Penns Woods Bancorp (PWOD) Investor Presentation summary

Transaction overview

• Northwest Bancshares will acquire 100% of Penns Woods Bancorp in an all-stock transaction valued at approximately $270.4 million, with a fixed exchange ratio of 2.385 NWBI shares per PWOD share and per-share consideration of about $34.44.

• Jersey Shore State Bank and Luzerne Bank will merge into Northwest Bank, and PWOD CEO Richard Grafmyre will join the board, resulting in a combined board of 12 members.

• The deal is expected to close in Q3 2025, pending regulatory and shareholder approvals, with projected ownership of 87.6% NWBI and 12.4% PWOD.

• The transaction price represents 139% of tangible book value and 12.8x LTM core EPS for PWOD.

• Extensive due diligence was conducted, including review of credit, contracts, and operational areas.

Strategic rationale and market impact

• The merger bridges NWBI's Northwestern and Southeastern Pennsylvania presence, expanding into attractive markets and strengthening the State College area.

• The combined entity will be among the largest banks by deposit market share in Pennsylvania, ranking #1 in Williamsport and Lock Haven.

• PWOD brings a low-cost, granular deposit base and strong market share in North Central and Northeast Pennsylvania.

• The deal enables significant cross-selling, broader product offerings, and higher lending limits for PWOD customers.

• Four overlapping branches will be consolidated to enhance efficiency.

Financial impact and assumptions

• Projected 2026 EPS accretion of 23.4% and tangible book value dilution of 9.0%, with a 2.9-year earnback period.

• Pro forma capital ratios at closing: TCE/TA 7.6%, CET1 10.8%, and total risk-based capital 13.9%.

• Cost savings estimated at 40% of PWOD's noninterest expense base, with 75% realized in the first full year.

• Loan credit mark of $28.1 million (1.4% of PWOD loans), with additional fair value and CECL adjustments.

• One-time pre-tax transaction expenses of $36.2 million and core deposit intangible of 3.6% of PWOD's core deposits.