WARREN, Pa., April 28, 2016 /PRNewswire/ -- Northwest
Bancshares, Inc. (NASDAQGS: NWBI) today announced that its
wholly-owned subsidiary, Northwest Bank ("Northwest"), has signed a
definitive agreement to acquire 18 Western New York bank branches with deposits
of $1.7 billion, subject to the
closing of the KeyCorp/First Niagara Financial Group, Inc. merger,
from First Niagara Bank N.A., which will be a wholly owned
subsidiary of KeyCorp at the time of closing. The premium to
be paid on the deposits to be transferred is 4.5%. In
addition to receiving approximately $1.0
billion in cash from the transaction, Northwest will acquire
$511 million of performing business
and consumer loans. Unless otherwise specified, financial
information presented herein is as of December 31, 2015.
The First Niagara branches are being sold in connection with its
pending acquisition by KeyCorp. The divestitures have been
approved by the United States Department of Justice (DOJ) and the
Federal Reserve Board following a customary anti-trust review.
This acquisition provides Northwest the opportunity to enhance
its footprint in Western New York
by adding over 72,000 new households while advancing the company to
#4 in deposit market share in the Buffalo MSA.
William J. Wagner, Chairman,
President and CEO of Northwest Bancshares commented, "We are
excited to announce this opportunity to significantly increase
Northwest's presence in a geographic region that we know well and
find extremely attractive. The offices we are purchasing are
excellent facilities in exceptional locations, with deposit
balances averaging $96 million per
branch. All 18 offices will remain open and the staffs of
these offices will be offered employment with Northwest so that
they can continue to serve their customers. We believe
these new customers will embrace Northwest's products, services and
passion for customer satisfaction, and we look forward to serving
them. This increased presence also provides an opportunity
for Northwest to expand its commitment to western New York and to seek additional opportunities
to add jobs, promote economic development and remain a good
corporate citizen."
The acquisition is anticipated to be accretive to earnings per
share by approximately 25% in 2017. Given that the average
branch size of $96 million greatly
exceeds Northwest's branch average of $38
million, the acquired branches will enhance the company's
efficiency while also improving its deposit mix.
Additionally, the acquisition of a balanced $511 million loan portfolio will assist
Northwest's ongoing effort to diversify its loan mix. A key
element in the economics of this transaction is Northwest's
intention to replace $715 million of
long-term debt with lower cost deposits, thereby increasing net
interest margin and enabling the company's assets to remain below
the Dodd-Frank threshold of $10
billion. The company also noted that this approach to
cash deployment significantly reduces the reinvestment risk
typically associated with purchasing deposits.
Mr. Wagner added, "In recent years we consistently communicated
to our shareholders that Northwest pursues acquisitions that are
not only accretive to earnings but also enhance the franchise value
of our institution. This acquisition meets both of those
objectives. Our profitability and shareholder return metrics
will be significantly improved while the replacement of borrowed
funds with core deposits from thousands of new customers will
enhance our franchise value. The quality of the branch
network, deposits and loans we are receiving will also add
significant value to our bank."
The transaction has received approvals from each party's board
of directors and remains subject to regulatory approval and other
customary closing conditions. Pending such completion, the
transaction is expected to close in the third quarter of 2016.
Northwest was advised by the investment banking firm of Boenning
& Scattergood and the law firm of Luse
Gorman, PC. KeyCorp was advised by the investment
banking firm of Morgan Stanley & Co. LLC as well as the law
firm of Simpson Thacher & Bartlett LLP. First Niagara
received legal advice from Sullivan & Cromwell LLP.
Investor Conference Call
Executives from Northwest
will host a conference call and live webcast with investors and the
financial community at 9:00 AM Eastern
Time on Friday, April 29, 2016
to discuss this transaction. Those wishing to listen
to the call may join by dialing toll-free
1-877-870-4263, and asking to be connected to the Northwest Bank
call. Participants may view the live webcast at
https://www.webcaster4.com/Webcast/page/1049/14885. Please
join at least 10 minutes prior to the start time to ensure a
connection. A replay of the call will be available until
May 6, 2016 by dialing 1-877-344-7529
and using access code 10085338. An investor presentation on
this transaction is also available at the Investor Relations
section of Northwest's website www.northwest.com.
About Northwest Bancshares, Inc.
Headquartered in
Warren, Pennsylvania, Northwest
Bancshares, Inc. is the holding company of Northwest Bank.
Founded in 1896, Northwest 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 150 full-service community banking
offices and seven free-standing drive-up facilities 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"). Additionally, information regarding
Northwest Bancshares, Inc. and Northwest Bank can be accessed
on-line at www.northwest.com.
Forward Looking Statements
This press release contains
statements that may be considered forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are intended to be covered by the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995, and this statement is included for purposes of complying
with these safe harbor provisions. Readers should not place undue
reliance on such forward-looking statements, which speak only as of
the date made. These forward-looking statements are based on
current plans and expectations, which are subject to a number of
risk factors and uncertainties that could cause future results to
differ materially from historical performance or future
expectations. These differences may be the result of various
factors, including, among others: (1) failure of the parties to
satisfy the closing conditions in the purchase and assumption
agreement in a timely manner or at all; (2) failure to obtain
governmental approvals for the acquisition of the branches; (3)
disruptions to the parties' businesses as a result of the
announcement and pendency of the branch acquisition; (4) costs or
difficulties related to the integration of the business of the
acquired branches following the closing of the transaction; (5) the
risk that the anticipated benefits, cost savings and any other
savings from the transaction may not be fully realized or may take
longer than expected to realize; (6) changes in general business,
industry or economic conditions or competition; (7) changes in any
applicable law, rule, regulation, policy, guideline or practice
governing or affecting financial holding companies and their
subsidiaries or with respect to tax or accounting principles or
otherwise; (8) adverse changes or conditions in the capital and
financial markets; (9) changes in interest rates or credit
availability; (10) the inability to realize expected cost savings
or achieve other anticipated benefits in connection with the
proposed transaction; (11) changes in the quality or
composition of loan and investment portfolios; (12) adequacy of
loan loss reserves and changes in loan default and charge-off
rates; (13) increased competition and its effect on pricing,
spending, third-party relationships and revenues; (14) continued
relationships with major customers; (15) deposit attrition,
necessitating increased borrowings to fund loans and investments;
(16) rapidly changing technology; (17) unanticipated regulatory or
judicial proceedings and liabilities and other costs; (18) changes
in the cost of funds, demand for loan products or demand for
financial services; and (19) other economic, competitive,
governmental or technological factors affecting operations,
markets, products, services and prices.
The foregoing list should not be construed as exhaustive, and
KeyCorp/First Niagara Financial Group, Inc. and Northwest
Bancshares, Inc. undertake no obligation to subsequently revise any
forward-looking statements to reflect events or circumstances after
the date of such statements, or to reflect the occurrence of
anticipated or unanticipated events or circumstances.
For additional factors that could cause actual results to differ
materially from those expressed in the forward-looking statements,
please see filings by KeyCorp, First Niagara Financial Group, Inc.
and Northwest Bancshares, Inc. with the SEC, including KeyCorp,
First Niagara Financial Group, Inc., and Northwest Bancshares,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015, respectively.
Contact:
William J. Wagner, President, Chief
Executive Officer (814) 728-7284
William W. Harvey, Jr., Senior
Executive Vice President, Chief Financial Officer (814)
728-7242
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SOURCE Northwest Bancshares, Inc.