Northwest Bancshares, Inc. (NASDAQ:NWBI) has announced that it recently received regulatory approval to acquire 18 offices from First Niagara Financial Group Inc. (NASDAQ:FNFG).
The Federal Deposit Insurance Corporation and the Pennsylvania Department of Banking and Securities gave the firm the go-ahead to Northwest Bancshares to proceed with the acquisition. The company has been in talks with First Niagara for the acquisition of 18 branches owned by the financial firm. The deal was announced in April this year and is expected to close ON September 9 as a part of the agreement with the Federal office and theDepartment of Justice (DOJ).
The acquisition has a close relation to the recent merger between First Niagara and KeyCorp (NYSE:KEY) which came to a close on July 29 this year. The merger was also under review by the same regulatory bodies. Northwest Bank intends to strengthen its position in West New York through the acquisition of the 18 branches and deposits worth $1.7 billion and $0.5 billion in loans within the Buffalo Federal Reserve banking market. The bank has been in the buffalo market for roughly 15 years.
Northwest also stated that it expects the acquisition to add more value to the company’s earnings per share by roughly 25% in 2017. It is also expected to help improve the company’s mix and have a positive impact on its efficiency. Northwest pointed out that the most significant aspect of the acquisition is the company’s goal of replacing long-term debt worth $715 million with lower cost deposits. This move will allow the firm to boost its interest margin and at the same time maintain assets below the $10 million Dodd-Frank threshold.
Northwest Bancshares’ chairman, president, and CEO William J. Wagner stated that his firm is pleased to reveal the opportunity which is expected to enhance the company’s presence in a geographic region that it finds attractive. Wagner highlighted that the offices that the firm will acquire have excellent locations and are situated in ideal locations.