SCHEDULE
14A
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment
No. )
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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[X]
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Definitive
Additional Materials
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Soliciting
Material Pursuant to Rule 14a-11(c) or Rule 14a-12
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Prudential
Bancorp, Inc. of Pennsylvania
(Name
of Registrant as Specified In Its Charter)
n/a
(Name
of Person(s) Filing Proxy Statement, if other than Registrant)
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of Filing Fee (Check the appropriate box):
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Explanatory Note:
Below is the text of an advertisement
appearing in the Philadelphia Business
Journal.
January
28, 2008
Dear
Fellow Shareholder:
You
recently received two letters from
the Stilwell Group urging you to withhold your vote on the election of the
directors of Prudential Bancorp, Inc. of Pennsylvania. As you know,
this is the third year Mr. Stilwell has taken this tack. Once again,
Mr. Stilwell’s attacks on your Board are short on facts and long on
rhetoric. And more telling, his attacks have taken on a very personal
flavor. His letters sound very much like the boy on the playing field
who, when he cannot win by the rules, wants to change the rules to favor
him and
if he cannot change the rules, walks off the field. Well, Mr.
Stilwell, if you are so unhappy with your investment and our performance,
why
don’t you sell your Prudential stock and move on?
The
reality is that no matter what this
Board does, Mr. Stilwell will never be satisfied unless we accede to his
demands, whether or not they are in the best interest of Prudential Bancorp
and
all of its stockholders, not just Mr. Stilwell’s investors.
Mr.
Stilwell’s strategy has been to demand a Board seat and a massive stock
repurchase program in exchange for his support of the stock benefit
plans. If we had listened to Mr. Stilwell and purchased 3 million
shares as he demanded in the summer of 2005, it likely would have cost us
more
than $45 million which would have severely and adversely affected our lending
capability and our profitability. We did not think this was a wise or
prudent course of action to take and believe hindsight has proved our decision
to be the correct one. We are committed to a long-term business
strategy that permits us to grow and implement reasonable amounts of stock
repurchases as part of a capital management strategy that recognizes the
value
of a strong balance sheet and strong capital position. We only need
to look at the recent capital issuances by money center banks and Wall Street
investment firms and the harmful effects these offerings have had on existing
shareholders to recognize the value of maintaining sufficient capital to
carry
an institution through difficult times.
When
you read Mr. Stilwell’s first
letter, he makes only two points that are and should be relevant to shareholders
- points relating to our earnings per share in fiscal 2007 and the lack of
loan
portfolio growth for the same period. He correctly notes that our
earnings per share declined. However, what he does not tell you is
that most financial institutions experienced declines in their earnings per
share for 2007, in some cases substantial declines. When we compare
ourselves to a peer group of similarly sized institutions (many of which
are
also in a mutual holding company structure), three quarters of the institutions
in the peer group experienced greater declines in earnings and earnings per
share on both a dollar and a percentage basis than Prudential
Bancorp. The reality is that 2007 was a very challenging year for the
banking industry and the thrift industry in particular. The
combination of an unfavorable interest rate environment which compressed
interest rate margins and reduced lending activity, especially residential,
due
to declining real estate values, adversely affected the earnings of all banks
and thrifts. Is the Board satisfied with Prudential Bancorp’s
performance in fiscal 2007? The answer is “no.” We are
committed to improving profitability and building value but like all financial
institutions, recognize the difficulties that current market conditions
present. Nevertheless, our strong balance sheet and conservative
business strategy will stand us in very good stead to weather a difficult
operating environment.
Likewise,
Mr. Stilwell attacks the lack
of growth of our net loan portfolio. He is correct that our portfolio
remained essentially the same in fiscal 2007. In view of the turmoil
in the real estate market, in particular the residential construction market,
Prudential deliberately chose to proceed cautiously and not increase its
exposure, especially in construction lending, until the real estate market
stabilizes. Yes, we could have acted rashly and grown our portfolio
of higher yielding construction and land development loans but we believed
that
the more prudent course was to proceed cautiously. In addition,
although our loan portfolio did not grow this past fiscal year, we remained
an
active lender in our communities, funding more than $65 million of loans
in
fiscal 2007. Furthermore, we find it very interesting that Mr.
Stilwell is now attacking us for not growing our business. When we
first met, he did not want us to expand or diversify our business but wanted
us
to focus our resources on funding a massive buyback of our stock.
In
fiscal 2007, we continued to
implement capital management strategies including repurchasing almost 600,000
shares at an average cost of $13.48 per share while paying dividends aggregating
$0.19 per share. Since completing our mutual holding company
reorganization, we have repurchased more than 1.2 million shares at a total
cost
of more than $16.0 million, amounting to more than 21% of the shares of our
common stock issued to the public. In view of the current state of
the capital and the real estate markets, we believe significant share
repurchases are an appropriate use of our capital. A reflection of
our commitment to shareholders and to prudent capital management is the
announcement on January 22nd
that
Prudential Bancorp and Prudential Mutual Holding Company would each be
repurchasing up to an additional 5% of the shares held by public shareholders,
440,000 shares in the aggregate.
As
we have said from the beginning, we
believe Mr. Stilwell’s actions all stem from the fact that we will not accede to
his demands. He may wrap himself in the cloak of claiming to be
acting only for the best interests of public shareholders, but Mr. Stilwell’s
actions with Prudential and every one of his other significant investment
actions speak for themselves; he is pursuing his personal agenda, not what
is in
the long-term best interest of all the shareholders of Prudential.
As
we have stated from the onset of the
reorganization, we chose the mutual holding company structure in order to
be
able to continue to serve the needs of all our constituents, not just our
shareholders but also our customers and our communities. We will
continue to implement our strategic business plan designed to build long-term
shareholder value while continuing to serve the banking needs of our local
communities.
We
ask that you continue to show your
support by voting “FOR” the election of the Board of Directors’ nominees on the
enclosed WHITE proxy card today. Your vote is important, no matter
how many shares you own. If your shares are held by a broker, you may
be able to vote by telephone or the Internet. Please follow the
instructions of your broker.
Very
truly yours,
Thomas
A
Vento
President
and Chief Executive
Officer
Solicitation
On
January 4, 2008, Prudential Bancorp,
Inc. of Pennsylvania filed a definitive proxy statement with the SEC and
mailed
it to Prudential Bancorp’s shareholders. WE URGE INVESTORS TO READ THE PROXY
STATEMENT ALONG WITH OUR ANNUAL REPORT ON FORM 10-K AND ANY OTHER RELEVANT
DOCUMENTS THAT PRUDENTIAL BANCORP HAS FILED WITH THE SEC BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. Shareholders are able to obtain a free copy of
the proxy statement and other related documents filed by Prudential Bancorp
at
the SEC’s website at www.sec.gov. Prudential
Bancorp’s proxy statement and other related documents may also be obtained from
Joseph R. Corrato, Executive Vice President and Chief Financial Officer,
Prudential Bancorp, Inc. of Pennsylvania, 1834 Oregon Avenue, Philadelphia,
Pennsylvania 19145.
LISTING
OF PERSONS WHO MAY BE DEEMED “PARTICIPANTS” IN THE SOLICITATION AND CERTAIN
INFORMATION CONCERNING SUCH PERSONS IS SET FORTH IN PRUDENTIAL BANCORP’S
DEFINITIVE PROXY STATEMENT FILED WITH THE SEC ON JANUARY 4, 2008, WHICH MAY
BE
OBTAINED THROUGH THE WEB SITE MAINTAINED BY THE SEC AT www.sec.gov.
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