Fulton Financial Getting More Active, But Value Creation Still Not Certain

 

The trailing multiyear track record at Fulton Financial (NASDAQ:FULT) has left a lot of investors wanting more, with the shares lagging regional bank peer groups by quite a bit over the last few years. Although earnings growth hasn’t been too bad, (10% on a trailing 5-year basis, 6% on a trailing 10-year basis), the predominant sentiment has long been “yeah, it’s fine … but there isn’t much going on”, particularly with the company sitting on excess capital that management wanted to deploy into M&A.

After a long wait, longer than I imagine management intended or wanted, Fulton Financial has finally gotten back to M&A, though I don’t think the target was to everyone’s liking. While integrating Prudential Bancorp (PBIP) should unlock worthwhile synergies, loan growth and rate leverage prospects seem more average than exceptional and at best I think the shares are modestly undervalued relative to other smaller bank peers with stronger organic growth stories.

 

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Fulton Financial Getting More Active, But Value Creation Still Not Certain