Breaking Down William Penn Bancorporation (WMPN) Financial Health: Key Insights for Investors

You're looking at William Penn Bancorporation (WMPN) right now, and the headline number-a GAAP net loss of $(0.99) million for Q2 FY2025 (ending December 31, 2024)-might give you pause, but honestly, that figure is deceptive. As a seasoned analyst, I can tell you the real story is one of a controlled exit and strong underlying credit quality, not operational distress. The loss was primarily driven by $0.73 million in one-time merger-related expenses as the company moves toward its expected close with Mid Penn Bancorp in the second calendar quarter of 2025. What's really defintely worth noting for any investor is the bank's exceptional asset quality, with non-performing assets to total assets improving to a low 0.30% in Q2 FY2025, plus its tangible book value per share holding steady at $12.93. The balance sheet is clean. So, the question isn't about survival; it's about the value capture in this all-stock acquisition, especially with the net interest margin (NIM) stabilizing near 2.27% despite a tough rate environment.

Revenue Analysis

William Penn Bancorporation (WMPN) operates primarily as a traditional bank, so its revenue is split between the core business of lending (Net Interest Income) and other fee-based activities (Non-Interest Income). The near-term picture, specifically the three months ended December 31, 2024 (Q2 FY2025), shows a total revenue of approximately $5.035 million, but this figure masks some underlying pressures and one-off gains.

Your main takeaway is that core revenue is under pressure, but a one-time asset sale provided a temporary uplift to the non-interest segment. Honestly, the biggest factor here is the pending merger with Mid Penn Bancorp, Inc., which is driving the near-term narrative.

The primary revenue streams for William Penn Bancorporation (WMPN) break down as follows for the second quarter of fiscal year 2025:

• Net Interest Income (NII): This is the profit from lending-the difference between interest earned on loans and securities and interest paid on deposits and borrowings. It remains the dominant segment.
• Non-Interest Income: This includes service charges, fees, and, significantly in Q2 FY2025, gains on the sale of assets.

For the three months ended December 31, 2024, Net Interest Income was $4.1 million, which represented a decrease of $155 thousand, or 3.7%, compared to the same period in the prior year. This drop is a clear signal of margin compression, mainly due to higher funding costs for deposits and lower interest income from investment securities. The net interest margin (NIM) was relatively flat at 2.27% for the quarter, compared to 2.28% a year earlier. This is a tight margin environment.

The contribution of different business segments to the total revenue for Q2 FY2025 was heavily weighted toward NII, but Non-Interest Income's share was unusually high due to a one-off event. Here's the quick math:

The year-over-year revenue growth rate for the last twelve months (TTM) ending December 31, 2024, was a decline of -7.28%, with total TTM revenue at $20.36 million. That's a defintely challenging trend in a rising rate environment where deposit costs have squeezed bank profitability. The good news is that management expects future rate cuts to be a profitability tailwind given the bank's liability-sensitive balance sheet positioning.

The most significant change in the revenue stream for Q2 FY2025 was the surge in Non-Interest Income. This segment totaled $975 thousand, an increase of 17.8% year-over-year. This growth wasn't organic; it was primarily driven by a $211 thousand net gain on the disposition of fixed assets from the sale of two bank-owned buildings. You can't count on selling buildings every quarter, so the underlying non-interest income from fees and service charges remains a smaller, more stable component. For a deeper dive into the market's reaction to these figures, you should check out Exploring William Penn Bancorporation (WMPN) Investor Profile: Who's Buying and Why?

Profitability Metrics

You need to know where the core profitability of William Penn Bancorporation (WMPN) stands, especially with the pending merger. The direct takeaway is clear: WMPN's profitability metrics for the first half of fiscal year 2025 (H1 FY2025) show significant pressure, primarily from funding costs and one-time merger expenses, leading to a net loss.

For a bank, we look at Net Interest Margin (NIM) as the closest analog to a Gross Profit Margin, as it measures the spread between interest earned on loans and interest paid on deposits. Operational efficiency is then captured by the Efficiency Ratio, which is the bank's true operational cost management indicator.

• Net Interest Margin (NIM) is the bank's key gross profit metric.
• Efficiency Ratio is the best measure of operating efficiency.
• Net Loss shows the final bottom-line profitability challenge.

Margins and Core Profitability (H1 FY2025)

William Penn Bancorporation's profitability for the six months ended December 31, 2024 (H1 FY2025), was challenged. The company reported a GAAP net loss of approximately $1.0 million. Excluding professional fees related to the pending merger with Mid Penn Bancorp, the core net loss was still substantial at approximately $744 thousand for the same period.

Here's the quick math on the key profitability indicators for the period:

The Net Interest Margin of 2.28% for the six months ended December 31, 2024, is the most telling figure, reflecting the pressure from rising deposit interest expense, which outpaced the increase in interest income on loans. This is defintely the core headwind.

Operational Efficiency and Industry Comparison

The operational efficiency of William Penn Bancorporation (WMPN) is currently a major concern. The GAAP Efficiency Ratio-which measures non-interest expense as a percentage of total revenue-was elevated at 122.9% in Q2 FY2025. A healthy bank typically aims for an Efficiency Ratio below 60%. Even the core efficiency ratio, which strips out the one-time merger costs, was still high at 118.0%.

Comparing WMPN's core profitability to the industry average for U.S. community banks in 2025 highlights the gap:

• WMPN NIM (2.27% in Q2 FY2025) vs. Community Bank Average NIM (3.62% in Q2 2025).
• WMPN ROA (Annualized Loss) vs. Community Bank Average ROA (1.13% in Q2 2025).

The industry average Net Interest Margin of 3.62% for community banks in Q2 2025 shows WMPN's 2.27% NIM is lagging significantly. This difference of over 130 basis points points to a structural challenge in WMPN's funding mix or asset yield, though management is expecting rate cuts to be a tailwind due to the bank's liability-sensitive balance sheet. You can read more about the strategic context in Exploring William Penn Bancorporation (WMPN) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking for a clear picture of how William Penn Bancorporation (WMPN) funded its operations right up to the merger, and the data from the 2025 fiscal year tells a story of a conservative, capital-rich institution. The direct takeaway is that William Penn Bancorporation (WMPN) maintained a significantly lower debt-to-equity profile than its regional bank peers, relying heavily on shareholder capital and deposits rather than wholesale borrowings.

This conservative structure was a key part of its value proposition leading into the all-stock acquisition by Mid Penn Bancorp, Inc., which closed on April 30, 2025.

Debt Levels and Capital Strength

For a bank, the true measure of leverage often excludes customer deposits, focusing instead on borrowed funds like Federal Home Loan Bank (FHLB) advances and other notes. William Penn Bancorporation (WMPN) actively reduced this debt in the lead-up to the merger, a smart move to de-risk the balance sheet.

• Short-Term/Long-Term Debt: The primary wholesale debt, Advances from the Federal Home Loan Bank (FHLB Borrowings), stood at $28.000 million as of the quarter ended December 31, 2024 (Q2 FY2025).
• Debt Reduction: This figure represents a notable decrease from the $54.000 million in FHLB Borrowings reported just a year prior.
• Total Equity: Total shareholder's equity was approximately $128.3 million as of September 30, 2024 (Q1 FY2025), demonstrating a robust capital base.

The company's capital ratios remained strong, with the Bank's Community Bank Leverage Ratio (CBLR)-a key regulatory measure-at a solid 16.66% in Q2 FY2025.

Debt-to-Equity: A Conservative Stance

The Debt-to-Equity (D/E) ratio shows how much debt a company uses to finance its assets relative to the value of its shareholders' equity. For William Penn Bancorporation (WMPN), this ratio was extremely low compared to the industry average, which is typical for a bank focused on capital preservation and asset quality.

Here's the quick math using the most recent pre-merger data available (Q2 FY2025):

A D/E ratio of approximately 0.22 means William Penn Bancorporation (WMPN) was using only about 22 cents of primary debt for every dollar of equity. To be fair, the typical D/E for a regional bank is around 0.5, so William Penn Bancorporation (WMPN) was operating with significantly less leverage, which lowered its financial risk but also limited its potential for debt-fueled growth. This low leverage was a defintely a selling point in the merger.

Financing Strategy and Merger Context

The company's financing strategy in 2025 was clearly focused on capital management and preparing for the merger. They prioritized a reduction in high-cost borrowings, like the FHLB advances, over seeking out new debt, which is why there were no major debt issuances or credit rating changes reported in the immediate pre-merger period. The ultimate financing decision was to use an all-stock transaction for the acquisition, valuing the company at roughly $120 million, which is the purest form of equity funding for the shareholders.

This focus on equity funding and capital strength is central to understanding the company's long-term philosophy. You can read more about their underlying values in their Mission Statement, Vision, & Core Values of William Penn Bancorporation (WMPN).

Liquidity and Solvency

You need to know if William Penn Bancorporation (WMPN) has the near-term cash to cover its obligations, and the quick answer is yes, the balance sheet shows a deliberate de-risking trend in the first half of fiscal year 2025. The company's liquidity position is strong, underpinned by a significant reduction in wholesale funding, which is a key sign of balance sheet health in a rising-rate environment.

Assessing William Penn Bancorporation's Liquidity

For a bank, traditional Current and Quick Ratios (Current Assets/Current Liabilities) aren't defintely the right tools. A bank's primary current liability is customer deposits, which are its core funding. Instead, we look at the composition of liquid assets versus short-term borrowings and the overall Liquidity Ratio. William Penn Bancorporation's Liquidity Ratio was reported at 39.5% in Q1 FY2025 (September 30, 2024), an improvement from the prior quarter, signaling a solid cushion of liquid assets against total liabilities. That's a healthy buffer.

The management commentary points to substantial liquidity being retained in cash or invested in high-quality government-backed securities. This focus on high-quality, liquid assets is a conservative and smart move given the economic uncertainty.

Working Capital and Cash Flow Trends

The working capital story for William Penn Bancorporation is centered on managing its funding mix. While the traditional working capital (Current Assets - Current Liabilities) is less applicable, the trend in its core funding sources is crucial. The decrease in Cash and Cash Equivalents by $4.2 million in the first half of FY2025 (ending December 31, 2024) might look concerning at first glance, but here's the quick math: the decrease was primarily driven by a $20.0 million reduction in advances from the Federal Home Loan Bank (FHLB).

This reduction in FHLB borrowings-a form of wholesale funding-from $54.0 million in Q2 FY2024 to $28.0 million in Q2 FY2025 shows a clear effort to de-leverage the balance sheet and reduce reliance on more expensive, short-term debt. That is a positive trend for funding stability and a sign of good liquidity management.

The cash flow statement overview for the period shows a few key trends:

• Operating Cash Flow: Pressured by merger-related expenses of $0.73 million in Q2 FY2025, which drove a GAAP net loss of $(0.99) million. Core operating cash flow is more stable, but expenses are elevated.
• Investing Cash Flow: Reflects investment paydowns of $15.6 million and a decrease in net loans of $3.1 million, which generated cash. This is a source of cash, increasing liquidity.
• Financing Cash Flow: The major use of cash here was the $20.0 million paydown of FHLB advances and $1.6 million for share repurchases. This is a deliberate use of cash to reduce debt and return capital.

Liquidity Strengths and Risks

The biggest strength is the significant reduction in FHLB borrowings, which lowers interest expense and improves the stability of the funding profile. The bank remains well-capitalized, with a Community Bank Leverage Ratio (CBLR) of 16.66% as of December 31, 2024, far above the regulatory minimum. The primary near-term risk is the ongoing expense drag from the pending merger with Mid Penn Bancorp, which is targeted to close in the second calendar quarter of 2025. This merger is the single largest factor influencing current financial results and liquidity management.

For a deeper dive into the valuation and strategic framework, you can read the full post: Breaking Down William Penn Bancorporation (WMPN) Financial Health: Key Insights for Investors

Valuation Analysis

You're looking for a clear valuation signal on William Penn Bancorporation (WMPN), but the truth is, the traditional analysis is moot: the company was acquired by Mid Penn Bancorp, Inc. and delisted on April 30, 2025. The final valuation was essentially the acquisition price, which we can evaluate against its last reported metrics.

The stock's final trade price was $12.32 on the NASDAQ. This price was near the middle of its 52-week range, which ran from a low of $9.75 to a high of $13.87 prior to the acquisition announcement. The key takeaway isn't overvalued or undervalued, but that a strategic buyer saw value in the franchise at a price that represented a discount to its book value.

Here's the quick math on the final valuation ratios, based on the last available data for the 2025 fiscal year before the delisting:

• Price-to-Earnings (P/E): The trailing twelve-month (TTM) P/E ratio was a highly negative -120.126. This negative number is a massive red flag, indicating the company had a loss per share of -$0.13 in the last 12 months, so this ratio is not useful for comparison.
• Price-to-Book (P/B): The P/B ratio was a low 0.81. For a bank, a P/B ratio below 1.0 suggests the market valued the company for less than its net asset value, or book value, which often signals a bank is undervalued or facing significant operational headwinds.
• Price-to-Tangible Book Value (P/TBV): This is a better metric for banks, and it stood at 0.87. The acquisition was essentially a trade at a discount to tangible book value.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric was not applicable (n/a), as it's less standard for bank valuation, where P/B is king.

The low P/B ratio of 0.81 suggests that William Penn Bancorporation was technically undervalued by the market as a standalone entity, which is why the acquisition was a logical move for a larger, more profitable institution like Mid Penn Bancorp, Inc. They bought assets at a discount.

Dividend and Analyst Sentiment

The dividend provided a modest return but was not sustainable given the losses. The last reported forward dividend yield was 0.97%, based on an annual dividend of $0.12 per share. The payout ratio was extremely volatile and negative due to the negative earnings, which tells you the dividend was being paid out of capital, not profit.

Since the company was acquired and delisted in April 2025, there is no current analyst consensus (Buy, Hold, or Sell) on William Penn Bancorporation (WMPN) stock. The focus shifts to the combined entity, Mid Penn Bancorp, Inc. (MPB). You can learn more about the shareholder base and motivations behind the merger by Exploring William Penn Bancorporation (WMPN) Investor Profile: Who's Buying and Why?

What this estimate hides is the premium paid to the unaffected stock price before the merger announcement, which is the real measure of the acquisition's value to shareholders. Still, the low P/B ratio was the defintely the signal that M&A activity was likely.

Risk Factors

You're looking at William Penn Bancorporation (WMPN) in a unique light, given the company's all-stock merger with Mid Penn Bancorp, Inc. closed on April 30, 2025. For investors, the risks shift from WMPN's long-term viability as a small, independent bank to the near-term execution of this integration and the legacy financial pressures that drove the deal. The biggest risks in the 2025 fiscal year were merger execution and stubborn funding costs.

Operational and Financial Headwinds (Pre-Merger)

Before the merger, William Penn Bancorporation faced classic community bank pressures, specifically the challenge of Net Interest Margin (NIM) compression-the squeeze on the difference between what a bank earns on loans and pays on deposits. In the first half of fiscal year 2025, the bank's profitability was defintely challenged by elevated funding costs. For the quarter ending September 30, 2024 (Q1 FY2025), deposit interest expense was significant at $3.491 million. This pressure was a key reason Net Interest Income softened to $4.06 million in the quarter ending December 31, 2024 (Q2 FY2025). This is a tough environment for any small regional bank.

The immediate operational risk in the 2025 fiscal year was the cost of the merger itself, which drove a GAAP net loss of $(0.99) million in Q2 FY2025. The merger-related expenses alone totaled $0.73 million in that quarter, pushing the GAAP efficiency ratio-a measure of how much a bank spends to make a dollar-to an elevated 122.9%. That's just not sustainable on a standalone basis. Here's the quick math on the pre-merger financial position:

Strategic and Integration Risks Post-Acquisition

The most critical risk now is strategic execution. The merger, valued at approximately $120 million, was intended to create a larger, more competitive entity with approximately $6.3 billion in consolidated assets. But mergers are hard. The core risk is whether Mid Penn Bancorp, Inc. can successfully integrate William Penn Bancorporation's operations, technology, and culture without losing key customers or employees. If the promised cost savings and revenue synergies don't materialize quickly, the combined company's stock could face pressure.

The other side of the strategic risk is the market. William Penn Bancorporation's balance sheet was liability-sensitive, meaning higher interest rates hurt their bottom line by increasing deposit costs faster than loan yields. The merger is supposed to mitigate this by providing greater scale and a more diverse funding mix, but if the Federal Reserve reverses course and starts raising rates again, even the larger entity will feel the pinch. You can see the foundational strategy behind this move here: Mission Statement, Vision, & Core Values of William Penn Bancorporation (WMPN).

Mitigation Strategies and Clear Actions

The former William Penn Bancorporation management had clear mitigation strategies in place right up to the merger, which now inform the combined company's risk profile:

• De-risking the Balance Sheet: They proactively reduced Federal Home Loan Bank (FHLB) borrowings to $28 million in Q2 FY2025, improving liquidity.
• Maintaining Credit Quality: Asset quality remained a bright spot, with Non-Performing Assets (NPAs) to total assets improving to a very low 0.30% in Q2 FY2025. This is a strong starting point for the combined loan portfolio.
• Strategic Scale: The merger itself is the primary risk mitigation against the competitive pressures of a consolidating industry, offering a larger footprint in the Greater Philadelphia Metro market.

Your action now is to monitor Mid Penn Bancorp, Inc.'s next two earnings calls for specific updates on merger integration costs, realized synergies, and any changes to the combined entity's asset quality metrics. That's where the true risk-and opportunity-lies.

Growth Opportunities

You need to know that the future growth story for William Penn Bancorporation (WMPN) is now entirely defined by its $120 million all-stock merger with Mid Penn Bancorp, Inc., which closed on April 30, 2025. This wasn't a standalone growth strategy; it was a strategic exit that created a much larger, more competitive regional bank. The near-term opportunity is realizing the promised merger synergies (operational efficiencies and cross-selling) within the new, expanded footprint.

Here's the quick math on scale: William Penn Bancorporation's approximately $812 million in total assets as of September 30, 2024, were combined with Mid Penn Bancorp's, creating a pro forma (as if the merger happened earlier) entity with about $6.3 billion in total assets. That's a huge jump in scale, and scale is defintely a competitive advantage in community banking.

Analysis of Key Growth Drivers and Strategic Initiatives

The primary growth driver is geographic expansion without the cost of organic branch building. William Penn Bancorporation's 12 branches in Southeastern Pennsylvania and Central/Southern New Jersey fill critical gaps for Mid Penn Bancorp, extending their reach into the attractive Greater Philadelphia Metro area. This strategic initiative is all about leveraging William Penn's established community presence to cross-sell Mid Penn's broader range of products, especially commercial banking services.

• Acquisition: All-stock merger with Mid Penn Bancorp, Inc.
• Market Expansion: Deepening footprint in Greater Philadelphia and Southern New Jersey.
• Synergy: Anticipated enhanced profitability through operational efficiencies.

Future Revenue Projections and Earnings Estimates

Predicting the combined entity's exact fiscal year 2025 (FY2025) revenue is complex because the merger closed late in the fiscal year. What we do know is that William Penn Bancorporation was struggling with profitability pre-merger, posting a GAAP net loss of $(0.99) million in Q2 FY2025 (quarter ended December 31, 2024), which included $0.73 million in merger-related expenses. The goal now is to turn that around. Analyst forecasts for William Penn Bancorporation's Q3 2025 (pre-merger close) projected a quarter revenue of $4.87 million and an EPS of -0.05. Post-merger, the expectation is for the combined entity to see a significant uplift in earnings per share (EPS) and revenue growth driven by cost savings and new loan generation in the expanded market.

The core of the value proposition is the liability-sensitive balance sheet William Penn Bancorporation brought to the table. Management expected lower interest rates to be a profitability tailwind, which is a key factor in the combined company's future net interest margin (NIM) expansion.

Competitive Advantages Post-Merger

William Penn Bancorporation's key competitive advantage, which Mid Penn Bancorp is now capitalizing on, was its consistent asset quality. Even while facing funding cost pressure, William Penn Bancorporation's credit quality remained a differentiator, with non-performing assets (NPAs) to total assets improving to 0.30% in Q2 FY2025. This strong underwriting is now part of the larger bank's foundation.

The combined entity's competitive edge comes from:

Your next step is to research Mid Penn Bancorp's (MPB) integration plan and synergy targets for the remainder of 2025. You should also review the Mission Statement, Vision, & Core Values of William Penn Bancorporation (WMPN). to understand the cultural fit that Mid Penn Bancorp aimed to acquire.