WSFS to acquire Bryn Mawr Bank Corp.
WILMINGTON – WSFS Bank, Delaware’s largest remaining homegrown bank, announced Wednesday morning that it has signed a merger agreement with Bryn Mawr Bank Corp., the parent company of Bryn Mawr Trust based northwest of Philadelphia.
The $976.4 million acquisition deal will grow WSFS’ assets by about 25% and its wealth management assets by more than 40%, totaling post-merger nearly $20 billion and $43 billion, respectively, as of Dec. 31. According to an investor presentation, WSFS would become the sixth largest bank by deposit in the Philadelphia-Wilmington-Camden metropolitan area after the merger, leapfrogging its biggest Delaware competitor M&T Bank.
The merger agreement has been approved by the boards of directors of both companies but is subject to approval from regulators and stockholders. Pending those approvals, the transaction is expected to close early in the fourth quarter of 2021.
Rodger Levenson, WSFS chairman, president and CEO, told analysts March 10 that he and Bryn Mawr President and CEO Frank Leto have known each other for years and that he has long admired Bryn Mawr’s operation. While the chief executives had previously mused about a potential merger, Levenson said the “timing just wasn’t right.”
“Then, over the course of the past year, we probably talked a little bit more than normal because a lot of us were sharing notes about how we navigated through the COVID environment,” he explained. “I think that strengthened our relationship and got us to know each other and our franchises better.”
Around Jan. 1, Levenson said both sides returned to talk about the potential for a merger and the negotiations moved quickly afterward.
“I think this is definitely a case of one plus one is more than two,” Levenson said, noting that the banks have seen an increase in prospects over the pandemic, especially small and medium-sized businesses that were unhappy with the response from larger, national institutions in the market. “We are the only local alternative to the big banks. I think that really bodes well and is a tailwind for the growth rates.”
The merger aligns with the strategic plan developed by WSFS and develops the sixth largest bank-affiliated wealth management and trust business nationwide under $100 billion in assets.
Levenson said that the wealth management arm would continue to utilize the prominent local Bryn Mawr Trust brand, although how that would play out in concert with WSFS’ existing wealth management services was still being determined. Jennifer Dempsey Fox, president of wealth management at Bryn Mawr, will reportedly continue in a similar role under WSFS Chief Wealth Officer Art Bacchi.
Leto said that he believed both banks had strengths to add to the wealth management practice, calling them complementary businesses.
“I look at it as really becoming a real powerhouse in the wealth space,” he said, noting each already has a nationwide presence.
While the merger will end the 132-year-old Bryn Mawr’s run, its shareholders will find a 16% premium over its latest share value. Under the terms of the agreement, Bryn Mawr stockholders will receive 0.90 of a share of WSFS common stock for each share of Bryn Mawr common stock. The per share value equates to an implied value of $48.55 for Bryn Mawr stockholders based on the closing price of WSFS stock on March 9. Leto and two other Bryn Mawr board members will join WSFS’ board after the close of the merger.
The merger is WSFS’ ninth since 2010, including traditional banks and other fee-based businesses in southeastern Pennsylvania and Delaware. Its most notable merger prior to Bryn Mawr was Philadelphia-based Beneficial Bank, which held $5 billion in assets across Philadelphia and Southeast New Jersey when it merged with WSFS in 2019.
The deal comes at a time when WSFS’ competitors are also growing, with M&T announcing a $7.6 billion deal to acquire Connecticut-based People’s United Financial Inc. last month and PNC Bank cutting a $11.6 billion deal to acquire the U.S. operations of Spanish bank BBVA in November.
WSFS anticipates consolidating about 30% of the combined banking offices due to geographic overlap and optimization opportunities within the network. WSFS operates 112 offices, including 89 bank branches, with 52 located in Pennsylvania, 42 in Delaware, and 16 in New Jersey. Bryn Mawr operates 41 bank branches, seven wealth management offices and two insurance and risk management locations in Southeast Pennsylvania, Southeast New Jersey and New Castle County.
WSFS expects pre-tax merger and restructuring costs of approximately $127 million, including severance connected to a few hundred redundant job cuts, and to achieve annual cost synergies of approximately $73 million, once fully phased in by 2023. The bank hopes to limit job losses through the placement of about 150 current job openings.