Northwest Bancshares in Columbus, Ohio, said Tuesday it would acquire Penns Woods Bancorp in a bid to expand into Pennsylvania.
The $270 million, all-stock deal would bolster and extend the $14.4 billion-asset Northwest's reach in the north-central and northeastern sections of Pennsylvania. Williamsport, Pennsylvania-based Penns Woods has approximately $2.3 billion of assets, $1.7 billion of deposits and $1.9 billion of loans.
Based on Northwest's closing stock price of $14.44 on Dec. 16, the transaction was valued at $34.44 for each Penns Woods share. This equates to a 139% multiple of tangible book value, according to a press release announcing the combination.
Penns Woods is the holding company of Jersey Shore State Bank and Luzerne Bank. The banks have 24 branches across Blair, Centre, Clinton, Luzerne, Lycoming, Montour and Union counties in Pennsylvania. Those branches would transition to the Northwest Bank name after closing.
The companies expect to close the transaction in the third quarter of 2025. The merged company would have nearly $17 billion of assets. Northwest will have more than 150 branches across its home state and Pennsylvania as well as Indiana and New York.
"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," Louis Torchio, president and CEO of Northwest, said in the release.
Excluding one-time transaction costs, Northwest expects the deal to be 23% accretive to 2026 earnings per share. The bank projected it would earn back tangible book value dilution of 9% within three years. Northwest said it and its bank would have capital ratios "significantly above" regulatory thresholds.
After closing, the shares issued to Penns Woods shareholders were expected to comprise about 12% of the outstanding shares of the combined company. As part of the deal, Penns Woods shareholders would receive a dividend of about 48 cents per share. Penns Woods' current quarterly dividend is 32 cents.
Northwest also agreed to appoint Penns Woods CEO Richard Grafmyre to the boards of Northwest and Northwest Bank.
"We believe that the combination of our highly compatible organizations will create a catalyst for growth and benefit all of the communities we serve," Grafmyre said in the release. "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."
By deal value, the Northwest-Penns Woods combination would rank among the 15 largest of 2024. It contributed to an accelerated pace of deal volume as well.
There were 114 bank sales announced this year through the end of November, S&P Global Market Intelligence data show. Those deals had an aggregate deal value of $14.4 billion. For all of last year, there were 98 deal announcements with a combined value of $4.2 billion.
Several more mergers have been inked so far in December. The
