By the Division of Banks


Berkshire Bank (Berkshire or the Petitioner), Pittsfield, Massachusetts has applied to the Division of Banks (Division) for authority to merge its wholly-owned subsidiary Berkshire Bank Municipal Bank (Municipal Bank), Albany, New York with and into Berkshire pursuant to the provisions of Massachusetts General Laws chapter 167C, section 6, and Massachusetts General Laws chapter 168, section 34D.  Under the terms of an Agreement and Plan of Merger dated as of April 24, 2014, Municipal Bank will merge with and into Berkshire under the charter, by-laws and name of Berkshire Bank (Continuing Institution).  The main office of Berkshire would remain the main office of the Continuing Institution and the banking office out of which Municipal Bank operated would be retained as a branch office of Berkshire. 

Notice of the bank merger application was published and posted as directed by the Division thereby affording opportunity for interested parties to submit comments. The period for filing comments has expired. The Division reviewed the application and all related documents in accordance with the statutory criteria of whether competition among banking institutions would be unreasonably affected and whether public convenience and advantage and net new benefits would be promoted by approval of the proposed transaction.  The record of performance under the Commonwealth's Community Reinvestment Act (CRA), Massachusetts General Laws chapter 167, section 14 and its implementing regulation, 209 CMR 46.00 et seq. was also a factor considered by the Division.

Berkshire Bank is a Massachusetts-chartered stock savings bank that was established in 1846.   Its deposits are insured by the Federal Deposit Insurance Corporation (FDIC) to the maximum extent permitted by law, and, as a savings bank, by the Depositors Insurance Fund (DIF) for deposits in excess of FDIC coverage.  Berkshire had consolidated assets of approximately $5.3 billion as of March 31, 2014. In addition to its main office in Pittsfield, the Petitioner operates full service branch offices in Massachusetts, Connecticut, New York, Tennessee and Vermont. Berkshire Hills Bancorp, Inc. is the holding company for Berkshire and is located in Massachusetts.

Municipal Bank is a New York-chartered limited purpose commercial bank that commenced operations in 2005 and is a wholly-owned subsidiary of Berkshire.  Municipal Bank was established to engage solely in the municipal deposit business in New York.  As of March 31, 2014, Municipal Bank had total consolidated assets of approximately $13.9 million. Its deposits are insured by the FDIC to the maximum extent permitted by law.  The branch location in Albany, New York out of which Municipal Bank operated will continue to be a branch office of Berkshire Bank.

The Division’s review of this matter takes into consideration whether competition among banks will be unreasonable affected by the proposed transaction. Since the proposed merger is a corporate reorganization, the review of the transaction’s impact on competition does not raise concerns which would preclude its approval.

The Division has also considered whether public convenience and advantage will be promoted by this proposed transaction as well as whether there has been a showing of "net new benefits" related to the transaction. That term as set out in section 34D of said chapter 168 includes initial capital investments, job creation plans, consumer and business services and commitments to maintain and open branch offices, among other factors, which the Commissioner may deem necessary. According to the application, Berkshire had determined to exit the municipal deposit business in New York.  Berkshire decided, based on a cost/benefit analysis, that maintaining a separate bank in New York no longer made sense from a business perspective. There will be no loss of jobs as a result of this merger. Berkshire has expanded its New York banking operations in recent years through de novo branch openings and bank and branch acquisitions and it is anticipated that this growth will create additional jobs and provide career advancement for current employees. These and other factors were also cited as support for meeting the statutory criteria.

Related to the issue of public convenience and advantage is the record of performance under CRA. Such review for a state-chartered bank includes examination by personnel of the Division as well as analysis of concerns received from the bank's community and its response to those concerns fairly raised.  A publicly available descriptive rating and evaluation by a federal bank regulatory agency will also be considered.  The Division has noted that Berkshire Bank received a "Satisfactory" rating on its most recent CRA performance evaluation.  

Upon review of the application with reference to the relevant statutory and regulatory requirements, this Division has concluded that the consummation of the proposed consolidation would be in the public interest.  On the basis of these considerations, approval is granted to merge Berkshire Bank Municipal Bank with and into Berkshire Bank under the charter, by-laws and name of Berkshire Bank under the provisions of said Massachusetts General Laws chapter 167C, section 6 and Massachusetts General Laws chapter 168, section 34D.  

The approval granted herein is subject to the following conditions:

  1. that the proposed merger shall not become effective until a Certificate signed by the Presidents and Clerks or other duly authorized officers of each bank indicating that each institution has complied with the provisions of Massachusetts General Laws chapter 167C, section 6 and  Massachusetts General Laws chapter 168, section 34D or other applicable statute has been returned with my endorsement thereon;
  2. that the proposed merger shall not become effective until Articles of Merger with my endorsement thereon are filed with the Secretary of State; and
  3. that the proposed merger shall be consummated within one year of the date of this Decision.

June 25, 2014

David J. Cotney
Commissioner of Banks

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