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HONESDALE, Pa. - Norwood Financial Corp (NASDAQ:NWFL) and PB Bankshares, Inc. (NASDAQ:PBBK) announced Monday their boards have unanimously approved a merger agreement in which Presence will merge with and into Norwood. PB Bankshares, currently valued at $41.2 million in market capitalization, has seen its stock trade near its 52-week high of $19.05, with a 21% return over the past year.
Under the terms of the agreement, 80% of Presence’s common shares will be converted into Norwood Financial common stock, while the remaining 20% will be exchanged for cash. Presence shareholders can elect to receive either 0.7850 shares of Norwood Financial common stock or $19.75 in cash for each common share they own, subject to proration. According to InvestingPro analysis, PBBK currently trades at a P/E ratio of 19.3x, suggesting the deal price represents a premium to its current market valuation. For comprehensive valuation metrics and additional insights, investors can access more than 30 financial indicators through InvestingPro.
Based on Norwood’s July 3 closing price of $26.65, the transaction is valued at approximately $54.9 million, representing 106.6% of Presence’s March 31, 2025, tangible book value and a 2.3% core deposit premium.
The combined entity will have approximately $3.0 billion in assets and operate throughout Northeastern, Central and Southeastern Pennsylvania. Norwood Financial is the holding company for Wayne Bank, which operates 30 banking offices in Pennsylvania and New York, while Presence Bank operates four banking offices and one loan production office in Central and Southeastern Pennsylvania. PBBK has demonstrated solid performance with revenue growth of 5.2% in the last twelve months and maintains profitable operations with $1.93 million in net income.
As part of the agreement, Presence’s subsidiary bank will merge into Wayne Bank. Two non-employee Presence Bank board members will join the Norwood Financial and Wayne Bank boards. Janak M. Amin, Presence’s President and CEO, will join Wayne Bank as Executive Vice President and Chief Operating Officer upon closing.
The merger is expected to be approximately 10% accretive to earnings per share in 2026, while resulting in 4.2% tangible book value dilution with a 2.5-year earn back period. Based on InvestingPro’s Fair Value assessment, PBBK appears to be trading above its intrinsic value, suggesting the deal timing aligns with favorable valuation conditions for shareholders.
The transaction, subject to regulatory approvals and Presence shareholder approval, is expected to close in either late fourth quarter of 2025 or early first quarter of 2026, according to the companies’ press release statement.
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