Overview of Financial Performance

In 2024, Fulton Financial Corporation reported strong financial results, with net income available to common shareholders of $278.5 million, a $4.5 million increase compared to 2023. However, net income per diluted share decreased by $0.07 to $1.57.

The year’s results were impacted by several notable items, including a $37.0 million preliminary gain on the acquisition of Republic First, $92.6 million in core deposit intangible (CDI) amortization, a $23.4 million provision for credit losses related to the Republic First transaction, $37.6 million in acquisition-related expenses, and $32.0 million in FultonFirst implementation and asset disposal costs.

Revenue and Profit Trends

Net interest income, the difference between interest earned on loans and investments and interest paid on deposits and borrowings, increased by $106.1 million to $978.2 million in 2024. This was driven by a 54 basis point increase in the yield on interest-earning assets, partially offset by a 58 basis point increase in the cost of interest-bearing liabilities.

The provision for credit losses increased to $71.6 million in 2024, up from $54.0 million in 2023, primarily due to a $23.4 million provision related to the Republic First acquisition.

Non-interest income, excluding investment securities losses and the gain on acquisition, increased by $30.6 million, or 13.4%, to $259.0 million. This was driven by growth in wealth management, cash management, mortgage banking, and other fee income. However, the Corporation recorded a $20.3 million loss on the sale of $345.7 million in available-for-sale securities.

Non-interest expense increased by $140.6 million, or 20.7%, to $819.8 million. Excluding the gain on the sale-leaseback transaction, acquisition-related expenses, and FultonFirst implementation costs, non-interest expense increased by $94.4 million, or 14.0%, primarily due to higher salaries and benefits, data processing, and occupancy costs, as well as $15.7 million in CDI amortization from the Republic First acquisition.

Strengths and Weaknesses

The Corporation’s key strengths include:

• Diversified revenue streams, with strong growth in non-interest income sources like wealth management, commercial banking, and consumer banking
• Successful integration of the Republic First acquisition, which added $2.4 billion in net loans and $3.7 billion in deposits
• Solid capital position, with a Common Equity Tier 1 ratio of 10.8% as of December 31, 2024

Potential weaknesses and risks include:

• Elevated provision for credit losses, driven in part by the Republic First acquisition
• Significant acquisition-related and integration expenses, which impacted profitability
• Exposure to interest rate risk, with the net interest margin sensitive to changes in interest rates

Outlook and Future Prospects

Looking ahead, the Corporation is focused on continued organic growth, further integration of the Republic First operations, and disciplined expense management. Key priorities include:

• Leveraging the expanded customer base and deposit franchise from the Republic First acquisition to drive loan and fee income growth
• Realizing cost savings and operational efficiencies through the FultonFirst initiative, which includes consolidating 15 financial centers in early 2025
• Maintaining strong credit quality and prudent risk management practices amid an uncertain economic environment

Overall, Fulton Financial Corporation delivered solid financial results in 2024, though the impact of the Republic First acquisition and related integration costs weighed on profitability. The Corporation appears well-positioned for the future, with a diversified business model, strong capital levels, and a focus on disciplined growth and expense management.