Victory Bancorp in Limerick, Pa., and Huntingdon Valley in Warminster have agreed to a merger of equals.

The two companies reached an agreement last week to combine, under the Victory name, once Huntingdon completes a capital raise and mutual-to-stock conversion. New Huntingdon stock will be issued to Victory's shareholders; the Victory shareholders will also receive cash, if necessary, to ensure that they own no more than 48.5% of the combined company.

Huntingdon Chief Executive Travis Thompson will be executive chairman and Victory Chairman Joseph Major will be president and CEO of the combined company. Huntington will select seven members of the combined company's board, and Victory will control six seats.

Huntingdon has $159.3 million in assets and seven branches, and Victory has $141 million of assets and two branches

"The conversion of Huntingdon Valley Bank provides our depositors the ability to benefit as shareholders, while the merger with Victory creates a more valuable company for our  future shareholders," Thompson said in a news release. "This transaction combines two complementary organizations, creating an institution with over $300 million in total assets and the scale and ability to grow profitably."

Griffin Financial Group and the law firm Jones Walker advised Huntingdon on the merger agreement, while the Kafafian Group and the law firm Kilpatrick Townsend advised Victory. The conversion and merger are expected to close in the second quarter.

Chris Cumming is a reporter for American Banker.