Northwest Philly's Valley Green Bank sold for $76 million, will retain name
Valley Green Bank, which takes its name from the verdant land that runs through its home turf in Northwest Philadelphia, will merge next year with Univest Corp., one of the largest financial companies based in the area.
The deal, in which Univest will buy Valley Green Bank for $76 million in stock, is expected to be approved by the bank's shareholders in the fall, followed by the merging of the companies in early 2015.
The bank will retain its name and be called Valley Green Bank, Division of Univest.
It will also retain its goal to serve local businesses and residents, bank president Jay Goldstein, who will continue as leader of the Valley Green division, told NewsWorks this week.
Bank's local history
Founded in 2005 to support local businesses throughout Philadelphia, the bank's headquarters are based at 7226 Germantown Ave. in Mount Airy.
"We believed that being located on an emerging main-street business corridor was an important symbol of what we were trying to create," Goldstein said. "We thought that by investing in a building on the corridor, we would spur further development."
It was also a location that had ties for many of the bank's co-founders. Among them were developer Ken Weinstein; Algot Thorell Jr., former executive director of the Chestnut Hill Business Association; Goldstein, a former board president of Mt. Airy USA; Robert Elfant, president of Elfant Wissahickon Realtors and John McCoubrey, president of McCoubrey/Overholser Building Construction of Mt. Airy.
Since its founding, Valley Green has made almost $750 million in small business loans "at a time when many other banks were not lending at all," Goldstein said.
Lending to nonprofits
From its Mt. Airy, Chestnut Hill and South Philadelphia branches, as well as loan offices in Radnor and Center City, Valley Green also focused on lending to nonprofits "because they are potential linchpins for communities, and we feel that's a passion and responsibility of ours," he said.
When Weavers Way Co-op decided to expand into Chestnut Hill in 2009, Valley Green understood its benefit to the community. While it may not have been a "traditional loan" for another bank, Goldstein said "we were enthusiastic to support it."
Stuart Katz, then-president of Weavers Way who now serves as treasurer, said Valley Green Bank was "our primary lender, and helped ensure that we had enough funds to do the expansion well and at a good rate. Jay also gave the board good advice on putting the deal together."
Weavers Way went through negotiations for several different properties, and Goldstein offered counsel throughout the process.
"Having someone you trust and who has been through these kinds of deals, who cares about the co-op and understands the local culture and politics, was tremendously helpful," Katz said.
Why they're selling
The decision to sell to Univest was motivated by the desire to grow Valley Green's impact in the community, with the support of a strong financial institution, Goldstein said.
"Univest has been a relatively small community bank in southeastern Pennsylvania for the last 140 years, and they're vehemently independent," he said. "For the first time, they believed in what was happening in the city of Philadelphia and its potential opportunities, but they also recognized they didn't have the expertise here. So, they sought us out to partner with us.
"We saw that we would get the back-office and technological support from a well-established institution."
It was a also a good business move.
The sale price for Valley Green is three times the $9 per share that the bank's 300 shareholders had invested.
For the bank's retail customers, the change will mean they receive "the same attention they have been getting, and at the same time we can offer the most up-to-date products and services," as well as Univest's mortgage, insurance, leasing and wealth-management expertise, Goldstein said.
"Borrowers will have the same relationship with the existing lenders, but we now have the capacity to lend significantly more than we could have in the past," he said.
Katz, of Weavers Way, said he doesn't know much about Univest, but he's comfortable with the fact that Goldstein is staying on to manage the Valley Green division.
"I'm hopeful that given the greater access to capital, and the greater ability to do more things, the bank will play a larger role in Northwest Philadelphia," he said. "We all like the idea of a local bank, and local is a main focus of where Weaver Way tries to be. If they maintain a local focus, the potential is to do bigger and better things."