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Prudential Bancorp, Inc. of Pennsylvania
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(Name of Registrant as Specified In Its Charter)
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[The following letter from the President of the Registrant is to be distributed
to the Registrant's shareholders on or about January 6, 2006. The letter may
be deemed "soliciting materials" within the meaning of the Securities Exchange
Act of 1934, as amended, and the rules and regulations of the Securities and
Exchange Commission.]
Prudential Bancorp Letterhead
January 6, 2006
Dear Shareholder:
You recently received materials from The Stilwell Group
("Stilwell Group") urging you to withhold your vote in favor of the
election of the Board of Directors' nominees for director at our
upcoming Annual Meeting of Shareholders. For the reasons set forth
below, we urge you to support the Board and vote in favor of the
Board's nominees for director. We urge you to return the enclosed
WHITE proxy card and not return any GREEN proxy card(s) received from
the Stilwell Group. Remember, your latest dated proxy card is the
only one that counts. Please return the enclosed WHITE proxy card
even if you have already returned one.
* As we stated clearly in connection with the reorganization of
Prudential Savings Bank into the mutual holding company structure, it
was our intent to continue to operate under our community bank model.
* An integral part of that strategy is operating under the
direction of a Board with deep roots in the community and with an
intimate knowledge of the needs of and issues facing the community.
Tom Vento, the President and Chief Executive Officer, and Joseph W.
Packer, Jr., the Chairman of the Board, combined have more than 100
years of service to the Bank. Two other directors also have extensive
years of service to the Bank. Mr. Stilwell lives and works in New
York and, to our knowledge, is not active in community affairs or
business within our market area.
* This Board guided the Company to a number of notable accomplishments in
fiscal 2005.
* Successful Stock Offering and Reorganization. We completed the
mutual holding company reorganization, raising more than $50.0
million of additional capital in March 2005.
* Record Profitability. We reported record net income of $3.4
million, a 37% increase over the prior fiscal year.
* Payment of Quarterly Cash Dividends. We established a quarterly
cash dividend policy in the first full quarter as a public company
and are well positioned to grow dividends over time.
* Strong Asset Growth. We grew our assets by almost 10% and our
loans by more than 15%, reflecting the continued successful
implementation of our business plan.
* Superior Asset Quality. We maintained superior asset quality
with no loan charges offs and a non-performing assets to total assets
ratio of .13%.
* Regulatory Approval to Repurchase Shares. We convinced federal
regulators to approve a 5% stock repurchase program within the first
full quarter after completing the Company's stock offering. We are
not aware of any other newly formed mutual holding company receiving
such approval in recent years.
* Strong Capital Base. We have a capital base which is almost three
times the level required to be considered "well-capitalized." Our
capital level affords us the ability to grow our business, maintain
a quarterly cash dividend and implement significant share repurchases
in the years ahead.
Mr. Stilwell believes that he should be appointed to our Board.
Mr. Stilwell seems to be of the view that merely being a large
stockholder in and of itself is a sufficient reason to be considered
appropriate to serve as a director. The Board believes that having
persons who are knowledgeable about the community in which we operate
and the business we conduct who are willing to work in a collegial
and cooperative manner is more important than having someone on the
Board merely because of his ownership level. This guiding principle
has served our Company well as evidenced by the accomplishments
outlined above and will permit us in the years ahead to continue to
build shareholder value by growing our Company and improving our
profitability.
Our Board is committed to being attentive and attuned to the
interests of our customers, the community and our shareholders and to
creating shareholder value over the long-term. Our belief that we can
achieve these objectives was a primary reason for effecting the
mutual holding company reorganization. We do not believe Mr. Stilwell
has the same interests or concerns. In fact, a review of Mr.
Stilwell's publicly disclosed significant investments in publicly
traded financial institutions reveals a pattern in which the
companies are generally sold within a relatively short time period
after the Stilwell Group discloses its ownership has exceeded 5%. As
part of such disclosures, Mr. Stilwell usually states that the
appropriate course of action for the board of the involved company is
to pursue the sale of the company. Of the seven financial
institutions that we are aware of (other than Prudential) in which
Stilwell has owned more than 5% of the stock, six have been sold. The
Stilwell Group has publicly disclosed that it believes the seventh
company should be sold and that if the board does not pursue such
course of action, it will nominate an alternative slate of directors
and solicit proxies to elect them. You should know, and Mr. Stilwell
knows, that the sale of a recently formed mutual holding company is
impermissible under applicable banking regulations. Federal
regulators prohibit such sales in order to ensure that activist
shareholders do not try to force a quick sale of a company before it
has had the time and opportunity to prudently leverage its newly
raised capital.
Our Board and management have operated Prudential Savings Bank
in a safe and sound manner for decades, producing profits year after
year. We ask that you continue to support your Board and to vote for
the Board's nominees for director. We are committed to building
value for our shareholders on a long-term basis. Please vote FOR the
Board's nominees on the enclosed WHITE proxy card and return it in
the enclosed postage paid envelope. Your support is greatly
appreciated.
Sincerely,
/s/ Thomas A. Vento
Thomas A. Vento
President and Chief Executive Officer