Filed by Willow Grove Bancorp, Inc.
(Commission File No. 0-49706)
Pursuant to Rule 425 under the Securities Act of
1933 and Deemed Filed under Rule 14a-12 of the
Securities Exchange Act of 1934
Subject Company: Chester Valley Bancorp Inc.
(Commission File No. 0-18833)
January 20, 2005
To our employees,
We have some exciting news to share! This afternoon, Willow Grove Bancorp, Inc.
announced that it is acquiring Chester Valley Bancorp Inc. This dynamic
partnership will create a whole new range of benefits for our customers,
business partners, and employees.
Chester Valley Bancorp Inc. is the holding company for two main subsidiaries:
First Financial Bank, a commercial bank, and Philadelphia Corporation for
Investment Services, a full-service broker/dealer. First Financial Bank is
headquartered in Downingtown, Pa., with $644 million in assets. Its 13
full-service branches are strategically located throughout Chester County, one
of the fastest-growing counties in Pennsylvania. The bank has long been known
for outstanding customer service and its full complement of products and
services, which encompass retail, commercial banking, brokerage services, and
trust and wealth management.
The acquisition of Chester Valley Bancorp Inc. will position Willow Grove
Bancorp, Inc. as the 5th largest bank headquartered in Southeast Pennsylvania.
This exciting partnership will further expand our opportunity to provide
financial services to retail and commercial customers along the booming Route
202 corridor. Together we will bring a range of consumer and commercial banking
products, a 27-branch retail network, and the local presence and high touch that
our respective customers have come to know and expect from both banks.
This is a merger strategically unlike any other in the Philadelphia area. For
all intents and purposes, it is a merger where the value of the combined entity
is expected to greatly exceed the value of the individual parts. With the
combination of our two great community banks, we expect to create a much
stronger, more powerful regional bank--but one that retains its tight ties to
the local community. Opportunities to expand relationships with our respective
customers and penetrate new markets will be plentiful upon completion of this
deal.
In addition, this merger will position us for new growth and new career
opportunities. We firmly believe the need for locally-based community banks has
never been greater. Large `mega-banks' with institutional owners and remote
decision makers simply can't provide the same level of service that we will be
able to provide as an expanded bank with more branches, broader product
offerings, and additional management. Our plan is to use both sides of the house
to find new growth opportunities in the months and years to come.
As you know, last year I announced that I would be retiring as President and
CEO, and that we were starting a search to find my replacement. I am delighted
to announce that Donna M. Coughey, President and CEO of Chester Valley Bancorp
Inc., has agreed to lead the new organization as President and CEO. Donna, who
previously served as Chairwoman and Chief Executive Officer of Mellon Bank of
Delaware, is one of the area's most respected community bankers. She brings big
bank experience, as well as a tremendous sensitivity to the needs and desires of
our community and customers. In addition, one of her primary objectives will be
to ensure that all employees feel a part of the new organization, regardless of
which side of the house they come from. Reflecting this, the leadership team
that has been selected to support her will be fairly equally divided between
Willow Grove Bank and First Financial Bank executives. I will remain an active
and visible member of the Board of Directors, and I look forward to continuing
to work with all of you, and to watching as your careers flourish in the
combined company.
As part of the acquisition, we will be naming local leaders within our
respective market territories. In line with that, I am proud to announce that
John Powers will serve as Regional President to lead the Willow Grove Bank
Division. I am certain that he will be successful in his new, expanded role.
John has been my confidante and `go-to' guy for many years, and he has often
filled in for me at community events. All Willow Grove employees should be proud
that one of their own--a well-respected leader within the bank and the
community--has scored such a major achievement as part of this acquisition.
Congratulations, John!
I am sure that all of you are wondering what this merger means to you as
employees. As with any merger, there will be some redundancies between the
companies and one benefit of a combination is a reduction in administrative
expenses. At this time, the banks are just beginning to develop an integration
plan. However, I want to assure you that we are working hard to minimize the
impact of any consolidation initiatives. Both banks are immediately implementing
a hiring freeze in order to let employee attrition provide a cushion. Affected
employees will be given opportunities to apply for other open positions within
the new organization. Additionally, we will provide a safety net in the form of
a severance program for displaced employees.
For now, many of our operations will continue with business as usual. Our
branches will still operate under the Willow Grove name (although we will be
evaluating new names for the holding company in the near future). We will
continue to focus on serving customers and, above all else, providing the local
touch and care customers have come to expect from each and every one of us.
This is a tremendous opportunity for all of our stakeholders: customers,
shareholders, and employees! Chester Valley is an excellent strategic fit for
Willow Grove, and I'm gratified to be able to execute this transaction. Today's
accomplishments will have an impact on the communities we serve for decades to
come, and I am excited about this new chapter in our history. It opens new doors
in our quest to become the premier locally-based community bank in a newly
expanded market.
We will be communicating with you frequently during this transaction. We hope
you take this opportunity to help us advance the bank, and continue our
tradition of service to customers, and our commitment to employees in the months
to come.
Best regards,
/s/ Frederick A. Marcell Jr.
--------------------------------------------
Frederick A. Marcell Jr.
President and CEO
FORWARD LOOKING STATEMENTS. A number of the matters discussed in this message
that are not historical or current facts deal with potential future
circumstances and developments, in particular, information regarding the new
company, including expected synergies resulting from the merger of Willow Grove
Bancorp and Chester Valley Bancorp, combined operating and financial data,
future banking plans, and whether and when the transactions contemplated by the
merger agreement will be consummated. The discussion of such matters is
qualified by the inherent risks and uncertainties surrounding future
expectations generally, and also may materially differ from actual future
experience involving any one or more of such matters. Such risks and
uncertainties include: the failure to realize capital, operating expense and
other synergies; the result of the review of the proposed merger by various
regulatory agencies, and any conditions imposed on the new company in connection
with consummation of the merger; approval of the merger by the shareholders of
Willow Grove Bancorp and Chester Valley Bancorp and satisfaction of various
other conditions to the closing of the merger contemplated by the merger
agreement; and the risks that are described from time to time in Willow Grove
Bancorp's and Chester Valley Bancorp's respective reports filed with the SEC,
including each company's annual report on Form 10-K for the year ended June 30,
2004 and quarterly report on Form 10-Q for the quarter ended September 30, 2004.
This message speaks only as of its date, and Willow Grove Bancorp and Chester
Valley Bancorp each disclaims any duty to update the information herein.
ADDITIONAL INFORMATION AND WHERE TO FIND IT. In connection with the proposed
merger, a registration statement on Form S-4 will be filed with the SEC. WILLOW
GROVE BANCORP AND CHESTER VALLEY BANCORP SHAREHOLDERS ARE ENCOURAGED TO READ THE
REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC,
INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE
REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE MERGER. The final joint proxy statement/prospectus will be mailed to
shareholders of Willow Grove Bancorp and Chester Valley Bancorp. Shareholders
will be able to obtain the documents free of charge at the SEC's website,
www.sec.gov, from Willow Grove Bancorp by calling Christopher E. Bell or from
Chester Valley Bancorp by calling Joseph Crowley.
PARTICIPANTS IN SOLICITATION. Willow Grove Bancorp, Chester Valley Bancorp and
their respective directors and executive officers and other members of
management and employees may be deemed to be participants in the solicitation of
proxies in respect of the merger. Information concerning persons who may be
considered participants in the solicitation of Willow Grove Bancorp's
shareholders is set forth in the proxy statement dated October 8, 2004, for
Willow Grove Bancorp's 2004 annual meeting of shareholders as filed with the SEC
on Schedule 14A. Information concerning persons who may be considered
participants in the solicitation of Chester Valley Bancorp's shareholders is set
forth in the proxy statement dated September 10, 2004, for Chester Valley
Bancorp's 2004 annual meeting of shareholders as filed with the SEC on Schedule
14A. Additional information regarding the interests of participants of Willow
Grove Bancorp and Chester Valley Bancorp in the solicitation of proxies in
respect of the merger will be included in the registration statement and joint
proxy statement/prospectus to be filed with the SEC.