Commerce Bank to keep name following acquisition
David "Duddie" Massad (second from left) purchase a majority stake in Commerce Bank in 1993. With the bank's still strong ties to the Worcester community, its new owner plans to keep its brand for branches in the city.
Commerce Bank branches in Worcester will keep their name and branding even after they are purchased by Berkshire Hills Bancorp, the parent company of Berkshire Bank.
Berkshire said Commerce, which was founded in 1955, is Worcester's hometown bank, so keeping the name intact is important.
“They have built up a good reputation and solid customer following,” said Allison O'Rourke, executive vice president of Berkshire Bank.
Pittsfield-based Berkshire announced May 22 its acquisition of Commerce for $209 million in stock. The company is looking to grow its presence in Central and Eastern Massachusetts, and will move its headquarters to Boston. Its total assets are expected to be $12 billion, including $2.2 billion in acquired assets from Commerce, making it the largest regional bank based in Boston.
Eying the Worcester market
But the fast-growing Worcester market is also attractive, O'Rourke said.
“Worcester is the second largest city in New England, and the growth has been outpacing most of the region for several years now,” she said. “We see tremendous opportunity to bring our products and services to this market to continue to help fuel that growth.”
Commerce, which has 13 branches in the Worcester area and three in Boston, reported $1.5 billion in loans and $2 billion in deposits as of March 31. Outstanding shares of Commerce's common stock will be exchanged for 0.93 shares of Berkshire Hills common stock and comprise 14 percent of Berkshire ownership stock.
Duddie's new role
In 1993, Commerce's Worcester roots deepened when David “Duddie” Massad became the bank's majority shareholder.
Once the transaction is complete, two Commerce board members will join Berkshire's board: Pamela Massad, a lawyer at Worcester-based Fletcher Tilton and Duddie Massad's daughter; and David Brunelle, managing director at Worcester financial advisory firm North Point Wealth Management.
As part of the merger, Duddie Massad agreed to refrain from buying more than a 9.9-percent ownership stake in Berkshire stock or selling Berkshire stock without the company's approval, according to a filing with the Securities & Exchange Commission.
The reason for that agreement is that the Federal Reserve has issued policy statements on shareholders owning more than 9.9 percent of a bank stock, said O'Rourke. Such lock-up agreements are typical of any acquisition resulting in large individual shareholders.
“Limiting Duddie's ownership to below 10 percent, eases the regulatory burden on him and us,” O'Rourke said.
Commerce has 223 employees. Berkshire made no mention of layoffs but said in a presentation to investors the merger synergies will create a 20-percent savings in Commerce expenses.
The merger, subject to regulatory approvals, is on target to be finalized in six to nine months.
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