COLUMBUS, Ohio, Dec. 17,
2024 /PRNewswire/ -- Northwest Bancshares, Inc.
("Northwest") (NASDAQ: NWBI) the bank holding company for Northwest
Bank, and Penns Woods Bancorp, Inc. ("Penns Woods") (NASDAQ: PWOD),
the multi-bank holding company of Jersey Shore State Bank and
Luzerne Bank, jointly announced today that they have entered
into a definitive Agreement and Plan of Merger ("Agreement")
whereby Northwest will acquire Penns Woods in an all-stock
transaction valued at approximately $270.4
million. Combining the two organizations will significantly
enhance the combined company's presence in North Central and
Northeastern Pennsylvania.
Headquartered in Williamsport,
Pennsylvania, Penns Woods 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. The combined company is
expected to have pro forma total assets in excess of $17 billion and is expected to be one of the
nation's top 100 largest banks. The combined company's Pennsylvania banking presence will be enhanced
through the addition of 24 branch locations across Blair, Centre, Clinton, Luzerne, Lycoming, Montour, and Union counties. The complementary footprint of
Penns Woods links Northwest's presence in both eastern and western
Pennsylvania. When the transaction
is completed, Northwest will have more than 150 financial centers,
as well as loan production offices, across four states.
Under the terms of the Agreement, which has been unanimously
approved by the board of directors of both companies, Northwest
will exchange shares of its common stock for all of the outstanding
shares of Penns Woods common stock, in an all-stock transaction.
Penns Woods shareholders will be entitled to receive 2.385 shares
of Northwest common stock for each share of Penns Woods common
stock they own upon the effective time of the merger. Any
unexercised stock options of Penns Woods will be canceled in
exchange for a cash payment at the spread value over the exercise
price. Based on Northwest's closing stock price of $14.44 as of December 16,
2024, the transaction consideration is valued at
$34.44 for each share of Penns Woods
which equates to a 139.0% multiple of tangible book value, a 12.8x
multiple on LTM core earnings and a core deposit premium of 5.2% as
of September 30, 2024. Including the
consideration paid to option holders, the aggregate consideration
is approximately $270.4 million. The
merger is expected to qualify as a tax-free reorganization.
Following completion of the transaction, Penns Woods shareholders
would be expected to receive, on a per share equivalent basis, a
dividend equal to approximately $0.48
per share based on Northwest's current quarterly dividend of
$0.20 per share. This dividend is
approximately 49% higher than Penns Woods' current quarterly
dividend of $0.32 per share.
Louis J. Torchio, President and
CEO of Northwest, stated, "We are very excited to announce this
partnership with the Penns Woods team as this transaction marks
another milestone in our long-term growth strategy and executes on
our strategic plan. Jersey Shore State Bank and Luzerne Bank have outstanding reputations
throughout their respective markets, and we look forward to
welcoming our new colleagues and their customers to the Northwest
family. We will be strongly positioned to continue to serve
communities that are familiar to Northwest, expand our presence
into new markets, and deliver exceptional banking services across
our entire footprint. Through this acquisition, we look forward to
building on Northwest's rich history of community-focused banking
and delivering even greater value to our customers, employees,
communities, and shareholders."
Richard A. Grafmyre, CEO of Penns
Woods, added, "As Lou mentioned, we are very excited to announce
this partnership and are looking forward to bringing together two
like-minded institutions. This combination will provide the best
path for the long-term success of our organization, employees,
customers, and shareholders. We believe that the combination of our
highly compatible organizations will create a catalyst for growth
and benefit all of the communities we serve. The merger will
provide increased scale and additional capabilities for our
customers, and it will provide greater opportunities for our
employees to advance their careers as a part of a larger
organization."
Upon completion of the merger, the shares issued to Penns Woods
shareholders are expected to comprise approximately 12% of the
outstanding shares of the combined company. The Agreement also
provides that Northwest will appoint Richard A. Grafmyre to the boards of Northwest
and Northwest Bank after closing.
Excluding one-time transaction costs, Northwest expects the
transaction to be approximately 23% accretive to 2026 fully diluted
earnings per share. Tangible book value dilution is expected to be
approximately 9% at closing, with an expected tangible book value
earn-back period of under 3 years using the "cross-over" method.
The "pay-to-trade" multiple is 0.91x. Northwest and Northwest Bank
capital ratios are expected to be significantly above
"well-capitalized" regulatory thresholds upon closing.
The companies expect to complete the transaction in the third
quarter of 2025, subject to the satisfaction of customary closing
conditions, including regulatory approvals and approval by Penns
Woods shareholders. At closing, Jersey Shore State Bank and
Luzerne Bank branches will become
branches of Northwest Bank.
Janney Montgomery Scott, LLC is
acting as financial advisor to Northwest, and Dinsmore & Shohl
LLP is acting as its legal advisor in the transaction. Stephens
Inc. is acting as financial advisor to Penns Woods, and Stevens
& Lee, P.C. is acting as its legal advisor in the transaction.
An investor presentation that provides additional details regarding
this transaction is available online at
investorrelations.northwest.bank.
About Northwest Bancshares, Inc.
Headquartered in Columbus,
Ohio, Northwest Bancshares, Inc. is the bank holding company
of Northwest Bank. Founded in 1896, Northwest Bank is a
full-service financial institution which offers a complete line of
business and consumer banking products, as well as employee
benefits and wealth management services. Currently, Northwest
operates 130 full-service financial centers and eleven free
standing drive-up facilities in Pennsylvania, New
York, Ohio, and
Indiana.
Northwest Bancshares, Inc.'s common stock is listed on the
NASDAQ Global Select Market under the symbol NWBI. Additional
information regarding Northwest Bancshares, Inc. and Northwest Bank
can be accessed online at www.northwest.bank.
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 Northeastern Pennsylvania through their retail
banking, commercial banking, mortgage services, and financial
services divisions. Penns Woods Bancorp, Inc. stock is listed on
the NASDAQ Global Select Market under the symbol PWOD.
Previous press releases and additional information can be obtained
from the company's website at www.pwod.com.
Forward-Looking Statements
The statements in this press release that are not historical
facts, in particular the statements with respect to the expected
timing of and benefits of the proposed merger between Northwest and
Penns Woods, the parties' plans, obligations, expectations, and
intentions, and the statements with respect to accretion and
earn-back of tangible book value dilution, constitute
forward-looking statements as defined by federal securities laws.
Such statements are subject to numerous assumptions, risks, and
uncertainties. Actual results could differ materially from
those contained or implied by such statements for a variety of
factors including: the businesses of Northwest and Penns Woods may
not be integrated successfully or such integration may take longer
to accomplish than expected; the expected cost savings and any
revenue synergies from the proposed merger may not be fully
realized within the expected timeframes; disruption from the
proposed merger may make it more difficult to maintain
relationships with clients, associates, or suppliers; the required
governmental approvals of the proposed merger may not be obtained
on the expected terms and schedule; Penns Woods' shareholders may
not approve the proposed merger and the Agreement; and changes in
economic conditions; movements in interest rates; competitive
pressures on product pricing and services; success and timing of
other business strategies; the nature, extent, and timing of
governmental actions and reforms; and extended disruption of vital
infrastructure; and other factors described in Northwest's 2023
Annual Report on Form 10-K, Penns Woods's 2023 Annual Report on
Form 10-K, and documents subsequently filed by Northwest and Penns
Woods with the Securities and Exchange Commission (SEC).
Annualized, pro forma, projected and estimated numbers are used for
illustrative purposes only, are not forecasts and may not reflect
actual results. All forward-looking statements included
herein are based on information available at the time of the
release. Neither Northwest nor Penns Woods assumes any obligation
to update any forward-looking statement.
Additional Information about the Merger and Where to Find
It
This news release does not constitute an offer to sell or the
solicitation of an offer to buy securities of Northwest. In
connection with the proposed merger, Northwest will file with the
SEC a Registration Statement on Form S-4 that will include a proxy
statement of Penns Woods, and a prospectus of Northwest, as well as
other relevant documents concerning the proposed transaction.
INVESTORS AND SHAREHOLDERS OF PENNS WOODS, AND OTHER INTERESTED
PARTIES ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY
STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE
AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. The Proxy Statement/Prospectus
will be mailed to shareholders of Penns Woods prior to the
shareholder meeting, which has not yet been scheduled. In addition,
when the Registration Statement on Form S-4, which will include the
Proxy Statement/Prospectus, and other related documents are filed
by Northwest with the SEC, it may be obtained for free at the SEC's
website at www.sec.gov, and from either Northwest's website at
www.northwest.bank or Penns Woods' website at www.pwod.com.
Participants in the Solicitation
Northwest, Penns Woods, and their respective executive officers
and directors may be deemed to be participants in the solicitation
of proxies from the shareholders of Northwest and Penns Woods in
connection with the proposed merger. Information about the
directors and executive officers of Northwest is set forth in the
proxy statement for Northwest's 2024 annual meeting of
shareholders, as filed with the SEC on March
8, 2024. Information about the directors and executive
officers of Penns Woods is set forth in the proxy statement for
Penns Woods's 2024 annual meeting of shareholders, as filed with
the SEC on March 26, 2024.
Information about any other persons who may, under the rules of the
SEC, be considered participants in the solicitation of shareholders
of Penns Woods in connection with the proposed merger will be
included in the Proxy Statement/Prospectus. You can obtain free
copies of these documents from the SEC, Northwest, or Penns Woods
using the website information above. This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
PENNS WOODS SHAREHOLDERS AND INVESTORS ARE URGED TO READ THE
PROXY STATEMENT/PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE
BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS WITH RESPECT TO
THE PROPOSED MERGER.
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SOURCE Northwest Bancshares, Inc.