It will take a while for the dust to settle, but it is clear that WSFS’ proposed acquisition of Philadelphia’s Beneficial Bancorp can be defined with that overused term “game-changer.”
The transaction gives WSFS a significant chunk of the banking market in a city that is clearly on the rebound, and in a region with a solid economy.
Overall, the deal is a win-win for Delaware, since it gives the state a more powerful financial institution with regional reach. It is also possible that the deal will create at least a few new jobs in Delaware as the branch overlap will take place outside the state.
WSFS made a smart move in deciding that it will plow some of the savings from combining offices and functions into a system that should smooth out problems we see when financial institutions of comparable size are combined. More than one banking merger has struggled when separate systems are patched together and get the duct tape treatment.
Another bonus will be the ability of WSFS to plug in its growing wealth management businesses into a larger footprint.
One question that may arise involves cultures. WSFS has worked to transform its culture in striving to provide a high level of customer service.
How that will play out with a larger bank with its own culture will be interesting to watch. One plus is that both WSFS and Beneficial have their roots as blue-collar savings banks.
WSFS has also made a series of “bolt-on” acquisitions – a few of which took place in the Philly suburbs. Those experiences should prove to be helpful. And don’t discount the Philadelphia roots of the current CEO and his future successor.
It is worth noting that the price of WSFS shares dropped by more than 6 percent after the announcement. The response may reflect the ability of the Delaware bank to crank out bigger profits than Beneficial.
Still, Beneficial may have been ripe for a merger with a larger bank that would come with more drastic cuts, given the changes taking place in the regulatory sphere.
Given the solid performance of WSFS over the decades, my bet is on a smooth integration that will surprise skeptics. – Doug Rainey, publisher.
(Note to readers) The opinions expressed in this column are my own and are not based on conversations with WSFS officials.)
