Fulton Financial Corporation Announces Second Quarter 2024 Results

About this update from Fulton Financial Corporation

LANCASTER, Pa. , July 16, 2024 /PRNewswire/ -- Fulton Financial Corporation (NASDAQ: FULT) (" Fulton " or the "Corporation") reported net income available to common shareholders of $92.4 million , or $0.52 per diluted share, for the second quarter of 2024, an increase of $33 .0 million, or $0.16 per share, in comparison to the first quarter of 2024. Operating net income available to common shareholders for the three months ended June 30, 2024 was $82.5 million , or $0.47 per diluted share(1), an increase of $17.1 million , or $0.07 per share in comparison to the first quarter of 2024. "The second quarter was an extraordinary quarter for Fulton . I want to personally thank both our new Republic teammates and our dedicated Fulton team for an exceptional effort," said Curtis J. Myers Chairman and CEO of Fulton Financial Corporation . " Fulton's solid performance, steady business trends and stable asset quality were supplemented by a meaningful contribution from the Republic transaction." Republic Transaction On April 26, 2024 , the Corporation announced that its wholly owned banking subsidiary, Fulton Bank, National Association (" Fulton Bank "), acquired substantially all of the assets and assumed substantially all of the deposits and certain liabilities of Republic First Bank , doing business as Republic Bank ("Republic Bank"), from the Federal Deposit Insurance Corporation (the " FDIC "), as receiver for Republic Bank (the "Acquisition"), pursuant to the terms of the Purchase and Assumption Agreement - Whole Bank , All Deposits, effective as of April 26, 2024 (the "Acquisition Date"), among the FDIC , as receiver of Republic Bank, the FDIC and Fulton Bank . The Acquisition included total assets with preliminary fair values of approximately $4.8 billion including total loans with preliminary fair values of approximately $2.5 billion and investments with a fair value of $1.9 billion . Following the Acquisition, the Corporation sold the acquired investments with a portion of the proceeds used to repay $1.4 billion of assumed borrowings. In the Acquisition, the Corporation assumed $4.1 billion of deposits without a premium. Additionally, the Corporation received $809.9 million in cash from the FDIC and $208.5 million in cash reflected on Republic Bank's balance sheet. (1) Financial measure derived by methods other than generally accepted accounting principles ("GAAP"). Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of the press release. Financial Highlights Second quarter of 2024 results were impacted by the following items: Preliminary gain on acquisition of $47.4 million (net of tax). Core deposit intangible of $92.6 million in connection with the Acquisition resulting in intangible amortization expense of $4.1 million for the quarter. Provision for credit losses of $23.4 million related to non-purchased credit deteriorated loans acquired in the Acquisition. Acquisition-related expenses of $13.8 million . Pre-tax gain of $20.3 million in connection with a sale-leaseback transaction (the "Sale-Leaseback Transaction") involving 40 Fulton Bank financial center office locations. Restructured a portion of the available-for-sale investment portfolio and realized a pre-tax loss of $20.3 million on the sale of $356.4 million of investment securities with the proceeds reinvested in higher-yielding securities of a similar type and similar duration. FultonFirst implementation and asset disposal costs of $6.3 million . Issued 19,166,667 shares of common stock at $15.00 per share resulting in proceeds of approximately $273.0 million net of issuance costs. The following items highlight notable changes in the components of net income in the second quarter of 2024 compared to the first quarter of 2024: Net interest income totaled $241.7 million , an increase of $34.8 million . The Acquisition contributed approximately $30.7 million to the increase. Net interest margin was 3.43%, an increase of 11 basis points, entirely due to the Acquisition. Non-interest income before investment securities gains (losses) was $113.3 million compared to $57.1 million in the first quarter of 2024. The increase was primarily due to a $47.4 million gain on acquisition (net of tax) as well as $2.8 million from Republic Bank's operations. The remaining $6.1 million increase in non-interest income included a $1.3 million decrease in losses from equity method investments, a $0.9 million increase in merchant fee income due to seasonality and a merchant fee increase during the quarter, a $0.9 million increase in mortgage banking income from higher loan volumes and higher spreads, an $0.8 million increase in wealth management revenues due to an increase in assets under management in the brokerage business due to equity market returns and organic sales results, a $0.6 million increase in cash management fee income due to an increase in account analysis fees with customers electing to move funds to interest-bearing accounts along with a pricing increase and a $0.3 million increase in gains from Small Business Administration loan sales. Excluding the $20.3 million gain on the Sale-Leaseback Transaction, reflected in other expense, non-interest expense was $219.8 million compared to $177.6 million in the first quarter of 2024. The increase was largely due to $13.8 million of Acquisition-related expenses and $21.1 million from Republic Bank's operations. The remaining increase of $7.3 million was primarily due to a $6.7 million increase in salaries and benefits expense as a result of an increase in variable incentive expenses, the impact of the annual merit increases and approximately $1.0 million of severance costs related to the FultonFirst initiative. Balance Sheet Summary Net loans totaled $24.1 billion , an increase of $2.7 billion compared to $21.4 billion as of March 31, 2024 . The increase was primarily due to the Acquisition resulting in an increase of $2.5 billion based on preliminary fair values as of the Acquisition Date. The reduction in fair value on the acquired loans as of the Acquisition Date was $378.9 million , which included an adjustment for interest rates of $299.5 million , an adjustment for credit of $55.9 million on purchased credit deteriorated ("PCD") loans and an adjustment for credit of $23.4 million for non-PCD loans. Excluding the impact from the day 1 PCD credit-related adjustment of $55.9 million and purchase accounting accretion of $10.4 million , net loans acquired from Republic Bank declined approximately $33.1 million subsequent to the Acquisition Date. Excluding the Acquisition, net loans increased $123.6 million largely due to increases of $102.9 million and $63.8 million in residential mortgage loans and construction loans, respectively, partially offset by a decrease of $25.7 million in consumer loans and a $19.8 million decrease in leases and other loans. Deposits totaled $25.6 billion , an increase of $3.8 billion compared to $21.7 billion as of March 31, 2024 . The increase was primarily due to the Acquisition resulting in an increase of $3.6 billion based on preliminary fair values as of the Acquisition Date. Deposits assumed in the Acquisition declined approximately $357.3 million subsequent to the Acquisition Date. Excluding the Acquisition, deposits increased $62.7 million largely due to increases of $180.1 million , $159.4 million and $102.8 million in interest-bearing demand deposits, time deposits and savings deposits, respectively, partially offset by decreases of $190.8 million in brokered deposits and $188.8 million in noninterest-bearing demand deposits. Provision for Credit Losses and Asset Quality The provision for credit losses was $32.1 million in the second quarter of 2024 compared to $10.9 million in the first quarter of 2024. The increase was primarily related to the Acquisition, which included a provision for credit losses of $23.4 million for non-PCD loans. Excluding the Acquisition, the provision declined $2.2 million primarily due to a $1.4 million reduction in the reserve for unfunded commitments. Non-performing assets were $163.8 million , or 0.52% of total assets, at June 30, 2024 , in comparison to $156.4 million , or 0.57% of total assets, at March 31, 2024 . The dollar increase was largely due to the Acquisition. Net charge-offs for the second quarter of 2024 were 0.19% of total average loans in comparison to 0.16% in the first quarter of 2024. The allowance for credit losses attributable to net loans totaled $375.9 million , or 1.56% of total loans at June 30, 2024 , an increase of $78.1 million . The Acquisition resulted in a $79.4 million increase in the allowance for credit losses. Additional information on Fulton is available on the Internet at www.fultonbank.com . Safe Harbor Statement This press release may contain forward-looking statements with respect to the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," "projects," the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation's future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation's business or financial results. Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation's control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023 , Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the " SEC ") and are, or will be, available in the Investor Relations section of the Corporation's website ( www.fultonbank.com ) and on the SEC's website ( www.sec.gov ). Non-GAAP Financial Measures The Corporation uses certain financial measures in this press release that have been derived from methods other than GAAP. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this press release. FULTON FINANCIAL CORPORATION SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) (dollars in thousands, except per share and shares data) Three months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 2024 2024 2023 2023 2023 Ending Balances Investment securities $ 4,184,027 $ 3,783,392 $ 3,666,274 $ 3,698,601 $ 3,867,334 Net loans 24,106,297 21,444,483 21,351,094 21,177,508 21,044,685 Total assets 31,769,813 27,642,957 27,571,915 27,375,177 27,403,163 Deposits 25,559,654 21,741,950 21,537,623 21,421,589 21,206,540 Shareholders' equity 3,101,609 2,757,679 2,760,139 2,566,693 2,642,152 Average Balances Investment securities 4,043,136 3,672,844 3,665,261 3,834,824 3,916,130 Net loans 23,345,914 21,370,033 21,255,779 21,121,277 20,866,235 Total assets 30,774,891 27,427,626 27,397,671 27,377,836 27,235,567 Deposits 24,642,954 21,378,754 21,476,548 21,357,295 21,207,143 Shareholders' equity 2,952,671 2,766,945 2,618,024 2,645,977 2,647,464 Income Statement Net interest income 241,720 206,937 212,006 213,842 212,852 Provision for credit losses 32,056 10,925 9,808 9,937 9,747 Non-interest income 92,994 57,140 59,378 55,961 60,585 Non-interest expense 199,488 177,600 180,552 171,020 168,018 Income before taxes 103,170 75,552 81,024 88,846 95,672 Net income available to common shareholders 92,413 59,379 61,701 69,535 77,045 Per Share Net income available to common shareholders (basic) $0.53 $0.36 $0.38 $0.42 $0.46 Net income available to common shareholders (diluted) $0.52 $0.36 $0.37 $0.42 $0.46 Operating net income available to common shareholders(1) $0.47 $0.40 $0.42 $0.43 $0.47 Cash dividends $0.17 $0.17 $0.17 $0.16 $0.16 Common shareholders' equity $16.00 $15.82 $15.67 $14.47 $14.75 Common shareholders' equity (tangible)(1) $12.43 $12.37 $12.25 $11.05 $11.36 Weighted average shares (basic) 175,305 162,706 163,975 164,566 165,854 Weighted average shares (diluted) 176,934 164,520 165,650 166,023 167,191 (1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this press release. Three months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 2024 2024 2023 2023 2023 Asset Quality Net charge-offs to average loans 0.19 % 0.16 % 0.15 % 0.10 % 0.04 % Non-performing loans to total net loans 0.67 % 0.73 % 0.72 % 0.67 % 0.70 % Non-performing assets to total assets 0.52 % 0.57 % 0.56 % 0.52 % 0.55 % ACL - loans(1) to total loans 1.56 % 1.39 % 1.37 % 1.38 % 1.37 % ACL - loans(1) to non-performing loans 232 % 191 % 191 % 208 % 195 % Profitability Return on average assets 1.24 % 0.91 % 0.93 % 1.04 % 1.17 % Operating return on average assets(2) 1.11 % 1.00 % 1.03 % 1.08 % 1.18 % Return on average common shareholders' equity 13.47 % 9.28 % 10.09 % 11.25 % 12.59 % Operating return on average common shareholders' equity (tangible)(2) 15.56 % 13.08 % 14.68 % 15.17 % 16.52 % Net interest margin 3.43 % 3.32 % 3.36 % 3.40 % 3.40 % Efficiency ratio(2) 62.6 % 63.2 % 62.0 % 61.5 % 60.1 % Non-interest expense to total average assets 2.61 % 2.60 % 2.61 % 2.48 % 2.47 % Operating non-interest expense to total average assets(2) 2.55 % 2.49 % 2.47 % 2.47 % 2.46 % Capital Ratios (3) Tangible common equity ratio ("TCE")(2) 7.3 % 7.4 % 7.4 % 6.8 % 7.0 % Tier 1 leverage ratio 9.0 % 9.3 % 9.5 % 9.4 % 9.3 % Common equity Tier 1 capital ratio 10.3 % 10.3 % 10.3 % 10.3 % 10.1 % Tier 1 risk-based capital ratio 11.1 % 11.1 % 11.2 % 11.1 % 11.0 % Total risk-based capital ratio 13.8 % 14.0 % 14.0 % 14.0 % 13.8 % (1) "ACL - loans" relates to the allowance for credit losses ("ACL") specifically on "Net Loans" and does not include the ACL related to off-balance-sheet ("OBS") credit exposures. (2) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this press release. (3) Regulatory capital ratios as of June 30, 2024 are preliminary estimates and prior periods are actual. FULTON FINANCIAL CORPORATION CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) (dollars in thousands) Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 2024 2024 2023 2023 2023 ASSETS Cash and due from banks $ 333,238 $ 247,581 $ 300,343 $ 304,042 $ 123,779 Other interest-earning assets 1,188,341 231,389 373,772 222,781 505,141 Loans held for sale 26,822 10,624 15,158 20,368 14,673 Investment securities 4,184,027 3,783,392 3,666,274 3,698,601 3,867,334 Net loans 24,106,297 21,444,483 21,351,094 21,177,508 21,044,685 Less: ACL - loans(1) (375,941) (297,888) (293,404) (292,739) (287,442) Loans, net 23,730,356 21,146,595 21,057,690 20,884,769 20,757,243 Net premises and equipment 180,642 213,541 222,881 215,626 216,322 Accrued interest receivable 120,752 107,089 107,972 101,624 96,991 Goodwill and intangible assets 648,026 560,114 560,687 561,284 561,885 Other assets 1,357,609 1,342,632 1,267,138 1,366,082 1,259,795 Total Assets $ 31,769,813 $ 27,642,957 $ 27,571,915 $ 27,375,177 $ 27,403,163 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits $ 25,559,654 $ 21,741,950 $ 21,537,623 $ 21,421,589 $ 21,206,540 Borrowings 2,178,597 2,296,040 2,487,526 2,370,112 2,719,114 Other liabilities 929,953 847,288 786,627 1,016,783 835,357 Total Liabilities 28,668,204 24,885,278 24,811,776 24,808,484 24,761,011 Shareholders' equity 3,101,609 2,757,679 2,760,139 2,566,693 2,642,152 Total Liabilities and Shareholders' Equity $ 31,769,813 $ 27,642,957 $ 27,571,915 $ 27,375,177 $ 27,403,163 LOANS, DEPOSITS AND BORROWINGS DETAIL: Loans, by type: Real estate - commercial mortgage $ 9,289,770 $ 8,252,117 $ 8,127,728 $ 8,106,300 $ 7,846,861 Commercial and industrial 4,967,796 4,467,589 4,545,552 4,577,334 4,599,759 Real estate - residential mortgage 6,248,856 5,395,720 5,325,923 5,279,681 5,147,262 Real estate - home equity 1,120,878 1,040,335 1,047,184 1,045,438 1,061,891 Real estate - construction 1,463,799 1,249,199 1,239,075 1,078,263 1,308,564 Consumer 692,086 698,421 729,318 743,976 763,530 Leases and other loans(2) 323,112 341,102 336,314 346,516 316,818 Total Net Loans $ 24,106,297 $ 21,444,483 $ 21,351,094 $ 21,177,508 $ 21,044,685 Deposits, by type: Noninterest-bearing demand $ 5,609,383 $ 5,086,514 $ 5,314,094 $ 5,575,374 $ 5,865,855 Interest-bearing demand 7,478,077 5,521,017 5,722,695 5,757,487 5,543,320 Savings 7,563,495 6,846,038 6,616,901 6,707,729 6,646,448 Total demand and savings 20,650,955 17,453,569 17,653,690 18,040,590 18,055,623 Brokered 995,975 1,152,427 1,144,692 941,059 949,259 Time 3,912,724 3,135,954 2,739,241 2,439,940 2,201,658 Total Deposits $ 25,559,654 $ 21,741,950 $ 21,537,623 $ 21,421,589 $ 21,206,540 Borrowings, by type: Federal funds purchased $ — $ — $ 240,000 $ 544,000 $ 555,000 Federal Home Loan Bank advances 750,000 900,000 1,100,000 730,000 1,165,000 Senior debt and subordinated debt 535,741 535,566 535,384 540,174 539,994 Other borrowings 892,856 860,474 612,142 555,938 459,120 Total Borrowings $ 2,178,597 $ 2,296,040 $ 2,487,526 $ 2,370,112 $ 2,719,114 (1) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures. (2) Includes equipment lease financing, overdraft and net origination fees and costs. FULTON FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands, except per share and share data) Three months ended Six months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 Jun 30 2024 2024 2023 2023 2023 2024 2023 Net Interest Income: Interest income $ 400,506 $ 339,666 $ 338,134 $ 330,371 $ 314,912 $ 740,172 $ 604,732 Interest expense 158,786 132,729 126,128 116,529 102,060 291,515 176,293 Net Interest Income 241,720 206,937 212,006 213,842 212,852 448,657 428,439 Provision for credit losses 32,056 10,925 9,808 9,937 9,747 42,981 34,291 Net Interest Income after Provision 209,664 196,012 202,198 203,905 203,105 405,676 394,148 Non-Interest Income: Wealth management 20,990 20,155 19,388 19,413 18,678 41,144 36,740 Commercial banking: Merchant and card 7,798 6,808 7,045 7,626 7,700 14,607 14,534 Cash management 6,966 6,305 6,030 5,960 5,835 13,271 11,350 Capital markets 2,585 2,341 4,258 2,960 6,092 4,926 8,436 Other commercial banking 4,061 3,375 3,447 3,176 3,518 7,434 6,338 Total commercial banking 21,410 18,829 20,780 19,722 23,145 40,238 40,658 Consumer banking: Card 8,305 6,628 6,739 6,770 6,592 14,933 12,835 Overdraft 3,377 2,786 2,991 2,996 2,696 6,163 5,429 Other consumer banking 2,918 2,254 2,357 2,407 2,432 5,172 4,673 Total consumer banking 14,600 11,668 12,087 12,173 11,720 26,268 22,937 Mortgage banking 3,951 3,090 2,288 3,190 2,940 7,041 4,910 Gain on acquisition, net of tax 47,392 — — — — 47,392 — Other 4,933 3,398 5,587 1,463 4,106 8,332 7,075 Non-interest income before investment securities gains (losses) 113,276 57,140 60,130 55,961 60,589 170,415 112,320 Investment securities gains (losses), net (20,282) — (752) — (4) (20,282) 19 Total Non-Interest Income 92,994 57,140 59,378 55,961 60,585 150,133 112,339 Non-Interest Expense: Salaries and employee benefits 110,630 95,481 97,275 96,757 94,102 206,111 183,385 Data processing and software 20,357 17,661 16,985 16,914 16,776 38,018 32,571 Net occupancy 17,793 16,149 14,647 14,561 14,374 33,943 28,812 Other outside services 16,933 13,283 14,670 12,094 10,834 30,216 20,960 FDIC insurance 6,696 6,104 11,138 4,738 4,895 12,800 9,690 Intangible amortization 4,688 573 597 601 1,072 5,261 1,746 Equipment 4,561 4,040 3,995 3,475 3,530 8,602 6,920 Professional fees 2,571 2,088 2,302 1,869 1,829 4,659 4,221 Marketing 2,101 1,912 3,550 1,913 1,655 4,012 3,541 Acquisition-related expenses 13,803 — — — — 13,803 — Other (645) 20,309 15,393 18,098 18,951 19,662 35,790 Total Non-Interest Expense 199,488 177,600 180,552 171,020 168,018 377,087 327,636 Income Before Income Taxes 103,170 75,552 81,024 88,846 95,672 178,722 178,851 Income tax expense 8,195 13,611 16,761 16,749 16,065 21,806 30,931 Net Income 94,975 61,941 64,263 72,097 79,607 156,916 147,920 Preferred stock dividends (2,562) (2,562) (2,562) (2,562) (2,562) (5,124) (5,124) Net Income Available to Common Shareholders $ 92,413 $ 59,379 $ 61,701 $ 69,535 $ 77,045 $ 151,792 $ 142,796 Three months ended Six months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 Jun 30 2024 2024 2023 2023 2023 2024 2023 PER SHARE: Net income available to common shareholders (basic) $0.53 $0.36 $0.38 $0.42 $0.46 $0.90 $0.86 Net income available to common shareholders (diluted) $0.52 $0.36 $0.37 $0.42 $0.46 $0.89 $0.85 Cash dividends $0.17 $0.17 $0.17 $0.16 $0.16 $0.34 $0.31 Weighted average shares (basic) 175,305 162,706 163,975 164,566 165,854 169,006 166,227 Weighted average shares (diluted) 176,934 164,520 165,650 166,023 167,191 170,769 167,809 FULTON FINANCIAL CORPORATION CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) (dollars in thousands) Three months ended June 30, 2024 March 31, 2024 June 30, 2023 Average Yield/ Average Yield/ Average Yield/ Balance Interest (1) Rate Balance Interest (1) Rate Balance Interest (1) Rate ASSETS Interest-earning assets: Net loans(2) $ 23,345,914 $ 355,533 6.12 % $ 21,370,033 $ 313,882 5.90 % $ 20,866,235 $ 287,154 5.52 % Investment securities(3) 4,396,050 33,799 3.07 % 3,983,753 27,048 2.71 % 4,234,096 27,303 2.57 % Other interest-earning assets 1,125,886 15,730 5.61 % 249,079 3,328 5.36 % 529,582 4,860 3.68 % Total Interest-Earning Assets 28,867,850 405,062 5.64 % 25,602,865 344,258 5.40 % 25,629,913 319,317 4.99 % Noninterest-earning assets: Cash and due from banks 302,381 282,895 129,682 Premises and equipment 203,166 223,375 216,847 Other assets 1,759,138 1,614,746 1,541,657 Less: ACL - loans(4) (357,644) (296,255) (282,532) Total Assets $ 30,774,891 $ 27,427,626 $ 27,235,567 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Demand deposits $ 7,080,302 $ 31,748 1.80 % $ 5,596,725 $ 20,500 1.47 % $ 5,535,669 $ 14,612 1.06 % Savings deposits 7,309,141 44,901 2.47 % 6,669,228 38,797 2.34 % 6,632,572 29,289 1.77 % Brokered deposits 1,123,328 15,074 5.40 % 1,083,382 14,655 5.44 % 954,773 12,135 5.10 % Time deposits 3,670,158 39,364 4.31 % 2,968,344 29,622 4.01 % 2,063,038 13,763 2.68 % Total Interest-Bearing Deposits 19,182,929 131,087 2.75 % 16,317,679 103,574 2.55 % 15,186,052 69,799 1.84 % Borrowings and other interest-bearingliabilities 2,441,691 27,699 4.53 % 2,608,376 29,155 4.46 % 2,790,860 32,261.2 4.60 % Total Interest-Bearing Liabilities 21,624,620 158,786 2.95 % 18,926,055 132,729 2.82 % 17,976,912 102,060 2.27 % Noninterest-bearing liabilities: Demand deposits 5,460,025 5,061,075 6,021,091 Other liabilities 737,575 673,551 590,100 Total Liabilities 27,822,220 24,660,681 24,588,103 Shareholders' equity 2,952,671 2,766,945 2,647,464 Total Liabilities and Shareholders' Equity $ 30,774,891 $ 27,427,626 $ 27,235,567 Net interest income/net interest margin(fully taxable equivalent) 246,276 3.43 % 211,529 3.32 % 217,257 3.40 % Tax equivalent adjustment (4,556) (4,592) (4,405) Net Interest Income $ 241,720 $ 206,937 $ 212,852 (1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. (2) Average balances include non-performing loans. (3) Average balances include amortized historical cost for available for sale ("AFS") securities; the related unrealized holding gains (losses) are included in other assets. (4) ACL - loans relates to the ACL for net loans and does not include the ACL related to OBS credit exposures, which is included in other liabilities. FULTON FINANCIAL CORPORATION AVERAGE LOANS, DEPOSITS AND BORROWINGS DETAIL (UNAUDITED) (dollars in thousands) Three months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 2024 2023 2023 2023 2023 Loans, by type: Real estate - commercial mortgage $ 8,958,139 $ 8,166,018 $ 8,090,627 $ 7,912,801 $ 7,775,436 Commercial and industrial 4,853,583 4,517,179 4,579,441 4,611,376 4,629,919 Real estate - residential mortgage 5,977,132 5,353,905 5,303,632 5,209,105 5,008,295 Real estate - home equity 1,117,367 1,039,321 1,043,753 1,045,806 1,066,615 Real estate - construction 1,430,057 1,240,640 1,153,601 1,254,577 1,306,286 Consumer 685,183 721,523 746,011 761,273 763,407 Leases and other loans(1) 324,453 331,447 338,714 326,339 316,277 Total Net Loans $ 23,345,914 $ 21,370,033 $ 21,255,779 $ 21,121,277 $ 20,866,235 Deposits, by type: Noninterest-bearing demand $ 5,460,025 $ 5,061,075 $ 5,440,098 $ 5,672,411 $ 6,021,091 Interest-bearing demand 7,080,302 5,596,725 5,723,169 5,740,229 5,535,669 Savings 7,309,141 6,669,228 6,682,512 6,676,792 6,632,572 Total demand and savings 19,849,468 17,327,028 17,845,779 18,089,432 18,189,332 Brokered 1,123,328 1,083,382 1,051,369 937,657 954,773 Time 3,670,158 2,968,344 2,579,400 2,330,206 2,063,038 Total Deposits $ 24,642,954 $ 21,378,754 $ 21,476,548 $ 21,357,295 $ 21,207,143 Borrowings, by type: Federal funds purchased $ 32,637 $ 173,659 $ 446,707 $ 634,163 $ 679,401 Federal Home Loan Bank advances 833,726 902,890 760,087 793,098 880,811 Senior debt and subordinated debt 535,656 535,479 539,186 540,086 539,906 Other borrowings and other interest-bearing liabilities 1,039,672 996,348 795,747 723,740 690,742 Total Borrowings $ 2,441,691 $ 2,608,376 $ 2,541,727 $ 2,691,087 $ 2,790,860 (1) Includes equipment lease financing, overdraft and net origination fees and costs. FULTON FINANCIAL CORPORATION CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) (dollars in thousands) Six months ended June 30 2024 2023 Average Yield/ Average Yield/ Balance Interest (1) Rate Balance Interest (1) Rate ASSETS Interest-earning assets: Net loans(2) $ 22,357,972 $ 669,414 6.02 % $ 20,665,779 $ 550,219 5.36 % Investment securities(3) 4,189,901 60,847 2.90 % 4,261,718 54,824 2.57 % Other interest-earning assets 699,547 19,059 5.47 % 511,456 8,508 3.34 % Total Interest-Earning Assets 27,247,420 749,320 5.52 % 25,438,953 613,551 4.85 % Noninterest-Earning assets: Cash and due from banks 292,638 135,436 Premises and equipment 213,270 219,920 Other assets 1,686,941 1,552,669 Less: ACL - loans(4) (326,950) (277,942) Total Assets $ 29,113,319 $ 27,069,036 LIABILITIES AND SHAREHOLDERS' EQUITY Interest-Bearing liabilities: Demand deposits $ 6,338,513 $ 52,248 1.66 % $ 5,431,696 $ 23,067 0.86 % Savings deposits 6,989,186 83,699 2.41 % 6,551,470 49,824 1.53 % Brokered deposits 1,103,356 29,728 5.42 % 698,644 17,308 5.00 % Time deposits 3,319,249 68,986 4.18 % 1,880,970 21,221 2.28 % Total Interest-Bearing Deposits 17,750,304 234,661 2.66 % 14,562,780 111,420 1.54 % Borrowings and other interest-bearing liabilities 2,525,034 56,854 4.49 % 2,928,819 64,873 4.43 % Total Interest-Bearing Liabilities 20,275,338 291,515 2.89 % 17,491,599 176,293 2.03 % Noninterest-Bearing liabilities: Demand deposits 5,260,550 6,329,701 Other liabilities 717,623 617,252 Total Liabilities 26,253,511 24,438,552 Shareholders' equity 2,859,808 2,630,484 Total Liabilities and Shareholders' Equity $ 29,113,319 $ 27,069,036 Net interest income/net interest margin (fully taxableequivalent) 457,805 3.37 % 437,258 3.46 % Tax equivalent adjustment (9,148) (8,819) Net Interest Income $ 448,657 $ 428,439 (1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. (2) Average balances include non-performing loans. (3) Average balances include amortized historical cost for AFS; the related unrealized holding gains (losses) are included in other assets. (3) ACL - loans relates to the ACL for net loans and does not include the ACL related to OBS credit exposures, which is included in other liabilities. FULTON FINANCIAL CORPORATION AVERAGE LOANS, DEPOSITS AND BORROWINGS DETAIL (UNAUDITED) (dollars in thousands) Six months ended June 30 2024 2023 Loans, by type: Real estate - commercial mortgage $ 8,562,077 $ 7,748,356 Commercial and industrial 4,685,383 4,598,097 Real estate - residential mortgage 5,665,518 4,900,182 Real estate - home equity 1,078,344 1,076,270 Real estate - construction 1,335,348 1,291,299 Consumer 703,353 742,445 Leases and other loans(1) 327,949 309,130 Total Net Loans $ 22,357,972 $ 20,665,779 Deposits, by type: Noninterest-bearing demand $ 5,260,550 $ 6,329,701 Interest-bearing demand 6,338,513 5,431,696 Savings 6,989,186 6,551,470 Total demand and savings 18,588,249 18,312,867 Brokered 1,103,356 698,644 Time 3,319,249 1,880,970 Total Deposits $ 23,010,854 $ 20,892,481 Borrowings, by type: Federal funds purchased $ 103,148 $ 592,753 Federal Home Loan Bank advances 868,308 1,070,148 Senior debt and subordinated debt 535,567 539,817 Other borrowings 1,018,011 726,101 Total Borrowings $ 2,525,034 $ 2,928,819 (1) Includes equipment lease financing, overdraft and net origination fees and costs. FULTON FINANCIAL CORPORATION ASSET QUALITY INFORMATION (UNAUDITED) (dollars in thousands) Three months ended Six months ended June 30 Jun 30 Mar 31 Dec 31 Sep 30 June 30 Jun 30 Jun 30 2024 2024 2023 2023 2023 2024 2023 Allowance for credit losses related to net loans: Balance at beginning of period $ 297,888 $ 293,404 $ 292,739 $ 287,442 $ 278,695 $ 293,404 $ 269,366 CECL day 1 provision expense(1) 23,444 — — — — 23,444 — Initial purchased credit deteriorated allowance for creditlosses 55,906 — — — — 55,906 — Loans charged off: Real estate - commercial mortgage (7,853) (26) (3,547) (860) (230) (7,879) (13,592) Commercial and industrial (2,955) (7,632) (3,397) (3,220) (2,017) (10,587) (2,629) Real estate - residential mortgage (35) (251) — — (62) (286) (62) Consumer and home equity (1,766) (2,238) (2,192) (1,803) (1,313) (4,004) (3,519) Real estate - construction — — — — — — — Leases and other loans(2) (1,398) (805) (1,096) (1,396) (1,165) (2,203) (1,888) Total loans charged off (14,007) (10,952) (10,232) (7,279) (4,787) (24,959) (21,690) Recoveries of loans previously charged off: Real estate - commercial mortgage 146 152 160 101 29 298 815 Commercial and industrial 796 1,248 779 620 988 2,044 2,074 Real estate - residential mortgage 122 116 278 37 58 238 106 Consumer and home equity 1,161 676 555 1,023 959 1,837 1,620 Real estate - construction 233 — 87 — 569 233 771 Leases and other loans(2) 247 162 374 400 213 409 329 Recoveries of loans previously charged off 2,705 2,354 2,233 2,181 2,816 5,059 5,715 Net loans charged off (11,302) (8,598) (7,999) (5,098) (1,971) (19,900) (15,975) Provision for credit losses(1) 10,005 13,082 8,664 10,395 10,718 23,087 34,051 Balance at end of period $ 375,941 $ 297,888 $ 293,404 $ 292,739 $ 287,442 $ 375,941 $ 287,442 Net charge-offs to average loans 0.19 % 0.16 % 0.15 % 0.10 % 0.04 % 0.18 % 0.15 % Provision for credit losses related to OBS Credit Exposures Provision for credit losses(1) $ (1,393) $ (2,157) $ 1,144 $ (458) $ (971) $ (3,550) $ 240 NON-PERFORMING ASSETS: Non-accrual loans $ 135,367 $ 129,628 $ 121,620 $ 113,022 $ 123,280 Loans 90 days past due and accruing 26,962 26,521 31,721 27,962 24,415 Total non-performing loans 162,329 156,149 153,341 140,984 147,695 Other real estate owned 1,444 277 896 2,549 3,881 Total non-performing assets $ 163,773 $ 156,426 $ 154,237 $ 143,533 $ 151,576 NON-PERFORMING LOANS, BY TYPE: Commercial and industrial $ 50,817 $ 44,118 $ 41,020 $ 33,365 $ 30,588 Real estate - commercial mortgage 46,343 47,891 46,527 44,058 55,048 Real estate - residential mortgage 40,955 40,685 42,029 40,560 39,157 Consumer and home equity 11,589 10,172 10,878 11,580 10,469 Leases and other loans(2) 9,993 10,135 10,011 10,744 11,334 Real estate - construction 2,632 3,148 2,876 677 1,099 Total non-performing loans $ 162,329 $ 156,149 $ 153,341 $ 140,984 $ 147,695 (1) The sum of these amounts are reflected in the provision for credit losses in the Condensed Consolidated Statements of Income. (2) Includes equipment lease financing, overdraft and net origination fees and costs. FULTON FINANCIAL CORPORATION SUMMARY OF ASSETS ACQUIRED AND LIABILITIES ASSUMED IN ACQUISITION (UNAUDITED) (dollars in thousands) as of April 26, 2024 AssetsAcquired/LiabilitiesAssumed Fair Value Adjustments Adjusted AssetsAcquired/Liabilities Assumed Cash payment received from FDIC $ 809,920 $ — $ 809,920 Assets acquired: Cash and due from banks 208,451 — 208,451 Other interest-earning assets 37,931 — 37,931 Investment securities 1,961,099 (22,528) 1,938,571 Net loans 2,883,930 (378,890) 2,505,040 Net premises and equipment 2,669 (1,699) 970 Accrued interest receivable 16,164 — 16,164 Goodwill and intangible assets — 92,600 92,600 Other assets 11,715 67 11,782 Total Assets $ 5,121,959 $ (310,450) $ 4,811,509 Liabilities assumed: Deposits 4,112,325 — 4,112,325 Borrowings 1,434,846 1,130 1,435,976 Other liabilities 10,771 1,088 11,859 Total Liabilities $ 5,557,942 $ 2,218 $ 5,560,160 Gain on acquisition, before tax $ 61,269 Gain on acquisition, net of tax $ 47,392 FULTON FINANCIAL CORPORATION RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) (dollars in thousands, except per share and share data) Explanatory note: This press release contains supplemental financial information, as detailed below, that has been derived by methods other than GAAP. The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparativeinformation to assess trends in the Corporation's results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Management believes that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate the Corporation's results. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable tosimilarly titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow: Three months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 2024 2024 2023 2023 2023 Operating net income available to common shareholders Net income available to common shareholders $ 92,413 $ 59,379 $ 61,701 $ 69,535 $ 77,045 Plus: Core deposit intangible amortization 4,556 441 441 441 912 Plus: Acquisition-related expense 13,803 — — — — Less: Non-PCD credit-related interest income from acquisition (571) — — — — Plus: CECL day 1 provision expense 23,444 — — — — Plus: Interest rate derivative transition valuation(1) (137) (151) (1,102) 2,958 — Less: Gain on acquisition, net of tax (47,392) — — — — Plus: Loss on securities restructuring 20,282 — — — — Less: Gain on sale-leaseback (20,266) — — — — Plus: FDIC special assessment — 956 6,494 — — Plus: FultonFirst implementation and asset disposals 6,323 6,329 3,197 — — Less: Tax impact of adjustments (9,961) (1,591) (1,896) (714) (192) Operating net income available to common shareholders (numerator) $ 82,494 $ 65,363 $ 68,835 $ 72,220 $ 77,765 Weighted average shares (diluted) (denominator) 176,934 164,520 165,650 166,023 167,191 Operating net income available to common shareholders, per share (diluted) $ 0.47 $ 0.40 $ 0.42 $ 0.43 $ 0.47 Common shareholders' equity (tangible), per share Shareholders' equity $ 3,101,609 $ 2,757,679 $ 2,760,139 $ 2,566,693 $ 2,642,152 Less: Preferred stock (192,878) (192,878) (192,878) (192,878) (192,878) Less: Goodwill and intangible assets (648,026) (560,114) (560,687) (561,284) (561,885) Tangible common shareholders' equity (numerator) $ 2,260,705 $ 2,004,687 $ 2,006,574 $ 1,812,531 $ 1,887,389 Shares outstanding, end of period (denominator) 181,831 162,087 163,801 164,084 166,097 Common shareholders' equity (tangible), per share $ 12.43 $ 12.37 $ 12.25 $ 11.05 $ 11.36 (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. (2) Results are annualized. Three months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 2024 2024 2023 2023 2023 Operating return on average assets (2) Net income $ 94,975 $ 61,941 $ 64,263 $ 72,097 $ 79,607 Plus: Core deposit intangible amortization 4,556 441 441 441 912 Plus: Acquisition-related expense 13,803 — — — — Less: Non-PCD credit-related interest income from acquisition (571) — — — — Plus: CECL day 1 provision expense 23,444 — — — — Plus: Interest rate derivative transition valuation(1) (137) (151) (1,102) 2,958 — Less: Gain on acquisition, net of tax (47,392) — — — — Plus: Loss on securities restructuring 20,282 — — — — Less: Gain on sale-leaseback (20,266) — — — — Plus: FDIC special assessment — 956 6,494 — — Plus: FultonFirst implementation and asset disposals 6,323 6,329 3,197 — — Less: Tax impact of adjustments (9,961) (1,591) (1,896) (714) (192) Operating net income (numerator) $ 85,056 $ 67,925 $ 71,397 $ 74,782 $ 80,327 Total average assets $ 30,774,891 $ 27,427,626 $ 27,397,671 $ 27,377,836 $ 27,235,567 Less: Average net core deposit intangible (68,234) (4,666) (5,106) (5,548) (6,417) Total operating average assets (denominator) $ 30,706,657 $ 27,422,960 $ 27,392,565 $ 27,372,288 $ 27,229,150 Operating return on average assets 1.11 % 1.00 % 1.03 % 1.08 % 1.18 % Operating return on average common shareholders' equity (tangible) (2) Net income available to common shareholders $ 92,413 $ 59,379 $ 61,701 $ 69,535 $ 77,045 Plus: Intangible amortization 4,688 573 597 601 1,072 Plus: Acquisition-related expense 13,803 — — — — Less: Non-PCD credit-related interest income from acquisition (571) — — — — Plus: CECL day 1 provision expense 23,444 — — — — Plus: Interest rate derivative transition valuation(1) (137) (151) (1,102) 2,958 — Less: Gain on acquisition, net of tax (47,392) — — — — Plus: Loss on securities restructuring 20,282 — — — — Less: Gain on sale-leaseback (20,266) — — — — Plus: FDIC special assessment — 956 6,494 — — Plus: FultonFirst implementation and asset disposals 6,323 6,329 3,197 — — Less: Tax impact of adjustments (9,989) (1,618) (1,929) (747) (225) Adjusted net income available to common shareholders (numerator) $ 82,598 $ 65,468 $ 68,958 $ 72,347 $ 77,892 Average shareholders' equity $ 2,952,671 $ 2,766,945 $ 2,618,024 $ 2,645,977 $ 2,647,464 Less: Average preferred stock (192,878) (192,878) (192,878) (192,878) (192,878) Less: Average goodwill and intangible assets (624,471) (560,393) (560,977) (561,578) (563,146) Average tangible common shareholders' equity (denominator) $ 2,135,322 $ 2,013,674 $ 1,864,169 $ 1,891,521 $ 1,891,440 Operating return on average common shareholders' equity (tangible) 15.56 % 13.08 % 14.68 % 15.17 % 16.52 % (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. (2) Results are annualized. Three months ended Jun 30 Mar 31 Dec 31 Sep 30 June 30 2024 2024 2023 2023 2023 Tangible common equity to tangible assets (TCE Ratio) Shareholders' equity $ 3,101,609 $ 2,757,679 $ 2,760,139 $ 2,566,693 $ 2,642,152 Less: Preferred stock (192,878) (192,878) (192,878) (192,878) (192,878) Less: Goodwill and intangible assets (648,026) (560,114) (560,687) (561,284) (561,885) Tangible common shareholders' equity (numerator) $ 2,260,705 $ 2,004,687 $ 2,006,574 $ 1,812,531 $ 1,887,389 Total assets $ 31,769,813 $ 27,642,957 $ 27,571,915 $ 27,375,177 $ 27,403,163 Less: Goodwill and intangible assets (648,026) (560,114) (560,687) (561,284) (561,885) Total tangible assets (denominator) $ 31,121,787 $ 27,082,843 $ 27,011,228 $ 26,813,893 $ 26,841,278 Tangible common equity to tangible assets 7.26 % 7.40 % 7.43 % 6.76 % 7.03 % Efficiency ratio Non-interest expense $ 199,488 $ 177,600 $ 180,552 $ 171,020 $ 168,018 Less: Acquisition-related expense (13,803) — — — — Less: Gain on sale-leaseback 20,266 — — — — Less: FDIC special assessment — (956) (6,494) — — Less: FultonFirst implementation and asset disposals (6,323) (6,329) (3,197) — — Less: Intangible amortization (4,688) (573) (597) (601) (1,072) Less: Debt extinguishment — — 720 — — Non-interest expense (numerator) $ 194,940 $ 169,742 $ 170,984 $ 170,419 $ 166,946 Net interest income $ 241,720 $ 206,937 $ 212,006 $ 213,842 $ 212,852 Tax equivalent adjustment 4,556 4,592 4,549 4,442 4,405 Plus: Total non-interest income 92,994 57,140 59,378 55,961 60,585 Plus: Interest rate derivative transition valuation(1) (137) (151) (1,102) 2,958 — Less: Non-PCD credit-related interest income from acquisition (571) — — — — Less: Gain on acquisition, net of tax (47,392) — — — — Plus: Investment securities (gains) losses, net 20,282 — 752 — 4 Total revenue (denominator) $ 311,452 $ 268,518 $ 275,583 $ 277,203 $ 277,846 Efficiency ratio 62.6 % 63.2 % 62.0 % 61.5 % 60.1 % Operating non-interest expense to total average assets Non-interest expense $ 199,488 $ 177,600 $ 180,552 $ 171,020 $ 168,018 Less: Amortization of tax credit investments — — — — — Less: Intangible amortization (4,688) (573) (597) (601) (1,072) Less: Acquisition-related expense (13,803) — — — — Less: Gain on sale-leaseback 20,266 — — — — Less: FDIC special assessment — (956) (6,494) — — Less: FultonFirst implementation and asset disposals (6,323) (6,329) (3,197) — — Non-interest expense (numerator) $ 194,940 $ 169,742 $ 170,264 $ 170,419 $ 166,946 Total average assets (denominator) $ 30,774,891 $ 27,427,626 $ 27,397,671 $ 27,377,836 $ 27,235,567 Operating non-interest expenses to total average assets 2.55 % 2.49 % 2.47 % 2.47 % 2.46 % (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. (2) Results are annualized. Note: numbers in this report may not sum due to rounding. Media Contact: Lacey Dean (717) 735-8688Investor Contact: Matt Jozwiak (717) 327-2657 View original content to download multimedia: https://www.prnewswire.com/news-releases/fulton-financial-corporation-announces-second-quarter-2024-results-302198762.html SOURCE Fulton Financial Corporation

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