Fulton Financial Corporation Acquires Substantially All of the Assets and Assumes Substantially All of the Deposits of Republic First Bank From the FDIC

Rhea-AI Summary

Fulton Financial (NASDAQ: FULT) announced the acquisition of substantially all assets and deposits of Republic First Bank from the FDIC. The transaction has closed, doubling Fulton's regional presence. Key terms include assets of $6 billion and liabilities of $5.3 billion. Fulton advances growth in the Philadelphia market, improves liquidity, and donates $5 million to the Fulton Forward® Foundation.

Positive

• Acquisition of Republic First Bank assets and deposits from the FDIC
• Doubles regional presence for Fulton Financial
• Key transaction terms: $6 billion in assets and $5.3 billion in liabilities
• Advances growth in the Philadelphia market and improves liquidity
• Donation of $5 million to the Fulton Forward® Foundation

Negative

• None.

Insights

Financial Analyst

The acquisition of Republic First Bank by Fulton Financial Corporation represents a strategic expansion, signaling confidence in Fulton's growth trajectory. The transaction involves 6 billion in purchased assets, including a substantial investment portfolio and loans, paired with the assumption of 5.3 billion in liabilities. This move notably decreases Fulton's loan to deposit ratio from 99% to 92%, enhancing liquidity—a key factor for banking stability and future lending capacity.

From a financial standpoint, nearly doubling the deposit base in the Philadelphia market to 8.6 billion is a significant leap, potentially increasing market share and revenue streams. The 5 million commitment to the Fulton Forward® Foundation also suggests a strategic approach to community engagement, likely to foster goodwill and potentially enhance the bank's brand in the process. Investors should monitor the integration process for efficiency gains and any cost synergies that could improve profitability in forthcoming quarters.

Market Research Analyst

Bank consolidations can alter competitive landscapes. Fulton's acquisition indicates a push towards regional dominance. The assimilation of Republic Bank's customer base could result in improved service offerings and cross-selling opportunities. For investors, the key lies in monitoring customer retention rates post-transition and the bank's ability to capitalize on its expanded footprint without incurring disproportionate costs.

Furthermore, the donation to Fulton Forward® Foundation may resonate with socially conscious investors, aligning with growing trends in corporate social responsibility. It's prudent to assess whether this philanthropic strategy correlates with improved community relationships and brand loyalty, potentially translating into a stronger customer base—a vital asset in the financial sector.

Risk Management Specialist

Acquisitions carry inherent risks, particularly in the banking sector where integration of systems and cultures are complex. The pledge of uninterrupted service for Republic Bank's customers is important to mitigate transition risks. As a risk assessment measure, investors should seek clarity on the measures Fulton is taking to ensure a seamless integration of assets and liabilities.

An important aspect to consider is the impact on Fulton's capital ratios and how this aligns with regulatory requirements. While the acquisition ostensibly improves liquidity, the management of the added loan portfolio and investment assets demands scrutiny to ensure asset quality remains high and in line with Fulton's risk appetite.

Fulton doubles regional presence while providing stability to customers

LANCASTER, Pa. & PHILADELPHIA--(BUSINESS WIRE)-- Fulton Financial Corporation (NASDAQ: FULT) (the “Corporation”) today announced that its bank subsidiary, Fulton Bank, N.A. (“Fulton”), has acquired substantially all of the assets and assumed substantially all of the deposits of Republic First Bank, doing business as Republic Bank (“Republic Bank”), from the Federal Deposit Insurance Corporation (the “FDIC”). All regulatory approvals, including approval from the Office of the Comptroller of the Currency, have been obtained, and the transaction has closed.

“With this transaction, we are excited to double our presence across the region,” said Fulton Chairman and CEO Curt Myers. “We look forward to welcoming Republic Bank’s team members and customers to Fulton and providing our comprehensive set of consumer, commercial and wealth advisory products and services to even more customers.”

During the transition, Republic Bank depositors will continue to have uninterrupted access to their accounts through online banking or by writing checks, using existing ATMs or debit cards. Republic Bank depositors will become Fulton depositors and do not need to change their banking relationship to retain their federally insured deposit insurance coverage.

Beginning as early as tomorrow, former Republic Bank financial centers will reopen as Fulton with their regularly scheduled operating hours.

Additionally, as part of this transaction, Fulton Bank is making a $5 million donation to the Fulton Forward® Foundation to provide additional impact grants to nonprofit community organizations across the region that share Fulton’s vision of advancing economic empowerment, particularly in underserved communities.

Key transaction terms include:

• Purchased assets of approximately $6 billion, including an investment portfolio of approximately $2.0 billion and loans of approximately $2.9 billion.
• Assumed liabilities of approximately $5.3 billion, including deposits of approximately $4 billion and other borrowings and liabilities of approximately $1.3 billion.

As a result of the transaction, Fulton Bank:

• Significantly advances its growth plan in a strategically important market.
• Almost doubles its presence in the Philadelphia market with combined company deposits of approximately $8.6 billion.
• Reduces its loan to deposit ratio from 99% to 92%, improving its liquidity profile.

Investor Call

Fulton will host a conference call and audio webcast at 11 a.m. on April 29, 2024. Fulton Chairman and CEO Curt Myers and Interim Chief Financial Officer Betsy Chivinski will host the call.

The link to the webcast of this call can be found at http://investor.fultonbank.com. The webcast will be archived on Fulton’s website following the call. Participants can also access the audio-only webcast at: https://edge.media-server.com/mmc/p/ap9sadhf.

Piper Sandler & Co. and BofA Securities, Inc. acted as financial advisors to Fulton in connection with the transaction. Sullivan & Cromwell LLP acted as legal advisor.

Safe Harbor Statement

This press release contains forward-looking statements with respect to the financial condition, results of operations and business of the Corporation. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results.

Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2023 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).

About Fulton Bank, N.A.

Headquartered in Lancaster, Pa., Fulton Bank is a premier community bank in the Mid-Atlantic region. As a subsidiary of Fulton Financial Corporation, a $27 billion financial services holding company, Fulton Bank offers a broad array of products and services at more than 200 financial centers across Pennsylvania, New Jersey, Maryland, Delaware, and Virginia. At Fulton Bank, we seek to change lives for the better by building strong customer relationships, providing significant community support and empowering more than 3,400 employees to do the same. Through the Fulton Forward® initiative, we’re helping build vibrant communities. Learn more at www.FultonBank.com. Fulton Bank, N.A., Member FDIC. Equal Housing Lender.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240426420772/en/

Media:

Lacey Dean

(717) 735-8688



Investor:

Matt Jozwiak

(717) 327-2657

Source: Fulton Financial Corporation

FAQ

What assets and deposits did Fulton Financial acquire from Republic First Bank?

Fulton Financial acquired substantially all assets and assumed substantially all deposits of Republic First Bank.

What is the total value of the assets acquired by Fulton Financial ?

The purchased assets amount to approximately $6 billion, including an investment portfolio of approximately $2.0 billion and loans of approximately $2.9 billion.

What liabilities did Fulton Financial assume in the transaction?

Fulton Financial assumed liabilities of approximately $5.3 billion, including deposits of approximately $4 billion and other borrowings and liabilities of approximately $1.3 billion.

What is the impact of the transaction on Fulton Bank's growth plan?

The transaction significantly advances Fulton Bank's growth plan in a strategically important market, almost doubling its presence in the Philadelphia market with combined company deposits of approximately $8.6 billion.

How does the transaction affect Fulton Bank's liquidity profile?

The transaction reduces Fulton Bank's loan to deposit ratio from 99% to 92%, improving its liquidity profile.

What is the purpose of the $5 million donation to the Fulton Forward® Foundation?

The $5 million donation aims to provide additional impact grants to nonprofit community organizations across the region that share Fulton's vision of advancing economic empowerment, particularly in underserved communities.