Controversy-plagued community bank in Pennsylvania finds a buyer

Noah Bank's search for a buyer in the wake of its CEO's bribery and theft convictions is over.

The $275 million-asset bank in Elkins Park, Pennsylvania, on Thursday agreed to be sold to Bank of Princeton in New Jersey for $25.4 million in cash. The deal ended a monthslong pursuit of a seller that included at least two other possible options.

In June, Edward Shin, the former CEO of Noah, was found guilty of all charges in a jury trial in a federal court in New York. Prosecutors accused him of using his insider position to issue Small Business Administration-backed loans to entities in which he secretly held a stake. The government also accused Shin of taking kickbacks from a broker who received fraudulent commissions from other SBA loans made by the bank.

Shin was arrested in 2019. He was convicted of charges that each carry a maximum sentence of 30 years in prison, including bank bribery, theft of funds by a bank officer and conspiracy to commit bank fraud. Earlier this month, he was sentenced to 14 months in prison.

"Instead of promoting and protecting the bank's interests, Shin used the bank as his own piggy bank, stealing from it to line his pockets and the pockets of his corrupt friends," Damian Williams, the U.S. attorney for the Southern District of New York, said in a release after the sentencing.

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Noah had entertained other sale possibilities this year. These included a buyout offer from NMB Financial, the $621 million-asset parent of New Millennium Bank in Fort Lee, New Jersey. Noah also considered a stock purchase agreement with a private investor group valued at $10 million. That deal would have given the investor group control of the bank.

The Philadelphia-area bank ultimately agreed to be sold to the $1.6 billion-asset Bank of Princeton; the transaction is expected to close in the second quarter.

The purchase price equals 79.7% of tangible book value as of June 30, according to Bank of Princeton. It anticipates "modest" tangible book dilution of 3% that it expects to earn back in one year.

The buyer also said the deal would be accretive to its earnings per share in the first year after the acquisition closes.

"This acquisition provides the Bank of Princeton with an excellent opportunity to expand in markets that are a key part of our long-term strategy, while doing so in a manner that is minimally dilutive to tangible book value and accretive to our earnings," Edward Dietzler, Bank of Princeton president and CEO, said in a news release announcing the deal.

Noah has six branches and serves businesses and consumers primarily in the Asian American communities of southeastern Pennsylvania, northern New Jersey and New York City.

The combined bank would have about $1.9 billion of assets, $1.6 billion of loans and $1.6 billion of deposits, with 29 branches serving the southeastern Pennsylvania, New Jersey and the New York City markets.

Bank of Princeton previously announced it had secured all stockholder and regulatory approvals needed to reorganize into a bank holding company. Under the reorganization, expected to be completed in the first quarter, the bank will become a wholly owned subsidiary of a newly formed corporation known as Princeton Bancorp.