William Penn Bancorporation (WMPN): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at William Penn Bancorporation right now, and honestly, the picture is tight. We're talking about a small regional bank, with total deposits around $630 million as of September 2024, facing the reality of a pending $127 million merger to gain scale. My two decades in this game tell me that this environment-where depositors can easily chase higher yields and rivalry with giants like WSFS Financial Corporation is fierce-demands a clear-eyed view of its competitive moat. Before you make any moves, you need to see exactly how much pressure its suppliers (depositors) and customers are exerting, and whether that small footprint of 12 branch offices can actually defend against digital newcomers. Keep reading to see the full breakdown of the five forces shaping William Penn Bancorporation's path forward.

William Penn Bancorporation (WMPN) - Porter's Five Forces: Bargaining power of suppliers

You're looking at William Penn Bancorporation's (WMPN) funding structure, and honestly, the power held by your depositors-your primary suppliers of funds-is a major lever in your profitability equation. For a community bank like WMPN, especially leading up to and immediately following the April 2025 merger, the cost of funding is defintely a near-term risk.

The funding mix is highly sensitive to rising deposit costs. We saw this pressure clearly in the results for the six months ended December 31, 2024, where net interest income fell by $758 thousand, representing an 8.5% decrease compared to the prior year period. The primary driver here was an increase in interest expense on deposits; this shows that as market rates moved, WMPN had to pay more for its core funding base. That's the supplier side pushing back.

Let's look at the scale of that supplier base. As of September 30, 2024, William Penn Bancorporation had total deposits of approximately $630 million. This figure represents the total volume of funding available to the bank from its depositors. By December 31, 2024, total deposits had seen a slight sequential decline to $627.4 million.

A key element of this sensitivity is the composition of those deposits. We observed a sequential decline in noninterest-bearing deposits during the quarter ending December 31, 2024, with notable decreases in money market accounts and non-interest bearing checking accounts. When noninterest-bearing deposits-which are essentially free funding-decline, they are often replaced by interest-bearing alternatives, which directly increases the overall cost of funds and squeezes the net interest margin (NIM). Even after the acquisition, the combined entity saw a $20.7 million decrease in noninterest-bearing accounts in the quarter ending September 30, 2025, suggesting this pressure point is industry-wide.

Here is a snapshot of the funding base around the time of the merger announcement and subsequent reporting periods:

The power of these suppliers is amplified by low switching costs for many depositors. For standard checking or savings accounts, moving funds to a competitor offering a better Annual Percentage Yield (APY) is relatively straightforward, especially with modern digital banking tools. This lack of stickiness means William Penn Bancorporation must constantly monitor and react to competitor rates to retain its funding base.

Furthermore, the competitive landscape for core deposits is intense. Industry surveys in 2025 show that core deposit growth is ranked as a top external risk for community banks. Large regional banks are actively pursuing consolidation to strengthen their deposit franchises, putting direct competitive pressure on smaller institutions like WMPN was. To combat this, banks must increase customer 'stickiness' by embedding services; for example, offering treasury management services is cited as a key way to make customers less likely they will switch banks.

The bargaining power of suppliers is high because:

• Depositors can easily move funds to seek higher yields elsewhere.
• The decline of zero-cost, noninterest-bearing deposits raises the average cost of funds.
• Competition from larger regional banks for core deposits is a constant market reality.
• Rising interest expense directly impacted profitability, as seen by the 8.5% drop in net interest income for the first half of the 2024 fiscal year.

William Penn Bancorporation (WMPN) - Porter's Five Forces: Bargaining power of customers

The bargaining power of customers for William Penn Bancorporation is significant, driven by the availability of alternatives and the relatively low friction in moving basic banking relationships. You, as a customer, have many choices, which keeps the pressure on William Penn Bancorporation to maintain competitive pricing and service levels.

Customers have numerous options from a broad competitive field. While the number of community banks in the Greater Philadelphia area declined from 106 in 2012 to 65 in 2022, the overall commercial banking industry in Delaware still comprises 226 businesses as of 2025. Furthermore, the broader market includes large players; for instance, a major competitor was recently evaluated among over 9,000 financial institutions nationally for a 2025 award, indicating a vast pool of potential alternatives.

Switching costs for core products remain low, especially for transactional accounts. Moving a basic checking or savings account is often a matter of paperwork and direct deposit changes, not a major capital investment. While William Penn Bancorporation operates through 12 branches across Pennsylvania and New Jersey, and its bank entity reports 13 Domestic Offices, the convenience of digital banking across many institutions erodes the geographic advantage for simple services.

Evidence of customer price sensitivity is visible in William Penn Bancorporation's recent loan performance. Loan balances declined sequentially from $470.6 million at the end of Q4 FY2024 to $462.2 million in Q1 FY2025, suggesting that cautious lending and pricing discipline were necessary in a tough demand environment. This sequential drop of $8.4 million in loans (when comparing Q1 FY2025 assets to the previous quarter's asset breakdown) signals that customers are sensitive to the value proposition offered.

William Penn Bancorporation's primary defense against this power lies in its localized approach. The bank's advantage is rooted in personalized service within the local Delaware Valley area, a commitment emphasized before its pending merger with Mid Penn Bancorp, Inc.. This focus on relationship banking contrasts with the scale of the combined entity, which, based on September 30, 2024 data, was projected to have total assets of approximately $6.3 billion, compared to William Penn Bancorporation's reported $812.2 million in total assets as of Q1 FY2025.

Here are key figures illustrating the competitive environment and WMPN's recent balance sheet activity:

The pressure from customers manifests in several ways that you need to watch:

• Deposit cost management is critical, as deposit interest expense rose to $3.491 million in Q1 FY2025.
• Net interest margin (NIM) was tight at 2.29% in Q1 FY2025, showing yield pressure.
• Customers are choosing to move funds, evidenced by notable decreases in money market and non-interest bearing checking accounts in Q2 FY2025.
• The bank's ability to retain deposits is key, with total deposits remaining relatively stable at $627.4 million (Q2 FY2025) vs. $629.8 million (Q1 FY2025).

Finance: draft 13-week cash view by Friday.

William Penn Bancorporation (WMPN) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive landscape for William Penn Bancorporation (WMPN) right before its full integration into Mid Penn Bancorp, Inc. The competitive rivalry force was, frankly, a major driver behind the strategic move to merge. For a smaller community bank like William Penn Bancorporation, competing against established regional giants meant constant pressure on pricing, technology investment, and market share acquisition.

The rivalry was definitely intense with large regional banks like WSFS Financial Corporation. To put this in perspective, as of March 31, 2025, WSFS Financial Corporation reported total assets of approximately $20.5 billion on its balance sheet. This dwarfs William Penn Bancorporation's reported total assets of approximately $812 million as of June 30, 2024. When you are facing competitors with over twenty times your asset base, maintaining profitability and growth becomes a real uphill battle.

This scale disparity directly translated into market penetration challenges. William Penn Bancorporation held a small estimated market share of only 2-5% locally, which is consistent with historical data showing market shares in its primary market area counties ranging from as low as 0.2% to 1.3% in Bucks County as of June 30, 2019. Competing against institutions with much greater resources, as noted in their filings, meant William Penn Bancorporation had to fight hard for every deposit and loan.

The pressure on profitability from this rivalry was evident in the Net Interest Margin (NIM). The company's NIM was a tight 2.27% in Q2 FY2025 (the quarter ended December 31, 2024). This margin, where deposit costs largely offset loan yields, shows the difficulty in achieving significant spread when larger competitors can leverage greater funding advantages. Honestly, that margin was a clear signal that scale was necessary for long-term competitive health.

The merger with Mid Penn Bancorp was a direct strategic response to these scale challenges. The definitive agreement, announced in late 2024 and valued at approximately $127 million initially, closed on April 30, 2025. This transaction immediately created a more formidable combined community banking franchise with total assets approximating $6.3 billion. This move was designed to bolster presence in the attractive Greater Philadelphia Metro area, a key competitive theater.

Here are some key figures illustrating the competitive context:

The competitive rivalry dynamic is further characterized by the types of institutions William Penn Bancorporation faced:

• Much larger and more diversified institutions.
• Regional, super regional, and money center banks.
• Other locally based thrifts and banks.
• Emphasis on community orientation as a differentiator.

The merger, therefore, wasn't just about growth; it was about achieving the necessary scale to compete effectively on pricing and service delivery against players like WSFS Financial Corporation in the Delaware Valley area. Finance: draft 13-week cash view by Friday.

William Penn Bancorporation (WMPN) - Porter's Five Forces: Threat of substitutes

You're analyzing William Penn Bancorporation's competitive landscape as of late 2025, and the substitutes for traditional community banking are more potent than ever. The threat here isn't just from the bank across the street; it's from digital wallets and specialized credit providers.

Fintech platforms offer superior digital and low-cost alternatives.

The digital shift continues to pull customers away from branch-centric models. The U.S. fintech market size was valued at US$95.2 Bn in 2025. This sector is expected to grow at a Compound Annual Growth Rate (CAGR) of 14.7% through 2032. Specifically, neobanking-the branch-free model-is forecast to grow fastest, with a CAGR of 21.67% between 2025 and 2030. For a bank like William Penn Bancorporation, which operates through physical offices in the Delaware Valley, this means customers can easily switch to platforms where 70.79% of the market share in 2024 used mobile apps for their primary interface. The focus on speed and convenience offered by these platforms directly challenges the value proposition of traditional deposit-taking and payment services.

Credit unions provide non-profit, member-focused banking services.

Credit unions present a strong, mission-driven alternative, especially for retail deposits and household lending. As of the second quarter of 2025, the total assets for federally insured credit unions reached $2.38 trillion, with total loans outstanding at $1.68 trillion. Membership in these institutions stood at 143.8 million in Q2 2025. To be fair, this shows a massive, sticky customer base that competes directly for the same deposit dollars William Penn Bancorporation seeks. We see evidence of this competition in deposit preferences; for instance, share certificate accounts at credit unions grew 10.3% year-over-year to $571.0 billion in Q1 2025. Here's a quick look at the scale:

Commercial borrowers can access non-bank direct lending for capital.

For William Penn Bancorporation's commercial clients, especially in the small and mid-cap space, non-bank direct lending is a significant substitute for traditional commercial loans. The global private credit market topped approximately $3.0 trillion by 2025, with direct lending making up about 50% of that, equating to ≈ $1.5 trillion in Assets Under Management (AUM). US-based direct lending funds deployed roughly $500 billion in new loans in 2025. The speed advantage is clear: direct lending averaged 12 days for approval versus 45 days in conventional systems in 2025. This faster execution and flexibility in structuring deals-like multi-currency tranches-pulls higher-quality commercial borrowers away from bank balance sheets.

National high-yield savings accounts substitute for local deposits.

The competition for core, low-cost deposits is fierce, not just from credit unions, but from national online banks offering superior rates on savings products. While I don't have the exact national average high-yield savings rate for November 2025, the pressure is evident in the shift toward higher-cost deposits even at competitors. For example, Mid Penn Bancorp, which acquired William Penn Bancorporation, saw its net interest margin drop from 3.07% (nine months ended Sept 30, 2024) to 3.48% (nine months ended Sept 30, 2025), partly due to the increased cost on interest-bearing liabilities. This suggests that to retain or grow deposits, the combined entity must pay more, a cost pressure driven by substitutes.

The threat manifests in several ways for deposit gathering:

• Fintechs offer seamless digital onboarding for new accounts.
• Credit unions saw share certificate accounts grow 10.3% in Q1 2025.
• Online banks offer rates that often exceed local, physical bank offerings.
• The need to increase interest-bearing liabilities signals rate competition.

Finance: draft a sensitivity analysis on a 50 basis point increase in average cost of funds by Q2 2026, assuming a 10% shift of non-interest-bearing deposits to high-yield substitutes.

William Penn Bancorporation (WMPN) - Porter's Five Forces: Threat of new entrants

The threat of new entrants into the banking sector that William Penn Bancorporation (WMPN), now part of Mid Penn Bancorp, Inc. (MPB), operates in remains moderated by significant structural hurdles, though the digital landscape introduces new avenues for competition.

High regulatory and capital requirements create a barrier to entry.

Starting a chartered bank requires substantial upfront capital and navigating complex regulatory frameworks. For a large entity like the combined MPB, which reported a Common Tier 1 Capital (to Risk Weighted Assets) ratio of 13.9% as of September 30, 2025, the implicit capital expectation for a new competitor is high. While specific minimums for a new small bank charter are less publicized than for large firms, the Federal Reserve mandates a minimum CET1 capital ratio of 4.5% plus a Stress Capital Buffer (SCB) of at least 2.5% for large banks. A new entrant must prove solvency to regulators, often needing to finance the first year of operation with 200,000 - 500,000 EUR just to prove solvency, in addition to minimum initial capital requirements that can start around 125,000 EUR. Furthermore, securing the necessary banking licenses and adhering to compliance like KYC (Know Your Customer) and AML (Anti-Money Laundering) can demand an investment of $500,000 to several million dollars in initial fees and legal counsel.

New entrants can bypass physical branch costs with digital-only models.

The digital-only model directly challenges the high fixed costs associated with traditional banking. Real estate expenses, which are a major component of overhead for brick-and-mortar institutions, can account for up to 40% of traditional banking expenses. A small-scale digital bank focusing on basic services might launch with an investment as low as $50,000 to $150,000. This cost disparity allows digital competitors to potentially offer higher yields on savings products or lower fees, as they avoid the overhead of maintaining physical locations. Still, even a lean digital launch requires significant investment in core software development and cybersecurity, which can consume 20-40% of the budget, ranging from $2 million to over $5 million for a medium-scale operation.

WMPN's small footprint of 12 branch offices limits scale-based defenses.

William Penn Bancorporation, prior to its merger completion on April 30, 2025, maintained a relatively focused physical presence of 12 branch offices across its market area. This limited footprint means that the scale-based defense against new entrants is not as formidable as it would be for a bank with hundreds of locations. The acquisition by MPB, which brought combined assets to approximately $6.3 billion, certainly increases the scale, but the legacy WMPN market defense relied on local density rather than broad geographic reach. The threat here is that a well-funded digital entrant could target specific, high-value geographic nodes within the Delaware Valley without needing to match the entire branch network.

Entrants must overcome established local customer relationships.

The primary moat for the former WMPN business unit lies in the established, personal banking relationships within its specific counties in Pennsylvania and New Jersey. New entrants, especially digital-only ones, struggle to replicate the trust built through face-to-face interactions, which remains valued by many consumers for complex transactions or advisory needs. The acquisition itself was valued at approximately $120 million in an all-stock transaction, indicating the premium placed on acquiring this established customer base and local market position. A new competitor must invest heavily in customer acquisition strategies to displace these entrenched relationships, which often involves offering superior digital experiences or highly competitive pricing structures.

• Digital-only setup fees (BaaS): 15,000 EUR to 75,000 EUR setup.
• MPB Post-Acquisition Total Assets: $6.3 billion.
• WMPN Acquisition Price: Approximately $120 million.
• MPB Common Tier 1 Capital Ratio (Sep 2025): 13.9%.