PITTSFIELD, Mass. and
ROME, N.Y., Oct. 12 /PRNewswire-FirstCall/ -- Berkshire Hills
Bancorp, Inc. ("Berkshire")
(Nasdaq: BHLB), and Rome Bancorp, Inc. ("Rome") (Nasdaq: ROME) announced today that they have signed a
definitive merger agreement under which Berkshire will acquire Rome and its subsidiary, The Rome Savings
Bank, in a transaction valued at approximately $74 million.
Rome's assets totaled
$330 million at June 30, 2010, and it operates five banking
offices serving Rome, Lee, and
New Hartford, New York. The
Rome Savings Bank will be merged into Berkshire Bank, the principal
operating subsidiary of Berkshire.
After the merger is completed, Berkshire Bank will serve customers
in Massachusetts, New York, and Vermont through a network of 46 full-service
bank branches. Berkshire is expected to have total assets
exceeding $3.0 billion and a total
market capitalization for its common stock in excess of
$300 million upon consummation of the
transaction. Pro forma tangible equity to tangible assets is
expected to improve to 8.4%.
Under the terms of the merger agreement, 70% of the outstanding
Rome shares will be exchanged for
Berkshire shares at a fixed
exchange ratio of 0.5658 Berkshire
shares for each share of Rome.
The remaining 30% of Rome
shares will be exchanged for cash in the amount of $11.25 per share. Based on Berkshire's closing stock price of
$18.78 on October 11, 2010, the combined consideration for
Rome's shares is calculated at
$10.81 per share. This
represents 120% of Rome's tangible
book value per share, 19.3x Rome's
trailing twelve month earnings, and a 6.0% premium to core deposits
based on financial information for the period ended June 30, 2010.
Michael P. Daly, Berkshire's President and Chief Executive
Officer, stated, "This is an attractive combination for both of our
companies, and we expect it to produce solid investment returns to
stockholders. We expect $0.09
core earnings per share accretion in 2011 before transactions costs
and up to $0.10 earnings per share
accretion in 2012 after cost saves and deal costs are fully
absorbed in 2011. The merger is a desirable extension of our
New York franchise and is expected
to accelerate our long term earnings growth. Rome is a
successful and well respected company with solid asset quality and
strong market share in an attractive market. It provides
access to the Utica market and
proximity to the Syracuse market,
which was recently listed by the Brookings Institution along with
Albany as among the strongest of
the top hundred metro areas in the country. The Syracuse and
Utica-Rome markets have a combined population of
nearly one million persons. We have been successful in
growing low cost deposits in markets similar to Rome and in developing strong new commercial
business in adjacent markets like Syracuse and Utica. We believe that the scope of our
regional bank product selection and our energetic brand initiatives
will be well received in these markets. Berkshire is well
positioned to be a partner to Rome
and other institutions in and around our markets who recognize the
benefits that can be delivered to all of our constituencies through
a well-structured business combination such as this."
Charles M. Sprock, Rome's Chairman of The Board, President, and
Chief Executive Officer stated, "We are very pleased to join
Berkshire Hills Bancorp and Berkshire Bank. Berkshire has
successfully partnered and expanded into new markets, and its
experienced New York leadership is
knowledgeable of our markets in and around Rome. Berkshire Bank will continue to
uphold our tradition of service excellence while introducing new
products, including insurance and wealth management. With a
14% premium to the recent price of our stock, the transaction
pricing is attractive to our shareholders, especially when taking
into account the significant upside potential for core earnings
growth and stock appreciation of Berkshire stock."
Each Rome shareholder will have
the right to elect the form of consideration, subject to proration
procedures to maintain the overall 70%/30% mix of stock and cash
consideration. The transaction is intended to qualify as a
reorganization for federal income tax purposes, and as a result,
the shares of Rome common stock
exchanged for shares of Berkshire
common stock are expected to be transferred on a tax-free basis.
The definitive agreement has been unanimously approved by the
Boards of Directors of both Berkshire and Rome. Consummation of the agreement is
subject to the approval of Rome's
shareholders, as well as state and federal regulatory agencies.
Berkshire does not anticipate that the transaction will
require approval of its shareholders. The merger is expected
to be completed in the first quarter of 2011. Berkshire and Rome have created foundations for community
charitable support which will continue to provide charitable
contributions to the local communities.
Stifel Nicolaus & Company, Incorporated served as the
financial advisor to Berkshire,
and Sandler O'Neill & Partners, L.P. served as the financial
advisor for Rome. Luse
Gorman Pomerenk & Schick, P.C. served as outside legal counsel
to Berkshire, while SNR Denton US
LLP served as outside legal counsel to Rome.
BERKSHIRE UPDATE
An information presentation with additional information about
the merger will be posted promptly in the Investor Relations
section of Berkshire's website at
www.berkshirebank.com. Berkshire has a previously announced
conference call to discuss third quarter earnings and earnings
guidance on Thursday, October 21,
2010, and management will also plan to discuss this merger
announcement on that call.
Berkshire CEO Mike Daly added,
"We are pleased that our third quarter earnings per share are
anticipated to meet or exceed current consensus expectations of
$0.24 per share. We also
anticipate that our net interest margin will meet or exceed our
expectations, with continuing solid loan growth and favorable asset
quality metrics. We look forward to providing more
information about our improving results and expectations in our
forthcoming earnings release after the close of business on
October 20, and in the conference
call on October 21."
BACKGROUND
Berkshire Hills Bancorp is the parent of Berkshire Bank —
America's Most Exciting Bank(SM). The Company has
$2.7 billion in assets and 46
financial centers in Massachusetts, New
York, and Vermont.
Berkshire Bank provides 100% deposit insurance protection for
all deposit accounts, regardless of amount, based on a combination
of FDIC insurance and the Depositors Insurance Fund (DIF).
For more information, visit www.berkshirebank.com or call
800-773-5601.
Rome Bancorp, Inc. is a publicly held, one-bank holding company
whose wholly-owned subsidiary, The Rome Savings Bank, maintains its
corporate offices in Rome, New
York. Rome Bancorp, Inc. is incorporated in the state
of Delaware. The Rome Savings
Bank, regulated by the Office of Thrift Supervision, operates five
full-service community banking offices in Rome, Lee, and New
Hartford, New York. Rome's primary lines of business
include residential real estate lending, small business loan and
deposit services, as well as a variety of consumer loan and deposit
services.
FORWARD LOOKING STATEMENTS
This news release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 about the proposed merger of Berkshire and Rome. These statements include statements
regarding the anticipated closing date of the transaction and
anticipated future results. Forward-looking statements can be
identified by the fact that they do not relate strictly to
historical or current facts. They often include words like
"believe," "expect," "anticipate," "estimate," and "intend" or
future or conditional verbs such as "will," "would," "should,"
"could" or "may." Certain factors that could cause actual results
to differ materially from expected results include delays in
completing the merger, difficulties in achieving cost savings from
the merger or in achieving such cost savings within the expected
time frame, difficulties in integrating Berkshire and Rome, increased competitive pressures, changes
in the interest rate environment, changes in general economic
conditions, legislative and regulatory changes that adversely
affect the business in which Berkshire and Rome are engaged, changes in the securities
markets and other risks and uncertainties disclosed from time to
time in documents that Berkshire
files with the Securities and Exchange Commission.
ADDITIONAL INFORMATION FOR STOCKHOLDERS
The proposed transaction will be submitted to Rome stockholders for their consideration.
Berkshire will file with the SEC a
Registration Statement on Form S-4 that will include a Proxy
Statement of Rome and a Prospectus
of Berkshire, as well as other
relevant documents concerning the proposed transaction with the
SEC. Stockholders of Rome are
urged to read the Registration Statement and the Proxy
Statement/Prospectus when it becomes available and any other
relevant documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important
information. You will be able to obtain a free copy of the
Registration Statement, Proxy Statement/Prospectus, as well as
other filings containing information about Berkshire and Rome at the SEC's Internet site
(http://www.sec.gov).
Berkshire and Rome and certain of their directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of Rome in connection with the proposed merger.
Information about the directors and executive officers of
Berkshire is set forth in the
proxy statement, dated March 26,
2010, for Berkshire's 2010
annual meeting of stockholders, as filed with the SEC on Schedule
14A. Information about the directors and executive officers
of Rome is set forth in the proxy
statement, dated April 1, 2010, for
Rome's 2010 annual meeting of
stockholders, as filed with the SEC on Schedule 14A. Additional
information regarding the interests of such participants and other
persons who may be deemed participants in the transaction may be
obtained by reading the Proxy Statement/Prospectus when it becomes
available. Free copies of this document may be obtained as
described in the above paragraph.
NON-GAAP FINANCIAL MEASURES
This news release references non-GAAP financial measures
incorporating tangible equity and related measures, as well as core
deposits. These measures are commonly used by investors in
evaluating business combinations and financial condition.
Tangible equity/tangible assets excludes intangible assets
from the numerator and denominator. Tangible book value per
share excludes intangible assets. Core deposits are total
deposits less time deposits over $100
thousand.
SOURCE Berkshire Hills Bancorp, Inc.
Copyright . 12 PR Newswire