Fulton Financial Corporation (NASDAQ:FULT) ("Fulton" or the "Corporation") reported net income available to common shareholders of $59.4 million, or $0.36 per diluted share, for the first quarter of 2024, a decrease of $2.3 million, or 3.8%, in comparison to the fourth quarter of 2023. Operating net income available to common shareholders for the three months ended March 31, 2024 was $65.4 million, or $0.40 per diluted share⁽¹⁾, a decrease of $3.5 million, or 5.0% in comparison to the fourth quarter of 2023.

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"We are pleased with our first quarter results, which are a good start to the year; operating earnings were solid, deposit growth outpaced loan growth during the quarter, net interest margin was in line with our expectations, and asset quality remained stable," said Curtis J. Myers, Chairman and CEO of Fulton Financial Corporation. "We are focused and making progress on our strategic initiatives."

Net Interest Income and Balance Sheet

Net interest income for the first quarter of 2024 was $206.9 million, a decrease of $5.1 million in comparison to the fourth quarter of 2023, due to slight decreases in both average interest-earning assets and the net interest margin.

Total average interest-earning assets for the first quarter of 2024 were $25.6 billion, a decrease of $41.0 million from the fourth quarter of 2023 primarily driven by a decrease in average investment securities and average other interest-earning assets of $137.0 million and $18.3 million, respectively, partially offset by an increase in average net loans of $114.3 million.

Total average interest-bearing liabilities increased $347.9 million to $18.9 billion in the first quarter of 2024 in comparison to $18.6 billion in the fourth quarter of 2023. The increase in average interest-bearing liabilities was driven by an increase in the average balance of total interest-bearing deposits and the average balance of borrowings and other interest-bearing liabilities of $281.2 million and $66.6 million, respectively.

⁽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.

The net interest margin for the first quarter of 2024 decreased four basis points to 3.32% in comparison to 3.36% in the fourth quarter of 2023. The decrease was primarily due to an increase in the rate on average interest-bearing deposits and a shift in the funding mix from noninterest-bearing demand deposits to interest-bearing deposits, partially offset by higher loan yields and a lower rate on average borrowings and other interest-bearing liabilities.

A seven basis point increase in the yield on average net loans and an increase in the average balance of net loans of $114.3 million in the first quarter of 2024 drove an increase in interest income of $1.5 million to $339.7 million in comparison to $338.1 million in the fourth quarter of 2023.

Interest expense on interest-bearing liabilities for the first quarter of 2024 increased by $6.6 million to $132.7 million in comparison to $126.1 million in the fourth quarter of 2023. The linked-quarter increase in interest expense in the first quarter of 2024 was primarily due to an increase in the rate on average interest-bearing deposits of 16 basis points, a decline of $379.0 million in the average balance of noninterest-bearing deposits and an increase in the average balance of interest-bearing deposits of $281.2 million in comparison to the fourth quarter of 2023, partially offset by a decrease in the rate on borrowings and other interest-bearing liabilities of 12 basis points.

For the first quarter of 2024, net interest income was $206.9 million, a decrease of $8.7 million, or 4.0%, in comparison to the first quarter of 2023. Interest income for the first quarter of 2024 increased by $49.8 million to $339.7 million in comparison to $289.8 million in the first quarter of 2023, primarily driven by rising interest rates resulting in an increase in interest income from net loans of $50.6 million.

Total average interest-earning assets for the first quarter of 2024 increased by $357.0 million from the first quarter of 2023. Average net loans for the first quarter of 2024 were $21.4 billion, an increase of $0.9 billion from the same period in 2023. Compared to the first quarter of 2023, average investment securities decreased $305.9 million and average other interest-earning assets decreased $244.1 million in the first quarter of 2024.

Total average interest-bearing liabilities for the first quarter of 2024 increased $1.9 billion to $18.9 billion in comparison to $17.0 billion in the first quarter of 2023, driven by an increase in the average balance of total interest-bearing deposits of $2.4 billion, partially offset by a decrease in the average balance of borrowings and other interest-bearing liabilities of $0.5 billion.

Increases in the average balance of net loans of $0.9 billion and yields on net loans of 69 basis points in the first quarter of 2024 compared to the first quarter of 2023 each contributed to the increase in interest income.

Interest expense on interest-bearing liabilities for the first quarter of 2024 increased by $58.5 million to $132.7 million in comparison to $74.2 million in the first quarter of 2023, primarily driven by rising interest rates resulting in an increase to interest expense from interest-bearing deposits of $62.0 million. A decrease in the average balance of noninterest-bearing deposits of $1.6 billion and an increase in the average balance of interest-bearing deposits of $2.4 billion, in the first quarter of 2024 in comparison to the first quarter of 2023 also contributed to the increase in interest expense.

Asset Quality

The provision for credit losses was $10.9 million in the first quarter of 2024 compared to $9.8 million in the fourth quarter of 2023 and $24.5 million in the first quarter of 2023. The provision for credit losses of $10.9 million recorded in the first quarter of 2024 was primarily due to net charge-offs of $8.6 million and loan growth.

Non-performing assets were $156.4 million, or 0.57% of total assets, at March 31, 2024, in comparison to $154.2 million, or 0.56% of total assets, at December 31, 2023, and $167.9 million, or 0.62% of total assets, at March 31, 2023.

Net charge-offs for the first quarter of 2024 were 0.16% of total average loans in comparison to 0.15% and 0.27% in the fourth quarter of 2023 and the first quarter of 2023, respectively.

Non-interest Income

Non-interest income before investment securities gains (losses) in the first quarter of 2024 was $57.1 million, a decrease of $3.0 million, or 5.0%, from the fourth quarter of 2023. The decrease in non-interest income was due to a $2.0 million decrease in commercial customer interest rate swap fee income, reflected in capital markets, a $2.2 million decrease in other non-interest income (including a $0.9 million decrease in income from equity method investments and a $1.0 million net change from market movements in our commercial customer interest rate swap program resulting from the reference rate transition from the London Inter-Bank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR")). These decreases were partially offset by increases in wealth management revenues due to an increase in assets under management and mortgage banking income due to higher loan sales volumes and higher spreads.

Compared to the first quarter of 2023, non-interest income before investment securities gains (losses) increased $5.4 million, or 10.5%, from $51.7 million. The increase in non-interest income was primarily due to increases of $2.1 million in wealth management revenues due to an increase in assets under management, $1.3 million in commercial banking income, $1.1 million in mortgage banking income and $0.5 million in consumer banking income. The increase in commercial banking income was primarily due to increases of $0.8 million in cash management fee income and $0.3 million in gains on sale from Small Business Administration loans, reflected in other commercial banking income. The increase in mortgage banking income was driven by higher loan sale volumes and higher spreads.

Non-interest Expense

Non-interest expense was $177.6 million in the first quarter of 2024, a decrease of $3.0 million, or 1.6%, compared to $180.6 million in the fourth quarter of 2023. The decrease was primarily due to a $5.0 million decrease in FDIC insurance expense, which included special assessment charges of $1.0 million in the first quarter of 2024 and $6.5 million in the fourth quarter of 2023, assessed to recover the loss to the Deposit Insurance Fund in connection with the closures of certain banks in 2023. The decrease was partially offset by an increase in FultonFirst implementation costs and loss on asset disposals of $3.1 million. The FultonFirst implementation costs and loss on asset disposals of $6.3 million in the first quarter of 2024 included a $3.6 million loss on disposal of assets, reflected in other non-interest expense, $2.5 million of consulting service expense, included in other outside services, and $0.2 million of severance expense, reflected in salaries and employee benefits expense. The FultonFirst implementation costs and loss on asset disposals of $3.2 million in the fourth quarter of 2023 included $2.6 million of consulting services, reflected in other outside services, and $0.6 million of severance expense, included in salaries and employee benefits expense.

Excluding FultonFirst implementation costs and loss on asset disposals, and FDIC expense noted above in the first quarter of 2024 and the fourth quarter of 2023, non-interest expense decreased $0.5 million, or 0.3%, compared to the fourth quarter of 2023, largely due to decreases in marketing expense of $1.6 million and salaries and employee benefits expense of $1.4 million, partially offset by increases in snow removal costs of $1.1 million, included in net occupancy expense, $0.7 million in data processing and software expense and a debt extinguishment gain of $0.7 million recorded in the fourth quarter of 2023. The $1.6 million decrease in marketing expense was the result of higher costs incurred in the fourth quarter of 2023 related to a targeted customer deposit acquisition program and brand marketing campaigns in growth markets. The $1.4 million decrease in salaries and benefits expense was primarily due to a decrease in healthcare costs and variable incentive expenses, partially offset by an increase in payroll taxes due to the reset of payroll tax caps.

Compared to the first quarter of 2023, excluding the FultonFirst implementation costs and loss on asset disposals of $6.3 million discussed above, non-interest expense increased $11.7 million, or 7.3%. The increase was primarily due to increases of $6.0 million in salaries and employee benefits expense, $1.9 million in data processing and software expense primarily due to technology investments made in 2023, $1.7 million in net occupancy expense driven by snow removal costs, $1.3 million in FDIC insurance, which includes the $1.0 million special assessment charge noted above, and $0.7 million in other outside services expense. The $6.0 million increase in salaries and benefits expense was primarily due to merit increases and healthcare costs.

Income Tax Expense

For the first quarter of 2024 the effective tax rate was 18.0% in comparison to 18.5% for the full-year of 2023.

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 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
	Mar 31			Dec 31			Sep 30			Jun 30			Mar 31
		2024			2023			2023			2023			2023
Ending Balances
Investment securities	$	3,783,392		$	3,666,274		$	3,698,601		$	3,867,334		$	3,950,101
Net loans		21,444,483			21,351,094			21,177,508			21,044,685			20,670,188
Total assets		27,642,957			27,571,915			27,375,177			27,403,163			27,112,176
Deposits		21,741,950			21,537,623			21,421,589			21,206,540			21,316,584
Shareholders' equity		2,757,679			2,760,139			2,566,693			2,642,152			2,618,998

Average Balances
Investment securities		3,672,844			3,665,261			3,834,824			3,916,130			3,964,615
Net loans		21,370,033			21,255,779			21,121,277			20,866,235			20,463,096
Total assets		27,427,626			27,397,671			27,377,836			27,235,567			26,900,653
Deposits		21,378,754			21,476,548			21,357,295			21,207,143			20,574,323
Shareholders' equity		2,766,945			2,618,024			2,645,977			2,647,464			2,613,316

Income Statement
Net interest income		206,937			212,006			213,842			212,852			215,587
Provision for credit losses		10,925			9,808			9,937			9,747			24,544
Non-interest income		57,140			59,378			55,961			60,585			51,753
Non-interest expense		177,600			180,552			171,020			168,018			159,616
Income before taxes		75,552			81,024			88,846			95,672			83,180
Net income available to common shareholders		59,379			61,701			69,535			77,045			65,752
Pre-provision net revenue⁽¹⁾		94,184			100,050			102,342			106,495			108,375

Per Share
Net income available to common shareholders (basic)	$	0.36		$	0.38		$	0.42		$	0.46		$	0.39
Net income available to common shareholders (diluted)	$	0.36		$	0.37		$	0.42		$	0.46		$	0.39
Operating net income available to common shareholders⁽¹⁾	$	0.40		$	0.42		$	0.43		$	0.47		$	0.39
Cash dividends	$	0.17		$	0.17		$	0.16		$	0.16		$	0.15
Common shareholders' equity	$	15.82		$	15.67		$	14.47		$	14.75		$	14.67
Common shareholders' equity (tangible)⁽¹⁾	$	12.37		$	12.25		$	11.05		$	11.36		$	11.26
Weighted average shares (basic)		162,706			163,975			164,566			165,854			166,605
Weighted average shares (diluted)		164,520			165,650			166,023			167,191			168,401

⁽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
	Mar 31			Dec 31			Sep 30			Jun 30			Mar 31
		2024			2023			2023			2023			2023
Asset Quality
Net charge-offs to average loans		0.16	%		0.15	%		0.10	%		0.04	%		0.27	%
Non-performing loans to total net loans		0.73	%		0.72	%		0.67	%		0.70	%		0.80	%
Non-performing assets to total assets		0.57	%		0.56	%		0.52	%		0.55	%		0.62	%
ACL - loans⁽¹⁾ to total loans		1.39	%		1.37	%		1.38	%		1.37	%		1.35	%
ACL - loans⁽¹⁾ to non-performing loans		191	%		191	%		208	%		195	%		169	%

Profitability
Return on average assets		0.91	%		0.93	%		1.04	%		1.17	%		1.03	%
Operating return on average assets⁽²⁾		1.00	%		1.03	%		1.08	%		1.18	%		1.04	%
Return on average common shareholders' equity		9.28	%		10.09	%		11.25	%		12.59	%		11.02	%
Operating return on average common shareholders' equity (tangible)⁽²⁾		13.08	%		14.68	%		15.17	%		16.52	%		14.46	%
Net interest margin		3.32	%		3.36	%		3.40	%		3.40	%		3.53	%
Efficiency ratio⁽²⁾		63.2	%		62.0	%		61.5	%		60.1	%		58.5	%
Non-interest expense to total average assets		2.60	%		2.61	%		2.48	%		2.47	%		2.41	%
Operating non-interest expense to total average assets⁽²⁾		2.49	%		2.47	%		2.47	%		2.46	%		2.40	%

Capital Ratios⁽³⁾
Tangible common equity ratio ("TCE")⁽²⁾		7.4	%		7.4	%		6.8	%		7.0	%		7.0	%
Tier 1 leverage ratio		9.4	%		9.5	%		9.4	%		9.3	%		9.2	%
Common equity Tier 1 capital ratio		10.2	%		10.3	%		10.3	%		10.1	%		9.8	%
Tier 1 risk-based capital ratio		11.0	%		11.2	%		11.1	%		11.0	%		10.6	%
Total risk-based capital ratio		13.9	%		14.0	%		14.0	%		13.8	%		13.4	%

⁽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 March 31, 2024 are preliminary estimates and prior periods are actual.

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
(dollars in thousands)

	Mar 31			Dec 31			Sep 30			Jun 30			Mar 31
		2024			2023			2023			2023			2023
ASSETS
Cash and due from banks	$	247,581		$	300,343		$	304,042		$	123,779		$	129,003
Other interest-earning assets		231,389			373,772			222,781			505,141			545,355
Loans held for sale		10,624			15,158			20,368			14,673			6,507
Investment securities		3,783,392			3,666,274			3,698,601			3,867,334			3,950,101
Net loans		21,444,483			21,351,094			21,177,508			21,044,685			20,670,188
Less: ACL - loans⁽¹⁾		(297,888	)		(293,404	)		(292,739	)		(287,442	)		(278,695	)
Loans, net		21,146,595			21,057,690			20,884,769			20,757,243			20,391,493
Net premises and equipment		213,541			222,881			215,626			216,322			216,059
Accrued interest receivable		107,089			107,972			101,624			96,991			90,267
Goodwill and intangible assets		560,114			560,687			561,284			561,885			563,502
Other assets		1,342,632			1,267,138			1,366,082			1,259,795			1,219,889
Total Assets	$	27,642,957		$	27,571,915		$	27,375,177		$	27,403,163		$	27,112,176
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits	$	21,741,950		$	21,537,623		$	21,421,589		$	21,206,540		$	21,316,584
Borrowings		2,296,040			2,487,526			2,370,112			2,719,114			2,446,770
Other liabilities		847,288			786,627			1,016,783			835,357			729,824
Total Liabilities		24,885,278			24,811,776			24,808,484			24,761,011			24,493,178
Shareholders' equity		2,757,679			2,760,139			2,566,693			2,642,152			2,618,998
Total Liabilities and Shareholders' Equity	$	27,642,957		$	27,571,915		$	27,375,177		$	27,403,163		$	27,112,176

LOANS, DEPOSITS AND BORROWINGS DETAIL:
Loans, by type:
Real estate - commercial mortgage	$	8,252,117		$	8,127,728		$	8,106,300		$	7,846,861		$	7,746,920
Commercial and industrial		4,467,589			4,545,552			4,577,334			4,599,759			4,596,096
Real estate - residential mortgage		5,395,720			5,325,923			5,279,681			5,147,262			4,880,919
Real estate - home equity		1,040,335			1,047,184			1,045,438			1,061,891			1,074,712
Real estate - construction		1,249,199			1,239,075			1,078,263			1,308,564			1,326,754
Consumer		698,421			729,318			743,976			763,530			730,775
Leases and other loans⁽²⁾		341,102			336,314			346,516			316,818			314,012
Total Net Loans	$	21,444,483		$	21,351,094		$	21,177,508		$	21,044,685		$	20,670,188
Deposits, by type:
Noninterest-bearing demand	$	5,086,514		$	5,314,094		$	5,575,374		$	5,865,855		$	6,403,484
Interest-bearing demand		5,521,017			5,722,695			5,757,487			5,543,320			5,478,237
Savings		6,846,038			6,616,901			6,707,729			6,646,448			6,579,806
Total demand and savings		17,453,569			17,653,690			18,040,590			18,055,623			18,461,527
Brokered		1,152,427			1,144,692			941,059			949,259			960,919
Time		3,135,954			2,739,241			2,439,940			2,201,658			1,894,138
Total Deposits	$	21,741,950		$	21,537,623		$	21,421,589		$	21,206,540		$	21,316,584
Borrowings, by type:
Federal funds purchased	$	—		$	240,000		$	544,000		$	555,000		$	525,000
Federal Home Loan Bank advances		900,000			1,100,000			730,000			1,165,000			747,000
Senior debt and subordinated debt		535,566			535,384			540,174			539,994			539,814
Other borrowings		860,474			612,142			555,938			459,120			634,956
Total Borrowings	$	2,296,040		$	2,487,526		$	2,370,112		$	2,719,114		$	2,446,770

⁽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
	Mar 31		Dec 31		Sep 30		Jun 30		Mar 31
		2024		2023		2023		2023		2023
Net Interest Income:
Interest income	$	339,666	$	338,134	$	330,371	$	314,912	$	289,820
Interest expense		132,729		126,128

Fulton Financial Corporation Announces First Quarter 2024 Results