Penn Liberty will merge into WSFS Financial Corporation’s wholly owned bank subsidiary, WSFS Bank.
Headquartered in Wayne, PA, Penn Liberty was founded b in 2004 to serve the local community by offering a wide array of financial products and services to small and mid-size businesses, professional real estate developers and investors, and retail customers throughout the western suburban Philadelphia area.
Penn Liberty has $651 million in assets, $510 million in loans and $558 million in deposits as of September 30, 2015 and serves its customers from 11 offices in Chester and Montgomery Counties. Following the merger, WSFS will have 24 offices in southeastern Pennsylvania.
WSFS President and Chief Executive Officer, Mark A. Turner said, “We are excited to announce our combination with Penn Liberty Bank, a high-quality community bank with incredibly professional and committed associates and leadership. Penn Liberty’s 11 locations are a great complement to our Pennsylvania network, including our recently acquired Alliance Bank locations, and Penn Liberty’s experienced management team and commercially-focused business model will add important relationships to our banking franchise. We have aligned ourselves with a terrific partner in Penn Liberty, as they also share our extraordinary commitment to customers, cCommunities and associates. Southeastern Pennsylvania continues to be a highly desirable and complementary market extension opportunity for our franchise and we look forward to further serving that market. This is our sixth Delaware Valley acquisition since 2008 and our largest to date.”
The total transaction is valued at approximately $101 million, based on a 10-day volume weighted average price of WSFS common stock, and Penn Liberty’s common shares outstanding of 4.26 million and options outstanding of 685.6 thousand with a weighted average strike price of $10.05.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, shareholders of Penn Liberty will be entitled to elect to receive either 0.6601 shares of WSFS common stock or $21.75 in cash for each common share of Penn Liberty, subject to an overall allocation of exchanged Penn Liberty shares into 60 percent WSFS common stock and 40% cash.
The closing and systems conversion is anticipated to occur early in the third quarter of 2016, subject to approval by Penn Liberty shareholders, regulatory approvals, and other customary closing conditions.
WSFS expects to incur pre-tax merger and integration costs of approximately $15.5 million and to achieve cost savings totaling 34 percent of Penn Liberty Financial Corp’s non-interest expenses or $6.3 million per year once fully phased in.
The acquisition is expected to immediately add to WSFS earnings per share, excluding one- time costs.
Upon completion of the merger, Patrick Ward, chairman and CEO of Penn Liberty Bank will join the WSFS Financial Corporation Board of Directors and assume the role of Executive Vice President and Pennsylvania Market President. Brian Zwaan, President, Chief Operating Officer and Chief Lending Officer of Penn Liberty Bank will also join the WSFS Senior Management team as Senior Vice President, Pennsylvania Commercial Banking.
WSFS Bank, is the oldest and the largest, locally-managed bank and trust company headquartered in Delaware and the Delaware Valley.
With the Penn Liberty transaction, WSFS will have approximately $6.1 billion in assets and will operate out of 70 locations, including 24 in southeastern Pennsylvania.