The merger of Fulton Financial Corporation FULT and Prudential Bancorp, Inc. PBIP is expected to be done by the end of July. This week, more than 98 percent of Prudential Bancorp shareholders gave their consent to the stock deal as well as cash transaction (announced at the end of March) that is worth $142.1 million.
After the completion of the transaction FULT will have two subsidiaries in the banking sector that include Fulton Bank, N.A. in addition to Prudential Bank – till the date Prudential Bank is merged into Fulton Bank. It is noteworthy that the merger is anticipated to happen during the 4th quarter in 2022 the necessary approval was obtained from the Office of the Comptroller of the Currency on June 13.
E. Philip Wenger, Fulton’s Chairman and CEO , stated, “The approval by Prudential Bancorp shareholders, along and the collection of all necessary regulatory approvals, will allow Fulton to proceed with closing this acquisition.”
With assets of nearly $26 billion Fulton offers financial assistance through its 200 financial centers located that are located in Pennsylvania, Delaware, Maryland, New Jersey and Virginia. Then again, Prudential Bancorp is the holding company of Prudential Bank, a Pennsylvania-chartered savings bank with assets of $1 billion.
Acquisition of PBIP could boost the pace of FULT’s Philadelphia and urban strategies for market growth. The acquisition will also create an extremely important market for FULT’s organic growth as well as expansion.
At the moment of the news, FULT expected the merger to yield cost savings by 45 percent. The merger was also anticipated to yield pre-tax costs of $16.5 million, and after-tax expenses that totaled $14 million. In 2023 the merger is projected to be 3.5 percent accretive to profits per share. According to the cross-over technique that is less than one percent dilution of tangible book value, with an earn-back time in the range of 1.2 years is anticipated.
Over the last 12 months the Fulton shares Fulton have dropped 10.9 percent, while shares of Prudential Bancorp have risen 7.5 percent..
At present both FULT and PBIP are currently rated Zacks rank of #3 (Hold). It is possible to view the entire list of the current the Zacks Top Rank (Strong Buy)
Inorganic Growth Efforts by Another Bank
Like Fulton many smaller and mid-sized banks are looking to expand their reach through strategic acquisitions. This month, to increase their presence within North Carolina, F.N.B. Corp FNB signed an agreement to purchase the Greenville-based UB Bancorp. The all-stock purchase is worth $19.56 for each share or close to $117 million, based upon the closing price of FNB at the time of its closing on May 31, 2022.
After the transaction is completed and expected in the fourth quarter of 2022 F.N.B. Corp is likely to move up to the eighth spot on the list of North Carolina in terms of the market share of deposits. In addition, the cost of deposits, which is 11 basis points is beneficial to the company’s finances in an environment of rising rates.
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