Asset Transaction (Form 8-K)

Item 2.01. Completion of Acquisition or Disposition of Assets.

Pursuant to the Merger Agreement, on the Closing Date, Penns Woods merged with and into Northwest (the "Merger"), with Northwest continuing as the surviving corporation in the Merger (the "Surviving Entity"). Immediately following the effective time of the Merger (the "Effective Time"), each of Penns Woods' wholly owned banking subsidiaries, Jersey Shore State Bank and Luzerne Bank, merged with and into Northwest's wholly owned banking subsidiary,Northwest Bank (collectively, the "Bank Mergers"), with Northwest Bank continuing as the surviving bank in the Bank Mergers.

Pursuant to the Merger Agreement, at the Effective Time, each share of common stock, $5.55 par value, of Penns Woods ("Penns Woods Common Stock") issued and outstanding immediately prior to the Effective Time, was converted into the right to receive 2.385 shares (the "Exchange Ratio," and such shares, the "Merger Consideration") of common stock, $0.01 par value, of Northwest ("Northwest Common Stock"). Each holder of Penns Woods Common Stock converted pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of Northwest Common Stock (after taking into account all shares held by such holder) will instead receive cash in lieu of such fractional share in accordance with the terms of the Merger Agreement.

Upon the terms and subject to the conditions set forth in the Merger Agreement, all options outstanding under the Penns Woods equity incentive plan (each, a "Penns Woods Option") shall, immediately prior to the Effective Time, vest in full and cease to represent an option to purchase shares of Penns Woods common stock. At the Effective Time, the vested Penns Woods Options will convert automatically by virtue of the Merger into the right to receive an amount of cash equal to the product of (A) the average closing-sale prices of Northwest Common Stock on the Nasdaq Global Select Market® as published in The Wall Street Journal for the five (5) consecutive full trading days ending on the trading day preceding the Effective Date multiplied by 2.385, less the current exercise price per share of the respective Penns Woods Option, as adjusted pursuant to the terms of the Merger Agreement; and (B) the number of shares of Penns Woods Common Stock underlying such Penns Woods Option.