LORAIN — Other than a name change and new color scheme, longtime customers of Lorain National Bank shouldn’t notice anything different about their banking experiences as the result of a merger with a Pennsylvania-based banking company.
Lorain National is being acquired by Northwest Bancshares Inc., which operates 164 banking offices in Pennsylvania, New York, Ohio and Maryland, and another 51 consumer finance offices in Pennsylvania through its subsidiary, Northwest Consumer Discount Co.
The deal is reported to be a combination cash and stock transaction valued at $18.64 per share, or about $183.3 million.
All of LNB’s outlets will undergo name changes to Northwest Bank and sport its green color scheme, said LNB spokesman Pete Catanese. Those changes are expected to take place in the third quarter of 2015.
Once the merger is completed by the end of the first quarter of 2015, the joint venture will add LNB’s 20 branches and nearly 30 ATM locations in Lorain, Cuyahoga and Summit counties to form a banking company with about $9 billion in total assets.
No LNB branches are expected to be closed, Catanese said.
As for any impact on employment, Catanese said, “We look for all of our branch associates to remain on the job.”
Bank officials met with about 200 employees Monday night at DeLuca’s Place in the Park, 6075 Middle Ridge Road, to discuss the merger, according to an employee who attended the meeting. Employees were told that Northwest mergers often lead to a loss of about 5 percent of customers.
Employees were told that if workers are laid off, there would be compensation packages.
“They said we’re pretty safe as far as branch employees,” said the worker, who spoke on the condition of anonymity.
Nancy Terrill, managing director of Inglewood Associates, a Cleveland-based financial consulting firm that works with banks and bank customers, said she experienced multiple mergers while working for the former Cleveland Trust bank and former Society Bank.
Terrill said she wasn’t familiar with the specifics of the Northwest merger, but in general, branch layoffs are unlikely if the bigger bank doesn’t have branches in the area where the merger occurs. However, Terrill said the bigger bank typically looks to avoid service duplications by making cuts in areas such as check processing, human resources or upper management. “Probably, you will have a net loss of jobs,” she said.
Terrill said big changes aren’t usually made immediately due to fears of losing customers. However, over time, the bigger bank usually makes changes in policies such as lending practices and fee structures.
Founded in 1905, Lorain National Bank employs just under 300 people, Catanese said. Lorain National and its Morgan Bank partner have 20 branches and 28 ATMs in Lorain, eastern Erie, western Cuyahoga and Summit counties, according to Lorain National’s website.
“The big story here is that the (Northwest) headquarters for its Ohio region will remain here in Lorain,” Catanese said.
Daniel E. Klimas, president and CEO of LNB Bancorp, the parent company of Lorain National Bank, will become regional president and market leader for the Ohio franchise of Northwest Bank.
Reporter Evan Goodenow contributed to this story.
Contact Steve Fogarty at 329-7146 or email@example.com.