Home Federal Bancorp, Inc. of Louisiana, the holding company of Home Federal Bank, and Northwest Bancshares Corporation, the holding company of the First National Bank of Benton, signed a definitive Agreement and Plan of Merger pursuant to which the Company will acquire Northwest Bancshares in an all cash acquisition.
Under the terms of the Merger Agreement, shareholders of Northwest Bancshares will receive their pro rata portion of aggregate merger consideration equal to $4.25 million, plus the sum of 8.0% of total assets of Northwest Bancshares as of the month-end immediately prior to the closing of the merger after giving effect to a special distribution (the “Special Distribution”) to be paid, less the amount, if any, that Northwest Bancshares’ total unaccrued and unpaid transaction expenses exceed $125,000. Based on financial data as of August 31,2022, the parties currently estimate that the aggregate merger consideration will be approximately $10.1 million.
In addition to the merger consideration, the Merger Agreement provides that, prior to consummation of the merger, Northwest Bancshares will pay the Special Distribution in cash to its shareholders in an aggregate amount which will reduce the ratio of Northwest Bancshares’ total shareholders’ equity to total consolidated assets to 8.0%. Based on financial data at August 31, 2022, the parties currently estimate that the amount of Special Distribution will be approximately $8.4 million.
First National currently operates out of one banking location in Benton, Louisiana. As of August 31, 2022, Northwest Bancshares had total consolidated assets of $81.7 million, $52.1 million in total loans, $67.2 million in total deposits and $14.2 million in shareholders’ equity. Under the terms of the Merger Agreement, First National will be merged with and into Home Federal Bank promptly following completion of the holding company merger.
“First National provides a natural expansion of our branch office footprint,” said James R. Barlow, Chairman, President and CEO of Home Federal Bancorp. “First National has developed an exceptional customer base in its market area. We are excited to expand to the Benton community and increase our market share in Bossier Parish. We are confident that the products and services we offer will allow us to deepen those valued relationships.”
The Merger Agreement was unanimously approved by the boards of directors of both companies. The transaction is expected to close in the first quarter of 2023, subject to customary closing conditions, including regulatory approvals and Northwest Bancshares’ shareholder approval.