Northwest Bank and Penns Woods have announced a plan for merger.

Northwest Bancshares, Inc., the bank holding company for Northwest Bank, and Penns Woods Bancorp, Inc. jointly announced Tuesday they have entered into a definitive Agreement and Plan of 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.

Headquartered in Williamsport, Penns Woods has approximately $2.3 billion in assets, $1.7 billion in total deposits, and $1.9 billion in total loans as of Sept. 30. 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.

Its 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.

“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. 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,” Louis J. Torchio, President and CEO of Northwest, stated. “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. Through this acquisition, we look forward to building on Northwest’s rich history of community-focused banking and delivering even greater value to our customers, employees, communities, and shareholders.”

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. Any unexercised stock options of Penns Woods will be canceled in exchange for a cash payment at the spread value over the exercise price. Based on Northwest’s closing stock price of $14.44 as of Monday, the transaction consideration is valued at $34.44 for each share of Penns Woods.

“We are very excited to announce this partnership and are looking forward to bringing together two like-minded institutions,” said Richard A. Grafmyre, CEO of Penns Woods. “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. The merger will provide increased scale and additional capabilities for our customers, and it will provide greater opportunities for our employees to advance their careers as a part of a larger organization.”

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

Currently, Northwest operates 130 full-service financial centers and eleven free standing drive-up facilities in Pennsylvania, New York, Ohio, and Indiana. Northwest Bancshares, Inc.’s common stock is listed on the NASDAQ Global Select Market under the symbol NWBI. Additional information regarding Northwest Bancshares, Inc. and Northwest Bank can be accessed online at www.northwest.bank.