425: Fulton Financial to Acquire Blue Foundry Bancorp in All-Stock Merger

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

Summary

• Blue Foundry Bancorp (Blue Foundry) will merge with and into Fulton Financial Corporation (Fulton), with Fulton surviving the merger.
• Blue Foundry's wholly-owned bank subsidiary, Blue Foundry Bank, will merge with and into Fulton's wholly-owned bank subsidiary, Fulton Bank, N.A., with Fulton Bank as the surviving bank.
• Blue Foundry stockholders will receive 0.650 shares of Fulton common stock for each share of Blue Foundry 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 merger agreement was unanimously approved by the Boards of Directors of both Blue Foundry and Fulton.
• The transaction is expected to close in the second quarter of 2026, subject to customary closing conditions, including regulatory approvals and approval by Blue Foundry's stockholders.
• Blue Foundry restricted stock awards will fully vest and convert into the right to receive the merger consideration.
• All outstanding Blue Foundry stock options will become vested (if not already vested) and will be cancelled and cashed out.
• Fulton will make a $1.5 million contribution to the Fulton Forward Foundation, designated for impact grants in New Jersey community organizations.

Sentiment

Score: 8

Explanation: The announcement is highly positive, detailing a strategic all-stock merger with clear financial benefits (accretion to earnings and tangible book value, neutral capital ratios) and strong management support from both companies. The expansion into an attractive market and commitment to community investment further enhance the positive outlook.

Positives

• The transaction accelerates Fulton's growth efforts in the attractive northern New Jersey market.
• The transaction is expected to be accretive to first full-year earnings by over 5%.
• The transaction is expected to be immediately accretive to tangible book value per share.
• The transaction is expected to be neutral to regulatory capital ratios at close.
• The combination brings together two community-focused banks with shared values and a strong commitment to customer service.
• The merger creates an opportunity to leverage Fulton's robust banking services, providing greater convenience and innovative solutions to an expanded customer base.
• The expansion aligns with Fulton's strategy of growing in local markets and is expected to drive organic growth across commercial, consumer, wealth advisory, and mortgage businesses.
• The partnership allows Blue Foundry to preserve local relationships and personalized service while gaining access to greater resources and solutions.
• Fulton will contribute $1.5 million to the Fulton Forward Foundation to support nonprofit community organizations in New Jersey.

Negatives

• Blue Foundry will be required to pay Fulton a termination fee of $9,694,662 under certain circumstances, such as termination in connection with a competing acquisition transaction.
• There is a risk of potential 'excess parachute payment' under Section 280G of the Internal Revenue Code for executives, though parties will cooperate to mitigate the impact.
• Unanticipated challenges or delays in the integration of Blue Foundry's business into Fulton's business or the conversion of operating systems and customer data may significantly increase expenses.
• The transaction may cause dilution due to Fulton's issuance of common stock.
• Diversion of management's attention and time from ongoing business operations and other opportunities on matters relating to the Proposed Transaction.

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, due to integration challenges, economic strength, competitive factors, or other unexpected events.
• The Merger Agreement may be terminated under certain circumstances.
• Required regulatory, stockholder, or other approvals or conditions to closing may not be received or satisfied on a timely basis or at all, and such approvals may impose conditions that 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 Proposed Transaction.
• The outcome of any legal proceedings related to the Proposed Transaction could differ from expectations.
• Unanticipated challenges or delays in the integration of Blue Foundry's business into Fulton's business and/or the conversion of Blue Foundry's operating systems and customer data onto Fulton's may significantly increase the expense associated with the Proposed Transaction.
• Other factors that may affect future results include continued pressures and uncertainties within the banking industry and the companies' markets, such as changes in interest rates, price fluctuations, market events, deposit amounts and composition, increased competitive pressures, operational risks, asset and credit quality deterioration, the impact of tariffs, economic slowdown, and legislative, regulatory, and fiscal policy changes and related compliance costs.

Future Outlook

The transaction is expected to close in the second quarter of 2026 and is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. Fulton anticipates the merger will be accretive to its first full-year earnings by over 5% and immediately accretive to tangible book value per share, while maintaining neutral regulatory capital ratios. The combined entity aims to leverage Fulton's expanded services to drive organic growth in commercial, consumer, wealth advisory, and mortgage businesses within the northern New Jersey market.

Management Comments

• Curtis J. Myers, Fulton Chairman and CEO, stated: "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, Blue Foundry President and CEO, commented: "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 reflects a strategic move by Fulton Financial Corporation to expand its geographic footprint into the attractive northern New Jersey banking market. Such regional consolidations are a common trend in the banking industry, allowing larger institutions to gain market share, achieve economies of scale, and diversify their customer base and loan portfolios. The emphasis on leveraging robust banking services and driving organic growth aligns with broader industry efforts to enhance customer offerings and optimize operational efficiency in competitive financial landscapes.

Comparison to Industry Standards

• Both Blue Foundry Bank and Fulton Bank maintain regulatory capital ratios that exceed the levels established for 'well-capitalized institutions,' indicating strong financial health relative to regulatory benchmarks.
• The Company's investment, securities, commodities, risk management, and other policies, practices, and procedures are described as 'prudent and reasonable in the context of such businesses' and in 'material compliance with the terms of such policies, practices and procedures,' aligning with industry best practices.
• Allowances for credit losses are determined in compliance with GAAP and standards established by applicable Governmental Entities and the Financial Accounting Standards Board, reflecting adherence to standard accounting and risk management practices.
• Data backups, disaster recovery, and business-continuity practices are consistent with 'industry practices' and comply with applicable law, demonstrating a commitment to operational resilience and data security.

Management Changes

Corporate Governance

Legal Proceedings

• The filing notes that neither the Company nor any of its Subsidiaries is a party to any, and there are no outstanding or pending or, to the knowledge of the Company, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against the Company or any of its Subsidiaries or any of their current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement, except as would not have a Material Adverse Effect on the Company.
• The outcome of any legal proceedings related to the Proposed Transaction which may be instituted against Fulton or Blue Foundry is identified as a potential risk factor.

Related Party Transactions

• Fulton entered into voting agreements with directors and certain executive officers of Blue Foundry, in their capacities as stockholders, to vote their shares in favor of the Merger Agreement.
• James D. Nesci, President and Chief Executive Officer of Blue Foundry, entered into a Settlement and Restrictive Covenant Agreement, receiving $4,311,000 upon the merger's effective date.
• Kelly Pecoraro, Executive Vice President and Chief Financial Officer of Blue Foundry, entered into a Settlement and Restrictive Covenant Agreement, receiving $2,601,000 upon the merger's effective date.

Stakeholder Impact

• **Shareholders (Blue Foundry)**: Will receive 0.650 shares of Fulton common stock for each Blue Foundry share, representing a fixed exchange ratio. Their restricted stock and options will vest and be cashed out or converted. Their approval is required for the merger.
• **Shareholders (Fulton)**: Will experience dilution from the issuance of new common stock but are expected to benefit from accretion to first full-year earnings and immediate accretion to tangible book value per share.
• **Employees (Blue Foundry)**: Key executives James D. Nesci and Kelly Pecoraro will cease employment and receive substantial settlement payments. Continuing employees will receive comparable base salary, annual cash bonus opportunities, and substantially comparable employee benefits for a specified period post-merger, with prior service credit recognized.
• **Customers (Blue Foundry)**: Are expected to benefit from access to Fulton's broader range of banking services, greater convenience, and innovative solutions, while the intent is to preserve local relationships and personalized service.
• **Communities (New Jersey)**: Fulton will make a $1.5 million contribution to the Fulton Forward Foundation to support local nonprofit community organizations in New Jersey.

Next Steps

• Fulton will promptly prepare and file a registration statement on Form S-4 with the SEC, which will include a proxy statement for Blue Foundry.
• Blue Foundry will call a meeting of its stockholders to obtain the Requisite Company Vote for the merger, expected to be held as soon as reasonably practicable after the S-4 is declared effective, but no later than 45 calendar days thereafter.
• Both parties will cooperate to obtain all necessary regulatory approvals from the Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), and the New Jersey Department of Banking and Insurance (NJDBI).
• Fulton will file a notification form with NASDAQ for the listing of all shares of Fulton Common Stock to be delivered as merger consideration.
• Blue Foundry will take action to terminate its Employee Stock Ownership Plan (ESOP) effective the day immediately prior to the Closing Date.
• Fulton and Blue Foundry will cooperate to plan and prepare for the conversion of Blue Foundry's data and other files and records to Fulton's production environment.
• 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 a strategically sound move for Fulton Financial Corporation, expanding its presence in the attractive northern New Jersey market. The transaction is projected to be accretive to first full-year earnings by over 5% and immediately accretive to tangible book value per share, with a neutral impact on regulatory capital ratios. These financial benefits, coupled with unanimous board approval and positive management outlook on leveraging combined strengths, suggest a favorable long-term outlook for Fulton. For Blue Foundry shareholders, the fixed exchange ratio means their investment's future value is tied to Fulton's performance, making it a 'hold' if they believe in the combined entity's growth potential, or a 'sell' if they prefer to realize the current implied value. From an acquiring company's perspective, the strategic rationale and financial projections support a 'buy' recommendation for Fulton.

Keywords

Bank Merger, Fulton Financial Corporation, Blue Foundry Bancorp, All-stock acquisition, New Jersey banking, Financial services, Regional bank, Corporate acquisition, SEC filing