Blue Foundry contacted Fulton after 20+ others passed on a deal
Blue Foundry Bancorp in Rutherford, N.J., approached Fulton Financial in Lancaster, Pa., about a merger after more than 20 other banks and credit unions passed on a deal.
The $32 billion-asset Fulton agreed last month to buy the $2.2 billion-asset Blue Foundry for $243 million in a deal expected to close in the second quarter. The deal priced Blue Foundry at just 77% of its tangible book value.
A regulatory filing tied to the pending acquisition revealed that Blue Foundry, which has struggled with profitability and was facing pressure from an activist investor, approached 21 banks and two credit unions with operations in New York, New Jersey and Pennsylvania between late 2024 and last September in hopes of securing a deal.
Only four institutions initially expressed interest, and just two signed confidentiality agreements and engaged in diligence. Overall, interest remained limited.
Blue Foundry’s investment bank approached Fulton last August. Fulton quickly entered into a confidentiality agreement, launched diligence, and began talks with Blue Foundry’s leadership and advisers.
By late September, Fulton submitted a non-binding indication of interest for an all-stock transaction valued at up to $12.75 per Blue Foundry share. The offer was anchored by a fixed exchange ratio with potential incremental consideration tied to fair value marks and resolution of certain real estate matters.
Blue Foundry’s board unanimously approved a sale during a Nov. 23 meeting. The deal was announced the next day.
The deal is expected to be more than 5% accretive to Fulton’s earnings per share and immediately accretive to tangible book value per share.
“We’re bringing together two community-focused banks with shared values and a strong commitment to making banking personal for each and every customer,” Curtis Myers, Fulton’s chairman and CEO, said in a press release announcing the acquisition.
The acquisition “creates an opportunity to leverage Fulton’s robust banking services and provide greater convenience and innovative solutions to an expanded customer base, with a continued focus on supporting our local communities,” Myers added. “The expansion in northern New Jersey aligns with our strategy of growing in our local markets and positions us well to drive organic growth across our commercial, consumer, wealth advisory, and mortgage businesses.”
Fulton plans to cut half of Blue Foundry’s annual operating expenses, or $27.4 million. It expects to incur $48.5 million of merger-related expenses.