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Northwest Bancshares (NWBI) to Divest Insurance Business Unit

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Northwest Bank, a subsidiary of Northwest Bancshares, Inc. (NWBI - Free Report) , has announced a deal to sell its insurance business unit — Northwest Insurance Services — to the insurance brokerage and consulting firm, USI Insurance Services. Financial terms of the transaction have not been disclosed yet.

The deal, expected to close early in the second quarter of 2021, is subject to customary closing conditions.

Notably, Northwest Insurance Services offers property and casualty, life, disability and long-term care insurance. Further, it provides group health, life and disability employee benefits.

The president and CEO of Northwest Bank, Ron Seiffert said, "We are very pleased to have reached a definitive agreement with USI. USI is a well-managed, national provider who combines industry-leading capabilities delivered through longstanding, passionate and committed local service teams. We share very similar experience philosophies and see this as an exciting partnership for our insurance associates and clients."

Per USI's Chairman and CEO, Michael J. Sicard, “We look forward to welcoming the talented professionals from Northwest Insurance Services to the USI family. By partnering together as ONE, we look forward to expanding our expertise throughout western Pennsylvania and western New York through the USI ONE Advantage, an interactive knowledge platform that integrates proprietary analytics, networked resources and enterprise planning to deliver truly customized solutions with material financial impact to clients."

This divestiture is part of Northwest Bancshares’s aim to remain focused on its core businesses and simplify the complex organization.

Over the past six months, shares of Northwest Bancshares have gained 48.9%, underperforming  the industry ’s 59% rally.

Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar Actions by Other Banks

There has been a rise in restructuring activities in the banking sector amid the coronavirus pandemic. Last month, Wells Fargo (WFC - Free Report) agreed to sell its Corporate Trust Services (CTS) business, to Computershare Limited. The transaction is likely to close in the first half of 2021. Additionally, HSBC Holdings (HSBC - Free Report) has entered into final talks to sell its unprofitable French retail bank to the U.S.-based private equity firm, Cerberus Capital Management.

Earlier, this January, Truist Financial Corporation (TFC - Free Report) agreed to sell its institutional 401(k) record keeping businesses to Ascensus and Empower Retirement.

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