FULTON FINANCIAL CORP [FULT] Filings

10-Q 1 fult-20240630.htm 10-Q fult-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024, or


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-39680

FULTON FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania

23-2195389

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

One Penn Square

P. O. Box 4887

Lancaster,

Pennsylvania

17604

(Address of principal executive offices)

(Zip Code)

(717) 291-2411

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $2.50	FULT	The Nasdaq Stock Market, LLC
Depositary Shares, Each Representing 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A	FULTP	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $2.50 Par Value – 181,905,424 shares outstanding as of August 2, 2024.

FULTON FINANCIAL CORPORATION

FORM 10-Q FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2024

INDEX


Description		Page



Glossary of Terms		3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited):

(a)	Consolidated Balance Sheets - June 30 , 2024 and December 31, 2023	7

(b)	Consolidated Statements of Income - Three months and six months ended June 30 , 2024 and 2023	8

(c)	Consolidated Statements of Comprehensive Income - Three months and six months ended June 30 , 2024 and 2023	9

(d)	Consolidated Statements of Shareholders’ Equity - Three months and six months ended June 30 , 2024 and 2023	10

(e)	Consolidated Statements of Cash Flows - Six months ended June 30 , 2024 and 2023	11

(f)	Notes to Consolidated Financial Statements	12

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		36

Item 3. Quantitative and Qualitative Disclosures A bout Market Risk		61

Item 4. Controls and Procedures		64

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		64

Item 1A. Risk Factors		64

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		64

Item 3. Defaults Upon Senior Securities - (not applicable)

Item 4. Mine Safety Disclosures - (not applicable)

Item 5. Other Information		77

Item 6. Exhibits		66

Signatures		67

Note: Some numbers contained in the document may not sum due to rounding

GLOSSARY OF DEFINED ACRONYMS AND TERMS

2024 Repurchase Program

The authorization, commencing on January 1, 2024 and expiring on December 31, 2024, to repurchase up to $125 million of the Corporation's common stock; under this authorization, up to $25 million of the $125 million authorization may be used to repurchase the Corporation's preferred stock and outstanding subordinated notes

ACL

Allowance for credit losses

Acquisition Date

April 26, 2024, the date of the Republic First Transaction

AFS

Available for sale

ALCO

Asset/Liability Management Committee

AOCI

Accumulated other comprehensive (loss) income

ASC

Accounting Standards Codification

ASU

Accounting Standards Update

BHCA

Bank Holding Company Act of 1956, as amended

Blue Owl Agreement

Agreement for Purchase and Sale of Real Property with certain affiliates of Blue Owl Capital Inc.

bp or bps

Basis point(s)

Capital Rules

Regulatory capital requirements applicable to the Corporation and Fulton Bank

CDI

Core deposit intangible

CECL Day 1 Provision

Initial provision for credit losses required on non-PCD Loans acquired in the Republic First Transaction

Corporation, Company, we, our or us

Fulton Financial Corporation

Directors' Plan

Amended and Restated 2023 Director Equity Plan

Dodd-Frank Act

Dodd-Frank Wall Street Reform and Consumer Protection Act

Employee Equity Plan

2022 Amended and Restated Equity and Cash Incentive Compensation Plan

ETR

Effective tax rate

Exchange Act

Securities Exchange Act of 1934, as amended

FASB

Financial Accounting Standards Board

FDIC

Federal Deposit Insurance Corporation

Federal Reserve Board

Board of Governors of the Federal Reserve System

FHLB

Federal Home Loan Bank

FRB

Federal Reserve Bank

FTE

Fully taxable-equivalent

Fulton Bank or the Bank

Fulton Bank, N.A.

GAAP

U.S. generally accepted accounting principles

HTM

Held to maturity

LGD

Loss given default

LIBOR

London Interbank Offered Rate

LTV

Loan-to-value

Management's Discussion

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Merger

The acquisition by the Corporation of Prudential Bancorp that was completed effective as of July 1, 2022

MSRs

Mortgage servicing rights

Net loans

Loan and lease receivables (net of unearned income)

NIM

Net interest margin

N/M

Not meaningful

OBS

Off-balance-sheet

OCI

Other comprehensive income

OREO

Other real estate owned

PCD Loans

Loans purchased with more-than-insignificant credit deterioration

Probability of default

Pension Plan

Defined Benefit Pension Plan

Postretirement Plan

Postretirement Benefits Plan

Prudential Bancorp

Prudential Bancorp, Inc.

PSU

Performance-based restricted stock unit

Republic First Bank

Republic First Bank, doing business as Republic Bank

Republic First Assets and Liabilities

The assets acquired and liabilities assumed of Republic First Bank by Fulton Bank in connection with the Republic First Transaction

Republic First Transaction

The acquisition of substantially all of the assets and assumption of substantially all of the deposits and certain liabilities of Republic First Bank by Fulton Bank from the FDIC, as receiver for Republic First Bank

RSU

Restricted stock unit

Sale-Leaseback Transaction

Sale of 40 financial center office locations to certain affiliates of Blue Owl Capital Inc. with concurrent agreements to lease each of the locations

SBA

Small Business Administration

SEC

United States Securities and Exchange Commission

SOFR

Secured Overnight Financing Rate

TruPS

Trust Preferred Securities

FORWARD-LOOKING STATEMENTS

The Corporation has made, and may continue to make, certain forward-looking statements with respect to its 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. Many factors could affect future financial results including, without limitation:

•the impact of adverse conditions in the economy and financial markets, including increasing or elevated interest rates and elevated levels of inflation, on the performance of the Corporation's loan portfolio and demand for the Corporation's products and services;

•the potential impacts of recent events affecting the financial services industry on the Corporation, including increased competition for, and costs of, deposits and other funding sources, more stringent regulatory requirements relating to liquidity and interest rate risk management and capital adequacy and increased FDIC insurance expenses;

•the effects of actions by the federal government, including those of the Federal Reserve Board and other government agencies, that impact the money supply and market interest rates;

•the effects of market interest rates, and the relative balances of interest rate-sensitive assets to interest rate-sensitive liabilities, on NIM and net interest income;

•the composition of the Corporation's loan portfolio, including commercial mortgage loans, commercial and industrial loans and construction loans, which collectively represent a majority of the loan portfolio, may expose the Corporation to increased credit risk;

•the effects of changes in interest rates on demand for the Corporation's products and services;

•investment securities gains and losses, including declines in the fair value of securities, which may result in changes to earnings or shareholders' equity;

•the effects of changes in interest rates or disruptions in liquidity markets on the Corporation's sources of funding;

•capital and liquidity strategies, including the Corporation's ability to comply with applicable capital and liquidity requirements, and the Corporation's ability to generate capital internally or raise capital on favorable terms;

•the effects of competition on deposit rates and growth, loan rates and growth and NIM;

•possible goodwill impairment charges;

•the impact of operational risks, including the risk of human error, inadequate or failed internal processes and systems, computer and telecommunications systems failures, faulty or incomplete data and an inadequate risk management framework;

•the loss of, or failure to safeguard, confidential or proprietary information;

•the Corporation's failure to identify and adequately and promptly address cybersecurity risks, including data breaches and cyberattacks;

•the impact of failures from third-party vendors upon which the Corporation relies to perform in accordance with contractual arrangements and the effects of concerns about other financial institutions on the Corporation;

•the potential to incur losses in connection with repurchase and indemnification payments related to sold loans;

•the potential effects of climate change on the Corporation's business and results of operations;

•the potential effects of increases in non-performing assets, which may require the Corporation to increase the ACL, charge-off loans and incur elevated collection and carrying costs related to such non-performing assets;

•the determination of the ACL, which depends significantly upon assumptions and judgments with respect to a variety of factors, including the performance of the loan portfolio, the weighted-average remaining lives of different classifications of loans within the loan portfolio and current and forecasted economic conditions, among other factors;

•the effects of the extensive level of regulation and supervision to which the Corporation and Fulton Bank are subject;

•changes in regulation and government policy, which could result in significant changes in banking and financial services regulation;

•the continuing impact of the Dodd-Frank Act on the Corporation's business and results of operations;

•the potential for negative consequences resulting from regulatory violations, investigations and examinations, including potential supervisory actions, the assessment of fines and penalties, the imposition of sanctions, the need to undertake remedial actions and possible damage to the Corporation's reputation;

•the effects of adverse outcomes in litigation and governmental or administrative proceedings;

•the effects of changes in U.S. federal, state or local tax laws;

•the effects of the significant amounts of time and expense associated with regulatory compliance and risk management;

•completed and potential acquisitions, including but not limited to the Republic First Transaction, may affect costs and the Corporation may not be able to successfully integrate the acquired business or realize the anticipated benefits from such acquisitions;

•the possibility that the anticipated benefits of the Republic First Transaction, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Corporation, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events;

•the Corporation's ability to successfully integrate into the Corporation's operations any assumed assets, liabilities, customers, systems, and management personnel the Corporation may acquire in connection with the Republic First Transaction, which may result in a disruption to the Corporation’s business;

•changes in the estimated fair value of the Republic First Assets and Liabilities in connection with the Republic First Transaction;

•the possibility of increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Republic First Transaction;

•potential exposure to unknown or contingent risks and liabilities the Corporation has acquired, or may acquire, or target for acquisition, including in connection with the purchase and assumption of certain assets and liabilities in connection with the Republic First Transaction;

•geopolitical conditions, including acts or threats of terrorism, actions taken by the United States or other governments in response to acts or threats of terrorism and/or military conflicts, including the war between Russia and Ukraine and escalating conflict in the Middle East, which could impact business and economic conditions in the United States and abroad;

•public health crises and pandemics and their effects on the economic and business environments in which the Corporation operates, including on the Corporation's credit quality and business operations, as well as the impact on general economic and financial market conditions;

•the Corporation's ability to achieve its growth plans;

•the Corporation's ability to attract and retain talented personnel;

•the effects of competition from financial service companies and other companies offering bank services;

•the Corporation's ability to keep pace with technological changes;

•the Corporation's reliance on its subsidiaries for substantially all of its revenues and its ability to pay dividends or other distributions;

•the effects of negative publicity on the Corporation's reputation; and

•other factors that may affect future results of the Corporation.

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per-share data)


	June 30, 2024		December 31, 2023
	(unaudited)
ASSETS
Cash and due from banks	$	333,238	$	300,343
Interest-bearing deposits with other banks	1,063,044		249,367
Cash and cash equivalents	1,396,282		549,710
FRB and FHLB stock	125,297		124,405

Loans held for sale	26,822		15,158
Investment securities
AFS, at estimated fair value	2,939,594		2,398,352
HTM, at amortized cost	1,244,433		1,267,922
Net loans	24,106,297		21,351,094
Less: ACL - loans	(375,941)		(293,404)
Loans, net	23,730,356		21,057,690
Net premises and equipment	180,642		222,881
Accrued interest receivable	120,752		107,972
Goodwill and net intangible assets	648,026		560,687
Other assets	1,357,609		1,267,138
Total Assets	$	31,769,813	$	27,571,915
LIABILITIES
Deposits:
Noninterest-bearing	$	5,609,383	$	5,314,094
Interest-bearing	19,950,271		16,223,529
Total Deposits	25,559,654		21,537,623
Borrowings:
Federal funds purchased	—		240,000
Federal Home Loan Bank advances	750,000		1,100,000
Senior debt and subordinated debt	535,741		535,384
Other borrowings	892,856		612,142
Total Borrowings	2,178,597		2,487,526
Accrued interest payable	48,757		35,083
Other liabilities	881,196		751,544
Total Liabilities	28,668,204		24,811,776
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 10,000,000 shares authorized; Series A, 200,000 shares authorized and issued as of June 30, 2024 and December 31, 2023, liquidation preference of $1,000 per share	192,878		192,878
Common stock, $2.50 par value, 600,000,000 shares authorized, 245,809,384 shares issued as of June 30, 2024 and 225,760,963 shares issued as of December 31, 2023	614,523		564,402
Additional paid-in capital	1,781,090		1,552,860
Retained earnings	1,712,646		1,619,300
Accumulated other comprehensive loss	(310,534)		(312,280)
Treasury stock, at cost, 63,978,306 shares as of June 30, 2024 and 61,959,552 shares as of December 31, 2023	(888,994)		(857,021)
Total Shareholders' Equity	3,101,609		2,760,139
Total Liabilities and Shareholders' Equity	$	31,769,813	$	27,571,915

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


(dollars in thousands, except per-share data)	Three months ended June 30				Six months ended June 30
	2024		2023		2024		2023
Interest Income
Loans, including fees	$	352,697	$	284,690	$	663,913	$	545,341
Investment securities	32,079		25,362		57,201		50,883
Other interest income	15,730		4,860		19,058		8,508
Total Interest Income	400,506		314,912		740,172		604,732
Interest Expense
Deposits	131,087		69,799		234,661		111,420
Federal funds purchased	492		9,112		2,881		15,147
Federal Home Loan Bank advances	9,799		11,826		20,748		27,299
Senior debt and subordinated debt	5,299		5,344		10,604		10,689
Other borrowings and interest-bearing liabilities	12,109		5,979		22,621		11,738
Total Interest Expense	158,786		102,060		291,515		176,293
Net Interest Income	241,720		212,852		448,657		428,439
Provision for credit losses	32,056		9,747		42,981		34,291
Net Interest Income After Provision for Credit Losses	209,664		203,105		405,676		394,148
Non-Interest Income
Wealth management	20,990		18,678		41,144		36,740
Commercial banking	21,410		23,145		40,238		40,658
Consumer banking	14,600		11,720		26,268		22,937
Mortgage banking	3,951		2,940		7,041		4,910
Gain on acquisition, net of tax	47,392		—		47,392		—
Other	4,933		4,106		8,332		7,075
Non-Interest Income Before Investment Securities (Losses) Gains, Net	113,276		60,589		170,415		112,320
Investment securities (losses) gains, net	(20,282)		(4)		(20,282)		19
Total Non-Interest Income	92,994		60,585		150,133		112,339
Non-Interest Expense
Salaries and employee benefits	110,630		94,102		206,111		183,385
Data processing and software	20,357		16,776		38,018		32,571
Net occupancy	17,793		14,374		33,943		28,812
Other outside services	16,933		10,834		30,216		20,960
FDIC insurance	6,696		4,895		12,800		9,690
Intangible amortization	4,688		1,072		5,261		1,746
Equipment	4,561		3,530		8,602		6,920
Professional fees	2,571		1,829		4,659		4,221
Marketing	2,101		1,655		4,012		3,541

Acquisition-related expenses	13,803		—		13,803		—
Other	(645)		18,951		19,662		35,790
Total Non-Interest Expense	199,488		168,018		377,087		327,636
Income Before Income Taxes	103,170		95,672		178,722		178,851
Income taxes	8,195		16,065		21,806		30,931
Net Income	94,975		79,607		156,916		147,920
Preferred stock dividends	(2,562)		(2,562)		(5,124)		(5,124)
Net Income Available to Common Shareholders	$	92,413	$	77,045	$	151,792	$	142,796

PER SHARE:
Net income available to common shareholders (basic)	$	0.53	$	0.46	$	0.90	$	0.86
Net income available to common shareholders (diluted)	0.52		0.46		0.89		0.85
Cash dividends	0.17		0.16		0.34		0.31
See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(dollars in thousands)


	Three months ended June 30				Six months ended June 30
	2024		2023		2024		2023

Net Income	$	94,975	$	79,607	$	156,916	$	147,920
Other Comprehensive Income (Loss), net of tax:
Unrealized gains (losses) on AFS investment securities
Net unrealized holding gains (losses)	(14,199)		(31,219)		(30,864)		1,422
Reclassification adjustment for securities net change realized in net income	15,688		(3)		15,688		14
Amortization of net unrealized gains on AFS securities transferred to HTM	1,403		1,501		2,790		2,979
Net unrealized gains (losses) on AFS investment securities	2,892		(29,721)		(12,386)		4,415
Unrealized gains (losses) on interest rate derivatives used in cash flow hedges
Net unrealized holding gains (losses)	2,256		(5,586)		6,553		(12,406)
Reclassification adjustment for net change realized in net income	3,891		7,010		7,790		14,153
Net unrealized gains on interest rate derivatives used in cash flow hedges	6,147		1,424		14,343		1,747
Defined benefit pension plan and postretirement benefits
Amortization of net unrecognized pension and postretirement items	(105)		3		(211)		28
Other Comprehensive Income (Loss), net of tax	8,934		(28,294)		1,746		6,190
Total Comprehensive Income	$	103,909	$	51,313	$	158,662	$	154,110

See Notes to Consolidated Financial Statements

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except per-share data)


	Preferred Stock			Common Stock			Additional		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total
	Shares Outstanding	Amount		Shares Outstanding	Amount		Paid-in Capital
Three months ended June 30, 2024
Balance at March 31, 2024	200	$	192,878	162,087	$	564,751	$	1,554,624	$	1,651,133	$	(319,468)	$	(886,239)	$	2,757,679
Net income									94,975						94,975
Other comprehensive loss											8,934				8,934
Common stock issued(1)				19,200	48,000		225,205						—		273,205
Dividend reinvestment activity				91			90						1,255		1,345

Stock-based compensation awards (repurchases)				453	1,772		1,171						(4,010)		(1,067)

Preferred stock dividend									(2,562)						(2,562)
Common stock dividends - $0.17 per share									(30,900)						(30,900)
Balance at June 30, 2024	200	$	192,878	181,831	$	614,523	$	1,781,090	$	1,712,646	$	(310,534)	$	(888,994)	$	3,101,609

Three months ended June 30, 2023
Balance at March 31, 2023	200	$	192,878	165,396	$	561,853	$	1,544,758	$	1,491,701	$	(350,992)	$	(821,200)	$	2,618,998
Net income									79,607						79,607
Other comprehensive loss											(28,294)				(28,294)

Common stock issued(2)				46	115		474						6		595
Dividend reinvestment activity				108			(68)						1,501		1,433

Stock-based compensation awards (repurchases)				547	2,169		542						(3,753)		(1,042)

Preferred stock dividend									(2,562)						(2,562)
Common stock dividends - $0.16 per share									(26,583)						(26,583)
Balance at June 30, 2023	200	$	192,878	166,097	$	564,137	$	1,545,706	$	1,542,163	$	(379,286)	$	(823,446)	$	2,642,152

Six months ended June 30, 2024
Balance at December 31, 2023	200	$	192,878	163,801	$	564,402	$	1,552,860	$	1,619,300	$	(312,280)	$	(857,021)	$	2,760,139
Net income									156,916						156,916
Other comprehensive income											1,746				1,746
Common stock issued(1)				19,279	48,198		226,100						12		274,310
Dividend reinvestment activity				178			274						2,476		2,750

Stock-based compensation awards (repurchases)				507	1,923		1,856						(4,113)		(334)
Acquisition of treasury stock				(1,934)									(30,348)		(30,348)
Preferred stock dividend									(5,124)						(5,124)
Common stock dividends - $0.34 per share									(58,446)						(58,446)
Balance at June 30, 2024	200	$	192,878	181,831	$	614,523	$	1,781,090	$	1,712,646	$	(310,534)	$	(888,994)	$	3,101,609

Six months ended June 30, 2023
Balance at December 31, 2022	200	$	192,878	167,599	$	561,511	$	1,541,840	$	1,450,758	$	(385,476)	$	(781,754)	$	2,579,757
Net income									147,920						147,920
Other comprehensive loss											6,190				6,190
Common stock issued(2)				135	338		1,472						20		1,830
Dividend reinvestment activity				189			172						2,630		2,802

Stock-based compensation awards (repurchases)				586	2,288		2,222						(3,893)		617
Acquisition of treasury stock				(2,412)									(40,449)		(40,449)
Preferred stock dividend									(5,124)						(5,124)
Common stock dividends - $0.31 per share									(51,391)						(51,391)
Balance at June 30, 2023	200	$	192,878	166,097	$	564,137	$	1,545,706	$	1,542,163	$	(379,286)	$	(823,446)	$	2,642,152

See Notes to Consolidated Financial Statements

(1) Issuance of common stock includes the issuance of 19,166,667 shares of common stock in an underwritten public offering that closed on May 1, 2024, issuance in connection with the Corporation’s Employee Stock Purchase Plan and exercised stock options.

(2) Issuance of common stock includes issuance in connection with the Corporation's Employee Stock Purchase Plan and exercised stock options.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


(dollars in thousands)	Six months ended June 30
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	156,916	$	147,920
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	42,981		34,291
Depreciation and amortization of premises and equipment	15,673		14,675
Net amortization of investment securities premiums	822		5,829
Investment securities losses (gains), net	20,282		(19)
Gain on sales of mortgage loans held for sale	(4,233)		(2,277)
Proceeds from sales of mortgage loans held for sale	243,130		132,609
Originations of mortgage loans held for sale	(250,561)		(137,741)
Intangible amortization	5,261		1,746
Amortization of issuance costs and discounts on long-term borrowings	357		360


Gain on acquisition, net of tax	(47,392)		—
Loss on disposal of premises and equipment	222		—
Gain on Sale-Leaseback Transaction	(20,266)		—
Stock-based compensation	3,779		4,240
Net change in deferred federal income tax	14,491		19,232
Net change in accrued salaries and benefits	(134)		(12,163)
Net change in life insurance cash surrender value	(7,051)		(20,433)
Other changes, net	146,747		28,641
Total adjustments	164,108		68,990
Net cash provided by operating activities	321,024		216,910
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of AFS securities	2,261,028		80,666
Proceeds from principal repayments and maturities of AFS securities	120,714		55,102
Proceeds from principal repayments and maturities of HTM securities	26,542		29,815
Purchase of AFS securities	(1,050,738)		(64,996)

Net change in FRB and FHLB stock	(892)		5,968

Net change in loans	(214,157)		(781,310)
Net purchases of premises and equipment	(3,542)		(11,019)
Settlement of bank-owned life insurance	963		45
Proceeds from Sale-Leaseback Transaction	51,123		—
Net cash received for acquisition	1,018,371		—
Net change in tax credit investments	(24,292)		(18,436)
Net cash provided (used) by investing activities	2,185,120		(704,165)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand and savings deposits	(11,999)		(796,291)
Net change in time deposits and brokered deposits	(78,295)		1,353,293
Net change in other borrowings	(1,745,262)		(152,453)


Net proceeds from issuance of common stock	270,197		1,009
Dividends paid	(63,865)		(55,073)
Acquisition of treasury stock	(30,348)		(40,449)
Net cash (used) provided by financing activities	(1,659,572)		310,036
Net increase (decrease) in Cash and Cash Equivalents	846,572		(177,219)
Cash and Cash Equivalents at Beginning of Period	549,710		681,921
Cash and Cash Equivalents at End of Period	$	1,396,282	$	504,702








Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	277,841	$	162,377
Income taxes	19,308		15,183
Supplemental Schedule of Certain Noncash Activities:

Business Combination

Fair value of tangible assets acquired	$	4,718,909	$	—
Intangible assets	92,600		—
Liabilities assumed	5,560,160		—
PCD Loans credit discount	55,906		—


See Notes to Consolidated Financial Statements

FULTON FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 – Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of the Corporation have been prepared in conformity with GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as of the date of the financial statements as well as revenues and expenses during the period. Actual results could differ from those estimates. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023. Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The Corporation evaluates subsequent events through the date of filing of this Quarterly Report on Form 10-Q with the SEC for potential recognition or disclosure in the Consolidated Financial Statements.

Significant Accounting Policies

The significant accounting policies used in preparation of the Consolidated Financial Statements are disclosed in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023. Those significant accounting policies are unchanged at June 30, 2024.

Recently Adopted Accounting Standards

In June 2022, FASB issued ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03"). This update clarifies how the fair value of equity securities subject to contractual sale restrictions is determined and requires additional qualitative and quantitative disclosures for equity securities with contractual sale restrictions. The Corporation adopted ASU 2022-03 on January 1, 2024, and it did not have a material impact on its consolidated financial statements.

In March 2023, FASB issued ASU 2023-01 Leases (Topic 842): Common Control Arrangements ("ASU 2023-01"). This update clarifies guidance for leases between related parties under common control. The Corporation adopted ASU 2023-01 on January 1, 2024, and it did not have a material impact on its consolidated financial statements.

Recently Issued Accounting Standards

In November 2023, FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). This update requires public entities with reportable segments to provide additional and more detailed disclosures. The Corporation will adopt ASU 2023-07 on December 15, 2024. The Corporation is not currently required to report segment information and, as such, does not expect the adoption of ASU 2023-07 to have an impact on its consolidated financial statements.

In December 2023, FASB issued ASU 2023-08 Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"). This update provides guidance for crypto assets to be carried at fair value and requires additional disclosures. The Corporation will adopt ASU 2023-08 on January 1, 2025. The Corporation does not expect the adoption of ASU 2023-08 to have an impact on its consolidated financial statements. The Corporation currently does not hold crypto assets.

In December 2023, FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). This update requires companies to disclose specific categories in the income tax rate reconciliation and requires additional information for certain reconciling items. The Corporation will adopt ASU 2023-09 on January 1, 2025. The Corporation does not expect the adoption of ASU 2023-09 to have an impact on its consolidated financial statements.

In March 2024, FASB issued ASU 2024-01 Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards ("ASU 2024-01"). This update provides guidance for profits interest and similar awards. The Corporation will adopt ASU 2024-01 on January 1, 2025

FULTON FINANCIAL CORP [FULT] Filings

FULTON FINANCIAL CORP [FULTP] Filings