PITTSFIELD — After expanding its footprint for a decade by purchasing financial institutions throughout the Northeast, Berkshire Bank is slimming down a bit by selling some assets and consolidating others.
The bank’s holding company has announced that it has entered into an agreement to sell eight branches in New Jersey and Pennsylvania that it acquired in 2016, and to consolidate 16 other full-service offices in New England and New York, moves that will reduce Berkshire’s overall branch footprint by almost a fifth (18 percent).
Only six of the 16 branches targeted for consolidation have been selected so far, and only one of them is located in Berkshire County, at 458 Main St. in Dalton. That branch will close on Feb. 26 and be consolidated with Berkshire’s branch at 39 Cheshire Road in the Allendale section of Pittsfield. The consolidations are scheduled to begin in January, and be completed by the middle of next year.
“Additional branch consolidations will be announced in the near future with the same care and consideration for our employees and communities as the already announced branches,” said Lori Gazzillo-Kiely, the company’s Berkshire County regional president.
The bank is hoping to retain the former Dalton branch employees in other areas of the company.
“We are working closely with our team members at each of the branches to review career opportunities within the bank and transition them to other positions,” Gazzillo-Kiely said. “We have a strong track record of retaining team members who have previously been impacted by a consolidation.”
Berkshire’s agreement to sell its mid-Atlantic branches, six offices in New Jersey and two in Pennsylvania, to Investors Bank of Short Hills, N.J. is subject to the customary regulatory approvals, and is expected to be completed during the first half of 2021. When both the sale and consolidations are completed, Berkshires will have 106 branches in five states, Massachusetts, Connecticut, Rhode Island, Vermont and New York. The bank currently operates 130 branches in seven states.
One expansion measure is also on the docket — Berkshire Bank is in the process of finalizing plans to open a new commercial banking office in Providence, R.I., to strengthen the southeast New England operations that it acquired last year.
All of these moves are part of an evolving strategic focus that Berkshire Bank began earlier this year, Gazzillo-Kiely said in a statement. Berkshire is changing its focus from acquiring more property to building a purpose driven 21st century community bank through building relationships with all of its customers, including the underbanked, in all of its markets, she said.
“The bank has sold or consolidated 40 branches previously — this is not a change in philosophy, but an effort to actively manage our branch footprint,” Gazzillo-Kiely said. “This week we reported plans to open a new Providence commercial banking office as we expand our recently acquired operations in southeast New England. In October, we announced a major new digital account opening platform which expands our accessibility in all areas. The bank continues to expand through focused organic growth and technology investment.”
Acting CEO Sean Gray said the moves will strengthen the bank’s profitability.
“At the beginning of 2019, Berkshire announced a strategic shift toward improving profitability by refocusing on strengthening and building our core operations,” Gazzillo-Kiely said. “The consolidation of these branches is a continuation of that strategy and will enhance our core markets’ focus and optimize our branch network. An extensive review has shown strong customer behaviors toward digital usage. Our optimization plan is reflective of customers’ preferences and adoption of digital banking channels and our commitment to enhancing those channels as a 21st century community bank.”
Berkshire Bank has gone through several changes this year. A shakeup in the executive team occurred this summer when former bank president and CEO Richard Marotta resigned suddenly without explanation on Aug. 10. On Sept. 3, executive vice president and chief experience and culture officer, Malia Lazu, tasked with helping Berkshire Bank reach minority households that traditionally have had trouble receiving bank financing, resigned to pursue other career opportunities, the bank said. Previously a community organizer, Lazu had been brought to the bank by Marotta in July 2019 after serving Berkshire as a consultant.
Berkshire Hills Bancorp., the bank’s holding company, also experienced significant drops in net revenue and profits during the second quarter of this year, coinciding with the COVID-19 pandemic’s maximum impact, according to financial industry publications and banking analysts. A ”goodwill impairment” write-off of $554 million during the second quarter of this year was blamed on an overall decline in the value of bank stocks attributed to the pandemic
The bank’s stock price, which was $33.72 per share last December, was trading as low as $9.22 per share on Sept. 3. Most of the decline occurred after the pandemic began to effect the economy in March. On Friday morning, shares of Berkshire Hills Bancorp. stock were trading at $17.94 per share on the New York Stock Exchange
The eight Middle Atlantic branches that Berkshire is closing were acquired four years ago through a merger with First Choice Bank of New Jersey, in an all-stock transaction valued at $111.7 million. The six New Jersey branches are all located in the Princeton area, and the two Pennsylvania branches outside of Philadelphia.