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Norwood Financial Corp Acquires PB Bankshares in $54.9 Million Merger

A visual representation of the significant merger between Norwood Financial and PB Bankshares.

News Summary

Norwood Financial Corp has announced its acquisition of PB Bankshares in a merger valued at approximately $54.9 million. The merger aims to enhance service offerings and expand into high-growth areas of Central and Southeastern Pennsylvania. Following the merger, both banks will have around $3 billion in combined assets, with significant changes in leadership occurring as part of the transition. The deal is expected to conclude in late 2025 or early 2026, subject to regulatory approvals.

Pennsylvania: Norwood Financial Corp and PB Bankshares Announce $54.9 Million Merger

Norwood Financial Corp, based in Honesdale, Pennsylvania, has entered into a definitive agreement to acquire PB Bankshares, Inc., headquartered in Coatesville, Pennsylvania, in a merger transaction valued at approximately $54.9 million. Both companies’ boards have unanimously approved the merger, paving the way for significant expansion into new markets.

Details of the Merger

The merger will see PB Bankshares merge with Norwood Financial, with Presence Bank—PB Bankshares’ subsidiary—being integrated into Wayne Bank, which is the banking subsidiary of Norwood Financial. The combined organization will boast approximately $3 billion in assets, significantly amplifying Norwood Financial’s reach into high-growth areas of Central and Southeastern Pennsylvania. As of March 31, 2025, Norwood Financial reported consolidated assets of $2.4 billion, while PB Bankshares had assets of $467 million.

As part of the agreement, 80% of Presence’s common shares will be exchanged for Norwood Financial common stock, while the remaining 20% will be paid in cash. Shareholders will have the choice to receive either 0.7850 shares of Norwood common stock or $19.75 in cash for each common share of Presence they own. After the merger, shareholders from Presence Bank will collectively own about 14% of Norwood Financial’s outstanding common stock.

Impact on Services and Capacity

The merger is designed to enhance service offerings and solutions for the customers of both banks. Norwood Financial aims to deliver a broader product mix and a larger balance sheet to deepen customer relationships and expand its services. Following the merger, Norwood Financial is projected to achieve a cumulative 10% increase in earnings per share by 2026, although a 4.2% dilution of tangible book value is expected at closing. The tangible book value dilution is anticipated to be regained over a period of 2.5 years.

Leadership Changes

James O. Donnelly serves as the President, CEO, and Director of Norwood Financial, while Janak M. Amin, currently the President, CEO, and Director of PB Bankshares, will transition to become the Executive Vice President and Chief Operating Officer of Wayne Bank post-merger. Additionally, two non-employee members from Presence Bank’s board are expected to join Norwood Financial’s board, serving terms of two and three years, respectively.

Future Outlook

The merger is subject to various customary closing conditions, including necessary regulatory approvals and the backing of Presence shareholders. The deal is anticipated to finalize in late 2025 or early 2026. As of now, Norwood Financial has a market capitalization of approximately $44.28 million.

Context of the Merger

This merger reflects an ongoing trend of increased merger and acquisition activity within the banking sector, particularly among small to midsize financial institutions. As institutions seek to bolster their market presence and enhance service capabilities, this strategic merger positions Norwood Financial to better serve a broader customer base.

With the announcement of this merger, both Norwood Financial and PB Bankshares are set to reshape their operational landscapes, offering expanded services and improved customer experiences as they consolidate their positions in the competitive banking sector in Pennsylvania.