Berkshire Hills Bancorp Acquires Firestone Financial A Major Lender To Vending Operators

NEEDHAM, MA -- Berkshire Hills Bancorp Inc. said it has signed a definitive agreement to acquire privately held Firestone Financial Corp., a leading and the oldest provider of equipment financing to vending and amusements, among other industries. Firestone will become an operating subsidiary of Needham, MA-based Berkshire Bank.

Firestone chief executive David Cohen said Berkshire's resources will enable his company to continue to grow and offer additional financial services to its customers.

At the end of this year's first quarter, Firestone said it had around $190 million in outstanding loans, which are spread across multiple industries and geographies. Borrowers are widely dispersed with no state comprising more than 11% of the outstanding balance, and the largest borrower only represents 1.2% of outstanding credit, the company reported. The portfolio's weighted average yield as of Mar. 31 was 9.8%, and its weighted average remaining maturity was 36 months. Firestone added that the net charge-off rate of its portfolio has not exceeded 0.23% in the past three years.

"Firestone is a terrific fit for Berkshire Bank," said the bank's chief executive, Michael Daly. "The strength of the [Firestone] management team and their conservative approach to credit has made them into a solid performing finance company."

Daly said that Firestone's lending expertise will complement Berkshire's asset-based lending platform. The bank has approximately $7.3 billion in assets and 96 full-service branch offices in Massachusetts, Connecticut, Vermont and New York.

Firestone has been in business for 50 years. In addition to vending machines, arcade games and jukeboxes, the company finances equipment for the fitness and laundry industries. Its senior management team is led by Cohen and Scott A. Cooper, both of whom joined the company in the 1980s. They will run Berkshire's Firestone unit after the deal closes.

According to financial news sources, the acquisition is priced at 130% of Firestone's adjusted tangible book value. The deal value is estimated to be approximately $53 million, with 75% of the consideration to be paid in BHLB common stock and 25% in cash.