LANCASTER, Pa., July 14, 2010 (GLOBE NEWSWIRE) -- Fulton Financial Corporation (Nasdaq:FULT) today announced that it has redeemed all 376,500 outstanding shares of Fulton's Fixed Rate Cumulative Perpetual Preferred Stock, Series A that it issued to the U. S. Treasury as part of the Troubled Asset Relief Program (TARP) in December of 2008. Fulton Financial paid $379,585,208 to the U.S. Treasury, consisting of $376,500,000 of principal and $3,085,208 of accrued and unpaid dividends.
"The TARP funds served as a form of insurance against the risk of a very severe and prolonged recession, and we appreciate how this investment bolstered our company's historically strong capital position," said R. Scott Smith, Jr., chairman and chief executive officer of Fulton Financial Corporation.
"Our recent successful common stock offering of $230 million enhanced the Corporation's capital position and facilitated our decision to redeem the Preferred Stock," continued Smith. "Having redeemed the Preferred Stock, we will now be able to pursue our strategic objectives with renewed focus."
The Preferred Stock that Fulton Financial redeemed for $376.5 million had a carrying value of $371 million at June 30, 2010. As a result of the redemption, Fulton Financial will accelerate the accretion of the remaining discount of $5.5 million in the third quarter of 2010, resulting in a reduction of net income available to common shareholders of $5.5 million or approximately $0.03 per share. The redemption of the Preferred Stock will eliminate the $18.8 million annual expense of paying dividends to the U.S. Treasury.
In connection with the issuance of the Preferred Stock in December 2008, Fulton Financial issued to the U.S. Treasury a warrant to purchase 5,509,756 shares of its common stock. This warrant is still held by the U.S. Treasury and Fulton Financial intends to repurchase the warrant at a price to be negotiated, though it may decide not to do so. If Fulton Financial does not repurchase the warrant, the U.S. Treasury could either exercise the warrant or sell it to third parties.
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has approximately 3,950 employees and operates 271 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; Skylands Community Bank, Hackettstown, NJ and The Columbia Bank, Columbia, MD.
Additional information on Fulton Financial Corporation is available on the Internet at www.fult.com.
