Northwest Bancshares, Inc. Announces Agreement to Acquire Penns Woods Bancorp, Inc.

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 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 a ratio of 2.385 shares of Northwest for each share of Penns Woods [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, and Penns Woods shareholders will receive a dividend of approximately $0.48 per share post-merger, which is about 49% higher than their current dividend [3]. Strategic Implications - The merger is seen as a milestone in Northwest's long-term growth strategy, allowing for expansion into new markets and enhanced service delivery [4]. - The combined entity will have over 150 financial centers across four states, increasing its market presence significantly [2][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 anticipated 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 consent from Penns Woods [6].