and has grown over the years as a result of that commitment.
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."
TRANSACTION SUMMARY
Under the terms of the merger 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.
Following are selected transaction terms and metrics based upon
current projections:
- Total transaction value: $180
million
- Price to September 30, 2018
tangible book value: 118%
- Tangible book value dilution of $0.53 per share or 2.4% with an expected less
than 3.0 year earn-back period
- Anticipated to be 5% accretive to earnings per share in 2020,
the first full year of integrated operations
- Core deposit premium: 2.6%
- Targeted cost saves: 30%
LEADERSHIP
Under the agreement, SIFI's President and Chief Executive
Officer, Rheo A. Brouillard, will be
appointed to Berkshire's Board of
Directors when the merger is completed. Key business leaders
from SIFI will remain with Berkshire Bank in continuing leadership
roles.
APPROVALS
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. The
definitive agreement has been approved by the unanimous votes of
the Boards of Directors of both companies. 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.
ADVISORS
Berkshire was advised by
Piper Jaffray & Co. and legal
counsel was provided by Luse Gorman,
PC; SIFI was advised by Keefe, Bruyette & Woods, Inc.,
and legal counsel was provided by Kilpatrick Townsend & Stockton LLP.
INVESTOR PRESENTATION AND CONFERENCE CALL
Berkshire will conduct a
conference call/webcast at 10:00 a.m.
eastern time on Wednesday, December 12, 2018 to discuss the
acquisition of SIFI. Participants should pre-register for the
conference call using the following link:
http://dpregister.com/10127087.
Participants may also reach the registration link and access the
webcast by logging in through the investor section of Berkshire's website at ir.berkshirebank.com.
Those parties who do not have internet access or are otherwise
unable to pre-register for this event, may still participate at the
above time by dialing 1-844-792-3726 and asking the Operator to
join the Berkshire Hills Bancorp (BHLB) call. The recorded webcast
will be available on Berkshire's
website for an extended period of time.
A copy of the investor presentation will be made available prior
to the call on Berkshire's website
(ir.berkshirebank.com).
ABOUT BERKSHIRE
HILLS
Berkshire Hills Bancorp, Inc. is the parent of Berkshire Bank.
At September 30, 2018, the Company
had approximately $12.0 billion in
assets and 115 full service branches in Massachusetts, New
York, Connecticut,
Vermont, New Jersey, and Pennsylvania providing personal and business
banking, insurance, and wealth management services. The Company
also offers mortgages and specialized commercial lending services
in targeted national markets.
ABOUT SI FINANCIAL
SI Financial Group, Inc. is the holding company for Savings
Institute Bank and Trust Company. Established in 1842,
Savings Institute Bank and Trust Company is a community-oriented
financial institution headquartered in Willimantic, Connecticut. Through its 23
branch locations, the Bank offers a full-range of financial
services to individuals, businesses and municipalities within its
market area. For more information, visit www.mysifi.com.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements include, but are not limited
to, statements about (1) the benefits of the merger between
Berkshire and SIFI, including
anticipated future results, cost savings and accretion to reported
earnings that may be realized from the merger; (2) Berkshire and SIFI's plans, objectives,
expectations and intentions and other statements contained in this
presentation that are not historical facts; and (3) other
statements identified by words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates" or words of
similar meaning.
Forward-looking statements involve risks and uncertainties that
may cause actual results to differ materially from those in such
statements. The following factors, among others, could cause actual
results to differ materially from the anticipated results expressed
in the forward-looking statements: the businesses of Berkshire and SIFI may not be combined
successfully, or such combination may take longer than expected;
the cost savings from the merger may not be fully realized or may
take longer than expected; operating costs, customer loss and
business disruption following the merger may be greater than
expected; governmental approvals of the merger may not be obtained,
or adverse regulatory conditions may be imposed in connection with
governmental approvals of the merger or otherwise; the stockholders
of SIFI may fail to approve the merger; credit and interest rate
risks associated with Berkshire's
and SIFI's respective businesses; and difficulties associated with
achieving expected future financial results. Additional factors
that could cause actual results to differ materially from those
expressed in the forward-looking statements are discussed in
Berkshire's and SIFI's reports
(such as the Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K) filed with the SEC and
available at the SEC's Internet website (www.sec.gov). All
subsequent written and oral forward-looking statements concerning
the proposed transaction or other matters attributable to
Berkshire or SIFI or any person
acting on their behalf are expressly qualified in their entirety by
the cautionary statements above. Except as required by law,
Berkshire and SIFI do not
undertake any obligation to update any forward-looking statement to
reflect circumstances or events that occur after the date the
forward-looking statement is made.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is being made in respect of the proposed
merger between Berkshire and SIFI.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval.
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 SIFI and a Prospectus of
Berkshire, as well as other
relevant documents concerning the proposed merger. Before making
any voting or investment decision, investors and security holders
of SIFI and Berkshire are urged to
carefully read the entire registration statement and Proxy
Statement/Prospectus, when they become available, as well as any
amendments or supplements to these documents, because they will
contain important information about the proposed
transaction. A free copy of the Registration Statement and
Proxy Statement/Prospectus, as well as other filings containing
information about Berkshire and
SIFI, when they become available, may be obtained at the SEC's
Internet site (www.sec.gov). Copies of documents filed by
Berkshire with the SEC may also be
obtained, free of charge, from Berkshire's website at ir.berkshirebank.com or
by contacting Erin Duggan at
413-236-3773. Copies of the documents filed by SIFI with the
SEC may also be obtained, free of charge, from SIFI's website at
www.mysifi.com or by contacting Rheo
Brouillard at 860-456-6540.
PARTICIPANTS IN SOLICITATION
Berkshire and SIFI and certain
of their respective directors and executive officers may be deemed
to be participants in the solicitation of proxies from the
stockholders of SIFI in connection with the proposed merger.
Information about the directors and executive officers of
Berkshire is set forth in the
proxy statement for Berkshire's
2018 annual meeting of stockholders, as filed with the SEC on a
Schedule 14A on April 6, 2018.
Information about the directors and executive officers of SIFI is
set forth in the proxy statement for SIFI's 2018 annual meeting of
stockholders, as filed with the SEC on a Schedule 14A on
March 29, 2018.
Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction and a description of their direct and indirect
interests, by security holdings or otherwise, may be obtained by
reading the Proxy Statement/Prospectus and other relevant documents
regarding the proposed merger to be filed with the SEC (when they
become available). Free copies of these documents may be obtained
as described in the preceding paragraph.
CONTACTS
Berkshire Hills Bancorp, Inc.: James M. Moses, Chief Financial Officer;
617-641-9281
SI Financial Group, Inc.: Rheo A.
Brouillard, President and CEO; 860-456-6540
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SOURCE Berkshire Hills Bancorp, Inc.