Fulton Financial
Corporation FULT today announced that its wholly-owned bank
subsidiary, Fulton Bank, N.A., has entered into an agreement with
Cambridge Mercantile Group to divest its Global Exchange Group (GEG)
division. GEG provides international payment solutions to meet the
needs of companies, law firms and professionals.
"In 2006 we acquired GEG, a provider of worldwide payments and funds
transfer services, to supplement our proprietary international
capabilities," said E. Philip Wenger, Fulton Financial Corporation's
president and chief operating officer. "The Corporation's current
strategic focus is on community banking within our five-state
geographic footprint. Rather than limiting the scope of GEG's future
activities to within our regional presence, we located a buyer whose
goals and objectives are more compatible with GEG's international
strategy."
The transaction is expected to occur prior to the end of 2012 and is
subject to customary conditions to closing. The transaction is
expected to result in a pre-tax gain in the fourth quarter of
approximately $6.2 million ($2.2 million, net of tax). For the twelve
months ended October 31, 2012, GEG activities generated revenues of
$9.1 million, expenses of $5.2 million and net income of
approximately $2.5 million.
The proceeds of this transaction and short-term borrowings will be
used to prepay approximately $20 million in Federal Home Loan Bank
(FHLB) advances, with an interest rate of 4.38% and maturing in
January 2017. Fulton Financial Corporation anticipates incurring a
penalty in connection with prepaying these FHLB advances of
approximately $3.3 million ($2.2 million, net of tax). The annual
interest expense savings from the prepayment of the FHLB advances is
approximately $825,000, or $540,000 net of tax.
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