Kroll affirms WSFS Financial, Bryn Mawr Bank following deal announcement

Kroll Bond Rating Agency affirmed the ratings for Delaware-based WSFS Financial Corp., Pennsylvania-based Bryn Mawr Bank Corp. and their respective bank subsidiaries following the announcement that the two companies have agreed to merge in an all-stock deal.

The rating agency affirmed the senior unsecured debt ratings of A-, the subordinated debt ratings of BBB+ and the short-term debt ratings of K2 for WSFS Financial and Bryn Mawr Bank. The deposit and senior unsecured debt ratings of Wilmington Savings Fund Society FSB and Bryn Mawr Trust Co. were affirmed at A, the subordinated debt ratings at A- and the short-term deposit and debt ratings at K1.

The outlook for all long-term ratings is stable.

In the rating agency's view, the deal is "strategically sound" because it represents a scale play for both parties, especially given the recent focus on technology investment and integration. Moreover, Kroll noted that the merged entity will have the largest deposit market share within the Philadelphia metropolitan statistical area among community/regional banks by a reasonably wide margin with an expanded wealth platform.

Kroll also considers the wealth platforms as enhancing the credit profiles for both companies. On a pro forma basis, WSFS Financial will have combined assets under management/assets under administration of approximately $43 billion with Bryn Mawr Bank's wealth management division remaining a core brand in the merged entity, according to the rating agency.