Penns Woods Bancorp — Merger or Acquisition (December 2024)
21 slides from Penns Woods Bancorp's merger presentation, Dec 17, 2024
Slide 1: Merger Investor Presentation: Acquisition of Penns Woods Bancorp, Inc.
& Merger Investor Presentation Acquisition of Penns Woods Bancorp, Inc. December 17, 2024 NASDAQ: NWBI | NASDAQ: PWOD
Slide 2: Forward-looking Statements and Additional Information
Forward - looking Statements and Additional Information This presentation contains forward - looking statements within the meaning of the federal securities laws relating to the proposed merger with Penns Woods Bancorp, Inc. (“PWOD”) by Northwest Bancshares, Inc. (“Northwest” or “NWBI”), the integra
Slide 3: Forward-looking Statements and Additional Information
Forward - looking Statements and Additional Information This communication is being made in respect of the proposed merger transaction involving NWBI and PWOD. This material is not a s olicitation of any vote or approval of the NWBI or PWOD shareholders and is not a substitute for the proxy statemen
Slide 4: Northwest Bancshares At A Glance
Northwest Bancshares At A Glance 4 1 Non - GAAP financial measure; See “Non - GAAP Financial Measures” and Non - GAAP reconciliations herein FOUNDED 1896 TOTAL ASSETS $ 14.4B TOTAL DEPOSITS $ 12.1B TOTAL LOANS $ 11.3B FINANCIAL CENTERS 130 ROAA 0.93% LTM Core ROATCE 11.6% 1 NIM 3.33 % Diluted EPS $0
Slide 5: Overview of Penns Woods Bancorp, Inc.
($ in 000's, unless otherwise indicated) LTM CAGR (%) Q3'24 2019 – Q3'24 Balance Sheet and Capital Total Assets $2,259,250 6.63 Total Gross Loans $1,884,141 7.11 Total Deposits $1,700,321 5.41 Tangible Common Equity $187,111 6.79 Loans / Deposits (%) 110.3 TCE / TA (%) 8.3 CET1 Ratio (%) 10.2 Profit
Slide 6: A Noteworthy Transaction: Significant and Financially Appealing
A Noteworthy Transaction: Significant and Financially Appealing 6 1 Excluded rate marks include: loans, deposits and borrowings 2 For illustrative purposes, assumes transaction closes on July 1, 2025, cost savings are 75% phased - in during the first full ye ar of operations and excludes one - time
Slide 7: Geographically Attractive Combined Company
Pennsylvania DMS (Top 20) Geographically Attractive Combined Company 7 Source: S&P Capital IQ Pro Note: Deposit market share is as of June 30, 2024, and is pro forma for pending acquisitions 1 Includes anticipated branch consolidations Penns Woods provides a strategic opportunity for geographic expa
Slide 8: Geographically Attractive Combined Company (Continued)
$61,769 $68,331 $64,441 $61,545 $65,466 $80,121 $72,348 $74,855 Blair, PA Centre, PA Clinton, PA Luzerne, PA Lycoming, PA Montour, PA Union, PA Pennsylvania 37.7 41.5 PWOD KRE Banks 78,408 56,926 135,334 Combined Geographically Attractive Combined Company (Continued) 8 Source: S&P Capital IQ Pro and
Slide 9: Transaction Structure and Multiples
• Northwest Bancshares, Inc. to acquire 100% of Penns Woods Bancorp, Inc. outstanding common stock • At closing Jersey Shore State Bank and Luzerne Bank will merge with and into Northwest Bank • 100% stock consideration • Fixed exchange ratio of 2.385x NWBI shares for each PWOD share • Outstanding s
Slide 10: Earnings, Synergies, Cost Savings and Loan Mark
• Net income for NWBI based on consensus analyst estimates through 2026 • Net income estimates for PWOD were developed in conjunction with NWBI and PWOD management teams • Cost savings of 40% of PWOD’s noninterest expense base (75% realized in the first full year of combined operations, 100% ther ea
Slide 11: Strong Credit Profile and Thorough Due Diligence Process
0.05% 0.02% 0.03% - 0.03% 0.02% 2020 2021 2022 2023 Q3'24 YTD Strong Credit Profile and Thorough Due Diligence Process 11 Source: S&P Capital IQ Pro 0.90% 0.60% 0.46% 0.08% 0.20% 2020 2021 2022 2023 Q3'24 PWOD – Net Charge - offs / Average Loans PWOD – NPAs / Assets 131.3% 253.1% 157.6% NWBI PWOD Pr
Slide 12: Combined Balance Sheet Composition
Transaction 14.3% MMDA + Savings 62.9% Retail Time (<$100K) 13.1% Jumbo Time (>$100K) 9.7% Noninterest - bearing Deposits 22.0% $14.1B Deposits MRQ & Combined Balance Sheet Composition 12 Source: S&P Capital IQ Pro, bank regulatory data as of September 30, 2024; deposit costs and loan yields are fro
Slide 13: Strong Combined Profitability
Comparison With $10B - $20B Midwest & Mid - Atlantic Peers 1 0.00 5.00 10.00 15.00 20.00 25.00 30.00 NWBI Pro Forma Median NWBI Standalone 0.00 0.50 1.00 1.50 2.00 Median NWBI Pro Forma NWBI Standalone Strong Combined Profitability 13 Source: S&P Capital IQ Pro as of December 9, 2024 Note: Core figu
Slide 14: Disciplined Yet Opportunistic Growth Strategy
$7.7 $8.1 $9.4 $9.6 $9.9 $11.7 $14.5 $14.1 $14.4 $14.4 $1.2 $1.6 $0.6 $2.1 $2.3 $9.0 $9.6 $9.4 $9.6 $10.5 $13.8 $14.5 $14.1 $14.4 $16.6 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q3'24 NWBI Assets ($B) Acquired Assets ($B) Disciplined Yet Opportunistic Growth Strategy 14 Source: S&P Capital IQ Pro
Slide 15: Appendix
& Appendix
Slide 16: Transaction Consideration and Goodwill Calculation
($ in millions) Equity Consideration to PWOD 1,2 $260.2 (+) Cash Consideration for PWOD Options 3 10.2 Aggregate Consideration $270.4 PWOD Tangible Book Value at Close 196.5 (+) After-Tax Merger Costs Attributable to PWOD (17.6) (+) Pre-Tax Fair Value Adjustments (108.9) (+) Net Deferred Tax Asset /
Slide 17: Illustrative Pro Forma Net Income & EPS Accretion
($ in millions, except per share data) 2026 Estimated Pro Forma NWBI Net Income to Common (Consensus) $142.9 PWOD Net Income to Common (Management) 22.9 Combined Net Income $165.8 After-Tax Acquisition Adjustments Cost Savings $13.0 Core Deposit Intangible Amortization (5.9) Purchase Accounting Fair
Slide 18: NWBI: Non-GAAP Reconciliations
($ in 000's, unless otherwise indicated) As of December 31, MRQ 2019 2020 2021 2022 2023 Q3'24 Tangible common equity to tangible assets Total common stockholders' equity $1,353,285 $1,538,703 $1,583,571 $1,491,486 $1,551,317 $1,591,325 Less: Goodwill 346,103 382,279 380,997 380,997 380,997 380,997
Slide 19: NWBI: Non-GAAP Reconciliations (Continued)
($ in 000's, unless otherwise indicated) For the Year Ended December 31, 5-Year LTM 2019 2020 2021 2022 2023 Median Q3'24 Return on average tangible common equity Net Income $110,432 $74,854 $154,323 $133,666 $134,957 $96,542 Add: Intangible amortization expense (net of tax) 5,169 5,416 4,387 3,379
Slide 20: PWOD: Non-GAAP Reconciliations
PWOD: Non - GAAP Reconciliations Source: S&P Capital IQ Pro 20 ($ in 000's, unless otherwise indicated) As of December 31, MRQ 2019 2020 2021 2022 2023 Q3'24 Tangible common equity to tangible assets Total common stockholders' equity $154,960 $164,142 $172,274 $167,665 $191,556 $203,694 Less: Goodwi
Slide 21: PWOD: Non-GAAP Reconciliations (Continued)
($ in 000's, unless otherwise indicated) For the Year Ended December 31, 5-Year LTM 2019 2020 2021 2022 2023 Median Q3'24 Return on average tangible common equity Net Income $15,686 $15,224 $16,048 $17,422 $16,608 $19,554 Add: Intangible amortization expense (net of tax) 209 179 151 638 92 81 Net In
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