William Penn Bancorp in Levittown, Pa., is facing pressure from an activist to conduct a mutual conversion.

Management at the $313 million-asset William Penn should explore either making a second-step conversion or launching a yearly 10% stock buyback plan, the New York investor Joseph Stilwell said in an April 12 regulatory filing.

"We believe the Issuer has made progress on shareholder-friendly capital allocation," Stilwell said in the filing. However, a stock buyback or a second-step conversion would "maximize shareholder value," he said.

Funds controlled by Stilwell own about 4% of William Penn. Stilwell has owned shares in William Penn since May 2008.

William Penn is majority-owned by a mutual holding company that holds about 75% of the company. It completed a partial conversion from a mutual to a publicly traded company in April 2008.

William Penn Bank was established in 1870. Its three branches are in Levittown, Morrisville and Richboro, Pa.

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