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LNB Bancorp (LNBB) in Lorain, Ohio, has sold $3.7 million of stock as part of a plan to exit the Troubled Asset Relief Program.
December 17 -
Earnings at Northwest Bancshares in Warren, Pa., dropped slightly compared with last year, as a reduced return from the bank's loan portfolio squeezed profits.
October 17 -
Northwest Bancshares in Warren, Pa., has promoted two executives and eliminated a pair of high-level positions.
August 28
Northwest Bancshares in Warren, Pa., has agreed to buy LNB Bancorp in Lorain, Ohio.
The $7.8 billion-asset Northwest will pay $183.3 million, or $18.64 a share, in cash and stock for the $1.2 billion-asset LNB. The merger, which marks Northwest's first use of its common stock as part of a consideration, values LNB at nearly 198% of the seller's tangible book value.
The deal, expected to be completed in the second quarter, will expand Northwest's franchise by adding 20 branches around Cleveland.
Northwest said in a press release late Monday that the transaction will be immediately accretive to its earnings per share, excluding $15 million of expected merger costs. The deal is also expected to increase Northwest's return on average tangible common equity from 7% to 9% after the first year of combined operations. It should take Northwest nearly five years to earn back its 7% tangible book valuation dilution.
Northwest said it plans to cut about 28% of LNB's annual noninterest expenses.
"As part of our strategy, we have sought opportunities to expand our presence in the attractive Northeast Ohio market," William Wagner, Northwest's president and chief executive, said in a press release. "LNB offers a great opportunity to address our strategic goals with a complementary blend of performance, size and location and a business model that is similar to Northwest's."
Daniel Klimas, LNB's president and chief executive, will become Northwest's regional president and market leader for northwest Ohio.
When the transaction is consummated, the combination of the two banking companies will create a bank with approximately $9.0 billion in total assets providing banking services through 184 branch locations and 297 ATMs in four states.
Boenning & Scattergood and Luse Gorman advised Northwest. Sandler O'Neill and Calfee, Halter & Griswold advised LNB.
