Berkshire Hills Bancorp in Pittsfield, Mass., has agreed to buy First Choice Bank in Lawrenceville, N.J.
The $7.8 billion-asset Berkshire said in a press release Monday that it will pay $111.7 million in stock for the $1.1 billion-asset First Choice. The deal, which is expected to close in the fourth quarter, values First Choice at 108% of its tangible book value.
Berkshire will expand into Princeton, N.J., and Philadelphia with the acquisition. It will also gain First Choice Loan Services, a residential retail and consumer direct mortgage originator with a national platform. Mortgage production at First Choice Loan Services totaled $2.5 billion last year.
"This partnership builds on Berkshire's commitment to create a strong regional platform for serving our customers, while diversifying our revenue streams, improving profitability and increasing shareholder value," Michael Daly, Berkshire's chief executive, said in the release. First Choice "builds on markets where we presently manage commercial relationships, and adds a well-positioned deposit base, a best-in-class home lending operation and enthusiastic new teams that complement our current culture."
Berkshire said the deal should be 4.3% accretive to earnings next year, excluding merger-related costs. It should take about 15 months to earn back any dilution to tangible book value.
Key senior executives from First Choice Loan Services have executed retention agreements and will remain with Berkshire Bank in continuing leadership roles.
Berkshire Hills was advised by Sandler O'Neill and Luse Gorman. First Choice was advised by Houlihan Lokey and Pepper Hamilton; Ambassador Financial Group provided a fairness opinion.
