Northwest Bancshares in Columbus, Ohio, has agreed to buy Penns Woods Bancorp in Williamsport, Pa.
The $14.4 billion-asset Northwest said in a press release that it will pay $270.4 million in stock for the $2.3 billion-asset Penns Woods. The deal, which is expected to close in the third quarter, priced Penns Woods at 139% of its tangible book value.
Penns Woods has 24 branches, $1.7 billion of deposits and $1.9 billion of loans.
“This transaction marks another milestone in our long-term growth strategy and executes on our strategic plan,” Louis Torchio, Northwest’s president and CEO, said in the release. “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.”
Richard Grafmyre, Penns Woods’ CEO, will join Northwest’s board.
Northwest expects the transaction to be about 23% accretive to 2026 earnings per share, excluding one-time transaction costs. It should take less than three years to earn back an estimated 9% dilution to Northwest’s tangible book value.
Northwest plans to cut about 40% of Penns Woods’ annual operating expenses. The company expects to incur $36.2 million of merger-related charges.
Janney Montgomery Scott and Dinsmore & Shohl advised Northwest. Stephens and Stevens & Lee advised Penns Woods.