Northwest Bancshares Announces Agreement to Acquire Penns Woods Bancorp

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].