By Lisa Kerner
Charlotte, N.C., May 21 - Harleysville National Corp. and Willow Financial Bancorp, Inc. agreed to merge in a deal valued at approximately $162 million, or $10.28 per Willow Financial share.
Under the companies' definitive agreement, Willow Financial Bancorp's wholly owned subsidiary, Willow Financial Bank, will merge with and into Harleysville National Bank and Trust Co.
Each share of Willow Financial common stock will be exchanged for 0.73 shares of Harleysville National common stock, a Harleysville news release stated.
Following the transaction's close, expected in the fourth quarter of 2008, Harleysville National shareholders will own 73% and current Willow Financial shareholders will own 27% of the combined company.
Harleysville National said the merger is subject to regulatory and shareholder approval.
Willow Financial president and chief executive officer Donna Coughey will continue with Harleysville National as an executive vice president for a one-year period to assist with the transition, according to the release.
Two current Willow Financial directors will join Harleysville National's board of directors.
"The acquisition delivers the benefit of scale and synergies in a transaction that we believe will be accretive to earnings in year one," Harleysville National president and CEO Paul Geraghty said in the release.
Willow Financial's network of 29 branches will provide Harleysville National with "significant" market share in Chester County, the fastest-growing county in Pennsylvania, as well as in three additional counties, Geraghty noted.
According to Coughey, the combined bank will be the third-largest bank based in the Philadelphia region, with assets of $5.5 billion and 84 branches.
Synergies are estimated to be $15 million to $20 million in 2009, or some 10% to 13% of the combined bank's expense base, according to the release.
Harleysville National was advised by Janney Montgomery Scott LLC and Bybel Rutledge LLP. Sandler O'Neill and Partners, LP advised Willow Financial.
Harleysville National is the holding company for Harleysville National Bank and its division, East Penn Bank. The company is based in Harleysville, Pa.
Willow Financial, based in Wayne, Pa., is the holding company for Willow Financial Bank.
| Acquirer: | Harleysville National Corp.
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| Target: | Willow Financial Bancorp, Inc.
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| Announcement date: | May 21
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| Transaction total: | $162 million
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| Price per share: | 0.73 Harleysville National shares, or $10.28
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| Expected closing: | Fourth quarter of 2008
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| Stock price for acquirer: | Nasdaq: HNBC: $14.08 on May 20
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| Stock price of target: | Nasdaq: WFBC: $7.74 on May 20
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