Fulton Financial in Lancaster, Pa., has finally returned to bank acquisitions, agreeing to buy Prudential Bancorp in Philadelphia.
The $26 billion-asset Fulton said in a press release Wednesday that it will pay $142.1 million in cash and stock for the $1.1 billion-asset Prudential. The deal is expected to close in the third quarter.
Prudential has 10 branches, $594 million of loans and $721 million of deposits.
Fulton said it will make a $2 million contribution to the Fulton Forward Foundation, designated for nonprofits in the Philadelphia area focused on “advancing economic empowerment, particularly in underserved communities.”
Fulton hasn’t completed a bank acquisition since 2006 as it spent five years working through regulatory orders. It then went to work consolidating its bank charters.
“I have shared with investors Fulton’s desire to be more active in mergers and acquisitions of companies that are a good fit for us – strategically, culturally and geographically,” E. Philip Wenger, Fulton’s chairman, president and CEO, said in the release.
“We look forward to working with the Prudential team to bring our mutual community-oriented style of banking, our comprehensive range of products and services, and our talented teams together to help even more customers and communities in Philadelphia achieve financial success,” Wenger added.
Fulton said it expects the deal to be 3.5% accretive in 2023. It should take a little over a year for the company to earn back an estimated 1% dilution to its tangible book value.
Fulton plans to cut about 45% of Prudential’s annual noninterest expenses. The company expects to incur $30.5 million of merger-related charges.
Stephens and Barley Snyder advised Fulton. Keefe, Bruyette & Woods and Silver, Freedman, Taff & Tiernan advised Prudential.