Exhibit 99.5
RP®FINANCIAL, LC. | |
Advisory | Planning | Valuation |
May 30, 2012
Boards of Directors
Malvern Federal Mutual Holding Company
Malvern Federal Bancorp, Inc.
Malvern Federal Savings Bank.
42 East Lancaster Avenue
Paoli, Pennsylvania 19301
Re: | Plan of Conversion and Reorganization | |
Malvern Federal Mutual Holding Company |
Members of the Boards of Directors:
All capitalized terms not otherwise defined in this letter have the meanings given such terms in the Plan of Conversion and Reorganization (the “Plan”) adopted by the Board of Directors of Malvern Federal Mutual Holding Company (the “MHC”), Malvern Federal Bancorp, Inc. (“MLVF”) and Malvern Federal Savings Bank, which are all based in Paoli, Pennsylvania. The Plan provides for the conversion of the MHC into the stock form of organization. Pursuant to the Plan, the MHC will be merged into MLVF and MLVF will merge with Malvern Bancorp, Inc., a newly formed Pennsylvania corporation (the “Company”), with the Company as the resulting entity and the MHC will no longer exist. As part of the Plan, the Company will sell shares of common stock in an offering that will represent the ownership interest in MLVF now owned by the MHC.
We understand that in accordance with the Plan, depositors will receive rights in a liquidation account maintained by the Company representing the amount of (i) the MHC’s ownership interest in MLVF’s total stockholders’ equity as of the date of the latest statement of financial condition used in the prospectus plus (ii) the value of the net assets of the MHC as of the date of the latest statement of financial condition of the MHC prior to the consummation of the conversion (excluding its ownership of MLVF). The Company shall continue to hold the liquidation account for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders who continue to maintain deposits in Malvern Federal Savings Bank. We further understand that Malvern Federal Savings Bank will also establish a liquidation account in an amount equal to the Company’s liquidation account, pursuant to the Plan. The liquidation accounts are designed to provide payments to depositors of their liquidation interests in the event of liquidation of Malvern Federal Savings Bank (or the Company and Malvern Federal Savings Bank).
In the unlikely event that either Malvern Federal Savings Bank (or the Company and Malvern Federal Savings Bank) were to liquidate after the conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution to depositors as of December 31, 2010 and depositors as of the last day of the calendar quarter immediately preceding the date on which the Federal Reserve Board (“FRB”) approves the MHC’s application for conversion, of the liquidation account maintained by the Company. Also, in a complete liquidation of both entities, or of Malvern Federal Savings Bank, when the Company has insufficient assets (other than the stock of Malvern Federal Savings Bank) to fund the liquidation account distribution due to Eligible Account Holders and Supplemental Eligible Account Holders and Malvern Federal Savings Bank has positive net worth, Malvern Federal Savings Bank shall immediately make a distribution to fund the Company’s remaining obligations under the liquidation account. The Plan further provides that if the Company is completely liquidated or sold apart from a sale or liquidation of Malvern Federal Savings Bank, then the rights of Eligible Account Holders and Supplemental Eligible Account Holders in the liquidation account maintained by the Company shall be surrendered and treated as a liquidation account in Malvern
Washington Headquarters | |
Three Ballston Plaza | Telephone: (703) 528-1700 |
1100 North Glebe Road, Suite 600 | Fax No.: (703) 528-1788 |
Arlington, VA 22201 | Toll-Free No.: (866) 723-0594 |
www.rpfinancial.com | E-Mail: mail@rpfinancial.com |
RP Financial, LC.
Boards of Directors
May 30, 2012
Page 2
Federal Savings Bank, the bank liquidation account and depositors shall have an equivalent interest in such bank liquidation account, subject to the same rights and terms as the liquidation account.
Based upon our review of the Plan and our observations that the liquidation rights become payable only upon the unlikely event of the liquidation of Malvern Federal Savings Bank (or the Company and Malvern Federal Savings Bank), that liquidation rights in the Company automatically transfer to Malvern Federal Savings Bank in the event the Company is completely liquidated or sold apart from a sale or liquidation of Malvern Federal Savings Bank, and that after two years from the date of conversion and upon written request of the FRB, the Company will transfer the liquidation account and depositors’ interest in such account to Malvern Federal Savings Bank and the liquidation account shall thereupon become the liquidation account of Malvern Federal Savings Bank no longer subject to the Company’s creditors, we are of the belief that: the benefit provided by the Malvern Federal Savings Bank liquidation account supporting the payment of the liquidation account in the event the Company lacks sufficient net assets does not have any economic value at the time of the transactions contemplated in the first and second paragraphs above. We note that we have not undertaken any independent investigation of state or federal law or the position of the Internal Revenue Service with respect to this issue.
Sincerely,
RP Financial, LC.