Just days after federal banking regulators lifted a supervisory agreement that had restricted its ability to buy another company, Northwest Bancshares struck a deal to buy a financial advisory firm and a related employee benefits firm in Erie, Pa.
The Warren, Pa.-based parent of Northwest Savings Bank, which operates 19 branches in the greater Buffalo and Rochester markets, said Wednesday it had agreed to pay an undisclosed price to buy Evans Capital Management Inc., which manages or administers over $240 million in assets for its clients.
Founded in 1983 by Jeffrey W. Evans, the firm specializes in comprehensive financial planning for individuals, profit-sharing and 401(k) plans, trusts, estates, charities and small businesses. It serves all of northwestern Pennsylvania, with a long list of individual, business, nonprofit and public clients.
The deal is expected to close Jan. 1, after which Evans Capital will continue operating from its current location under its current management and 10 employees, as a subsidiary of the bank. Northwest will have nearly $2 billion in assets under management or administration.
“We are extremely pleased to be able to partner with ECM and its staff,” said Northwest Executive Vice President Gregory C. LaRocca. “This combination will bring the expanded services of a larger organization to ECM’s customers, and it will significantly enhance Northwest’s wealth management activities in western Pennsylvania.”
Northwest also agreed to buy Employee Benefit Resources, an employee benefits and consulting insurance firm that is owned separately by Evans and his son, Jeffrey G. Evans. The agency’s staff will become part of Northwest Insurance Services.
This is the second nonbank deal in about a year for Northwest, both in Erie. The bank bought The Bert Co., an employee benefits firm, in December 2012. But both deals could have been problematic for the company.
Since July 2012, Northwest had been under a “memorandum of understanding” with its regulator, the Federal Deposit Insurance Corp., that required it to evaluate and enhance its compliance training and complaint management system for dealing with consumers.
That agreement, in turn, had followed a consent order imposed in July 2011, after a compliance exam found the bank had failed to pay proper interest to some consumers. It was fined $325,000 and had to pay $375,000 in restitution, as well as beef up its policies, procedures and staffing.
But more significantly, the regulatory problems had derailed the bank’s last acquisition, of NexTier Bank. That purchase, which would have added nearly $600 million in assets and 16 branches in Pennsylvania, was terminated in November 2010 after the FDIC discovered the problem.
With the regulatory restrictions now lifted, observers expect the bank to try again.