DEFA14A: Brookline Bancorp and Berkshire Hills Bancorp Address Stockholder Lawsuits, Provide Supplemental Merger Disclosures

Brookline Bancorp and Berkshire Hills Bancorp provide supplemental disclosures to their joint proxy statement/prospectus in response to stockholder demand letters and lawsuits challenging the proposed merger.

Summary

• Brookline Bancorp and Berkshire Hills Bancorp are proceeding with their proposed merger, as detailed in the Merger Agreement.
• In response to demand letters and lawsuits from purported stockholders alleging material omissions in the joint proxy statement/prospectus, both companies are providing supplemental disclosures.
• The companies deny all allegations of wrongdoing or the need for additional disclosures but are providing the supplemental information to avoid delays and costs.
• The supplemental disclosures include additional details regarding the background of the mergers, the opinions of the financial advisors, and the material financial analyses.
• The companies reaffirm their belief that the merger will provide compelling financial upside for stockholders.
• The special meeting of the Brookline stockholders is scheduled to be held on May 21, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the merger is still expected to proceed, the need for supplemental disclosures due to legal challenges introduces uncertainty and potential risks.

Positives

• The companies are proactively addressing stockholder concerns to ensure the merger proceeds smoothly.
• The supplemental disclosures provide additional transparency regarding the merger process and financial analyses.
• The companies believe the merger will create a stronger entity with over $20 billion in assets, better positioned to compete in key northeast markets.
• The Berkshire board determined that an appropriately structured merger of equals with Brookline would likely be able to produce better and more sustainable long-term financial results and increased stockholder value for Berkshire stockholders in comparison to Berkshires expected performance metrics and growth on a continuing stand-alone basis.

Negatives

• The existence of stockholder lawsuits and demand letters indicates some level of dissatisfaction or concern among investors.
• The supplemental disclosures, while intended to be helpful, may add complexity to the merger process.
• The companies are incurring costs to address the litigation and provide the supplemental disclosures.

Risks

• The outcome of the Merger Litigations is uncertain, and an unfavorable ruling could potentially delay or prevent the merger.
• Additional demand letters or Merger Litigations may be filed, further increasing costs and potential delays.
• The anticipated benefits of the merger may not be realized as expected, or at all.
• Delays in completing the Proposed Transaction could impact the expected benefits of the Proposed Transaction.

Future Outlook

The companies are focused on completing the merger and believe it will create a stronger, more competitive entity. However, the forward-looking statements are subject to risks and uncertainties that could affect future results.

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 reflects a trend of consolidation in the banking industry, as institutions seek to gain scale and improve competitiveness in a challenging environment.

Comparison to Industry Standards

• The document includes a Selected Publicly Traded Companies Analysis comparing Brookline to peers like NBT Bancorp, Dime Community Bancshares, and OceanFirst Financial Corp. based on metrics such as assets, loans/deposits, and profitability.
• The document includes a Pro Forma Peer Analysis comparing the combined company to peers like F.N.B. Corporation, Fulton Financial Corporation, and Eastern Bankshares, Inc. based on metrics such as projected ROAA, ROAE, and efficiency ratio.
• Raymond James performed a discounted cash flow analysis of Berkshire and Brookline based on the Projections. Consistent with the periods included in the Projections, Raymond James used estimated calendar year 2029 as the final year for the analysis and applied multiples, ranging from 11.0x to 15.0x for Berkshire and Brookline, which range was selected based on Raymond Jamess professional judgement and industry experience, to estimated calendar year 2029 adjusted earnings of $117.7 million for Berkshire and $119.5 million for Brookline, each of which were based on the Projections.

Legal Proceedings

• Brookline and Berkshire 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 is expected to benefit stockholders through increased value and a stronger combined company.
• Employees may be affected by the integration of the two companies.
• Customers are expected to benefit from the combined company's enhanced capabilities and broader service offerings.

Next Steps

• Brookline stockholders will vote on the merger at a special meeting on May 21, 2025.
• The companies will continue to defend against the Merger Litigations.
• The companies will seek to obtain necessary regulatory approvals for the merger.

Key Dates

Keywords

merger, Brookline Bancorp, Berkshire Hills Bancorp, stockholder litigation, proxy statement, disclosures, financial analysis, bank merger