PITTSFIELD >> Berkshire Bank is enhancing its expertise, reputation, and geographic reach in the small business lending market.
The county's largest bank has signed an asset purchase agreement to acquire the business model of a well-known Pennsylvania-based lending company, and the assets that firm manages for a New Jersey-based bank.
The transaction is subject to the receipt of required regulatory approvals by the state Division of Banks and the Federal Deposit Insurance Corp. It is expected to be completed by the first quarter of 2016. Berkshire declined to release the purchase price.
Under the terms of the deal, Berkshire Bank will purchase 44 Business Capital LLC of Blue Bell, Pa., a firm that is consistently ranked among the country's top U.S. Small Business Administration lenders. The transaction also allows Berkshire to acquire the entire SBA 7(a) loan portfolio that 44 Business Capital manages for Parke Bank of New Jersey.
Berkshire is acquiring the 51 percent of 44 Business Capital that Parke owns, and the Pennsylvania-based lending company's remaining 49 percent. The SBA loan program is the only part of Parke Bank that is being acquired by Berkshire. SBA 7(a) loan programs provide small businesses with greater access to capital.
44 Business Capital will continue to operate under the same name, but the company's entire team along with its leadership group will join Berkshire Bank.
The company, which has closed over $200 million in SBA loans since its inception six years ago, became the top SBA lender by dollar volume in the Philadelphia area in May.
Peter Rice, Berkshire Bank's senior vice president for business lending, termed the transaction "a great cultural fit" for both institutions because Berkshire is the top SBA lender in Western Massachusetts, New York's Capital Region, central New York, and Vermont.
"Over the last three years we've really rededicated ourselves to business banking and small business," Rice said. "We really wanted to put more resources into that market place. 44 Business Capital and Parke were looking for a partner and we were a natural fit.
"These guys love what they do," Rice said, referring to 44 Business Capital's leadership team. "You want to partner with the best.
"More specifically, I think they're very, very impressed by our operations base and the speed with which we can serve their clients," he added.
44 Business Capital President Greg Poehlmann said joining Berkshire will help his firm grow. The firm provides SBA loan assistance to small businesses in Pennsylvania, New Jersey, Delaware, Baltimore, Northern Virginia and Washington D.C.
"Parke Bank has been a great partner over the past six plus years. We've accomplished great things together," Poehlmann said in a statement. "As 44 Business Capital becomes part of Berkshire Bank we will be able to leverage our staff's national experience to build out an exceptional SBA lending platform that will serve the SBA's mission on a larger scale."
In May, Berkshire reached an agreement to purchase Firestone Financial, a commercial speciality finance company in Needham. That transaction was finalized on Aug. 7.
Berkshire's decision to purchase both Firestone and 44 Business Capital are not "directly related," Rice said, but it does reflect the way the county's largest bank assesses business opportunities.
"Firestone Financial owns its own space like 44 Business Capital owns theirs," Rice said. "Firestone has 50 years of experience. They have a fantastic leadership team, and are well known in their industry."
Most of Berkshire's transactions prior to Firestone were other bank chains. But purchasing other types of financial institutions doesn't mean Berkshire is no longer interested in purchasing banks.
"We just closed on Hampden Bank in Springfield this year," Rice said. "We continue to look at every opportunity that serves our customers and shareholders."