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Berkshire Hills Bancorp, Inc. BHLB announced that its wholly-owned subsidiary Berkshire Bank has entered into an agreement to divest 10 branches in upstate and eastern New York to three separate buyers. Through this strategic move, the company aims to enhance the efficiency and profitability of its overall branch network.

The divestiture comprises roughly $485.5 million in deposits and $60.5 million of related residential mortgage and consumer loans. Further, branch premises and equipment are part of the transaction, while Berkshire Bank’s commercial banking business is not included.

The sale is expected to be completed by the end of the third quarter of 2024 and is still subject to regulatory approvals. The move will lower BHLB’s branch footprint to 86 locations.

Under the terms of the deal, Hudson Valley Credit Union is set to take over eight branches located in Albany, Saratoga, Schenectady and Columbia counties. Glens Falls National Bank and Trust Company, the bank subsidiary of Arrow Financial Corporation AROW, will acquire the Whitehall office. Following the closure of the acquisition, AROW, through Glens Falls National Bank, will operate through nine branches in Washington County.

Further, Pathfinder Bank is set to purchase BHLB’s branch in East Syracuse. Notably, these buyers intend to offer employment to currently associated staff with the respective offices.

Berkshire Hills Bancorp expects this transaction to reduce expense run rate and improve the efficiency of its branch network. The company anticipates the divestiture to have no material impact on the 2024 earnings outlook. It will continue to operate 16 branches in core New York markets.

Nitin Mhatre, CEO of Berkshire Hills Bancorp, said, “The proposed sales will concentrate our overall geographic footprint while strengthening focus in our core New York markets.”

In the past, BHLB expanded its operations organically and through acquisitions. In 2017, the company acquired Commerce Bancshares Corp., making it the largest regional bank headquartered in Massachusetts. This, along with other expansion initiatives, helped the company bolster its market share and diversify its revenue mix.

BHLB’s shares have gained 1.9% in the past six months against the industry’s downside of 7%.

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Currently, BHLB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks Taking Similar Steps

In February 2024, Truist Financial Corporation TFC entered into an agreement to sell the remaining 80% stake in its insurance subsidiary – Truist Insurance Holdings, to Stone Point Capital and Clayton Dubilier & Rice. Mubadala Investment Company and co-investors were a part of the deal as well. This is an all-cash deal valued at $15.5 billion.

The transaction is expected to close by the second quarter of 2024, subject to regulatory approvals. TFC divested 20% of its stake in April 2023 for $1.95 billion.

Likewise, Wintrust Financial Corporation WTFC entered into an agreement to sell its Retirement Benefits Advisors division based in Chicago to OneDigital Investment Advisors.

WTFC expects that the deal will enable them to enhance value for their clients and expansion of services.

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