Prudential Bancorp in Philadelphia has agreed to buy Polonia Bancorp in Huntingdon Valley, Pa.
The $538 million-asset Prudential said in a press release Thursday that it will pay $38.1 million in cash and stock for the $312 million-asset Polonia. The deal is expected to close in the fourth quarter.
Prudential said it expects "modest" tangible book value dilution that it should earn back in a year. The deal should be "significantly accretive" to Prudential's earnings per share in 2017, taking into account the company's plans to cut Polonia's costs in half.
"Acquiring Polonia is a very beneficial transaction that will enable us to increase the value of the franchise for the benefit of our shareholders," Dennis Pollack, Prudential's president and chief executive, said in the release. "We will continue to pursue all strategies available to reach a higher level of financial performance in order to maximize shareholder value."
Polonia in March 2015 hired Joseph Svetik as its chief executive. Svetik spent much of his professional career as chairman, president and chief executive of ESSA Bancorp and, before that, First Star Bank.
Sandler O'Neill and Silver, Freedman, Taff & Tiernan advised Prudential. FinPro Capital Advisors and Kilpatrick Townsend & Stockton advised Polonia.