Fulton Financial Corporation Announces Increased Common Stock Dividend, Preferred Stock Dividend and $125 Million Repurchase Program

Rhea-AI Summary

Fulton Financial Corporation (Nasdaq: FULT) Increases Quarterly Dividend and Announces Share Repurchase Program

Insights

Financial Analyst

The announcement by Fulton Financial Corporation of an increased quarterly cash dividend and the initiation of a substantial share repurchase program can be seen as a strong signal of confidence by the company's management in its financial health and future prospects. The modest increase in dividend payout, from sixteen to seventeen cents per share, suggests a stable and possibly growing income stream, which may be attractive to income-focused investors.

The $125 million share repurchase authorization, including up to $25 million for Preferred Stock and subordinated notes, indicates that Fulton's Board believes its stock is undervalued or that it is an opportune time to return capital to shareholders. This could potentially lead to earnings per share accretion, as the reduction in outstanding shares may increase the value of remaining shares, assuming stable net income levels.

However, investors should consider the opportunity cost of such capital allocation decisions. The repurchase program's impact on the company's capital structure and liquidity should be evaluated, especially since the repurchase is not an obligation and is subject to various market and company performance conditions. The timing and execution of the repurchases will also affect the program's success.

Industry Analyst

Within the banking industry, share repurchase programs and dividend increases are often interpreted as indicators of a company's operational strength and financial stability. Fulton Financial's actions align with a broader industry trend where banks seek to deliver shareholder value through capital return strategies, especially in a maturing economic cycle where organic growth may be harder to achieve.

It is important to monitor how these strategic financial decisions correlate with Fulton's overall performance metrics, such as return on equity (ROE) and return on assets (ROA), as well as its capital adequacy ratios. Investors should also consider the broader economic context, including interest rate trends and regulatory changes, which could influence the bank's profitability and its ability to sustain capital return programs.

Risk Management Expert

When evaluating the risk implications of Fulton's announcement, it is essential to consider the balance between rewarding shareholders and maintaining a robust capital buffer. The share repurchase program, in particular, must be managed alongside the bank's need to meet regulatory capital requirements and fund future growth initiatives.

Furthermore, while the dividend increase is relatively small, it is a commitment to a higher fixed cash outflow, which must be sustainable across economic cycles. The company's risk management strategy should ensure that such payouts do not compromise its financial resilience, particularly in the face of potential economic downturns or unexpected financial market volatility.

LANCASTER, Pa.--(BUSINESS WIRE)-- Fulton Financial Corporation (“Fulton”) (Nasdaq: FULT) today announced that its Board of Directors (the “Board”) declared a quarterly cash dividend of seventeen cents per share on its common stock, payable on January 12, 2024, to shareholders of record as of January 2, 2024. This is a one cent per share increase from the quarterly cash dividend that the Board declared on September 19, 2023.

In addition, Fulton announced that the Board declared a quarterly dividend of $12.81 per share (equivalent to $0.32025 per depositary share) on its Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A (the “Preferred Stock”), payable on January 16, 2024, to shareholders of record as of January 1, 2024, for the period from and including October 15, 2023, to but excluding, January 15, 2024.

Fulton also announced that the Board approved the repurchase of shares of Fulton’s common stock and other securities in an aggregate principal amount not to exceed $125 million (the “2024 Program”) commencing on January 1, 2024 and expiring on December 31, 2024. Under the 2024 Program, up to $25 million may be used to repurchase shares of Fulton’s Preferred Stock and outstanding subordinated notes. Purchases may be made from time to time under the 2024 Program in open market transactions at prevailing market prices, in privately negotiated transactions or by other means in accordance with federal securities laws. The 2024 Program may be discontinued at any time at the discretion of the Board and does not commit Fulton to repurchase any of its securities. Purchases, if any, will be determined by management in its discretion and will depend upon a number of factors, including Fulton's capital position, liquidity, financial performance and alternate uses of capital, the market price of Fulton's securities, general market and economic conditions, and applicable legal and regulatory requirements.

Fulton, a $27 billion Lancaster, Pennsylvania-based financial holding company, has more than 3,300 employees and operates more than 200 financial centers in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through Fulton Bank, N.A.

Additional information on Fulton can be found at investor.fultonbank.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231219476692/en/

Media:

Rachel Sharkey (717) 291-2831

Investors:

Matt Jozwiak (717) 327-2657

Source: Fulton Financial Corporation

FAQ

What is the ticker symbol for Fulton Financial Corporation?

The ticker symbol for Fulton Financial Corporation is FULT.

When is the quarterly cash dividend payable for Fulton Financial Corporation?

The quarterly cash dividend of seventeen cents per share on its common stock is payable on January 12, 2024, to shareholders of record as of January 2, 2024.

What is the amount of the quarterly cash dividend increase for Fulton Financial Corporation?

The quarterly cash dividend has increased by one cent per share from the previous declaration.

What is the amount of the quarterly dividend on the Preferred Stock for Fulton Financial Corporation?

The quarterly dividend on the Preferred Stock is $12.81 per share (equivalent to $0.32025 per depositary share), payable on January 16, 2024, to shareholders of record as of January 1, 2024.

What is the 2024 Program announced by Fulton Financial Corporation?

The 2024 Program is a share repurchase program with an aggregate principal amount not to exceed $125 million, commencing on January 1, 2024, and expiring on December 31, 2024.