| | Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the merger or the securities to be issued in the merger or determined if this proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense. | | |
| | The securities to be issued in the merger are not savings or deposit accounts or other obligations of any bank or non-bank subsidiary of either Berkshire Hills Bancorp or SI Financial, and they are not insured by the Federal Deposit Insurance Corporation or any other governmental agency. | | |
| Berkshire Hills Bancorp, Inc. 60 State Street Boston, Massachusetts 02109 Attention: Investor Relations Manager (800) 773-5601, ext. 13373 |
| | SI Financial Group, Inc. 803 Main Street Willimantic, Connecticut 06226 Attention: Investor Relations (860) 456-6514 |
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BY ORDER OF THE BOARD OF DIRECTORS
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/s/ Rheo A. Brouillard
Rheo A. Brouillard
President and Chief Executive Officer |
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| | | | A-1 | | | |
| | | | B-1 | | |
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Berkshire Hills
Bancorp Common Stock |
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SI Financial
Common Stock |
| |
Implied Value of
Merger Consideration |
| |||||||||
December 11, 2018
|
| | | $ | 31.29 | | | | | $ | 13.03 | | | | | $ | 15.02 | | |
February 19, 2019
|
| | | $ | 30.59 | | | | | $ | 14.42 | | | | | $ | 14.68 | | |
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At September 30,
|
| |
At December 31,
|
| ||||||||||||||||||||||||||||||||||||
(In thousands, except per share data)
|
| |
2018
|
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2017
|
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2017
|
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2016
|
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2015
|
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2014
|
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2013
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Selected Financial Data: | | | | | | | | | |||||||||||||||||||||||||||||||||||
Total assets
|
| | | $ | 12,030,059 | | | | | $ | 9,766,703 | | | | | $ | 11,570,751 | | | | | $ | 9,162,542 | | | | | $ | 7,831,086 | | | | | $ | 6,501,079 | | | | | $ | 5,671,724 | | |
Securities
|
| | | | 1,917,874 | | | | | | 1,823,798 | | | | | | 1,898,564 | | | | | | 1,628,246 | | | | | | 1,371,316 | | | | | | 1,205,794 | | | | | | 870,091 | | |
Loans(1) | | | | | 8,904,513 | | | | | | 6,947,406 | | | | | | 8,299,338 | | | | | | 6,549,787 | | | | | | 5,725,236 | | | | | | 4,680,600 | | | | | | 4,180,523 | | |
Allowance for loan losses
|
| | | | (58,457) | | | | | | (49,004) | | | | | | (51,834) | | | | | | (43,998) | | | | | | (39,308) | | | | | | (35,662) | | | | | | (33,323) | | |
Goodwill and other intangible assets
|
| | | | 552,945 | | | | | | 420,242 | | | | | | 557,583 | | | | | | 422,551 | | | | | | 334,607 | | | | | | 276,270 | | | | | | 270,662 | | |
Total deposits
|
| | | | 8,766,101 | | | | | | 6,790,146 | | | | | | 8,749,530 | | | | | | 6,622,092 | | | | | | 5,589,135 | | | | | | 4,654,679 | | | | | | 3,848,529 | | |
Borrowings
|
| | | | 1,540,126 | | | | | | 1,488,649 | | | | | | 1,137,075 | | | | | | 1,313,997 | | | | | | 1,263,318 | | | | | | 1,051,371 | | | | | | 1,063,032 | | |
Total stockholders’ equity
|
| | | | 1,532,315 | | | | | | 1,284,527 | | | | | | 1,496,264 | | | | | | 1,093,298 | | | | | | 887,189 | | | | | | 709,287 | | | | | | 678,062 | | |
| | |
For the Nine Months
Ended September 30, |
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For the Years Ended December 31,
|
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2018
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2017
|
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2017
|
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2016
|
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2015
|
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2014
|
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2013
|
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Selected Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest and dividend income
|
| | | $ | 343,310 | | | | | $ | 254,435 | | | | | $ | 360,258 | | | | | $ | 280,439 | | | | | $ | 247,030 | | | | | $ | 207,042 | | | | | $ | 203,741 | | |
Total interest expense
|
| | | | 77,378 | | | | | | 46,006 | | | | | | 65,463 | | | | | | 48,172 | | | | | | 33,181 | | | | | | 28,351 | | | | | | 34,989 | | |
Net interest income
|
| | | | 265,932 | | | | | | 208,429 | | | | | | 294,795 | | | | | | 232,267 | | | | | | 213,849 | | | | | | 178,691 | | | | | | 168,752 | | |
Fee income
|
| | | | 87,176 | | | | | | 92,594 | | | | | | 122,801 | | | | | | 68,606 | | | | | | 57,480 | | | | | | 53,434 | | | | | | 50,525 | | |
All other non-interest (loss) income
|
| | | | 1,655 | | | | | | 3,797 | | | | | | 2,888 | | | | | | (2,755) | | | | | | (3,192) | | | | | | (5,664) | | | | | | 7,707 | | |
Total non-interest income
|
| | | | 88,831 | | | | | | 96,391 | | | | | | 125,689 | | | | | | 65,851 | | | | | | 54,288 | | | | | | 47,770 | | | | | | 58,232 | | |
Total net revenue
|
| | | | 354,763 | | | | | | 304,820 | | | | | | 420,484 | | | | | | 298,118 | | | | | | 268,137 | | | | | | 226,461 | | | | | | 226,984 | | |
Provision for loan losses
|
| | | | 18,735 | | | | | | 14,884 | | | | | | 21,025 | | | | | | 17,362 | | | | | | 16,726 | | | | | | 14,968 | | | | | | 11,378 | | |
Total non-interest expense
|
| | | | 220,183 | | | | | | 209,669 | | | | | | 299,710 | | | | | | 203,302 | | | | | | 196,829 | | | | | | 165,986 | | | | | | 157,359 | | |
Income tax expense (continuing operations)
|
| | | | 24,339 | | | | | | 22,210 | | | | | | 44,502 | | | | | | 18,784 | | | | | | 5,064 | | | | | | 11,763 | | | | | | 17,104 | | |
Net (loss) income from discontinued operations
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net income
|
| | | | 91,506 | | | | | | 58,057 | | | | | | 55,247 | | | | | | 58,670 | | | | | | 49,518 | | | | | | 33,744 | | | | | | 41,143 | | |
Dividends per common share
|
| | | | 0.66 | | | | | | 0.63 | | | | | | 0.84 | | | | | | 0.80 | | | | | | 0.76 | | | | | | 0.72 | | | | | | 0.72 | | |
Basic earnings per common share
|
| | | | 1.99 | | | | | | 1.55 | | | | | | 1.40 | | | | | | 1.89 | | | | | | 1.74 | | | | | | 1.36 | | | | | | 1.66 | | |
Diluted earnings per common share
|
| | | | 1.98 | | | | | | 1.54 | | | | | | 1.39 | | | | | | 1.88 | | | | | | 1.73 | | | | | | 1.36 | | | | | | 1.65 | | |
Weighted average common shares outstanding – basic
|
| | | | 46,009 | | | | | | 37,547 | | | | | | 39,456 | | | | | | 30,988 | | | | | | 28,393 | | | | | | 24,730 | | | | | | 24,802 | | |
Weighted average common shares outstanding – diluted
|
| | | | 46,226 | | | | | | 37,908 | | | | | | 39,695 | | | | | | 31,167 | | | | | | 28,564 | | | | | | 24,854 | | | | | | 24,965 | | |
| | |
At or For the Nine
Months Ended September 30, |
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At or For the Years Ended December 31,
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2018
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2017
|
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2017
|
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2016
|
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2015
|
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2014
|
| |
2013
|
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Selected Operating Ratios and Other Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Per Common Share Data(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net earnings diluted
|
| | | $ | 1.98 | | | | | $ | 1.54 | | | | | $ | 1.39 | | | | | $ | 1.88 | | | | | $ | 1.73 | | | | | $ | 1.36 | | | | | $ | 1.65 | | |
Adjusted earnings, diluted(2)
|
| | | | 2.08 | | | | | | 1.71 | | | | | | 2.29 | | | | | | 2.20 | | | | | | 2.09 | | | | | | 1.80 | | | | | | 1.87 | | |
Total book value per share
|
| | | | 32.84 | | | | | | 31.78 | | | | | | 32.14 | | | | | | 30.65 | | | | | | 28.64 | | | | | | 28.17 | | | | | | 27.08 | | |
Tangible book value per share(2)
|
| | | | 20.68 | | | | | | 21.38 | | | | | | 19.83 | | | | | | 18.81 | | | | | | 17.84 | | | | | | 17.19 | | | | | | 16.27 | | |
Dividends
|
| | | | 0.66 | | | | | | 0.63 | | | | | | 0.84 | | | | | | 0.80 | | | | | | 0.76 | | | | | | 0.72 | | | | | | 0.72 | | |
Market price at period end
|
| | | | 40.70 | | | | | | 38.75 | | | | | | 36.60 | | | | | | 36.85 | | | | | | 29.11 | | | | | | 26.66 | | | | | | 27.27 | | |
Performance Ratios(1)(3): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets
|
| | | | 1.05% | | | | | | 0.85% | | | | | | 0.56% | | | | | | 0.74% | | | | | | 0.68% | | | | | | 0.55% | | | | | | 0.78% | | |
Adjusted return on average assets(2)
|
| | | | 1.10% | | | | | | 0.92% | | | | | | 0.93% | | | | | | 0.86% | | | | | | 0.82% | | | | | | 0.73% | | | | | | 0.88% | | |
Return on average equity
|
| | | | 7.96% | | | | | | 6.63% | | | | | | 4.45% | | | | | | 6.44% | | | | | | 6.14% | | | | | | 4.87% | | | | | | 6.09% | | |
Adjusted return on average equity(2)
|
| | | | 8.36% | | | | | | 7.37% | | | | | | 7.31% | | | | | | 7.51% | | | | | | 7.40% | | | | | | 6.46% | | | | | | 6.92% | | |
Net interest margin, fully tax equivalent(4)
|
| | | | 3.39% | | | | | | 3.35% | | | | | | 3.40% | | | | | | 3.31% | | | | | | 3.34% | | | | | | 3.30% | | | | | | 3.67% | | |
Fee income/total net revenue
|
| | | | 24.57% | | | | | | 30.38% | | | | | | 29.20% | | | | | | 23.01% | | | | | | 21.44% | | | | | | 23.60% | | | | | | 22.26% | | |
Growth Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total commercial loans
|
| | | | 5.40% | | | | | | 8.94% | | | | | | 37.79% | | | | | | 18.39% | | | | | | 28.65% | | | | | | 14.80% | | | | | | 4.51% | | |
Total loans
|
| | | | 9.72% | | | | | | 8.09% | | | | | | 26.71% | | | | | | 14.41% | | | | | | 22.32% | | | | | | 11.96% | | | | | | 4.81% | | |
Total deposits
|
| | | | 0.25% | | | | | | 3.38% | | | | | | 32.13% | | | | | | 18.48% | | | | | | 20.08% | | | | | | 20.95% | | | | | | (6.14)% | | |
Total net revenue, (compared to prior year)
|
| | | | 16.38% | | | | | | 37.16% | | | | | | 41.05% | | | | | | 11.18% | | | | | | 18.40% | | | | | | (0.23)% | | | | | | 14.96% | | |
Earnings per share, (compared to prior year)
|
| | | | 28.57% | | | | | | (1.90)% | | | | | | (26.06)% | | | | | | 8.62% | | | | | | 27.21% | | | | | | (17.58)% | | | | | | 10.74% | | |
Adjusted earnings per share, (compared to prior year)(2)
|
| | | | 21.64% | | | | | | 4.32% | | | | | | 4.09% | | | | | | 5.26% | | | | | | 16.11% | | | | | | (3.74)% | | | | | | (5.56)% | | |
Asset Quality Ratios(5): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loans charged-offs (annualized/average total loans)
|
| | | | 0.19% | | | | | | 0.20% | | | | | | 0.19% | | | | | | 0.21% | | | | | | 0.25% | | | | | | 0.29% | | | | | | 0.29% | | |
Allowance for loan losses/total loans
|
| | | | 0.66% | | | | | | 0.71% | | | | | | 0.62% | | | | | | 0.67% | | | | | | 0.69% | | | | | | 0.76% | | | | | | 0.80% | | |
Capital and Liquidity Ratios(1): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 capital to average assets – Company
|
| | | | 9.09% | | | | | | 9.46% | | | | | | 9.01% | | | | | | 7.88% | | | | | | 7.71% | | | | | | 7.01% | | | | | | N/A | | |
Total capital to risk-weighted assets – Company
|
| | | | 12.99% | | | | | | 14.27% | | | | | | 12.43% | | | | | | 11.87% | | | | | | 11.91% | | | | | | 11.38% | | | | | | N/A | | |
Tier 1 capital to average assets – Bank
|
| | | | 9.08% | | | | | | 7.91% | | | | | | 8.32% | | | | | | 7.84% | | | | | | 7.66% | | | | | | 7.18% | | | | | | 7.99% | | |
Total capital to risk-weighted assets – Bank
|
| | | | 12.20% | | | | | | 11.69% | | | | | | 11.17% | | | | | | 11.21% | | | | | | 11.16% | | | | | | 10.78% | | | | | | 11.62% | | |
Shareholders’ equity/total assets
|
| | | | 12.74% | | | | | | 13.15% | | | | | | 12.93% | | | | | | 11.93% | | | | | | 11.33% | | | | | | 10.91% | | | | | | 11.95% | | |
Tangible common shareholders’ equity to tangible
assets(2) |
| | | | 8.53% | | | | | | 9.25% | | | | | | 8.52% | | | | | | 7.68% | | | | | | 7.37% | | | | | | 6.96% | | | | | | 7.54% | | |
Loans/deposits
|
| | | | 102% | | | | | | 102% | | | | | | 95% | | | | | | 99% | | | | | | 102% | | | | | | 101% | | | | | | 109% | | |
| | | | | |
At or for the Nine Months Ended
|
| |
At or For the Years Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
(in thousands)
|
| | | | |
September 30,
2018 |
| |
September 30,
2017 |
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||||||||||||||
Net income (GAAP)
|
| | | | | | $ | 91,506 | | | | | $ | 58,057 | | | | | $ | 55,247 | | | | | $ | 58,670 | | | | | $ | 49,518 | | | | | $ | 33,744 | | | | | $ | 41,143 | | |
Adj: Securities (gains) losses and other revenue adjustments
|
| | | | | | | 696 | | | | | | (5,939) | | | | | | (5,969) | | | | | | 551 | | | | | | (2,110) | | | | | | 9,691 | | | | | | (6,045) | | |
Adj: Net gains on sale of business operations
|
| | | | | | | (460) | | | | | | (296) | | | | | | (296) | | | | | | (1,085) | | | | | | — | | | | | | — | | | | | | — | | |
Adj: Merger, acquisition, restructuring, conversion related and other expense adjustments
|
| | | | | | | 6,138 | | | | | | 16,005 | | | | | | 34,958 | | | | | | 15,761 | | | | | | 17,611 | | | | | | 8,492 | | | | | | 15,348 | | |
Adj: Deferred tax asset impairment
|
| | | | | | | | | | | | | — | | | | | | 18,145 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Adj: Income taxes
|
| | | | | | | (1,678) | | | | | | (3,314) | | | | | | (11,277) | | | | | | (5,455) | | | | | | (5,409) | | | | | | (7,185) | | | | | | (3,750) | | |
Total adjusted income (non-GAAP)
|
| |
(A)
|
| | | $ | 96,202 | | | | | $ | 64,513 | | | | | $ | 90,808 | | | | | $ | 68,442 | | | | | $ | 59,610 | | | | | $ | 44,742 | | | | | $ | 46,696 | | |
Total revenue (GAAP)
|
| | | | | | $ | 354,763 | | | | | $ | 304,820 | | | | | $ | 420,484 | | | | | $ | 298,118 | | | | | $ | 268,137 | | | | | $ | 226,461 | | | | | $ | 226,984 | | |
Adj: Securities (gains) losses and other revenue adjustments
|
| | | | | | | 696 | | | | | | (5,939) | | | | | | (5,969) | | | | | | 551 | | | | | | (2,110) | | | | | | 9,691 | | | | | | (6,045) | | |
Adj: Net gains on sale of business operations
|
| | | | | | | (460) | | | | | | (296) | | | | | | (296) | | | | | | (1,085) | | | | | | — | | | | | | — | | | | | | — | | |
Total operating revenue (non-GAAP)
|
| |
(B)
|
| | | $ | 354,999 | | | | | $ | 298,585 | | | | | $ | 414,219 | | | | | $ | 297,584 | | | | | $ | 266,027 | | | | | $ | 236,152 | | | | | $ | 220,939 | | |
Total non-interest expense (GAAP)
|
| | | | | | $ | 220,183 | | | | | $ | 209,669 | | | | | $ | 299,710 | | | | | $ | 203,302 | | | | | $ | 196,830 | | | | | $ | 165,986 | | | | | $ | 157,359 | | |
Less: Total non-operating expense (see above)
|
| | | | | | | (6,138) | | | | | | (16,005) | | | | | | (34,958) | | | | | | (15,761) | | | | | | (17,611) | | | | | | (8,492) | | | | | | (15,348) | | |
Adjusted non-interest expense (non-GAAP)
|
| |
(C)
|
| | | $ | 214,045 | | | | | $ | 193,664 | | | | | $ | 264,752 | | | | | $ | 187,541 | | | | | $ | 179,219 | | | | | $ | 157,494 | | | | | $ | 142,011 | | |
(in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total average assets
|
| |
(D)
|
| | | $ | 11,687 | | | | | $ | 9,369 | | | | | $ | 9,815 | | | | | $ | 7,958 | | | | | $ | 7,249 | | | | | $ | 6,171 | | | | | $ | 5,306 | | |
Total average shareholders’ equity
|
| |
(E)
|
| | | | 1,534 | | | | | | 1,167 | | | | | | 1,244 | | | | | | 911 | | | | | | 805 | | | | | | 693 | | | | | | 675 | | |
Total average tangible shareholders’
equity |
| |
(F)
|
| | | | 978 | | | | | | 746 | | | | | | 793 | | | | | | 563 | | | | | | 494 | | | | | | 415 | | | | | | 403 | | |
Total average tangible common shareholders’ equity(2)
|
| |
(G)
|
| | | | 937 | | | | | | 746 | | | | | | 784 | | | | | | 563 | | | | | | 494 | | | | | | 415 | | | | | | 403 | | |
Total tangible shareholders’ equity, period-end(2)
|
| |
(H)
|
| | | | 979 | | | | | | 864 | | | | | | 939 | | | | | | 671 | | | | | | 553 | | | | | | 433 | | | | | | 407 | | |
Total tangible common shareholders’ equity, period-end(2)
|
| |
(I)
|
| | | | 939 | | | | | | 864 | | | | | | 898 | | | | | | 671 | | | | | | 553 | | | | | | 433 | | | | | | 407 | | |
Total tangible assets, period-end(2)
|
| |
(J)
|
| | | | 11,477 | | | | | | 9,346 | | | | | | 11,013 | | | | | | 8,740 | | | | | | 7,496 | | | | | | 6,226 | | | | | | 5,402 | | |
Total common shares outstanding, period-end (thousands)
|
| |
(K)
|
| | | | 45,420 | | | | | | 40,424 | | | | | | 45,290 | | | | | | 35,673 | | | | | | 30,974 | | | | | | 25,183 | | | | | | 25,036 | | |
Average diluted shares outstanding (thousands)
|
| |
(L)
|
| | | | 46,226 | | | | | | 37,708 | | | | | | 39,695 | | | | | | 31,167 | | | | | | 28,564 | | | | | | 24,854 | | | | | | 24,965 | | |
GAAP earnings per share, diluted
|
| | | | | | $ | 1.98 | | | | | $ | 1.54 | | | | | $ | 1.39 | | | | | $ | 1.88 | | | | | $ | 1.73 | | | | | $ | 1.36 | | | | | $ | 1.65 | | |
Adjusted earnings per share, diluted
|
| |
(A/L)
|
| | | | 2.08 | | | | | | 1.71 | | | | | | 2.29 | | | | | | 2.20 | | | | | | 2.09 | | | | | | 1.80 | | | | | | 1.87 | | |
Book value per share, period-end
|
| | | | | | | 32.84 | | | | | | 31.78 | | | | | | 32.14 | | | | | | 30.65 | | | | | | 28.64 | | | | | | 28.17 | | | | | | 27.08 | | |
Tangible book value per share,
period-end |
| |
(I/K)
|
| | | | 20.68 | | | | | | 21.38 | | | | | | 19.83 | | | | | | 18.81 | | | | | | 17.84 | | | | | | 17.19 | | | | | | 16.27 | | |
Total shareholders’ equity/total
assets |
| | | | | | | 12.74 | | | | | | 13.15 | | | | | | 12.93 | | | | | | 11.93 | | | | | | 11.33 | | | | | | 10.91 | | | | | | 11.95 | | |
Total tangible shareholders’ equity/total tangible assets
|
| |
(H)/(J)
|
| | | | 8.53 | | | | | | 9.25 | | | | | | 8.52 | | | | | | 7.68 | | | | | | 7.37 | | | | | | 6.95 | | | | | | 7.54 | | |
Performance ratios(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
GAAP return on assets
|
| | | | | | | 1.05% | | | | | | 0.83% | | | | | | 0.56% | | | | | | 0.74% | | | | | | 0.68% | | | | | | 0.55% | | | | | | 0.78% | | |
Adjusted return on assets
|
| |
(A/D)
|
| | | | 1.10 | | | | | | 0.92 | | | | | | 0.93 | | | | | | 0.86 | | | | | | 0.82 | | | | | | 0.73 | | | | | | 0.88 | | |
GAAP return on equity
|
| | | | | | | 7.96 | | | | | | 6.63 | | | | | | 4.45 | | | | | | 6.44 | | | | | | 6.15 | | | | | | 4.87 | | | | | | 6.09 | | |
Adjusted return on equity
|
| |
(A/E)
|
| | | | 8.36 | | | | | | 7.37 | | | | | | 7.31 | | | | | | 7.51 | | | | | | 7.40 | | | | | | 6.46 | | | | | | 6.92 | | |
| | |
At September 30,
|
| |
At December 31,
|
| ||||||||||||||||||||||||||||||||||||
(In thousands, except per share data)
|
| |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||||||||||||||
Selected Financial Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets
|
| | | $ | 1,607,135 | | | | | $ | 1,585,000 | | | | | $ | 1,580,956 | | | | | $ | 1,550,890 | | | | | $ | 1,481,834 | | | | | $ | 1,350,533 | | | | | $ | 1,346,379 | | |
Loans(1) | | | | | 1,291,968 | | | | | | 1,241,533 | | | | | | 1,250,343 | | | | | | 1,233,536 | | | | | | 1,177,039 | | | | | | 1,053,408 | | | | | | 1,056,090 | | |
Allowance for loan losses
|
| | | | 14,227 | | | | | | 12,217 | | | | | | 12,334 | | | | | | 11,820 | | | | | | 9,863 | | | | | | 7,797 | | | | | | 6,916 | | |
Securities
|
| | | | 147,576 | | | | | | 168,545 | | | | | | 154,053 | | | | | | 159,367 | | | | | | 175,132 | | | | | | 173,040 | | | | | | 170,220 | | |
Total deposits
|
| | | | 1,250,093 | | | | | | 1,214,089 | | | | | | 1,208,047 | | | | | | 1,130,685 | | | | | | 1,058,017 | | | | | | 1,010,713 | | | | | | 984,749 | | |
Borrowings(2) | | | | | 161,028 | | | | | | 175,063 | | | | | | 178,342 | | | | | | 226,007 | | | | | | 242,843 | | | | | | 156,525 | | | | | | 184,520 | | |
Total stockholders’ equity
|
| | | | 170,012 | | | | | | 171,002 | | | | | | 168,481 | | | | | | 164,727 | | | | | | 154,330 | | | | | | 157,739 | | | | | | 152,842 | | |
| | |
For the Nine Months
Ended September 30, |
| |
For the Years Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||||||||||||||
Selected Operating Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest income
|
| | | $ | 42,672 | | | | | $ | 40,349 | | | | | $ | 53,987 | | | | | $ | 52,911 | | | | | $ | 48,126 | | | | | $ | 47,521 | | | | | $ | 38,192 | | |
Total interest expense
|
| | | | 9,215 | | | | | | 8,305 | | | | | | 11,081 | | | | | | 10,083 | | | | | | 8,901 | | | | | | 8,243 | | | | | | 8,454 | | |
Net interest income
|
| | | | 33,457 | | | | | | 32,044 | | | | | | 42,906 | | | | | | 42,828 | | | | | | 39,225 | | | | | | 39,278 | | | | | | 29,738 | | |
Service charges and fee income
|
| | | | 5,240 | | | | | | 5,704 | | | | | | 7,460 | | | | | | 7,662 | | | | | | 7,930 | | | | | | 8,185 | | | | | | 6,923 | | |
All other non-interest income
|
| | | | 3,392 | | | | | | 2,959 | | | | | | 3,701 | | | | | | 7,932 | | | | | | 2,391 | | | | | | 1,981 | | | | | | 1,382 | | |
Total non-interest income
|
| | | | 8,632 | | | | | | 8,663 | | | | | | 11,161 | | | | | | 15,594 | | | | | | 10,321 | | | | | | 10,166 | | | | | | 8,305 | | |
Total net revenue
|
| | | | 51,304 | | | | | | 49,012 | | | | | | 65,148 | | | | | | 68,505 | | | | | | 58,447 | | | | | | 57,687 | | | | | | 46,497 | | |
Provision for loan losses
|
| | | | 2,022 | | | | | | 501 | | | | | | 661 | | | | | | 2,190 | | | | | | 2,509 | | | | | | 1,539 | | | | | | 1,319 | | |
Total non-interest expense
|
| | | | 29,856 | | | | | | 30,023 | | | | | | 39,795 | | | | | | 39,998 | | | | | | 40,585 | | | | | | 41,506 | | | | | | 37,677 | | |
Income tax expense (benefit)
|
| | | | 2,147 | | | | | | 3,378 | | | | | | 8,369 | | | | | | 4,924 | | | | | | 2,104 | | | | | | 1,988 | | | | | | (98) | | |
Net income (loss)
|
| | | $ | 8,064 | | | | | $ | 6,805 | | | | | $ | 5,242 | | | | | $ | 11,310 | | | | | $ | 4,348 | | | | | $ | 4,411 | | | | | $ | (855) | | |
|
| | |
At or For
the Nine Months Ended September 30, |
| |
At or For the Years Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||||||||||||||
Selected Operating Ratios and Other Data:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Performance Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets(3)
|
| | | | 0.68% | | | | | | 0.58% | | | | | | 0.33% | | | | | | 0.75% | | | | | | 0.31% | | | | | | 0.33% | | | | | | (0.08)% | | |
Return on average equity(4)
|
| | | | 6.34% | | | | | | 5.39% | | | | | | 3.09% | | | | | | 7.09% | | | | | | 2.79% | | | | | | 2.82% | | | | | | (0.63)% | | |
Net interest rate spread(5)
|
| | | | 2.77% | | | | | | 2.68% | | | | | | 2.69% | | | | | | 2.85% | | | | | | 2.82% | | | | | | 2.97% | | | | | | 2.74% | | |
Net interest margin(6)
|
| | | | 3.00% | | | | | | 2.88% | | | | | | 2.89% | | | | | | 3.01% | | | | | | 2.97% | | | | | | 3.11% | | | | | | 2.93% | | |
Non-interest income/total net revenue
|
| | | | 16.83% | | | | | | 17.68% | | | | | | 17.13% | | | | | | 22.76% | | | | | | 17.66% | | | | | | 17.62% | | | | | | 17.86% | | |
Non-interest expense/average assets
|
| | | | 2.51% | | | | | | 2.54% | | | | | | 2.51% | | | | | | 2.64% | | | | | | 2.87% | | | | | | 3.06% | | | | | | 3.48% | | |
Capital Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stockholders’ equity/total assets
|
| | | | 10.58% | | | | | | 10.79% | | | | | | 10.66% | | | | | | 10.62% | | | | | | 10.41% | | | | | | 11.68% | | | | | | 11.35% | | |
Tier 1 capital to average assets – Savings Institute Bank and Trust
|
| | | | 9.61% | | | | | | 9.52% | | | | | | 9.40% | | | | | | 9.41% | | | | | | 9.38% | | | | | | 9.37% | | | | | | 8.94% | | |
Total capital to risk-weighted assets – Savings Institute Bank and Trust
|
| | | | 14.27% | | | | | | 15.65% | | | | | | 15.02% | | | | | | 15.40% | | | | | | 15.37% | | | | | | 15.87% | | | | | | 15.65% | | |
| | |
At or For
the Nine Months Ended September 30, |
| |
At or For the Years Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||||||||||||||
Asset Quality Ratios: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loans charged-off/average total
loans |
| | | | 0.01% | | | | | | 0.01% | | | | | | 0.01% | | | | | | 0.02% | | | | | | 0.04% | | | | | | 0.06% | | | | | | 0.10% | | |
Allowance for loan losses/total loans
|
| | | | 1.10% | | | | | | 0.99% | | | | | | 0.99% | | | | | | 0.96% | | | | | | 0.84% | | | | | | 0.74% | | | | | | 0.66% | | |
Share Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per common
share |
| | | | 0.68 | | | | | | 0.57 | | | | | | 0.44 | | | | | | 0.96 | | | | | | 0.36 | | | | | | 0.36 | | | | | | (0.08) | | |
Diluted earnings per common share
|
| | | | 0.68 | | | | | | 0.57 | | | | | | 0.44 | | | | | | 0.95 | | | | | | 0.36 | | | | | | 0.36 | | | | | | (0.08) | | |
Dividends per common share
|
| | | | 0.18 | | | | | | 0.15 | | | | | | 0.20 | | | | | | 0.16 | | | | | | 0.16 | | | | | | 0.12 | | | | | | 0.12 | | |
Tangible book value per share(7)
|
| | | | 12.76 | | | | | | 12.59 | | | | | | 12.38 | | | | | | 12.06 | | | | | | 11.15 | | | | | | 10.88 | | | | | | 10.41 | | |
Market price at (period) year
end |
| | | | 14.00 | | | | | | 14.95 | | | | | | 14.70 | | | | | | 15.40 | | | | | | 13.65 | | | | | | 11.33 | | | | | | 12.05 | | |
Weighted average common shares outstanding – basic
|
| | | | 11,832,723 | | | | | | 11,850,229 | | | | | | 11,859,401 | | | | | | 11,806,927 | | | | | | 11,976,291 | | | | | | 12,313,549 | | | | | | 10,434,191 | | |
Weighted average common shares outstanding – diluted
|
| | | | 11,917,026 | | | | | | 11,939,719 | | | | | | 11,926,519 | | | | | | 11,868,122 | | | | | | 12,005,987 | | | | | | 12,347,129 | | | | | | 10,434,191 | | |
| | |
September 30,
|
| |
December 31,
|
| ||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |
2013
|
| |||||||||||||||||||||
Book value per share
|
| | | $ | 14.13 | | | | | $ | 13.98 | | | | | $ | 13.76 | | | | | $ | 13.49 | | | | | $ | 12.63 | | | | | $ | 12.35 | | | | | $ | 11.94 | | |
Effect of intangible assets per share
|
| | | | (1.37) | | | | | | (1.39) | | | | | | (1.38) | | | | | | (1.43) | | | | | | (1.48) | | | | | | (1.47) | | | | | | (1.53) | | |
Tangible book value per share
|
| | | $ | 12.76 | | | | | $ | 12.59 | | | | | $ | 12.38 | | | | | $ | 12.06 | | | | | $ | 11.15 | | | | | $ | 10.88 | | | | | $ | 10.41 | | |
|
| | |
Berkshire
Hills Bancorp Historical |
| |
SI Financial
Historical |
| |
Pro Forma
Combined(1)(2) |
| |
Per Equivalent
SI Financial Share(4) |
| ||||||||||||
Book value per common share(3): | | | | | | | | | | | | | | | | | | | | | | | | | |
At September 30, 2018
|
| | | $ | 32.84 | | | | | $ | 14.13 | | | | | $ | 32.39 | | | | | $ | 15.55 | | |
Cash dividends declared to common stockholders per share:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2018
|
| | | | 0.66 | | | | | | 0.18 | | | | | | 0.66 | | | | | | 0.32 | | |
Year ended December 31, 2017
|
| | | | 0.84 | | | | | | 0.20 | | | | | | 0.84 | | | | | | 0.40 | | |
Basic earnings per common share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2018
|
| | | | 1.99 | | | | | | 0.68 | | | | | | 2.00 | | | | | | 0.96 | | |
Year ended December 31, 2017
|
| | | | 1.40 | | | | | | 0.44 | | | | | | 1.48 | | | | | | 0.71 | | |
Diluted earnings per common share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2018
|
| | | | 1.98 | | | | | | 0.68 | | | | | | 2.00 | | | | | | 0.96 | | |
Year ended December 31, 2017
|
| | | | 1.39 | | | | | | 0.44 | | | | | | 1.47 | | | | | | 0.71 | | |
| | |
Berkshire Hills Bancorp
Common Stock |
| |
SI Financial
Common Stock |
| ||||||||||||||||||||||||||||||
| | |
High
|
| |
Low
|
| |
Dividends
|
| |
High
|
| |
Low
|
| |
Dividends
|
| ||||||||||||||||||
Quarter Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
March 31, 2019 (through February 19, 2019)
|
| | | $ | 30.59 | | | | | $ | 26.86 | | | | | $ | 0.23 | | | | | $ | 14.42 | | | | | $ | 12.81 | | | | | $ | 0.06 | | |
December 31, 2018
|
| | | | 41.00 | | | | | | 26.09 | | | | | | 0.22 | | | | | | 14.29 | | | | | | 12.60 | | | | | | 0.06 | | |
September 30, 2018
|
| | | | 43.15 | | | | | | 40.35 | | | | | | 0.22 | | | | | | 15.15 | | | | | | 13.65 | | | | | | 0.06 | | |
June 30, 2018
|
| | | | 43.55 | | | | | | 37.40 | | | | | | 0.22 | | | | | | 15.30 | | | | | | 14.20 | | | | | | 0.06 | | |
March 31, 2018
|
| | | | 39.75 | | | | | | 36.35 | | | | | | 0.22 | | | | | | 15.10 | | | | | | 13.90 | | | | | | 0.06 | | |
December 31, 2017
|
| | | | 39.65 | | | | | | 35.95 | | | | | | 0.21 | | | | | | 15.60 | | | | | | 14.25 | | | | | | 0.05 | | |
September 30, 2017
|
| | | | 38.75 | | | | | | 33.15 | | | | | | 0.21 | | | | | | 16.30 | | | | | | 14.05 | | | | | | 0.05 | | |
June 30, 2017
|
| | | | 37.95 | | | | | | 33.65 | | | | | | 0.21 | | | | | | 16.15 | | | | | | 14.05 | | | | | | 0.05 | | |
March 31, 2017
|
| | | | 36.80 | | | | | | 34.20 | | | | | | 0.21 | | | | | | 15.35 | | | | | | 13.55 | | | | | | 0.05 | | |
| Boston Private Financial Holdings, Inc. | | | Meridian Bancorp, Inc. | |
| Independent Bank Corp. | | | Century Bancorp, Inc. | |
| Brookline Bancorp, Inc. | | | Washington Trust Bancorp, Inc. | |
| United Financial Bancorp, Inc. | | | Camden National Corporation | |
| | |
Berkshire Hills
Bancorp |
| |
Selected Companies
|
| ||||||||||||||||||||||||
| | |
25th
Percentile |
| |
Median
|
| |
Average
|
| |
75th
Percentile |
| ||||||||||||||||||
MRQ Core Return on Average Assets(1)
|
| | | | 1.12% | | | | | | 1.05% | | | | | | 1.22% | | | | | | 1.21% | | | | | | 1.36% | | |
MRQ Core Return on Average Equity(1)
|
| | | | 8.54% | | | | | | 10.22% | | | | | | 12.89% | | | | | | 12.39% | | | | | | 13.51% | | |
MRQ Core Return on Average Tangible Common Equity(1)
|
| | | | 13.82% | | | | | | 12.33% | | | | | | 13.98% | | | | | | 14.69% | | | | | | 17.46% | | |
MRQ Net Interest Margin
|
| | | | 3.37% | | | | | | 2.96% | | | | | | 3.02% | | | | | | 3.11% | | | | | | 3.28% | | |
MRQ Fee Income/Revenue(2)
|
| | | | 24.60% | | | | | | 13.80% | | | | | | 19.20% | | | | | | 20.10% | | | | | | 26.00% | | |
MRQ Efficiency Ratio
|
| | | | 57.80% | | | | | | 60.40% | | | | | | 55.40% | | | | | | 57.30% | | | | | | 52.90% | | |
| | |
Berkshire Hills
Bancorp |
| |
Selected Companies
|
| ||||||||||||||||||||||||
| | |
25th
Percentile |
| |
Median
|
| |
Average
|
| |
75th
Percentile |
| ||||||||||||||||||
Tangible Common Equity/Tangible Assets
|
| | | | 8.18% | | | | | | 7.73% | | | | | | 8.07% | | | | | | 8.52% | | | | | | 9.53% | | |
Common Equity Tier 1 Ratio
|
| | | | 11.47% | | | | | | 11.14% | | | | | | 11.56% | | | | | | 11.54% | | | | | | 11.96% | | |
Tier 1 Capital Ratio
|
| | | | 11.61% | | | | | | 11.99% | | | | | | 12.51% | | | | | | 12.35% | | | | | | 12.88% | | |
Total Capital Ratio
|
| | | | 12.99% | | | | | | 12.90% | | | | | | 13.76% | | | | | | 13.75% | | | | | | 14.56% | | |
Loans/Deposits
|
| | | | 101.60% | | | | | | 92.80% | | | | | | 100.10% | | | | | | 98.00% | | | | | | 107.90% | | |
Loan Loss Reserves/Loans
|
| | | | 0.65% | | | | | | 0.87% | | | | | | 0.95% | | | | | | 0.96% | | | | | | 1.00% | | |
Nonperforming Assets/Loans + OREO
|
| | | | 0.53% | | | | | | 0.70% | | | | | | 0.59% | | | | | | 0.58% | | | | | | 0.36% | | |
Net Charge-offs/Average Loans
|
| | | | 0.18% | | | | | | 0.04% | | | | | | 0.01% | | | | | | (0.01)% | | | | | | (0.01)% | | |
| | |
Berkshire Hills
Bancorp |
| |
Selected Companies
|
| ||||||||||||||||||||||||
| | |
25th
Percentile |
| |
Median
|
| |
Average
|
| |
75th
Percentile |
| ||||||||||||||||||
One-Year Stock Price Change
|
| | | | (17.50)% | | | | | | (18.10)% | | | | | | (10.30)% | | | | | | (11.60)% | | | | | | (6.80)% | | |
Year-To-Date Stock Price Change
|
| | | | (14.60)% | | | | | | (16.80)% | | | | | | (9.20)% | | | | | | (10.50)% | | | | | | (5.80)% | | |
Price/Tangible Book Value per Share
|
| | | | 1.51x | | | | | | 1.46x | | | | | | 1.59x | | | | | | 1.77x | | | | | | 1.92x | | |
Price/2018E EPS
|
| | | | 11.90x | | | | | | 12.20x | | | | | | 12.90x | | | | | | 13.10x | | | | | | 13.80x | | |
Price/2019E EPS
|
| | | | 10.70x | | | | | | 11.40x | | | | | | 12.40x | | | | | | 12.00x | | | | | | 12.80x | | |
Price/2020E EPS
|
| | | | 10.10x | | | | | | 10.40x | | | | | | 11.10x | | | | | | 11.20x | | | | | | 12.00x | | |
Dividend Yield
|
| | | | 2.80% | | | | | | 2.00% | | | | | | 3.00% | | | | | | 2.70% | | | | | | 3.40% | | |
2018 Dividend Payout Ratio
|
| | | | 33.50% | | | | | | 34.40% | | | | | | 38.70% | | | | | | 38.30% | | | | | | 42.00% | | |
| Century Bancorp, Inc. | | | Western New England Bancorp, Inc. | |
| Washington Trust Bancorp, Inc. | | | Cambridge Bancorp | |
| Camden National Corporation | | | First Bancorp, Inc. | |
| Bar Harbor Bankshares | | | Bankwell Financial Group, Inc. | |
| Enterprise Bancorp, Inc. Hingham Institution for Savings |
| | Northeast Bancorp Salisbury Bancorp, Inc. |
|
| | |
SI Financial
|
| |
Selected Companies
|
| ||||||||||||||||||||||||
| | |
25th
Percentile |
| |
Median
|
| |
Average
|
| |
75th
Percentile |
| ||||||||||||||||||
MRQ Core Return on Average Assets(1)
|
| | | | 0.71% | | | | | | 0.96% | | | | | | 1.16% | | | | | | 1.16% | | | | | | 1.37% | | |
MRQ Core Return on Average Equity(1)
|
| | | | 6.63% | | | | | | 10.87% | | | | | | 13.21% | | | | | | 12.74% | | | | | | 14.17% | | |
MRQ Core Return on Average Tangible Common Equity(1)
|
| | | | 7.34% | | | | | | 12.86% | | | | | | 13.72% | | | | | | 14.17% | | | | | | 16.40% | | |
MRQ Net Interest Margin
|
| | | | 3.06% | | | | | | 2.91% | | | | | | 3.10% | | | | | | 3.23% | | | | | | 3.32% | | |
MRQ Fee Income/Revenue(2)
|
| | | | 20.30% | | | | | | 11.60% | | | | | | 17.20% | | | | | | 17.60% | | | | | | 22.80% | | |
MRQ Efficiency Ratio
|
| | | | 67.10% | | | | | | 63.10% | | | | | | 58.50% | | | | | | 57.20% | | | | | | 55.80% | | |
| | |
SI Financial
|
| |
Selected Companies
|
| ||||||||||||||||||||||||
| | |
25th
Percentile |
| |
Median
|
| |
Average
|
| |
75th
Percentile |
| ||||||||||||||||||
Tangible Common Equity/Tangible Assets
|
| | | | 9.65% | | | | | | 7.73% | | | | | | 7.99% | | | | | | 8.40% | | | | | | 8.92% | | |
Total Capital Ratio
|
| | | | 15.40% | | | | | | 12.91% | | | | | | 13.72% | | | | | | 14.12% | | | | | | 14.62% | | |
Loans/Deposits
|
| | | | 103.20% | | | | | | 86.50% | | | | | | 95.40% | | | | | | 93.90% | | | | | | 104.40% | | |
Loan Loss Reserves/Loans
|
| | | | 1.10% | | | | | | 0.71% | | | | | | 0.83% | | | | | | 0.91% | | | | | | 1.13% | | |
Nonperforming Assets/Loans + OREO
|
| | | | 1.46% | | | | | | 1.60% | | | | | | 0.95% | | | | | | 1.12% | | | | | | 0.47% | | |
Net Charge-offs/Average Loans
|
| | | | 0.01% | | | | | | 0.04% | | | | | | 0.01% | | | | | | 0.01% | | | | | | — | | |
| | |
SI Financial
|
| |
Selected Companies
|
| ||||||||||||||||||||||||
| | |
25th
Percentile |
| |
Median
|
| |
Average
|
| |
75th
Percentile |
| ||||||||||||||||||
One-Year Stock Price Change
|
| | | | (10.20)% | | | | | | (15.70)% | | | | | | (10.90)% | | | | | | (10.00)% | | | | | | (4.70)% | | |
Year-To-Date Stock Price Change
|
| | | | (9.90)% | | | | | | (14.10)% | | | | | | (10.70)% | | | | | | (8.40)% | | | | | | 2.20% | | |
Price/Tangible Book Value per Share
|
| | | | 1.04x | | | | | | 1.27x | | | | | | 1.55x | | | | | | 1.66x | | | | | | 2.00x | | |
Price/LTM Core EPS(1)
|
| | | | 15.10x(2) | | | | | | 11.30x | | | | | | 12.80x | | | | | | 13.30x | | | | | | 14.70x | | |
Price/2018E EPS
|
| | | | — | | | | | | 11.30x | | | | | | 12.00x | | | | | | 12.60x | | | | | | 12.30x | | |
Price/2019E EPS
|
| | | | — | | | | | | 11.50x | | | | | | 11.50x | | | | | | 12.50x | | | | | | 12.30x | | |
Dividend Yield
|
| | | | 1.80% | | | | | | 1.40% | | | | | | 2.10% | | | | | | 2.20% | | | | | | 3.30% | | |
LTM Dividend Payout Ratio
|
| | | | 27.40% | | | | | | 17.00% | | | | | | 32.30% | | | | | | 28.50% | | | | | | 37.80% | | |
Acquiror
|
| |
Acquired Company
|
|
RBB Bancorp | | | First American International Corp. | |
HarborOne Bancorp, Inc. (MHC) | | | Coastway Bancorp, Inc. | |
Old Line Bancshares, Inc. | | | Bay Bancorp, Inc. | |
Howard Bancorp, Inc. | | | 1st Mariner Bank | |
Berkshire Hills Bancorp, Inc. | | | Commerce Bancshares Corp. | |
Bryn Mawr Bank Corporation | | | Royal Bancshares of Pennsylvania, Inc. | |
OceanFirst Financial Corp. | | | Ocean Shore Holding Co. | |
Berkshire Hills Bancorp, Inc. | | | First Choice Bank | |
Bar Harbor Bankshares | | | Lake Sunapee Bank Group | |
Westfield Financial, Inc. | | | Chicopee Bancorp, Inc. | |
OceanFirst Financial Corp. | | | Cape Bancorp, Inc. | |
| | |
Berkshire Hills
Bancorp/SI Financial |
| |
Selected Transactions
|
| ||||||||||||||||||||||||
| | |
25th
Percentile |
| |
Median
|
| |
Average
|
| |
75th
Percentile |
| ||||||||||||||||||
Price/Tangible Book Value per Share
|
| | | | 1.18x | | | | | | 1.25x | | | | | | 1.40x | | | | | | 1.54x | | | | | | 1.75x | | |
Core Deposit Premium
|
| | | | 2.80% | | | | | | 5.10% | | | | | | 5.70% | | | | | | 8.50% | | | | | | 13.40% | | |
Price/LTM EPS(1)
|
| | | | 17.00x(2) | | | | | | 14.80x | | | | | | 15.50x | | | | | | 15.80x | | | | | | 15.70x | | |
One-Day Market Premium
|
| | | | 13.20%(1) | | | | | | 18.70% | | | | | | 24.00% | | | | | | 30.20% | | | | | | 36.70% | | |
| | |
Berkshire Hills Bancorp/SI Financial Merger Based on:
|
| |||||||||||||||
| | |
30-Day VWAP
|
| |
60-Day VWAP
|
| |
90-Day VWAP e
|
| |||||||||
Price/Tangible Book Value per Share
|
| | | | 1.26x | | | | | | 1.38x | | | | | | 1.43x | | |
Core Deposit Premium
|
| | | | 4.20% | | | | | | 5.90% | | | | | | 6.70% | | |
Price/LTM EPS(1)
|
| | | | 18.20x | | | | | | 19.90x | | | | | | 20.60x | | |
One-Day Market Premium
|
| | | | 21.70% | | | | | | 32.50% | | | | | | 37.30% | | |
| | |
Berkshire
Hills Bancorp % of Total |
| |
SI Financial
% of Total |
| ||||||
Pro Forma Ownership: | | | | | | | | | | | | | |
Based on 0.48 Exchange Ratio
|
| | | | 89% | | | | | | 11% | | |
Balance Sheet: | | | | | | | | | | | | | |
Total Assets
|
| | | | 88% | | | | | | 12% | | |
Gross Loans Held for Investments
|
| | | | 87% | | | | | | 13% | | |
Total Deposits
|
| | | | 88% | | | | | | 12% | | |
Common Equity
|
| | | | 90% | | | | | | 10% | | |
Tangible Common Equity
|
| | | | 86% | | | | | | 14% | | |
Income Statement: | | | | | | | | | | | | | |
LTM Core Net Income(1)
|
| | | | 93% | | | | | | 7% | | |
2018E GAAP Net Income
|
| | | | 92% | | | | | | 8% | | |
2019E GAAP Net Income
|
| | | | 92% | | | | | | 8% | | |
2020E GAAP Net Income
|
| | | | 92% | | | | | | 8% | | |
Market Capitalization: | | | | | | | | | | | | | |
12/10/2018 Closing Stock Prices
|
| | | | 90% | | | | | | 10% | | |
Named Executive Officers
|
| |
Cash(1)
($) |
| |
Equity(2)
($) |
| |
Pension/
NQDC(3) ($) |
| |
Perquisites/
Benefits(4) ($) |
| |
Total
($) |
| |||||||||||||||
Rheo A. Brouillard
|
| | | | 1,980,045 | | | | | | — | | | | | | 193,314 | | | | | | 61,883 | | | | | | 2,235,242 | | |
Laurie L. Gervais
|
| | | | 987,535 | | | | | | — | | | | | | 136,758 | | | | | | 26,650 | | | | | | 1,150,943 | | |
Paul R. Little
|
| | | | 808,765 | | | | | | 5,560 | | | | | | — | | | | | | 62,398 | | | | | | 876,723 | | |
Lauren L. Murphy
|
| | | | 400,702 | | | | | | — | | | | | | 1,047,283 | | | | | | 62,398 | | | | | | 1,510,383 | | |
Jonathan S. Wood
|
| | | | 498,622 | | | | | | — | | | | | | — | | | | | | 31,717 | | | | | | 530,339 | | |
| | |
Individual SERP
($) |
| |
Supplemental
Executive Retirement Plan ($) |
| ||||||
Rheo A. Brouillard
|
| | | | — | | | | | | 193,314 | | |
Laurie L. Gervais
|
| | | | — | | | | | | 136,758 | | |
Paul R. Little
|
| | | | — | | | | | | — | | |
Lauren L. Murphy
|
| | | | 933,619 | | | | | | 113,664 | | |
Jonathan S. Wood
|
| | | | — | | | | | | — | | |
|
Authorized Stock
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
The Berkshire Hills Bancorp certificate of incorporation authorizes 102,000,000 shares of capital stock, consisting of 100,000,000 shares of common stock, $0.01 par value, and 2,000,000 shares of preferred stock, $0.01 par value.
•
As of February 19, 2019, there were 45,542,049 shares of Berkshire Hills Bancorp common stock issued and outstanding.
•
As of February 19, 2019, there were 521,607 shares of preferred stock issued and outstanding.
|
| |
•
The SI Financial articles of incorporation authorizes 36,000,000 shares of capital stock, consisting of 35,000,000 shares of common stock, $0.01 par value, and 1,000,000 shares of preferred stock, $0.01 par value.
•
As of February 19, 2019, there were 12,054,785 shares of SI Financial common stock issued and outstanding.
•
As of February 19, 2019, there were no shares of preferred stock issued and outstanding.
|
|
|
Voting Rights
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
The holders of the common stock exclusively possess all voting power, subject to the authority of the board of directors to offer voting rights to the holders of preferred stock and the limited voting rights of the Series B Non-Voting Preferred stockholders.
•
The Series B Non-Voting Preferred stock is not be entitled to vote on any matter except as required by Delaware law. As to all matters for which voting by class is specifically required by Delaware law, each outstanding share of Series B Non-Voting Preferred Stock is entitled to one vote.
•
Each share of common stock is entitled to one vote. Beneficial owners of 10% or more of the outstanding stock are subject to voting limitations.
|
| |
•
The holders of the common stock exclusively possess all voting power, subject to the authority of the board of directors to offer voting rights to the holders of preferred stock
•
Each share of common stock is entitled to one vote. Beneficial owners of 10% or more of the outstanding stock are subject to voting limitations.
•
Under SI Financial’s articles of incorporation, holders of common stock may not cumulate their votes.
|
|
|
Voting Rights
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
Holders of common stock may not cumulate their votes for the election of directors.
|
| | | |
|
Preemptive Rights
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
Stockholders do not have a preemptive right to acquire Berkshire Hills Bancorp’s issued shares.
|
| |
•
Stockholders do not have a preemptive right to acquire SI Financial’s issued shares.
|
|
|
Required Vote for Authorization of Certain Actions
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
At least 80% of the outstanding shares of voting stock must approve certain business combinations involving an interested stockholder or any affiliate of an interested stockholder. However, if a majority of directors not affiliated with the interested stockholder approves the business combination or certain pricing criteria are satisfied, a majority vote of the outstanding shares is sufficient to approve a business combination.
|
| |
•
Under Maryland law, a two-thirds vote is generally required for approval of mergers, consolidations, share exchange or certain transfers of all or substantially all of the assets of a corporation not in the ordinary course of business, unless otherwise provided in a company’s articles of incorporation. SI Financial’s articles of incorporation provide that such transactions can be approved by the affirmative vote of the holders of a majority of the total shares outstanding and entitled to vote thereon.
|
|
|
Dividends
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
Holders of common stock are entitled, when declared by the Berkshire Hills Bancorp board of directors, to receive dividends, subject to the rights of holders of preferred stock. No dividend may be declared or paid on the common stock unless a dividend equal to two hundred percent (200%) of the amount declared or paid on the common stock is also concurrently declared or paid, as applicable, on the Series B Non-Voting Preferred Stock.
|
| |
•
Holders of common stock are entitled, when declared by the Board of Directors, to receive dividends out of legally available funds.
|
|
|
Stockholders’ Meetings
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
Berkshire Hills Bancorp must deliver written notice of a meeting and, in the case of a special meeting, a description of its purpose no fewer than ten days and no more than 60 days before the meeting to each stockholder entitled to vote.
•
Subject to the rights of any holders of preferred stock, special meetings may be called only by the board of directors.
•
For purposes of determining stockholders entitled to vote at a meeting, the board of directors may fix a record date that is not less than ten days and not more than 60 days before the meeting.
|
| |
•
Notice of a meeting must be delivered and, in the case of a special meeting, a description of its purpose, no fewer than 10 days and no more than 90 days before the meeting of each stockholder entitled to vote.
•
The chairman of the board, president, two-thirds of the board of directors or the secretary, upon the written request of the holders of not less than a majority of all shares outstanding and entitled to vote at the meeting, may call a special meeting.
•
For purposes of determining stockholders entitled to vote at a meeting, the board of
|
|
|
Stockholders’ Meetings
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
The board of directors or any stockholder entitled to vote may nominate directors for election or propose new business.
•
To nominate a director or propose new business, stockholders must give written notice to the Secretary of Berkshire Hills Bancorp not less than 90 days before the meeting. However, if Berkshire Hills Bancorp gives less than 100 days’ notice or prior public disclosure of the meeting, written notice of the stockholder proposal or nomination must be delivered to the Secretary not later than ten days following the date notice of the meeting was mailed to stockholders or public disclosure of the meeting was made. Each notice given by a stockholder with respect to a nomination to the board of directors or proposal for new business must include certain information regarding the nominee or proposal and the stockholder making the nomination or proposal.
|
| |
directors may fix a record date that is not more than 90 days nor less than 10 days before the meeting.
•
To nominate a director or propose new business at an annual meeting, stockholders must give written notice to the Secretary of SI Financial not less than 90 days before the meeting. However, if less than 100 days’ notice of the meeting is provided, written notice of the nomination or stockholder proposal must be delivered to the secretary not less than 10 days following the date notice of the meeting was mailed to stockholders or public disclosure was made. Each notice given by a stockholder with respect to a nomination to the board of directors or proposal for new business must include certain information regarding the nominee or proposal and the stockholder making the nomination or proposal.
|
|
|
Action by Stockholders without a Meeting
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
Action required or permitted to be taken at an annual or special meeting of stockholders must be effected at a duly called meeting and may not be effected by written consent of stockholders.
|
| |
•
Maryland law permits any action required or permitted to be taken at a meeting of stockholders to be taken without a meeting if unanimous consent is given in writing by each stockholder entitled to vote on the matter. In addition, if authorized by the charter, the holders of common stock of a Maryland corporation that are entitled to vote generally in the election of directors may take action or consent to any action by delivering a consent in writing or by electronic transmission of the stockholders entitled to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a stockholders meeting if the corporation gives notice of the action not later than 10 days after the effective date of the action to each holder of the class of common stock and to each stockholder who, if the action had been taken at a meeting, would have been entitled to notice of the meeting. SI Financial’s governing documents are silent on the rights of stockholders to conduct a vote in the absence of a meeting.
|
|
|
Board of Directors
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
The bylaws provide that the number of directors, to be designated by the board of directors, shall not exceed 15.
•
Beginning with the 2020 annual meeting of stockholders, the full board of directors will be elected at the annual meeting of stockholders.
•
Vacancies on the board of directors will be filled by a vote of a majority of the remaining directors.
•
Directors may be removed only for cause by the vote of 80% of the outstanding shares entitled to vote at an annual or special meeting called for that purpose.
|
| |
•
The bylaws provide that the number of directors may be fixed from time to time by vote of the Board of Directors pursuant to the bylaws, but shall never be less than the minimum number permitted by Maryland law
•
The Board of Directors is divided into three classes as equal as possible and approximately one-third of the directors are elected at each meeting
•
Vacancies on the board of directors will be filled by a vote of a majority of the remaining directors. Any director elected to fill a vacancy shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred.
•
Any director or the entire Board of Directors may be removed, at any time, but only for cause and only by the affirmative vote of a majority of the outstanding shares of capital stock entitled to vote in the election of directors.
|
|
|
Amendment of the Bylaws
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
The bylaws may be amended, altered or repealed either by the board of directors at any meeting of the board, provided that notice of the proposed change was given not less than two days before the meeting, or by the vote of 80% of the outstanding shares entitled to vote, provided that notice of the proposed change was given in the notice of the meeting of stockholders.
|
| |
•
The bylaws may be amended or repealed either by the approval of a majority of the board of directors or by the vote of 75% of the voting stock pursuant to the articles of incorporation.
|
|
|
Amendment of the Certificate of Incorporation/Articles of Incorporation
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
The certificate of incorporation may be amended or repealed upon approval of a majority of the shares entitled to vote on the matter, unless otherwise provided under Delaware law or in the certificate of incorporation, which requires the vote of at least 80% of outstanding shares to amend certain provisions.
|
| |
•
The articles of incorporation may be amended upon the affirmative vote of two-thirds of all the votes entitled to be cast.
•
Section C of Article Sixth (Limitation of Voting on Common Stock), Section B of Article Seventh (Classification of Directors), Sections F and J of Article Eight (Amendment of Bylaws and Directors Liability) and Article Tenth (Amendment of Articles of Incorporation) of the articles of incorporation may only be amended upon the approval of the affirmative vote of the holders of not less than 75% of the issued and outstanding shares of capital stock entitled to vote.
|
|
|
Limitation on Directors’ and Officers’ Liability
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
Berkshire Hills Bancorp’s certificate of incorporation limits liability of directors for monetary damages, except a director may be liable (i) for a breach of duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.
|
| |
•
The articles of incorporation provide that an officer or director of SI Financial shall not be liable to SI Financial or its stockholders for money damages except (a) to the extent that it is proved that the person actually received an improper benefit or profit in money, property or services, for the amount of the benefit or profit in money, property or services actually received, or (b) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person’s action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding, or (c) to the extent otherwise provided by Maryland law. If Maryland law is amended to further eliminate or limit the personal liability of officers and directors, then the liability of officers and directors of SI Financial shall be eliminated or limited to the fullest extent permitted by the Maryland law, as so amended.
|
|
|
Indemnification
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
•
Berkshire Hills Bancorp indemnifies its current and former directors and officers to the fullest extent permitted by Delaware law. Under Delaware law, a corporation may indemnify its directors, officers, and employees against expenses (including attorneys’ fees) judgments, fines and amounts paid in settlement actually and reasonably incurred in proceedings arising because of the person’s relationship to the company, so long as the individual acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interest of the company (and, in the case of a criminal proceeding, so long as the individual had no reasonable cause to believe his conduct was unlawful). To the extent a person eligible for indemnification is successful on the merits or otherwise in defense in such an action, indemnification for expenses actually and reasonably incurred is mandatory. Delaware law provides that a company may pay expenses incurred in advance of the final disposition of the proceeding provided the company receives from the individual a written undertaking to repay the advanced amounts if it is ultimately determined that the individual was not entitled to be indemnified. A similar standard for
|
| |
•
SI Financial indemnifies (a) its directors and officers to the fullest extent permitted by Maryland law, including the advance of expenses, and (b) its other employees and agents to such extent as authorized by the board of directors, its bylaws and permitted by law. Under Maryland law, SI Financial may indemnify any director made a party to any proceeding by reason of service in that capacity unless it is established that (i) the act or omission of the director was material to the matter giving rise to the proceeding and (A) was committed in bad faith, or (B) was the result of active and deliberate dishonesty, or (ii) the director actually received an improper personal benefit in money, property, or services, or (iii) in the case of any criminal proceeding, the director has reasonable cause to believe that the act or omission was unlawful. Maryland law provides that indemnification may be against judgment, penalties, fines, settlements and reasonable expenses actually incurred by the director in connection with the proceeding. However, if the proceeding was by or in the right of SI Financial, indemnification may not be made in respect of any proceeding in which the director shall have been adjudged to be
|
|
|
Indemnification
|
| |||
|
Berkshire Hills Bancorp
|
| |
SI Financial
|
|
|
indemnification applies in a stockholder “derivative” claim (i.e., an action by or in the right of the company) except that indemnification only extends to expenses incurred in defense of such a proceeding and except that, where the individual has been found liable to the company, indemnification must be approved by the court.
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| |
liable to SI Financial. Furthermore, a director may not be indemnified if the proceeding charging improper personal benefit to the director if the director is adjudged to be liable on the basis that personal benefit was improperly received. SI Financial must indemnify a director for any reasonable expenses incurred (i) who has successfully defended a claim, or (ii) where the court orders indemnification. SI Financial may also advance payments to a director who is a party to a proceeding, provided the director affirm in writing his or her good faith belief that the standard of conduct necessary for indemnification by SI Financial has been met and an undertaking in writing to reimburse SI Financial if it is ultimately determined that the standard of conduct has not been met.
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Dissenters’ Rights
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Berkshire Hills Bancorp
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SI Financial
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Delaware law permits stockholders to dissent from a merger or consolidation transaction and obtain payment of the fair value of their shares, if they follow statutorily defined procedures. However, appraisal rights do not apply if (i) the shares are listed on a national securities exchange or held of record by more than 2,000 holders, or (ii) the shares are being exchanged for shares of a surviving corporation, which shares are listed on a national securities exchange or held of record by more than 2,000 holders.
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•
Maryland law permits stockholders to object to a merger transaction and obtain payment of the fair value of their shares if they follow statutorily defined procedures. However, rights of an objecting stockholder do not apply where: (i) the stock is listed on a national securities exchange, and (ii) the charter provides that the holders of the stock are not entitled to exercise the rights of an objecting stockholder. SI Financial’s articles of incorporation provide that holders of shares of stock are not entitled to exercise any rights of an objecting stockholder unless the SI Financial board of directors adopts a resolution to permit such objection.
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Right to Inspect Stockholder List
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Berkshire Hills Bancorp
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SI Financial
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Delaware law provides that any stockholder generally has the right to inspect a company’s stock ledger and list of stockholders, provided the stockholder has a proper purpose for doing so and satisfies certain procedural requirements.
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Maryland law provides that any stockholder may inspect the bylaws, minutes of any stockholder meeting, annual statements of affairs, and voting trust agreements. Further, the stockholder may request an inspection of all stock issued by SI Financial during a specified period of not more than 12 months before the date of the request.
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Name and Address
|
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Number of
Shares Owned |
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Percent of
Common Stock Outstanding |
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BlackRock, Inc.
55 East 52nd Street New York, New York 10055 |
| | | | 739,576(1) | | | | | | 6.1% | | |
The Vanguard Group
100 Vanguard Blvd. Malvern, PA 19355 |
| | | | 679,055(2) | | | | | | 5.6% | | |
Savings Institute Bank & Trust Company
Employee Stock Ownership Plan 803 Main Street Willimantic, Connecticut 06226 |
| | | | 676,837(3) | | | | | | 5.6% | | |
Name
|
| |
Number of
Shares Owned(1) |
| |
Number of Shares
That May Be Acquired Within 60 Days By Exercising Options |
| |
Total
|
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Percent of
Common Stock Outstanding |
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Directors | | | | | | | | | | | | | | | | | | | | | | | | | |
Mark D. Alliod
|
| | | | 14,091(2) | | | | | | 6,000 | | | | | | 20,091 | | | | | | *% | | |
Rheo A. Brouillard
|
| | | | 82,333(3) | | | | | | — | | | | | | 82,333 | | | | | | *% | | |
Roger Engle
|
| | | | 21,360(4) | | | | | | 6,000 | | | | | | 27,360 | | | | | | *% | | |
Donna M. Evan
|
| | | | 23,390 | | | | | | 6,000 | | | | | | 29,390 | | | | | | *% | | |
Michael R. Garvey
|
| | | | 9,903 | | | | | | 14,981 | | | | | | 24,884 | | | | | | *% | | |
Robert O. Gillard
|
| | | | 25,429(5) | | | | | | 6,000 | | | | | | 31,429 | | | | | | *% | | |
Kevin M. McCarthy
|
| | | | 80,093 | | | | | | 6,000 | | | | | | 86,093 | | | | | | *% | | |
Kathleen A. Nealon
|
| | | | 6,281 | | | | | | 6,000 | | | | | | 12,281 | | | | | | *% | | |
Dennis Pollack
|
| | | | 3,930 | | | | | | 6,000 | | | | | | 9,930 | | | | | | *% | | |
Named Executive Officers Who Are Not Also Directors | | | | | | | | | | | | | | | | | | | | | | | | | |
Laurie L. Gervais
|
| | | | 64,576(6) | | | | | | — | | | | | | 64,576 | | | | | | *% | | |
Paul R. Little
|
| | | | 14,552 | | | | | | — | | | | | | 14,552 | | | | | | *% | | |
Lauren L. Murphy
|
| | | | 31,768(7) | | | | | | — | | | | | | 31,768 | | | | | | *% | | |
Jonathan S. Wood
|
| | | | 18,271 | | | | | | 20,000 | | | | | | 38,271 | | | | | | *% | | |
All Directors and Executives Officers as a group (13 persons)
|
| | | | 395,977 | | | | | | 76,981 | | | | | | 472,958 | | | | | | 3.9% | | |
| | |
Allocated
Shares Held in ESOP Trust |
| |
Shares Held in
Trust in 401(k) Plan |
| ||||||
Mr. Brouillard
|
| | | | 11,861 | | | | | | 19,618 | | |
Ms. Gervais
|
| | | | 7,863 | | | | | | 22,194 | | |
Mr. Little
|
| | | | 4,787 | | | | | | — | | |
Ms. Murphy
|
| | | | 6,998 | | | | | | 2,758 | | |
Mr. Wood
|
| | | | 4,097 | | | | | | 5,867 | | |
Filings
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| |
Period of Report or Date Filed
|
|
•
Annual Report on Form 10-K
|
| | Year ended December 31, 2017 | |
•
Quarterly Report on Form 10-Q
|
| | Periods Ended March 31, 2018, June 30, 2018 and September 30, 2018 | |
•
Current Reports on Form 8-K
|
| | January 4, 2018, March 23, 2018, May 14, 2018, May 18, 2018, May 31, 2018, November 26, 2018, December 4, 2018, and December 11, 2018 (other than the portions of those documents not deemed to be filed) | |
Filings
|
| |
Period of Report or Date Filed
|
|
•
Annual Report on Form 10-K
|
| | Year ended December 31, 2017 | |
•
Quarterly Report on Form 10-Q
|
| | Periods Ended March 31, 2018, June 30, 2018 and September 30, 2018 | |
•
Current Reports on Form 8-K
|
| | January 3, 2018, January 24, 2018, January 26, 2018, May 9, 2018, May 10, 2018, and December 11, 2018 (other than the portions of those documents not deemed to be filed) | |
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Berkshire Hills Bancorp, Inc.
60 State Street Boston, Massachusetts 02109 Attention: Investor Relations Manager Telephone: (800) 773-5601 ext. 133773 |
| |
SI Financial Group, Inc.
803 Main Street Willimantic, Connecticut 06226 Attention: Investor Relations Telephone: (860) 456-6514 |
|
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| Exhibit A | | | Form of SI Financial Group, Inc. Voting Agreement | |
| Exhibit B | | | Plan of Bank Merger | |
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