Berkshire Hills Bancorp’s announcement that it would expand into the New Jersey and Greater Philadelphia markets with its latest acquisition might be turning heads, but the deal nicely complements both Berkshire’s balance sheet and its previous moves, experts say.

The holding company for Berkshire Bank announced Monday that it would purchase First Choice Bancorp, based in Lawrenceville, New Jersey, in an all-stock deal valued around $111.7 million.

“This partnership builds on Berkshire’s commitment to create a strong regional platform for serving our customers, while diversifying our revenue streams, improving profitability and increasing shareholder value,” CEO Michael P. Daly said in a statement. “The First Choice franchise builds on markets where we presently manage commercial relationships, and adds a well-positioned deposit base, a best in class home lending operation and enthusiastic new teams that complement our current culture. After integration, the transaction is expected to be accretive to Berkshire’s earnings per share, return on equity and return on assets, liquidity and capital. We have a strong track record of execution and our collective teams are positioned to complete this integration flawlessly.”

Collyn Gilbert, an equity analyst with Keefe, Bruyette & Woods, said that she, too, was a little surprised by the announcement, but upon further reflection, the transaction makes sense, particularly given Berkshire’s acquisition last year of the Pennsylvania-based 44 Business Capital along with Parke Bank’s SBA 7(a) loan operations.

The First Choice deal, she said, would nicely complement Berkshire Bank’s SBA lending. Gilbert added that First Choice Bancorp’s deposit base was also probably a plus for Berkshire. With $436 million in net loans, excluding those held for sale, and $906 million in deposits at the end of the first quarter, she said that First Choice’s low loan-to-deposit ratio may have also been attractive for Berkshire.

“I think that deposit franchise was certainly of interest to Berkshire Hills because they’re sitting with a loan-to-deposit ratio in excess of 100 percent. I think this is going to help keep that ratio in check a little bit,” she said.

Berkshire’s total assets will increase to $8.9 billion after the deal goes through. Along with the $1.1 billion in First Choice assets, Berkshire will pick up six branches near Princeton, New Jersey  and two branches in the Greater Philadelphia area.

The deal is anticipated to close by the year’s end, after which point First Choice Bank’s Chairman of the Board, Martin Tuchman, along with board member Munish Sood, will serve as advisors to Berkshire and liaisons to the local community. Berkshire said it had also executed retention agreements with several key senior executives who will remain with First Choice Loan Services as a subsidiary of Berkshire Bank.

Keefe, Bruyette & Woods affirmed an “outperform” expectation of Berkshire Hills in the wake of the deal announced Monday.

“The stock is trading at $25.65. We have a $33 target price. We think given the valuation and given what Berkshire Hills is trying to do in optimizing the balance sheet and looking to scale their business and start to improve operating leverage, we think it’s a good investment idea,” Gilbert said. “This management team is very, very proactive in the way they run the business so they’re going to always look for ways to improve performance versus letting the challenging environment take over.”