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Following $230M Commerce buy, Berkshire moves forward with fresh faces

BY Emily Micucci

2/5/2018
The Commerce Bank Lincoln Street branch in Worcester is one of 13 in Central Massachusetts to keep its name following an acquisition by Berkshire Hills Bancorp in October.

Four months after acquiring Worcester's Commerce Bank for $230 million, Pittsfield's Berkshire Hills Bancorp., Inc. has replaced the old Commerce leadership as it strives to maintain the brand's market presence.

Commerce “is the most important acquisition we've ever made,” said Paul Kelly, regional vice president for Berkshire in Central and Eastern Massachusetts.

Kelly, formerly regional president of Central Massachusetts for Connecticut-based People's United Bank, was hired along with four other banking executives in the months since the purchase to integrate Commerce into the Berkshire business.

“They have terrific branch networks that we didn't have,” said Kelly, “and what you saw that Commerce didn't have is more of that more sophisticated commercial lending.”

Gone are the most well-known names from Commerce before the acquisition: former Chairman David “Duddie” Massad, who acquired Commerce when he purchased a majority stake in 1993 and remains a Berkshire shareholder; and former CEO Brian Thompson, who ended his stint as a consultant for the new entity last month.

New hires will lead the expansion of Berkshire services in Central Mass. at Commerce branches, but the Commerce name will survive, said Elizabeth Mach, Berkshire senior vice president of marketing.

“We wanted to continue the legacy of the Commerce Bank name,” Mach said.

Two former Commerce board members serve on the Berkshire board: Massad's daughter, Pamela Massad, an attorney at Worcester law firm Fletcher Tilton; and David Brunelle, managing director at Worcester-based North Pointe Wealth Management.

When Berkshire bought Commerce in October, the two created the largest regional bank headquartered in Massachusetts. Berkshire offered Commerce the services and scale to grow, and Commerce, with its 16 branches, filled the void between Berkshire's locations in the Western Massachusetts and Greater Springfield areas, and Boston, the site of its new headquarters opening presently.

The three former Commerce branches in Boston will assume the Berkshire name, but the Commerce name is one Berkshire wants to preserve at the 13 branches in Central Massachusetts, a recognition of its brand power in the region, said Kelly, who is based in the former Commerce headquarters on Main Street in Worcester.

As a financial services company, Berkshire also includes Firestone Financial, a Needham commercial lender that Berkshire acquired in 2015, Berkshire Insurance Group, a business and personal insurance affiliate, and a New Jersey-based U.S. Small Business Administration lending group, also acquired in 2015.

These divisions will bring to Commerce a larger suite of products, allowing Commerce branches to service more middle-market companies, with under $30 million in annual revenue. In addition, Berkshire is adding mortgage lending services at Commerce locations, something Kelly said hasn't been available for years.

With nearly $2 billion in assets at the time of the Berkshire merger, Commerce has had a hand in project and nonprofit organizations crucial to Worcester's vitality. It lists The Boys and Girls Club of Worcester, Habitat for Humanity MetroWest/Greater Worcester, the UMass Memorial Medical Foundation, and the Greater Worcester Community Foundation among the 126 nonprofits it supported in 2017.

The bank is the namsake for Commerce Bank Field at Foley Stadium on Chandler Street, and the name is expected to remain unchanged for now.

Kelly said support of local groups will continue, and Commerce will remain invested in projects key to Worcester's redevelopment, though he decline to discuss specifics due to confidentiality agreements with clients.

“The people around Central Massachusetts and Worcester want to see their financial institution actively involved,” Kelly said.

Martin Connors, president and CEO of Rollstone Bank & Trust, a Fitchburg-based community bank, recognized the contributions Commerce has made to the Central Massachusetts region over the years.

“Commerce was a very good corporate citizen” Connors said. “They had the size to make a difference, and I think they did.”

Connors said he expects Berkshire to continue that legacy, but he said the institutional knowledge of the community that Commerce is losing through leadership changes isn't easily replaced.

He added Berkshire's decision to set up its new executive headquarters in Boston, rather than Worcester, was a loss for the region.

“I'm a little disappointed that they didn't take an opportunity to have their headquarters in Worcester. It seems to me it would be right in the middle of the state, and they have so much in Western Massachusetts,” Connors said.

However, Mach said a small number of Berkshire executives will be Boston based, and that the Worcester workforce will remain local.

Now, Berkshire is looking ahead to the practical side of the transition. Beginning March 23, online banking accounts will move from the former Commerce system, to the Berkshire system, which will be complete on March 26, Mach said.

Kelly said after that, the focus will be on expanding products, and building out offices to support that in the region.

“It's a highly attractive growth market,” Kelly said.