Harleysville approves merger
Ron Gower/TIMES NEWS East Penn Bank on Ridge Street, Lansford, soon will become - like all East Penn Bank branches - a branch of First Niagara Bank, which is headquartered in Buffalo, N.Y. The name change is expected to occur some time before March 31.
The shareholders of Harleysville National Corporation, which is the parent company of East Penn Bank, have voted overwhelmingly to approve the merger with First Niagara Financial Group of Buffalo, N.Y.
More than 97 percent of the shareholders voted on the proposal, with 76 giving support to the transaction.
Still needed for the merger to become effective is approval by federal regulators.
Joe Crivelli, spokesman for Harleysville National, said the closing for the merger is anticipated to occur within the first quarter of 2010.
All East Penn and Harleysville branches will assume the name and new logo of First Niagara. Crivelli said the name change is anticipated "between now and March 31."
The spokesman also said there have been assurances by First Niagara that none of the East Penn or Harleysville branches will be closed. East Penn Bank has branches in Mahoning Township, Palmerton, Summit Hill, Lansford and Slatington.
"We thank Harleysville shareholders for their strong support of our merger with First Niagara," said Paul D. Geraghty, president and chief executive officer of Harleysville National. "In approving the transaction, our shareholders recognized that First Niagara's strong balance sheet, consistent profitability, acquisition track record and experienced integration teams will clearly help our franchise build on its strong presence in the Philadelphia area."
The acquisition will provide First Niagara with $5.6 billion in assets, including $3.6 billion in loans and $4.1 billion in deposits in 83 branches across nine eastern Pennsylvania counties.
First Niagara currently employs about 2,800 people. Harleysville's workforce totals more than 1,100 employees.
Under the terms of the agreement, each Harleysville shareholder will receive 0.474 shares of First Niagara common stock for each Harleysville share owned.
At one time, Harleysville was an aggressive firm consuming smaller local banks.
Harleysville suffered in the collapse of the building boom.
The bank's share price dropped from a peak of $28 in 2003 to $3.61 in July 2009. The current prices is $6.72 per share.
By selling the bank, Harleysville avoided a possible federal takeover.
Less than two years ago, Harleysville announced that it was in a pretty good financial posture. It showed net income of $6.6 million in its third quarter of 2008, or 21 cents per diluted share.
For the first nine-month period of 2008, Harleysville had a net income of $21.3 million.
Harleysville National reported a net loss of $4.4 million or $.10 per diluted share for the third quarter of 2009.
For the nine months ended Sept. 30, 2009, net loss was $222.3 million or $5.16 per diluted share.
Harleysville became a player on the local financial field in 1990 when it acquired Citizens National Bank in an $8.6 million deal.
A year later, it purchased Summit Hill Trust Company in a $4.6 million deal.
In the past 16 years, Harleysville has acquired Security National Bank, Farmers & Merchants Bank, Northern Lehigh Bancorp, Citizens Bank & Trust Co. of Palmerton, Millennium Bank, East Penn Financial Corp., and Willow Financial Bankcorp.
When it purchased East Penn Financial Corp. in November 2007, the firm changed the name of all Carbon County area branches from Harleysville to East Penn Bank.