Form 4: Penns Woods Bancorp CEO Richard Grafmyre Disposes of Shares and Options in Merger with Northwest Bancshares

Richard Grafmyre, CEO of Penns Woods Bancorp, reports the disposition of common stock and stock options due to the merger with Northwest Bancshares, Inc.

Summary

• Richard A. Grafmyre, CEO of Penns Woods Bancorp, filed a Form 4 on July 28, 2025, reporting transactions related to the merger with Northwest Bancshares, Inc. which took place on July 25, 2025.
• The filing indicates the disposition of 44,267 shares of common stock directly held and 800 shares held indirectly by his wife.
• Grafmyre also disposed of employee stock options with exercise prices of $20.85 (6,300 options), $20.85 (12,700 options), $24.10 (11,000 options), and $24.23 (13,500 options).
• The merger consideration involved each share of Penns Woods Bancorp being converted into the right to receive 2.385 shares of Northwest Bancshares common stock.
• Stock options were canceled and converted into the right to receive a cash payment based on the average closing sales price of Northwest Bancshares common stock multiplied by the exchange ratio, less the option's exercise price.

Sentiment

Score: 5

Explanation: Neutral sentiment as the filing primarily reports the execution of a previously announced merger agreement.

Positives

• The merger provides liquidity to Penns Woods Bancorp shareholders through the exchange of shares for Northwest Bancshares stock and cash for fractional shares.
• Option holders receive a cash payment for their options, representing the in-the-money value based on the merger terms.

Negatives

• Shareholders of Penns Woods Bancorp no longer directly own shares in the company, as it has merged into Northwest Bancshares.
• Existing stock options are canceled, although holders receive a cash payment in exchange.

Risks

• The value of the consideration received (Northwest Bancshares stock and cash) is subject to the market risk associated with Northwest Bancshares' stock price.

Future Outlook

The filing does not contain specific forward-looking statements beyond the completion of the merger. The future performance of the investment depends on the performance of Northwest Bancshares.

Management Comments

• No direct quotes are available in this filing, but the filing indicates the completion of the merger as per the agreed terms.

Industry Context

The merger reflects a trend of consolidation in the banking industry, where smaller banks are merging with larger entities to achieve economies of scale and expand their market presence.

Comparison to Industry Standards

• Mergers in the banking sector often involve a premium paid to the acquired company's shareholders. The 2.385 exchange ratio would need to be compared to other similar bank mergers to assess the fairness of the deal.
• Comparable companies and projects would include recent bank mergers of similar size and geographic footprint, such as the merger of People's United Financial into M&T Bank.
• Industry benchmarks for merger premiums and deal structures can be found in financial databases like FactSet and Bloomberg.

Stakeholder Impact

• Shareholders of Penns Woods Bancorp will become shareholders of Northwest Bancshares.
• Employees of Penns Woods Bancorp may experience changes as a result of the integration with Northwest Bancshares.
• Customers of Penns Woods Bancorp will become customers of Northwest Bancshares.

Next Steps

• Northwest Bancshares will integrate Penns Woods Bancorp's operations into its existing business.
• Shareholders of Penns Woods Bancorp will receive shares of Northwest Bancshares and/or cash as per the merger agreement.

Key Dates

Recommendation

The merger has already been completed, so the recommendation is to hold the shares of Northwest Bancshares received in the merger and evaluate the combined company's performance.

Keywords

Merger, Penns Woods Bancorp, Northwest Bancshares, Form 4, Grafmyre, Stock Options, Common Stock, Disposition, CEO