Core Viewpoint - Northwest Bancshares, Inc. will acquire Penns Woods Bancorp, Inc. in an all-stock transaction valued at approximately $270.4 million, enhancing its presence in North Central and Northeastern Pennsylvania [1][2]. Company Overview - Penns Woods Bancorp, Inc. has approximately $2.3 billion in assets, $1.7 billion in total deposits, and $1.9 billion in total loans as of September 30, 2024 [2]. - The combined company is expected to have pro forma total assets exceeding $17 billion, positioning it among the top 100 largest banks in the nation [2]. Transaction Details - The merger will involve Northwest exchanging shares of its common stock for all outstanding shares of Penns Woods common stock, with Penns Woods shareholders receiving 2.385 shares of Northwest common stock for each share they own [3]. - The transaction consideration is valued at $34.44 per share of Penns Woods, representing a 139.0% multiple of tangible book value and a 12.8x multiple on LTM core earnings [3]. - The merger is expected to qualify as a tax-free reorganization, with Penns Woods shareholders anticipated to receive a dividend of approximately $0.48 per share post-merger, which is about 49% higher than their current dividend [3]. Strategic Rationale - The merger is seen as a milestone in Northwest's long-term growth strategy, allowing for expansion into new markets and enhanced service delivery across its footprint [4]. - Both companies believe the merger will create a catalyst for growth, benefiting employees, customers, and shareholders [4]. Financial Impact - Excluding one-time transaction costs, the merger is expected to be approximately 23% accretive to 2026 fully diluted earnings per share [5]. - Tangible book value dilution is projected to be around 9% at closing, with an earn-back period of under 3 years [5]. Timeline and Approvals - The transaction is expected to be completed in the third quarter of 2025, pending regulatory approvals and shareholder approval from Penns Woods [6].

Financial Performance - Net income for the nine months ended September 30, 2024, was $14.0 million, with basic and diluted earnings per share of $1.86, compared to $11.1 million and $1.56 for the same period in 2023, representing a 26.1% increase in net income [2]. - Core earnings for the nine months ended September 30, 2024, were $14.0 million, with core earnings per share of $1.86, compared to $11.2 million and $1.55 for the same period in 2023 [5]. - Income before income tax provision surged by 119.79% to $5,853,000, compared to $2,663,000 in the prior year [18]. - Net income available to common shareholders increased by 115.87% to $4,801,000, up from $2,224,000 year-over-year [18]. - Basic earnings per share rose by 106.45% to $0.64, compared to $0.31 in the same quarter last year [18]. - GAAP net income for the three months ended September 30, 2024, was $4,801,000, compared to $2,224,000 for the same period in 2023, representing a significant increase [26]. - Non-GAAP core earnings for the three months ended September 30, 2024, were $4,773,000, up from $2,288,000 in the prior year, indicating strong operational performance [26]. Asset and Equity Growth - Total assets rose to $2.3 billion at September 30, 2024, an increase of $82.8 million compared to the previous year, with net loans increasing by $58.0 million to $1.9 billion [9]. - Shareholders' equity increased by $29.2 million to $203.7 million at September 30, 2024, with a book value per share of $26.96 compared to $24.55 in 2023 [12]. - Total assets increased by 3.80% to $2,259,250,000 from $2,176,468,000 [17]. - Total shareholders' equity increased by 16.70% to $203,694,000 from $174,540,000 [17]. - Total assets reached $2,220,944,000 as of September 30, 2024, compared to $2,092,034,000 in the previous year, reflecting a growth of 6.2% [21]. - Total shareholders' equity increased to $203,694,000 as of September 30, 2024, from $197,087,000 a year earlier, indicating a solid capital position [26]. - Book value per share improved to $26.96 as of September 30, 2024, compared to $26.13 in the prior year, reflecting growth in shareholder equity [26]. Loan and Deposit Trends - Deposits increased by $133.1 million to $1.7 billion at September 30, 2024, with interest-bearing deposits growing by $151.6 million [11]. - Total loans as of September 30, 2024, amounted to $1,861,973,000, compared to $1,734,968,000 in 2023, marking an increase of 7.3% [21]. - Total interest-bearing deposits increased to $1,189,548,000 for the three months ended September 30, 2024, from $1,084,765,000 in 2023, representing a rise of 9.7% [21]. - Total deposits grew by 8.49% to $1,700,321,000 from $1,567,267,000 [17]. Interest Income and Expense - The net interest margin for the three months ended September 30, 2024, was 2.88%, up from 2.65% in the same period of 2023, driven by an increase in interest-earning asset rates [8]. - Total interest and dividend income increased by 17.84% year-over-year to $28,188,000 for the three months ended September 30, 2024 [18]. - Total interest income for the three months ended September 30, 2024, was $28,188,000, compared to $23,921,000 for the same period in 2023, representing an increase of 17.6% [20]. - Total interest expense increased by 24.02% to $13,132,000, primarily due to higher deposit costs [18]. - Total interest expense increased to $13,132,000 for the three months ended September 30, 2024, from $10,589,000 in the prior year, reflecting a rise of 24.1% [20]. Credit Quality - The allowance for credit losses included a provision of $740,000 for the three months ended September 30, 2024, compared to $1.4 million for the same period in 2023, indicating improved credit quality [3]. - The ratio of non-performing loans to total loans increased to 0.42% at September 30, 2024, from 0.20% a year earlier, with non-performing loans rising to $7.9 million [10]. - Provision for credit losses decreased by 46.06% to $740,000, indicating improved credit quality [18]. Operational Efficiency - The efficiency ratio improved to 62.26%, down from 66.25% in the previous quarter, indicating better operational efficiency [24]. - Non-interest expense decreased slightly by 2.58% to $10,884,000, reflecting cost management efforts [18]. - Non-interest expense decreased to $10,884 thousand from $10,996 thousand in the previous quarter, a reduction of 1.0% [24].

Financial Performance - Net income for the three months ended June 30, 2024, was $5,390,000, an increase of 29.2% compared to $4,171,000 for the same period in 2023[110] - Basic earnings per share for the three months ended June 30, 2024, were $0.72, up from $0.59 in the same period of 2023, representing a 22% increase[115] - Total interest income for the six months ended June 30, 2024, was $53,259,000, compared to $41,757,000 for the same period in 2023, representing a 27.5% increase[126] - Net interest income (GAAP) for the three months ended June 30, 2024, was $14,515,000, up from $13,386,000 in 2023, reflecting an 8.4% increase[126] - Net interest income (fully taxable equivalent) for the six months ended June 30, 2024, was $28,508,000, compared to $27,954,000 in 2023, showing a 2% increase[126] Interest and Expense Management - Interest and dividend income for the three months ended June 30, 2024, increased by $5,136,000, or 23.46%, compared to the same period in 2023[116] - Total interest expense for the three months ended June 30, 2024, was $12,514,000, an increase of 47.10% compared to $8,507,000 for the same period in 2023[120] - Total interest expense rose to $24,998,000, a 77.63% increase from $14,073,000 in the previous year[121] - The rate paid on interest-bearing deposits increased by 115 basis points, resulting in an expense increase of $4,026,000 for the three months ended June 30, 2024[122] - Total interest-bearing liabilities increased to $1,535,026,000, with an average rate of 3.28%[124] Asset and Loan Growth - Loans including fees for the three months ended June 30, 2024, amounted to $24,529,000, representing 90.75% of total interest and dividend income[117] - Average loan portfolio balance increased by $120,814,000 for the three months ended June 30, 2024, compared to the same period in 2023[122] - Total loans for the six months ended June 30, 2024, amounted to $1,855,425,000, compared to $1,702,467,000 for the same period in 2023, marking a 9% increase[125] - Gross loans increased by $26,524,000 since December 31, 2023, reaching a total of $1,866,288,000, driven primarily by growth in residential and commercial real estate mortgage categories[151] Credit Quality and Loss Provisions - The allowance for credit losses for the three months ended June 30, 2024, included negative provisions of $1,177,000, compared to negative provisions of $1,180,000 for the same period in 2023[110] - The provision for credit losses decreased from $11,446,000 at December 31, 2023, to $11,234,000 at June 30, 2024, indicating improved loan quality[133] - The allowance for credit losses to total loans was 0.60% at June 30, 2024, down from 0.62% at December 31, 2023[133] - Nonperforming loans increased to $6,784,000 at June 30, 2024, from $3,148,000 at December 31, 2023, representing a significant rise[136] - The ratio of nonperforming loans to total loans increased to 0.36% at June 30, 2024, compared to 0.17% at December 31, 2023[136] Deposits and Funding - Total deposits increased to $16,840,000, representing a 104.79% change from $8,223,000 in the previous year[121] - Total interest-bearing deposits increased to $1,164,996,000 for the six months ended June 30, 2024, from $1,073,869,000 in 2023, a rise of 8.5%[125] - Money market deposits surged by $105,213,000, representing a 48.96% increase, from $214,888,000 to $320,101,000 during the same period[160] - Time deposits rose by $50,120,000, or 19.27%, from $260,067,000 to $310,187,000[160] - Total borrowed funds decreased by $35,006,000, or 8.78%, from $398,524,000 to $363,518,000[161] Capital and Regulatory Ratios - Common Equity Tier I Capital ratio increased to 10.170% as of June 30, 2024, up from 10.098% on December 31, 2023[172] - Total Capital ratio improved to 10.801% as of June 30, 2024, compared to 10.798% at the end of 2023[172] - The Company maintained a net loans to total deposits ratio of 113% as of June 30, 2024, exceeding the maximum limit of 100%[176] - The Total Capital to Risk-weighted Assets ratio was 10.624% as of June 30, 2024, compared to 10.701% on December 31, 2023, with an actual amount of $143,787 thousand[173] Operational Efficiency - Total non-interest expense decreased by $433,000 for the three months ended June 30, 2024, compared to the same period in 2023[144] - Non-interest expenses for the three months ended June 30, 2024, totaled $10,996,000, a decrease of $433,000 or 3.79% compared to $11,429,000 for the same period in 2023[145] - Marketing expenses decreased significantly by $194,000 or 71.32% in Q2 2024, totaling $78,000 compared to $272,000 in Q2 2023[145] Risk Management - The Company is primarily exposed to interest rate risk and liquidity risk[190] - Interest rate sensitivity is monitored through measures produced by an independent third party[190] - Management believes the Company is well positioned to respond to changes in market interest rate outlook[191]

Core Points - Penns Woods Bancorp, Inc. reported a net income of $9.2 million for the six months ended June 30, 2024, with earnings per share of $1.22 [1][2] - The company experienced an increase in net interest income of $1.1 million and $577,000 for the three and six months ended June 30, 2024, compared to the same periods in 2023 [2] - The allowance for credit losses showed negative provisions of $1.2 million and $1.0 million for the three and six months ended June 30, 2024, respectively [2] Net Income - Net income for the three months ended June 30, 2024, was $5.4 million, up from $4.2 million in the same period of 2023 [2][10] - Basic and diluted earnings per share for the three months ended June 30, 2024, were $0.72, compared to $0.59 for the same period in 2023 [2][10] Net Interest Margin - The net interest margin for the three and six months ended June 30, 2024, was 2.83% and 2.75%, respectively, compared to 2.77% and 2.92% for the same periods in 2023 [11] - The increase in the net interest margin for the three-month period was driven by a 74 basis point increase in the rate paid on interest-earning assets [11] Assets - Total assets increased to $2.2 billion at June 30, 2024, an increase of $99.3 million compared to June 30, 2023 [27] - Net loans increased by $97.2 million to $1.9 billion at June 30, 2024, with a focus on commercial loan growth and indirect auto lending [27] Shareholders' Equity - Shareholders' equity increased by $22.7 million to $197.1 million at June 30, 2024, compared to June 30, 2023 [7] - The book value per share increased to $26.13 at June 30, 2024, from $24.69 at June 30, 2023 [7] Non-performing Loans - The ratio of non-performing loans to total loans increased to 0.36% at June 30, 2024, from 0.24% at June 30, 2023 [28] - Non-performing loans increased to $6.8 million at June 30, 2024, from $4.3 million at June 30, 2023 [28] Deposits - Total deposits increased by $94.3 million to $1.6 billion at June 30, 2024, compared to June 30, 2023 [29] - Interest-bearing deposits increased by $109.2 million, primarily due to growth in the time deposit portfolio [29]

Press Release — For Immediate Release July 25, 2024 Penns Woods Bancorp, Inc. achieved net income of $9.2 million for the six months ended June 30, 2024, resulting in basic and diluted earnings per share of $1.22. • The allowance for credit losses was impacted for the three and six months ended June 30, 2024 by negative provisions for credit losses of $1.2 million and $1.0 million, respectively, compared to negative provisions for credit losses of $1.2 million and $1.1 million for the 2023 periods. The reco ...

About Penns Woods Bancorp, Inc. Penns Woods Bancorp, Inc. is the bank holding company for Jersey Shore State Bank and Luzerne Bank. The banks serve customers in North Central and North Eastern Pennsylvania through their retail banking, commercial banking, mortgage services and financial services divisions. Penns Woods Bancorp, Inc. stock is listed on the NASDAQ National Market under the symbol PWOD. Previous press releases and additional information can be obtained from the company's website at www.pwod.com ...

Penns Woods Bancorp, Inc. is the bank holding company for Jersey Shore State Bank and Luzerne Bank. The banks serve customers in North Central and North Eastern Pennsylvania through their retail banking, commercial banking, mortgage services and financial services divisions. Penns Woods Bancorp, Inc. stock is listed on the NASDAQ National Market under the symbol PWOD. Previous press releases and additional information can be obtained from the company's website at www.pwod.com. Contact: Richard A. Grafmyre, ...

Note: This press release may contain certain "forward-looking statements" including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact. The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-l ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended March 31, 2024. ☐ Transition report pursuant to Section 13 or 15 (d) of the Exchange Act For the Transition Period from to . No. 0-17077 (Commission File Number) PENNS WOODS BANCORP INC. (Exact name of Registrant as specified in its charter) Pennsylvania 300 Market Street, P.O. Box 967 23- ...

Financial Performance - Net income for the three months ended March 31, 2024, was $3.8 million, down from $4.7 million for the same period in 2023, resulting in basic and diluted earnings per share of $0.51 compared to $0.66 and $0.64, respectively [2][4]. - Core earnings for the same period were $3.8 million, a decrease from $4.7 million in 2023, with annualized core return on average assets at 0.69% and core return on average equity at 8.09%, down from 0.93% and 11.19% in 2023 [4]. - Net income available to common shareholders decreased by 18.25% to $3,808, with diluted earnings per share falling by 20.31% to $0.51 [21]. - Net income for Q1 2024 was $3,808,000, a decrease of 18.3% from $4,658,000 in Q1 2023 [26]. - Basic earnings per share (EPS) for Q1 2024 was $0.51, a decrease of 22.7% compared to $0.66 in Q1 2023 [29]. Asset and Loan Growth - Total assets increased to $2.2 billion, up $145 million from March 31, 2023, with net loans rising by $155.5 million to $1.8 billion [8]. - Total assets increased by 7.02% to $2,210,116, compared to $2,065,143 in 2023 [19]. - Loans held for sale rose significantly by 97.07% to $3,360, while total loans increased by 9.14% to $1,855,347 [19]. - The average loan portfolio balance increased by $185.5 million, with a corresponding increase in taxable equivalent interest income of $5.9 million [7]. Non-Performing Loans and Credit Quality - Non-performing loans increased to $8.0 million, resulting in a non-performing loans to total loans ratio of 0.43%, up from 0.28% in the previous year [9]. - The provision for credit losses increased to $138,000 from $71,000 in the prior year, primarily due to a loan relationship moving to nonaccrual status [5]. - The provision for credit losses increased by 94.37% to $138, suggesting a more cautious outlook on credit quality [21]. - Non-performing loans increased to $7,958,000, representing 0.36% of total assets, up from 0.23% in Q1 2023 [27]. Deposits and Liabilities - Deposits decreased by $20.3 million to $1.6 billion, with noninterest-bearing deposits down $30.9 million, while interest-bearing deposits increased by $10.6 million [10]. - Total deposits rose to $1,618,562,000 in Q1 2024, compared to $1,638,835,000 in Q1 2023, reflecting a decrease of 1.2% [27]. - Total liabilities rose by 6.63% to $2,016,599, with long-term borrowings increasing by 97.21% to $261,770 [19]. Shareholders' Equity - Shareholders' equity rose by $19.5 million to $193.5 million, with a book value per share of $25.72, up from $24.64 in 2023 [11][12]. - Shareholders' equity increased to $193,517,000 in Q1 2024, compared to $173,970,000 in Q1 2023, marking an increase of 11.2% [27]. - Shareholders' equity increased by 11.24% to $193,517, reflecting a rise in additional paid-in capital by 14.01% [19]. Interest Income and Expense - The net interest margin decreased to 2.69% for the three months ended March 31, 2024, from 3.10% in the same period of 2023, primarily due to a 156 basis point increase in the rate paid on interest-bearing liabilities [5]. - Total interest and dividend income grew by 32.05% to $26,230, driven by a 32.52% increase in loans including fees [21]. - Interest expense surged by 124.29% to $12,484, primarily due to a 136.15% increase in deposits [21]. - Net interest income for Q1 2024 was $13,746,000, down from $14,298,000 in Q1 2023, reflecting a decline of 3.9% [26]. Operational Efficiency - The efficiency ratio for Q1 2024 was 71.41%, up from 65.46% in Q1 2023, indicating a decline in operational efficiency [26]. - The interest rate spread decreased to 1.84% from 2.60% in the previous year, indicating tighter margins [24]. Strategic Focus - The company continues to focus on increasing electronic deposit banking utilization among customers as part of its core deposit gathering efforts [10].