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At least three Berkshire Bank branches in Connecticut will close as part of a branch consolidation that will eventually see 16 locations shutter in New England and New York.
Berkshire said in a statement yesterday that the branch consolidation, as well as the sale of offices in New Jersey and Pennsylvania, would reduce the bank’s overall branch footprint by 18 percent.
Sean Gray, acting CEO of Berkshire Bank, said in the statement that the announcements aligned with “Berkshire’s strategic shift toward improving profitability by refocusing on our core operations and operating efficiency.”
“Over the last decade, we have executed the consolidation or sale of 40 branches with a high rate of customer retention supported by our MyBanker professionals who provide personalized banking solutions and concierge service,” Gray said. “Our optimization plan is consistent with customers’ preferences and adoption of digital banking channels and our commitment to enhancing those channels as a 21st century community bank.”
Only six of the 16 branch closures have been announced so far, according to a spokesperson for Berkshire Bank. The Connecticut branches closing include two former Savings Institute branches inside Walmart stores in Lisbon and North Windham. Berkshire acquired the Willimantic-based Savings Institute in 2019.
Also closing is the Newington office, which became a Berkshire branch with the 2012 acquisition of the Connecticut Bank & Trust Co.
These three branches are currently closed as part of Berkshire’s response to the surge in coronavirus cases. The Newington branch is scheduled to permanently close on Jan. 29, and the two Walmart locations will close on Feb. 26, according to letters sent to customers.
Newington customer accounts will transfer to Berkshire’s Rocky Hill branch. The Lisbon branch will be consolidated with a Norwich branch, while North Windham customers will be transferred to Berkshire’s Manchester branch.
The bank also announced the closing of two Massachusetts branches, one in the Feeding Hills section of Agawam, just over the Connecticut border, and another in Dalton outside of Pittsfield. A branch in upstate New York will also close.
“Additional branch consolidations will be announced in the near future with the same care and consideration for our employees and communities as the already announced branches,” the bank said in an email to The Commercial Record.
The 16 branches that will eventually close have total current deposit balances of approximately $568 million. The consolidations are expected to begin in January and be completed by the middle of 2021.
“Extensive review has shown increasing digital channel usage by our customers,” Gray said in the statement. “The bank is proactively communicating its decision to customers who could be impacted by a branch office closure and is making introductions to team members at other branches and to our MyBanker team to ensure a seamless transition.”
Gray added that Berkshire Bank is working with employees at the branches to review career opportunities and transition them to other positions at the bank.
Along with the branch consolidation, Berkshire also announced yesterday that it would sell its Mid-Atlantic branches – six in New Jersey and two eastern Pennsylvania – to New Jersey-based Investors Bank. Subject to customary regulatory approvals, the sale is expected to take place in the first half of 2021.
As part of the sale, Berkshire will transfer to Investors Bank approximately $639 million in deposits and $308 million in loans. Investors Bank has agreed to pay a premium equal to 3 percent of the final deposit balance transferred, Berkshire said in the statement. Berkshire expects to complete the net transfer with funds from short-term investments.
All branch premises and equipment will be included in the sale, and Investors Bank intends to offer employment to all associated staff.
Once the branch consolidation and the sale of the Mid-Atlantic branches are completed, the bank will have 106 branches in Massachusetts, Connecticut, Rhode Island, Vermont and New York.
Gray also announced in yesterday’s statement that Berkshire would open a new commercial banking office in Providence next year “to strengthen the southeast New England operations we acquired in 2019.” Berkshire expanded into Rhode Island when it acquired the Savings Institute.
“The combination of these initiatives is targeted to optimize our branch network, improve our business focus and support our core profitability,” Gray said in the statement.
