(By Balachander) Fulton Financial Corp. (NASDAQ: FULT) has agreed to sell its Global Exchange Group (GEG) division to focus on community banking within its five-state geographic footprint. Financial terms of the agreement were not disclosed.
The Lancaster, Pennsylvania-based financial services provider expects a fourth-quarter pre-tax gain of roughly $6.2 million from the sale of its international payment services unit.
For the twelve months ended Oct. 31, GEG activities generated earnings of about $2.5 million, revenue of $9.1 million and expenses of $5.2 million.
"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," commented Fulton COO Philip Wenger.
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Fulton acquired GEG in 2006 to supplement its international capabilities.
The company expects to use proceeds of the sale and short-term borrowings to prepay around $20 million in Federal Home Loan Bank (FHLB) advances, with an interest rate of 4.38 percent and maturing in January 2017.
The agreement with Cambridge Mercantile Group to sell GEG unit is expected to close before the end of 2012.
FULT shares added 0.51 percent to trade at $9.75 on Tuesday.