Mid Penn Bancorp in Harrisburg, Pennsylvania, said Friday it struck a $127 million, all-stock deal to acquire in-state peer William Penn Bancorp in a bid to expand in metropolitan Philadelphia.
The deal, expected to close in the first half of 2025, would create a combined bank with $6.3 billion of assets, $4.9 billion of loans and $5.3 billion of deposits, the companies said in a joint press release. It would have about 57 branches.
The $812 million-asset William Penn has about $465 million of loans and $630 million of deposits. The bank, based in the Philadelphia suburb of Bristol, operates 12 branches in Pennsylvania and New Jersey.
"This merger will bolster Mid Penn's presence in the attractive Greater Philadelphia metro area market, aligning with our strategic plan of disciplined growth in the southeastern region of Pennsylvania and the southern region of New Jersey," Mid Penn Chairman and CEO Rory Ritrievi said in the release.
Mid Penn said the deal was expected to be immediately accretive to its earnings per share.
Both banks trumpeted the merits of added scale, saying that by joining forces they could offer more services and better compete with larger peers.
"The merger enables us to accelerate our growth far more rapidly than we could as an independent company," William Penn Chairman and CEO Kenneth Stephon said in the release. Stephon would join Mid Penn's board and become vice chairman of Mid Penn Bank.
HomeStreet and FirstSun are working to devise a new formula after the Texas Department of Banking and the Federal Reserve declined to approve their merger application.
If the deal is called off under certain circumstances, William Penn may have to pay a termination fee of $4.9 million, according to a regulatory filing.
Also on Friday, Mid Penn announced the pricing of a public offering of its common stock. It priced the offering at $29.50 per share for an aggregate amount of $70 million.
The company said it expects net proceeds of approximately $67 million that it could use to support strategic transactions, organic growth, the potential redemption of subordinated debt and general corporate purposes.
Mid Penn's offer for William Penn marked the first sizable deal of November. Should it close as planned, it would be the company's sixth bank acquisition in 10 years. The deal is among the 20 largest announced this year by deal value.
Winter Haven, Florida-based
At least 100 banks announced plans this year through October. That put the industry ahead of last year's total of 98 deals, according to S&P Global Market Intelligence data.
Mid Penn in October reported third-quarter net income of $12.3 million, or 74 cents per share, up from $9.2 million, or 56 cents, a year earlier.
William Penn swung to a third-quarter net loss of $21,000. It said its EPS broke even. A year earlier, the company reported net income of $179,000, or 2 cents per share. The bank is liability sensitive and has struggled with elevated funding costs in the high interest rate environment of the past two years.
