425: Berkshire Hills Bancorp and Brookline Bancorp Address Stockholder Lawsuits, Provide Additional Merger Disclosures

Berkshire Hills Bancorp and Brookline Bancorp address stockholder lawsuits alleging omissions in the joint proxy statement/prospectus related to their proposed merger, providing supplemental disclosures to avoid delays and costs.

Summary

• Berkshire Hills Bancorp and Brookline Bancorp are undergoing a merger, with Berkshire acquiring Brookline.
• Stockholder lawsuits were filed alleging material omissions in the joint proxy statement/prospectus.
• To avoid delays and costs, Berkshire and Brookline are providing supplemental disclosures.
• The companies deny any wrongdoing or legal necessity for the additional disclosures.
• The supplemental disclosures do not affect the merger consideration or the timing of stockholder meetings.
• The supplemental disclosures relate to the background of the mergers and the opinions of the financial advisors.
• Berkshire and Brookline filed a registration statement on Form S-4 with the SEC that includes a joint proxy statement of Brookline and Berkshire and a prospectus of Berkshire, which have been distributed to the stockholders of Brookline and Berkshire in connection with their votes on the merger of Brookline with and into Berkshire and the issuance of Berkshire Common Stock in the Proposed Transaction.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the merger is presented as a positive strategic move, the presence of lawsuits and the need for supplemental disclosures introduce uncertainty. The companies deny any wrongdoing, but the situation warrants careful monitoring.

Positives

• The companies are proactively addressing stockholder concerns to ensure the merger proceeds smoothly.
• The supplemental disclosures aim to provide greater transparency to stockholders.
• The companies are working to avoid any delays in the merger process.

Negatives

• Stockholder lawsuits indicate potential dissatisfaction or concerns regarding the merger disclosures.
• The need for supplemental disclosures suggests possible initial inadequacies in the joint proxy statement/prospectus.
• The existence of litigation, even if denied, can create uncertainty and potential costs.

Risks

• The outcome of the Merger Litigations is uncertain and could potentially delay or prevent the merger.
• Additional demand letters or Merger Litigations may be filed, requiring further disclosures and legal expenses.
• Failure to obtain necessary regulatory or stockholder approvals could jeopardize the Proposed Transaction.
• The anticipated benefits of the Proposed Transaction may not be realized, impacting the combined company's performance.
• Integration of the two companies could present unforeseen challenges and costs.

Future Outlook

The document contains forward-looking statements regarding the financial condition, results of operations, business plans, and future performance of Berkshire and Brookline, which are subject to inherent uncertainties, risks, and changes in circumstances.

Management Comments

• Berkshire and Brookline deny all allegations in the Merger Litigations and the Demand Letters and believe that no additional disclosure is required in the joint proxy statement/prospectus.
• Berkshire, the Berkshire board of directors, Brookline, and the Brookline board of directors deny that they have violated any laws or breached any duties to their shareholders in connection with the joint proxy statement/prospectus, and none of the Supplemental Disclosures nor any other disclosure in this Current Report on Form 8-K should be construed as an admission of the legal necessity or materiality under applicable laws of any Supplemental Disclosures.

Industry Context

The merger aims to create a stronger regional player in the Northeast banking market, better positioned to compete and serve clients and communities.

Comparison to Industry Standards

• The document includes a selected companies analysis comparing Berkshire and Brookline to peer companies based on various financial and valuation metrics.
• The selected companies for Berkshire (and respective financial and valuation metrics) that Raymond James deemed relevant include the following: Balance Sheet Asset Quality LTM Income Statement TCE / Leverage Loans / LLRs / NPAs / Core Core Efficiency Fee Income / Selected Companies for Berkshire Assets ($M) TA Ratio Deposits Loans Assets ROAA ROAE NIM Ratio Revenue Independent Bank Corp. 19,408 10.7% 11.2% 93.0% 1.14% 0.54% 1.04% 6.9% 3.29% 56.8% 18.3% Community Financial System, Inc. 16,405 5.7% 9.1% 76.1% 0.74% 0.40% 1.18% 11.3% 3.04% 63.6% 39.7% NBT Bancorp Inc. 13,840 8.4% 10.3% 85.5% 1.21% 0.27% 1.07% 10.0% 3.19% 63.0% 30.2% Dime Community Bancshares, Inc. 13,747 7.3% 8.8% 95.4% 0.78% 0.36% 0.48% 5.3% 2.35% 65.2% 9.6% OceanFirst Financial Corp. 13,488 8.7% 9.7% 99.2% 0.69% 0.21% 0.77% 6.3% 2.74% 61.7% 10.7% First Commonwealth Financial Corporation 11,983 8.8% 10.3% 92.0% 1.40% 0.64% 1.34% 11.7% 3.58% 54.5% 20.5% Brookline Bancorp, Inc. 11,677 8.5% 9.1% 111.7% 1.31% 0.62% 0.70% 6.7% 3.07% 64.5% 7.6% Eagle Bancorp, Inc. 11,285 10.9% 10.8% 93.3% 1.40% 1.22% 0.32% 3.2% 2.45% 51.9% 6.1% ConnectOne Bancorp, Inc. 9,640 9.7% 11.1% 107.8% 1.02% 0.53% 0.77% 6.2% 2.68% 55.8% 6.1% S&T Bancorp, Inc. 9,584 10.9% 11.7% 100.4% 1.36% 0.33% 1.42% 10.4% 3.86% 55.0% 14.7% Flushing Financial Corporation 9,281 7.0% 7.9% 90.0% 0.59% 0.59% 0.30% 4.0% 2.12% 79.2% 10.3% Amalgamated Financial Corp. 8,414 8.1% 8.6% 59.9% 1.34% 0.34% 1.20% 16.1% 3.45% 51.0% 9.6% Univest Financial Corporation 8,206 8.7% 9.5% 98.2% 1.28% 0.45% 0.94% 8.8% 2.85% 66.3% 29.0% Tompkins Financial Corporation 8,006 7.9% 9.2% 89.4% 0.94% 0.78% 0.86% 10.1% 2.77% 67.9% 29.3% Price / Selected Companies for Berkshire Price / TBV LTM Core EPS Price / 2025 EPS Price / 2026 EPS Independent Bank Corp. 152% 15.1x 13.2x 9.9x Community Financial System, Inc. 396% 19.0x 16.9x 13.9x NBT Bancorp Inc. 217% 17.1x 15.1x 12.2x Dime Community Bancshares, Inc. 136% 22.9x 12.2x 8.7x OceanFirst Financial Corp. 101% 11.3x 12.0x 9.5x First Commonwealth Financial Corporation 182% 12.0x 13.0x 11.7x Brookline Bancorp, Inc. 117% 14.0x 11.6x 9.7x Eagle Bancorp, Inc. 72% 21.9x 11.9x 9.7x ConnectOne Bancorp, Inc. 109% 14.4x 11.8x 8.5x S&T Bancorp, Inc. 162% 12.1x 13.9x 13.1x Flushing Financial Corporation 68% 16.9x 12.3x 8.6x Amalgamated Financial Corp. 157% 10.9x 10.0x 8.1x Univest Financial Corporation 132% 12.7x 13.6x 11.7x Tompkins Financial Corporation 176% 16.4x 14.8x 12.4x
• The selected companies for Brookline (and respective financial and valuation metrics) that Raymond James deemed relevant include the following: Balance Sheet Asset Quality LTM Income Statement TCE / Leverage Loans / LLRs / NPAs / Core Core Efficiency Fee Income / Selected Companies for Brookline Assets ($M) TA Ratio Deposits Loans Assets ROAA ROAE NIM Ratio Revenue Independent Bank Corp. 19,408 10.7% 11.2% 93.0% 1.14% 0.54% 1.04% 6.9% 3.29% 56.8% 18.3% Community Financial System, Inc. 16,405 5.7% 9.1% 76.1% 0.74% 0.40% 1.18% 11.3% 3.04% 63.6% 39.7% NBT Bancorp Inc. 13,840 8.4% 10.3% 85.5% 1.21% 0.27% 1.07% 10.0% 3.19% 63.0% 30.2% Dime Community Bancshares, Inc. 13,747 7.3% 8.8% 95.4% 0.78% 0.36% 0.48% 5.3% 2.35% 65.2% 9.6% OceanFirst Financial Corp. 13,488 8.7% 9.7% 99.2% 0.69% 0.21% 0.77% 6.3% 2.74% 61.7% 10.7% First Commonwealth Financial Corporation 11,983 8.8% 10.3% 92.0% 1.40% 0.64% 1.34% 11.7% 3.58% 54.5% 20.5% Berkshire Hills Bancorp, Inc. 11,605 9.1% 9.9% 96.7% 1.21% 0.23% 0.80% 9.3% 3.21% 65.6% 17.4% Eagle Bancorp, Inc. 11,285 10.9% 10.8% 93.3% 1.40% 1.22% 0.32% 3.2% 2.45% 51.9% 6.1% ConnectOne Bancorp, Inc. 9,640 9.7% 11.1% 107.8% 1.02% 0.53% 0.77% 6.2% 2.68% 55.8% 6.1% S&T Bancorp, Inc. 9,584 10.9% 11.7% 100.4% 1.36% 0.33% 1.42% 10.4% 3.86% 55.0% 14.7% Flushing Financial Corporation 9,281 7.0% 7.9% 90.0% 0.59% 0.59% 0.30% 4.0% 2.12% 79.2% 10.3% Amalgamated Financial Corp. 8,414 8.1% 8.6% 59.9% 1.34% 0.34% 1.20% 16.1% 3.45% 51.0% 9.6% Univest Financial Corporation 8,206 8.7% 9.5% 98.2% 1.28% 0.45% 0.94% 8.8% 2.85% 66.3% 29.0% Tompkins Financial Corporation 8,006 7.9% 9.2% 89.4% 0.94% 0.78% 0.86% 10.1% 2.77% 67.9% 29.3% Price / Selected Companies for Brookline Price / TBV LTM Core EPS Price / 2025 EPS Price / 2026 EPS Independent Bank Corp. 152% 15.1x 13.2x 9.9x Community Financial System, Inc. 396% 19.0x 16.9x 13.9x NBT Bancorp Inc. 217% 17.1x 15.1x 12.2x Dime Community Bancshares, Inc. 136% 22.9x 12.2x 8.7x OceanFirst Financial Corp. 101% 11.3x 12.0x 9.5x First Commonwealth Financial Corporation 182% 12.0x 13.0x 11.7x Berkshire Hills Bancorp, Inc. 123% 14.0x 12.6x 11.0x Eagle Bancorp, Inc. 72% 21.9x 11.9x 9.7x ConnectOne Bancorp, Inc. 109% 14.4x 11.8x 8.5x S&T Bancorp, Inc. 162% 12.1x 13.9x 13.1x Flushing Financial Corporation 68% 16.9x 12.3x 8.6x Amalgamated Financial Corp. 157% 10.9x 10.0x 8.1x Univest Financial Corporation 132% 12.7x 13.6x 11.7x Tompkins Financial Corporation 176% 16.4x 14.8x 12.4x

Legal Proceedings

• Berkshire and Brookline are facing Merger Litigations alleging material omissions in the joint proxy statement/prospectus.
• The lawsuits seek an injunction enjoining consummation of the Proposed Transaction, rescission of the Proposed Transaction, costs of the actions, including attorneys fees and experts fees and expenses, and any other relief the court may deem just and proper.

Stakeholder Impact

• The merger could impact shareholders through changes in stock value and dividend payouts.
• Employees may be affected by potential redundancies or changes in roles and responsibilities.
• Customers could experience changes in service offerings and branch locations.
• The merger could affect suppliers and creditors through changes in procurement and financing arrangements.

Next Steps

• Berkshire and Brookline will hold their respective stockholder meetings on May 21, 2025, to vote on the merger.
• The companies will continue to defend against the Merger Litigations.
• The companies will seek to obtain necessary regulatory approvals for the Proposed Transaction.
• The companies will work towards completing the merger and integrating their operations.

Key Dates

Keywords

merger, Berkshire Hills Bancorp, Brookline Bancorp, stockholder lawsuits, proxy statement, supplemental disclosures, financial advisors, SEC, Proposed Transaction