WARREN, Pa. and
LORAIN, Ohio,
Dec. 15, 2014
/PRNewswire/ -- Northwest Bancshares, Inc.
(NASDAQ: NWBI) and LNB Bancorp, Inc. (NASDAQ: LNBB) jointly
announced the signing of a definitive merger agreement pursuant to
which Northwest Bancshares, Inc. will acquire LNB Bancorp, Inc.,
the Lorain, Ohio-based holding
company and parent of Lorain National Bank, in a combination cash
and stock transaction valued at approximately $18.64 per share, or $183.3 million in the aggregate, using the 20 day
average closing stock price of Northwest Bancshares, Inc. as of
Friday, December 12, 2014.
The transaction is immediately accretive to Northwest's
earnings per share excluding merger costs, increasing its
stand-alone EPS by approximately 17% beginning in 2016, and will
give Northwest access to a new region of prospective customers. The
acquisition is expected to increase Northwest's return on average
tangible common equity from approximately 7% to approximately 9%
after the first year of combined operations and provide Northwest
with an additional $1.24 billion in
total assets, $1.06 billion in total
deposits, $923 million in loans and
20 banking locations based upon financial information as of
September 30, 2014. Inclusive of LNB,
Northwest will have over $6.7 billion
in deposits and 184 branch locations.
Daniel E. Klimas, President
and Chief Executive Officer of LNB Bancorp, Inc., will be named
Regional President and market leader for Northwest's Ohio franchise after the merger is
consummated. Klimas commented, "During our proud 109 year history,
LNB has been committed to serving our clients and local
communities. Through a consistent level of superior quality
service, our dedicated staff has grown a loyal commercial and
retail customer base. We are very excited about joining the
Northwest team. We strongly believe that Northwest Bancshares, Inc.
demonstrates a commitment to its clients, employees and the
communities it serves, shares our core values and has an
outstanding record of enhancing shareholder value. We
are also pleased that Northwest has agreed that the headquarters
for the newly formed Ohio Region of Northwest will be Lorain, Ohio."
"Since completing a $658
million stock offering in 2009, we have actively pursued
opportunities to leverage that capital and add to the 36 successful
bank and branch acquisitions we had previously completed," added
William J. Wagner, President and
Chief Executive Officer of Northwest Bancshares, Inc. Wagner
continued, "We have maintained a focus on banks that will enhance
Northwest's franchise and shareholder values. As part of our
strategy, we have sought opportunities to expand our presence in
the attractive Northeast Ohio
market. 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.
That said, we believe LNB's customers and employees will embrace
Northwest's culture and values. The structure of this
transaction allows LNB to be rewarded for its fine performance and
scarcity value, yet the anticipated deal multiples are comparable
to similar transactions. This merger marks Northwest's first
use of our common stock as part of the consideration, with half of
the payment to LNB's shareholders being made using Northwest
shares. As a result, Northwest will maintain a robust capital
position following the merger, giving the combined company
significant capital to pursue future acquisitions, pay attractive
dividends and repurchase shares when we anticipate that such
activities will enhance shareholder value."
Under the terms of the merger agreement, which has been
approved unanimously by the boards of directors of both companies,
shareholders of LNB Bancorp, Inc. will be entitled to elect to
receive either 1.461 shares of Northwest Bancshares, Inc. common
stock or $18.70 in cash for each
common share of LNB Bancorp, Inc., subject to an overall allocation
of exchanged shares into 50% cash and 50% stock. The exchange ratio
is fixed and the transaction is expected to qualify as a tax-free
exchange for shareholders of LNB Bancorp, Inc. to the extent such
shareholders receive Northwest Bancshares common stock. Northwest's
annual dividend of $0.52 per share
paid in 2014, excluding special dividends, equates to almost
$0.76 per share for LNB shareholders
electing stock, representing an increase of approximately 1,800%
over the $0.04 per share in dividends
paid by LNB in 2014. Based on the 20 day average of
Northwest's closing stock price before the execution of the
definitive agreement, the deal is valued at $183.3 million, or $18.64 per share, which equates to a price to
tangible book value ratio of 197.7% and a price to earnings ratio,
after considering cost savings, of 11.0x based on consensus
estimates for LNB's 2016 net income. The tangible book
valuation dilution earn back is forecast to be approximately 4.9
years.
As part of the merger, one mutually-agreed upon LNB
Bancorp director will be added to Northwest's bank and holding
company boards. All of the directors and certain executive
officers of LNB Bancorp have entered into voting agreements with
Northwest pursuant to which they have agreed to vote their shares
in favor of the transaction.
Northwest Bancshares, Inc. and LNB Bancorp, Inc. expect to
complete the transaction in the second quarter of 2015, after
satisfaction of customary closing conditions, including regulatory
approvals and the approval of the shareholders of LNB
Bancorp.
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. The transaction will expand Northwest's
franchise by 20 offices located in Lorain, Cuyahoga and Summit Counties in northeastern Ohio.
Boenning & Scattergood is serving as financial advisor
and Luse Gorman is serving as legal
counsel to Northwest in this transaction.
Sandler O'Neill + Partners L.P. is serving as financial
adviser and Calfee, Halter & Griswold LLP is serving as legal
counsel to LNB Bancorp.
Investor Conference Call
Executives from Northwest
will host a conference call with investors and the financial
community at 10:00 AM Eastern Time on
Tuesday, December 16, 2014 to discuss
this transaction. Those wishing to participate in the call may dial
toll-free 1-877-870-4263. Participants should ask to be
joined into the Northwest Savings Bank call. A replay of the
call will be available until December 23,
2014 by dialing 1-877-344-7529, access code 10057654. An
investor presentation on this transaction is also available at the
Investors Relations section of Northwest's website
www.northwestsavingsbank.com.
About Northwest Bancshares, Inc.
Headquartered
in Warren, Pennsylvania, Northwest
Bancshares, Inc. is the holding company of Northwest Savings
Bank. Founded in 1896, Northwest Savings Bank is a
full-service financial institution offering a complete line of
business and personal banking products, employee benefits and
wealth management services, as well as the fulfillment of business
and personal insurance needs. Northwest operates 164 community
banking offices in Pennsylvania,
New York, Ohio and Maryland and 51 consumer finance offices in
Pennsylvania through its
subsidiary, Northwest Consumer Discount Company. Northwest
Bancshares, Inc.'s common stock is listed on the NASDAQ Global
Select Market ("NWBI"). Additional information regarding Northwest
Bancshares, Inc. and Northwest Savings Bank can be accessed on-line
at www.northwestsavingsbank.com.
About LNB Bancorp, Inc.
LNB Bancorp,
Inc. (NASDAQ: LNBB), is the holding company of The Lorain National
Bank with assets of approximately $1.2
billion, as of September 30,
2014. Headquartered in Lorain,
Ohio, LNB Bancorp is the largest community bank
headquartered in the Cleveland MSA and a leading community bank in
the region, operating 20 branch locations and over 28 ATMs in
Lorain, Cuyahoga and Summit Counties. LNB
Bancorp serves Summit County under
the operating name Morgan Bank. LNB
Bancorp has served the community since 1905, offering banking and
related financial services to both individuals and business
customers. More information about LNB Bancorp, Inc. is
available at www.4lnb.com.
Forward-Looking Statements
This release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 giving Northwest
Bancshares' and LNB Bancorp's expectations or predictions of future
financial or business performance or conditions. Forward-looking
statements are typically identified by words such as "believe,"
"expect," "anticipate," "intend," "target," "estimate," "continue,"
"positions," "prospects" or "potential," by future conditional
verbs such as "will," "would," "should," "could" or "may," or by
variations of such words or by similar expressions. These
forward-looking statements are subject to numerous assumptions,
risks and uncertainties, which change over time. Forward-looking
statements speak only as of the date they are made and we assume no
duty to update forward-looking statements. Actual results may
differ materially from current projections.
In addition to factors previously disclosed in Northwest
Bancshares' and LNB Bancorp's reports filed with the U.S.
Securities and Exchange Commission (the "SEC") and those identified
elsewhere in this document, the following factors among others,
could cause actual results to differ materially from
forward-looking statements or historical performance: ability to
obtain regulatory approvals and meet other closing conditions to
the merger, including approval by LNB Bancorp shareholders on the
expected terms and schedule; delay in closing the merger;
difficulties and delays in integrating LNB Bancorp business or
fully realizing cost savings and other benefits; business
disruption following the merger; changes in asset quality and
credit risk; the inability to sustain revenue and earnings growth;
changes in interest rates and capital markets; inflation; customer
acceptance of Northwest Bancshares products and services; customer
borrowing, repayment, investment and deposit practices; customer
disintermediation; the introduction, withdrawal, success and timing
of business initiatives; competitive conditions; the inability to
realize cost savings or revenues or to implement integration plans
and other consequences associated with mergers, acquisitions and
divestitures; economic conditions; and the impact, extent and
timing of technological changes, capital management activities, and
other actions of the Federal Reserve Board and legislative and
regulatory actions and reforms.
Annualized, pro forma, projected and estimated numbers are used
for illustrative purpose only, are not forecasts and may not
reflect actual results.
Important Additional Information and Where to Find
It
In connection with the proposed merger, Northwest
Bancshares will file with the SEC a Registration Statement on Form
S-4 that will include a Proxy Statement of LNB Bancorp and a
Prospectus of Northwest Bancshares, as well as other relevant
documents concerning the proposed transaction. This communication
does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or
approval. SHAREHOLDERS OF LNB BANCORP ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING
THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
A free copy of the Proxy Statement/Prospectus, as well as other
filings containing information about Northwest Bancshares and LNB
Bancorp, may be obtained at the SEC's Internet site
(http://www.sec.gov). You will also be able to obtain these
documents, free of charge, from Northwest Bancshares at
www.northwestsavingsbank.com under the heading "Investor Relations"
and then under "SEC Filings" or from LNB Bancorp by accessing LNB
Bancorp's website at www.4lnb.com under the heading "Investor
Relations" and then under "SEC Filings." Copies of the Proxy
Statement/Prospectus can also be obtained, free of charge, by
directing a request to Northwest Bancshares, Inc., 100 Liberty
Street, Warren, Pennsylvania
16365, Attention: Investor Relations, Telephone: (814) 726-2140 or
to LNB Bancorp, Inc., 457 Broadway, Lorain, Ohio 44052, Attention: Investor
Relations, Telephone: (440) 244-7317.
LNB Bancorp and Northwest Bancshares and certain of their
directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of LNB Bancorp
in connection with the proposed merger. Information about the
directors and executive officers of LNB Bancorp and their ownership
of LNB Bancorp common stock is set forth in the proxy statement for
LNB Bancorp's 2014 annual meeting of shareholders, as filed with
the SEC on Schedule 14A on March 11,
2014. Information about the directors and executive officers
of Northwest Bancshares is set forth in the proxy statement for
Northwest Bancshares' 2014 annual meeting of shareholders, as filed
with the SEC on a Schedule 14A on March
5, 2014. Additional information regarding the
interests of those participants and other persons who may be deemed
participants in the transaction may be obtained by reading the
Proxy Statement/Prospectus regarding the proposed merger when it
becomes available. Free copies of this document may be obtained as
described in the preceding paragraph.
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visit:http://www.prnewswire.com/news-releases/northwest-bancshares-inc-enters-suburban-cleveland-and-akron-markets-through-merger-with-lnb-bancorp-inc-300009907.html
SOURCE Northwest Bancshares, Inc.