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WSFS Financial (WSFS) to Buy Bryn Mawr Bank (BMTC) for $976.4M

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Zacks Equity Research
·4 min read
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With an aim to further solidify its position in the Greater Philadelphia and Delaware regions, WSFS Financial Corporation WSFS has inked a deal to acquire Bryn Mawr Bank Corporation BMTC. The all-stock deal, expected to close early in the fourth quarter of 2021, is valued at $976.4 million.

Since the announcement of the transaction last week, shares of WSFS Financial have declined 2.5%, while that of Bryn Mawr Bank has jumped 11.8%.

WSFS Financial’s management believes that the deal will not only strengthen its market share, but is likely to improve balance sheet position, in turn, helping it compete with large regional and national banks.

The deal has been already approved by the board of directors of both the companies. It still requires consents from regulators and both companies’ shareholders.

Rodger Levenson, WSFS Financial’s Chairman, President and CEO said, “Combining with Bryn Mawr allows us to accelerate our long-term strategic objectives, including scale to continue to invest in our delivery and talent transformations. This combination also creates the premier wealth management and trust business in the region and the sixth largest bank-affiliated wealth management and trust business nationwide under $100 billion in assets.”

Transaction Details

Under the terms of the deal, shareholders of Bryn Mawr Bank will get 0.90 of share of WSFS Financial common stock for each share of Bryn Mawr Bank. This will result in approximately 27% ownership of Bryn Mawr Bank shareholders in the combined company.

Following the closure, Frank Leto, President and CEO of Bryn Mawr Bank, will join the boards of directors of WSFS Financial along with two mutually agreed upon current directors of Bryn Mawr Bank’s board.

Synergies & Other Financial Benefits

WSFS Financial expects the acquisition of Bryn Mawr Bank to be 6.7% accretive to earnings (excluding the one-time merger and restructuring costs) in 2022 and 13.4% in 2023. Further, the deal is likely to lead to significant revenue synergies, which has not been included in the transaction model.

The transaction will result in one-time merger-related costs of $127 million. Also, WSFS Financial projects nearly $73 million of annual cost savings, with 65% to be realized by next year and 100% in 2023.

Additionally, the transaction will result in 30% reduction in total branch count mainly owing to “geographic overlap and optimization opportunities within the network.”

The combined company will have $20 billion in assets, $12.6 billion in net loans, $16.2 billion in total deposits and roughly $43 billion in Wealth Management business based on Dec 31, 2020-data.

Conclusion

Over the years, WSFS Financial has grown meaningfully through acquisitions. Specifically, since 2010, the company has acquired eight banks, which has substantially strengthened its position in the regional market and improved financials.

Over the past six months, shares of WSFS Financial and Bryn Mawr Bank have jumped 87.6% and 76.4%, respectively.



Currently, WSFS Financial carries a Zacks Rank #3 (Hold) and Bryn Mawr Bank has a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks Undertaking Similar Efforts

Since the beginning of 2021, many small and large banks have announced acquisition deals amid tough operating backdrop owing to the coronavirus pandemic. Some of these are Shore Bancshares, Inc. SHBI and M&T Bank Corporation MTB.

Earlier this month, Shore Bancshares announced the signing of a definitive merger agreement with Severn Bancorp, Inc. The stock and cash deal worth $146 million, is expected to close in the third quarter of 2021, subject to necessary approvals.

Last month, M&T Bank agreed to acquire People’s United Financial Inc. in an all-stock merger deal worth $7.6 billion. The transaction is expected to close in the fourth quarter of 2021.

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M&T Bank Corporation (MTB) : Free Stock Analysis Report

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