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Jersey Shore State Bank part of merger

Northwest Bancshares Inc., the bank holding company for Northwest Bank, and Penns Woods Bancorp. Inc., the multi-bank holding company of Jersey Shore State Bank and Luzerne Bank, jointly announced this week they have entered into a definitive agreement and plan of merger.

With this merger, 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, according to a news release from Carolyn Konopski, vice president and marketing manager of Jersey Shore State and Luzerne banks released Tuesday.

Headquartered in Williamsport, Penns Woods has about $2.3 billion in assets, $1.7 billion in total deposits and $1.9 billion in total loans as of Sept. 30, 2024, according to the news release.

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, the news release said.

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, the release said. Any unexercised stock options of Penns Woods will be canceled in exchange for a cash payment at the spread value over the exercise price.

“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,” Louis J. Torchio, president and CEO of Northwest, said, according to the news release. “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.”

“As Lou mentioned, we are very excited to announce this partnership and are looking forward to bringing together two like-minded institutions,” Richard A. Grafmyre, CEO of Penns Woods, said, according to the news release. “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.”

Upon completion of the merger, the shares issued to Penns Woods shareholders are expected to comprise approximately 12 percent 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.

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 adviser to Penns Woods, and Stevens & Lee, P.C. is acting as its legal adviser in the transaction. An investor presentation that provides additional details regarding this transaction is available online at investorrelations.northwest.bank.

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