For Pittsfield-based Berkshire Hills Bancorp Inc., the acquisition of The Connecticut Bank & Trust Co. (CBT) represents still more fuel needed to meet its aggressive growth targets.

“We’re looking for double-digit growth in all our markets,” said David Gonci, Berkshire’s CFO.

The company’s “first focus is always on organic growth,” Gonci said. But actions sometimes speak louder than words, and Berkshire is certainly proving it’s not shy about making acquisitions, either.

“We’re always open to talk about partnerships,” Gonci said, and having regional operations in Springfield and customers from northern Connecticut made the roughly $30 million acquisition of CBT, with assets of about $283 million, attractive indeed. 

Old Hat

Making acquisitions and marketing across state lines are practically old hat for Berkshire by now, according to Gonci.

“[Acquiring out-of-state banks is] something that we’re used to,” Gonci said. “We’re in Vermont and New York and we’ve learned how to find the local leadership. We have customers in northern Connecticut and that gives us a beachhead into the Hartford area.”

The CBT acquisition marks Berkshire’s third purchase this year, after entering New York with its purchase of Rome, N.Y.-based Rome Bancorp in April and closing on its acquisition of cross-town Pittsfield rival Legacy Bancorp in July.

The bank expanded into Vermont in 2007 with its acquisition of Factory Point Bancorp. With the CBT acquisition, Berkshire now gains a valuable foothold in the Connecticut market.

In a statement, Berkshire said it expects its CBT acquisition to be immediately accretive to its earnings per share numbers. And if past performance is any indication, once closed, the move looks like it could soon begin paying dividends to Berkshire’s bottom line, too.

In the third quarter of this year – the first quarter of operations to include results of both the Legacy and Rome acquisitions – the bank reported net income of more than $4.39 million. That’s up more than 27 percent over the third quarter of 2010, according to the bank’s most recent financial statement.

Through Sept. 30, the bank recorded approximately $9.1 million in net income, down almost 11 percent from roughly $10.23 million through the same time last year. But the naked bottom line numbers don’t reveal the $16.25 million in merger-related expenses incurred during the first nine months of this year, compared to just $21,000 last year.

Nor do they reflect the almost 30 percent jump in top-line net revenues, to $102.36 million from $79.17 million last year.

Staying Flexible

If Berkshire manages to take the beach in Connecticut by early in the second quarter of 2012, as intended, how will local customers react to the raising of the Berkshire flag? Does the Berkshire name mean anything to the Hartford region?

Gonci said the bank is flexible in how it brands itself in any new market. For example, after acquiring Legacy Bancorp in July, Berkshire decided to “co-brand” with Legacy. Both the Legacy name and the Berkshire name appear at branches and in marketing materials.

Berkshire may be leaning that way in the CBT deal, too.

“Every situation is unique,” Gonci said, “and we appreciate the power and presence of the CBT brand in Connecticut. We’ll be working with management on the best branding going forward. We’re flexible.”

One thing that will definitely be retained is Berkshire’s tagline, “America’s most exciting bank,” Gonci said.

As will David Lentini, CBT’s current president and CEO. Gonci said Lentini will become Berkshire’s “regional leader” in the Connecticut market.

In a statement, Lentini said Berkshire’s demonstrated skill with acquisitions made it attractive when considering the benefits to CBT shareholders of a potential combination.

“Our shareholders will also benefit from the larger and more liquid market for Berkshire shares.  As we considered our strategic alternatives, there were compelling reasons for us to enter this partnership,” Lentini said in a statement announcing the deal. “Berkshire has been a good merger partner with other area banks, and with its current Springfield regional headquarters it is well positioned to combine with our operations.”

Gonci said the impact on current CBT employees will be minimal.

“Final decisions on staffing are still in front of us,” he said, but “in both of our prior mergers, we had better results finding new opportunities within our company for people.”

Consolidation Continues

Dan Forte, president of the Massachusetts Bankers Association, said industry consolidation shows little sign of waning in Massachusetts. Aggressive banks like Berkshire often help themselves and the banks they acquire, Forte said.

And looking to new states for targets is to be expected of banks that can handle slightly more complicated transactions.

“Obviously, the legal department becomes more pressed. It has to understand” the legal and regulatory details of doing business in multiple states, Forte said. But for a legal team accustomed to multi-state mergers, “it’s really not much more complicated than doing an in-state merger.”

“Clearly they have the expertise to do it,” Forte said of Berkshire.

Also, the cultures and banking markets in Northwestern Connecticut, Western Massachusetts, Eastern Upstate New York and Western Vermont are similar, Forte said.

“There are differences as you go north, or south to Fairfield County in Connecticut, but Western Massachusetts and Connecticut are similar and we work together on a lot of legislative issues,” Forte said.

Forte said the number of banks in Massachusetts has decreased 46 percent since 1980, “and that’s probably a slower merger rate than other places in the country, because there are so many mutuals here that can’t be bought out [or] forced to merge, and Massachusetts is not a state that has particularly strong population growth, and expenses are up.”

As long as mergers help “spread that cost and consolidate operations,” Forte said, “the consolidation is going to continue.”