In brief: Fulton sells payment services subsidiary
Fulton Financial Corp. is selling its overseas payment services division to the Toronto-based Cambridge Mercantile Group, Fulton said this week.
The $6.2 million transaction will close by the end of the year and is expected to yield Fulton about $2.2 million "net of taxes," the Lancaster-based company said in a release.
Fulton, the parent company of Fulton Bank, said it will use the proceeds along with short-term loans to prepay about $20 million in Federal Home Loan Bank advances that would have matured in January 2017.
Fulton said it will incur a prepayment penalty of $3.3 million before taxes, but will save about $825,000 a year in interest, also before taxes.
Fulton acquired Global Exchange Group in 2006, Fulton President and Chief Operating Officer E. Philip Wenger said in the statement.
"The corporation's current strategic focus is on community banking within our five-state geographic footprint," he said. "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."