Audubon, N.J.-based mutual Audubon Savings Bank is merging into Levittown, Pa.-based William Penn Bank (MHC), a unit of William Penn Bancorp Inc. (MHC).
The transaction — subject to regulatory and Audubon Savings Bank member approvals — is expected to close in the second quarter of 2018.
Under the deal, Audubon Savings Bank depositors will become William Penn Bank depositors and will have the same rights and privileges in William Penn MHC, the mutual holding company parent of William Penn Bancorp, as if their accounts had been established at William Penn Bank on the date established at Audubon Savings Bank.
As part of the transaction, William Penn Bancorp will issue additional shares of its common stock to William Penn MHC in an amount equal to the fair value of Audubon Savings Bank as determined by an independent appraiser. These shares are expected to be issued in connection with the completion of the merger, which is anticipated to increase William Penn Bancorp's consolidated assets from about $313 million at Sept. 30 to roughly $470 million.
SNL valuations for bank and thrift targets in the Mid Atlantic region between Dec. 6, 2016, and Dec. 6, 2017, averaged 130.81% of book, 133.98% of tangible book and had a median of 30.59x last-12-months earnings, on an aggregate basis.
The combined bank will operate one branch in Burlington County, N.J., to be ranked No. 19 with a 0.22% share of approximately $10.88 billion in total market deposits. The combined bank will also operate two branches in Camden County, N.J., to be ranked No. 16 with a 0.87% share of approximately $10.55 billion in total market deposits, and will operate three branches in Bucks County, Pa., to be ranked No. 21 with a 1.03% share of approximately $18.25 billion in total market deposits.
William Penn President and CEO Terry Sager will head the combined company's executive leadership team. Audubon Savings Bank President and CEO Kenneth Stephon will join William Penn Bank's current executive team as senior executive vice president and COO. Stephon will replace Sager as president and CEO upon her retirement in early 2019, with Sager continuing to serve as a director.
The combined company will have nine directors, comprised of William Penn Bancorp's existing six directors and three directors from Audubon Savings Bank, which will be Audubon Savings Bank's current Chairman Vincent Sarubbi, Kenneth Stephon and Audubon Savings Bank's current Vice Chairman, D. Michael Carmody Jr. The combined company's chairman will be William Penn Bancorp's current Chairman William Feeney.
All Audubon Savings Bank directors not serving on the William Penn Bank Board will be invited to join a Southern New Jersey advisory board, which will be formed by William Penn Bancorp and will focus on developing business in the New Jersey marketplace.
SNL data shows that as of Sept. 30, William Penn Bank had $312.7 million in assets, while Audubon Savings Bank had assets of $157.4 million.
Keefe Bruyette & Woods and Silver Freedman Taff & Tiernan LLP served as William Penn Bancorp's financial adviser and legal counsel, respectively. FinPro Capital Advisors Inc. served as financial adviser to Audubon Savings Bank, and Kilpatrick Townsend & Stockton LLP acted as legal counsel.