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MAPLE GLEN, PA-Locally based Willow Grove Bancorp inked an agreement to acquire Chester Valley Bancorp, which is based in Downingtown and operates First Financial Bank and Philadelphia Corp. for Investment Services. The transaction is valued at approximately $152.5 million and is expected to close in the third quarter of this year.

This brings together 14 Willow Grove Bank branches, located primarily in suburbs to the north of Philadelphia, and 13 First Financial Bank branches, located primarily to the south, creating what Frederick A. Marcell Jr., president and CEO of Willow Grove, describes as a "crescent-shaped footprint surrounding Philadelphia." All branches will remain and will retain their existing names for the next three years, operating as divisions of the new bank. "We're already discussing the name for a new bank holding company for the combined entities," he said during a conference call.

Last year Marcell announced plans to retire this year, but will remain on the combined banks' board of directors. Donna M. Coughey, current president and CEO of Chester Valley, will become president and CEO of the newly formed company. Securing her "was a key component of this merger," Marcell says, adding, "the merger ensures the continuation of both bank companies' local presence, high-touch philosophy."

Willow Grove and Chester Valley both trade on the Nasdaq as WGBC and CVAL, respectively. Under the agreement, shareholders of Chester Valley can elect to receive either $27.90 in cash or nearly 1.5 shares of Willow Grove common stock for each share of Chester Valley stock they own on the merger date. These elections are subject to an allocation intended to ensure that just under 65% of Chester Valley shares are converted to Willow Grove shares.

Coughey says the company will look to acquire additional branches from larger banks downsizing in the region and develop new ones. According to Coughey, the geographic synergy of the two companies is matched by other factors, including their size and services. Willow Grove's $975.6 million in assets combine with Chester Valley's $644.7 million to create a $1.6-billion banking institution, the fifth largest in Southeastern Pennsylvania. Their combined products include retail and commercial banking, real estate, commercial and consumer lending, wealth management, and trust and brokerage operations. The latter is primarily through Chester Valley's Philadelphia Corp. for Investment Services.

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Willow Grove Buys First Financial Bank for $153M

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