It really has nothing to do with them being under capitalized, or trying to avoid a takeover.
As any bank grows its deposit base, it must maintain a certain amount of equity as a ratio by law. You don't want to far exceed that ratio, since your ROE will go down. You don't want to come in under that ratio, or the fed will start to penalize with you nasty overnight rates and reduced ability to get access to funds. So banks actively manage their ratio of equity to asset base.
When it comes time to tweak the ratio to stay "optimal" banks have 2 options. They can sell new stock in an offering to increase equity, or they can take on certain types of debt that the fed counts as "tier 2 equity".
Fulton chose to go with the later, which is the more aggressive and arguably not more risky approach. The bottom line as far as I can tell is that its a non event, and more about the every day running of a bank than something special on the horizon.
Seriously - Can anyone explain the significance of this? Typically I'd say 100m in debt is a sign that they're getting more aggressive leveraging their balance sheet, which should yield a higher return for shareholders. Then again, 5.75% is a hefty cost of funds for bank debt. Wouldn't it be better to go find 100m in deposits instead?
It smells like its probably a good thing, but I really don't understand the mechanics. I mean, what kind of spread are they going to get loaning this money back out when the 30 year rate is at 5.75?