Lorain National Bank shareholders have approved a merger with Northwest Savings Bank, but 99 of 280 bank workers will be cut when the companies join Aug. 14.
On June 16, LNB Bancorp Inc. announced its shareholders voted to approve the merger of LNB with Northwest Bancshares Inc., the parent company of the Warren, Pa.-based bank.
“I am pleased to report that our shareholders have approved the merger with Northwest, with 80 percent of the outstanding common shares in favor of the merger proposal,” said Daniel E. Klimas, president and chief executive officer of Lorain National Bank.
However, Klimas said the job cuts will be a difficult part of the merger.
Many of the eliminations will be within back office functions such as operations, technology and customer service at LNB’s headquarters, 457 Broadway, and its operations center, 2130 W. Park Drive in Lorain. Northwest Savings will keep many of the customer-facing jobs such as commercial lending, trust and investment management and the retail branches, Klimas said.
The bank already has had workers meet with representatives from the Ohio Department of Job and Family Services to develop resumes and find positions within other local companies, Klimas said.
So far, at least 12 workers have found other jobs with other businesses and some others have been placed internally as positions become available, he said.
“So, we have a game plan in place to do the best we can to assist in this transition,” Klimas said.
Many of the jobs will be eliminated by Aug. 14 and all by the end of the year.
The employees also will have a severance package that shows Northwest Savings’ commitment to the local community, Klimas said. He added the severance package with salary and health insurance is as good as any he has seen from a banking organization.
The workers involved are local people with families and lives outside the bank, Klimas said. Eliminating even one job is a sad occasion, so the job cuts on this scale have been even more difficult to deal with, he said.
“Obviously, this is extremely difficult,” Klimas said. “Many of these folks have been with the bank a long time. A vast majority are great performers and have done a good job for us over time.
“Many of them are extremely high performance. None of this displacement is related to performance whatsoever. It’s really a duplication of activities that are performed by Northwest Savings.”
The 99 job cuts deal with a lot of people, but it is less than would be involved in a typical merger because Northwest Savings does not yet have a strong presence in the territory of Lorain National Bank, Klimas said.
As for the merger, details were the same as announced previously Dec. 15, 2014.
LNB Bancorp Inc. shareholders will be entitled to elect to receive either 1.461 shares of Northwest Bancshares Inc. common stock or $18.70 in cash for each common share of LNB Bancorp, subject to an overall allocation of exchanged shares into 50 percent cash and 50 percent stock, according to the company.
Shareholders can expect to receive election forms in July.
All regulatory approvals have been received for the merger.
The companies expect to begin providing information in July to LNB customers regarding the integration of LNB’s deposit and loan system and the conversion of LNB’s branches to Northwest Bank’s operating platform. Both are anticipated to be completed over the weekend of Aug. 14, subject to completion of the merger.