PITTSFIELD — Berkshire Bank is making its second venture into the Middle Atlantic states, this time expanding its branches into the greater Philadelphia area.
Berkshire Hills Bancorp, the bank's holding company, on Wednesday signed a definitive merger agreement that will allow New Jersey-based First Choice Bank to merge into Berkshire.
First Choice Loan Services, a subsidiary of First Choice Bank, also will become a subsidiary of Berkshire Bank in an all-stock transaction valued at approximately $111.7 million.
The definitive agreement has been approved by the boards of directors of both financial institutions. But consummation of the transaction is subject to the approval of First Choice's shareholders, along with state and regulatory approvals. The merger is expected to be completed by the fourth quarter of 2016.
After the transaction is completed, First Choice Chairman Martin Tuchman and board member Munish Sood will serves as advisers to Berkshire and liaisons to the local community.
When the merger is completed, Berkshire will have a pro forma market cap of $905 million, $8.9 billion in total assets, and 101 bank branches in six Northeastern states.
First Choice Bank is the second largest community by bank deposit share in Mercer County, N.J. in the central part of that state, an area where the per capita income is well above the national and regional averages.
First Choice has $1.1 billion in assets, and reported $436 million in net loans (excluding loans for sale) and $906 million in deposits as of March 31. Total mortgage production at First Choice in 2015 was $2.5 billion.
First Choice operates six branches in the Princeton, N.J., area and two others in Horsham and Yardley, Pa., outside of Philadelphia.
The partnership builds on Berkshire's commitment to create a strong regional platform for serving its customers, diversifies the bank's revenue streams, improves profitability and increases shareholder values, according to Berkshire Bank CEO Michael P. Daly.
"The First Choice franchise builds on markets where we presently manage commercial relationships and adds a well-positioned deposit base, a best-in-class home lending operation and enthusiastic new teams that complement our current culture," Daly said in a statement.
"This is the kind of financial and strategic deal that really drives a bank forward," said William J. Ryan, chairman of Berkshire's board. "The continued diversification of revenue streams is a natural next step in the evolution of Berkshire."
Last October, the county's largest bank 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.
Contact Tony Dobrowolski at 413 496-6224.