8-K: Fulton Financial to Acquire Blue Foundry Bancorp in All-Stock Deal

Fulton Financial Corporation will acquire Blue Foundry Bancorp in an all-stock transaction valued at approximately $243 million, expanding its presence in northern New Jersey.

Summary

• Fulton Financial Corporation (Fulton) will acquire Blue Foundry Bancorp (Blue Foundry) in an all-stock merger, with Fulton as the surviving corporation.
• Blue Foundry's wholly-owned bank subsidiary, Blue Foundry Bank, will merge into Fulton's wholly-owned bank subsidiary, Fulton Bank, N.A.
• Each share of Blue Foundry common stock will be exchanged for 0.6500 shares of Fulton common stock.
• Based on Fulton's share price of $17.96 as of November 21, 2025, the transaction is valued at approximately $243 million, or $11.67 per share of Blue Foundry common stock.
• The Boards of Directors of both Fulton and Blue Foundry have unanimously approved the merger agreement.
• The transaction is expected to close in the second quarter of 2026, subject to regulatory approvals and Blue Foundry's stockholder approval.
• Blue Foundry's President and CEO, James D. Nesci, will receive a settlement payment of $4,311,000, and EVP and CFO, Kelly Pecoraro, will receive $2,601,000, in consideration for termination of their employment/change in control agreements and restrictive covenants.
• Fulton will make a $1.5 million contribution to the Fulton Forward Foundation, designated for impact grants in New Jersey.

Sentiment

Score: 8

Explanation: The filing presents a highly positive outlook on the merger, emphasizing strategic benefits, financial accretion for the acquirer, and continuity for employees and customers. The unanimous board approvals and the fairness opinion further support a positive sentiment. Risks are acknowledged but presented as standard forward-looking statement disclaimers rather than immediate concerns.

Positives

• The transaction is expected to be accretive to Fulton's first full-year earnings by over 5%.
• The merger is immediately accretive to Fulton's tangible book value per share.
• The transaction is expected to be neutral to Fulton's regulatory capital ratios at close.
• The acquisition accelerates Fulton's growth efforts in the attractive northern New Jersey market.
• The combination allows Fulton to leverage its robust banking services and provide greater convenience and innovative solutions to an expanded customer base.
• The merger is expected to drive organic growth across Fulton's commercial, consumer, wealth advisory, and mortgage businesses.
• Blue Foundry's Board of Directors unanimously determined the merger to be in the best interests of the company and its stockholders.
• Fulton will contribute $1.5 million to the Fulton Forward Foundation for community organizations in New Jersey.

Risks

• Revenue or expense synergies and other expected benefits, including anticipated cost savings and strategic gains, may not be realized when expected or at all.
• Challenges may arise from the integration of Blue Foundry into Fulton.
• The strength of the economy and competitive factors in the areas where Fulton and Blue Foundry do business could impact expected benefits.
• The Merger Agreement could be terminated due to various events or circumstances.
• Required regulatory, stockholder, or other approvals may not be received or satisfied on a timely basis or at all.
• Regulatory approvals may result in the imposition of conditions that could adversely affect Fulton or Blue Foundry or the expected benefits.
• Reputational risks and potential adverse reactions or changes to business or employee relationships may result from the announcement or completion of the transaction.
• Fulton's issuance of common stock in connection with the transaction will cause dilution.
• Diversion of management's attention and time from ongoing business operations and other opportunities.
• Legal proceedings related to the Proposed Transaction may be instituted against Fulton or Blue Foundry.
• Unanticipated challenges or delays in the integration of Blue Foundry's business or conversion of its operating systems and customer data may significantly increase expenses.
• Continued pressures and uncertainties within the banking industry and markets, including changes in interest rates, price fluctuations, deposit amounts and composition, increased competitive pressures, operational risks, and asset/credit quality deterioration.
• The impact of proposed or imposed tariffs by the U.S. government or retaliatory tariffs by U.S. trading partners could adversely affect customers.
• Any recession or slowdown in economic growth, particularly in the markets where Fulton or Blue Foundry operate, could negatively impact results.
• Legislative, regulatory, and fiscal policy changes and related compliance costs pose risks.

Future Outlook

The transaction is expected to close in the second quarter of 2026, subject to customary closing conditions including regulatory and stockholder approvals. Fulton anticipates the merger will be accretive to its first full-year earnings by over 5%, immediately accretive to tangible book value per share, and neutral to regulatory capital ratios at closing. The combined entity aims to leverage Fulton's services for expanded customer base and drive organic growth in commercial, consumer, wealth advisory, and mortgage businesses in the northern New Jersey market.

Management Comments

• Curtis J. Myers, Fulton Chairman and CEO: "We're bringing together two community-focused banks with shared values and a strong commitment to making banking personal for each and every customer. The combination of our companies creates an opportunity to leverage Fulton's robust banking services and provide greater convenience and innovative solutions to an expanded customer base, with a continued focus on supporting our local communities. The expansion in northern New Jersey aligns with our strategy of growing in our local markets and positions us well to drive organic growth across our commercial, consumer, wealth advisory and mortgage businesses."
• James D. Nesci, President and Chief Executive Officer of Blue Foundry: "Joining forces with Fulton is an exciting step forward for our employees, customers and communities. This partnership allows us to preserve the local relationships and personalized service our customers value, while gaining access to greater resources and providing more solutions and convenience to customers. Together, we're building a stronger future for everyone we serve."

Industry Context

This all-stock merger represents a strategic consolidation within the regional banking sector, allowing Fulton Financial to expand its geographic footprint into the attractive northern New Jersey market. This move aligns with a broader industry trend of larger regional banks acquiring smaller institutions to gain market share, achieve economies of scale, and diversify their customer base and service offerings. The focus on leveraging existing banking services and driving organic growth in commercial, consumer, wealth advisory, and mortgage businesses reflects a common strategy for enhancing shareholder value through M&A in a competitive financial landscape.

Comparison to Industry Standards

• Both Blue Foundry Bank and Fulton Bank, N.A. maintain regulatory capital ratios that exceed the levels established for 'well-capitalized institutions' as defined by their primary bank regulators, indicating strong financial health prior to the merger.
• Blue Foundry Bank has a Community Reinvestment Act rating of 'satisfactory or better,' which is a standard benchmark for community engagement and compliance in the banking industry.
• The expected accretion to Fulton's first full-year earnings per share (over 5%) and immediate accretion to tangible book value per share are generally considered favorable outcomes for an acquiring institution in a bank merger, often exceeding typical industry averages for initial accretion.

Management Changes

Corporate Governance

Related Party Transactions

• Fulton has entered into voting agreements with directors and certain executive officers of Blue Foundry, in their capacities as stockholders, agreeing to vote their shares in favor of the Merger Agreement.

Stakeholder Impact

• Shareholders of Blue Foundry will receive 0.6500 shares of Fulton common stock for each of their shares, converting their ownership into the acquiring company.
• Shareholders of Fulton are expected to benefit from earnings accretion (over 5% in the first full year) and immediate tangible book value accretion.
• Employees of Blue Foundry who are actively employed on the Closing Date will receive no less favorable base salary/hourly wages, annual cash bonus opportunity, and substantially comparable employee benefits for a 'Relevant Period' (up to one year for some benefits).
• Employees of Blue Foundry will receive prior service credit under Fulton's benefit plans for their service with Blue Foundry.
• Employees of Blue Foundry involuntarily terminated within six months of closing will be covered by Fulton's general severance policy.
• Customers of Blue Foundry are expected to gain access to Fulton's broader banking services, greater convenience, and innovative solutions.
• The community in New Jersey will benefit from Fulton's $1.5 million contribution to the Fulton Forward Foundation for local non-profit organizations.
• Directors and certain executive officers of Blue Foundry have entered into voting agreements, committing their shares to the merger.
• Blue Foundry's President and CEO and EVP and CFO will receive significant settlement payments upon the merger's effective date, subject to executing a mutual release of claims and restrictive covenants.

Next Steps

• Fulton will file a registration statement on Form S-4 with the SEC, including a proxy statement for Blue Foundry stockholders.
• Blue Foundry will mail the proxy statement to its stockholders.
• Blue Foundry stockholders will hold a meeting to approve the Merger Agreement.
• Both parties will seek required regulatory approvals from the Federal Reserve Board, OCC, and NJDBI.
• Fulton will file a notification form with NASDAQ for the listing of new common stock shares.
• Blue Foundry will terminate its ESOP effective the day prior to the merger's effective date.
• The merger is expected to close in the second quarter of 2026.
• Following the merger, Blue Foundry Bank will merge into Fulton Bank, N.A.

Key Dates

Recommendation

The all-stock merger is structured to be accretive to Fulton's earnings per share by over 5% in the first full year and immediately accretive to tangible book value per share, while maintaining neutral regulatory capital ratios. This indicates a financially sound acquisition for Fulton. The expansion into the attractive northern New Jersey market provides strategic growth opportunities. For Blue Foundry shareholders, the fixed exchange ratio offers a clear valuation and participation in a larger, growing entity. The unanimous board approvals and fairness opinion further bolster confidence in the transaction's value. While integration risks exist, the stated financial benefits and strategic rationale suggest a positive long-term outlook for the combined entity, making it a 'buy' for investors seeking growth and market expansion in the banking sector.

Keywords

Bank Merger, Acquisition, Financial Services, New Jersey Market, Stock Transaction, Fulton Financial, Blue Foundry Bancorp, Banking Industry, Corporate Governance, Regulatory Approval