Berkshire Hills Bancorp Inc., the Massachusetts lender with Connecticut operations, is paying roughly $53 million to widen its specialty-finance footprint.
The Pittsfield, Mass. parent to Berkshire Bank said it signed a definitive pact to pay cash and stock for privately held Firestone Financial Corp., of Needham, Mass. The deal is set to close in the third quarter.
Half-century-old Firestone will operate as a Berkshire Bank subsidiary, providing secured, installment-loan equipment financing for small- and medium-sized businesses, Berkshire CEO Michael Daly said.
The bank’s Connecticut deposit-collection and lending operation, Berkshire Bank/CBT Region, is based in Hartford.
Afterwards, Firestone’s senior management team will continue to run the business following the closing, Daly said.
At March 31, Firestone had approximately $190 million in loans outstanding with no state comprising more than 11 percent of the outstanding balance and the largest borrower representing just 1.2 percent of outstandings, authorities said. The weighted average yield on the portfolio at quarter end was 9.8 percent and its weighted average remaining maturity was 36 months. The portfolio’s net charge-off rate has not exceeded 0.23 percent in any of the last three years.
“Firestone is a terrific fit for Berkshire Bank,” Daly said. “Our strategic decision to complement our strong asset based lending platform with this commercial lending business enables us to further diversify our assets while expanding our client offerings.”
Law firm Luse Gorman PC served as outside counsel to Berkshire. For Firestone, Houlihan Lokey served as exclusive financial advisor and Locke Lord LLP served as outside counsel.
Berkshire Hills has about $7.3 billion in assets and 96 full service branch offices in Connecticut, Massachusetts, New York, and Vermont.
