Dive Brief:

• Berkshire Bank is selling 10 of its upstate and eastern New York branches to three buyers, the Boston-based lender said in a press release Monday.
• Eight of the branches will be acquired by Hudson Valley Credit Union. That would mark Hudson Valley’s second banking acquisition so far this year. The Poughkeepsie, New York-based credit union announced in January it would buy Catskill Hudson Bank in a deal worth roughly $28.6 million.
• Glens Falls National Bank and Trust Co. is purchasing a Berkshire branch in Whitehall. Oswego, New York-based Pathfinder Bank is purchasing a branch in East Syracuse, Berkshire said.

Dive Insight:

Berkshire did not disclose financial terms of the deals but said the sales include roughly $485.5 million in deposits and $60.5 million of related residential mortgage and consumer loans.

All three deals are expected to be completed by the end of the third quarter of 2024, the bank said, and are set to reduce Berkshire’s overall footprint to 86 branches, from 96.

Berkshire CEO Nitin Mhatre said the sales are another step in the $12.4 billion-asset bank’s efforts to create efficiencies in its branch network so it can improve its long-term profitability. 

“The proposed sales will concentrate our overall geographic footprint and lower our expense run rate, while strengthening focus in our core New York markets,” Mhatre said. “The branch sales combined with a future securities sale will not materially increase borrowings and will be effectively neutral to full year 2024 earnings outlook.”

The sales will leave 16 Berkshire branches in upstate and eastern New York, the bank said.

The eight branches in Albany, Saratoga, Schenectady, and Columbia counties that $7 billion-asset Hudson Valley will buy would expand the credit union’s reach to 30 branches throughout the Hudson Valley and Capital Region. That would not include the branches it stands to gain in the Catskill Hudson deal.

Hudson Valley CEO Jonathan Roberts said the credit union intends to keep all employees of the acquired Berkshire branches.

The purchases will include the deposits, fixed assets and certain residential and consumer loans at the affected branches, Hudson Valley said. 

There have been five purchases of a whole bank by a credit union so far in 2024 — though two more, including this one, have targeted part of a bank’s footprint. Daleville, Alabama-based All In Credit Union agreed to acquire five branches of 22nd State Bank in January.

Attorney Michael Bell of Honigman, who advised Hudson Valley on the Berkshire deal, said the branch-deal space is becoming markedly more active, and he expects that to hold true throughout 2024.

“Buyers are incentivized to gain scale and liquidity, and sellers are interested to get more efficient, to deliver earnings and to right size,” Bell said in an interview.

Bank trade groups, meanwhile, continue to criticize deals involving credit unions buying banks. The Independent Community Bankers of America on Monday expressed concerns in a post on X, formerly Twitter, that Indiana-based Beacon Credit Union does not have federal deposit insurance. The credit union in January said it plans to acquire Salem, Indiana-based Mid-Southern Savings Bank.

The ICBA on Twitter asked consumers to visit the website https://www.creditunionquestions.com to urge Congress to hold a hearing on credit union policy.