FULT - Rate-Sensitive Fulton Financial Looks Stuck Without Higher Rates Or M&A

• Fulton posted a small beat at the pre-provision line in the fourth quarter, with lower credit costs making a bigger contribution.
• Management is trying to reduce expenses, credit looks to be under control, and the loan pipeline is encouraging, but Fulton is a rate-sensitive bank in a period of record-low rates.
• M&A is the biggest wildcard in the growth outlook; the bank has the capital and the desire to do a deal in the Philly and/or Baltimore metro areas.
• Fulton actually looks a little undervalued on a long-term core earnings basis, but the near-term outlook is challenging and there are other undervalued banks with better setups.

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