Fulton Financial Announces First Quarter 2022 Results

Rhea-AI Summary

Fulton Financial Corporation (NASDAQ:FULT) reported net income of $61.7 million for Q1 2022, up 4% from Q4 2021. Key highlights include solid loan growth and record income from wealth management. Total net interest income was $161.3 million, down from Q4, primarily due to decreased loan fees from PPP loans. Non-interest income decreased by 13.5% linked quarter, largely due to lower mortgage banking income. Operating expenses fell by 5.2% from Q4. The corporation plans to acquire Prudential Bancorp to strengthen its Philadelphia market presence, while a share repurchase program is set for $75 million.

Positive

• Net income increased 4% to $61.7 million compared to Q4 2021.
• Solid loan growth reported in both consumer and commercial sectors.
• Record income from wealth management services.
• Operating expenses declined by 5.2% linked quarter.
• Planned acquisition of Prudential Bancorp to enhance market presence.
• Share repurchase program approved for up to $75 million.

Negative

• Net interest income decreased by $4.3 million from Q4 2021.
• Decline in interest income on loans by $14.4 million year-over-year.
• Non-interest income down by 13.5% linked quarter.

LANCASTER, Pa.--(BUSINESS WIRE)-- Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $61.7 million, or $0.38 per diluted share, for the first quarter of 2022, an increase of $2.4 million, or 4.0%, in comparison to the fourth quarter of 2021.

"Overall, we are pleased with our first quarter results. Our consumer and commercial businesses had solid loan growth during the quarter despite the volatile rate environment. We again saw record income in our wealth management business. Our asset quality remained stable, and we saw a decline in operating expenses linked quarter," said E. Phillip Wenger, Chairman and CEO. "On the corporate front, we were pleased to be able to raise our quarterly dividend. And our announcement of our intent to acquire Prudential Bancorp, Inc. later this year will help grow Fulton's presence in Philadelphia, which is a strategically important market for us."

Net Interest Income and Balance Sheet

Net interest income for the first quarter of 2022 was $161.3 million, $4.3 million lower than the fourth quarter of 2021. The net interest margin for the first quarter of 2022 increased 1 basis point, to 2.78%, from 2.77% in the fourth quarter of 2021.

The linked-quarter decrease in net interest income was primarily due to a decrease in loan fees related to Paycheck Protection Program ("PPP") loans, which were $4.4 million in the first quarter of 2022 compared to $10.0 million in the fourth quarter of 2021, partially offset by lower interest expense. The linked-quarter increase in net interest margin was primarily due to an increase in average net loans to $18.4 billion from $18.2 billion coupled with a decrease in lower yielding other interest-earning assets to $1.3 billion from $2.1 billion. The PPP loan balance was $164.3 million and $301.3 million as of March 31, 2022 and December 31, 2021, respectively.

For the first quarter of 2022, net interest income was $161.3 million, a decrease of $3.1 million, or 1.9%, in comparison to the first quarter of 2021. The net interest margin for the first quarter of 2022 decreased 1 basis point, to 2.78% from 2.79% in the first quarter of 2021. The yield on average interest-earning assets declined 15 basis points and the rate on average interest-bearing liabilities declined 20 basis points in the first quarter of 2022 in comparison to the first quarter of 2021.

The year-over-year decrease in net interest income was primarily due to a decline in interest income on loans of $14.4 million, from $165.5 million in the first quarter of 2021 compared to $151.1 million for the first quarter of 2022. The decline in interest income on loans was primarily due to a decline of $15.0 million in PPP loan fees. Interest expense on interest-bearing deposits and long-term borrowings declined by $4.0 million and $4.7 million, respectively, in the first quarter of 2022 in comparison to the first quarter of 2021. The decline in interest expense on interest-bearing deposits in the first quarter of 2022 was primarily due to a decrease in rate of 11 basis points. The decline in interest expense on long-term borrowings in the first quarter of 2022 was driven by a $661.3 million decrease in average balance due to the balance sheet restructuring in the first quarter of 2021, which included the prepayment of $536.0 million of long-term Federal Home Loan Bank ("FHLB") advances and the cash tender offer for $75 million and $60.0 million of the Corporation's outstanding subordinated and senior notes, respectively.

Total average interest-earning assets for the first quarter of 2022 was $23.9 billion, a decrease of $382.2 million from the fourth quarter of 2021, primarily due to a decrease of $842.2 million in average other interest-earning assets, partially offset by increases in average taxable investment securities and average net loans of $271.7 million and $162.6 million, respectively.

Total average interest-earning assets for the first quarter of 2022 decreased $388.2 million from the first quarter of 2021. Average net loans for the first quarter of 2022 were $18.4 billion, a decrease of $597.5 million from the same period in 2021. Included in average net loans for the first quarter of 2022 were PPP loans with an average balance of $226.1 million, a decrease of $1.5 billion from the first quarter of 2021. The decrease in average PPP loans for the first quarter of 2022 was partially offset by increases in average residential mortgage loans, average commercial mortgage loans and average real estate construction loans of $703.8 million, $165.9 million and $82.9 million, respectively. Average taxable investment securities increased $635.1 million for the first quarter of 2022 compared to the first quarter of 2021.

Total average interest-bearing liabilities decreased $374.6 million, to $15.1 billion, in the first quarter of 2022 compared to the fourth quarter of 2021, driven by decreases of $268.8 million in demand deposits and $59.6 million in time deposits.

Total average interest-bearing liabilities for the first quarter of 2022 decreased $1.2 billion from the first quarter of 2021, driven by a decrease in total interest-bearing deposits of $395.2 million and a decrease in long-term borrowings of $661.3 million. Average noninterest-bearing deposits increased $758.4 million for the first quarter of 2022 compared to the first quarter of 2021.

On March 21, 2022, the Corporation announced that its Board of Directors approved the repurchase of up to $75 million of shares of Fulton's common stock commencing on April 1, 2022 and expiring on December 31, 2022.

Asset Quality

In the first quarter of 2022, a negative provision for credit losses of $7.0 million was recognized, as compared to a negative provision for credit losses of $5.0 million in the fourth quarter of 2021, and a negative provision for credit losses of $5.5 million in the first quarter of 2021. The negative provision for credit losses for the first quarter of 2022 was recorded to adjust the allowance for credit losses as a result of improved economic conditions.

Non-performing assets were $163.0 million, or 0.64% of total assets, at March 31, 2022, compared to $153.9 million, or 0.60% of total assets, and $156.1 million, or 0.60% of total assets, at December 31, 2021 and March 31, 2021, respectively.

Annualized net charge-offs (recoveries) for the quarter ended March 31, 2022, were (0.02)% of total average loans, compared to 0.07% and 0.13% for the quarters ended December 31, 2021 and March 31, 2021, respectively.

Non-interest Income

Non-interest income before investment securities gains in the first quarter of 2022 was $55.2 million, a decrease of $8.6 million, or 13.5%, from the fourth quarter of 2021. The decrease in non-interest income was primarily due to declines in income from equity method investments of $4.0 million reflected in other income, mortgage banking income of $2.7 million due to lower gains on sales, and capital markets income of $1.3 million primarily due to lower fee income from commercial customer interest rate swaps, partially offset by an increase of $1.1 million in wealth management income.

Compared to the first quarter of 2021, non-interest income before investment securities gains in the first quarter of 2022 decreased $6.7 million, or 10.8%, from $61.9 million. The decrease in non-interest income was primarily due to a $9.4 million decrease in mortgage banking income due to lower gains on sale, partially offset by a $2.1 million increase in wealth management income.

In the first quarter of 2021, Fulton completed balance sheet restructurings involving sales of investment securities and corresponding prepayments of FHLB advances, subordinated debt and senior notes. The balance sheet restructuring involved gains on sales of Visa, Inc. Class B restricted shares of $34.0 million that were offset in non-interest expense by debt extinguishment of costs of $33.2 million.

Non-interest Expense

Non-interest expense was $146.0 million in the first quarter of 2022, a decrease of $8.0 million, or 5.2%, compared to the fourth quarter of 2021. The decrease was primarily due to decreases in charitable contributions and donations of $2.2 million, state-related taxes of $1.7 million and a net gain for owned fixed assets of $1.5 million, all reflected in other expense. Additionally, the decrease in non-interest expense was also driven by decreases in other outside services of $1.5 million and salaries and benefits of $1.0 million. Included in non-interest expense was $0.4 million for merger-related expenses associated with the pending acquisition of Prudential Bancorp, Inc.

Compared to the first quarter of 2021, non-interest expense decreased $32.4 million, or 18.2%, in the first quarter of 2022, primarily due to debt extinguishment costs of $33.2 million related to the prepayment of FHLB advances, subordinated debt and senior notes during the first quarter of 2021.

Income Tax Expense

For the first quarter of 2022, the effective tax rate was moderately lower at 17.1%, compared to 17.6% for the full-year of 2021.

Additional information on Fulton is available on the Internet at www.fultonbank.com.

Safe Harbor Statement

This news 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, 2021 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission (the "SEC"), including the risks, uncertainties and assumptions regarding the Corporation's pending acquisition of Prudential Bancorp, Inc. set forth under the heading "Safe Harbor Statement" in the Corporation's Current Report on Form 8-K filed on March 2, 2022, 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 non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release (GAAP: Generally Accepted Accounting Principles).

FULTON FINANCIAL CORPORATION
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
in thousands, except per-share data and percentages
	Three months ended
	Mar 31				Dec 31				Sep 30				Jun 30				Mar 31
	2022				2021				2021				2021				2021
Ending Balances
Investments	$	4,288,674			$	4,167,774			$	4,000,760			$	3,921,658			$	3,612,010
Net loans		18,476,119				18,325,350				18,269,407				18,586,756				18,990,986
Total assets		25,598,310				25,796,398				26,390,832				26,079,774				25,892,990
Deposits		21,541,174				21,573,499				22,074,041				21,724,312				21,633,838
Shareholders' equity		2,569,535				2,712,680				2,699,818				2,692,958				2,629,655
Average Balances
Investments	$	4,228,827			$	3,980,045			$	3,914,627			$	3,670,333			$	3,448,166
Net loans		18,383,118				18,220,550				18,414,153				18,906,556				18,980,586
Total assets		25,622,462				26,136,536				26,440,876				26,017,542				26,082,816
Deposits		21,480,183				21,876,938				22,123,480				21,765,601				21,117,024
Shareholders' equity		2,688,834				2,713,198				2,722,833				2,669,413				2,637,098
Income Statement
Net interest income	$	161,310			$	165,613			$	171,270			$	162,399			$	164,448
Provision for credit losses		(6,950	)			(5,000	)			(600	)			(3,500	)			(5,500	)
Non-interest income		55,256				63,881				62,577				51,890				95,397
Non-interest expense		145,978				154,019				144,596				140,831				178,384
Income before taxes		77,538				80,475				89,851				76,958				86,961
Net income available to common shareholders		61,726				59,325				73,021				62,402				70,472
Pre-provision net revenue(1)		71,842				77,837				90,947				75,575				81,795
Per Share
Net income available to common shareholders (basic)	$	0.38			$	0.37			$	0.45			$	0.38			$	0.43
Net income available to common shareholders (diluted)	$	0.38			$	0.37			$	0.45			$	0.38			$	0.43
Cash dividends	$	0.15			$	0.22			$	0.14			$	0.14			$	0.14
Common shareholders' equity	$	14.79			$	15.70			$	15.53			$	15.34			$	14.99
Common shareholders' equity (tangible)(1)	$	11.44			$	12.35			$	12.21			$	12.05			$	11.69
Weighted average shares (basic)		160,588				161,210				162,506				162,785				162,441
Weighted average shares (diluted)		161,911				162,355				163,456				163,858				163,737
(1) Non-GAAP financial measure. Refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this document.
	Three months ended
	Mar 31				Dec 31				Sep 30				Jun 30				Mar 31
	2022				2021				2021				2021				2021
Asset Quality
Net (recoveries) charge offs to average loans (annualized)		(0.02	)%			0.07	%			(0.05	)%			0.15	%			0.13	%
Non-performing loans to total loans		0.87	%			0.83	%			0.82	%			0.83	%			0.80	%
Non-performing assets to total assets		0.64	%			0.60	%			0.58	%			0.60	%			0.60	%
ACL - loans(2) to total loans		1.32	%			1.36	%			1.41	%			1.37	%			1.40	%
ACL - loans(2) to non-performing loans		151	%			164	%			171	%			166	%			174	%
Asset Quality, excluding PPP(1)(3)
Net (recoveries) charge offs to adjusted average loans (annualized)		(0.02	)%			0.07	%			(0.05	)%			0.16	%			0.14	%
Non-performing loans to total adjusted loans		0.88	%			0.84	%			0.85	%			0.88	%			0.88	%
ACL - loans(2) to total adjusted loans		1.33	%			1.38	%			1.45	%			1.46	%			1.54	%
Profitability
Return on average assets		1.02	%			0.94	%			1.13	%			1.00	%			1.14	%
Return on average common shareholders' equity		10.03	%			9.34	%			11.45	%			10.01	%			11.73	%
Return on average common shareholders' equity (tangible)(1)		12.88	%			11.89	%			14.56	%			12.93	%			15.00	%
Net interest margin		2.78	%			2.77	%			2.82	%			2.73	%			2.79	%
Efficiency ratio(1)		65.8	%			65.2	%			60.3	%			63.8	%			63.0	%
Non-interest expenses to total average assets(1)		2.29	%			2.30	%			2.14	%			2.14	%			2.25	%
Capital Ratios
Tangible common equity ratio(1)		7.3	%			7.8	%			7.6	%			7.7	%			7.5	%
Tier 1 leverage ratio(4)		8.9	%			8.6	%			8.4	%			8.5	%			8.2	%
Common equity Tier 1 capital ratio(4)		10.0	%			9.9	%			10.1	%			10.0	%			9.7	%
Tier 1 risk-based capital ratio(4)		10.9	%			10.9	%			11.1	%			11.0	%			10.7	%
Total risk-based capital ratio(4)		13.8	%			14.1	%			14.4	%			14.5	%			14.3	%
(1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.
(2) "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.
(3) Asset quality information excluding Paycheck Protection Program ("PPP") loans. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.
(4) Regulatory capital ratios as of March 31, 2022 are preliminary and prior periods are actual.

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
dollars in thousands
																						% Change from
		Mar 31				Dec 31				Sep 30				Jun 30				Mar 31				Dec 31			Mar 31
		2022				2021				2021				2021				2021				2021			2021
ASSETS
	Cash and due from banks	$	161,462			$	172,276			$	260,564			$	143,002			$	102,570			(6.3	)%		57.4	%
	Other interest-earning assets		1,054,232				1,523,973				2,271,738				1,823,688				1,625,515			(30.8	)%		(35.1	)%
	Loans held for sale		27,675				35,768				43,123				41,924				34,092			(22.6	)%		(18.8	)%
	Investment securities		4,288,674				4,167,774				4,000,760				3,921,658				3,612,010			2.9	%		18.7	%
	Net loans		18,476,119				18,325,350				18,269,407				18,586,756				18,990,986			0.8	%		(2.7	)%
	Less: ACL - loans(1)		(243,705	)			(249,001	)			(256,727	)			(255,032	)			(265,986	)		(2.1	)%		(8.4	)%
	Loans, net		18,232,414				18,076,349				18,012,680				18,331,724				18,725,000			0.9	%		(2.6	)%
	Net, premises and equipment		218,257				220,357				228,179				228,353				229,035			(1.0	)%		(4.7	)%
	Accrued interest receivable		55,102				57,451				57,902				63,232				65,649			(4.1	)%		(16.1	)%
	Goodwill and intangible assets		537,877				538,053				536,697				536,847				536,544			—	%		0.2	%
	Other assets		1,022,617				1,004,397				979,189				989,346				962,575			1.8	%		6.2	%
	Total Assets	$	25,598,310			$	25,796,398			$	26,390,832			$	26,079,774			$	25,892,990			(0.8	)%		(1.1	)%
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits	$	21,541,174			$	21,573,499			$	22,074,041			$	21,724,312			$	21,633,838			(0.1	)%		(0.4	)%
	Short-term borrowings		452,440				416,764				468,967				533,749				520,989			8.6	%		(13.2	)%
	Other liabilities		478,667				472,110				520,620				501,542				482,101			1.4	%		(0.7	)%
	Long-term borrowings		556,494				621,345				627,386				627,213				626,407			(10.4	)%		(11.2	)%
	Total Liabilities		23,028,775				23,083,718				23,691,014				23,386,816				23,263,335			(0.2	)%		(1.0	)%
	Shareholders' equity		2,569,535				2,712,680				2,699,818				2,692,958				2,629,655			(5.3	)%		(2.3	)%
	Total Liabilities and Shareholders' Equity	$	25,598,310			$	25,796,398			$	26,390,832			$	26,079,774			$	25,892,990			(0.8	)%		(1.1	)%
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Loans, by type:
	Real estate - commercial mortgage	$	7,289,376			$	7,279,080			$	7,145,115			$	7,152,932			$	7,142,137			0.1	%		2.1	%
	Commercial and industrial		3,992,285				3,906,791				3,863,154				3,870,462				3,986,858			2.2	%		0.1	%
	Real estate - residential mortgage		3,946,741				3,846,750				3,719,684				3,555,897				3,254,058			2.6	%		21.3	%
	Real estate - home equity		1,098,171				1,118,248				1,126,628				1,136,128				1,149,958			(1.8	)%		(4.5	)%
	Real estate - construction		1,210,340				1,139,779				1,111,487				1,070,755				1,083,494			6.2	%		11.7	%
	Consumer		481,551				464,657				458,595				448,433				451,857			3.6	%		6.6	%
	Equipment lease financing		253,521				236,344				242,967				252,158				260,907			7.3	%		(2.8	)%
	Other(2)		39,857				32,448				11,330				(14,410	)			(26,677	)		22.8	%		N/M
	Net loans before PPP		18,311,842				18,024,097				17,678,960				17,472,355				17,302,592			1.6	%		5.8	%
	PPP		164,277				301,253				590,447				1,114,401				1,688,394			(45.5	)%		(90.3	)%
	Total Net Loans	$	18,476,119			$	18,325,350			$	18,269,407			$	18,586,756			$	18,990,986			0.8	%		(2.7	)%
Deposits, by type:
	Noninterest-bearing demand	$	7,528,391			$	7,370,963			$	7,434,155			$	7,442,132			$	7,046,116			2.1	%		6.8	%
	Interest-bearing demand		5,625,286				5,819,539				6,187,096				5,795,404				5,959,909			(3.3	)%		(5.6	)%
	Savings		6,479,196				6,403,995				6,401,619				6,276,554				6,244,513			1.2	%		3.8	%
	Total demand and savings		19,632,873				19,594,497				20,022,870				19,514,090				19,250,538			0.2	%		2.0	%
	Brokered		248,833				251,526				262,617				277,444				309,873			(1.1	)%		(19.7	)%
	Time		1,659,468				1,727,476				1,788,554				1,932,778				2,073,427			(3.9	)%		(20.0	)%
	Total Deposits	$	21,541,174			$	21,573,499			$	22,074,041			$	21,724,312			$	21,633,838			(0.1	)%		(0.4	)%
Short-term borrowings, by type:
	Customer funding	$	452,440			$	416,764			$	468,967			$	533,749			$	520,989			8.6	%		(13.2	)%
	Total Short-Term Borrowings	$	452,440			$	416,764			$	468,967			$	533,749			$	520,989			8.6	%		(13.2	)%
(1) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures.
(2) Consists of overdrafts and net origination fees and costs.
	N/M - Not meaningful

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
dollars in thousands
				Three Months Ended																				% Change from
				Mar 31				Dec 31				Sep 30				Jun 30				Mar 31				Dec 31			Mar 31
				2022				2021				2021				2021				2021				2021			2021
Interest Income:
	Interest income			$	173,001			$	177,724			$	184,079			$	176,673			$	184,937			(2.7	)%		(6.5	)%
	Interest expense				11,691				12,111				12,809				14,274				20,488			(3.5	)%		(42.9	)%
	Net Interest Income				161,310				165,613				171,270				162,399				164,449			(2.6	)%		(1.9	)%
	Provision for credit losses				(6,950	)			(5,000	)			(600	)			(3,500	)			(5,500	)		39.0	%		26.4	%
	Net Interest Income after Provision				168,260				170,613				171,870				165,899				169,949			(1.4	)%		(1.0	)%
Non-Interest Income:
	Commercial banking:
	Merchant and card				6,097				6,588				6,979				6,786				5,768			(7.5	)%		5.7	%
	Cash management				5,428				5,318				5,285				5,341				4,921			2.1	%		10.3	%
	Capital markets				1,676				2,982				2,063				1,536				2,800			(43.8	)%		(40.1	)%
	Other commercial banking				2,807				3,592				2,411				3,466				2,853			(21.9	)%		(1.6	)%
	Total commercial banking				16,008				18,480				16,738				17,129				16,342			(13.4	)%		(2.0	)%
	Consumer banking:
	Card				5,796				5,953				5,941				5,733				5,878			(2.6	)%		(1.4	)%
	Overdraft				3,772				3,896				3,474				2,750				2,724			(3.2	)%		38.5	%
	Other consumer banking				2,106				2,280				2,386				2,377				2,152			(7.6	)%		(2.1	)%
	Total consumer banking				11,674				12,129				11,801				10,860				10,754			(3.8	)%		8.6	%
	Wealth management				19,428				18,285				18,532				17,634				17,347			6.3	%		12.0	%
	Mortgage banking				4,576				7,243				9,535				2,838				13,960			(36.8	)%		(67.2	)%
	Other				3,551				7,739				5,971				3,393				3,518			(54.1	)%		0.9	%
	Non-interest income before investment securities gains				55,237				63,876				62,577				51,854				61,921			(13.5	)%		(10.8	)%
	Investment securities gains, net				19				5				—				36				33,475			N/M			(99.9	)%
	Total Non-Interest Income				55,256				63,881				62,577				51,890				95,396			(13.5	)%		(42.1	)%
Non-Interest Expense:
	Salaries and employee benefits				84,464				85,506				82,679				78,367				82,586			(1.2	)%		2.3	%
	Net occupancy				14,522				14,366				12,957				12,494				13,982			1.1	%		3.9	%
	Data processing and software				14,315				14,612				14,335				13,932				13,561			(2.0	)%		5.6	%
	Other outside services				8,167				9,637				7,889				8,178				8,490			(15.3	)%		(3.8	)%
	Equipment				3,423				3,539				3,416				3,424				3,428			(3.3	)%		(0.1	)%
	FDIC insurance				3,209				3,032				2,727				2,282				2,624			5.8	%		22.3	%
	Professional fees				1,792				1,946				2,271				2,651				2,779			(7.9	)%		(35.5	)%
	Marketing				1,320				1,477				1,448				1,348				1,002			(10.6	)%		31.7	%
	Intangible amortization				176				146				150				178				115			20.5	%		53.0	%
	Debt extinguishment				—				674				—				412				32,163			(100.0	)%		(100.0	)%
	Merger-related expenses				401				—				—				—				—			N/M			N/M
	Other				14,189				19,084				16,724				17,565				17,654			(25.6	)%		(19.6	)%
	Total Non-Interest Expense				145,978				154,019				144,596				140,831				178,384			(5.2	)%		(18.2	)%
	Income Before Income Taxes				77,538				80,475				89,851				76,958				86,961			(3.6	)%		(10.8	)%
	Income tax expense				13,250				18,588				14,268				11,994				13,898			(28.7	)%		(4.7	)%
	Net Income				64,288				61,887				75,583				64,964				73,063			3.9	%		(12.0	)%
	Preferred stock dividends				(2,562	)			(2,562	)			(2,562	)			(2,562	)			(2,591	)		—	%		1.1	%
	Net Income Available to Common Shareholders			$	61,726			$	59,325			$	73,021			$	62,402			$	70,472			4.0	%		(12.4	)%
PER SHARE:
	Net income available to common shareholders:
	Basic			$	0.38			$	0.37			$	0.45			$	0.38			$	0.43			2.7	%		(11.6	)%
	Diluted			$	0.38			$	0.37			$	0.45			$	0.38			$	0.43			2.7	%		(11.6	)%
	Cash dividends			$	0.15			$	0.22			$	0.14			$	0.14			$	0.14			(31.8	)%		7.1	%
	Weighted average shares (basic)				160,588				161,210				162,506				162,785				162,441			(0.4	)%		(1.1	)%
	Weighted average shares (diluted)				161,911				162,355				163,456				163,858				163,737			(0.3	)%		(1.1	)%

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
		Three months ended
		March 31, 2022											December 31, 2021											March 31, 2021
		Average				Interest				Yield/			Average				Interest				Yield/			Average				Interest				Yield/
		Balance				(1)				Rate			Balance				(1)				Rate			Balance				(1)				Rate
ASSETS
Interest-earning assets:
	Net loans	$	18,383,118			$	151,127			3.32	%		$	18,220,550			$	159,057			3.47	%		$	18,980,586			$	165,462			3.53	%
	Taxable investment securities		3,073,643				15,213			1.71	%			2,801,934				14,006			1.75	%			2,438,496				13,691			2.08	%
	Tax-exempt investment securities		1,152,709				9,038			3.13	%			1,120,263				8,418			3.00	%			911,648				7,156			3.13	%
	Total Investment Securities		4,226,352				24,251			2.29	%			3,922,197				22,424			2.29	%			3,350,144				20,847			2.49	%
	Loans held for sale		28,549				241			3.37	%			35,235				333			3.77	%			53,465				471			3.53	%
	Other interest-earning assets		1,258,174				671			0.22	%			2,100,392				(905	)		(0.19	)%			1,900,199				1,136			0.24	%
	Total Interest-Earning Assets		23,896,193				176,290			2.98	%			24,278,374				180,909			2.96	%			24,284,394				187,916			3.13	%
Noninterest-Earning assets:
	Cash and due from banks		162,320											211,958											120,181
	Premises and equipment		219,932											226,319											230,649
	Other assets		1,595,039											1,677,028											1,728,473
	Less: ACL - loans(2)		(251,022	)										(257,143	)										(280,881	)
	Total Assets	$	25,622,462										$	26,136,536										$	26,082,816
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-Bearing liabilities:
	Demand deposits	$	5,664,987			$	728			0.05	%		$	5,933,780			$	756			0.05	%		$	5,832,174			$	1,160			0.08	%
	Savings deposits		6,436,548				1,021			0.06	%			6,413,638				992			0.06	%			6,137,084				1,526			0.10	%
	Brokered deposits		250,350				216			0.35	%			256,192				220			0.34	%			324,364				395			0.49	%
	Time deposits		1,697,063				3,640			0.87	%			1,756,672				3,928			0.89	%			2,150,570				6,521			1.23	%
	Total Interest-Bearing Deposits		14,048,948				5,605			0.16	%			14,360,282				5,896			0.16	%			14,444,192				9,602			0.27	%
	Short-term borrowings		423,949				121			0.12	%			474,022				128			0.11	%			570,775				188			0.13	%
	Long-term borrowings		609,866				5,966			3.91	%			623,073				6,088			3.91	%			1,271,170				10,698			3.38	%
	Total Interest-Bearing Liabilities		15,082,763				11,692			0.31	%			15,457,377				12,112			0.31	%			16,286,137				20,488			0.51	%
Noninterest-Bearing liabilities:
	Demand deposits		7,431,235											7,516,656											6,672,832
	Other		419,630											449,305											486,749
	Total Liabilities		22,933,628											23,423,338											23,445,718
	Total Deposits/Cost of Deposits		21,480,183							0.11	%			21,876,938							0.11	%			21,117,024							0.18	%
	Total interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds")		22,513,998							0.21	%			22,974,033							0.21	%			22,958,969							0.36	%
	Shareholders' equity		2,688,834											2,713,198											2,637,098
	Total Liabilities and Shareholders' Equity	$	25,622,462										$	26,136,536										$	26,082,816
	Net interest income/net interest margin (fully taxable equivalent)						164,598			2.78	%							168,797			2.77	%							167,428			2.79	%
	Tax equivalent adjustment						(3,288	)										(3,184	)										(2,979	)
	Net Interest Income					$	161,310										$	165,613										$	164,449
	(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances.
	(2) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures.

FULTON FINANCIAL CORPORATION
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL (UNAUDITED):
dollars in thousands
		Three months ended																		% Change from
		Mar 31			Dec 31			Sep 30				Jun 30				Mar 31				Dec 31			Mar 31
		2022			2021			2021				2021				2021				2021			2021
Loans, by type:
	Real estate - commercial mortgage	$	7,294,914		$	7,157,906		$	7,134,177			$	7,177,622			$	7,128,997			1.9	%		2.3	%
	Commercial and industrial		3,986,900			3,898,559			3,878,767				3,920,771				4,033,367			2.3	%		(1.2	)%
	Real estate - residential mortgage		3,887,428			3,773,156			3,642,822				3,396,690				3,183,585			3.0	%		22.1	%
	Real estate - home equity		1,106,319			1,122,042			1,128,076				1,139,558				1,175,218			(1.4	)%		(5.9	)%
	Real estate - construction		1,137,649			1,117,592			1,085,846				1,054,469				1,054,718			1.8	%		7.9	%
	Consumer		471,129			462,346			452,844				451,486				459,038			1.9	%		2.6	%
	Equipment lease financing		236,388			238,349			247,776				256,248				266,405			(0.8	)%		(11.3	)%
	Other(1)		36,277			15,558			(6,773	)			(14,677	)			(9,455	)		133.2	%		N/M
	Net loans before PPP		18,157,004			17,785,508			17,563,535				17,382,167				17,291,873			2.1	%		5.0	%
	PPP		226,114			435,042			850,618				1,524,389				1,688,713			(48.0	)%		(86.6	)%
	Total Net Loans	$	18,383,118		$	18,220,550		$	18,414,153			$	18,906,556			$	18,980,586			0.9	%		(3.1	)%
Deposits, by type:
	Noninterest-bearing demand	$	7,431,235		$	7,516,656		$	7,439,644			$	7,203,696			$	6,672,832			(1.1	)%		11.4	%
	Interest-bearing demand		5,664,987			5,933,780			6,168,908				5,979,855				5,832,174			(4.5	)%		(2.9	)%
	Savings		6,436,548			6,413,638			6,392,537				6,280,629				6,137,084			0.4	%		4.9	%
	Total demand and savings		19,532,770			19,864,074			20,001,089				19,464,180				18,642,090			(1.7	)%		4.8	%
	Brokered		250,350			256,192			270,168				297,815				324,364			(2.3	)%		(22.8	)%
	Time		1,697,063			1,756,672			1,852,223				2,003,606				2,150,570			(3.4	)%		(21.1	)%
	Total Deposits	$	21,480,183		$	21,876,938		$	22,123,480			$	21,765,601			$	21,117,024			(1.8	)%		1.7	%
Short-term borrowings, by type:
	Customer funding	$	423,949		$	474,022		$	494,811			$	514,025			$	570,775			(10.6	)%		(25.7	)%
	Total Short-Term borrowings	$	423,949		$	474,022		$	494,811			$	514,025			$	570,775			(10.6	)%		(25.7	)%
(1) Consists of overdrafts and net origination fees and costs.

FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
		Three months ended
		Mar 31				Dec 31				Sep 30				Jun 30				Mar 31
			2022				2021				2021				2021				2021
Allowance for credit losses related to net loans:
Balance at beginning of period		$	249,001			$	256,727			$	255,032			$	265,986			$	277,567
Loans charged off:
	Commercial and industrial		(227	)			(9,417	)			(647	)			(954	)			(4,319	)
	Real estate - commercial mortgage		(152	)			(369	)			(14	)			(6,506	)			(1,837	)
	Consumer and home equity		(1,052	)			(828	)			(504	)			(1,130	)			(847	)
	Real estate - residential mortgage		—				—				(602	)			(496	)			(192	)
	Real estate - construction		—				—				—				—				(39	)
	Equipment lease financing and other		(469	)			(380	)			(467	)			(436	)			(968	)
	Total loans charged off		(1,900	)			(10,994	)			(2,234	)			(9,522	)			(8,202	)
Recoveries of loans previously charged off:
	Commercial and industrial		1,980				5,795				2,330				693				769
	Real estate - commercial mortgage		112				1,007				564				729				174
	Consumer and home equity		454				767				504				634				440
	Real estate - residential mortgage		222				89				86				105				95
	Real estate - construction		32				77				697				254				384
	Equipment lease financing and other		154				283				358				153				159
	Recoveries of loans previously charged off		2,954				8,018				4,539				2,568				2,021
Net loans recovered (charged off)			1,054				(2,976	)			2,305				(6,954	)			(6,181	)
Provision for credit losses			(6,350	)			(4,750	)			(610	)			(4,000	)			(5,400	)
Balance at end of period		$	243,705			$	249,001			$	256,727			$	255,032			$	265,986
Net (recoveries) charge offs to average loans (annualized)			(0.02	) %			0.07	%			(0.05	) %			0.15	%			0.13	%
Allowance credit losses related to OBS Credit Exposures(1)
	Balance at beginning of period	$	14,533			$	14,783			$	14,773			$	14,273			$	14,373
	Provision for credit losses		(600	)			(250	)			10				500				(100	)
	Balance at end of period	$	13,933			$	14,533			$	14,783			$	14,773			$	14,273
NON-PERFORMING ASSETS:
	Non-accrual loans	$	136,799			$	143,666			$	138,833			$	147,864			$	143,889
	Loans 90 days past due and accruing		24,182				8,453				11,389				5,865				8,559
	Total non-performing loans		160,981				152,119				150,222				153,729				152,448
	Other real estate owned		2,014				1,817				1,896				2,779				3,664
	Total non-performing assets	$	162,995			$	153,936			$	152,118			$	156,508			$	156,112
NON-PERFORMING LOANS, BY TYPE:
	Commercial and industrial	$	30,193			$	30,629			$	32,697			$	33,522			$	31,871
	Real estate - commercial mortgage		64,190				54,044				52,100				53,693				54,164
	Real estate - residential mortgage		39,308				39,399				37,077				38,185				36,152
	Consumer and home equity		11,465				11,505				11,509				11,408				13,072
	Real estate - construction		672				901				965				1,016				1,440
	Equipment lease financing and other		15,153				15,641				15,874				15,905				15,749
	Total non-performing loans	$	160,981			$	152,119			$	150,222			$	153,729			$	152,448
(1) The allowance for credit losses related to OBS Credit Exposures is presented in "other liabilities" on the consolidated balance sheets.

FULTON FINANCIAL CORPORATION
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)
in thousands, except per share data and percentages
Explanatory note:	This press release contains supplemental financial information, as detailed below, which has been derived by methods other than Generally Accepted Accounting Principles ("GAAP"). The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations. 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 to similarly-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
							Mar 31				Dec 31				Sep 30				Jun 30				Mar 31
							2022				2021				2021				2021				2021
Common shareholders' equity (tangible), per share
Shareholders' equity							$	2,569,535			$	2,712,680			$	2,699,818			$	2,692,958			$	2,629,655
Less: Preferred stock								(192,878	)			(192,878	)			(192,878	)			(192,878	)			(192,878	)
Less: Goodwill and intangible assets								(537,877	)			(538,053	)			(536,697	)			(536,847	)			(536,544	)
Tangible common shareholders' equity (numerator)							$	1,838,780			$	1,981,749			$	1,970,243			$	1,963,233			$	1,900,233
Shares outstanding, end of period (denominator)								160,669				160,490				161,429				162,988				162,518
Common shareholders' equity (tangible), per share							$	11.44			$	12.35			$	12.21			$	12.05			$	11.69
Return on average common shareholders' equity (tangible)
Net income available to common shareholders							$	61,726			$	59,325			$	73,021			$	62,402			$	70,472
Plus: Merger-related expenses, net of tax								317				—				—				—				—
Plus: Intangible amortization, net of tax								138				114				118				140				90
Net income available to common shareholder's (numerator)							$	62,181			$	59,439			$	73,139			$	62,542			$	70,562
Average shareholders' equity							$	2,688,834			$	2,713,198			$	2,722,833			$	2,669,413			$	2,637,098
Less: Average preferred stock								(192,878	)			(192,878	)			(192,878	)			(192,878	)			(192,878	)
Less: Average goodwill and intangible assets								(537,976	)			(536,638	)			(536,772	)			(536,470	)			(536,601	)
Average tangible common shareholders' equity (denominator)							$	1,957,980			$	1,983,682			$	1,993,183			$	1,940,065			$	1,907,619
Return on average common shareholders' equity (tangible), annualized								12.88	%			11.89	%			14.56	%			12.93	%			15.00	%
Tangible common equity to tangible assets (TCE Ratio)
Shareholders' equity							$	2,569,535			$	2,712,680			$	2,699,818			$	2,692,958			$	2,629,655
Less: Preferred stock								(192,878	)			(192,878	)			(192,878	)			(192,878	)			(192,878	)
Less: Goodwill and intangible assets								(537,877	)			(538,053	)			(536,697	)			(536,847	)			(536,544	)
Tangible common shareholders' equity (numerator)							$	1,838,780			$	1,981,749			$	1,970,243			$	1,963,233			$	1,900,233
Total assets							$	25,598,310			$	25,796,398			$	26,390,832			$	26,079,774			$	25,892,990
Less: Goodwill and intangible assets								(537,877	)			(538,053	)			(536,697	)			(536,847	)			(536,544	)
Total tangible assets (denominator)							$	25,060,433			$	25,258,345			$	25,854,135			$	25,542,927			$	25,356,446
Tangible common equity to tangible assets								7.34	%			7.85	%			7.62	%			7.69	%			7.49	%
Efficiency ratio
Non-interest expense							$	145,978			$	154,019			$	144,596			$	140,831			$	178,384
Less: Amortization of tax credit investments								(696	)			(1,547	)			(1,546	)			(1,563	)			(1,531	)
Less: Merger-related expenses								(401	)			—				—				—				—
Less: Intangible amortization								(176	)			(146	)			(150	)			(178	)			(115	)
Less: Debt extinguishment costs								—				(674	)			—				(412	)			(32,163	)
Non-interest expense (numerator)							$	144,705			$	151,652			$	142,900			$	138,678			$	144,575
Net interest income							$	161,310			$	165,613			$	171,270			$	162,399			$	164,449
Tax equivalent adjustment								3,288				3,184				3,114				3,018				2,979
Plus: Total non-interest income								55,256				63,881				62,577				51,890				95,396
Less: Investment securities gains, net								(19	)			(5	)			—				(36	)			(33,475	)
Total revenue (denominator)							$	219,835			$	232,673			$	236,961			$	217,271			$	229,349
Efficiency ratio								65.8	%			65.2	%			60.3	%			63.8	%			63.0	%
							Three months ended
							Mar 31				Dec 31				Sep 30				Jun 30				Mar 31
							2022				2021				2021				2021				2021
Non-interest expenses to total average assets (annualized)
Non-interest expense							$	145,978			$	154,019			$	144,596			$	140,831			$	178,384
Less: Amortization of tax credit investments								(696	)			(1,547	)			(1,546	)			(1,563	)			(1,531	)
Less: Intangible amortization								(176	)			(146	)			(150	)			(178	)			(115	)
Less: Merger-related expenses								(401	)			—				—				—				—
Less: Debt extinguishment costs								—				(674	)			—				(412	)			(32,163	)
Non-interest expense (numerator)							$	144,705			$	151,652			$	142,900			$	138,678			$	144,575
Total average assets (denominator)							$	25,622,462			$	26,136,536			$	26,440,876			$	26,017,542			$	26,082,816
Non-interest expenses to total average assets, (annualized)								2.29	%			2.30	%			2.14	%			2.14	%			2.25	%
Asset Quality, excluding PPP
Net loans recovered (charged-off) (numerator)							$	1,054			$	(2,976	)		$	2,305			$	(6,954	)		$	(6,181	)
Average net loans							$	18,383,118			$	18,220,550			$	18,414,153			$	18,906,556			$	18,980,586
Less: Average PPP loans								(226,114	)			(435,042	)			(850,618	)			(1,524,389	)			(1,688,713	)
Total adjusted average loans (denominator)							$	18,157,004			$	17,785,508			$	17,563,535			$	17,382,167			$	17,291,873
Net charge-offs (recoveries) to adjusted average loans (annualized)								(0.02	) %			0.07	%			(0.05	) %			0.16	%			0.14	%
Non-performing loans (numerator)							$	160,981			$	152,119			$	150,222			$	153,729			$	152,448
Net loans							$	18,476,119			$	18,325,350			$	18,269,407			$	18,586,756			$	18,990,986
Less: PPP loans								(164,277	)			(301,253	)			(590,447	)			(1,114,401	)			(1,688,394	)
Total adjusted loans (denominator)							$	18,311,842			$	18,024,097			$	17,678,960			$	17,472,355			$	17,302,592
Non-performing loans to total adjusted loans								0.88	%			0.84	%			0.85	%			0.88	%			0.88	%
ACL - loans (numerator)							$	243,705			$	249,001			$	256,727			$	255,032			$	265,986
Net loans							$	18,476,119			$	18,325,350			$	18,269,407			$	18,586,756			$	18,990,986
Less: PPP loans								(164,277	)			(301,253	)			(590,447	)			(1,114,401	)			(1,688,394	)
Total adjusted loans (denominator)							$	18,311,842			$	18,024,097			$	17,678,960			$	17,472,355			$	17,302,592
ACL - loans to total adjusted loans								1.33	%			1.38	%			1.45	%			1.46	%			1.54	%
Pre-provision net revenue
Net interest income							$	161,310			$	165,613			$	171,270			$	162,399			$	164,449
Non-interest income								55,256				63,881				62,577				51,890				95,396
Less: Investment securities gains, net								(19	)			(5	)			—				(36	)			(33,475	)
Total revenue							$	216,547			$	229,489			$	233,847			$	214,253			$	226,370
Non-interest expense							$	145,978			$	154,019			$	144,596			$	140,831			$	178,384
Less: Amortization on tax credit investments								(696	)			(1,547	)			(1,546	)			(1,563	)			(1,531	)
Less: Merger-related expenses								(401	)			—				—				—				—
Less: Intangible amortization								(176	)			(146	)			(150	)			(178	)			(115	)
Less: Debt extinguishment								—				(674	)			—				(412	)			(32,163	)
Total non-interest expense							$	144,705			$	151,652			$	142,900			$	138,678			$	144,575
Pre-provision net revenue							$	71,842			$	77,837			$	90,947			$	75,575			$	81,795
Note: numbers may not sum due to rounding.

 

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Media Contact: Laura Wakeley (717) 291-2616

Investor Contact: Matt Jozwiak (717) 327-2657

Source: Fulton Financial Corporation

FAQ

What was Fulton's net income for Q1 2022?

Fulton's net income for Q1 2022 was $61.7 million.

How much did Fulton's net interest income decrease in Q1 2022?

Fulton's net interest income decreased by $4.3 million compared to Q4 2021.

What is the significance of Prudential Bancorp's acquisition for FULT?

The acquisition of Prudential Bancorp is intended to enhance Fulton's presence in the strategically important Philadelphia market.

When is Fulton's share repurchase program set to begin?

The share repurchase program is set to commence on April 1, 2022.

What was Fulton's operating expense trend in Q1 2022?

Fulton's operating expenses decreased by 5.2% compared to Q4 2021.