PhillyDeals: WSFS Financial buys Broomall bank firm

WSFS Financial Corp.

, one of the biggest banks still based in the Philadelphia area, on Tuesday agreed to pay $92 million for Broomall-based

Alliance Bancorp Inc.

, which operates eight branches in Delaware and Chester Counties.

The price works out to $22 a share, a 10-year high for Alliance, which has lately traded around $17, but less than the nearly $24 that Alliance was worth at its 2004 peak.

With low interest rates squeezing small lenders, Alliance has been under pressure to find a buyer since 2013, when Illinois-based PL Capital Advisors bought 9 percent of the shares and threatened to run its own candidate against one of Alliance's incumbent directors. The bank agreed to add a PL director and speed profits to shareholders.

The deal adds $310 million in loans and $345 million in deposits to WSFS, whose assets will top $5 billion post-sale. WSFS already has nine offices in Pennsylvania and 45 in Delaware, plus outposts in Virginia and Nevada.

WSFS hopes to pick up business customers turned off by the big out-of-town banks that have bought up the dominant Philadelphia lenders, said Rodger Levenson, chief commercial lender at WSFS.

WSFS president Mark Turner says all Alliance branches will stay open. WSFS plans to cut 20 of Alliance's 77 jobs, mostly in the back office. He expects workers who don't mind the ride down I-95 will apply for posts at WSFS, which employs 850. Investment bankers at Boenning & Scattergood in West Conshohocken advised WSFS in the sale.

"Mark Turner is trying to get into Southeastern Pennsylvania in a big way. It's a nice acquisition," said Ted Peters, former chief executive of Bryn Mawr Trust Co. and cofounder and CEO of the Bluestone Financial Institutions Fund, of Wayne, which invests in banks. He said Alliance chief executive Dennis Cirucci "got a very fair and full price."

Why did investors press Cirucci to sell? "It's difficult being such a small bank, with all the federal regulations and the money you have to spend on cyber security," Peters told me. "They didn't have enough critical mass."

He predicted other local banks with under $1 billion in assets, like Malvern Federal Savings Bank, are likely to attract buyers. Peters said Beneficial Corp., the largest bank still based in Philadelphia, is less of a target: "I don't see them selling. They have a lot of capital. I think they are an acquirer. In fact, I'm a little surprised they didn't buy Alliance."

The Alliance deal is "a bit pricey," but WSFS is gaining market share from rival M&T, which owns the former Wilmington Trust, and should be able to pick up new customers in Alliance territory, Boenning & Scattergood analyst Matthew Schultheis told clients in a report.

AgustaWestland, an arm of the Italy-based Finmeccanica industrial group, says it will make its new AW609 tilt-rotor, a civilian aircraft the company compares to the military V-22 Osprey made at Boeing's Ridley Township plant, at AgustaWestland's factory in Northeast Philadelphia.

AgustaWestland announced the plan at Helicopter Association International's HAI Heli-Expo trade show Tuesday in Orlando. The company also said it is adding former Pennsylvania Gov. and Homeland Security Secretary Tom Ridge to its board of directors.

The company expects to start work on the AW609 in Philadelphia this year, and to get full Federal Aviation Administration civil certification by 2017. AgustaWestland will be expanding its engineering and supply-chain operations in Philadelphia to accommodate the new craft, spokeswoman Lauren Slepian told me. The company employs nearly 600 at this plant.