Two Pennsylvania thrifts completed a merger last week that required a complicated transaction to satisfy regulators.

More than a year after their deal was first announced, $2.6 billion- asset Northwest Savings Bank of Warren finally bought $29 million-asset Corry Savings Bank in Corry.

The merger was held up by regulations meant to discourage mutual thrifts, such as Corry Savings, from converting to stock form only to sell.

Regulators have ordinarily denied such applications from mutuals with more than $25 million of assets on grounds that the benefits rarely flow to the mutuals' depositors.

To gain approval, Northwest followed Corry's conversion with two steps. Northwest sold shares worth 30% of Corry's value to Corry's depositors at a 10% discount and simultaneously did a straight stock swap for the rest.

The deal brought Northwest's branch total to 71, in Pennsylvania and New York.

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