Fulton Financial Corp. in Lancaster, Pennsylvania, is adding scale in Philadelphia with a $142.1 million acquisition of Prudential Bancorp.
The cash-and-stock deal, announced Wednesday and set to close in the third quarter, would give the $26 billion-asset Fulton another $1 billion of assets as well as seven branches in Pennsylvania’s largest market. Fulton would also gain three branches in neighboring markets.
Prudential, founded in 1886, has about $594 million of loans and $721 million of deposits.
Fulton has about 200 financial centers in Pennsylvania, Delaware, Maryland, New Jersey and Virginia, but a relatively small presence in Philadelphia.
Fulton currently has four branches in the city, the nation’s sixth largest, and plans to open another in early 2023. The bank had previously signaled an interest in substantial growth in the market, including through M&A. Based on deposit market share data from the Federal Deposit Insurance Corp., Fulton would jump from the 21st-largest bank in Philadelphia to the 12th largest.
“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,” Philip Wenger, Fulton’s chairman and CEO, said in a press 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 the deal would generate 3.5% earnings per share accretion in 2023 and dilution to tangible book value of less than 1%. It expects to earn back that dilution in just over one year.
Those projections are based in part on expected cost savings of 45% of Prudential's expense base.
