By Manya Saini
(Reuters) -Berkshire Hills Bancorp and Brookline Bancorp (NASDAQ:) have agreed to merge in an all-stock deal worth about $1.1 billion, the regional lenders said Monday, in another sign of increasing industry consolidation.
Regional lenders at the heart of the 2023 banking crisis have made more deals this year to expand their geographic footprint and better compete with rivals, extending a wave of deals.
The banks, typically categorized as lenders with assets between $10 billion and $100 billion, have been under enormous pressure over the past two years as high interest rates have dampened lending, increased competition for deposits and led to higher losses on commercial real estate loans led.
SouthState’s acquisition of smaller rival Independent Bank Group (NASDAQ:) is the largest deal this year by assets, at $65 billion. UMB Financial (NASDAQ:)’s acquisition of Heartland Financial (NASDAQ:) is close behind.
Both Berkshire Hills (NYSE:) and Brookline are headquartered in Boston, Massachusetts and each own approximately $12 billion in assets. The deal aims to create a $24 billion bank with a geographic footprint spanning five states.
“It (the deal) combines Berkshire’s stable funding base in smaller cities and rural communities with Brookline’s strong lending presence in larger and faster-growing markets,” Berkshire Hills CEO Nitin Mhatre said in a conference call.
Shares of Brookline last rose marginally in afternoon trading, while shares of Berkshire Hills fell 1.3%.
The combined company will trade on the New York Stock Exchange under a new name and ticker symbol, to be announced at a later date. The banks expect the deal to be completed in the second half of next year.
“From a Berkshire perspective, it accelerates commercial banking services and opportunities in the key markets of Boston and Providence,” said Paul Perrault, CEO of Brookline.
Raymond (NS:) James & Associates acted as exclusive financial advisor to Berkshire on the deal, while Brookline was advised by Hovde Group.
