Northwest Ohio to purchase Penns Woods in a $270.4 million transaction
In a significant move that underscores the ongoing trend of bank mergers and acquisitions (M&A), Northwest Bancshares and Penns Woods Bancorp have agreed to combine forces in a deal worth approximately $270.4 million.
Independent Bank Corp. and Enterprise Bancorp, both based in Massachusetts, have also recently agreed to a $562 million combination. Meanwhile, the Federal Reserve has approved the $2 billion acquisition of Texas-based Independent Bank Group by Florida-based SouthState, and has given the green light to Canadian lender Scotiabank's application to acquire up to 14.99% of Cleveland-based KeyBank.
The Northwest-Penns Woods transaction is expected to close in the third quarter of 2025. Upon completion, Northwest Bank and its holding company will have assets exceeding $17 billion, an addition of $2.3 billion in assets, $1.7 billion in deposits, and $1.9 billion in loans. The merger will also add 24 locations to Northwest's existing network.
Richard Grafmyre, CEO of Penns Woods, will join the boards of Northwest Bank and its holding company post-merger. In a statement, Grafmyre expressed his belief that the merger will create a catalyst for growth and benefit all communities served by the combined entities. Louis Torchio, Northwest's CEO, considers the merger a significant step in Northwest's long-term growth strategy.
Penns Woods shareholders will receive 2.385 shares of Northwest common stock for each Penns Woods share they own. In addition, they would also receive a dividend of roughly 48 cents per share, a 50% increase on their current quarterly dividend. The shares issued to Penns Woods holders are expected to comprise 12% of the combined company's outstanding shares.
The merger is expected to be 23% accretive to 2026 earnings per share. Northwest looks forward to welcoming Jersey Shore State Bank and Luzerne Bank's employees and customers to its family.
The environment for bank M&A in 2025 remains healthy and is expected to continue growing due to a combination of favorable regulatory conditions, strategic needs for scale and technology investments, and an increasing role for credit unions in the sector. Credit unions, such as San Francisco FCU, are becoming increasingly active acquirers of banks, marking a significant shift in their growth strategies.
This spike in deal activity, including the $1.1 billion merger of equals between Berkshire Hills Bancorp and Brookline Bancorp, is driven primarily by smaller and mid-sized institutions seeking scale, geographic expansion, efficiency, and enhanced technological capabilities. Banks are motivated by competitive pressures to combine resources to remain viable against larger banks and fintech firms, while regulatory bodies like the FDIC have streamlined approval processes, reducing average deal closing times.
[1] Bank M&A Trends 2025: A Sustained Period of Robust Activity, Banking Strategies, 2025. [2] Credit Unions Accelerate Growth through Bank Acquisitions, Credit Union Times, 2025.
- As evidenced by the industry trend, banking institutions like Northwest Bancshares and Penns Woods Bancorp, along with others such as Independent Bank Corp. and Enterprise Bancorp, are actively engaging in mergers and acquisitions (M&A) to increase their financial resources and expand their business operations, with the Federal Reserve also approving significant acquisitions like the $2 billion acquisition of Texas-based Independent Bank Group by SouthState.
- In the dynamic landscape of finance, cross-regional bank mergers, including the Northwest-Penns Woods transaction, are becoming common as smaller and mid-sized institutions look for scale, geographic expansion, efficiency, and technological enhancements. The robust M&A environment is also being fueled by the growing role of credit unions, such as San Francisco FCU, as active acquirers in the sector.
