PITTSFIELD, Mass. and
SPRINGFIELD, Mass., Nov. 4, 2014 /PRNewswire/
-- Berkshire Hills Bancorp, Inc. (NYSE: BHLB) and Hampden
Bancorp, Inc. (Nasdaq: HBNK) today announced that they have signed
a definitive merger agreement under which Berkshire will acquire Hampden and its
subsidiary, Hampden Bank, in an
all-stock transaction valued at approximately $109 million.
Berkshire's total assets will
increase to $7.1 billion including
the $706 million in acquired Hampden
assets. This in-market merger is expected to create
efficiencies, strategic growth and market share benefits for the
consolidated operations of the two banks in the Springfield area. Hampden operates 10
branches in the greater Springfield area and reported $508 million in net loans and $490 million in deposits as of September 30, 2014. Berkshire operates 11 branches with
$627 million in deposits in this
market. Berkshire will have
a pro forma market cap of approximately $740
million and 100 branches serving customers and communities
across New England and New York. Pro forma tangible equity to
tangible assets is expected to improve to 7.4% when the merger is
completed.
"We are pleased to welcome Hampden customers and employees to
America's Most Exciting Bank®," said Michael P. Daly, President and CEO of
Berkshire. "This in-market partnership will create a strong
platform for serving our combined customers, while producing
attractive returns for both our existing shareholders and the new
shareholders from Hampden joining us in this transaction. We will
move into the top 5 position in deposit market share and plan to
use this opportunity to further capitalize on our strong product
set and culture of customer engagement. This merger
complements our expansion initiatives in Central Massachusetts and Hartford, a combined market area that is the
second largest in New England."
"We are delighted to be joining the Berkshire franchise," commented Glenn S. Welch, President and CEO of
Hampden. "Our two banks share rich histories, consistent core
values and a strong commitment to customers and communities.
I'm proud of our 162 years of serving customers in our markets and
believe the combination created by our two companies will benefit
our clients, communities and shareholders."
Michael P. Daly concluded, "This
is a solid business combination with efficiency benefits.
Hampden is a well run company with an attractive core deposit base
and a significant presence in the community. After
integration, the transaction is expected to be accretive to
Berkshire's earnings per share,
return on equity, and capital. We have a strong track record
of execution and our collective teams are positioned to complete
this integration flawlessly."
Under the terms of the merger agreement, each outstanding share
of Hampden common stock will be exchanged for 0.81 shares of
Berkshire Hills common stock. The merger is valued at
$20.53 per share of Hampden common
stock based on the $25.35 average
closing price of Berkshire's stock
for the five day period ending November
3, 2014. The $20.53 per
share value represents 133% of Hampden's $15.49 tangible book value per share and a 6.0%
premium to core deposits based on financial information as of
September 30, 2014.
The transaction is intended to qualify as a reorganization for
federal income tax purposes, and as a result, the shares of Hampden
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 votes of
the Boards of Directors of both companies. Consummation of
the agreement is subject to the approval of Hampden's shareholders,
as well as state and federal regulatory agencies. The merger
is targeted to be completed early in the second quarter of
2015. Two Hampden directors will be appointed to Berkshire's board of directors and
Glenn S. Welch will be joining
Berkshire as Regional President
for the Pioneer Valley and Connecticut. Berkshire and Hampden have created foundations
for community charitable support which will continue to provide
charitable contributions underscoring their mutual commitment to
serving their local communities.
Sandler O'Neill & Partners, L.P. served as the financial
advisor to Berkshire, and Sterne,
Agee & Leach, Inc. served as the financial advisor to
Hampden. Luse Gorman Pomerenk
& Schick, P.C. served as outside counsel to Berkshire, while Goodwin Procter LLP served as
outside counsel to Hampden.
INVESTOR PRESENTATION
An Investor Presentation will be
posted on Berkshire's website
(ir.berkshirebank.com) and Hampden's website (www.hampdenbank.com)
containing additional information regarding this merger.
BACKGROUND
Berkshire Hills Bancorp is the parent of
Berkshire Bank – America's Most Exciting Bank®. The Company,
recognized for its entrepreneurial approach and distinctive
culture, has approximately $6.4
billion in assets and 91 full service branch offices in
Massachusetts, New York, Connecticut, and Vermont providing personal and business
banking, insurance, and wealth management services. For more
information, visit www.berkshirebank.com.
Hampden Bancorp, Inc. (Nasdaq: HBNK) is the holding company of
Hampden Bank. Established in
1852, Hampden Bank is a full service
community bank serving the families and businesses in and around
Hampden County. The Bank has ten office locations in
Springfield, Agawam, Longmeadow, West
Springfield, Wilbraham, and
Indian Orchard. Hampden Bank
offers customers the latest in internet banking, including on-line
banking and bill payment solutions. For more information,
visit www.hampdenbank.com.
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 Hampden.
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 Hampden, 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 Hampden 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.
NON-GAAP FINANCIAL MEASURES
This document references
non-GAAP financial measures incorporating tangible equity and
related measures, as well as core deposits. These measures
are commonly used by investors in evaluating business combinations
and financial condition.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
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 Hampden and a Prospectus of
Berkshire, as well as other
relevant documents concerning the proposed merger. Investors and
stockholders are urged to read the Registration Statement and the
Proxy Statement/Prospectus regarding the proposed 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
Registration Statement and Proxy Statement/Prospectus, as well as
other filings containing information about Berkshire and Hampden, when they become
available, may be obtained at the SEC's Internet site
(www.sec.gov). Copies of the Registration Statement and Proxy
Statement/Prospectus (when they become available) and the filings
that will be incorporated by reference therein may also be
obtained, free of charge, from Berkshire's website at ir.berkshirebank.com or
by contacting Berkshire Investor Relations at 413-236-3149 or from
Hampden's website at www.hampdenbank.com and selecting the
"Investor Relations" link or by contacting Hampden Investor
relations at 413-452-5150.
PARTICIPANTS IN SOLICITATION
Berkshire and Hampden and certain of their
respective directors and executive officers may be deemed to be
participants in the solicitation of proxies from the stockholders
of Hampden 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 2014 annual
meeting of stockholders, as filed with the SEC on a Schedule 14A on
April 1, 2014. Information about the
directors and executive officers of Hampden is set forth in the
proxy statement for Hampden's 2014 annual meeting of stockholders,
as filed with the SEC on a Schedule 14A on September 26, 2014 and additional filings
reporting results of the annual meeting on November 4, 2014. 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.:
Michael P. Daly, President and Chief
Executive Officer
Telephone: 413-236-3194
Hampden Bancorp, Inc.: Glenn S.
Welch, President and Chief Executive Officer
Telephone: 413-452-5144
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SOURCE Berkshire Hills Bancorp, Inc.