Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - LNB BANCORP INC | d838266d8k.htm |
| EX-99.1 - EX-99.1 - LNB BANCORP INC | d838266dex991.htm |
| EX-4.1 - EX-4.1 - LNB BANCORP INC | d838266dex41.htm |
| EX-99.4 - EX-99.4 - LNB BANCORP INC | d838266dex994.htm |
| EX-2.1 - EX-2.1 - LNB BANCORP INC | d838266dex21.htm |
| EX-99.2 - EX-99.2 - LNB BANCORP INC | d838266dex992.htm |
| EX-99.5 - EX-99.5 - LNB BANCORP INC | d838266dex995.htm |
 December 16,
2014 The Merger of
with
Exhibit 99.3 |
 •
Daniel
E.
Klimas
–
President
&
CEO
•
James
H.
Nicholson
–
Senior
VP
&
CFO
Presented by:
•
William
J.
Wagner
–
Chairman,
President
&
CEO
•
William
W.
Harvey
Jr.
–
Senior
EVP
&
CFO |
 Additional Information for Shareholders of LNB Bancorp, Inc.
Communications
in
this
document
do
not
constitute
an
offer
to
sell
or
the
solicitation
of
an
offer
to
buy
any
securities
or
a
solicitation
of
any
vote
or
approval.
In
connection
with
the
proposed
merger,
Northwest
Bancshares,
Inc.
(“Northwest”)
will
file
with
the
Securities
and
Exchange
Commission
(SEC)
a
Registration
Statement
on
Form
S-4
that
will
include
a
Proxy
Statement
of
LNB
Bancorp,
Inc.
(“LNB”),
as
well
as
other
relevant
documents
concerning
the
proposed
transaction.
Shareholders
are
urged
to
read
the
Registration
Statement
and
the
Proxy
Statement/Prospectus
regarding
the
merger
when
it
becomes
available
and
any
other
relevant
documents
filed
with
the
SEC,
as
well
as
any
amendments
or
supplements
to
those
documents,
because
they
will
contain
important
information.
A
free
copy
of
the
Proxy
Statement/Prospectus,
as
well
as
other
filings
containing
information
about
Northwest
and
LNB,
may
be
obtained
at
the
SEC’s
Internet
site
(http://www.sec.gov).
You
will
also
be
able
to
obtain
these
documents,
free
of
charge,
from
Northwest
at
www.northwestsavingsbank.com
or
from
LNB
by
accessing
LNB’s
website
at
www.4lnb.com.
LNB
and
certain
of
its
directors
and
executive
officers
may
be
deemed
to
be
participants
in
the
solicitation
of
proxies
from
the
shareholders
of
LNB
in
connection
with
the
proposed
merger.
Information
about
the
directors
and
executive
officers
of
LNB
is
set
forth
in
the
proxy
statement
for
LNB’s
2014
annual
meeting
of
shareholders,
as
filed
with
the
SEC
on
a
Schedule
14A
on
March
11,
2014.
Additional
information
regarding
the
interests
of
those
participants
and
other
persons
who
may
be
deemed
participants
in
the
transaction
may
be
obtained
by
reading
the
Proxy
Statement/Prospectus
regarding
the
proposed
merger
when
it
becomes
available.
Free
copies
of
this
document
may
be
obtained
as
described
in
the
preceding
paragraph.
3
Disclosures |
 Disclosures
Forward-Looking Statement
This
presentation
contains
certain
forward-looking
statements
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995.
These
statements
include,
but
are
not
limited
to,
descriptions
of
Northwest’s
financial
condition,
results
of
operations,
asset
and
credit
quality
trends
and
profitability
and
statements
about
the
expected
timing,
completion,
financial
benefit
and
other
effects
of
the
proposed
mergers.
Forward-looking
statements
can
be
identified
by
the
use
of
the
words
“anticipate,”
“believe,”
“expect,”
“intend,”
“could”
and
“should,”
and
other
words
of
similar
meaning.
These
forward-looking
statements
express
management’s
current
expectations
or
forecasts
of
future
events
and,
by
their
nature,
are
subject
to
risks
and
uncertainties
and
there
are
a
number
of
factors
that
could
cause
actual
results
to
differ
materially
from
those
in
such
statements.
Factors
that
might
cause
such
a
difference
include,
but
are
not
limited
to:
market,
economic,
operational,
liquidity,
credit
and
interest
rate
risks
associated
with
Northwest’s
business;
competition;
government
legislation
and
policies
(including
the
impact
of
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act
and
its
related
regulations);
ability
of
Northwest
to
execute
its
business
plan,
including
the
proposed
acquisition
of
LNB
Bancorp;
changes
in
the
economy
which
could
materially
impact
credit
quality
trends
and
the
ability
to
generate
loans
and
gather
deposits;
failure
or
circumvention
of
Northwest’s
internal
controls;
failure
or
disruption
of
our
information
systems;
failure
to
adhere
to
or
significant
changes
in
accounting,
tax
or
regulatory
practices
or
requirements;
new
legal
obligations
or
liabilities
or
unfavorable
resolutions
of
litigations;
other
matters
discussed
in
this
presentation
and
other
factors
identified
in
Northwest’s
Annual
Report
on
Form
10-K
and
other
periodic
filings
with
the
Securities
and
Exchange
Commission.
These
forward-looking
statements
are
made
only
as
of
the
date
of
this
presentation,
and
Northwest
undertakes
no
obligation
to
release
revisions
to
these
forward-looking
statements
to
reflect
events
or
conditions
after
the
date
of
this
presentation.
Non-GAAP Financial Measures
These
slides
contain
non-GAAP
financial
measures.
For
purposes
of
Regulation
G,
a
non-GAAP
financial
measure
is
a
numerical
measure
of
the
registrant's
historical
or
future
financial
performance,
financial
position
or
cash
flows
that
excludes
amounts,
or
is
subject
to
adjustments
that
have
the
effect
of
excluding
amounts,
that
are
included
in
the
most
directly
comparable
measure
calculated
and
presented
in
accordance
with
GAAP
in
the
statement
of
income,
balance
sheet
or
statement
of
cash
flows
(or
equivalent
statements)
of
the
issuer;
or
includes
amounts,
or
is
subject
to
adjustments
that
have
the
effect
of
including
amounts,
that
are
excluded
from
the
most
directly
comparable
measure
so
calculated
and
presented.
In
this
regard,
GAAP
refers
to
generally
accepted
accounting
principles
in
the
United
States.
Pursuant
to
the
requirements
of
Regulation
G,
Northwest
has
provided
reconciliations
within
the
slides,
as
necessary,
of
the
non-GAAP
financial
measure
to
the
most
directly
comparable
GAAP
financial
measure.
4 |
 Transaction Highlights
5
Key Terms
•
Consideration:
1.461
shares
of
NWBI
stock
or
$18.70
in
cash
for
each
share
of
LNBB
stock
as
elected
by
each
holder
of
stock
•
Elections
subject
to
50%
of
outstanding
LNBB
shares
being
exchanged
for
NWBI
stock
•
Deal
value
=
$18.64
per
LNBB
share
and
$183.3
million
in
the
aggregate,
assuming
average
of
NWBI’s
last
20
closing
prices
of
$12.72
•
Price
/
2016E
EPS
of
18.0x;
Price
/
2016E
EPS
with
synergies
of
11.0x
•
Price
to
tangible
book
of
197.7%
•
One
member
of
LNBB
Board
of
Directors
to
join
NWBI
Board
Financial
Impact
•
Expected
to
be
immediately
accretive
to
EPS
in
2015,
excluding
acquisition
charges
of
approximately
$15.0
million
•
Expected
EPS
accretion
of
approximately
$0.12
in
2016
(first
full
year
of
combined
operations,
cost
savings
fully
phased
in)
•
Approximate
TBV
dilution
of
7%
earned
back
in
approximately
4.9
years
•
Cost
saves
estimated
at
28%
of
LNBB’s
noninterest
expense
•
Loan
credit
mark
estimated
at
$17.5
million,
or
1.9%
of
total
gross
loans
•
Loan
interest
rate
mark
estimated
at
$8.0
million
•
Expected
to
create
goodwill
of
approximately
$81
million
•
No
additional
capital
raise
needed
Closing
•
Transaction
anticipated
to
close
late
in
the
2
nd
quarter
of
2015,
subject
to
regulatory
and
LNBB
shareholder
approval
and
other
customary
closing
conditions
•
Pro
forma
ownership:
93.1%
NWBI
/
6.9%
LNBB
Note:
Deal
value
is
calculated
using
the
20
day
average
closing
stock
price
of
Northwest
Bancshares,
Inc.
as
of
Friday,
December
12,
2014. |
 Overview of Companies
Northwest
LNB
Assets
$7,826,926,000
$1,241,099,000
Loans
$6,054,866,000
$922,514,000
Deposits
$5,707,723,000
$1,056,784,000
Common Equity
$1,076,721,000
$113,065,000
Intangibles
$179,533,000
$21,938,000
Market Capitalization
$1.174 billion
$167 million
Last Market Close
$12.37
$17.27
Shares Outstanding
94.995 million
9.665 million
Offices
164
20
LNBB
Branches
NWBI
Branches
Financial
information
as
of
September
30,
2014.
Stock
prices
as
of
December
12,
2014.
Northwest
loan
total
is
grossed
up
by
undisbursed
loan
commitments
and
reduced
by
deferred
loan
costs.
6 |
 LNB
– An Attractive Franchise
Northwest targets acquisitions that add franchise
value as well as shareholder value.
7 |
 Talented Management and Staff
•
Dan
Klimas,
CEO
of
LNB
Bancorp,
Inc.
and
Lorain
National
Bank
is
a
talented
and
driven
leader.
Dan
has
assembled
a
successful
and
loyal
management
team.
We
are
pleased
that
he
has
agreed
to
stay
on
as
Northwest’s
Regional
President
and
market
leader
in
Ohio.
•
We
are
pleased
to
be
offering
continued
employment
to
all
of
LNB’s
lenders,
business
development
and
customer-facing
personnel.
•
Northwest’s
regional
management
team
will
remain
located
at
their
current
company
headquarters
in
Lorain.
•
This
strong,
talented,
experienced
and
cohesive
management
team
represents
Northwest’s
foundation
for
future
growth
in
Ohio.
8 |
 An
Attractive Deposit Mix Northwest
(deposits in millions)
% of Total
Non-interest
Checking
884.8
15.5%
Interest Checking
895.3
15.7%
Savings
1,214.3
21.3%
Money Market
1,180.5
20.7%
Time
1,532.8
26.8%
5,707.7
100%
Cost of Deposits
0.44%
•
Northwest’s
and
LNB’s
deposit
mixes
are
quite
similar
with
a
solid
base
of
checking
accounts
and
strong
core
deposits.
•
The
core
deposit
premium
being
paid,
based
on
deal
pricing,
is
8.7%.
9
September 30, 2014
LNB
(deposits in millions)
% of Total
Non-interest
Checking
154.0
14.6%
Interest Checking
179.9
17.0%
Savings
127.3
12.0%
Money Market
143.9
13.6%
Time
451.7
42.8%
1,056.8
100%
Cost of Deposits
0.49%
Combined
(deposits in millions)
% of Total
Non-interest
Checking
1,038.8
15.4%
Interest Checking
1,075.2
15.9%
Savings
1,341.6
19.8%
Money Market
1,324.4
19.6%
Time
1,984.5
29.3%
6,764.5
100%
Cost of Deposits
0.45% |
 A
Diversified Loan Mix •
A
diverse,
high-quality
loan
portfolio
provides
additional
balance
to
Northwest’s
current
portfolio
mix.
•
Our
combined
entity
can
capitalize
on
Northwest’s
mortgage
and
home
equity
expertise
in
the
Cleveland
market
and
on
LNB’s
consumer
lending
expertise
across
Northwest’s
vast
footprint.
•
Northwest’s
size
and
capital
strength
will
allow
our
Ohio
team
to
increase
their
targeted
loan
size
and
gain
access
to
a
base
of
businesses
with
higher
borrowing
needs.
•
The
deal
premium
as
a
percentage
of
loans
is
just
8.8%.
In
this
environment,
loans
are
as
important
as
deposits.
•
LNB’s
loan
to
deposit
ratio
is
87.3%.
10
September 30, 2014
Northwest
(loans in millions)
% of Total
Residential RE
2,519.4
41.6%
Home Equity
1,071.5
17.7%
Consumer
238.7
4.0%
Commercial RE
1,787.9
29.5%
Commercial
437.4
7.2%
6,054.9
100%
Portfolio Yield
4.78%
LNB
(loans in millions)
% of Total
Residential RE
70.9
7.7%
Home Equity
125.3
13.6%
Consumer
227.2
24.6%
Commercial RE
413.6
44.8%
Commercial
85.5
9.3%
922.5
100%
Portfolio Yield
3.91%
Combined
(loans in millions)
% of Total
Residential RE
2,590.3
37.1%
Home Equity
1,196.8
17.2%
Consumer
465.9
6.6%
Commercial RE
2,201.5
31.6%
Commercial
522.9
7.5%
6,977.4
100%
Portfolio Yield
4.66%
Northwest
loan
total
is
grossed
up
by
undisbursed
loan
commitments
and
reduced
by
deferred
loan
costs. |
 Solid Core Earnings
11
Annualized for Quarter Ended September 30, 2014
% of Average Assets
Northwest
LNB
Net Interest Income
3.16%
2.89%
Provision for Loan Losses
0.18%
0.23%
Non-interest Income
0.93%
1.08%
Non-interest Expense
2.73%
2.84%
Net Income Before Tax
1.18%
0.90%
Federal
and
State
Income
Tax
0.30%
0.23%
Net
Income
After
Tax
0.88%
0.67%
The
LNB
franchise
brings
a
respectable
net
interest
margin
and
exceptional
fee
income.
Assuming
cost
saves
of
28%,
the
efficiency
ratio
of
the
Ohio
Region
of
Northwest
after
the
merger
would
be
approximately
51%,
thereby
lowering
Northwest’s
current
efficiency
ratio
of
65%. |
 Exceptional Market Potential
•
Although not considered to be an in-market acquisition, LNB’s footprint is
a contiguous market and a natural extension of our strongest market,
northwest Pennsylvania, and is complemented by our existing four offices in
northeast Ohio. •
LNB ranks in the top 3 in market share in 9 of its 12 markets.
•
With the addition of LNB, Northwest’s Ohio Region will be the second largest
of our eight geographic regions.
•
The Cleveland/Akron/Canton combined statistical area has a population of 3.7
million people, representing
1.5
million
households
and
is
the
15
th
largest
CSA
in
the
country.*
•
The Cleveland MSA has a diversified employment base led by manufacturing and
service- based industries including health care.
•
Employment
statistics
in
the
Cleveland
MSA
have
improved
greatly
in
recent
years
with
unemployment down to 5.4% in Cleveland, 4.3% in Akron and 4.5% in Canton.**
•
All counties within the Cleveland MSA reside within the Marcellus and Utica Shale
footprint. •
The
already
strong
ties
between
western
Pennsylvania
and
eastern
Ohio
will
continue
to
grow
as their shared exposure to shale gas exploration further develops.
12
*
Source: SNL
** Source: U.S. Bureau of Labor Statistics |
 Exceptional Market Potential
•
The
Cleveland/Akron/Canton
area
is
experiencing
a
rebirth
from
a
rust
belt
market
to
a
center
of brain gain.
•
The area will always have a strong foundation in manufacturing and energy,
particularly with the exploration of Marcellus and Utica Shale
formations. •
LNB’s
market
area
is
home
to
several
nationally
acclaimed
healthcare
providers
and
an
emerging technology and biotechnology sector.
•
As a result, there is a tremendous infrastructure of private equity, legal and
financial professionals.
•
With a low cost of living and high quality of life, employers are attracting talent
to the area. •
As a small metropolitan area, LNB’s market area is easy to navigate and yet
has close access to two major airports and several regional airports.
There are also NFL, NBA and MLB professional sports franchises, as well as
five minor league teams. •
The area is also home to 68 colleges and universities.
•
This vibrancy is not lost on the rest of the country, with Cleveland recently
having been a candidate for both the Democratic and Republican National
Conventions in 2016 and selected as the winner for the RNC.
•
These factors have led to significant investment in the revitalization of the
downtown area, which has had a halo effect on the entire region both
economically and emotionally. 13 |
 Exceptional Market Potential
14
Source: SNL |
 Exceptional Market Potential
15
Source: SNL
Market
2014
Population
(#)
Ann. 5-Yr
Projected
Pop Chg (%)
2014
Households Projected HH
(#)
Ann. 5-Yr
Chg (%)
2014
Median HH Projected HH
Income ($)
Ann. 5-Yr
Inc Chg (%)
Markets where LNBB has an office
Amherst,
OH
11,324
(0.41)
4,620
(0.17)
49,360
(0.27)
Avon Lake,
OH
23,150
0.50
9,165
0.58
71,889
0.06
Avon,
OH
22,685
1.32
7,968
1.14
73,533
0.04
Elyria,
OH
53,826
(0.33)
22,655
(0.12)
41,299
0.28
Hudson,
OH
21,986
(0.28)
7,563
(0.20)
95,974
(0.47)
Lagrange,
OH
2,074
(0.28)
763
(0.11)
65,487
(0.07)
Lorain,
OH
62,813
(0.47)
25,603
(0.15)
31,767
0.16
North Ridgeville,
OH
30,872
0.90
12,022
0.82
63,666
0.31
Oberlin,
OH
8,106
(0.72)
2,816
0.09
51,433
1.05
Olmsted Falls,
OH
9,195
0.11
3,714
(0.02)
65,127
0.60
Stow,
OH
35,122
0.18
14,379
0.21
59,632
(0.07)
Vermilion,
OH
10,215
(0.37)
4,105
(0.23)
51,913
0.01
Westlake,
OH
32,812
0.09
13,997
0.19
66,446
0.32
Median
22,685
(0.28)
7,968
(0.02)
63,666
0.06
Markets that LNBB touches
Bay Village,
OH
15,338
(0.42)
6,122
(0.30)
76,008
0.29
Grafton,
OH
6,252
(1.00)
1,299
(0.06)
60,338
0.55
Rocky River,
OH
19,982
(0.24)
9,288
(0.05)
59,977
(0.14)
Sheffield Lake,
OH
9,019
(0.33)
3,747
(0.03)
43,164
(0.53)
Sheffield Village,
OH
4,105
0.61
1,621
0.51
56,926
0.01
Twinsburg,
OH
19,173
0.63
7,493
0.51
65,275
0.02
Median
12,179
(0.29)
4,935
(0.04)
60,158
0.02
Market
2014
Population
(#)
Ann. 5-Yr
Projected
Pop Chg (%)
2014
Households Projected HH
(#)
Ann. 5-Yr
Chg (%)
2014
Median HH Projected HH
Income ($)
Ann. 5-Yr
Inc Chg (%)
Nearby markets representing expansion potential
Eastern
Beachwood,
OH
11,819
(0.15)
5,054
(0.02)
65,428
(0.04)
Chagrin Falls,
OH
4,158
0.03
1,901
0.22
54,190
(1.08)
Highland Heights,
OH
8,467
0.34
3,294
0.55
90,301
0.19
Lyndhurst,
OH
13,713
(0.43)
6,423
(0.15)
60,840
0.06
Pepper Pike,
OH
5,911
(0.19)
2,185
0.06
99,013
(0.79)
Shaker Heights,
OH
27,949
(0.37)
11,731
(0.24)
62,920
(0.04)
Solon,
OH
23,525
0.17
8,423
0.20
85,197
(0.41)
Western
Fairview Park,
OH
16,513
(0.40)
7,503
(0.22)
50,942
0.38
North Olmsted,
OH
32,072
(0.41)
13,547
(0.19)
53,237
0.20
Southern
Brecksville,
OH
13,567
5,343
(0.03)
82,970
(0.24)
Broadview Heights,
OH
19,803
(0.11)
7,783
0.36
73,975
(0.18)
Fairlawn,
OH
7,317
(0.13)
3,208
(0.08)
56,735
0.52
Independence,
OH
7,033
(0.30)
2,741
(0.24)
65,667
(0.38)
Macedonia,
OH
11,627
0.58
4,442
0.51
80,892
0.20
North Royalton,
OH
30,900
0.34
13,230
0.46
57,897
0.03
Seven Hills,
OH
11,606
(0.36)
4,933
(0.26)
63,643
0.60
Strongsville,
OH
44,743
0.01
17,730
0.10
69,806
0.20
Median
13,567
(0.13)
5,343
(0.02)
65,428
0.03
0.45 |
 An
Attractive Branch Network 16
Northwest
LNB
Branches
164
20
Deposits
$5,707,723,000
$1,056,784,000
Deposits/Branch
$34,803,000
$52,839,000
Excluding Retirement Village Branches
Branches
16
Deposits
$1,042,085,000
Deposits/Branch
$65,130,000
•
Ten of LNB’s non-retirement village branches have over $50 million of
deposits.
•
The strength of LNB’s branch network lies in small and mid-sized
northeastern Ohio communities. Small-town banking is Northwest’s
strongest niche.
•
Attractive facilities which are in good locations with good access,
drive-ups and little deferred maintenance.
Financial data as of September 30, 2014 |
 Access to New Customers
17
Northwest
LNB
Combined
Number of Households
294,629
44,280
338,909
Number of Customers
537,500
66,420
603,920
Number of Accounts
1,206,540
122,000
1,328,540
A strategic challenge of the banking industry is expanding our existing
customer base. The merger with LNB brings Northwest access to a
significant number of new households and new customers.
|
 Solid Asset Quality
18
Financial data as of September 30, 2014
Note: Northwest’s due diligence review, assisted by a third party specialist,
looked at 38.4% of the loan portfolio including 87% of construction,
development and land loans, 71% of non-owner occupied commercial real estate loans, 78% of
multi-family and 74% of commercial and industrial loans. Our review gave
comfort that no additional credit mark above reserve will be
necessary. Northwest loan total is grossed up by undisbursed loan commitments and reduced by deferred loan costs.
Northwest
LNB
Combined
Total Loans
$6,054,866,000
$922,514,000
$6,977,380,000
Nonperforming Loans
$90,216,000
$18,193,000
$108,409,000
Nonperforming Loan %
1.51%
1.97%
1.55%
Nonperforming Assets
$105,223,000
$18,938,000
$124,161,000
Nonperforming Asset %
1.34%
1.53%
1.38%
Allowance for Loan
Losses
$71,650,000
$17,432,000
ALLL as a % of Loans
1.20%
1.90%
ALLL as a % of
Nonperforming Loans
79%
96% |
 Transaction Overview
19 |
 Strong Pro Forma Financial Metrics
20
Northwest
Bancshares
LNB Bancorp
Pro Forma
($ in thousands)
3Q 2014
3Q 2014
Branches
164
20
184
Total Assets
$7,826,926
$1,241,099
$9,036,129
Total Loans, net
5,885,451
906,579
6,800,005
Total Deposits
5,707,723
1,056,784
6,766,314
TCE / TA
11.77%
7.47%
10.30%
NPAs / Loans + OREO
2.43%
2.49%
2.44%
Market Capitalization
$1,208,334
$166,921
$1,298,145
Price / Total Book Value
112%
148%
111%
Price / Tangible Book Value
135%
183%
144%
Price / 2016E
18.9x
15.5x
16.1x
Note: Forward earnings estimates are based on analyst consensus for LNB’s 2016
net income. Deal value is calculated using the 20 day average closing stock
price of Northwest Bancshares, Inc. as of Friday, December 12, 2014.
|
 Attractively Priced
Relative to Comparable Transactions
21
($ in millions)
LNB Bancorp
Median*
Deal Value
$183.3
$120.0
Price / Book
159.4%
175.3%
Price / TBV
197.7%
212.1%
Price / 2016 EPS
18.0x
N/A
Price / 2016 EPS w/ synergies
11.0x
N/A
Core Deposit Premium
8.7%
13.2%
Target Composite Financials
Assets
$1,241.1
$846.0
TCE / Assets
7.47%
8.99%
LTM ROAA
0.60%
0.85%
LTM ROAE
6.80%
7.91%
*
Median is comprised of deals announced in 2014 where target is headquartered in Ohio and contiguous
states with assets between $350mm and $3.0B and TCE/TA greater than 5.0%
Note: Forward earnings estimates are based on analyst consensus for LNB’s 2016 net income. Deal
value is calculated using the 20 day average closing stock price of Northwest Bancshares, Inc.
as of Friday, December 12, 2014. |
 Transaction
Highlights Strategic
•
Marks a significant expansion into nearby northeastern Ohio market,
which is demographically appealing
•
LNB is the last independent, fully shareholder-owned community bank
with assets greater than $1 billion based in the Cleveland MSA
•
Strong core deposit franchise of nearly $800 million
•
Retention of talented senior management team who have demonstrated
an ability to grow their franchise
•
Significant opportunity for continued expansion
Financial
•
Expected to be immediately accretive to EPS (excluding one-time
charges)
•
Run rate EPS accretion of greater than 17% in 2016 and beyond
•
Tangible book value dilution of 7% with restructuring charges implies an
earn back of approximately 4.9 years
•
Tangible common equity/tangible assets remains over 10% while
ROATCE estimated at approximately 9% in 2016
Execution
•
Similar disciplined risk cultures and customer focus
•
Familiar markets
•
Comprehensive due diligence completed including loan review
•
Conversion and integration experience reduces integration risk
•
Will not cross Durbin threshold
22 |
 Appendix
23 |
 Non-GAAP
Reconciliation 24
Efficiency Ratio
($000, data is LTM as of 9/30/14)
Northwest
LNB
Noninterest Expense
$214,500
$35,407
Less: Amortization of Intangibles & Goodwill Impairment
(1,214)
(136)
Less: Foreclosure & Repo Expense
(3,888)
(117)
Adjusted Noninterest Expense
$209,398
$35,154
Net Interest Income (FTE)
$254,260
$36,840
Noninterest Income
67,789
12,734
Total Income
$322,049
$49,574
Efficiency Ratio
65.02%
70.91%
(Adjusted Noninterest Expense / Total Income)
Source: SNL Financial. |
 Non-GAAP
Reconciliation 25
Tangible Common Equity/Tangible
Assets
($000, data is LTM as of 9/30/14)
Northwest
LNB
Total Common Shareholders' Equity
$1,076,721
$113,065
Less: Goodwill & Other Intangibles, net
(179,533)
(21,938)
Tangible Common Equity
$897,188
$91,127
Total Assets
$7,826,926
$1,241,099
Less: Goodwill & Other Intangibles, net
(179,533)
(21,938)
Tangible Assets
$7,647,393
$1,219,161
Tangible Common Equity / Tangible Assets
11.73%
7.47%
Source: SNL Financial. |
 Non-GAAP
Reconciliation 26
Return on Avg. Tangible Common Equity
($000, data is LTM as of 9/30/14)
Northwest
LNB
Net Income
$65,050
$7,201
Plus: Amortization of Intangibles (35% tax rate)
789
88
Net Income Before Amortization of Intangibles
$65,839
$7,289
Average Total Shareholders' Equity
$1,108,353
$106,575
Less: Average Goodwill & Other Intangibles, net
(178,686)
(22,005)
Average Tangible Common Equity
$929,667
$84,570
Return on Average Tangible Common Equity
7.08%
8.62%
Source: SNL Financial. |