Massachusetts lender Berkshire Hills Bancorp Inc., which has Connecticut operations, is merging with in-market rival Hampden Bancorp Inc. in an estimated $109 million all-stock deal.
Both bank holding companies jointly announced Tuesday their definitive merger pact through which the Pittsfield, Mass., parent of Berkshire Bank will acquire Hampden and its flagship, Hampden Bank. Both banks’ markets extend into the Greater Springfield region.
Terms call for the swap of one share of Hampden common stock for 0.81 shares of Berkshire Hills common. The merger is valued at $20.53 a share of Hampden common stock based on the $25.35 average closing price of Berkshire’s stock for the five-day period that ended on Monday.
The per-share offer amounts to 133 percent of Hampden’s $15.49 tangible book value per share and a 6 percent premium to core deposits based on financials as of Sept. 30, both banks said.
Set to close in the second quarter of 2015, the merger will add Hampden’s $701 million in assets, boosting Berkshire’s total assets to $7.1 billion.
In 2013, Berkshire Hills paid $30 million to acquire former Connecticut Bank & Trust in Hartford, which now operates as Berskshire Bank-CBT Region.
“This is a solid business combination with efficiency benefits,” Berkshire President and CEO Michael P. Daly said in a statement. “Hampden is a well-run company with an attractive core deposit base and a significant presence in the community.”
Hampden Bank was founded in 1852.
“We are delighted to be joining the Berkshire franchise,” Hampden President and CEO Glenn S. Welch said. “Our two banks share rich histories, consistent core values and a strong commitment to customers and communities.”
Post-merger, Berkshire will have 100 branches across New England and New York.
Berkshire’s financial adviser was Sandler O’Neill & Partners L.P, with law firm Luse Gorman Pomerenk & Schick, P.C. as outside counsel; Sterne, Agee & Leach Inc. was Hampden’s adviser, with Goodwin Procter LLP as outside counsel.
