Pennsylvania-based Mid Penn Bancorp to acquire William Penn in $127M deal

Harrisburg, Pennsylvania-based Mid Penn Bancorp Inc. agreed to acquire Bristol, Pennsylvania-based William Penn Bancorp. in an all-stock transaction valued at approximately $127 million, based on Mid Penn's closing stock price as of Oct. 30.

Under the deal terms, shareholders of William Penn will receive a 0.4260 share of Mid Penn common stock for each share of William Penn common stock. Additionally, all options of William Penn will be rolled into Mid Penn equivalent options, according to a Nov. 1 news release.

Upon deal completion, William Penn Bank will be merged with and into Mid Penn Bank, with Mid Penn Bank being the surviving entity, according to a regulatory filing.

As of Sept. 30, Willian Penn had approximately $812 million in total assets, $465 million in total loans and $630 million in total deposits, according to the news release. The combined entity will have approximately $6.3 billion in total assets, $4.9 billion in total loans and $5.3 billion in total deposits, based on Sept. 30 financial data.

William Penn operates 12 branches across Pennsylvania and New Jersey.

Following deal close, Mid Penn Bancorp will expand in New Jersey by four branches to be ranked No. 52 with a 0.12% share of approximately $445.08 billion in total market deposits and will expand in Pennsylvania by nine branches to be ranked No. 23 with a 0.78% share of approximately $563.29 billion in total market deposits, according to S&P Global Market Intelligence data.

The deal is expected to be immediately accretive to Mid Penn's estimated EPS and to have a positive long-term impact on Mid Penn's key profitability and operating ratios.

At the announcement, Market Intelligence estimates the deal value to be 96.73% of common equity, 100.80% of tangible common equity, 20.03% of deposits and 15.53% of assets.

Market Intelligence valuations for bank and thrift targets in the Mid-Atlantic region between Oct. 31, 2023, and Oct. 31, 2024, averaged 96.80% of book and 98.98% of tangible book and had a median of 17.03x last-12-months earnings, on an aggregate basis, and averaged 98.42% of book and 103.25% of tangible book and had a median of 16.35x LTM earnings, on a per-share basis.

The transaction is expected to close in the first half of 2025.

If the deal is terminated under certain circumstances, William Penn may be obligated to pay a termination fee of $4.9 million, according to the filing.

Stephens Inc. is Mid Penn's exclusive financial adviser and Pillar + Aught is its legal adviser. Keefe Bruyette & Woods rendered a fairness opinion to Mid Penn's board of directors. Piper Sandler & Co. is William Penn's exclusive financial adviser and rendered a fairness opinion to William Penn's board of directors, while Kilpatrick Townsend & Stockton LLP is its legal adviser.

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