-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I3X1IaK4JwnG3e8ZGbVV2DN7pzOuUUmHxBpzCED8YWO9jItRAXC153GXNG/BZsQZ V0Sh8B+euW5PuQk7FxkB2g== 0000914317-05-002503.txt : 20050805 0000914317-05-002503.hdr.sgml : 20050805 20050805103403 ACCESSION NUMBER: 0000914317-05-002503 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050601 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050805 DATE AS OF CHANGE: 20050805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERKSHIRE HILLS BANCORP INC CENTRAL INDEX KEY: 0001108134 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 043510455 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15781 FILM NUMBER: 051001286 BUSINESS ADDRESS: STREET 1: 24 NORTH ST. CITY: PITTSFIELD STATE: MA ZIP: 01201 BUSINESS PHONE: 4134435601 MAIL ADDRESS: STREET 1: 24 NORTH ST CITY: PITTSFIELD STATE: MA ZIP: 01201 8-K 1 form8k-700360_berkshire.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) June 1, 2005 ------------ BERKSHIRE HILLS BANCORP, INC. ----------------------------- (Exact name of registrant as specified in its charter) Delaware 1-15781 04-3510455 -------- ------- ---------- (State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 24 North Street, Pittsfield, Massachusetts 01201 ------------------------------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code:(413)443-5601 ------------ Not Applicable -------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.01 Completion of Acquisition or Disposition of Assets. --------------------------------------------------- On June 1, 2005, Berkshire Hills Bancorp, Inc. ("Berkshire Hills"), the holding company for Berkshire Bank, consummated its acquisition of Woronoco Bancorp ("Woronoco Bancorp"), the holding company for Woronoco Savings Bank, pursuant to the Agreement and Plan of Merger, dated as of December 16, 2004, by and between Berkshire Hills and Woronoco Bancorp (the "Merger Agreement"). Pursuant to the terms of the Merger Agreement, each share of Woronoco Bancorp common stock was converted into the right to receive $36.00 in cash without interest or 1.00 share of Berkshire Hills common stock, subject to the requirement that 75% of Woronoco Bancorp shares be converted into the right to receive stock and the remainder be converted into the right to receive cash. Berkshire Hills issued a total of 2,928,792 shares of common stock and paid a total of approximately $35.1 million to former Woronoco Bancorp stockholders. Item 5.02 Departure of Directors or Principal Officers; Election of Directors; -------------------------------------------------------------------- Appointment of Principal Officers. ---------------------------------- Pursuant to the Merger Agreement, effective June 1, 2005, Berkshire Hills appointed John B. Davies, D. Jeffrey Templeton and Cornelius D. Mahoney as directors of Berkshire Hills. Mr. Davies was appointed to serve as a member of the Audit and Compensation Committees. Mr. Mahoney was appointed to serve as a member of the Corporate Governance/Nominating Committee. Item 9.01 Financial Statements and Exhibits. ---------------------------------- (a) Financial Statements of Businesses Acquired. The following audited consolidated financial statements of Woronoco Bancorp contained in Woronoco Bancorp's Annual Report on Form 10-K for the year ended December 31, 2004 as filed on March 15, 2005 are incorporated herein by reference to Exhibit 99.1: o Report of Independent Registered Public Accounting Firm o Consolidated Balance Sheets at December 31, 2004 and 2003 o Consolidated Statements of Income for the Years Ended December 31, 2004, 2003 and 2002 o Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2004, 2003 and 2002 o Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002 o Notes to Consolidated Financial Statements 1 The following unaudited consolidated financial statements of Woronoco Bancorp contained in Woronoco Bancorp's Form 10-Q as filed on May 10, 2005 are incorporated herein by reference to Exhibit 99.2: o Consolidated Balance Sheets at March 31, 2005 and December 31, 2004 (unaudited) o Consolidated Income Statements for the Three Months Ended March 31, 2005 and 2004 (unaudited) o Consolidated Statements of Changes in Stockholders' Equity For the Three Months Ended March 31, 2005 and 2004 (unaudited) o Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2005 and 2004 (unaudited) o Notes to Unaudited Consolidated Financial Statements (b) Pro Forma Financial Information. The unaudited pro forma consolidated condensed combined balance sheet as of March 31, 2005 and unaudited pro forma consolidated condensed combined statements of income for the three months ended March 31, 2005 and for the year ended December 31, 2004 are incorporated herein by reference to Exhibit 99.3. (c) Exhibits. Number Description ------ ----------- 23.1 Consent of Independent Registered Public Accounting Firm 99.1 Woronoco Bancorp's Audited Consolidated Financial Statements at and for the year ended December 31, 2004 (incorporated herein by reference to Woronoco Bancorp's Annual Report on Form 10-K for the year ended December 31, 2004 as filed on March 15, 2005 (File No. 0-14671)). 99.2 Woronoco Bancorp's Unaudited Consolidated Financial Statements at and for the three months ended March 31, 2005 (incorporated herein by reference to Woronoco Bancorp's Quarterly Report on Form 10-Q as filed with the SEC on May 10, 2005 (File No. 0-14671)). 99.3 The unaudited pro forma consolidated condensed combined balance sheet as of March 31, 2005 and unaudited pro forma consolidated condensed combined statements of income for the three months ended March 31, 2005 and for the year ended December 31, 2004. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BERKSHIRE HILLS BANCORP, INC. Dated: August 5, 2005 By: /s/ Wayne F. Patenaude ---------------------------- Wayne F. Patenaude Senior Vice President and Chief Financial Officer 3 EX-23.1 2 ex23-1.txt Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in this Filing on Form 8-K of Berkshire Hills Bancorp, Inc. of our report dated March 3, 2005, relating to the consolidated balance sheets of Woronoco Bancorp, Inc. and subsidiaries as of December 31, 2004 and 2003, and the related consolidated statements of income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2004, which report appears in the Annual Report on Form 10-K of Woronoco Bancorp, Inc. for the year ended December 31, 2004. /s/ Wolf & Company, P.C. August 3, 2005 EX-99.3 3 ex99-3.txt Exhibit 99.3 BERKSHIRE HILLS BANCORP, INC. PRO FORMA FINANCIAL INFORMATION Unaudited Pro Forma Consolidated Condensed Combined Financial Statements On June 1, 2005, Berkshire Hills Bancorp, Inc. ("Berkshire") acquired all of the common stock of Woronoco Bancorp, Inc. ("Woronoco"). Pursuant to the merger agreement, each share of Woronoco common stock was converted into either one share of Berkshire common stock or $36.00 in cash, without interest, subject to the requirement that 75% of the outstanding shares of Woronoco common stock were converted into the right to receive Berkshire stock and 25% of the shares of Woronoco common stock were converted into the right to receive cash. In addition, each holder of an option to acquire stock of Woronoco was converted into an option to acquire an equal number of shares of Berkshire at the same exercise price. The aggregate purchase price of $147 million reflects: (1) the issuance of 2,928,792 shares of Berkshire stock valued at $108.4 million; (2) the payment of $35.1 million in cash; and (3) the conversion of Woronoco options into options to acquire shares of Berkshire stock, valued at $3.5 million. The following unaudited pro forma consolidated condensed combined balance sheet as of March 31, 2005 and the unaudited pro forma consolidated condensed combined statements of income for the three months ended March 31, 2005 and the year ended December 31, 2004 give effect to the merger, accounted for as a purchase. The unaudited pro forma consolidated condensed combined balance sheet of Berkshire and subsidiaries and Woronoco and subsidiaries at March 31, 2005 has been prepared as if the merger had been consummated on that date. The unaudited pro forma consolidated condensed combined statements of income for the three months ended March 31, 2005 and for the twelve months ended December 31, 2004 have been prepared as if the merger had been consummated at the beginning of the periods presented. The unaudited pro forma consolidated condensed combined financial statements are based on the historical financial statements of Berkshire and Woronoco under the purchase method of accounting and the assumptions and adjustments in the notes that follow. The pro forma financial statements also give effect to the deleveraging program that was announced in conjunction with the acquisition based on the adjustments summarized in the notes accompanying the financial statements. The unaudited pro forma consolidated condensed combined financial statements do not give effect to any revenue enhancement opportunities or anticipated cost savings in connection with the merger. The unaudited pro forma consolidated condensed combined financial statements should be read in conjunction with the historical consolidated financial statements of Berkshire Hills Bancorp and Woronoco Bancorp, including the respective notes to those financial statements. The pro forma information is not necessarily indicative of the combined financial position or the results of operations in the future or of the combined financial position or the results of operations that would have been realized had the merger been consummated during the periods or as of the date for which the pro forma financial information is presented. 1
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED COMBINED BALANCE SHEET At March 31, 2005 ---------------------------------------------------------------------------- Historical Historical Pro Forma Pro Forma Berkshire Hills Woronoco Acquisition Deleverage Pro Forma Bancorp Bancorp Adjustment Adjustment Combined ---------- ---------- ---------- ---------- ---------- (In thousands) Assets: Cash and cash equivalents $ 14,962 $ 20,315 $ -- $ (4,400) $ 30,877 Investment securities 371,312 244,999 (54,509) (1) (102,000) 459,802 Loans, net 845,371 620,035 (9,994) (2) (90,000) 1,365,412 Premises and equipment, net 15,567 10,206 230 (3) -- 26,003 Goodwill 6,782 3,137 81,403 (1-8) -- 91,322 Other intangible assets 453 78 11,982 (4) -- 12,513 Other assets 39,853 13,796 3,013 (5) 1,540 58,202 ---------- ---------- ---------- ---------- ---------- Total assets $1,294,300 $ 912,566 $ 32,125 $ (194,860) $2,044,131 ========== ========== ========== ========== ========== Liabilities and stockholders' equity: Deposits $ 847,381 $ 446,645 $ 143 (6) $ (25,368) 1,268,801 Borrowed funds 314,471 380,753 (147)(7) (166,632) 528,445 Other liabilities 4,022 5,382 -- -- 9,404 ---------- ---------- ---------- ---------- ---------- Total liabilities 1,165,874 832,780 (4) (192,000) 1,806,650 Total stockholders' equity 128,426 79,786 32,129 (8) (2,860) 237,481 ---------- ---------- ---------- ---------- ---------- Total liabilities and stockholders' equity $1,294,300 $ 912,566 $ 32,125 $ (194,860) $2,044,131 ========== ========== ========== ========== ========== See accompanying notes to these pro forma consolidated condensed combined financial statements UNAUDITED PRO FORMA CONSOLIDATED CONDENSED COMBINED STATEMENTS OF INCOME For the Three Months Ended March 31, 2005 ------------------------------------------------------------------------------------ Historical Historical Pro Forma Pro Forma Berkshire Hills Woronoco Acquisition Deleverage Pro Forma Bancorp Bancorp Adjustments Adjustments Combined ---------- ---------- ---------- ---------- ---------- (In thousands, except per share data) Interest and dividend income $ 16,037 $ 11,027 $ 153 (1) $ (1,826) (8) $ 25,391 Interest expense 6,010 5,637 (132)(2) (2,020) (8) 9,495 ---------- ---------- ---------- ---------- ---------- Net interest income 10,027 5,390 285 194 15,896 Provision for loan losses 493 14 -- -- 507 Non-interest income 2,744 1,624 -- -- 4,368 Non-interest expense 7,536 5,609 (7) 446 (3,6,7) -- 13,591 ---------- ---------- ---------- ---------- ---------- Income before income taxes 4,742 1,391 (161) 194 6,166 Income tax expense 1,490 615 (56)(4) 68 (4) 2,117 ---------- ---------- ---------- ---------- ---------- Net income $ 3,252 $ 776 $ (105) $ 126 $ 4,049 ========== ========== ========== ========== ========== Earnings per share Basic $ 0.61 $ 0.21 $ 0.49 Diluted $ 0.57 $ 0.21 $ 0.47 Shares used for calculating earnings per share Basic 5,300 3,642 2,929 (5) 8,229 Diluted 5,691 3,734 3,004 (5) 8,695 See accompanying notes to these pro forma consolidated condensed combined financial statements
2
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED COMBINED STATEMENTS OF INCOME For the Twelve Months ended December 31, 2004 ------------------------------------------------------------------------------------ Historical Historical Pro Forma Pro Forma Berkshire Hills Woronoco Acquisition Deleverage Pro Forma Bancorp Bancorp Adjustments Adjustments Combined ---------- ---------- ---------- ---------- ---------- (In thousands, except per share data) Interest and dividend income $ 61,081 $ 40,772 $ 610 (1) $ (7,304) $ 95,159 Interest expense 20,724 19,784 (368)(2) (8,082) 32,058 ---------- ---------- ---------- ---------- ---------- Net interest income 40,357 20,988 978 778 63,101 Provision for loan losses 1,565 373 -- -- 1,938 Non-interest income 7,764 6,283 -- -- 14,047 Non-interest expense 28,977 23,203 (7) 1,782 (3,6,7) -- 53,962 ---------- ---------- ---------- ---------- ---------- Income from continuing operations before income taxes 17,579 3,695 (804) 778 21,248 Income tax expense 5,639 1,112 (281)(4) 272 6,742 ---------- ---------- ---------- ---------- ---------- Net income from continuing operations $ 11,940 $ 2,583 $ (523) $ 506 $ 14,506 ========== ========== ========== ========== ========== Earnings from continuing operations per share Basic $ 2.26 $ 0.76 $ 1.77 Diluted $ 2.08 $ 0.72 $ 1.66 Shares used for calculatingearnings from continuing operations pershare Basic 5,284 3,419 2,929 (5) 8,213 Diluted 5,731 3,580 3,004 (5) 8,735 See accompanying notes to these pro forma consolidated condensed combined financial statements
NOTES TO PRO FORMA CONSOLIDATED CONDENSED COMBINED BALANCE SHEET (UNAUDITED) Adjustments used in the preparation of the unaudited pro forma consolidated condensed combined balance sheet are as follows: (1) Adjustment to record sale of securities to fund the cash portion of acquisition. The adjustment includes $35,146,000 cash paid for shares of Woronoco common stock and $19,363,000 in incremental direct costs of the acquisition. (2) Adjustment to record acquired loans at estimated fair value. (3) Adjustment to record premises at estimated fair value. (4) Adjustment to record core deposit intangible asset at $9,664,000 and intangible asset representing non-competition agreements at $2,317,550. (5) Adjustment to record tax and other assets at estimated fair value. (6) Adjustment to record time deposits at estimated fair value. (7) Adjustment to record borrowings at estimated fair value. (8) Reflects issuance of 2,928,792 shares of Berkshire common stock with a value of $108,394,000 (based on purchase accounting methodology), estimated fair value of Woronoco stock options converted into 3 Berkshire stock options of $3,521,000, and the elimination of Woronoco's March 31, 2005 equity of $79,786,000. (9) Adjustment to record deleveraging including sale of securities and sale of loans. The proceeds from these sales were used to pay down borrowings and maturing deposits. Also records net $4,400,000 loss on deleveraging, primarily due to penalties paid to Federal Home Loan Bank of Boston for prepayment of borrowings. Berkshire's financial statements at March 31, 2005 include additional deleveraging totaling approximately $43,000,000 accomplished in the first quarter of 2005, through net reductions in the securities portfolio from sales and run-off. Proceeds were used to pay down borrowings and to fund loan growth that would otherwise have been funded through borrowings. NOTES TO PRO FORMA CONSOLIDATED CONDENSED COMBINED STATEMENTS OF INCOME (UNAUDITED) Adjustments used in the preparation of the unaudited pro forma consolidated condensed combined statements of income are as follows (adjustments are based on annual data; the three month financial statement adjustments are one quarter of annual adjustments). (1) Adjustment to record net amortization of fair value adjustments on loans, net of elimination of historic amortization/accretion of premiums/discounts and deferred costs. Adjustment also includes foregone interest income on securities sold to fund the cash portion of the acquisition, assuming an average 4% yield on these securities. (2) Adjustment to record net amortization of fair value adjustments on deposits and borrowings, net of elimination of historic amortization of brokered deposit premiums. (3) Adjustment to record amortization of intangibles related to core deposits and non-competition agreements, as well as additional depreciation related to premises fair value adjustments. (4) Record tax effect of the above adjustments, using a 35% tax rate. (5) The pro forma net income per common share amounts and average common shares outstanding include the effect of the adjustments described above and the issuance of 2,928,792 shares of Berkshire common stock in connection with the acquisition. The calculation of pro forma diluted earnings per share also includes the dilutive effect of Woronoco stock options converted into Berkshire stock options by application of the "treasury stock method" of accounting, based on market prices in June 2005. (6) The following table summarizes the estimated impact of the amortization of the core deposit intangible, the non-competition agreement intangible, and the net impact of amortization/accretion of the purchase accounting adjustments made in connection with the merger for the years indicated. 4
Projected future Non-competition Other Net increase/ amounts for the Core deposit agreement purchase (decrease) years ended intangible intangible accounting in income December 31, amortization (1) amortization (2) net impact (3) before taxes --------------- ---------------- ---------------- -------------- -------------- (In thousands) 2006 $ (1,029) $ (773) $ 1,820 $ 18 2007 (1,029) (773) 1,615 (187) 2008 (1,029) (322) 1,423 72 2009 (1,029) - 1,172 143 2010 (1,029) - 947 (82)
---------------------------------------------- (1) The core deposit intangible is estimated to have a useful life of about 9.4 years and is amortized over its useful life on a straight-line basis. (2) The non-competition agreement intangible is amortized on a straight-line basis over the three year life of the agreement. (3) Purchase accounting fair value adjustments are amortized/accreted over the estimated lives of the related assets and liabilities. Loan fair value adjustments are amortized based on the sum of the years digits method, based on expected lives ranging from 1 - 11 years. The premises fair value adjustment is depreciated over 39 years. The time deposits and borrowings fair value adjustments are amortized/accreted on a straight-line basis over various estimated expected lives. (7) Pro forma non-interest expense adjustments exclude incremental indirect merger and conversion/integration expenses, which are estimated to be $1,500,000 before tax for 2005. Merger expenses reported in the Woronoco historical income statements included $766,000 in the first quarter of 2005 and $3,999,000 for the year 2004. (8) Reflects the estimated effect of the deleverage program on interest income and expense. Also includes the effect of $43,000,000 net reductions in Berkshire's securities portfolio in the first quarter of 2005. 5 -----END PRIVACY-ENHANCED MESSAGE-----