UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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14a-6(e)(2))
[ ] Definitive Proxy Statement
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[ ] Soliciting Material Pursuant to 240.14a-12
Prudential Bancorp, Inc. of Pennsylvania
_____________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
_____________________________________________________________________________
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[Prudential Bancorp, Inc. of Pennsylvania Letterhead]
January 12, 2007
Dear Fellow Shareholder:
You recently received a letter from the Stilwell Group urging you to
withhold your vote on the election of directors of Prudential Bancorp, Inc.
of Pennsylvania.
Mr. Stilwell would have you believe that we have not listened to his
ideas and "offers of help" and "expertise" in managing our capital. He
would also have you believe that management and directors only have their
"self-interest" at heart. Don't be fooled by Joe Stilwell - he is a
corporate raider with a long history. The Stilwell Group has previously
taken positions exceeding 5.0% of the outstanding shares in eight other
financial institutions. All but one of those eight institutions have ended
up selling control. It should be clear that Stilwell is continuing his
adversarial tactics against your company, Prudential Bancorp, in order to
maximize his investor return.
This is Joe Stilwell's plan:
1. Nominate him to the Board of Directors and, in turn, he will support
approval of our stock benefit plans, or
2. Repurchase 3,000,000 shares of Prudential Bancorp common stock (all
while Stilwell remains a 9.0+ % shareholder) and, in turn, he will
support approval of our stock benefit plans.
We have carefully considered Stilwell's mass repurchase plan and have
consulted with our financial advisors. We have determined that this plan
would serve only to deplete our capital, reduce overall earnings and
significantly impact our ability to serve our local communities. The total
cost of his repurchase plan, at current market prices for our stock, would
exceed $39 million. We discussed our analysis with Stilwell and, although
he disagreed, he responded to us by letter as recently as September 13,
2006 "thanking" us for holding discussions. I ask you, does that sound like
he has been "ignored"?
We are committed to share repurchases that are fiscally responsible,
but believe that the enormous amount of resources needed to execute
Stilwell's plan would be greater utilized in the form of loans to our
customers and the continued growth of our Bank's branch network. In
addition, we believe that pursuing Stilwell's proposed strategy could be
considered an unsafe and unsound practice by our banking regulators.
Again, Stilwell's plan, which has been considered and discarded by
your Board of Directors, has not changed - engage in excessive stock
repurchases which would deplete our capital and benefit Joe Stilwell. His
interests are clear, and we do not believe they are in the best interest of
Prudential Bancorp or you.
We have had meetings and conversations with Stilwell and his counsel
on numerous occasions over the past 18 months. The reason we are no longer
talking to Joe Stilwell is because he has chosen to sue us in U.S. District
Court to challenge, among other things, our proposed stock option plan and
restricted stock plan even though the implementation of those plans, as
contemplated by Prudential Bancorp, has been authorized by the FDIC, the
Federal Reserve Board and the Nasdaq Stock Market. The details of these
plans have been fully disclosed to the public, are fully compliant with
state and Federal banking regulations and policies, and are not "excessive"
in any way. We now are spending inordinate amounts of management time and
your company's financial resources responding to this litigation.
As we stated clearly in connection with our 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 community. We will continue to implement our
strategic business plan which was discussed in our original prospectus for
the initial public offering. Our plan is designed to build long-term
shareholder value while continuing to serve the banking needs of our local
communities. We are determined that Joe Stilwell's attempts at "greenmail"
will not be successful. We also stand behind our record of achievements,
including the following:
* A 13.1% increase in net income in fiscal 2006 over fiscal 2005;
* Growth of our net loan portfolio by 25.3% over fiscal 2005;
* Repurchases of almost 500,000 shares of common stock since we went
public;
* Dividends of $0.16 per share in fiscal 2006;
* Receipt of regulatory approval to open a new Bank branch office in
"Old City" Philadelphia; and
* Maintaining asset quality with non-performing assets amounting to
only 0.03% of total assets at September 30, 2006.
We ask that you not be fooled by Joe Stilwell, and that you show your
support by voting "FOR" 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,
/s/ Thomas A. Vento
Thomas A. Vento
President and Chief Executive Officer
Solicitation
On January 5, 2007, 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 5, 2007, WHICH MAY BE OBTAINED THROUGH THE WEB SITE MAINTAINED BY
THE SEC AT www.sec.gov.
Forward-Looking Statements
In addition to historical information, this letter contains forward-
looking statements that are based upon Prudential Bancorp's estimates and
expectations concerning future events and are subject to certain risks and
uncertainties that could cause actual results to differ materially from
those reflected in the forward-looking statements. We caution that such
statements are subject to a number of uncertainties and actual results
could differ materially and therefore you should not place undue reliance
on any forward-looking statements we make. We may not update any forward-
looking statements we make today for future events or developments.
Information about risks and uncertainties are described in our filings with
the SEC, which are available on the SEC's website or our website or from
our Chief Financial Officer.