Following the acquisition of the failed Republic First Bank (“Republic Bank”) this April, Fulton Financial Corporation FULT decides to lay off 111 jobs in its Mount Laurel, NJ-based location as part of its effort to eliminate redundant roles. Per a notice filed with the state’s Department of Labor & Workforce Development, the cuts will take effect between Nov. 11 and Dec. 27.
FULT has decided to redesign some of the dropped roles into new ones and retain some staff whose roles have been cut.
Steve Trapnell, a spokesperson for Fulton Financial, said, “With the recent Republic Bank transaction, we brought in more than 300 team members, many with redundant roles to our existing corporate staff. As is typical with transactions of this nature, we eliminated redundant roles. Some eliminated positions are being repurposed into wholly new positions, and we are hopeful to retain some team members whose positions are being eliminated.”
This July, FULT said that it planned to close 13 branches on or around Nov. 22 and then consolidate those operations into nearby locations.
Post the closures, the bank expects its annual pre-tax operating costs to reduce by $8 million, beginning in the first quarter of next year. FULT will incur $1 million in future expenses related to employee severance.
FULT’s Acquisition of Republic Bank
On April 30, Fulton Financial acquired all assets and deposits of Republic Bank from the Federal Deposit Insurance Corporation (FDIC) following the necessary regulatory approvals.
Republic Bank was seized by U.S. regulators on April 26 as it struggled amid a high-interest-rate regime. This adversely impacted its balance sheet and market valuation, given its high exposure to commercial real estate loans.
Despite taking several measures, including the divestiture of mortgage origination business, headcount reduction and capital infusion, the company struggled to remain solvent. Thus, the bank became the first casualty of the regional banking crisis in 2024.
For FULT, the strategic move was in sync with its growth plan of doubling its presence in the Philadelphia market. As part of the deal, the company bought assets of $5.2 billion, which included an investment portfolio of $2 billion, and loans and leases worth $2.9 billion. Fulton’s assumed liabilities were worth $5.3 billion, which included deposits of $4.2 billion, and other borrowings and liabilities of $1.3 billion.
The acquisition was expected to provide immediate operative leverage via purchase accounting, anticipated cost savings and balance sheet restructuring. Also, the transaction was expected to be accretive to FULT’s 2024 EPS by roughly 20%.
A Little Into the Regional Banking Crisis
There were three major bank failures last year. Silicon Valley Bank and Signature Bank collapsed in early 2023. Silicon Valley Bank was acquired by First Citizens Bancshares, Inc. FCNCA, whereas New York Community Bancorp, Inc. NYCB acquired Signature Bank. In May, First Republic Bank collapsed and was bought by JPMorgan JPM.
FCNCA took over Silicon Valley Bank’s assets worth $110 billion, deposits worth $56 billion and loans worth $72 billion. The bank also received an available line of credit from the FDIC for contingent liquidity purposes. NYCB acquired $38 billion in assets and assumed $36 billion of liabilities of Signature Bridge Bank, N.A., from the FDIC.
Meanwhile, JPM paid $10.6 billion for the bulk of First Republic’s $228 billion of assets and assumed deposits worth $92 billion.
Fulton Financial’s Price Performance & Zacks Rank
Over the past six months, FULT shares have gained 24% compared with 19.2% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Currently, FULT carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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