Harleysville National shareholders approve sale of bank to First Niagara Financial for $237M

Harleysville Natl holders OK sale to First Niagara

HARLEYSVILLE, Pa. — The bank Harleysville National on Monday said its shareholders approved its sale to First Niagara Financial Group.

The $237 million deal, announced in July, is expected to close in the next two months, subject to regulatory approval. Harleysville shareholders, who approved the deal Friday, will receive 0.474 shares of First Niagara for every share of Harleysville they owned.

Late last year, Niagara applied to the Federal Reserve to become a bank holding company, which allow it to acquire commercial banks and provide it with more business flexibility.

Harleysville National Corp. operates 83 bank branches across eastern Pennsylvania, including the Philadelphia area.

First Niagara Financial Group Inc., of Buffalo, N.Y., acquired 57 branches in western Pennsylvania from National City last year. The bank will have 254 branches in two states when the acquisition is completed.

The deal values Harleysville shares at $5.50 per share. Shares of Harleysville slipped 13 cents, or 1.9 percent, to $6.63 Monday.

In July, First Niagara said the acquisition should boost earnings per share by about 14 percent in 2011. Last week, the bank posted 2009 profit of $105.6 million, or 72 cents per share, up from $89.8 million, or 83 cents per share, in 2008.

First Niagara shares fell 17 cents to $14.31.