Northwest closes on Union Community deal
Northwest Bancshares Inc. is officially poised to expand its presence in Lancaster County after completing a deal to acquire Donegal Financial Services Corp., the parent company of Union Community Bank.
The deal is valued at approximately $85.8 million, representing a combination of cash and Northwest stock.
The deal brings Northwest to 16 offices in Lancaster County, up from six.
When the merger was announced in June 2018, Northwest said in a press release that it expected to consolidate four of Community Bank’s 14 branches with nearby offices. However, William J. Wagner, then-chairman and CEO of Northwest, declined at the time to specify which branches would be consolidated.
Overall Northwest has assets of about $10.1 billion and 182 offices in Pennsylvania, New York and Ohio. In addition to Lancaster County, the Warren-based bank has branches in Dauphin, York and Lebanon counties.
“We believe that this transaction will help deliver value through increased operating scale in one of the most rapidly growing counties in our footprint,” said Ronald J. Seiffert, chairman, president and CEO of Northwest Bancshares.
As of June 30, 2018, total deposits for Northwest’s six Lancaster County branches was $150 million, according to the Federal Deposit Insurance Corp.
Under the terms of the agreement, Donegal Financial’s two shareholders, Donegal Mutual Insurance Corp. and Donegal Group Inc., received 50 percent cash and 50 percent stock, or a total of $42.5 million and 2,462,373 shares of Northwest common stock, according to a news release.
Prior to the closing of the merger, Donegal Financial paid a dividend of approximately $29.2 million to Donegal Group Inc. and Donegal Mutual Insurance Co., bringing their total proceeds to approximately $115 million.