Berkshire Bank, Legacy Create $4B Financial Entity

PRNewswire/FirstCall10:06AM / Wednesday, December 22, 2010Print Story | Email Story

PITTSFIELD, Mass. — Berkshire Hills Bancorp Inc. and Legacy Bancorp Inc. announced Tuesday that they have signed a definitive merger agreement under which Berkshire will acquire Legacy and its subsidiary, Legacy Banks, in a transaction valued at approximately $108 million.

The merger of Legacy into Berkshire will create a combined institution with $4 billion in assets. This in-market merger will create efficiencies and market share benefits for the combined banks, which both have branches in Western Massachusetts and Northeastern New York. Including Berkshire's pending merger with Rome Bancorp, the combined bank will have more than 60 offices serving Berkshire County, the Pioneer Valley, New York and Southern Vermont.

Legacy has nearly $1 billion in assets and 19 branches, while Berkshire has nearly $3 billion in assets and will have 47 branches including the Rome branches. Both institutions offer a wide range of personal and commercial banking products and services, as well as wealth management, investments, and insurance services. Both banks are headquartered in Pittsfield and have histories stretching back more than 150 years serving the Berkshire County market. The combined bank will be well-capitalized, with strong asset quality and strong planned revenue and core earnings growth. Berkshire will have a market capitalization exceeding $400 million and a dividend yield exceeding 3 percent based on current stock market prices.

Michael P. Daly, Berkshire's president and chief executive officer, stated, "this in-market combination will create a strong platform headquartered in Berkshire County for further growth of our Northeast regional franchise. I look forward to welcoming the Legacy team into the culture of 'America's Most Exciting Bank' as we together provide the best financial support and solutions to our markets. The transaction will be immediately accretive to core earnings per share, and the other metrics of this merger demonstrate that it is fairly priced and will produce an attractive return to investors."

"Shareholders will also benefit from our larger market capitalization and stock trading liquidity, and our strong franchise positioning in the middle of the Northeast region. We expect to complete our pending merger with Rome Bancorp in the first quarter of 2011 and to complete the Legacy merger in the following quarter, accelerating our planned return to a $2 annualized core EPS run-rate. Our strong executive team is positioned to complete these integrations flawlessly, and we look forward to welcoming Legacy executive Patrick Sullivan onto this team, along with two Legacy directors onto our board, including J. Williar Dunlaevy."

Dunlaevy stated, "Legacy and Berkshire have been friendly competitors over the years, and now we're joining the Berkshire team to create a larger combined platform to serve our traditional and target markets. This transaction produces a very attractive immediate return to our shareholders. Additionally, Berkshire's stock has excellent prospects for further attractive investment returns, particularly including the benefits of this partnership, which will provide long term benefits to all of our constituencies."

Sullivan added, "As we considered our strategic alternatives, there were compelling reasons for us to seek this partnership with Berkshire. Berkshire is a company with strong momentum and is well positioned as a bank that knows our communities, understands the customers we serve, and offers a unique brand promise for customer engagement. I look forward to joining the Berkshire executive team, and to successfully integrating our neighboring operations and accelerating our combined earnings growth in New England and New York."

The merger is valued at $13 per share of Legacy common stock based on the $20.75 average closing price of Berkshire's stock for the 10-day period ending Dec. 15, 2010. Under the terms of the merger agreement, each outstanding share of Legacy common stock will be exchanged for 0.56385 Berkshire common shares plus $1.30 in cash. As a result, 90 percent of the merger consideration will be in the form of Berkshire stock and 10 percent will be in the form of cash. The $13 per share value represents 110 percent of Legacy's tangible book value per share and a 1.0 percent premium to core deposits based on financial information as of Sept. 30, 2010. The merger is expected to be completed by June 30, 2011. It is expected to be $0.10 accretive to Berkshire's core earnings per share in 2012, which will be the first full year of operations, and there will also be some accretive benefit in the 2011 transition year.

The transaction is intended to qualify as a reorganization for federal income tax purposes, and as a result, it is expected that the exchange of Legacy shares for Berkshire shares will be on a tax-free basis. The definitive agreement has been unanimously approved by the boards of directors of both Berkshire and Legacy. Consummation of the agreement is subject to the approval of Berkshire's and Legacy's shareholders, as well as state and federal regulatory agencies. It is anticipated that there will be some divestiture of deposits in Berkshire County; any divestiture gains will be shared in accordance with the merger agreement. Both the Berkshire Bank Foundation and The Legacy Banks Foundation will continue to provide charitable contributions to the communities.

Sandler O'Neill & Partners LP was the financial adviser to Berkshire, and Keefe, Bruyette & Woods Inc. was the financial adviser for Legacy. Luse Gorman Pomerenk & Schick PC was outside legal counsel to Berkshire, while Nutter McClennan & Fish LLP was outside legal counsel to Legacy.

Regarding Berkshire's current-year performance, Daly added, "We are pleased that our fourth-quarter core earnings are anticipated to meet or exceed our previous guidance of $0.26 per share, which reflects an a5nnualized pace of growth around 16 percent compared to the prior quarter. This results from continued strong organic growth of our business and continued favorable asset quality metrics. We expect some one-time charges related to the Legacy and Rome merger agreements which will impact our GAAP earnings. We look forward to announcing our fourth quarter and full-year 2010 results after the close of business on Monday, Jan. 24, 2011, followed by a conference call/webcast at 10 a.m. on Tuesday, Jan. 25, 2011."

The preceding is from PRNewswire and edited for iBerkshires style. The full release can be found here. The merger is expected to cost up to 50 jobs.

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Your Comments

iBerkshires.com welcomes critical, respectful dialogue. Name-calling, personal attacks, libel, slander or foul language is not allowed. All comments are reviewed before posting and will be deleted or edited as necessary.

Great. Another local conglomerate doomed to be bought out by a larger non-local bank. It's all about the stock holders folks and the executives looking for that golden parachute. Only matter of time before Berkshire is bought out too. I left Berkshire to go to Legacy because of their failings. Now what?
from: Townee	on: 12-22-2010 11:34AM I Agree (5) - I Disagree (4)

1). Berkshire Bank is a local bank, so your complaint regarding a non-local bank is wrong. 2). You left Beksgire to go to Legacy because of concerns regarding Berkshire? Legacy Banks has lost money 7 quarters in a row! Your facts are worse than Dan Vakenti's. Editor: Both banks are local, and have been for more than 150 years. They're just the predecessors of a succession of merged smaller banks. That said, there are other banks and credit unions to chose from and another trying to get off the ground.
from: Confused	on: 12-22-2010 01:20PM I Agree (2) - I Disagree (0)

Townee, You may want to get you facts straight before you start posting ridiculous comments.The merger just makes the most sense, and is most beneficial to their employees and members of the county...that is unless you want the Citizens or the Bank of America's of the world to come in and buy them> Meanwhile obiliterating our local economy and skyrocketing unemployment in the county. You left Berkshire to join Legacy? Welcome back to Berkshire. Editor: Who it's from has been deleted - no name-calling allowed.
from:	on: 12-23-2010 10:46AM I Agree (1) - I Disagree (1)

For the record, my comment was directed to "townee", not the editor. I though townee was off base. Editor: No, if that was you, your "name" was directed toward townee. "You're a ..." is name-calling.
from: Confused	on: 12-23-2010 11:26AM I Agree (0) - I Disagree (0)

It's been my experience that, when banks merge, the customer usually is the one who suffers. Watch out for increased fees and take-backs, regarding account benefits.
from: Bob	on: 12-23-2010 01:32PM I Agree (0) - I Disagree (5)

Merging of local banks is detrimental to competition within community. Both of these banks are individual results of other mergers. Other than Greylock, a credit union, Pittsfield will have only two home-grown commercial banking institutions, Pittsfield Coop and the newly merged bank. It's a shame!
from: John	on: 12-27-2010 07:36PM I Agree (0) - I Disagree (0)

This merger as being beneficial to the employees? Only if you are one of the few Legacy workers left who are going to stay through this change and not get laid off. For most of us our careers are in question now and our faith in this bank that said we are all "exceptional" is gone.
from: Inside and worried	on: 01-04-2011 10:50PM I Agree (0) - I Disagree (0)

Texas-Style Barbecue Opens for Lunch, Takeout in Downtown Pittsfield

By Breanna SteeleiBerkshires Staff
12:16PM / Tuesday, October 06, 2026

PITTSFIELD, Mass. — FireKing BBQ is making it easier to find its smoked ribs — they're in the Clocktower Building in downtown Pittsfield.

Owner Ethan Sumner has been operating as a catering service for more than a decade, with a mobile smoker for his award-winning barbecue.

"We specialize in low and slow cooking as well as grilling over charcoal and hardwoods," he said. "We love using cherry wood, apple wood, and a little kiss of hickory wood in all of our cooking. Most of our cooking, I should say. And we don't use any propane. I'm a purist in that sense. I love cooking over open flame and hot coals."

He works alongside Robear Robespierre, who helps with Sumner's sales and distribution.

Sumner said he spends hours cooking his meat, like his baby back ribs that won him first place in the 2019 Grillsdale competition in New York State. It takes him about six hours, two of them smoking at 250 degrees, to cook the ribs.

He said he wanted a space to be able to keep up with demand. Business dropped off every winter because people think of barbecue as outdoor food, and while he will cook outside even in negative temperatures, an indoor space lets him serve year-round, including football season and the Super Bowl.

He is now located at 75 South Church St. and he is no stranger to the building. Sumner had run the publication Berkshire's Best: Buys, Business, and Beyond out of the building so he knew its possibilities.

"It's funny how I've come full circle here back into the building. So I've always kind of seen this space. But I was never into culinary then. I was into publishing. So this is 13 years in the making, and I had my paper for 13 years, which again, is coincidental," he said. "So I just really like this space. It's modern. It's nice. It's clean, and that's how my food is. It's clean. It's fresh, and it's local, just like me."

Sumner is originally from New York City and made his way to Great Barrington with his family. One of the inspirations behind his business was his father, who loved to grill outside.

"Even when we lived in New York City, he would go on the terrace of our 36-story apartment building on the third floor there was a terrace, and he would always cook on a Weber charcoal grill with charcoal, and I always was fascinated by that. And he always loved cooking outside, and he loved cooking over charcoal. And he would always make this mustard and tea leaf steak," he said. "That was a standout. It was a family favorite of ours and I could always taste the difference between something that was cooked [with charcoal]. Even when I was 7 years old I could, I always craved that certain taste that you could only get from charcoal."

He wants customers to know he cares about his food and its quality, making sure he gets the best ingredients for his dishes.

"I want them to know that. I'm a barbecue guy, but I also offer so much more. I consider myself somebody who loves cooking over open flame, smoking meats, but I also love using fresh ingredients to create deli sandwiches and fresh salads," Sumner said. "So I want people to associate FireKing with quality. I also want to point out that I get a lot of my meat from Mazzeo's meat market. So I don't sacrifice quality, which I think is half the battle in doing what I do is getting quality meats and produce."

He hopes customer will find the eatery a comfortable atmosphere to enjoy their lunch and hangout, or grab a sandwich and go.

"They could grab a pulled pork sandwich in about a minute and a half flat and be out of here if they want to. So there's no pressure," he said. "I love the community. I love talking to people here. Everyone in this community has been super kind and gracious, and I appreciate them. And I want to give back what they've given me."

He also plans to have DoorDash and barbecue pickup packages for families, and to have vacuum-sealed, pre-cooked smoked ribs with reheating instructions, also available for local pickup.

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