Willow Grove Bancorp, Inc. and Chester Valley Bancorp Inc. Join Forces to Form a $1.5 Billion Suburban Philadelphia Based Commun
January 20 2005 - 4:08PM
PR Newswire (US)
Willow Grove Bancorp, Inc. and Chester Valley Bancorp Inc. Join
Forces to Form a $1.5 Billion Suburban Philadelphia Based Community
Bank PHILADELPHIA, Jan. 20 /PRNewswire-FirstCall/ -- Willow Grove
Bancorp, Inc. (NASDAQ:WGBC) ("Willow Grove") and Chester Valley
Bancorp Inc. (NASDAQ:CVAL) ("Chester Valley") have signed a
definitive agreement to combine their companies and their
subsidiary banks, Willow Grove Bank and First Financial Bank. The
merger will create the fifth-largest banking institution
headquartered in Southeastern Pennsylvania, with more than $1.5
billion of assets and a network of 27 branches throughout the
region. In addition, the combined bank will offer an extensive
array of products encompassing retail and commercial banking, real
estate, commercial and consumer lending, and wealth management,
trust and brokerage operations. The merger brings together two of
the Philadelphia region's most successful community banks. Their
local communities, customers and employees, know both Willow Grove
Bank and First Financial Bank for their service and commitment. The
banks will retain their existing names and operate as divisions of
the new bank. Together, Willow Grove and Chester Valley serve a
Southeastern Pennsylvania region that is one of the fastest growing
and most dynamic markets for community-focused banking in the
nation. The new combined entity will have an expanded product
offering, increased legal lending limits, and extensive
cross-selling opportunities, including marketing of Chester
Valley's wealth management practice, the Philadelphia Corporation
for Investment Services, throughout the Willow Grove branch
network. Frederick A. Marcell Jr., President and CEO of Willow
Grove said, "This merger combines two outstanding banks with
complementary franchises and business models that share a
long-standing commitment to community banking. In addition, a key
component of this merger was our ability to secure Donna M.
Coughey, the current President and CEO of Chester Valley, to serve
as President and CEO of the combined company. Donna brings a
successful 33-year career at banks large and small to the table,
and we are excited about her plans to propel the combined bank to
the next level." Mr. Marcell, who previously announced that he will
retire as President and CEO of Willow Grove in 2005, will remain a
member of the combined bank's board of directors. William W.
Langan, Chairman of the Board of Directors of Willow Grove
commented, "Donna Coughey is an exceptionally talented individual
with significant commercial banking experience. Her leadership will
be a driving force in the company's transition to a full service,
community-oriented bank with increased legal lending limits." Donna
Coughey says, "I am very excited about prospects for the combined
company to grow earnings and market share by leveraging our bank's
strengths across a broader branch network. The merger is unlike any
other seen in the market, combining Chester Valley's know-how in
commercial banking and wealth management with Willow Grove's
successful history in the retail-banking arena. In short, the
combined bank will bring the best of both worlds to our respective
customers. In addition, we are creating a platform for continued
growth, and we expect to actively expand our branch network through
additional acquisitions or construction of new branches." James E.
McErlane, Chairman of the Board of Directors of Chester Valley
stated, "Willow Grove and Chester Valley have deep roots in the
communities they serve and have enjoyed great success by providing
superior customer service. Under the divisional structure, we will
continue to provide our customers with the superior service and
local decision making they are accustomed to receiving, while
offering a wider selection of products and services." Under the
terms of the definitive agreement, Chester Valley will merge with
and into Willow Grove and First Financial Bank will merge with and
into Willow Grove Bank, with each bank operating as a division of
the resulting bank. Shareholders of Chester Valley will have the
right to elect to receive either $27.90 or 1.4823 shares of Willow
Grove common stock for each share of Chester Valley they own at the
merger date. Elections will be subject to allocation procedures,
which are intended to ensure that 64.76% of the Chester Valley
common stock outstanding immediately prior to the completion of the
transaction will be converted into shares of Willow Grove common
stock. The transaction is intended to qualify as a reorganization
for federal income tax purposes. As a result, the shares of Chester
Valley exchanged for Willow Grove common stock will be issued to
Chester Valley shareholders on a tax-free basis. The transaction
values each share of Chester Valley at $27.90 based upon Willow
Grove's closing price of $18.82 at January 19, 2005. The
transaction is valued at 2.82 times of Chester Valley's book value
per share as of September 30, 2004 and 23.4 times the earnings per
share for the twelve months ended September 30, 2004. One time
non-recurring charges are estimated to be approximately $4.0
million, net of tax, consisting of data processing conversion and
integration costs, compensation and severance costs and
transaction-related professional fees. If the transaction had
closed on October 1, 2003, based upon the anticipated cost savings
and synergies, the transaction would have been accretive to GAAP
and cash earnings per share by approximately 12% and 17%,
respectively, for the twelve months ended September 30, 2004.
Similar accretion is expected to occur in the first twelve months
of operations of the combined company. The aforementioned accretion
is exclusive of any one time merger related charges. The combined
company will have a 17 member board of directors, with 10 of these
members drawn from the Willow Grove board and seven from the
Chester Valley board. All board members are prominent business,
educational or community leaders from the respective bank's market
area. All branch offices from each bank are expected to remain
open, as are the offices of the Philadelphia Corporation for
Investment Services, a full-service investment advisory and
securities brokerage firm currently owned and operated by Chester
Valley. The Boards of Directors of Willow Grove and Chester Valley
have approved the definitive agreement. The transaction is subject
to all required regulatory approvals, the approval by the
shareholders of Chester Valley and Willow Grove and other customary
conditions. The transaction is expected to close in the third
quarter of 2005 with operational integration to follow soon after.
The management teams of Willow Grove and Chester Valley will host a
conference call to discuss the transaction on Friday, January 21,
at 10:30 a.m. EST. The call and the accompanying slides will be
available via webcast at Willow Grove's website at
http://www.willowgrovebank.com/ and on the Investor Relations
portion of Chester Valley/First Financial Bank's website at
http://www.ffbonline.com/. To participate in the live call via
telephone, dial 973-935-8505. To access a replay of the conference
call, visit either Willow Grove or Chester Valley/First Financial's
website for an archived version of the call and slide presentation.
A digital replay will also be available until January 28th by
dialing 973-341-3080 and entering pass code #5615717. The
Blackstone Group served as financial advisor to Willow Grove and
Boenning & Scattergood, Inc. served as the financial advisor to
Chester Valley. Willow Grove received legal counsel from Elias,
Matz, Tiernan & Herrick L.L.P. and Chester Valley received
legal counsel from Cozen O'Connor. Willow Grove Bancorp, Inc. is
the holding company for Willow Grove Bank, a federally chartered
savings bank. The Bank was founded in 1909 and conducts its
business from its headquarters in Maple Glen, Pennsylvania, with
additional branch locations in Bustleton, Dresher, Hatboro,
Holland, Huntingdon Valley, North Wales, Rhawnhurst, Roslyn Valley,
Somerton, Southampton, Warminster and Willow Grove. Additional
information is available at: http://www.willowgrovebank.com/.
Chester Valley Bancorp Inc. is the parent company of both First
Financial Bank and Philadelphia Corporation for Investment
Services. First Financial Bank's executive offices are located in
Downingtown, Pennsylvania with additional branch locations in
Exton, Frazer, Thorndale, Westtown, Airport Village, Brandywine
Square, Devon, Kennett Square, Eagle, Coatesville, Avondale and
West Chester. Philadelphia Corporation has offices in Wayne and
Philadelphia. This press release contains certain forward-looking
statements with respect to the financial condition, results of
operations and business of Willow Grove upon consummation of the
acquisition of Chester Valley, including statements relating to:
(a) the estimated cost savings and accretion to reported earnings
that will be realized from the acquisition and (b) the merger
charges expected to be incurred in connection with the acquisition.
These forward-looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking
statements include, among others, the following possibilities: (1)
estimated cost savings from the acquisition cannot be fully
realized within the expected time frame; (2) revenues following the
acquisition are lower than expected; (3) competitive pressure among
depository institutions increases significantly; (4) costs or
difficulties related to the integration of the businesses of Willow
Grove and Chester Valley are greater than expected; (5) changes in
the interest rate environment reduce interest margins; (6) general
economic conditions, either nationally or in the markets in which
Willow Grove will be doing business, are less favorable than
expected; or (7) legislation or changes in regulatory requirements
adversely affect the businesses in which Willow Grove would be
engaged. Willow Grove and Chester Valley will be filing relevant
documents concerning the merger with the Securities and Exchange
Commission, including a registration statement on Form S-4
containing a prospectus/proxy statement. WE URGE INVESTORS TO READ
THESE DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION.
Investors will be able to obtain these documents free of charge at
the SEC's website, http://www.sec.gov/. In addition, documents
filed with the SEC by Willow Grove will be available free of charge
from the Secretary of Willow Grove, Welsh and Norristown Roads,
Maple Glen, Pennsylvania 19002, and documents filed with the SEC by
Chester Valley will be available free of charge from the Secretary
of Chester Valley, 100 East Lancaster Avenue, Downingtown,
Pennsylvania 19335. The directors and executive officers of Chester
Valley and Willow Grove may be deemed to be participants in the
solicitation of proxies to approve the merger. Information about
the directors and executive officers of Chester Valley and
ownership of Chester Valley common stock is set forth in the proxy
statement filed by Chester Valley with the SEC on September 10,
2004. Information about the directors and executive officers of
Willow Grove and ownership of Willow Grove common stock is set
forth in the proxy statement filed by Willow Grove with the SEC on
October 8, 2004. Additional information about the interests of
those participants may be obtained from reading the definitive
prospectus/proxy statement regarding the proposed acquisition when
it becomes available. CHESTER VALLEY INVESTORS SHOULD READ THE
PROSPECTUS/PROXY STATEMENT AND OTHER DOCUMENTS TO BE FILED WITH THE
SEC CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
DATASOURCE: Willow Grove Bancorp, Inc.; Chester Valley Bancorp Inc.
CONTACT: Media: Anthony J. DeFazio, Gregory FCA Communications,
+1-610-642-8253 x 13, or Investors: Joseph J. Crivelli, Gregory FCA
Communications, +1-610-642-8253 x 23, both for Willow Grove Bancorp
and Chester Valley Bancorp Web site:
http://www.willowgrovebank.com/ http://www.ffbonline.com/
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