2 0 2 4 A N N U A L R E P O R T
Dear Shareholder:
The past year has been one of strong performance as we advanced our strategy to grow the company,
deliver effectively for customers, operate with excellence and serve all our stakeholders.
The extraordinary effort of our approximately 3,400 teammates drove significant growth across the
company, in deposits, loans and fee income. We now serve more than 750,000 customers and continue to
make a positive impact in local communities.
As part of our effort to grow the company, we completed the Republic First Bank transaction that
accelerated our expansion in Greater Philadelphia and South Jersey.
Additionally, as part of our efforts to operate with excellence, we started implementing our FultonFirst
transformation to simplify our operating model, focus on key strengths and enhance productivity.
I am grateful for the dedication of our team members who handled these significant opportunities while
simultaneously working each day to help customers achieve their financial goals and change lives for the
better in our local communities.
Strong Performance
For the year, we delivered net income available to common shareholders of $278.5 million, or $1.57 per
diluted share, representing a return on average common equity of 9.83%. Total revenue exceeded $1.2
billion – a record for Fulton. We maintained solid capitalization while, at the same time, increasing total
committed liquidity to over $9 billion.
In 2024, we declared quarterly common dividends of $0.69 per share, with one increase during the calendar
year, ending the year with a dividend yielding 3.73%. The dividend, coupled with repurchasing over 1.9
million shares, returned over $150 million to common shareholders in 2024.
Strategic Expansion: Republic First Bank Transaction
In April 2024, we acquired substantially all of the assets and deposits of Republic First Bank, with locations
throughout the Philadelphia region and southern New Jersey. This transaction accelerated our growth in
the region by adding new customers and locations in a core growth market.
We now operate more than 60 financial centers and have over $8 billion in deposits across Greater
Philadelphia and South Jersey.
TRANSFORMATION & GROWTH
Curt Myers
CHAIRMAN AND CEO
This letter contains forward-looking statements with respect to Fulton Financial Corporation’s (“FFC”) 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, FFC’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 FFC’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 FFC’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future
conditions, and speak only as of the date when made. 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 FFC’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. FFC 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 FFC, and some of the factors that could cause FFC’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 FFC’s Annual Report on Form 10-K for the year ended December 31, 2024, which accompanies this letter.
Organizational Transformation: FultonFirst
Throughout 2024, we engaged in an enterprise-wide organizational transformation, called FultonFirst,
to improve operational excellence and accelerate growth. We developed our plan around three
fundamental themes:
• Simplicity in our operating model. We are simplifying our organizational structure and redesigning
end-to-end processes to deliver a superior customer experience.
• Focus on our core relationships. We are making investments to differentiate Fulton in the marketplace
and with customers that value a relationship-driven community bank.
• Productivity across the bank. We are working to enhance digital experiences and improve the speed
and efficiency of our operations.
Business lines and departments across the company evaluated their operations through the lens of simplicity,
focus and productivity and identified opportunities for greater effectiveness and efficiency.
2024 was a transformational year as we implemented new structures and processes that are designed to
accelerate our growth and improve our scalability in the years to come.
Ultimately, FultonFirst represents a mindset centered on continuous improvement. We are committed to that
mindset as we advance our strategy to grow the company, deliver effectively for customers, operate with
excellence and serve all our stakeholders.
Thank you for your investment in Fulton as we pursue our purpose to
change lives for the better!
27
24
21
18
15
12
9
6
3
0
2018-2024 IN REVIEW
32
28
24
20
16
12
8
4
0
( $ In Billions )
( $ In Billions )
( $ In Billions )
Years
Total Assets
Years
Deposits
Total Assets Grew 16.3%
Driven by the benefits of the Republic First Bank
transaction, additional on-balance-sheet liquidity,
and moderating loan growth, total assets once
again reached record highs.
Total Deposits Grew 21.4%
Deposit growth was strong in 2024. Organic growth
was approximately $0.9 billion, supplemented
by $3.7 billion in Republic First Bank deposits.
Noninterest-bearing deposits comprised 21% of
total deposits at year end. Our loan-to-deposit ratio
of 92% at year end provides strategic flexibility.
24
21
18
15
12
9
6
3
0
Years
Loans
Total Loans Grew 12.1%
We added $2.4 billion of retained outstanding loan
balances in connection with the Republic First Bank
transaction, offsetting modest declines in certain
de-emphasized portfolios and other loan categories.
20.7
21.9
25.9
25.8
26.9
27.6
32.1
16.2
16.8
18.9
18.3
20.3
21.4
24.0
17.4
16.4
20.8
21.6
20.6
21.5
26.1
18
19
20
21
22
23
24
18
19
20
21
22
23
24
18
19
20
21
22
23
24
Total Shareholders’ Equity
Earnings Per Share (Diluted)
Earnings per Share Impacted by Costs
of Republic First Bank Transaction and
FultonFirst
Diluted earnings per share of $1.57 was impacted
by costs associated with the Republic First Bank
transaction and the FultonFirst activities. A stable
net interest margin, strong fee income, and initial
benefits of FultonFirst contributed to a solid year.
Operating earnings per share (diluted) of $1.85*
represented an 8% increase over 2023 and a
record for the company.
Total Shareholders’ Equity Grew 15.8%
Solid earnings driven by strong revenue growth,
supplemented by an accretive capital raise,
boosted total shareholder equity.
Common Dividends Per Share
Common Dividends Declared Grew 7.8%
In 2024, the company declared common dividends
of $0.69, a 7.8% increase over the prior year.
1.80
1.60
1.40
1.20
1.00
.80
.60
.40
.20
0
1.35
1.08
1.18
1.62
1.67
( $ )
Years
1.64
1.57
18
19
20
21
22
23
24
( $ )
.72
.60
.48
.36
.24
.12
0
.52
.56
.56
.64
.66
Years
.64
.69
18
19
20
21
22
23
24
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2,248
2,342
2,617
2,713
2,580
Years
2,760
3,197
( $ In Millions )
18
19
20
21
22
23
24
*Operating earnings per share (diluted) is a financial measure derived by
methods other than generally accepted accounting principles (“GAAP”).
This non-GAAP financial measure is reconciled to the most comparable
GAAP measure on page 39 of our Annual Report on Form 10-K for the
year ended December 31, 2024 contained in this Annual Report.
Earnings per share (diluted)
Operating earnings per share (diluted)*
1.76
1.71
1.85
PENNSYLVANIA
MARYLAND
VIRGINIA
NEW
JERSEY
DE
OUR GROWING
FOOTPRINT
1Dollars in thousands; internal allocations by state, unallocated deposits included in PA.
2Market Share as of June 30, 2024 FDIC Summary of Deposits.
3Market Share Rank as of June 30, 2024 FDIC Summary of Deposits.
PENNSYLVANIA
Financial Centers
Deposits1
Market Share2
Market Share Rank3
113
$14,895,968
2.66%
10
NEW JERSEY
Financial Centers
Deposits1
Market Share2
Market Share Rank3
57
$7,494,238
1.62%
12
DELAWARE
Financial Centers
Deposits1
Market Share2
Market Share Rank3
12
$1,107,617
0.18%
13
MARYLAND
Financial Centers
Deposits1
Market Share2
Market Share Rank3
25
$2,159,454
1.13%
16
VIRGINIA
Financial Centers
Deposits1
Market Share2
Market Share Rank3
9
$472,157
0.20%
46
EXECUTIVE OFFICERS AND BOARD OF DIRECTORS
As of December 31, 2024
EXECUTIVE MANAGEMENT
Curtis J. Myers
Chairman and CEO
Angela M. Snyder
President
Beth Ann L. Chivinski1
Senior Executive Vice President
Andy B. Fiol
Senior Executive Vice President/
Head of Consumer & Small Business
John J. Glover
Senior Executive Vice President/
Head of Commercial Banking
Richard S. Kraemer2
Senior Executive Vice President/
Chief Financial Officer
Natasha R. Luddington
Senior Executive Vice President/
Chief Legal Officer and
Corporate Secretary
Atul Malhotra
Executive Vice President/
Chief Risk Officer
Meg R. Mueller
Senior Executive Vice President/
Enterprise Credit Executive
Angela M. Sargent
Senior Executive Vice President/
Chief Information Officer
Karthik K. Sridharan3
Senior Executive Vice President/
Chief Operations and
Technology Officer
Bernadette M. Taylor
Senior Executive Vice President/
Chief Human Resources Officer
BOARD OF DIRECTORS
Curtis J. Myers, Chairman
Jennifer Craighead Carey
Lisa M. Crutchfield
Denise L. Devine
Steven S. Etter
George K. Martin
James R. Moxley III
Antoinette M. Pergolin
Scott A. Snyder
Ronald H. Spair
E. Philip Wenger
BOARD OF DIRECTORS
Curtis J. Myers, Chairman
Angela M. Snyder, President
Jennifer Craighead Carey
Lisa M. Crutchfield
Denise L. Devine
Steven S. Etter
Janice M. Hamby
Dolores A. Laputka
George K. Martin
James R. Moxley III
Antoinette M. Pergolin
Michael F. Shirk
Ivy E. Silver
Scott A. Snyder
Ronald H. Spair
E. Philip Wenger
1 Ms. Chivinski served as Interim Chief Financial Officer from February 8, 2024
through October 31, 2024 and retired December 31, 2024.
2 Mr. Kraemer became Chief Financial Officer on November 1, 2024.
3Mr. Sridharan separated from the company on January 31, 2025.
ADVISORY BOARD MEMBERS
As of December 31, 2024
MAJOR METROPOLITAN AREAS
BALTIMORE
Joe Durham, Chair
Anna Gavin
Kate E. Jordan
Terrence M. Sawyer
James R. Walsh
Cheryl Y. Washington
James K. Wilhelm Jr.
WASHINGTON DC
Joe Durham, Chair
John Hale III
Scott Lessne
Derek Whitwer
Darryl Wiggins
DELAWARE
DELAWARE/CECIL
Janet Dougherty, Co-Chair
Kim Lewis, Co-Chair
Kelly Albanese Bedder
Jeffrey M. Fried
Robert R. Houck
Nancy G. Michener
Chirag B. Patel
MARYLAND
HAGERSTOWN
Angel Connolly, Chair
Stephen L. Hummel
Bridgett F. Jones-Smith
Alfred E. Martin
NEW JERSEY
CENTRAL NEW JERSEY
Sean Murray, Chair
Rachel Lilienthal Stark
Allen Weiss
Michael D. Yarrow
NORTHERN NEW JERSEY
Sean Murray, Chair
Christopher S. Bateman
Julie C. Cooke
Steven A. Loeb
Gurpreet S. Pasricha
Dennis Pollack
Shelby C. Rhodes
Norman L. Worth
SOUTHERN NEW JERSEY
Andrew G. Agger, Chair
James R. Donnelly Jr.
Wanda P. Hardy
Traci H. Jordan
Terri L. Marakos
Edward Remster
Steven M. Swartz
PHILADELPHIA
Andrew G. Agger, Chair
Gail Ball
Pauline W. Markey
Stephen D. Marshall
Mark R. Nicoletti Sr.
PENNSYLVANIA
BRANDYWINE
Cheryl Brida, Chair
Harry DiDonato
Kenneth M. Goddu
John C. Hosier
James D. McLeod Jr.
Bruce Miller
Kathryn V. Snyder
BUXMONT
Johnathan Hoke, Chair
Robert A. Dick Jr.
Elmer F. Hansen III
Marylee Mundell, DO
Lawrence J. Stuardi
CAPITAL
Bryan Jones, Chair
Amy Beth Kaunas
Justin D. McClure
Beth A. Peiffer
Dr. Aditya Sharma
H. Ralph Vartan
Steven C. Wilds, Esq.
GREATER BERKS
Ralph Richard, Chair
Eric G. Burkey
Marcelino Colon
Robert F. Firely Jr.
Kristi Gage-Linderman
LANCASTER
Philip N. Smith, Chair
Galen Eby
Dean A. Hoover
Robert A. Hostetter
Louis G. Hurst
Cinthia M. Kettering
Tony Legenstein
Kent M. Martin
Edward W. Monborne
David W. Sweigart III
Harold W. Weik Jr.
J. David Young Jr., Esq.
LEBANON
Kristi Heller, Chair
Barry E. Ansel
Donald H. Dreibelbis
Robert J. Funk
Wendie DiMatteo Holsinger
Kenneth C. Sandoe
LEHIGH VALLEY
Doug Downing, Co-Chair
Ralph Richards, Co-Chair
Andrea L. Brady
Mohammed Arif Fazil
Nicholas C. Hindle
Murtaza Jaffer
Richard J. Principato
Loren Speziale
NORTHERN
PENNSYLVANIA
Leslie Temple, Co-Chair
Heather Underkoffler, Co-Chair
Adanma C. Akujieze
Dr. Albert J. Alley, DO
Elizabeth A. Dupuis
Jeffrey M. Krauss
Matthew G. Markunas
Kevin M. McGarry
Thomas F. Songer III
Wendy S. Tripoli
YORK
John Eyster, Chair
Craig Aiello
Vernon L. Bracey
Kevin Eisenhart
Jeffrey L. Rehmeyer II
Gary A. Stewart Jr.
VIRGINIA
CENTRAL VIRGINIA
Darrick Wickre, Chair
Carlos M. Brown
Robert H. Keiter
Laura D. Lafayette
J. Keith Middleton
HAMPTON ROADS
Darrick Wickre, Chair
Joanna Brumsey
Jarryd A. Carver
James W. Noel III
SPECIALIZED
AGRICULTURAL
Ted Bowers, Chair
Robert N. Barley
Phoebe R. Bitler
Andrew S. Bollinger
Dwight Hess
Charles A. Hoober
William Hostetter
Rachel P. Roberts
Douglas S. Scipioni
Scott I. Sechler
P.O. Box 4887
One Penn Square
Lancaster, Pennsylvania 17604
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
TUESDAY, MAY 20, 2025 AT 10:00 A.M. EASTERN TIME
TO THE SHAREHOLDERS OF FULTON FINANCIAL CORPORATION:
NOTICE IS HEREBY GIVEN that, pursuant to the call of its Board of Directors, the 2025 Annual Meet-
ing (the “Annual Meeting”) of the shareholders of Fulton Financial Corporation (“Fulton”) will be held on
Tuesday, May 20, 2025, at 10:00 a.m. eastern time, at the Lancaster Marriott at Penn Square, 25 South Queen
Street, Lancaster, Pennsylvania 17603, for the purpose of considering and voting upon the following matters:
•
ELECTION OF DIRECTORS. The election of 11 director nominees to serve for a one-year term;
•
ADVISORY VOTE ON EXECUTIVE COMPENSATION. A non-binding advisory proposal to
approve the compensation of Fulton’s named executive officers; and
•
RATIFICATION OF INDEPENDENT AUDITOR. The ratification of the appointment of KPMG
LLP as Fulton’s independent auditor for the fiscal year ending December 31, 2025.
OTHER BUSINESS. Such other business as may properly be brought before the Annual Meeting
and any adjournments thereof.
Only those shareholders of record at the close of business on March 3, 2025 will be entitled to
be given notice of, to attend and to vote at, the Annual Meeting. Please take a moment to cast your vote
online using your computer, by mobile device or by telephone in accordance with the instructions set forth
on the enclosed proxy card. Alternatively, if you received a paper copy of this proxy statement (this “Proxy
Statement”) and proxy card, then complete, sign and date the proxy card and return it in the postage-paid
envelope. If you attend the Annual Meeting, you may vote during the meeting in person or online by using
the control number that appears on your proxy card even if you previously voted.
Your vote is important. Voting online using your computer, by mobile device or by telephone prior to
the Annual Meeting is fast and convenient, and your vote is immediately confirmed and tabulated. Your proxy
is revocable and may be withdrawn at any time before it is voted at the Annual Meeting. You are cordially
invited to attend the Annual Meeting on May 20, 2025 at 10:00 a.m. eastern time. If you plan on attending
the Annual Meeting in person, then please see the instructions contained in this Proxy Statement.
A copy of Fulton’s 2024 Annual Report on Form 10-K (the “Annual Report”) accompanies this
Proxy Statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2025
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 20, 2025. Our Proxy Statement and Annual
Report are available online at www.proxyvote.com. We will mail to certain shareholders a Notice of Inter-
net Availability of Proxy Materials which contains instructions on how to access these materials and vote
online. We expect to mail this notice and to begin mailing our proxy materials on or about April 1, 2025.
Sincerely,
April 1, 2025
Natasha R. Luddington
Senior Executive Vice President,
Chief Legal Officer and
Corporate Secretary
[This Page Intentionally Left Blank]
2025 Proxy Statement | i | Fulton Financial Corporation
TABLE OF CONTENTS
PAGE
2025 ANNUAL MEETING SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
OVERVIEW OF VOTING MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
PROPOSAL 1 – ELECTION OF DIRECTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Director Nominees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Voting for Director Nominees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Director Qualifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Selecting and Nominating Director Candidates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Director Nominees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Directors Who are Not Standing For Re-election at the Annual Meeting . . . . . . . . . . . . . . . . . . . . 15
Executive Officers Who are Not Serving as Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
CORPORATE GOVERNANCE AND BOARD MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Information about Director Nominees, Directors and Independence Standards. . . . . . . . . . . . . . 19
Shareholder Engagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Risk Oversight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Board’s Role in Consumer Financial Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Meetings and Committees of the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Committee Governance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
HR Committee Interlocks and Insider Participation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Corporate Governance Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Code of Conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ESG Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Related Person Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Delinquent Section 16(a) Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2024 Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2024 Director Compensation Table. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Stock Ownership Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Security Ownership of Directors, Nominees, Management and Certain Beneficial Owners. . . .
29
Owners of More Than Five Percent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Proposal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
INFORMATION CONCERNING EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Compensation Discussion and Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Executive Compensation Philosophy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Summary of Executive Compensation Practices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Corporate Governance and Compensation Practices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Pay for Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Executive Compensation Decision-Making Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
HR Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Independent Compensation Consultant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2024 Peer Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Shareholder Say-on-Pay Proposal Historical Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Compensation Plan Risk Review. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Elements of Our Executive Compensation Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Annual Cash Incentives – VCP Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2024 Scorecard Matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2024 VCP Award Matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Final 2024 Scorecard Matrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Equity Awards – LTI Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
2025 Proxy Statement | ii | Fulton Financial Corporation
2024 Equity Award Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Other Compensation Elements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Executive Compensation Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Stock Hedging and Pledging Policy and Stock Trading Procedures. . . . . . . . . . . . . . . . . . . . . . . . 48
Stock Ownership Guidelines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Clawback Policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Practices Related to the Grant of Certain Equity Awards Close in
Time to the Release of Material Nonpublic Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Tax Deductibility of Compensation Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
CEO Pay Ratio Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
HR Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Summary Compensation Table. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
All Other Compensation Table. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Grants of Plan-Based Awards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2024 Outstanding Equity Awards at December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2024 Option Exercise and Stock Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2024 Non-Qualified Deferred Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Employment Agreements, Severance and Change in Control Payments,
Consulting Agreement and Separation Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Potential Payments on Termination and Change in Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
2024 NEO Change in Control and Termination Table. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
2024 Pay Versus Performance Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Pay Versus Performance Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Pay Versus Performance Table. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Performance Measures Used to Link Company Performance and CAP. . . . . . . . . . . . . . . . . . . . . 65
Pay Versus Performance Charts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
PROPOSAL 3 – RATIFICATION OF INDEPENDENT AUDITOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Proposal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Relationship With Independent Public Accountants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Independent Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Audit Committee Pre-Approval Policies and Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Audit Committee Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
MEETING AND OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Date, Time and Place of the Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Notice of Internet Availability of Proxy Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Information Contained in Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Shareholders Eligible to Vote and Attend the Annual Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Shares Eligible to be Voted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Quorum Requirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Broker Non-Votes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
How to Vote. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Revoking or Changing Your Vote. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
The Cost of the Proxy Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
How to Obtain Fulton’s Corporate Governance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Sign Up for Electronic Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
COMPANY DOCUMENTS AND OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Shareholder Proposals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Procedure for Shareholder Nominations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Annual Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Householding of Proxy Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
NON-GAAP RECONCILIATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex A
2025 Proxy Statement | 1 | Fulton Financial Corporation
2025 ANNUAL MEETING SUMMARY
This summary highlights information contained elsewhere in this proxy statement (this “Proxy Statement”)
of Fulton Financial Corporation (“Fulton,” “we,” “our,” “us” or the “Company”). This summary provides an
overview and is not intended to contain all the information that you should consider before voting. We
encourage you to read this Proxy Statement for more detailed information prior to casting your vote.
When and Where
The 2025 Annual Meeting (the “Annual Meeting”) will be held at the Lancaster Marriott at Penn
Square, 25 South Queen Street, Lancaster, Pennsylvania 17603, on Tuesday, May 20, 2025, at
10:00 a.m. eastern time. Please refer to the “Date, Time and Place of the Annual Meeting”
section of this Proxy Statement for more details about attending the Annual Meeting.
Matters to be
Voted on and Vote
Recommendations
Proposal
Board
Recommendation
Page
Proposal 1:
Election of Directors. The election of 11 director
nominees to serve for a one-year term.
“FOR” each
director nominee
5
Proposal 2:
Advisory Vote on Executive Compensation.
A non-binding advisory proposal to approve
the compensation of Fulton’s named executive
officers (“NEOs”).
“FOR” approval
31
Proposal 3:
Ratification of Independent Auditor. The
ratification of the appointment of KPMG LLP
(“KPMG”) as Fulton’s independent auditor for
the fiscal year ending December 31, 2025.
“FOR” ratification
67
How to Vote
Your Shares
You can vote your
shares by visiting
www.proxyvote.
com.
Scan the following
QR code with a
mobile device.
You can vote your
shares by calling
1-800-690-6903.
If you received a paper
copy of this Proxy
Statement, you can
vote your shares by
signing and returning
your proxy card.
Electronic
Delivery
If you would like to save paper and reduce the costs incurred by
Fulton in printing and mailing proxy materials, you can consent to
electronically receiving all future proxy statements, proxy cards and
Annual Reports on Form 10-K. To sign up for electronic delivery, go to
www.proxyvote.com and follow the instructions.
2025 Proxy Statement | 2 | Fulton Financial Corporation
OVERVIEW OF VOTING MATTERS
PROPOSAL 1
Election of Directors
The Fulton board of directors (the “Board”)
approved the nomination of 11 director nominees
for election to serve as directors of Fulton until the
2026 Annual Meeting of Shareholders (the “2026
Annual Meeting”) or until their successors are
duly elected and qualified.
The Board unanimously recommends that shareholders vote “FOR” the election of each of the
11 director nominees.
Director Nominee
Age
Fulton
Director
Since
Independent
Director
Gender(1)
Demographic
Background(2)
Committee
Memberships
Jennifer Craighead Carey
56
2019
(3)
F
AA
Executive Committee
and Risk Committee(*)
Lisa Crutchfield
62
2014
F
AA
Nominating and Corporate
Governance Committee (the
“NCG Committee”) and Human
Resources Committee(**) (the
“HR Committee”)
Denise L. Devine
69
2012
F
C
Executive Committee(**),
Audit Committee(*)
and Risk Committee
George K. Martin
71
2021
M
AA
Risk Committee
and NCG Committee(**)
James R. Moxley III
Lead Director
64
2015
M
C
Executive Committee(*),
Audit Committee
and HR Committee
Curtis J. Myers
Chairman of the Board
(“Chairman”) and Chief
Executive Officer (“CEO”)
56
2019
-
M
C
Executive Committee
and Risk Committee(†)
Antoinette M. Pergolin
61
2022
F
C
Audit Committee(**)
and Risk Committee
Michael F. Shirk
49
-
M
C
Risk Committee(4)
Scott A. Snyder
59
2016
M
C
Executive Committee,
Risk Committee(**)
and NCG Committee(*)
Ronald H. Spair
69
2015
M
C
Executive Committee,
Audit Committee
and HR Committee(*)
E. Philip Wenger
67
2009
-
M
C
Risk Committee
(*) Indicates committee chairperson
(**) Indicates committee vice chairperson
(†) Indicates ex-officio committee member
(1) Gender – Male (M) or Female (F)
(2)
Demographic Background – African American (AA)
or Caucasian (C)
(3)
Ms. Craighead Carey is an independent director for purposes
of serving as a director and as a member of the committees
on which she serves.
(4)
Mr. Shirk is currently a “non-voting” member of the joint
Fulton and Fulton Bank, N.A. (“Fulton Bank”) Risk Committee.
Mr. Shirk, if elected, will be appointed a voting member of
the Risk Committee.
The following table provides summary information
regarding each director nominee. Additional details
about each of the director nominees can be found
beginning on page 9. Except for Mr. Shirk, each of the
below director nominees is presently a Fulton director.
2025 Proxy Statement | 3 | Fulton Financial Corporation
Our Current Governance Best Practices
We are committed to maintaining strong corporate
governance practices. The Board regularly reviews
our governance policies and procedures to ensure
compliance with laws, rules and regulations. We are
also committed to operating with corporate social
responsibility as a central tenet and continue to
focus our attention on environmental, social and
governance (“ESG”) principles. Additional details
about our corporate governance practices and our
efforts to be a solid corporate citizen are set forth
on page 19, and certain of our best practices are
highlighted below:
Best Practices Include:
Board Independence
Board Practices
Shareholders Rights
Shareholder Alignment
Independent lead
director (the “Lead
Director”)
Executive sessions
chaired by the Lead
Director
Board and
committee ability to
hire outside advisers
independent of
management
A majority of
independent
directors
The HR, Audit, and
NCG Committees are
composed entirely
of independent
directors
Annual Board and
committee self-
evaluations
Risk oversight and
strategic planning by
the Board
Independent
directors evaluate
CEO performance
and CEO
compensation
Board has direct
access to all of our
senior executive
officers
Outside public board
service limited
to a total of four,
including the Board
Annual election of
directors
Annual say-on-pay
advisory vote
Officer and director
stock ownership
guidelines
Anti-hedging and
anti-pledging
policies
Rigorous
compensation
clawback policies
that exceed Nasdaq
requirements
2025 Proxy Statement | 4 | Fulton Financial Corporation
PROPOSAL 2
Advisory Vote on Executive Compensation
Our advisory vote on executive compensation
(otherwise known as “say-on-pay”) is held annu-
ally. This proposal provides our shareholders with
the opportunity to vote to approve, on a non-bind-
ing advisory basis, the compensation of Fulton’s
NEOs, including the compensation, discussion
and analysis and accompanying compensation
tables and narrative discussion (the “CD&A”).
The Board believes that the compensation of our
NEOs is appropriate and should be approved on
an advisory basis by our shareholders.
As an advisory vote, this proposal is not binding
upon the Board, the HR Committee or Fulton.
The HR Committee, however, values the opinions
expressed by shareholders in their vote on this
proposal and will consider the outcome of the
vote when making future compensation decisions
for our NEOs. The CD&A beginning on page 32
provides a more detailed description of Fulton’s
compensation philosophy and practices.
PROPOSAL 3
Ratification of Independent Auditor
As a matter of good corporate practice, we are
seeking your ratification of the appointment of
KPMG as our independent auditor for the fiscal
year ending December 31, 2025. If our sharehold-
ers do not ratify the selection of KPMG, the Audit
Committee may reconsider its selection.
For 2024, the total fees for services provided by
KPMG, our current independent auditor, were
$4,284,300, all of which represented audit fees,
except for $66,500 in tax fees. Additional details
about audit matters can be found beginning
on page 67.
The Board unanimously recommends that shareholders vote “FOR” the approval of the
compensation paid to Fulton’s NEOs as disclosed in this Proxy Statement, including the CD&A,
compensation tables and narrative discussion.
The Board unanimously recommends that shareholders vote “FOR” the ratification of
the appointment of KPMG as Fulton’s independent auditor for the fiscal year ending
December 31, 2025.
2025 Proxy Statement | 5 | Fulton Financial Corporation
PROPOSAL 1
Election of Directors
Director Nominees
The Board nominates the following 11 director nomi-
nees for election to the Board for a one-year term:
•
Jennifer Craighead Carey •
Michael F. Shirk
•
George K. Martin
•
E. Philip Wenger
•
Antoinette M. Pergolin
•
Denise L. Devine
•
Ronald H. Spair
•
Curtis J. Myers
•
Lisa Crutchfield
•
Scott A. Snyder
•
James R. Moxley III
Except for Mr. Shirk, each of the above director
nominees is presently a Fulton director. The Board
approved the nomination of the above individuals.
The Board is currently comprised of 11 directors, all
of whom also serve on the board of directors (the
“Fulton Bank Board”) of Fulton’s banking subsidiary,
Fulton Bank. Mr. Etter will not stand for re-election
at the Annual Meeting as he reached Fulton’s man-
datory retirement age. The Board would like to
thank Mr. Etter for his service and valuable contri-
butions to the Board.
If elected at the Annual Meeting, the Board has no
reason to believe that any of the director nominees
will be unable to accept nomination or serve as a
director.
The Board unanimously recommends that shareholders vote “FOR” the election of each of the
11 director nominees.
Voting for Director Nominees
Vote Required
The 11 candidates receiving the highest number of
votes cast at the Annual Meeting will be elected to
the Board. Abstentions and broker non-votes will be
counted as present at the Annual Meeting if such
shares were voted on at least one non-procedural
matter, but abstentions and broker non-votes will not
be counted as votes cast in the election of directors.
Resignation Policy
In an uncontested election, any director nominee
who receives a greater number of votes “withheld”
from his or her election than votes “for” such elec-
tion is required to promptly tender his or her resigna-
tion. The NCG Committee will consider the tendered
resignation and recommend to the Board whether to
accept it. The Board will act on the NCG Committee’s
recommendation within 90 days following certifica-
tion of the shareholder vote. There is no cumulative
voting for our directors.
Director Qualifications
Mix of Skills, Qualifications and Attributes
The Board believes that the 2025 director nominees
provide Fulton with the right mix of skills and expe-
rience necessary for an effective Board. The NCG
Committee reviews the composition of the Board on
an annual basis to ensure that the Board reflects the
appropriate balance of experience, skills and exper-
tise. The Board believes different points of view
brought through inclusive representation leads to
better business performance, decision making and
understanding of the needs of our clients, employ-
ees, shareholders, business partners and other
stakeholders.
2025 Proxy Statement | 6 | Fulton Financial Corporation
Based on our business, the primary areas of experience, qualification and skills typically sought by the
NCG Committee in director candidates, include but are not limited to, the following:
FINANCIAL EXPERTISE
RISK MANAGEMENT
Qualified to serve as an “Audit Committee
financial expert” or experience in financial
management, capital allocation, account-
ing, financial reporting or audit processes.
As a bank holding company with multiple
business lines, it is important to have direc-
tors who understand financial audits and
can oversee financial reporting.
Knowledge of, or experience with, key risk
oversight or risk management functions,
including data privacy and cybersecurity.
Risk management is critical to achiev-
ing long-term success in our industry. As
such, we need directors with experience in
overseeing and understanding the dynamic
risks we face.
SENIOR LEADERSHIP EXPERIENCE
LEGAL/GOVERNANCE EXPERIENCE
Experience holding significant leadership
positions, particularly as a chief executive
officer or head of significant business line.
It is important to have proven leaders on
the Board who can oversee Fulton’s man-
agement and help us drive business strat-
egy, growth and performance.
Knowledge of, or experience in, regulated
industries or governmental organizations.
These skills are important to the Board’s
oversight of our highly regulated business.
MARKET KNOWLEDGE & INFLUENCE
MERGERS/ACQUISITIONS EXPERIENCE
Knowledge and influence in Fulton’s five-
state footprint.
Experience with respect to mergers and
acquisitions.
BANKING INDUSTRY EXPERIENCE
PUBLIC COMPANY BOARD EXPERIENCE
Experience with the banking or financial
services industry.
Experience in public company governance,
including corporate governance best prac-
tices and policies and managing relations
with key stakeholders.
2025 Proxy Statement | 7 | Fulton Financial Corporation
HR/COMPENSATION EXPERIENCE
MARKETING AND SALES EXPERIENCE
Knowledge of, or experience with, execu-
tive compensation and human capital
resource management strategies and over-
sight. It is important to have individuals on
the Board who can oversee our efforts to
attract, motivate and retain key talent and
provide valuable insight in determining the
compensation of the CEO and other execu-
tive officers.
Experience in brand development, cus-
tomer experience, marketing and sales.
INVESTMENT EXPERIENCE
PUBLIC COMPANY CEO EXPERIENCE
Experience with public company invest-
ment policies, practices and activities.
Experience as a chief executive officer of a
public company.
IT EXPERIENCE (GENERAL, FINTECH,
CYBER, DIGITAL)
STRATEGIC EXPERIENCE
Experience in the development and adop-
tion of technology, information security
and cybersecurity matters.
Experience with the oversight of public
company strategic planning.
Additionally, the NCG Committee may consider other attributes relevant to our strategic growth and
business needs including, but not limited to: (i) strong strategic, critical and innovative thinking, (ii) sound
business judgment, (iii) high ethical standards, (iv) collegial spirit, (v) ability to debate and challenge
constructively and (vi) availability and commitment to serve.
2025 Proxy Statement | 8 | Fulton Financial Corporation
Gender Diversity(1)
36.4%
Racial Diversity(1)
27.3%
Average Director Nominee Tenure(1)
8.0 Years
Female 4
Male 7
Diverse 3
Non-diverse 8
6-10 Years 5
11+ Years 3
0-5 Years 3
(1) Except for Mr. Shirk, each of the director nominees is presently a Fulton director.
Refreshment and Retention
The Board is committed to board refreshment. Pur-
suant to Fulton’s Bylaws, no person may be nomi-
nated for election to the Board if he or she will be
72 years old on or before the date of the annual
meeting of shareholders at which he or she would
stand for election. The NCG Committee believes
there is a balance between seasoned directors with
knowledge of Fulton and new directors who con-
tribute fresh ideas, perspectives and viewpoints to
the Board’s deliberations. The average tenure of
our director nominees as of the date of this Proxy
Statement is eight years. Our director nomination
process reflects our continued growth and focus
on having a Board composed of directors who con-
tribute to the evolving needs of Fulton while main-
taining the invaluable knowledge brought by more
tenured directors.
Selecting and Nominating Director
Candidates
Fulton’s Corporate Governance Guidelines (the “Guide-
lines”) provide that the Board will be sufficient in size to
achieve diversity in business experience, community
service and other qualifications. The NCG Committee
is responsible for carrying out the Board’s commitment
to maintaining a balanced and diverse composition
of well-qualified directors. The NCG Committee con-
siders director nominees who are recommended by
non-management directors, Fulton’s CEO, other senior
officers and third parties. The NCG Committee identi-
fies director nominee candidates and recommends
such candidate’s nomination to the Board based on his
or her ability to diversify and complement the Board’s
existing strengths. Information on the experience, qual-
ifications and attributes of Fulton’s director nominees
is detailed under “Director Nominees” on page 9.
Our shareholders may propose director candidates for
consideration by the NCG Committee by submitting
the individual’s name and qualifications to the Chair-
man or Corporate Secretary at One Penn Square, P.O.
Box 4887, Lancaster, Pennsylvania 17604 in accor-
dance with, and with such other information as may be
required by, our Bylaws and the Guidelines. Our NCG
Committee will consider all director candidates prop-
erly submitted by our shareholders and will utilize the
same criteria as director candidates not proposed by
shareholders.
2025 Proxy Statement | 9 | Fulton Financial Corporation
Director Nominees
The biographies of each of our director nominees are set forth below. Except for Mr. Shirk, each of the
below director nominees is presently a Fulton director.
Jennifer
Craighead Carey
Director Since: 2019 | Age: 56 | Independent Director
Committees: Risk (Chair) | Executive
Managing partner of Barley Snyder LLP (“Barley Snyder”) since January 2024.
Partner at Barley Snyder since 2001 and chaired Barley Snyder’s Employment
Law group from 2005 to 2019.
Other Directorships and Positions
• Member, High Holdings Corporation Board of Directors (2021-present)
• Member, High Industries Leadership Development & Compensation
Committee (2023-present)
• Member, Lancaster City Alliance (2019-present)
• Member, Advisory Board for Millersville University’s College of Arts,
Humanities and Social Sciences (2023-present)
• Member, Fulton Bank Board (2012-present)
Directorship Qualification Highlights
Ms. Craighead Carey has extensive legal, risk management, and human capital
experience. In addition, she is familiar with the markets in which Fulton operates.
Lisa Crutchfield
Director Since: 2014 | Age: 62 | Independent Director
Committees: HR (V-Chair) | NCG
Managing principal of Hudson Strategic Advisers, LLC, an economic analysis
and strategic advisory firm, a consultancy practice she launched in 2012. Prior to
launching this consultancy firm, Ms. Crutchfield served as Executive Vice President
and Chief Regulatory, Risk and Compliance Officer for the U.K.-based National
Grid plc, a global energy provider. Ms. Crutchfield has also served as an executive
officer for PECO, an Exelon Company, TIAA-CREF, and Duke Energy Corporation.
Other Directorships and Positions
• Member, Vistra Corporation Board of Directors (NYSE: VST) (2020-present)
• Member, Buckeye Energy Holdings LLC Board of Directors (2020-present)
• Member, Somos, Inc. Board of Directors (2023-present)
• Member, Fulton Bank Board (2014-present)
• Former Member, Unitil Corporation Board of Directors (NYSE: UTL)
(2012-2022)
• Former Member, Fortis Inc. Board of Directors (TSX/NYSE: FTS) (2022-2024)
• National Association of Corporate Directors (“NACD”) Board Leadership
Fellow (2019-present)
Directorship Qualification Highlights
Ms. Crutchfield has substantial experience leading corporate teams and has
experience and knowledge of the financial services industry. Ms. Crutchfield began
her career as a commercial and investment banker. Ms. Crutchfield brings expertise
in public board service, finance, risk management, regulation and compliance.
2025 Proxy Statement | 10 | Fulton Financial Corporation
Denise L. Devine
Director Since: 2012 | Age: 69 | Independent Director
Committees: Audit (Chair) | Executive (V-Chair) | Risk
Founder and Chief Executive Officer of FNB Holdings, LLC, a company dedicated
to initiatives in the health and wellness space since 2014.
Other Directorships and Positions
• Member, SelectQuote Board of Directors (NYSE: SLQT) (2020-present)
• Member, Innovative Solutions and Support, Inc. Board of Directors
(NASDAQ: ISSC) (2025-present)
• Member, AUS, Inc. Board of Directors (2016-present)
• Member, AgroFresh Solutions, Inc. Board of Directors (Nasdaq: AGFS)
(2018-2023)
• Member, Cubic Corporation Board of Directors (NYSE: CUB) (2019-2021)
• Member, Ben Franklin Technology Partners of Southeastern PA Board
(2016- present)
• Member, Ben Franklin Technology Development Authority Board
(2018-present)
• Member, Fulton Bank Board (2012-present)
• NACD Board Leadership Fellow (2016-present)
Directorship Qualification Highlights
Ms. Devine is a certified public accountant. Ms. Devine has substantial
management, business, public company and financial experience.
George K. Martin
Director Since: 2021 | Age: 71 | Independent Director
Committees: NCG (V-Chair) | Risk
Former senior partner of McGuireWoods LLP (“McGuireWoods”). From 2009 to
2021, Mr. Martin served as the managing partner of McGuireWoods’ largest office.
Mr. Martin became a partner with McGuireWoods in 1990 and practices construction
and commercial real estate law. Mr. Martin previously served in various firm
management capacities, including service on the recruiting committee, advisory
board, pension committees and McGuireWoods Consulting Oversight Committee.
Other Directorships and Positions
• Member, University of Virginia Investment Management Corporation Board
(2023-present)
• Member, Housing Development Law Institute Board (1991-present)
• Member, University of Virginia School of Architecture Foundation Board
(2011-present)
• Member, Jefferson Scholars Foundation Board (2015-2022)
• Member, Governing Council at the University of Virginia’s Miller Center
(Vice Chair) (2019-2024)
• Member, Governing Council at the University of Virginia’s Miller Center
(Chair) (2024-present)
• Adjunct professor at the University of Virginia School of Law (2020-present)
• Member, Fulton Bank Board (2016-present)
Directorship Qualification Highlights
Mr. Martin has substantial senior leadership, legal, real estate and risk
management experience.
2025 Proxy Statement | 11 | Fulton Financial Corporation
James R.
Moxley III
Director Since: 2015 | Age: 64 | Independent Director and
Lead Director
Committees: Executive (Chair) | Audit | HR
Principal of Security Development Corporation, a Washington-Baltimore real
estate land development company engaged primarily in retail and multifamily
projects since 1992.
Other Directorships and Positions
• Trustee, Johns Hopkins Medicine – Howard County Medical Center
(2021-present)
• Trustee, Howard Hospital Foundation (2014-2022)
• Founding Director, Real Estate Charitable Foundation of Maryland
(2015-present)
• Chair, Duke University Library Advisory Board (2022-present); Member
(2017-present)
• Member, Board of Visitors of Duke Law School (2017-2023)
• Trustee Emeritus, Glenelg Country School (1996-present)
• Member, Fulton Bank Board (2019-present)
• NACD Board Leadership Fellow (2017-present)
Directorship Qualification Highlights
Mr. Moxley has extensive business, tax and legal experience related to the
acquisition, financing and development of commercial and residential real estate.
Curtis J. Myers
Director Since: 2019 | Age: 56 | Chairman and CEO
Committees: Executive | Risk (ex-officio)
Chairman and CEO of Fulton since January 1, 2023. President of Fulton from 2018
to 2023. President and Chief Operating Officer of Fulton Bank from 2009 to 2023.
Mr. Myers became an executive officer of Fulton in 2013 and has held a number of
executive and management level positions with Fulton Bank since 1990.
Other Directorships and Positions
• Member, Operation HOPE Global Board of Advisors (2023-present)
• Member, Economic Development Company of Lancaster County Board
(2021-present)
• Member, ABA Stonier Graduate School of Banking Advisory Board
(2020-present)
• Member, IREX Corporation and North Lime Holdings Corporation Board
(2021-present)
• Member, Salvation Army, Lancaster, Pennsylvania (1995-present)
• Member, Fulton Bank Board (2009-present)
• Member, Pennsylvania Chamber of Business and Industry Board
(2024-present)
• Member, American Bankers Association Board (2024-present)
Directorship Qualification Highlights
Mr. Myers has substantial banking experience, market knowledge, executive
leadership and financial expertise.
2025 Proxy Statement | 12 | Fulton Financial Corporation
Antoinette M.
Pergolin
Director Since: 2022 | Age: 61 | Independent Director
Committees: Audit (V-Chair) | Risk
President and Chief Executive Officer of Bancroft, a New Jersey non-profit, for
over 15 years that is a leading regional non-profit provider of programs and
services for individuals with autism, intellectual and developmental disabilities
and those in need of neurological rehabilitation.
Other Directorships and Positions
• Member and Chairwoman, Peirce College Board of Trustees (2016-present)
• Member, Inspira Health Network, Inc. Board of Trustees (2021-present)
• Member, Fulton Bank Board (2012-present)
Directorship Qualification Highlights
Ms. Pergolin has extensive experience in senior leadership, governance,
investment, human resources, accounting and finance.
Michael F. Shirk
Director Since: N/A | Age: 49 | Independent Director Nominee
Committees: Risk
Chief Executive Officer at the High Companies since 2015, a leader in
manufacturing, construction and real estate in Lancaster, Pennsylvania. Prior to
that, Mr. Shirk was the Vice President of Architectural Specialties Worldwide at
Armstrong World Industries (NYSE: AWI) from 2009-2014.
Other Directorships and Position:
• Member, PA Chamber of Business and Industry Board (2010-present)
• Member, Lancaster County STEM Alliance Advisory Board (2016-present)
• Member, the High Companies (2011-2015)
• Member, PA Workforce Development Board (2023)
• Member, PA Governor-elect Shapiro Transition Advisory Subcommittee on
Business Development (2023)
• Member, Fulton Bank Board (2023-present)
Mr. Shirk is currently a “non-voting” member of the joint Fulton and Fulton Bank
Risk Committee. Mr. Shirk, if elected, will be appointed as a voting member of
the Risk Committee.
Directorship Qualification Highlights
Mr. Shirk has substantial experience in senior leadership, market knowledge and
influence, mergers and acquisitions, HR/compensation matters and strategic
experience.
2025 Proxy Statement | 13 | Fulton Financial Corporation
Scott A. Snyder
Director Since: 2016 | Age: 59 | Independent Director
Committees: NCG (Chair) | Risk (V-Chair) | Executive
Chief Digital Officer at EVERSANA, a leading provider of global commercial
services to the life sciences industry since 2021. Prior to that, Mr. Snyder was the
Global Head of Digital and Innovation at Heidrick Consulting between 2018 and
2020 and Senior Vice President, Managing Director, and Chief Technology and
Innovation Officer for Safeguard Scientifics, Inc. (NYSE: SFE) from 2016 to 2018.
Other Directorships and Positions
• Senior Fellow, Management Department at Wharton School (2003-present)
• Adjunct faculty member, School of Engineering and Applied Science,
University of Pennsylvania (1997-present)
• Member, Wellhive Advisory Board (2020-present)
• Member, Modus Create Advisory Board (2022-present)
• Member, Fulton Bank Board (2019-present)
Directorship Qualification Highlights
Dr. Snyder has substantial experience in information technology (“IT”), digital and
artificial intelligence strategy and implementation, as well as executive leadership
and risk management in both large and emerging growth companies.
Ronald H. Spair
Director Since: 2015 | Age: 69 | Independent Director
Committees: HR (Chair) | Audit | Executive
Retired Chief Financial Officer, Chief Operating Officer and a member of the
Board of Directors of OraSure Technologies, Inc. (“OraSure”) (Nasdaq: OSUR),
a diagnostic and medical device company headquartered in Bethlehem,
Pennsylvania. Mr. Spair served on the Board of Directors of OraSure from 2006
to 2018 and as executive officer of OraSure from 2001 to 2018.
Other Directorships and Positions
• Member, Fulton Bank Board (2019-present)
Directorship Qualification Highlights
Mr. Spair is a certified public accountant. Mr. Spair has substantial public
company, mergers and acquisitions, development and licensing transactions
and corporate finance experience.
2025 Proxy Statement | 14 | Fulton Financial Corporation
E. Philip Wenger
Director Since: 2009 | Age: 67 | Director
Committees: Risk
Chairman and CEO of Fulton from 2013 to December 31, 2022. Mr. Wenger
served as President from 2008 to 2017 and Chief Operating Officer of Fulton
from 2008 to 2012 in addition to other positions since 1979.
Other Directorships and Positions
• Member, Burnham Holdings, Inc. Board of Directors, (2019-present)
• Member, Operation HOPE Global Board of Advisors (2017-2022)
• Member, Pennsylvania Chamber of Commerce Board of Directors
(2013-present)
• Member, Penn State Harrisburg Board of Advisors (2016-present)
• Member, Attollo, a part of The Children Deserve a Chance Foundation,
Board Chair (2023-present)
• Member, Fulton Bank Board (2003-2009; 2019-present)
Directorship Qualification Highlights
Mr. Wenger has extensive knowledge of banking operations after more than
40 years in the financial services industry.
2025 Proxy Statement | 15 | Fulton Financial Corporation
Directors Who are Not Standing For Re-election at the Annual Meeting
Steven S. Etter
Director Since: 2019 | Age: 72 | Independent Director
Committees: NCG | HR
Former President and Chief Executive Officer of the Harrisburg News Company,
a regional magazine, book and newspaper wholesale distribution company
since 1998. After being acquired by the Hudson News in 2014, Mr. Etter served
as President of their Middle Atlantic Division until his retirement in 2020.
Other Directorships and Positions
• Member, University of Miami’s President’s Council (2014-present)
• Member and Emeritus Director of the Whitaker Center for Science and the
Arts (2001-present)
• Member, Fulton Bank Board (2012-present)
Directorship Qualification Highlights
Mr. Etter has extensive business skills, financial expertise and regional market
knowledge.
2025 Proxy Statement | 16 | Fulton Financial Corporation
Executive Officers Who are Not Serving as Directors
The biographies of each of our executive officers who are not directors of Fulton, as of the date of this
Proxy Statement, are set forth below.
Andy B. Fiol
Year of Hire: 2018 | Age: 53
Senior Executive Vice President and Head of Consumer & Small Business
Senior Executive Vice President and Head of Consumer & Small Business since
January 1, 2023. Mr. Fiol previously serviced in several key roles, including Director
of Consumer & Small Business Consumer Channel, Segment and Product. Mr. Fiol
previously held leadership and executive roles at Capital One Bank from 2011 to
2018 and Bank of America from 2003 to 2011. Before entering banking, Mr. Fiol
was an engineer and leader at Milliken & Company, as well as an entrepreneur and
business owner.
John J. Glover
Year of Hire: 2013 | Age: 49
Senior Executive Vice President and Head of Commercial Banking
Senior Executive Vice President and Head of Commercial Banking for Fulton
Bank since August 2024. Since 2020, Mr. Glover previously served in several key
roles, including Executive Vice President and Director of Commercial Markets
and Senior Vice President and Specialized Commercial Banking Executive.
Richard S.
Kraemer
Year of Hire: 2024 | Age: 46
Senior Executive Vice President and Chief Financial Officer
Senior Executive Vice President and Chief Financial Officer since November 1,
2024. Mr. Kraemer previously served as Chief Banking Officer of Valley National
Bank, the principal subsidiary of Valley National Bancorp (“Valley”), overseeing
commercial banking in Valley’s northern markets from January 2024 to July
2024. Mr. Kraemer previously served as Valley’s Executive Vice President,
Deputy Chief Financial Officer and Treasurer from February 2023 to December
2023; Executive Vice President, Chief Financial Services Officer from January
2020 to January 2023 and First Senior Vice President – Head of Corporate
Finance, Corporate Development, and Investor Relations Officer from December
2017 to December 2019.
2025 Proxy Statement | 17 | Fulton Financial Corporation
Natasha R.
Luddington
Year of Hire: 2021 | Age: 50
Senior Executive Vice President, Chief Legal Officer and Corporate Secretary
Senior Executive Vice President, Chief Legal Officer and Corporate Secretary
since 2021. Ms. Luddington became the Senior Executive Vice President, Chief
Legal Officer and Corporate Secretary Designee in October 2021. Prior to joining
Fulton, Ms. Luddington served in various positions, including Interim General
Counsel and Senior Vice President, Associate General Counsel at Pacific Western
Bank from 2014 to 2021. Ms. Luddington served in various roles in CapitalSource
Bank’s legal department from 2007 to 2014. Ms. Luddington has more than
25 years of legal experience.
Atul Malhotra
Year of Hire: 2015 | Age: 45
Executive Vice President and Chief Risk Officer
Executive Vice President and Chief Risk Officer since February 2024.
Mr. Malhotra served as Fulton’s Managing Director of Enterprise Risk
Management from November 2015 to February 2024. Mr. Malhotra previously
served as a regulatory and risk strategy consultant for various publicly traded
companies, including large, global financial institutions. Mr. Malhotra has more
than 20 years of enterprise risk experience in the financial services industry.
Meg R. Mueller
Year of Hire: 1996 | Age: 61
Senior Executive Vice President and Enterprise Credit Executive
Senior Executive Vice President and Enterprise Credit Executive since August
2024. Ms. Mueller served as Head of Commercial Banking from 2018 to 2024.
Ms. Mueller served as Chief Credit Officer from 2010 to 2017. Ms. Mueller was
promoted to Senior Executive Vice President of Fulton in 2013 and has been
employed by Fulton in a number of positions since 1996.
Angela M. Sargent
Year of Hire: 1992 | Age: 57
Senior Executive Vice President and Chief Information Officer
Senior Executive Vice President and Chief Information Officer since 2013.
Ms. Sargent served as Executive Vice President and Chief Information Officer
from 2002 to 2013 and has been employed by Fulton in a number of positions
since 1992.
2025 Proxy Statement | 18 | Fulton Financial Corporation
Angela M. Snyder
Year of Hire: 2002 | Age: 60
President
President of Fulton since January 2024. Ms. Snyder previously served as Chief
Banking Officer from January 2022 to December 2023. Ms. Snyder was Senior
Executive Vice President and Head of Consumer Banking from 2018 to 2022.
Ms. Snyder joined Fulton in 2002 as President of Woodstown National Bank.
Ms. Snyder served as Chairwoman, President, and Chief Executive Officer of
Fulton Bank of New Jersey until 2019. Ms. Snyder has more than 30 years of
experience in the financial services industry.
Bernadette M.
Taylor
Year of Hire: 1994 | Age: 63
Senior Executive Vice President and Chief Human Resources Officer
Senior Executive Vice President and Chief Human Resources Officer since
2015. Dr. Taylor served as Executive Vice President and director of Human
Resources prior to her promotion in 2015 to Chief Human Resources Officer.
Dr. Taylor joined Fulton in 1994 as the Corporate Training Director.
2025 Proxy Statement | 19 | Fulton Financial Corporation
CORPORATE GOVERNANCE AND BOARD MATTERS
Information about Director Nominees,
Directors and Independence Standards
Independence Standards
The Board determined that nine of Fulton’s 11
director nominees are “independent” within the
meaning of the director independence standards
of the Nasdaq Stock Market LLC (“Nasdaq”) listing
standards and Securities and Exchange Commis-
sion (“SEC”) rules and regulations. Specifically,
the Board determined that director nominees
Messes. Craighead Carey, Crutchfield, Devine and
Pergolin and Messrs. Martin, Moxley, Shirk, Sny-
der and Spair met the Nasdaq listing standards
and SEC rules and regulations with respect to
independent director requirements.
Each of the current members of the Audit, HR
and NCG Committees meet the requirements for
independence under the Nasdaq listing standards
and SEC rules and regulations. In reviewing direc-
tor independence, the Board considered the rela-
tionships and other arrangements, if any, of each
director nominee. The relationships and trans-
actions reviewed and considered are more fully
described in the “Related Person Transactions”
section on page 26.
Lead Director
The Guidelines provide that the Board must
include a Lead Director, and the Board deter-
mined a combined Chairman and CEO position
is appropriate for Fulton. This structure permits
the CEO to manage Fulton’s daily operations and
provides a single voice for Fulton. Fulton believes
that the separation of these roles is not necessary
because the Lead Director acts to counterbalance
the combined Chairman and CEO position. The
Board designates for a term of at least one year
the independent, non-employee director who will
lead the non-employee directors’ executive ses-
sions and preside at all Board meetings at which
the Chairman is not present. The Lead Director
will, among other things:
•
serve as a liaison between the Chairman and
the independent directors;
•
approve information sent to the Board;
•
approve meeting schedules to ensure that
there is sufficient time for discussion of all
agenda items; and
•
have the authority to call meetings of the inde-
pendent directors.
Mr. Moxley has served as the Lead Director and
independent Executive Committee Chair since
June 2018.
Executive Sessions
In 2024, the Fulton independent directors met two
times in executive session without management
present. Fulton’s Lead Director presided over the
executive sessions.
Annual Board and Committee Evaluations
The Board and its committees, except the Execu-
tive Committee, conduct annual self-evaluations.
The NCG Committee creates the annual pro-
cess to elicit feedback from the individual Board
and committee members to enhance Board and
committee effectiveness. The NCG Committee
implements a process with both written and oral
components. The self-evaluations are designed
to encourage open and candid feedback with
respect to Board and Committee effectiveness
and its committees and the effectiveness of each
of its members. The scope of the self-evaluations
includes elements of Board effectiveness, includ-
ing Board size, meeting frequency, quality and tim-
ing of information provided to the Board, director
communication, director education, development
and growth, director skills and qualifications,
director independence and Board strategy. The
NCG Committee annually reports to the Board the
results of these self-evaluations, and the Board
and each committee discuss their respective self-
evaluations. Periodically, the Board will engage
an independent third party to conduct a Board
and individual director assessment. Appropriate
action plans are then developed to implement
enhancements and other changes based on the
feedback received.
2025 Proxy Statement | 20 | Fulton Financial Corporation
Annual CEO Performance Evaluation
Each year, the non-employee directors and the HR
Committee review the CEO’s performance over
the past year in light of Fulton’s performance and
strategic goals and objectives.
CEO and Executive Succession Planning
Succession planning for the CEO and certain other
executive officers is one of the Board’s key respon-
sibilities. At least annually, the Board reviews the
CEO and certain other executive officer succession
plans. The Chief Human Resources Officer reviews
the succession planning process used by manage-
ment to identify NEO successors. The CEO emer-
gency succession plan is reviewed semi-annually
with the HR Committee.
Outside Directorships
Fulton values the experience our directors bring
from other boards on which they serve. We encour-
age all directors to carefully consider the number
of other company boards of directors on which
they serve, taking into account the time required
for board attendance, conflicts of interests, par-
ticipation and board effectiveness. Pursuant to
the Guidelines, no director may serve on more
than four total public company boards, including
the Board.
Contacting the Board
A Fulton shareholder can contact the Board by
writing to: Board of Directors, Fulton Financial Cor-
poration, Attention: Corporate Secretary, P.O. Box
4887, One Penn Square, Lancaster, Pennsylvania
17604. The Chairman will determine further dis-
tribution of written communications based on the
nature of the communication.
Shareholder Engagement
The Board and management regularly engage
with shareholders and meet with shareholders
that attend the Annual Meeting. In 2024, Fulton
management engaged with institutional share-
holders at various investor events. In addition to
meeting and engaging shareholders at the Annual
Meeting, management has taken a proactive
approach to investor relations. In 2024, manage-
ment increased its engagement by 50%, meeting
with over 90 institutional investors through vari-
ous industry conferences and direct calls. Fulton
maintains an Investor Relations officer to advance
its investor engagement activities.
Risk Oversight
Board’s Role in Risk Oversight
Fulton’s risk appetite is focused on enhanc-
ing shareholder value while managing risk at an
acceptable level. The Board and the committees
that monitor risk assess and oversee risk man-
agement, including the establishment, tracking
and reporting of key risk indicators across our
strategic, reputation, credit, market, liquidity,
operational, legal, compliance and regulatory risk
pillars. The Board has primary responsibility for
the oversight of capital adequacy and planning.
Fulton also engages in risk assessments, capital
management and stress testing to ensure that
Fulton has adequate capital to absorb potential
losses under various stress scenarios. The Board
specifically delegates certain risk oversight func-
tions to the Risk, HR, Audit and NCG Committees
as follows:
•
Risk Committee: Responsible for enterprise
risk oversight and regularly informing the
Board about risks. The Board and the Risk
Committee
regularly
review
information
regarding our exposure to the risks detailed
above as well as Fulton’s strategies to moni-
tor, control and mitigate exposure to these
risks. The Risk Committee also oversees
cybersecurity risk.
•
HR Committee: Responsible for risk over-
sight with respect to compensation plans and
human capital management.
•
Audit Committee: Responsible for risk man-
agement oversight with respect to financial
reporting and the evaluation and assessment
of the adequacy of our internal controls.
•
NCG Committee: Responsible for risk over-
sight associated with governance matters,
Board independence, potential conflicts of
interest and ESG matters.
2025 Proxy Statement | 21 | Fulton Financial Corporation
Management’s Role in Risk Oversight
Fulton’s Chief Risk Officer and members of
Fulton’s Enterprise Risk Management Committee
(“ERMC”), a management-level risk committee,
oversee organization-wide existing and emerg-
ing risks and serve as the primary review function
prior to escalation to the Risk Committee and the
Board. This management-level committee pro-
vides risk oversight, including oversight of Fulton’s
risk management and compliance programs.
Risk Appetite Statement
At least annually, the Board adopts a formal Risk
Appetite Statement (“RAS”) that details our risk
management approach and the qualitative and quan-
titative parameters within which Fulton executes
its business strategies. The RAS also outlines the
general structure within which Fulton manages
risk while balancing our customer and community
needs and enhancing shareholder value.
Risks and Controls
Fulton’s framework for enterprise risk manage-
ment consists of three “lines of defense.” Our first
line of defense, that includes our lines of business,
bank operations, shared services operations and
certain corporate functions, has primary respon-
sibility for risk management and compliance,
including process deployment, risk identifica-
tion, training and reporting. Our second line of
defense, that includes our independent risk man-
agement units, is responsible for: (i) overseeing
risk, (ii) defining governance requirements for risk
management and compliance and (iii) monitoring
front line unit risk and compliance activities in dis-
crete areas. Our risk management units include,
but are not limited to, risk management, compli-
ance, loan review, vendor risk management, fraud
risk management, Bank Secrecy Act compliance
and information security. Our third line of defense,
our internal audit function, independently vali-
dates the effectiveness of internal controls and
risk management activities within the first line of
defense and independent risk management units
and periodically reports its results to manage-
ment and the Board.
Board’s Role in Cybersecurity Risk
Cybersecurity risk is a key consideration in
Fulton’s operational risk management. Under
the direction of our Chief Information Security
Officer, Fulton maintains a formal information
security management program that is subject to
oversight by, and reports to, the Risk Committee.
Given the nature of Fulton’s operations and busi-
ness, including Fulton’s reliance on relationships
with various third-party providers in the delivery
of financial services, cybersecurity risk may mani-
fest itself through various business activities and
channels. As such, cybersecurity risk is consid-
ered an enterprise-wide risk subject to control
and monitoring at various levels of management
throughout the Company. In accordance with its
charter, the Risk Committee oversees and reviews
reports on significant matters of actual, threat-
ened or potential breaches of corporate security,
including cybersecurity.
By the very nature of our business, handling sensi-
tive data is a part of daily operations and is taken
very seriously by all employees. The cybersecurity
threat environment is volatile and dynamic requir-
ing all levels of Fulton to be cognizant and aware
of these threats at all times. As such, we main-
tain a comprehensive cybersecurity strategy that
includes, but is not limited to, regular employee
cybersecurity training and communications, regu-
lar monitoring, detection, alerting, and defense
technologies, regular internal and third-party pro-
gram oversight, policies and procedures regularly
reviewed and designed with regulatory and indus-
try guidance and regular reviews of vendors who
maintain sensitive data on our behalf.
Fulton has implemented formal processes and a
framework for determining cyber incident mate-
riality, as well as formal processes and proce-
dures for determining and, where necessary or
appropriate, reporting incident materiality. Cyber
incidents will be evaluated against this frame-
work and our processes and procedures to ensure
that any incidents meeting the defined material-
ity thresholds will be publicly disclosed in a timely
manner. Please see Part I, Item 1C Cybersecurity
in the Annual Report on Form 10-K for the year
ended December 31, 2024 for more information
regarding this framework and these processes
and procedures.
2025 Proxy Statement | 22 | Fulton Financial Corporation
Board’s Role in Consumer Financial
Protection
Under the direction of Fulton’s Chief Compliance
Officer, Fulton maintains a consumer compliance
program that is subject to the oversight of, and
reporting to, the Risk Committee. The consumer
compliance program includes regular risk assess-
ments, policy updates, compliance monitoring,
involvement in new product and significant proj-
ect initiatives, regulatory change management,
independent audit testing and a compliance
training program administered by Fulton’s Learn-
ing and Development team. Compliance courses
are mandatory and are assigned based upon an
employee’s role. Fulton’s compliance manage-
ment system also includes customer feedback
and complaint monitoring. Our compliance man-
agement system is subject to review and exami-
nation by various regulatory agencies, including
the Office of the Comptroller of the Currency and
the Consumer Financial Protection Bureau.
Meetings and Committees of the Board
Meeting Attendance
During 2024, the Board met 13 times. In 2024,
each director attended at least 75% of the meet-
ings of the Board and the committees on which he
or she served.
Unless their absence is excused, Fulton expects
directors to attend the Annual Meeting. Ten
members of the Board attended the 2024
Annual Meeting.
Other Board Committees
We believe the Board has created a sound com-
mittee structure designed to assist the Board in
carrying out its responsibilities in an effective and
efficient manner. While the Board may form, from
time to time, ad hoc or other special purpose com-
mittees, the Board has five regular standing com-
mittees: Audit, Executive, HR, NCG and Risk.
Each of the Audit, HR, NCG and Risk commit-
tees meets regularly and at least on a quarterly
basis. The committees, typically through their
committee chairpersons, routinely report their
actions to, and discuss their recommendations
with, the full Board.
The Board determined that each member of the
Audit, HR and NCG Committees is “independent”
within the meaning of the Nasdaq listing stan-
dards and the SEC rules and regulations.
As of December 31, 2024, the names of the
Board committee members and the key oversight
responsibilities of the Board committees are set
forth below. Mr. Shirk is currently a “non-voting”
member of the joint Fulton and Fulton Bank Risk
Committee. Mr. Shirk, if elected, will be appointed
a voting member of the Risk Committee.
2025 Proxy Statement | 23 | Fulton Financial Corporation
Audit Committee
Members: Denise L. Devine (Chair), Antoinette M. Pergo-
lin (Vice Chair), Ronald H. Spair and James R. Moxley III
Meetings in 2024: 14
Key Oversight Responsibilities:
• pre-approving audit and non-audit services;
• appointing (and recommending for shareholder
ratification), compensating, retaining and oversee-
ing the independent auditor;
• meeting with the independent auditor to review the
scope of audit services;
• reviewing and discussing with management and the
independent auditor annual and quarterly financial
statements and related disclosures;
• overseeing the internal audit function;
• overseeing internal control practices and reviewing the
effectiveness of our internal control framework; and
• overseeing our compliance with laws and regula-
tions relating to financial reporting.
The Board has determined that each member of the
Audit Committee satisfies the requirements established
by the SEC for qualification as an “audit committee
financial expert,” and each is independent under the
Nasdaq listing standards and SEC rules and regulations.
HR Committee
Members: Ronald H. Spair (Chair), Lisa Crutchfield
(Vice Chair), Steven S. Etter and James R. Moxley III
Meetings in 2024: 11
Key Oversight Responsibilities:
• approving and recommending to the Board com-
pensation for the CEO;
• approving the compensation for the NEOs (other
than the CEO);
• reviewing on a semi-annual basis the CEO emer-
gency succession plan;
• reviewing and approving on an annual basis the
Employee Stock Purchase Plan (“ESPP”);
• overseeing employee benefit plans, including Ful-
ton’s health and welfare plans;
• approving employment agreements and change
in control agreements for the NEOs and Fulton’s
senior executive officers;
• determining Fulton’s peer group; and
• fulfilling other compensation, benefits and human
resources duties.
Board of Directors
NCG Committee
Members: Scott A. Snyder (Chair), George K. Martin
(Vice Chair), Lisa Crutchfield and Steven S. Etter
Meetings in 2024: 8
Key Oversight Responsibilities:
• recommending to the Board nominees for election
to the Board;
• assisting the Board with corporate governance mat-
ters, including the review and approval of Fulton’s Code
of Conduct (the “Code of Conduct”) and the Guidelines;
• overseeing compliance with the Board’s self-
evaluation policy;
• determining whether Fulton’s directors and the
NEOs are in compliance with Fulton’s stock owner-
ship guidelines; and
• reviewing from time-to-time our policies, practices
and disclosures with respect to sustainability and
ESG factors.
Risk Committee
Members: Jennifer Craighead Carey (Chair), Scott A.
Snyder (Vice Chair), Denise L. Devine, George K. Mar-
tin, Curtis J. Myers (ex-officio member), Antoinette M.
Pergolin and E. Philip Wenger
Meetings in 2024: 8
Key Oversight Responsibilities:
• overseeing risk management functions and practices;
• overseeing established practices, processes and
controls employed to manage Fulton’s enterprise-
wide risk;
• upon recommendation of the ERMC, reviewing and
recommending to the Board Fulton’s risk manage-
ment framework and enterprise risk management
policy; and
• upon the recommendation of the ERMC, reviewing
and recommending to the Board for its approval,
Fulton’s RAS.
The Chair of the Risk Committee is a director deter-
mined by Fulton’s Board to possess the requisite
experience in identifying, assessing and managing risk
exposures at large, complex financial institutions.
Executive Committee
Members: James R. Moxley III (Chair), Denise L. Devine
(Vice Chair), Jennifer Craighead Carey, Curtis J. Myers,
Scott A. Snyder and Ronald H. Spair
Meetings in 2024: 0
Key Oversight Responsibilities: subject to our Bylaws,
authorized to exercise all the powers and authority of
the Board between board meetings.
2025 Proxy Statement | 24 | Fulton Financial Corporation
Committee Governance
The Board adopted a written charter for each of the
Audit, HR, NCG and Risk Committees that are avail-
able on Fulton’s website, www.fultonbank.com,
under “Investor Relations – Overview – Governance
Documents.” This Proxy Statement includes web-
site addresses and references to additional materi-
als found on those websites. These websites and
materials are not incorporated by reference into
this Proxy Statement or in any other SEC filing. The
Board reviews the committees’ charters, and each
committee reviews its own charter, on at least an
annual basis.
The charters provide that the committees have ade-
quate resources and authority to discharge their
responsibilities, including appropriate funding for
the retention of external consultants or advisors as
the committees deem necessary and appropriate.
HR Committee Interlocks and Insider
Participation
Ms. Crutchfield, and Messrs. Etter, Moxley, and
Spair served on the HR Committee in 2024, each of
whom is an independent director. Mr. Etter will not
stand for re-election at the Annual Meeting. None
of these individuals is, or has been, an officer or
employee of Fulton during the last fiscal year or as
of the date of this Proxy Statement, or is serving
or has served as a member of the compensation
committee (or other board committee performing
equivalent functions) of another entity that has
an executive officer serving on the compensation
committee (or other board committee performing
equivalent functions). No executive officer of Ful-
ton served as a director of another entity that had
an executive officer serving on the HR committee
(or other board committee performing equivalent
functions). Finally, no executive officer of Fulton
served as a member of the compensation com-
mittee (or other board committee performing
equivalent functions) of another entity that had an
executive officer serving as a director of Fulton.
Corporate Governance Guidelines
The Board has developed and adopted the Guide-
lines to promote the functioning of the Board and
its committees and to establish a common set of
expectations as to how the Board should perform
its functions. The Guidelines address, among
other matters: (i) the size of the Board, (ii) direc-
tor qualifications, (iii) the majority vote standard
with respect to the election of directors, (iv) ser-
vice on other boards and director change in sta-
tus, (v) meeting attendance and review of meeting
materials, (vi) director access to management
and independent advisors, (vii) the designation of
a Lead Director, (viii) executive sessions, (ix) CEO
evaluation and succession planning, (x) Board
and committee evaluations, (xi) stock ownership
guidelines, (xii) communications by interested
parties, (xiii) Board and committee responsibilities
and (xiv) the Code of Conduct.
A current copy of the Guidelines can be obtained,
without cost, by writing to the Corporate Secretary
at One Penn Square, P.O. Box 4887, Lancaster,
Pennsylvania 17604. The Guidelines are available
on Fulton’s website at www.fultonbank.com under
“Investor Relations – Overview – Governance
Documents.”
Code of Conduct
The Board adopted a Code of Conduct that gov-
erns the conduct of our and our affiliated entities’
directors, officers and employees. Our Code of
Conduct sets forth specific standards of conduct
that we expect all of our employees and direc-
tors to follow. We maintain an ethics hotline for
employees to use on an anonymous basis. A cur-
rent copy of the Code of Conduct can be obtained,
without cost, by writing to the Corporate Secre-
tary at One Penn Square, P.O. Box 4887, Lancaster,
Pennsylvania 17604. The current Code of Conduct
is available on Fulton’s website at www.fulton-
bank.com under “Investor Relations – Overview –
Governance Documents.”
ESG Overview
We are a community-focused, purpose-driven
organization with a deep, long-standing com-
mitment to promoting sound ESG practices. We
recognize that good practices and effective over-
sight and management of such matters are essen-
tial in driving success for our shareholders, the
communities in which we operate as well as other
stakeholders, including customers and employ-
ees. The Board and certain of its committees
provide ESG oversight as we continue to make
2025 Proxy Statement | 25 | Fulton Financial Corporation
progress in further enhancing our ESG approach,
including promoting the success and well-being
of our employees.
ESG Oversight
The Board designated the NCG Committee to be
the Board-level committee responsible for over-
sight of our ESG strategy and corporate social
responsibility reporting. We have a cross-functional
management-level Corporate Social Responsibility
Leadership Committee to coordinate Fulton’s ESG
program, and this committee provides updates to
the NCG Committee and the Board.
Employees
We recognize a crucial element of a successful
organization is having an inclusive culture and
workforce that encourages employees to share
their opinions and different perspectives, and fos-
ters a culture of respect.
We continually invest in our employees. We provide
relevant learning opportunities to help employees
cultivate their strengths and enrich their careers.
Our Employee Experience Council reviews data
from employee engagement surveys that lead
to action plans in response to survey feedback.
We measure progress based on these employee
engagement surveys, and success toward meet-
ing established performance goals is reflected in
the compensation of executives with an employee
engagement scorecard metric.
Community and Customers
As an active, integral member of the local com-
munities in which we operate, we recognize the
importance of supporting our communities,
including through charitable giving and providing
our employees with volunteer opportunities in our
communities. A key part of our mission is to serve
low- and moderate-income individuals and small
businesses operating in underbanked and under-
served areas.
We established and fund the Fulton Forward Foun-
dation to make direct impact grants to groups
in a manner aligned with our four Fulton For-
ward® pillars detailed below. Our investment in
opportunities for people in our communities to
improve their lives includes focusing people and
financial resources on philanthropic and volunteer
activities to advance the Fulton Forward pillars
that promote:
•
Affordable Housing and Home Ownership
•
Job Training and Workforce Development
•
Financial
Education
and
Economic
Empowerment
•
Inclusion
To ensure fair and equitable customer treatment,
we established a fair lending compliance pro-
gram consisting of policies, procedures, train-
ing, monitoring and testing controls to ensure
compliance with Fair Lending laws. The Fair
and Responsible Banking Strategy Committee,
assisted by the Fair and Responsible Banking
Director, oversees the development and execu-
tion of fair and responsible banking strategic
programs and initiatives.
Environment
As responsible environmental stewards, we strive
to reduce the environmental impact of our activi-
ties. We are mindful of our operational footprint
and deploy efficient land and building practices to
minimize the resources used in the communities
in which we operate.
A working group of senior officers from different
departments across our organization is tasked
with understanding the climate-related opportuni-
ties and risks in our business. The working group
is supporting us by:
•
actively seeking ways to reduce our opera-
tional impact on the environment;
•
incorporating climate-related risk manage-
ment into our business practices;
•
ensuring we have financial products and ser-
vices that support our customers’ sustainabil-
ity journeys; and
•
engaging our vendors on sustainability.
Our Strategic Sourcing and Procurement depart-
ment seeks to reduce the costs of goods and ser-
vices we purchase. Our Supplier Code of Conduct
can be found at www.fultonbank.com under the
“About” tab. These initiatives were created to help
reduce our overall environmental impact.
2025 Proxy Statement | 26 | Fulton Financial Corporation
The Risk Committee has oversight responsibil-
ity for enterprise risks including climate risk fac-
tors. The Risk Committee evaluates Fulton’s
established risk appetite and considers emerging
risk factors such as ESG in its regular oversight
and monitoring of management’s risk reporting
and analysis. Climate risk factors in the credit
and operational risk domains are considered in
the risk appetite and monitoring processes. For
more details on our Risk Committee’s activities,
see “Board’s Role in Risk Oversight” on page 20.
ESG Reporting
We published our 2023 Corporate Social Respon-
sibility Report (the “CSR”) that highlights our
approach to changing the lives of our customers,
employees, members of our communities and
other stakeholders for the better. The CSR can be
found on Fulton’s website at www.fultonbank.com
under the “About” tab. The content of our CSR is
not incorporated by reference into this Proxy
Statement or any other SEC filing.
As part of our continued emphasis on engaging
with stakeholders surrounding our ESG efforts,
we plan to publish a 2024 CSR report that will
include additional disclosures and ESG metrics, a
few of which will be aligned with the Sustainability
Accounting Standards Board.
Human Capital
Our workforce, excluding temporary employees
and interns, on December 31, 2024 consisted of
approximately 3,400 employees.
Employee Engagement and Retention. We place a
premium on having a highly engaged workforce
because engaged employees tend to perform at
a higher level, support our success, and are more
likely to stay with us. We conduct an annual survey
of our workforce to measure employee engage-
ment, assess employee morale, and help identify
areas of the employee experience that could be
improved. We then task our leaders with devel-
oping and implementing communication and
action plans to gain a better understanding of the
results of the assessment and to foster enhanced
future engagement.
Culture and Inclusion. We place significant
emphasis on shaping our corporate culture, and
we consider our culture to be one of the primary
components of our continuing success. Our
culture-shaping program, The Fulton Experience,
is a highly engaging program that is intended to
create new ways of thinking about employees’
individual roles, how employees collaborate, and
how we grow together. We recognize that having
an inclusive culture fosters a culture of respect
and is a crucial element of our success.
Compensation and Rewards. We invest in our work-
force by offering a comprehensive Total Rewards
program that includes competitive salaries, incen-
tives, and benefits. We offer performance-based
incentive programs designed to drive results in the
business units as well as at the enterprise level.
Workforce Recruitment and Development. We
recruit our workforce, filling replacement and new
positions through employee referrals, recruiting
efforts and by posting these positions internally,
on our website and on social media platforms. We
provide for professional development of new and
existing employees largely through the efforts of
our Learning and Development area that develops
and administers a wide variety of training pro-
grams. We also provide a number of third-party
offerings in which employees can further enhance
their skills, knowledge and leadership potential.
Safety, Health and Wellness. The safety, health
and wellness of our employees is a top priority. In
addition to healthcare, paid time off, paid parental
leave and retirement benefits, we provide behav-
ioral and mental health support and work-life ser-
vices through our Employee Assistance Program.
Related Person Transactions
In 2024, certain Fulton directors and execu-
tive officers, including certain NEOs, their fam-
ily members and the companies with which they
are associated, were customers of, and/or had
banking transactions with, Fulton Bank. These
transactions included deposit accounts, trust
relationships, loans and other financial products
and services provided in the ordinary course of
business by Fulton Bank. All loans and commit-
ments to lend made to these persons and to the
companies with which they are associated: (i) are
made in the ordinary course of business, (ii) are
made on substantially the same terms, including
interest rates and collateral, as those prevailing at
the time for comparable loans with persons not
2025 Proxy Statement | 27 | Fulton Financial Corporation
related to Fulton Bank and (iii) did not involve more
than a normal risk of collectability or present other
unfavorable features. It is anticipated that similar
transactions will be entered into in the future.
In 2024, Fulton had one related person transaction
in excess of $120,000 in connection with legal fees
paid to Barley Snyder in the amount of $1,057,616.
Ms. Craighead Carey, a director nominee, is the man-
aging partner of Barley Snyder. Ms. Craighead Carey
owns less than a 4% interest in Barley Snyder. In
2024, Ms. Craighead Carey was not directly engaged
as counsel for any Fulton-related matter, and she did
not bill any hours on Fulton engagements.
In 2024, there were no family relationships among
Board members, director nominees and Fulton
executive officers requiring disclosure.
Fulton does not have a separate related person
transactions policy. Under the Code of Conduct,
directors must provide prompt notice to Fulton
of all new or changed business activities, related
person relationships and board directorships.
The Audit Committee is charged with the over-
sight of, and responsibility to conduct, on an
annual basis, a review of all transactions with
related persons as defined in applicable SEC
regulations.
In February 2025, the Audit Committee reviewed
and approved a report of all 2024 related person
transactions.
Delinquent Section 16(a) Reports
Based solely on Fulton’s review of: (i) Forms 3
and 4 and amendments thereto filed electroni-
cally with the SEC during the 2024 fiscal year;
(ii) Forms 5 and amendments thereto filed elec-
tronically with the SEC with respect to the 2024
fiscal year and (iii) written representations from
Fulton’s directors, the NEOs and our officers, we
believe that all Section 16(a) reports were timely
filed during the 2024 fiscal year.
Director Compensation
The compensation for our non-employee directors
is designed to be competitive with other financial
institutions that are similar in size, complexity and
business model. The Board reviews Fulton’s non-
employee director compensation on an annual
basis with the assistance of the HR Committee.
Elements of Director Compensation
Non-employee directors receive a combina-
tion of a cash retainer and equity compensation
for service on the Board and its committees.
Fulton-employed directors do not receive indi-
vidual meeting fees or other director-related
compensation. In 2024, Fulton granted equity
awards in the form of restricted stock units
(“RSUs”) to its non-employee directors pursu-
ant to the Amended and Restated 2023 Director
Equity Plan (the “Director Equity Plan”). These
RSUs vest in full one year after their grant date and
accrue dividend equivalent units.
Fulton reimburses directors for Board-related
expenses and provides non-employee directors
with a $50,000 term life insurance policy. Certain
directors participate in Fulton’s Deferred Compen-
sation Plan (the “DCP”) that allows a director to
elect to defer a portion of his or her cash director
fees. Annual cash retainers are paid in quarterly
installments. For more details on our DCP, see
“Deferred Compensation Plan” on page 46.
Below is the amount of compensation paid to non-
employee directors in 2024:
2024 Fees
Payment Amounts
Annual director retainer
$70,000 in cash
Annual retainer paid to the Lead Director
$30,000 in cash
Annual retainer paid to committee chairpersons(1)
$17,500 in cash
Annual equity award(2)
$80,007
(1) A committee chair cash retainer is not paid to the chairperson of the Executive Committee.
(2) The number of RSUs awarded was determined using the closing price per share of Fulton’s common stock on May 31, 2024,
rounded up to the next whole share.
2025 Proxy Statement | 28 | Fulton Financial Corporation
2024 Director Compensation
The following table details the compensation paid to each 2024 Fulton non-employee director:
2024 Director Compensation Table
Name
Fees Earned or
Paid in Cash
($)
Stock
Awards(1)(2)
($)
All Other
Compensation(3)
Total
($)
Jennifer Craighead Carey
87,500
80,007
$48
167,555
Lisa Crutchfield
70,000
80,007
$48
150,055
Denise L. Devine
87,500
80,007
$48
167,555
Steven S. Etter
70,000
80,007
$48
150,055
George K. Martin
70,000
80,007
$48
150,055
James R. Moxley III
100,000
80,007
$48
180,055
Antoinette M. Pergolin
70,000
80,007
$48
150,055
Scott A. Snyder
87,500
80,007
$48
167,555
Ronald H. Spair
87,500
80,007
$48
167,555
E. Philip Wenger
70,000
80,007
$48
150,055
(1) The amounts in this column represent the grant date fair value determined in accordance with ASC Topic 718 of an RSU award
granted to each non-employee director on June 1, 2024 under the Director Equity Plan, consisting of 4,751 RSUs having a grant
date fair value of $16.84 per share, the closing price of Fulton common stock on May 31, 2024. The RSUs will vest in full on June
1, 2025, subject to the grantee’s continued service with Fulton.
(2) As of December 31, 2024, Fulton non-employee directors had the following outstanding stock awards payable in Fulton common
stock, including accumulated dividend equivalent units and RSUs with respect to which the director has elected under the Director
Equity Plan to defer delivery of the RSUs until January 15 of the calendar year following the earliest to occur of the director’s
separation from service as a director, death or disability, either in a single installment or three equal annual installments:
Name
Outstanding
Stock Awards
Jennifer Craighead Carey
27,894
Lisa Crutchfield
32,696
Denise L. Devine
25,310
Steven S. Etter
27,894
George K. Martin
24,833
James R. Moxley III(A)
4,841
Antoinette M. Pergolin
24,165
Scott A. Snyder
32,696
Ronald H. Spair
32,696
E. Philip Wenger(A)(B)
159,159
(A) Mr. Moxley and Mr. Wenger have not elected to defer delivery of RSUs.
(B) Mr. Wenger’s outstanding stock awards include 154,318 unvested performance-based RSUs granted on May 1, 2022 when Mr.
Wenger was serving as Fulton’s Chairman and Chief Executive Officer. The performance-based RSUs will vest on May 1, 2025.
(3) This amount represents the annual cost of the $50,000 life insurance benefit provided to each non-employee director.
2025 Proxy Statement | 29 | Fulton Financial Corporation
Stock Ownership Guidelines
The Guidelines require that each director own at
least $350,000 of Fulton common stock within
five calendar years after becoming a director. As
of December 31, 2024, all directors have satis-
fied the stock ownership guideline requirements
or are within the five calendar year period to
achieve compliance.
Security Ownership of Directors,
Nominees, Management and Certain
Beneficial Owners
The following table sets forth the beneficial own-
ership of Fulton common stock at the close of
business on March 3, 2025 (the “Record Date”)
by: (i) each director, (ii) each director nominee,
(iii) each NEO and (iv) Fulton’s directors and execu-
tive officers as a group. The following information
is based on information furnished by the respec-
tive directors and officers.
Directors and Director Nominees who are not NEOs
Total Shares
Beneficially
Owned(1)
% of Class
Jennifer Craighead Carey
4,985
*
Lisa Crutchfield
11,938
*
Denise L. Devine(2)
31,521
*
Steven S. Etter(3)
286,232
*
George K. Martin(4)
10,724
*
James R. Moxley III(5)
155,108
*
Antoinette M. Pergolin
3,229
*
Michael F. Shirk(6)
69,214
*
Scott A. Snyder
6,540
*
Ronald H. Spair(7)
19,072
*
E. Philip Wenger(8)
582,333
*
NEOs
Curtis J. Myers(9)
215,669
*
Richard S. Kraemer
-
*
Angela M. Snyder
63,682
*
Meg R. Mueller(10)
121,968
*
Beth Ann L. Chivinski(11)
122,654
*
Mark R. McCollom(12)
39,782
*
Karthik K. Sridharan(13)
16,245
All Directors and Executive Officers as a group (24 persons)
1,972,788(14)
1.08%
(*) Represents less than 1.0% of the outstanding shares of Fulton’s common stock calculated in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).
(1) For purposes of this table, “beneficial ownership” is determined in accordance with Rule 13d-3 under the Exchange Act,
pursuant to which a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that
such person has the right to acquire within 60 days of the Record Date, but are not deemed to be outstanding for the purposes
of computing the percentage ownership of any other person.
(2) Ms. Devine’s ownership includes 1,000 shares held jointly with her spouse.
(3) Mr. Etter will not stand for re-election at the Annual Meeting as he has reached Fulton’s mandatory retirement age.
2025 Proxy Statement | 30 | Fulton Financial Corporation
(4) Mr. Martin’s ownership includes 8,870 shares held in an individual retirement account and 125 shares held jointly with his
spouse.
(5) Mr. Moxley’s ownership includes: (i) 1,394 shares held solely by his spouse, (ii) 20,907 shares held by Mr. Moxley as custodian
for his children and (iii) 28,000 shares held in a 401(k) plan.
(6) Mr. Shirk’s ownership includes, (i) 10,213 shares held jointly with his spouse, (ii) 2,756 shares held in a simplified employee
pension individual retirement account held by his spouse, (iii) 10,051 shares held by Mr. Shirk as custodian for his children
and (iv) 3,000 shares held by Tipararee LLC, and (v) 37,608 shares held by Mr. Shirk as Trustee of JOS Credit Shelter Trust.
(7) Mr. Spair’s ownership includes 10,000 shares held jointly with his spouse.
(8) Mr. Wenger’s ownership includes: (i) 144,297 shares held jointly with his spouse, (ii) 96,626 shares held in an individual
retirement account (“IRA”), (iii) 3,851 shares held in an IRA by his spouse and (iv) 440 shares held by Mr. Wenger as custodian
for his children.
(9) Mr. Myers’ ownership includes: (i) 59,724 shares held in the Fulton Financial Corporation 401(k) Retirement Plan (the “401(k)
Plan”) and (ii) 22,109 shares held jointly with his spouse.
(10) Ms. Mueller’s ownership includes 10 shares held jointly with her spouse.
(11) Ms. Chivinski’s ownership includes 11,255 shares held in the 401(k) Plan. Ms. Chivinski served as Interim Chief Financial
Officer from February 8, 2024 through October 31, 2024. Ms. Chivinski retired on December 31, 2024.
(12) Mr. McCollom separated from Fulton on February 8, 2024.
(13) Mr. Sridharan separated from Fulton on January 31, 2025.
(14) Includes 2,031 RSUs that will vest within 60 days of the Record Date.
Owners of More Than Five Percent
The following table sets forth information as to those persons or entities believed by the Company to be
beneficial owners of more than 5% of Fulton’s outstanding shares of common stock on the Record Date
or as represented by the owner or as disclosed in certain reports regarding such ownership filed by such
persons with Fulton and with the SEC in accordance with Sections 13(d) and 13(g) of the Exchange Act.
Other than those persons listed below, Fulton is not aware of any person, as such term is defined in the
Exchange Act, that beneficially owns more than 5% of Fulton’s common stock as of the Record Date.
Name and Address of Beneficial Owner
Shares Owned
% of Class(1)
BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055
23,546,315
12.92%
The Vanguard Group(3)
100 Vanguard Blvd.
Malvern, PA 19355
19,444,753
10.67%
Dimensional Fund Advisors LP(4)
Building One
6300 Bee Cave Road
Austin, TX 78746
11,918,842
6.54%
State Street Corporation(5)
State Street Financial Center
1 Congress Street, Suite 1
Boston, MA 02114-2016
8,913,746
4.89%
(1) Based on 182,199,918 shares of Fulton common stock issued and outstanding as of the Record Date.
(2) Based on a Schedule 13G/A filed by BlackRock, Inc. with the SEC on January 23, 2024 that reported: (i) sole voting power as to
23,022,549 shares of Fulton common stock and (ii) sole dispositive power as to 23,546,315 shares of Fulton common stock.
(3) Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 13, 2024 that reported: (i) sole voting
power as to zero shares of Fulton common stock, (ii) sole dispositive power as to 19,123,055 shares of Fulton common stock,
(iii) shared voting power as to 147,036 shares of Fulton common stock and (iv) shared dispositive power as to 321,698 shares
of Fulton common stock.
(4) Based on a Schedule 13G/A filed by Dimensional Fund Advisors LP with the SEC on February 9, 2024 that reported: (i) sole
voting power as to 11,737,936 shares of Fulton common stock and (ii) sole dispositive power as to 11,918,842 shares of Fulton
common stock.
(5) Based on a Schedule 13G filed by State Street Corporation with the SEC on January 24, 2024 that reported: (i) shared
voting power as to 1,016,254 shares of Fulton common stock, (ii) shared dispositive power as to 8,913,746 shares of Fulton
common stock and (iii) ownership of 5.43% of Fulton common stock.
2025 Proxy Statement | 31 | Fulton Financial Corporation
PROPOSAL 2
Advisory Vote on Executive Compensation
Proposal
We present our say-on-pay proposal annually.
Pursuant to the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010 (the “Dodd-
Frank Act”) and Section 14A of the Exchange Act,
this proposal provides our shareholders with the
opportunity to vote to approve, on a non-binding
advisory basis, compensation of Fulton’s NEOs, as
discussed in this Proxy Statement, including the
CD&A. This proposal is not intended to address
any specific item of compensation, but rather
the overall compensation of our NEOs and the
philosophy, policies and practices described in
this Proxy Statement.
We ask our shareholders to indicate their support
for our executive compensation program for our
NEOs and vote “FOR” the following resolution at
the Annual Meeting:
“RESOLVED, that the compensation paid
to Fulton’s Named Executive Officers, as
disclosed pursuant to Item 402 of Regulation
S-K, including the Compensation Discussion
and Analysis, compensation tables and
narrative discussion, is hereby APPROVED.”
As an advisory vote, this proposal is not binding
on the Board, the HR Committee or Fulton. The
HR Committee, however, values the opinions
expressed by our shareholders in their vote on
this proposal and will consider the outcome of
the vote when making future compensation
decisions for our NEOs. The Board believes that
the compensation of our NEOs is appropriate
and should be approved on an advisory basis by
our shareholders.
The Board unanimously recommends that shareholders vote “FOR” the approval of the
compensation paid to Fulton’s NEOs as disclosed in this Proxy Statement, including the CD&A,
compensation tables and narrative discussion.
Vote Required
The affirmative vote of a majority of the shares for
which votes are cast on the proposal at the Annual
Meeting is needed to approve this proposal.
Abstentions and broker non-votes will not be
counted as votes cast and, therefore, will not affect
this proposal. Further, the failure to vote, either by
proxy or in person, will not have an effect on this
proposal. Unless instructions to the contrary are
specified in a proxy properly voted and returned
through available channels, the proxies will be
voted “FOR” this proposal.
2025 Proxy Statement | 32 | Fulton Financial Corporation
INFORMATION CONCERNING EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
In this CD&A we explain the design of our 2024
executive compensation program for our NEOs, which
consist of the CEO, Chief Financial Officer (“CFO”),
the former Interim Chief Financial Officer, the former
CFO, and our three other highest paid executive
officers (collectively, “NEOs”). The HR Committee has
designed our NEO compensation program to: (i) align
our executive officers’ interests with the interests
of our shareholders, (ii) pay for performance and
(iii) attract, motivate and retain executive officers.
Executive Summary
Our 2024 NEOs are listed below:
Named Executive Officers
Curtis J. Myers
Chairman and CEO
Richard S. Kraemer(1)
Senior Executive Vice President and CFO
Angela M. Snyder
President
Meg R. Mueller
Senior Executive Vice President and Enterprise Credit Executive
Beth Ann L. Chivinski(2)
Former Senior Executive Vice President and former Interim CFO
Mark R. McCollom(3)
Former Senior Executive Vice President and former CFO
Karthik K. Sridharan(4)
Former Senior Executive Vice President and former Chief
Operations and Technology Officer
(1) Mr. Kraemer was appointed CFO on November 1, 2024.
(2) Ms. Chivinski served as Senior Executive Vice President and Interim CFO from February 8, 2024 through October 31, 2024.
Ms. Chivinski retired on December 31, 2024. Ms. Chivinski is continuing in a consulting capacity for six months beginning
January 1, 2025 to ensure a continued, smooth transition of her duties and responsibilities.
(3) Mr. McCollom separated from Fulton on February 8, 2024.
(4) Mr. Sridharan separated from Fulton on January 31, 2025.
The following tables highlight the key factors and outcomes with respect to our 2024 financial performance
and executive compensation program:
2024 Key Accomplishments and Financial Highlights
Executed: Successfully completed the largest acquisition in Company history.
Earnings Per Share: Diluted EPS of $1.57.
Net Interest Margin: Net interest margin of 3.42%.
Total Loans: Exceeded $24 billion in total loans.
Dividends: Declared $0.69 per share in dividends.
2025 Proxy Statement | 33 | Fulton Financial Corporation
Executive Compensation Philosophy
Our executive compensation philosophy and program are intended to achieve the following three objectives:
2024 Executive Compensation Highlights
Performance-Based Compensation: 70% of CEO total target compensation was performance-based.
Say-on-Pay Results: Approximately 96% approval of our executive compensation program.
Annual Cash Incentive Results: Earned at 111.21% of target.
Long-Term Incentives (“LTI”): Granted in the form of performance-based RSUs (“Performance Shares”)
that vest based on relative total shareholder return (“TSR”) and time-based RSUs.
2021 Long-Term Performance-Based Awards Results: The equity awards granted in 2021 vested in
2024 based on the following performance goals: (i) the TSR performance relative to peers was at the
78.57 percentile resulting in a 150.00% award vesting as a percentage of target for that component
and (ii) the achievement of net income during the performance period of January 1, 2023 to December
31, 2023, sufficient to cover all dividends, if any, declared and paid to shareholders during the last four
full quarters prior to the date of grant was met resulting in a 100% award vesting for that component.
Align executive
officer interests with
shareholder interests
The interests of our executive officers should be closely aligned with our
shareholders using key financial measures that contribute to long-term
shareholder value.
Link pay to
performance
A close link should exist between our executive officer compensation and
our overall performance on both a short- and long-term basis. We seek to
reward our executive officers for their contributions to our financial and
non-financial achievements and to differentiate rewards to our executive
officers based on their individual contributions.
Attract, motivate
and retain executive
officers
Our compensation program is designed to attract, motivate and retain highly
talented executive officers.
2025 Proxy Statement | 34 | Fulton Financial Corporation
Summary of Executive Compensation Practices
Our HR Committee regularly reviews our compensation practices and policies to ensure that they further
our executive compensation philosophy. Below is a summary of certain of our corporate governance
and compensation practices. The HR Committee believes our corporate governance and compensation
practices closely align with the interests of our shareholders.
CORPORATE GOVERNANCE AND COMPENSATION PRACTICES
What We Do
Z HR Committee comprised exclusively of independent directors
Z Align our executive compensation policy with business goals and shareholder interests
Z Annual say-on-pay vote
Z Independent executive compensation consultant
Z Pay for performance – a substantial portion of executive compensation is variable or at risk
Z LTI compensation aligned with shareholder interests and financial objectives
Z NEO stock ownership requirements
Z Rigorous compensation clawback policies that exceed Nasdaq requirements
Z Evaluate and update the composition of our peer group on an annual basis
Z Maintain effective balance of short- and long-term incentives
Z Double-trigger change-in-control cash severance and equity vesting provisions
Z Annual incentive compensation risk assessment
Z Cap on NEO incentive compensation payments
What We Do Not Do
[ Permit hedging or pledging by executives
[ Spring-loading with respect to equity awards
[ Provide excise tax gross-ups in any NEO employment or change-in-control agreements
[ Reward executives for taking excessive, inappropriate or unnecessary risks
[ Allow the repricing of equity awards without shareholder approval
[ Allow the backdating of equity awards
[ Provide multi-year guaranteed salary increases or non-performance bonus arrangements
(other than guaranteed minimum bonuses for the year of hire used as a tool to attract new talent)
[ Rely exclusively on one metric in our executive compensation program
Pay for Performance
Our compensation philosophy is designed to align
pay for performance on both a short- and long-term
basis. We believe that the compensation of our
executive officers should reflect Fulton’s overall
performance as well as each individual executive
officer’s specific contributions to that performance.
We believe that a significant portion of our
executive officers’ total compensation should be
“performance-based” and “at-risk,” meaning that its
payment or vesting is based upon the achievement
of predefined performance metrics. We also believe
that a significant portion should be “variable,”
meaning that actual compensation paid to our NEOs
will increase or decrease based on the achievement
of pre-determined performance metrics.
A significant portion of pay “at-risk” motivates
our executives to achieve performance goals and
create value for our shareholders.
2025 Proxy Statement | 35 | Fulton Financial Corporation
•
The annual incentive bonus awards are earned
by our executives for the achievement of
short-term performance goals and how well
we perform relative to the industry and our
peers. The amount paid is tied to the level of
achieved performance, with higher payout
levels reflecting superior performance.
•
Our long-term, performance-based equity
awards reward our executives for achieving
long-term performance goals while contributing
to increased shareholder value. A portion of
our long-term incentive awards are also tied to
our performance relative to our peer group.
As reflected in the charts below, approximately
70% of our CEO’s target total 2024 compensation
was “variable” or “at-risk,” and an average of
approximately 54% of our other NEOs’ target total
2024 compensation was “variable” or “at-risk.”
(1) Mr. McCollom separated from Fulton on February 8, 2024. Pursuant to the terms of his separation agreement, Mr. McCollom
received a separation payment of $325,000. This separation payment was excluded in determining the average All Other
Compensation paid to the other NEOs.
Executive Compensation
Decision-Making Process
HR Committee
The HR Committee is currently comprised of four
independent directors who are appointed on an
annual basis.
The HR Committee is responsible for establishing
and overseeing our executive compensation
program in alignment with Fulton’s compensation
philosophy. We do not have an exact formula or
policy with regard to the allocation of compensation
between cash and non-cash elements. The HR
Committee determines the amount and type of our
executive compensation considering: (i) publicly
available peer executive compensation information
and regional and community banking survey data,
(ii) advice from our independent compensation
consultant,
(iii)
the
complexity,
scope
and
responsibilities of the individual’s position and
(iv) the CEO’s recommendations with respect
to the other NEOs. The CEO is not involved in
discussions and determinations related to his own
compensation.
The HR Committee reviews and approves NEO
base salaries and other compensation paid to the
NEOs other than the CEO. The independent direc-
tors of the Board review and approve compensa-
tion decisions for the CEO. The HR Committee also
administers Fulton’s equity and other compensa-
tion components.
Mr. Myers
Salary 27%
Annual Cash Incentive 30%
All Other Compensation 3%
RSUs 13%
Performance Shares 27%
Total
70%
Salary 42%
Annual Cash Incentive 21%
All Other Compensation 4%
RSUs 17%
Performance Shares 16%
Average for other NEOs(1)
Total
54%
2025 Proxy Statement | 36 | Fulton Financial Corporation
Management
Certain members of our executive management
team attend regular HR Committee meetings
at which Fulton’s performance and competitive
compensation levels are discussed and evaluated.
These executive management team members
provide information and recommendations to
the HR Committee with respect to our executive
compensation design.
The CEO, with the HR Committee and without any
other NEO present, reviews the performance of
all NEOs other than the CEO. The HR Committee,
without the CEO present, periodically reviews the
CEO’s overall performance.
In 2024, the HR Committee determined the
compensation of the NEOs other than the CEO. The
Board determined the CEO’s 2024 compensation
in executive session with only independent
directors present.
Independent Compensation Consultant
In 2024, the HR Committee retained Frederic W.
Cook & Co., Inc. (“FW Cook”) as its independent
compensation consultant. FW Cook performed
a variety of assignments during 2024, including:
(i) conducting an NEO compensation market
analysis, (ii) designing our executive compensation
program including our annual cash incentive
compensation awards (“VCP”) and equity awards,
(iii) reviewing our director compensation program
and (iv) providing general compensation advice
regarding our NEOs. As part of FW Cook’s 2024
engagement, the HR Committee also instructed FW
Cook to compare Fulton’s current compensation
practices and executive compensation programs
to our peers, evolving industry best practices and
regulatory guidance.
In 2024, FW Cook and its affiliates did not
provide any services to Fulton or its affiliates
other than FW Cook’s services as independent
compensation consultant. The HR Committee
considered the independence of FW Cook for
the 2024 engagement in light of SEC rules and
Nasdaq listing standards related to compensation
committee consultants. The HR Committee
concluded that the work performed by FW Cook
did not raise any conflict of interest and it further
concluded that FW Cook satisfied SEC rules
and Nasdaq listing standards with respect to
compensation committee consultants.
2024 Peer Group
As part of its annual review of our executive
compensation program, the HR Committee,
with FW Cook’s assistance, established a peer
group (the “2024 Peer Group”), based on a
number of factors, including asset size, revenue
composition, number of employees, market
capitalization, geographic location, business
model and composition of shareholder base. The
HR Committee considered the 2024 Peer Group
data, as well as other relevant data provided by
FW Cook, in establishing 2024 base salaries, 2024
annual cash incentive compensation awards
(“VCP Awards”) and setting LTI award levels
granted in the form of RSUs and Performance
Shares.
2024 Peer Group
Atlantic Union Bankshares
Corporation
Northwest Bancshares, Inc.
United Bankshares, Inc.
Cadence Bank
Old National Bancorp
United Community Banks, Inc.
Columbia Banking System,
Inc.(1)
Prosperity Bancshares, Inc.
Valley National Bancorp
Commerce Bancshares, Inc.
Provident Financial Services, Inc.
Wintrust Financial Corporation
F.N.B. Corporation
Simmons First National Corporation
WSFS Financial Corporation
Hancock Whitney Corporation
Trustmark Corporation
Independent Bank Corporation
UMB Financial Corporation
(1) Added as a peer in 2024 in connection with its 2024 Umpqua Holdings Corporation acquisition.
2025 Proxy Statement | 37 | Fulton Financial Corporation
The
HR
Committee
removes
peer
group
companies upon the announcement that a peer
group company is being acquired or is involved in
a significant merger and acquisition transaction.
The 2024 Peer Group is set forth below:
Shareholder Say-on-Pay Proposal
Historical Results
The Board and the HR Committee consider
the non-binding advisory say-on-pay vote as a
barometer of shareholder support for our executive
compensation program. Below are our say-on-pay
votes for the past five years:
Year
2024
2023
2022
2021
2020
% Voted “FOR”
95.87%
96.41%
96.95%
97.17%
97.45%
These prior say-on-pay votes confirm shareholder
support of our compensation philosophy and
objective of linking executive compensation to
performance delivery and shareholder value creation.
Compensation Plan Risk Review
At its January 2025 meeting, the HR Committee
conducted its annual incentive compensation
plan risk assessment review. The HR Committee
received an incentive compensation plan risk
assessment report from management, and the
HR Committee determined that our incentive
compensation design and plans do not promote
undue risk taking.
Elements of Our Executive Compensation
Program
Our executive compensation program currently
provides for a mix of base salary, VCP Awards
and long-term, equity-based incentive awards
(“LTI Awards”). The HR Committee reviews
these components and the effectiveness of
our compensation program annually. The HR
Committee generally targets a range around the
median of our peer group for positioning target
total direct NEO compensation. The purpose and
key features of each element of our executive
compensation program are as follows:
2025 Proxy Statement | 38 | Fulton Financial Corporation
2024 CEO
Actual Direct
Compensation
Average for Other
NEOs’ Actual Direct
Compensation
Purpose and Key Features
Base Salary
27%
42%
Purpose: Attract, motivate and retain NEOs.
Key Feature: Base salary based on NEO’s position,
experience, responsibilities and performance.
Annual Cash Incentive Awards – VCP Awards
30%
21%
Purpose: Reward NEOs for the achievement of certain
short-term financial, risk management and business goals.
Key Feature: Reward NEOs for performance relative to
the goals contained in our VCP scorecard.
Equity Awards – LTI Awards
40%
33%
Purpose: Focus NEOs’ attention on delivering long-term
performance results that increase shareholder value.
Key Feature: Reward NEOs for our relative TSR
performance and encourage retention through time-based
RSUs.
All Other Compensation(1)
3%
4%
Purpose: Attract and retain NEOs. See below
under heading “Other Compensation Elements”
for a description of the items included in “All Other
Compensation.”
(1) Mr. McCollom separated from Fulton on February 8, 2024. Pursuant to the terms of his separation agreement, Mr. McCollom
received a separation payment of $325,000. This separation payment was excluded in determining the average All Other
Compensation paid to the other NEOs.
2025 Proxy Statement | 39 | Fulton Financial Corporation
Base Salary
The HR Committee is responsible for setting
senior executive officer base salaries other
than for our CEO. The HR Committee considers
base salary levels as part of its process of
ensuring that each senior executive officer’s
overall compensation package is competitive,
including annual and long-term incentives, the
target amounts of which are generally based on
a percentage of base salary.
Our NEO base salaries are set within a competitive
range around Fulton’s peer median based upon
the NEOs’ position, experience, responsibilities
and performance. In 2024, the HR Committee
examined the compensation levels of our NEOs
based on the market analysis performed by
FW Cook in order to appropriately compare the
compensation of our NEOs to the compensation
paid by other companies with which we compete
for talent. The HR Committee increased the base
salary of Mr. Myers based on the CEO market
analysis performed by FW Cook to provide closer
alignment of Mr. Myers with the peer CEO median.
The other NEO salary increases were in connection
with role changes.
Below are the 2023 and 2024 base salaries for
each of the NEOs as of April of each year.
NEO
2023
Base Salary
2024
Base Salary
% Change
Curtis J. Myers
$850,000
$920,000
8.23%
Richard S. Kraemer(1)
-
$550,000
-
Angela M. Snyder(2)
$500,000
$550,000
10.0%
Meg R. Mueller
$433,290
$433,290
-
Beth Ann L. Chivinski(3)
$428,891
$500,000
16.58%
Mark R. McCollom(4)
$500,000
-
-
Karthik K. Sridharan(5)
$450,000
$450,000
-
(1) Mr. Kraemer was appointed CFO on November 1, 2024.
(2) Ms. Snyder’s base salary increased as a result of being appointed to President on January 1, 2024.
(3) Ms. Chivinski’s base salary increased in February 2024 as a result of being appointed the Interim CFO.
(4) Mr. McCollom separated from Fulton on February 8, 2024.
(5) Mr. Sridharan separated from Fulton on January 31, 2025.
Annual Cash Incentives – VCP Awards
Overview
The HR Committee uses a scorecard approach to
determine the VCP Award funding level, which we
also refer to as the VCP payout. The HR Committee
retains discretion to increase or decrease any VCP
Award subject to a cap on individual awards of
200% of the target award.
2024 Scorecard Performance Metrics
In March 2024, the HR Committee approved the
scorecard performance metrics for the 2024 VCP
Awards (the “2024 Scorecard”) which calculates
the performance of each scorecard metric
individually with a threshold performance payout of
50% and maximum performance payout of 200%.
In 2024, the scorecard calculation was changed
from a composite score calculation methodology
to an individual metric calculation. These design
changes brought the 2024 Scorecard into better
alignment with standard market practice for
enterprise-wide plan design and supports Fulton’s
continued focus on enhancing our performance-
based culture. The 2024 Scorecard included
key objectives in the following three categories:
“Financial Results,” “Risk Management” and
“Business
Objectives.”
The
HR
Committee
believes each of these objectives is a key driver
of Fulton’s performance and aligns Fulton and its
NEOs’ focus on continued long-term shareholder
value creation.
2025 Proxy Statement | 40 | Fulton Financial Corporation
Compared to the scorecard used for VCP awards
in 2023, the 2024 Scorecard reflects adjustments
to the goals and weightings within the Financial
Results and Business Objectives categories. In
addition, the 2024 Scorecard Financial Results
target performance metrics were generally lower
than those used in 2023, primarily reflecting
the expected impact on Fulton’s financial
performance due to an anticipated decline
in short-term interest rates. The interest rate
environment, which is an exogenous factor, is
a significant driver of our profitability. As such,
our target goals for 2024 reflected the negative
80-basis point projected twelve-month forward
move in the Federal Funds Rate from the mid-
point of the range as of December 2023. At
the time we set our goals, we believed this was
consistent with the broad trend expected by our
peers and the banking industry.
In evaluating our actual financial results relative
to established scorecard performance goals,
the HR Committee typically excludes unusual
items and items that do not occur on a regular
basis, such as acquisition-related expenses,
gains or losses on asset dispositions and other
similar items in a manner consistent with how
we disclose certain financial metrics that are
not determined in accordance with generally
accepted accounting principles (“GAAP”) in
our earnings releases and other SEC filings. In
evaluating our actual 2024 financial results rela-
tive to 2024 Scorecard performance goals, the
HR Committee determined to also exclude the
impacts of our purchase of substantially all of
the assets and the assumption of substantially
all of the deposits and certain other liabilities
of Republic First Bank from the Federal Deposit
Insurance Corporation on April 26, 2024 and our
issuance of additional shares of common stock
on May 1, 2024, which had a significant impact
on our 2024 financial results and were not con-
templated by the HR Committee at the time the
2024 Scorecard goals were established. The
adjustments that were made to our actual 2024
EPS, return on average equity (“ROE”), operat-
ing expense to average assets, efficiency ratio
and non-performing assets to total assets are
reconciled in Annex A to this Proxy Statement.
Our 2024 performance goals, target performance
metrics and relative weightings, as reflected in our
2024 Scorecard, were as follows:
2024 Scorecard Matrix
Performance
Categories
Performance Sub-categories(1)
Financial
Results
Score
Rating
(Threshold)
50% Payout
(Target)
100% Payout 150% Payout
(Max)
200% Payout
Weight
Adjusted EPS
$1.40
$1.56
$1.72
$1.87
30%
Adjusted ROE
8.78%
9.75%
10.73%
11.70%
20%
Adjusted Operating
Expense/ Average Assets
2.51%
2.45%
2.39%
2.33%
10%
Adjusted Efficiency Ratio
65.10%
63.50%
61.90%
60.30%
10%
Risk
Management
Weight
Capital, Liquidity, Management, Market Risk and Consumer Compliance
10%
Asset Quality: Adjusted Non-performing Assets to Total Assets
10%
Business
Objectives
Weight
2024 Company-wide Employee Engagement Index (All Employees)
10%
(1) Interpolated on a straight-line basis.
2025 Proxy Statement | 41 | Fulton Financial Corporation
VCP Payout Potential
In determining the VCP payout potential for each NEO, the HR Committee approved the following 2024
Scorecard matrix (“2024 Scorecard Matrix”):
VCP Scorecard Composite Score
VCP Payout Potential(1)
Threshold
50%
Target
100%
Maximum
200%
(1) Payouts are interpolated on a straight-line basis.
2024 VCP Award Matrix
NEO
Payment as a % of 2024 Eligible Earnings(1)
VCP Threshold
(50% of Target)
Scorecard Result
VCP Target
(100% of Target)
Scorecard Result
VCP Maximum
(200% of Target)
Scorecard Result
Curtis J. Myers
50%
100%
200%
Richard S. Kraemer(2)
35%
70%
140%
Angela M. Snyder
35%
70%
140%
Meg R. Mueller
25%
50%
100%
Beth Ann L. Chivinski(3)
35%
70%
140%
Mark R. McCollom(4)
35%
70%
140%
Karthik S. Sridharan(5)
25%
50%
100%
(1) For purposes of determining VCP Awards, eligible earnings are the actual 2024 base salary earnings paid to the NEOs.
(2) Mr. Kraemer was hired on September 3, 2024 and had a guaranteed minimum VCP payment of $385,000.
(3) Ms. Chivinski retired on December 31, 2024.
(4) Mr. McCollom separated from Fulton on February 8, 2024.
(5) Mr. Sridharan separated from Fulton on January 31, 2025.
Target VCP Opportunities
In February 2024, the HR Committee approved
the target VCP opportunities for each NEO with
a payout range of 0% to 200% of target based
on
performance
achievement
against
pre-
established goals. In addition to this payout
range, the HR Committee has the ability to modify
individual payouts based on its holistic evaluation
of Company and individual performance. The
application of any modifier for an NEO would be
informed by tailored individual goals without any
specific weighting. The following table shows
each NEO’s VCP opportunity range:
2025 Proxy Statement | 42 | Fulton Financial Corporation
2024 Scorecard Results
The following table shows Fulton’s actual 2024 results with respect to the 2024 Scorecard:
Final 2024 Scorecard Matrix
Performance
Categories
Performance Sub-categories(1)
Financial
Results
Score
Rating
(Threshold)
50% Payout
(Target)
100% Payout 150% Payout
(Max)
200% Payout Weight
Actual
Performance
Payout
Percentage
Adjusted
EPS(2)
$1.40
$1.56
$1.72
$1.87
30%
$1.68
41.35%
Adjusted
ROE(2)
8.78%
9.75%
10.73%
11.70%
20%
10.58%
28.47%
Adjusted
Operating
Expense/
Average
Assets(2)
2.51%
2.45%
2.39%
2.33%
10%
2.52%
0.00%
Adjusted
Efficiency
Ratio(2)
65.10%
63.50%
61.90%
60.30%
10%
62.94%
11.76%
Risk
Management
Weight
Actual
Performance
Payout
Percentage
Capital, Liquidity, Management, Market Risk and Consumer
Compliance
10%
4
15.00%
Asset Quality: Adjusted Non-performing Assets to Total Assets(2)
10%
0.73%
5.90%
Business
Objectives
Weight
Actual
Performance
Payout
Percentage
2024 Company-wide Employee Engagement Index (All Employees)
10%
67.46%
8.73%
Total Funding %
111.21%
(1) Interpolated on a straight-line basis.
(2) Non-GAAP financial measure. For more information regarding the calculation of non-GAAP financial measures included in this
section, please refer to the section titled “Non-GAAP Reconciliations” included in Annex A to this Proxy Statement.
2025 Proxy Statement | 43 | Fulton Financial Corporation
2024 VCP Award Compensation Payouts
Below are the NEOs’ 2024 VCP Award target and 2024 VCP Award paid based on a scorecard of 111.21%
of target:
NEO
2024 VCP Award Target
2024 VCP Award Paid
Curtis J. Myers
$901,154
$1,002,173
Richard S. Kraemer(1)
$116,981
$130,095
Angela M. Snyder
$385,000
$428,159
Meg R. Mueller
$216,645
$240,931
Beth Ann L. Chivinski(2)
$344,257
$382,848
Mark R. McCollom(3)
-
-
Karthik K. Sridharan(4)
$225,000
$250,222
(1) Mr. Kraemer had a minimum guaranteed 2024 VCP payment of $385,000 per the terms of his employment offer.
(2) Ms. Chivinski served as Interim CFO from February 8, 2024 through October 31, 2024. Ms. Chivinski retired on December 31, 2024.
(3) Mr. McCollom did not receive a VCP Award because he separated from Fulton prior to the VCP Award payment date.
(4) Mr. Sridharan separated from Fulton on January 31, 2025.
Equity Awards – LTI Awards
Overview
In 2024, LTI Awards were granted to our NEOs in the
form of Performance Shares and RSUs. LTI Awards
are awarded to focus each of our NEO’s attention
on delivering long-term performance results that
increase shareholder value.
Performance Shares that vest, together with
accrued dividend equivalent units, are settled in
shares of Fulton common stock on a one-for-one
basis. Dividend equivalent units will not be paid
unless the Performance Shares vest.
RSUs, together with accrued dividends, are set-
tled in shares of Fulton common stock. Dividend
equivalent units are not paid until the RSUs vest.
65%
Allocation: 65%
Grant Date: May 1, 2024
Performance Period: May 1, 2024 – March 31, 2027
Vesting: Relative TSR to 2024 Peer Group determines the number of
Performance Shares earned for the performance period
RSUs
35%
Allocation: 35%
Grant Date: May 1, 2024
Vesting: 3-year, time-based cliff vesting
2024 Equity Award Structure
Performance Shares
The LTI Awards granted in 2024 are summarized below:
2025 Proxy Statement | 44 | Fulton Financial Corporation
The actual payout of the Performance Shares por-
tion of the LTI award is based on 2024 Peer Group
performance from May 1, 2024 through March 31,
2027 using the following pay line:
TSR Performance Pay Line
LTI TSR Payout Potential
TSR Threshold – 25th percentile
50%
TSR Target – 50th percentile
100%
TSR Maximum – 75th percentile or greater
150%
Award Opportunities
The number of Performance Shares and RSUs
awarded to each of the NEOs is based on a target
opportunity amount that may be adjusted at the
discretion of the HR Committee. For 2024, the tar-
get award opportunities (as a percentage of each
NEO’s base salary) were as follows:
2024 LTI Target Opportunity(1)
NEO
LTI
Minimum
(0% of Target)
LTI
Target
LTI
Maximum
(125% of Target)
Curtis J. Myers
0%
135%
168.75%
Richard S. Kraemer(2)
0%
0%
0%
Angela M. Snyder
0%
100%
125.00%
Meg R. Mueller
0%
75%
93.75%
Beth Ann L. Chivinski(3)
0%
100%
125.00%
Mark R. McCollom(4)
0%
100%
125.00%
Karthik K. Sridharan(5)
0%
75%
93.75%
(1) 2024 LTI target opportunity is a percentage of the NEOs’ base salary as of January 1, 2024.
(2) Mr. Kraemer was hired after the May 1, 2024 grant date and therefore was not eligible for a grant.
(3) Ms. Chivinski served as Interim CFO from February 8, 2024 through October 31, 2024. Ms. Chivinski retired on December 31, 2024.
(4) As a result of Mr. McCollom’s separation from Fulton on February 8, 2024, Mr. McCollom did not receive a 2024 LTI Award. The
percentages in this table for Mr. McCollom represent his 2024 LTI opportunity prior to his separation.
(5) Mr. Sridharan separated from Fulton on January 31, 2025.
The actual number of shares of Fulton com-
mon stock, if any, issued upon vesting may be
higher or lower than the number of Performance
Shares granted to the NEOs based on the attain-
ment of the performance goal underlying the
Performance Shares.
The 2024 grant date fair value of the LTI awards and
the total number of Performance Shares and RSUs
awarded are set forth below:
2025 Proxy Statement | 45 | Fulton Financial Corporation
NEO
2024 Grant Date Fair
Value of LTI Award(1)
Performance
Shares Awarded-Subject
to TSR Performance
RSUs Awarded
Curtis J. Myers
$1,329,526
46,341
24,953
Richard S. Kraemer(2)
-
-
-
Angela M. Snyder
$637,240
22,212
11,959
Meg R. Mueller
$376,515
13,124
7,066
Beth Ann L. Chivinski(3)
$496,928
17,321
9,326
Mark R. McCollom(4)
-
-
-
Karthik K. Sridharan(5)
$391,024
13,630
7,338
(1) Based on the $16.90 May 1, 2024 grant date fair value.
(2) No grant was made to Mr. Kraemer because he was hired after the May 1, 2024 grant date.
(3) Ms. Chivinski served as Interim CFO from February 8, 2024 through October 31, 2024. Ms. Chivinski retired on
December 31, 2024.
(4) As a result of his separation from Fulton on February 8, 2024, Mr. McCollom was not eligible for a 2024 LTI Award.
(5) Mr. Sridharan separated from Fulton on January 31, 2025 and forfeited his 2024 Performance Shares.
Payout of 2021 Performance-Based Equity
Awards
Fulton granted to the NEOs on May 1, 2021
performance share unit awards (the “2021
Performance Share Award”) that vested on
May 1, 2024 based on the achievement of the
performance goals. The performance metric
targets and results are as follows:
2021 Performance
Share Award Metrics Weighting
Performance Period Targets
Actual Results
% of
Payment
3-year TSR
65.0%
TSR Relative to 2020 Peer Group from
May 1, 2021 to March 31, 2024
78.57 Percentile 150.00%
Profit Trigger
35.0%
Achievement of net income by Fulton
during the performance period of
January 1, 2023 to December 31, 2023
sufficient to cover all dividends if any,
declared and paid to shareholders
during the last four full quarters prior to
the grant date
100.00%
100.00%
Total Payout as a % of Target
132.50%
With respect to the 2021 Performance Share
Award, the total number of Performance Shares
awarded, the grant date fair value of Performance
Shares awarded, the total number of shares of
Fulton common stock issued upon vesting and
the total value of shares of Fulton common stock
issued upon vesting are as follows:
2025 Proxy Statement | 46 | Fulton Financial Corporation
NEO
Total Number
of Performance
Shares
Awarded
Grant Date
Fair Value
of Performance
Shares Awarded
Total Number of
Shares of Fulton
Common Stock
Issued upon
Vesting
Total Value of
Shares of Fulton
Common Stock
Issued upon
Vesting(1)
Curtis J. Myers
32,903
$558,644
49,653
$839,140
Richard S. Kraemer(2)
-
-
-
-
Angela M. Snyder
17,358
$294,713
26,195
$442,688
Meg R. Mueller
17,358
$294,713
26,195
$442,688
Beth Ann L. Chivinski
17,182
$291,725
25,929
$438,202
Mark R. McCollom(3)
25,549
$433,784
-
-
Karthik K. Sridharan(2)
-
-
-
-
(1) Shares valued at $16.90 per share on the May 1, 2024 vesting date. Vested amounts include accrued dividend equivalent units.
(2) Mr. Kraemer and Mr. Sridharan were hired after 2021 and therefore did not receive a 2021 Performance Share award.
(3) As a result of his separation from Fulton on February 8, 2024, Mr. McCollom forfeited his 2021 Performance Share Award.
Other Compensation Elements
Employee Stock Purchase Plan. The ESPP is
designed to advance the interests of Fulton and
its shareholders by encouraging employees
to acquire a stake in our future by purchasing
shares of Fulton common stock. We limit payroll
deduction and annual employee participation to
$15,000. The NEOs are eligible to purchase shares
through the ESPP at a discount, currently 15%, on
the same basis as other employees participating
in the ESPP.
Defined Contribution Plan – 401(k) Plan. Fulton
provides the 401(k) Plan to the NEOs and other
employees that allows employees to defer a portion
of their compensation and contribute such amount
to the 401(k) Plan on a pre-tax basis. For 2024,
Fulton matched 100% of employee contributions,
up to 5% of eligible compensation, subject to
contribution limits imposed by the Internal Revenue
Code of 1986, as amended (the “Tax Code”).
Deferred Compensation Plan. Fulton’s nonqualified
DCP permits non-employee directors to elect
to defer receipt of cash director fees. The DCP
also enables us to credit certain senior officers,
including the NEOs, with full-employer matching
contributions each year equal to the contributions
they would have otherwise been eligible to
receive under the 401(k) Plan notwithstanding
the contribution limits imposed by the Tax Code.
Under the DCP, eligible employees, including the
NEOs, may elect to defer receipt of up to 90%
their base salary and/or up to 90% of their annual
cash incentive or bonus payments. Depending
on the NEOs’ specific election, payments may
be made as a lump sum or in equal installments
over a specified period of time. With respect
to deferrals made in or after 2021, payments
begin on the first day of the seventh month after
termination. With respect to deferrals made in or
prior to 2020, payments may begin upon the later
of age 62 or the NEOs’ termination date. Both
employee and employer contributions are 100%
vested immediately.
Death Benefits. In the event an NEO dies while
actively employed by Fulton, such NEO’s estate or
beneficiaries are eligible for a payment equal to
two times the NEO’s base salary (plus an amount
equal to applicable individual income taxes due
on such amounts) pursuant to individual death
benefit agreements between Fulton and that NEO.
2025 Proxy Statement | 47 | Fulton Financial Corporation
In addition, under the terms of their death benefit
agreements, Mr. Myers and Messes. Chivinski
and Snyder would each receive a reduced, post-
retirement death benefit of $5,000. The other
NEOs are not eligible for any post-retirement
death benefit.
Health, Dental and Vision Benefits. We offer a
comprehensive benefits package for health,
dental and vision insurance coverage for all full-
time employees, including the NEOs and their
eligible spouses and dependents. We pay a
portion of the premium for the coverage selected,
and the amount paid varies with each health,
dental and vision plan.
Other NEO Benefits. We provide our NEOs with a
variety of other perquisites and personal benefits
that the HR Committee believes are necessary to
facilitate Fulton’s business operations, including
a company-owned automobile or a car allowance,
club memberships and other executive benefits.
These benefits enable us to attract and retain
talented senior officers for key positions. The
2024 amounts are included in the “All Other
Compensation”
column
of
the
“Summary
Compensation Table.”
2025 Proxy Statement | 48 | Fulton Financial Corporation
Executive Compensation Policies
Stock Hedging and Pledging Policy and
Stock Trading Procedures
We have an Insider Trading Policy that requires
all directors, officers, and employees of Fulton to
adhere to certain rules when trading in our securi-
ties. Among other requirements, directors, officers
and employees of Fulton that know of material,
non-public information regarding Fulton may not:
(i) buy or sell Fulton securities while the information
remains non-public or (ii) disclose the information
to relatives, friends or any other person. In addition,
we prohibit our NEOs from engaging in hedging and
other speculative transactions involving our secu-
rities, including “short sales,” “puts,” and pledging
our securities. Fulton’s NEOs are also prohibited
from holding Fulton securities in a margin account
or otherwise pledging Fulton securities as collateral
for a loan and must provide advance notice of any
sale, purchase, stock option exercise, gift or other
transfer of Fulton securities, including by members
of the NEOs’ immediate family sharing the same
household, or any corporation, partnership or trust
in which any such person has an economic interest
or investment control.
Stock Ownership Guidelines
Pursuant to the Guidelines, stock ownership for Ful-
ton’s executive officers is calculated as a multiple
of each of the NEO’s annual base salary as follows:
NEO Position
Minimum Ownership of Fulton
Common Stock
(Multiple of Base Salary)
CEO
6.0
President
3.0
CFO
3.0
Other NEOs
2.0
Compliance with our stock ownership guidelines
is determined on an annual basis. The Guidelines
require that each executive officer comply with
our stock ownership requirements within five
years after the later of: (i) first being appointed
to his or her position, (ii) being hired by Fulton
or (iii) a change in the minimum ownership
requirement. Stock ownership excludes Fulton
stock options and unvested equity awards, but
includes all other shares beneficially owned and
reported on an individual’s Form 3, 4 or 5 filed
with the SEC, including shares owned individually,
deferred vested stock unit awards, shares held
in retirement accounts, indirect ownership and
jointly held shares of Fulton common stock. As
of December 31, 2024, Mr. Myers has until
December 31, 2028 to comply with the stock
ownership guideline requirements. Ms. Snyder
and Mr. Kraemer have until December 31, 2029
to comply with the stock ownership guideline
requirements. Except for Mr. Sridharan (who, prior
to his departure, had until December 31, 2028 to
comply with his stock ownership guideline require-
ments), all of the other NEOs who were employed by
Fulton on December 31, 2024 satisfied their respec-
tive stock ownership guideline requirements.
Clawback Policies
Fulton maintains two distinct clawback policies –
its Amended and Restated Compensatory Recov-
ery “Clawback” Policy (the “Clawback Policy”) and
its Mandatory Recovery of Compensation Policy
(the “Mandatory Clawback Policy”).
Our Clawback Policy contains clawback provi-
sions for all participants, including the NEOs, with
respect to performance-based compensation,
including VCP Awards and Performance Shares.
The Clawback Policy identifies the events that may
give rise to a clawback, including: (i) any account-
ing restatement due to Fulton’s material noncom-
pliance with any financial reporting requirement
under applicable securities laws, including any
required accounting restatement to correct an
error in previously issued financial statements
that is material to the previously issued finan-
cial statements, or that would result in a material
misstatement if the error were corrected in the
current period or left uncorrected in the current
period, (ii) there is a material inaccuracy in the cal-
culation of Fulton’s performance metrics used to
determine incentive compensation or (iii) there is
a material violation of our Code of Conduct result-
ing in a negative financial impact to Fulton.
Our Board also adopted a separate and distinct
Mandatory Clawback Policy that applies to any
performance-based compensation paid to execu-
tive officers, including the NEOs. Except as pro-
vided in the Mandatory Clawback Policy, if Fulton
is required to prepare any accounting restatement
2025 Proxy Statement | 49 | Fulton Financial Corporation
due to Fulton’s material noncompliance with any
financial reporting requirement under applicable
securities laws, including any required account-
ing restatement to correct an error in previously
issued financial statements that is material to the
previously issued financial statements, or that
would result in a material misstatement if the
error were corrected in the current period or left
uncorrected in the current period, then the Board
will recover any recoverable amount of any incen-
tive compensation received by a current or former
executive officer. The recoverable amount will be
repaid to Fulton within a reasonable time after the
current or former executive officer is notified of
the recoverable amount. Recovery under the Man-
datory Clawback Policy will apply regardless of
any misconduct, fault, or illegal activity of Fulton,
the executive officer, or the Board.
Practices Related to the Grant of Certain
Equity Awards Close in Time to the
Release of Material Nonpublic Information
Other than through participation in our ESPP,
we did not grant any options to any employee
or other service provider in 2024, and as of
December 31, 2024, we had no options outstand-
ing that were granted to any employee or other
service provider. With respect to our annual equity
awards, the dollar value of such awards to be
granted to the NEOs are typically approved at a
meeting held in February of each year by the Board,
in the case of Mr. Myers, and by the HR Commit-
tee, in the case of the other NEOs. The grant date
for those annual equity awards is May 1 of each
year. The dollar value of the annual equity awards
to the NEOs is converted into shares by dividing
the dollar value of each annual equity award by the
closing price of our common stock on the grant
date or, if the grant date is not a business day, then
the next preceding business day, rounded down to
the nearest whole share. The Board and the HR
Committee do not take into account material non-
public information when determining the timing
and terms of annual equity awards to our NEOs.
We have not timed the disclosure of material non-
public information for the purpose of affecting the
value of executive compensation.
Tax Deductibility of Compensation Expense
Section 162(m) of the Tax Code generally places
a $1 million limit on the amount of compensation
a company can deduct in any one year for certain
executive officers. While the HR Committee con-
siders the deductibility of awards as one factor
in determining executive compensation, the HR
Committee also looks at other factors in making
its decisions, as detailed in the CD&A, and retains
the flexibility to award compensation that it deter-
mines to be consistent with the goals of our exec-
utive compensation program even if the awards
are not deductible by us for tax purposes.
CEO Pay Ratio Disclosure
We are providing the following information about
the annual total compensation of our median
employee (“Median Employee”) and the annual
total compensation of our CEO:
Pay Ratio Summary
• The 2024 annual total compensation of our
Median Employee (other than our CEO) was
$68,288.
• The 2024 annual total compensation of
our CEO, as reported in the Summary
Compensation Table, was $3,337,831.
• For 2024, the ratio of the annual total
compensation of our CEO to our Median
Employee was 48.88 to 1.
Our pay ratio estimate was calculated in a
manner consistent with Item 402(u) of Regula-
tion S-K using the data and assumptions sum-
marized below.
As of December 31, 2024, we identified a new
Median Employee because the previous Median
Employee moved to a different position and had
a significant compensation change in 2024. We
determined the new Median Employee by com-
paring the total compensation in Box 5 on the
2024 W-2 tax statements for our employee pop-
ulation as of December 31, 2024. We identified
our Median Employee using this consistently
applied compensation measure (excluding our
CEO and employees that departed our work-
force prior to December 31, 2024). In making this
determination, we annualized the compensa-
tion of permanent full-time employees who were
hired in 2024 and did not work for us during our
entire fiscal year but were still employed as of
December 31, 2024.
2025 Proxy Statement | 50 | Fulton Financial Corporation
For the 2024 pay ratio, we combined all of the ele-
ments of such employee’s compensation for 2024
consistent with the requirements of Item 402(c)
(2)(x) of Regulation S-K. For our CEO, the same
process and amount reported in the “Total” col-
umn of our 2024 Summary Compensation Table
(“SCT”) was used.
HR Committee Report
The HR Committee reviewed and discussed
with management the foregoing Compensa-
tion Discussion and Analysis and, based on
the review and discussions, the HR Committee
recommended to the Board that the Compensa-
tion Discussion and Analysis be incorporated in
this Proxy Statement.
HR Committee
Ronald H. Spair, Chair
Lisa Crutchfield, Vice Chair
Steven S. Etter
James R. Moxley III
2025 Proxy Statement | 51 | Fulton Financial Corporation
Summary Compensation Table
Name and Principal
Position(1)
Year
Salary
($)
Bonus
($)
Stock
Awards(2)
($)
Non-Equity
Incentive Plan
Compensation(3)
($)
All Other
Compensation(4)
($)
Total
($)
Curtis J. Myers
Chairman of the Board
and CEO (PEO)
2024
901,154
-
1,329,526
1,002,173
104,977
3,337,830
2023
850,000
-
954,757
382,500
122,183
2,309,440
2022
638,057
-
626,009
767,423
107,556
2,139,045
Richard S. Kraemer(5)
Senior Executive
Vice President and CFO
(PFO)
2024
167,115 298,064
749,997
130,095
14,230
1,359,501
2023
-
-
-
-
-
-
2022
-
-
-
-
-
-
Angela M. Snyder(6)
President
2024
550,000
-
637,240
428,159
72,181
1,687,580
2023
500,000
-
468,014
175,000
65,881
1,208,895
2022
459,865
-
378,563
390,426
55,414
1,284,268
Meg R. Mueller(7)
Senior Executive Vice
President and Enterprise
Credit Executive
2024
433,290
-
376,515
240,931
53,409
1,104,145
2023
428,803
-
292,475
107,201
48,819
877,298
2022
413,358
-
300,235
292,451
50,505
1,056,549
Beth Ann L. Chivinski(8)
Senior Executive
Vice President and former
Interim CFO (Former PFO)
2024
491,795
-
496,928
382,848
32,591
1,404,162
2023
424,450
-
289,507
106,112
38,527
858,596
2022
409,161
-
297,187
289,481
41,813
1,037,642
Mark R. McCollom(9)
Former Senior Executive
Vice President and CFO
(Former PFO)
2024
65,385
-
-
-
330,658
396,043
2023
500,000
-
468,014
-
86,465
1,054,479
2022
456,305
-
441,922
451,970
81,600
1,431,797
Karthik K. Sridharan(10)
Senior Executive
Vice President and
Chief Operations and
Technology Officer
2024
450,000
-
391,024
250,222
29,273
1,120,519
2023
242,308
37,500
199,996
112,500
11,479
603,783
(1) Titles and positions listed are as of December 31, 2024.
(2) Amounts represent the grant date fair values of stock awards (RSUs and Performance Shares), granted to our NEOs during the
applicable year. Mr. Kraemer’s grant was a new hire grant of RSUs on September 3, 2024. The closing price of Fulton common
stock on September 3, 2024 was $19.21. The grant date fair value of the Performance Shares in 2024, 2023 and 2022 was
determined in accordance with ASC Topic 718. Assumptions used in the calculation of the amounts reported in this column
are discussed in Note 16 to our Consolidated Financial Statements for the fiscal year ended December 31, 2024, included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Fair value is based on a Monte Carlo simulation
used to account for market conditions. The number and type of awards granted in 2024 is reflected in the “Grants of Plan-Based
Awards” table below. The fair value of Performance Shares granted in 2024, 2023 and 2022 are shown in this table assuming
the target level of such awards will be earned. The grant date fair value of the Performance Shares granted in 2024, if earned at
the maximum performance level, would equal $1,783,436 for Mr. Myers; $666,587 for Ms. Chivinski; $854,807 for Ms. Snyder;
$524,530 for Mr. Sridharan; and $505,064 for Ms. Mueller. As a result of Mr. McCollom’s separation on February 8, 2024,
Mr. McCollom forfeited all of his Performance Shares.
(3) The amounts reported in this column are VCP Awards detailed under “Annual Cash Incentives – VCP Awards” beginning on page 39.
(4) All other compensation includes: (i) Fulton contributions to the 401(k) Plan, (ii) Fulton contributions to the DCP, (iii) Fulton-
paid club memberships, (iv) automobile perquisites and (v) other benefits individually that, except for Mr. McCollom and
Ms. Snyder for 2024, are less than the greater of $25,000 or 10% of all perquisites. A breakdown of “All Other Compensation”
is included in the table below.
2025 Proxy Statement | 52 | Fulton Financial Corporation
(5) Mr. Kraemer was entitled to a minimum guaranteed bonus of $385,000 for 2024. Due to the 2024 Scorecard performance of
111.21% of target, Mr. Kraemer received a bonus of $298,064 in addition to a VCP Award of $130,095. The guaranteed bonus was
a one-time arrangement negotiated as part of Mr. Kraemer’s hire in 2024. Mr. Kraemer was appointed CFO on November 1, 2024.
(6) Ms. Snyder was appointed President on January 1, 2024.
(7) Ms. Mueller was appointed Senior Vice President and Enterprise Credit Executive on August 1, 2024.
(8) Ms. Chivinski was appointed the Interim CFO on February 8, 2024. Ms. Chivinski ceased to be the Interim CFO on
November 1, 2024 and retired on December 31, 2024.
(9) Mr. McCollom separated from Fulton on February 8, 2024. Pursuant to the terms of his separation agreement, Mr. McCollom
received a separation payment of $325,000.
(10) Mr. Sridharan was entitled to a guaranteed 2023 VCP bonus of $150,000 resulting in a bonus of $37,500 in addition to his
2023 VCP Award of $112,500. This guaranteed bonus was a one-time arrangement negotiated as part of Mr. Sridharan’s hire
in 2023. Mr. Sridharan separated from Fulton on January 31, 2025.
2025 Proxy Statement | 53 | Fulton Financial Corporation
All Other Compensation
Name
Year
Qualified
Retirement
Plan
Company
Contribution
($)
Nonqualified
Deferred
Compensation
Plan
Company
Contribution
($)
Club
Memberships
($)
Automobile
Perquisites
($)
Other
Compensation
and
Perquisites(1)
($)
Total All
Other
Compensation
($)(2)
Curtis J.
Myers
2024
17,250
47,320
24,865
4,647
10,894
104,977
2023
16,500
64,839
24,705
4,386
11,753
122,183
2022
15,250
57,441
19,661
3,640
11,564
107,556
Richard S.
Kraemer
2024
-
-
-
6,400
7,830
14,230
Angela M.
Snyder(3)
2024
17,250
19,198
-
2,204
33,529
72,181
2023
16,500
28,370
864
2,095
18,052
65,881
2022
15,250
24,827
2,935
2,019
10,383
55,414
Meg R.
Mueller
2024
17,250
-
13,887
11,169
11,104
53,409
2023
16,500
-
16,178
11,150
4,991
48,819
2022
15,250
-
15,800
11,215
8,240
50,505
Beth Ann L.
Chivinski
2024
17,250
12,660
-
1,481
1,200
32,591
2023
16,500
19,212
-
1,615
1,200
38,527
2022
15,250
21,746
-
2,988
1,829
41,813
Mark R.
McCollom(4) 2024
2,308
-
-
3,200
325,150(5)
330,658
2023
16,500
31,099
18,337
19,000
1,529
86,465
2022
15,250
33,362
14,088
18,000
900
81,600
Karthik K.
Sridharan
2024
7,788
1,385
-
19,200
900
29,273
2023
-
-
-
10,400
1,079
11,479
(1) The amount of “Other Compensation and Perquisites” includes personal travel, taxable housing expense, reimbursements for
mobile device expenses, company-provided mobile devices, spousal travel, company-sponsored trips and wellness credits
from our benefits programs. For 2024, Mr. Myers’, Ms. Mueller’s and Ms. Snyder’s personal travel included a tax gross up of
$3,371, $2,290 and $1,086, respectively. For Mr. Myers, Ms. Mueller and Ms. Snyder, 2022 personal travel included a tax gross
up of $3,897, $2,168 and $2,235, respectively, and 2023 personal traveled included a tax gross up of $4,030, $1,165 and $2,014,
respectively.
(2) Due to rounding, the amount in Total All Other Compensation may not equal the sum of the individual components.
(3) All Other Compensation and Perquisites amount for Ms. Snyder for 2024 includes a housing allowance of $28,048.
(4) Mr. McCollom separated from Fulton on February 8, 2024.
(5) Mr. McCollom received $325,000 in connection with his separation from Fulton on February 8, 2024.
2025 Proxy Statement | 54 | Fulton Financial Corporation
Grants of Plan-Based Awards
Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards(1)
Estimated Future
Payouts Under Equity
Incentive
Plan Awards(2)
All Other
Stock
Awards(3)
Grant
Date Fair
Value of
Stock and
Option
Awards(4)
Name
Approval
Date
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
Number
of Shares
of Stock
(#)
($)
Curtis J.
Myers
3/18/2024
5/1/2024
-
-
-
-
-
-
24,953
421,706
3/18/2024
5/1/2024
-
-
-
23,171
46,341
69,512
-
907,820
2/08/2024
-
450,577
901,154
1,802,308
-
-
-
-
-
Richard S.
Kraemer(5)
7/15/2024
9/3/24
-
-
-
-
-
-
39,042
749,997
7/15/2024
-
58,490
116,981
233,962
-
-
-
-
-
Angela M.
Snyder
3/18/2024
5/1/2024
-
-
-
-
-
-
11,959
202,107
3/18/2024
5/1/2024
-
-
-
11,106
22,212
33,318
-
435,133
2/08/2024
-
192,500
385,000
770,000
-
-
-
-
-
Meg R.
Mueller
3/18/2024
5/1/2024
-
-
-
-
-
-
7,066
119,415
3/18/2024
5/1/2024
-
-
-
6,562
13,124
19,686
-
257,099
2/08/2024
-
108,323
216,645
433,290
-
-
-
-
-
Beth Ann L.
Chivinski
3/18/2024
5/1/2024
-
-
-
-
-
-
9,326
157,609
3/18/2024
5/1/2024
-
-
-
8,661
17,321
25,982
-
339,318
2/08/2024
-
172,128
344,257
688,513
-
-
-
-
-
Mark R.
McCollom(6)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Karthik K.
Sridharan(7)
3/18/2024
5/1/2024
-
-
-
-
-
-
7,338
124,012
3/18/2024
5/1/2024
-
-
-
6,815
13,630
20,445
-
267,012
2/08/2024
-
112,500
225,000
450,000
-
-
-
-
-
(1) The amounts reflect incentive cash bonuses with respect to the VCP. The actual amounts paid for 2024 with respect to the VCP
is set forth in the “Non-Equity Incentive Plan Compensation” column of the SCT.
(2) Represents the number of Performance Shares granted to the NEOs. Performance Shares are earned and vested based on the
actual performance level achieved with respect to Fulton’s relative TSR during the performance period. The actual number of
2024 Performance Shares earned and vested is interpolated on a straight-line basis between the relevant targets.
(3) Represents the number of RSUs granted to the NEOs.
(4) See footnote 2 to the SCT on page 51 for additional information regarding the grant date fair value of the Performance Shares
and RSUs. The grant date fair value of each equity award is computed in accordance with FASB ASC Topic 718. The closing
price of Fulton common stock on the May 1, 2024 grant date was $16.90 and the closing price of Fulton common stock on
the September 3, 2024 grant date was $19.21. All RSUs and Performance Shares were granted under the 2022 Amended and
Restated Equity and Cash Incentive Compensation Plan (the “Equity Plan”).
(5) Mr. Kraemer was granted a new hire award of RSUs on September 3, 2024. Mr. Kraemer was ineligible to receive a 2024 LTI
Award since his hire date was after the May 1, 2024 grant date.
(6) Mr. McCollom was not granted any awards during 2024 due to his separation from Fulton on February 8, 2024.
(7) Mr. Sridharan separated from Fulton on January 31, 2025 and his unvested Performance Shares were forfeited.
2025 Proxy Statement | 55 | Fulton Financial Corporation
2024 Outstanding Equity Awards at December 31, 2024
Stock Awards
Name
Number of Shares of
Stock That Have
Not Vested
(#)(1)
Market Value of
Shares of Stock That
Have
Not Vested
($)(2)
Equity Incentive
Plan
Awards: Number of
Unearned Shares
That Have Not
Vested
(#)(3)
Equity Incentive
Plan Awards: Market
or Payout Value of
Unearned Shares
That Have Not Vested
($)(2)
Curtis J. Myers
-
61,656(4)
1,188,726
-
122,559(5)
2,362,937
25,424(A)
490,182
70,825(6)
1,365,498
Richard S. Kraemer
39,405(B)
759,738
-
-
Angela M. Snyder
-
-
37,285(4)
718,850
-
-
60,078(5)
1,158,299
11,898(A)
229,385
33,947(6)
654,506
Meg R. Mueller
-
-
29,571(4)
570,124
-
-
37,544(5)
723,857
7,029(A)
135,525
20,058(6)
386,716
Beth Ann L.
Chivinski
-
-
29,271(4)
564,336
-
-
37,163(5)
716,508
-
-
26,472(6)
510,386
Mark R.
McCollom(7)
-
-
-
-
-
-
-
-
-
-
-
-
Karthik K.
Sridharan(8)
15,385(C)
296,623
-
-
7,477(D)
144,149
20,831(6)
401,626
(1) Represents the number of RSUs and accrued dividend equivalent units on December 31, 2024.
(A) RSUs granted May 1, 2024. The RSUs will vest on May 1, 2027.
(B) RSUs granted on September 3, 2024. One-third of the RSUs will vest on each of September 3, 2025, 2026 and 2027.
(C) RSUs granted September 1, 2023. The RSUs vested on January 31, 2025 as a result of Mr. Sridharan's separation from Fulton.
(D) RSUs granted May 1, 2024. The RSUs vested on January 31, 2025 as a result of Mr. Sridharan's separation from Fulton.
(2) Market value of Performance Shares and RSUs shown is based on the Fulton closing price of $19.28 on December 31, 2024.
The number of Performance Shares and RSUs includes dividend equivalent units accrued through December 31, 2024.
As of December 31, 2024, the relative TSR performance that determined the number of Performance Shares allocated to the
TSR component of the 2022, 2023 and 2024 Performance Shares awards were at target or above performance levels, and, as
such, amounts are shown based upon maximum vesting of 150% for this component. For 2022 and 2023, with respect to the
profit trigger component, maximum vesting of 100% has been used in the calculation.
(3) Represents the number of Performance Shares and accrued dividend equivalent units on December 31, 2024 based on
maximum vesting.
(4) Performance Shares granted on May 1, 2022. If the performance criteria is achieved, then earned Performance Shares will vest
on May 1, 2025.
(5) Performance Shares granted on May 1, 2023. If the performance criteria is achieved, then earned Performance Shares will vest
on May 1, 2026.
(6) Performance Shares granted on May 1, 2024. If the performance criteria is achieved, then earned Performance Shares will vest
on May 1, 2027.
(7) Mr. McCollom forfeited all of his unvested stock awards upon his February 8, 2024 separation from Fulton.
(8) Mr. Sridharan forfeited his 2024 Performance Shares on the date of his January 31, 2025 separation from Fulton.
2025 Proxy Statement | 56 | Fulton Financial Corporation
2024 Option Exercise and Stock Vested
Option Awards
Stock Awards
Name
Number of
Shares
Acquired
on Exercise
(#)
Value Realized
on Exercise
($)
Number of
Shares
Acquired
on Vesting
(#)
Value Realized
on Vesting(1)
($)
Curtis J. Myers
-
-
49,653
$839,140
Richard S. Kraemer
-
-
-
-
Angela M. Snyder
-
-
26,477
$447,485
Meg R. Mueller
-
-
26,362
$445,510
Beth Ann L. Chivinski
-
-
26,149
$441,920
Mark R. McCollom
-
-
-
-
Karthik K. Sridharan
-
-
-
-
(1) Vested Performance Shares valued at $16.90 per share on the May 1, 2024 vesting date and include accrued dividend
equivalent units. Amounts for Ms. Snyder, Ms. Mueller and Ms. Chivinski also include RSUs withheld to cover Social Security
and Medicare taxes due to retirement eligibility at the time of the 2024 grant. With respect to Ms. Mueller and Ms. Chivinski,
shares were withheld to cover taxes at the time of grant, and, with respect to Ms. Snyder, shares were withheld to cover taxes
upon becoming retirement eligible on May 22, 2024.
2024 Non-Qualified Deferred Compensation(1)
Name
NEO
Contributions
in Last Fiscal
Year(2)
($)
Registrant
Contributions in
Last Fiscal
Year(3)
($)
Aggregate
Earnings in
Last Fiscal
Year
($)
Aggregate
Withdrawals
and
Distributions
in Last
Fiscal Year
($)
Aggregate
Balance
at Last Fiscal
Year-end(4)
($)
Curtis J. Myers
111,277
47,320
222,636
-
1,708,909
Richard S. Kraemer
-
-
-
-
-
Angela M. Snyder
156,250
19,198
232,861
-
1,683,758
Meg R. Mueller
-
-
149
-
3,046
Beth Ann L. Chivinski
18,006
12,660
24,589
-
381,453
Mark R. McCollom
-
-
37,572
50,830
231,073
Karthik K. Sridharan
7,050
1,385
182
-
8,617
(1) For more details on our DCP, see “Deferred Compensation Plan” on page 46.
(2) Amounts listed as NEO Contributions in Last Fiscal Year are included in the SCT for 2024 as Base Salary and/or Non-Equity
Incentive Plan Compensation.
(3) Amounts listed as Registrant Contributions to the DCP are also included as part of the NEOs’ “Total All Other Compensation”
in the SCT.
(4) The aggregate balances as of December 31, 2024 include the following amounts previously reported in the SCT for prior
years for Messrs. Myers and McCollom, and Messes. Snyder, Mueller and Chivinski of $871,485, $219,463, $648,041, $0 and
$126,124, respectively. Amounts listed as aggregate balances will be paid to the NEOs upon termination of employment for any
reason. Refer to the DCP narrative description on page 46 for additional information.
2025 Proxy Statement | 57 | Fulton Financial Corporation
Employment Agreements, Severance and
Change In Control Payments, Consulting
Agreement and Separation Agreement
We entered into employment agreements with
certain of our employees, including each of our
NEOs. Fulton entered into separate employment
agreements and change in control agreements
with each of the NEOs, all effective as of January 1,
2018, except for Mr. Myers, whose agreements
were effective January 1, 2023, Mr. Sridharan,
whose agreements were effective June 12, 2023,
and Mr. Kraemer, whose agreements were effective
September 3, 2024. The employment agreements
(individually, an “Employment Agreement,” and
collectively,
the
“Employment
Agreements”)
and key employee change in control agreements
(individually, a “CIC Agreement,” and collectively,
the “CIC Agreements”) with the NEOs continue until
the NEO’s employment is terminated and expire on
December 31 of the calendar year in which the NEO
attains age 65. In addition to the benefits described
below, the Employment Agreements and the CIC
Agreements provide for: (i) the receipt of base
salary, (ii) the participation in Fulton’s incentive
bonus programs and (iii) the participation in
Fulton’s retirement plans, welfare benefit plans and
other benefit programs.
The severance benefits our NEOs are entitled
to receive are discussed in the Section titled
“Potential Payments on Termination and Change
in Control.”
The Employment Agreements contain confidentiality
restrictions and include non-competition and non-
solicitation covenants that continue for one year
following termination of employment. The non-
competition and non-solicitation covenants in
the Employment Agreements will not apply if the
NEO terminates employment for Good Reason
(defined below), or if the NEO’s employment is
terminated Without Cause (defined below), but
a separate one year non-solicitation covenant in
the CIC Agreement will apply if the termination
occurs 90 days prior to or two years following a
change in control. The Employment Agreements
and the CIC Agreements do not include excise
tax gross-up provisions. Severance under the
Employment Agreements is conditioned on the
NEO’s execution and non-revocation of a release of
claims in favor of Fulton and certain other persons
and entities.
On February 8, 2024, Mr. McCollom separated
from his position as CFO of Fulton and Fulton
Bank. In connection with his separation, Fulton
and Mr. McCollom entered into a Separation
Agreement and General Release (the “Separation
Agreement”). Under the Separation Agreement,
Fulton agreed to pay Mr. McCollom $325,000.
The Separation Agreement contained a release
of claims and a reaffirmation of certain restric-
tive covenants in favor of Fulton and Fulton Bank.
As a result of his termination, Mr. McCollom also
became entitled to receive his DCP benefit (valued
at $252,199.01 on the date of such termination) to
be paid in accordance with the terms of the DCP.
Ms. Chivinski retired on December 31, 2024. On
November 1, 2024, Fulton entered into a Consulting
Agreement with Ms. Chivinski (the "Consulting
Agreement").
The
term
of
the
Consulting
Agreement commenced on January 1, 2025 and
ends on June 30, 2025, unless earlier terminated by
either Fulton or Ms. Chivinski. Under the Consulting
Agreement, Ms. Chivinski will provide advice to
Fulton as requested as an independent contractor
to ensure the continued, smooth transition of her
duties and responsibilities. As sole compensation
for her services under the Consulting Agreement,
Ms. Chivinski was paid $1,250,000.00 in a lump sum
during the first month of the term of the Consulting
Agreement. In addition, Fulton will pay or reimburse
Ms. Chivinski for reasonable expenses incurred
by Ms. Chivinski in performing services under the
Consulting Agreement. Ms. Chivinski will remain
subject to the confidentiality, non-competition,
non-solicitation and clawback provisions set forth
in Section 5 of her Employment Agreement. The
Consulting Agreement also contains a general
release of claims on the part of Ms. Chivinski.
Potential Payments on Termination
and Change in Control
Set forth below is a summary of the material terms
regarding the potential compensation of Fulton’s
NEOs in connection with a termination event or
change in control of Fulton. In addition to the
amounts set forth below, as the result of any termi-
nation of employment on December 31, 2024, each
of the NEOs would be entitled to receive the amounts
listed for him or her in the “Aggregate Balance at Last
Fiscal Year-end” column of the 2024 Non-Qualified
Deferred Compensation Table set forth above.
2025 Proxy Statement | 58 | Fulton Financial Corporation
The following defined terms will have the mean-
ings set forth below:
Definitions. The relevant definitions under the CIC
Agreement are summarized as follows:
•
“Cause” means (i) the NEO’s commitment of
a felony or misdemeanor resulting or intend-
ing to result directly or indirectly in gain or
personal enrichment to the NEO,(ii) the NEO’s
use of alcohol or other drugs which interferes
with the NEO’s performance, (iii) the NEO’s
continuing deliberate and intentional refusal
or failure to perform the NEO’s duties to Ful-
ton, (iv) the NEO’s participation in conduct
that brings public discredit on or injures the
reputation of Fulton or (v) the NEO’s legal pre-
clusion of employment.
•
“Change in Control” means (i) during any period
of not more than 36 months, the individuals
that constituted the Board at the beginning of
such period, with certain exceptions, cease
to constitute at least a majority of Fulton’s
Board, (ii) beneficial ownership of more than
30% of the outstanding voting power of Ful-
ton common stock is acquired by any person,
with certain exceptions, (iii) a merger or con-
solidation involving Fulton is consummated,
unless at least 50% of the voting power of the
resulting entity is represented by Fulton voting
securities outstanding prior to such merger
or consolidation, no person beneficially has
the power to vote 30% or more of the voting
power of the resulting entity, and at least a
majority of the members of the board of direc-
tors of the resulting entity were members of
the Board prior to the execution of the agree-
ment which effectuated such merger or con-
solidation, (iv) the sale of all or substantially
all of the assets of Fulton is consummated,
or (v) Fulton’s shareholders approve a plan of
liquidation or dissolution.
•
“Disability” means a medically determin-
able physical or medical impairment that is
expected to result in death or to last for at
least 12 months and that either renders the
NEO unable to engage in any substantial gain-
ful activity or qualifies the NEO for benefits
under a Fulton disability plan.
•
“Good Reason” means (i) a breach by Fulton
of its material obligations without rem-
edy, (ii) a significant change in the NEO’s
authority, duties, compensation or benefits
or (iii) a relocation of the NEO outside a
specified distance from where the NEO pre-
viously was based.
•
“Retirement” means the NEO terminates
employment with Fulton after the NEO has
achieved the earlier of: (i) age 60 with at least
ten years of service to Fulton or any affiliate or
(ii) age 62 with at least five years of service to
Fulton or any affiliate.
•
“Without Cause” means any reason other than
for Cause.
Voluntary Termination. In the event an NEO’s
employment is voluntarily terminated by the
NEO other than for Good Reason or Retirement,
Fulton’s obligations are limited to the payment
of the NEO’s earned but unpaid base salary,
together with any applicable expense reim-
bursements and all earned but unpaid benefits
and vested benefits (collectively, the “Accrued
Obligations”). No other payments are required,
and any unvested time-based restricted stock
units and Performance Shares are forfeited by
the NEO unless the voluntary termination is also
a Retirement.
Termination for Good Reason or Without Cause. If
an NEO terminates his or her employment
for Good Reason or the NEO’s employment is
terminated by Fulton Without Cause, other than
in connection with a Change in Control then in
addition to the Accrued Obligations, the NEO is
entitled to receive the NEO’s base salary for a
period of one year, plus any vested and unpaid
cash bonus for the prior fiscal year plus a cash
bonus for the fiscal year in which the termination
date occurs at the target payout level, pro-rated
to the date of termination, except that Mr. Myers
is entitled to receive his base salary for two years
(paid over two years). The NEO and his or her
spouse and eligible dependents are permitted to
participate in employee health and other benefit
plans for which the NEO is eligible during this
one-year period (or two years, in the case of
Mr. Myers). If Fulton is unable to continue the
NEO’s participation in any employee benefit
plan, the NEO will be compensated in an amount
equal to the cost Fulton would have incurred
had the NEO been eligible to participate in the
plan plus an amount equal to the applicable
individual income taxes due on such amount.
Unvested Performance Shares are forfeited.
2025 Proxy Statement | 59 | Fulton Financial Corporation
Termination for Cause. If an NEO’s employment
is terminated for Cause, Fulton is not obligated to
make any further payments to the NEO, other than
the Accrued Obligations. Unvested time-based
RSUs and Performance Shares are forfeited.
Retirement or Disability. In the event an NEO ter-
minates his or her employment due to Retirement,
the NEO is entitled to receive the Accrued Obliga-
tions, unvested time-based restricted stock units
vest and Performance Shares remain outstanding
and will vest based on achievement of the relevant
performance goals.
In the event of a termination due to an NEO’s Dis-
ability, the NEO is entitled to receive an amount
equal to at least six months’ base salary as in
effect immediately prior to the date of the Dis-
ability. After this six-month salary continuation
period, for as long as the NEO continues to be
disabled, the NEO will continue to receive at least
60% of the NEO’s base salary until the earlier of
the NEO’s death or December 31 of the calendar
year in which the NEO attains age 65 (the first
$15,000 per month of this benefit is paid under
our long-term disability policy generally appli-
cable to all benefits-eligible employees, and the
remainder is paid by Fulton). The NEO will also
receive those benefits customarily provided by
Fulton to disabled former employees through the
earlier of December 31 of the year the NEO turns
65 and the NEO’s death including, but not limited
to, life, medical, health and accident insurance. In
addition, upon a termination of an NEO’s employ-
ment due to Disability, unvested RSUs automati-
cally vest and unvested Performance Shares vest
either on an accelerated basis, subject to the
HR Committee’s determination of the extent to
which the performance goals have been met, or
vest subject to the achievement of the relevant
performance goals.
Death. In the event certain NEOs die while
actively employed by Fulton, such NEO’s estate
or beneficiaries are eligible for a payment from
Fulton (in addition to the Accrued Obligations)
equal to two times the NEO’s base salary (plus
an amount equal to applicable individual income
taxes due on such amounts) pursuant to indi-
vidual death benefit agreements between Fulton
and that NEO. In addition, under the terms of their
respective death benefit agreements, Mr. Myers
and Messes. Chivinski and Snyder would each
receive a reduced, post-retirement death ben-
efit of $5,000. The other NEOs are not eligible
for any post-retirement death benefit. Further, in
the event of the death of an NEO, unvested RSUs
automatically vest and unvested Performance
Shares vest either on an accelerated basis, sub-
ject to the HR Committee’s determination of the
extent to which the performance goals have been
met, or vest subject to the achievement of the rel-
evant performance goals.
Change in Control – NEOs other than Mr. Myers. If,
during the period beginning 90 days before a Change
in Control and ending two years after such Change
in Control, an NEO is terminated by Fulton Without
Cause or an NEO resigns for Good Reason, Fulton is
required to pay the NEO (in addition to the Accrued
Obligations) a lump sum payment equal to two times
the sum of the NEO’s: (i) annual base salary immedi-
ately before the Change in Control and (ii) the highest
annual cash bonus or other cash incentive compen-
sation awarded to the NEO over the prior three years.
The NEO is also entitled to receive: (i) an amount
equal to that portion of the 401(k) Plan or DCP con-
tributions for the NEO which did not vest plus an
amount equal to the applicable individual income
taxes due on such amount, (ii) an amount equal to
two years of Fulton retirement plan contributions to
each tax qualified or nonqualified retirement plan in
which the NEO was a participant immediately prior
to the NEO’s termination or resignation, (iii) payment
of up to $10,000 for outplacement services and
(iv) continuation of other employee welfare benefits
for a period of two years.
Change in Control – Mr. Myers. With respect to
Mr. Myers, if during the period beginning 90 days
before a Change in Control and ending two years
after such Change in Control, Mr. Myers is termi-
nated by Fulton Without Cause or he resigns for
Good Reason, Fulton is required to pay Mr. Myers
a lump sum payment equal to three times the sum
of Mr. Myers’: (i) annual base salary immediately
before the Change in Control and (ii) the average
annual cash bonus or other cash incentive com-
pensation awarded to Mr. Myers over the past
three years. Mr. Myers is also entitled to receive:
(i) an amount equal to that portion of the 401(k)
Plan or DCP contributions for Mr. Myers which
did not vest plus an amount equal to applicable
individual income taxes due on such amount,
2025 Proxy Statement | 60 | Fulton Financial Corporation
(ii) an amount equal to two years of Fulton retire-
ment plan contributions to each tax qualified or
nonqualified retirement plan in which Mr. Myers
was a participant immediately prior to Mr. Myers’
termination or resignation, (iii) payment of up to
$10,000 for outplacement services and (iv) con-
tinuation of other employee welfare benefits for a
period of two years.
The NEOs are not entitled to receive continua-
tion of other executive perquisites, but, the NEOs
have the ability to purchase, at book value, any
employer-provided automobile used by the NEO
at the time of his or her termination.
2025 Proxy Statement | 61 | Fulton Financial Corporation
2024 NEO Change in Control and Termination Table
Potential Payments as of December 31, 2024
NEO
Voluntary
Termination
or
Termination
for Cause
Termination
Without
Cause or for
Good
Reason –
Not in
Connection
With a
Change in
Control(4)
Termination
Without
Cause or
for Good
Reason –
in Connection
With a Change
in Control(5)
Termination
Due to
Retirement(6)
Termination
Due to
Disability(7)
Termination
Due to
Death(8)
Curtis J. Myers
Cash ($)
-
3,642,308
2,747,907
-
3,438,548
1,840,000
Equity ($)(1)
-
490,182
4,081,008
-
4,081,008
4,081,008
Pension/NQDC
Contributions ($)(2)
-
-
129,140
-
-
-
Perquisites and
Benefits ($)(3)
-
30,975
40,975
-
124,006
30,975
Tax Reimbursement ($)
-
-
-
-
-
1,177,868
TOTAL ($)
-
4,163,465
6,999,031
-
7,643,562
7,129,851
Richard S. Kraemer
Cash ($)
-
935,000
1,243,957
-
2,982,603
1,100,000
Equity ($)(1)
-
759,738
759,738
-
759,738
759,738
Pension/NQDC
Contributions ($)(2)
-
-
-
-
-
-
Perquisites and
Benefits ($)(3)
-
19,808
49,615
-
357,542
39,615
Tax Reimbursement ($)
-
-
-
-
-
704,160
TOTAL ($)
-
1,714,546
2,053,310
-
4,099,883
2,603,513
Angela M. Snyder
Cash ($)
-
935,000
1,554,938
-
878,904
1,100,000
Equity ($)(1)
-
229,385
2,082,433
2,082,433
2,082,433
2,082,433
Pension/NQDC
Contributions ($)(2)
-
-
72,896
-
-
Perquisites and
Benefits ($)(3)
-
15,488
40,975
-
62,353
30,975
Tax Reimbursement ($)
-
-
-
-
-
704,160
TOTAL ($)
-
1,179,873
3,751,242
2,082,433
3,023,690
3,917,568
Meg R. Mueller
Cash ($)
-
649,935
1,534,255
517,807
866,580
Equity ($)(1)
-
135,525
1,369,912
1,369,912
1,369,912
1,369,912
Pension/NQDC
Contributions ($)(2)
-
-
34,500
-
Perquisites and
Benefits ($)(3)
-
19,808
49,615
-
74,591
39,615
Tax Reimbursement ($)
-
-
-
-
554,737
TOTAL ($)
-
805,268
2,988,283
1,369,912
1,962,311
2,830,845
2025 Proxy Statement | 62 | Fulton Financial Corporation
Potential Payments as of December 31, 2024
NEO
Voluntary
Termination
or
Termination
for Cause
Termination
Without
Cause or for
Good
Reason –
Not in
Connection
With a
Change in
Control(4)
Termination
Without
Cause or
for Good
Reason –
in Connection
With a Change
in Control(5)
Termination
Due to
Retirement(6)
Termination
Due to
Disability(7)
Termination
Due to
Death(8)
Beth Ann L. Chivinski
Cash ($)
-
844,257
1,660,896
-
278,767
1,000,000
Equity ($)(1)
-
178,880
1,306,921
1,306,921
1,306,921
1,306,921
Pension/NQDC
Contributions ($)(2)
-
-
59,820
-
-
-
Perquisites and
Benefits ($)(3)
-
12,576
35,152
-
3,015
25,152
Tax Reimbursement ($)
-
-
-
-
-
640,146
TOTAL ($)
-
1,035,713
3,062,789
1,306,921
1,588,703
2,972,218
Karthik K. Sridharan
Cash ($)
-
675,000
1,110,760
-
1,078,521
900,000
Equity ($)(1)
-
440,772
708,523
-
708,523
708,523
Pension/NQDC
Contributions ($)(2)
-
18,346
-
-
Perquisites and
Benefits ($)(3)
-
7,391
24,782
-
70,093
14,782
Tax Reimbursement ($)
-
-
-
-
-
576,131
TOTAL ($)
-
1,123,163
1,862,411
-
1,857,136
2,199,435
(1) The amounts listed under Equity in this table consists of unvested: (i) Performance Shares and (ii) RSUs, in each case, valued based on
the closing price of Fulton’s common stock on December 31, 2024, accelerated for certain events as appropriate. For purposes of the
value associated with Performance Shares, performance at the target level was assumed.
(2) For those employees that participate, the amounts listed under Pension/NQDC Contributions represent the aggregate dollar value of
Fulton’s contributions to the 401(k) Plan, the DCP and other retirement benefits for the NEO over the applicable period.
(3) Perquisites and Benefits include, as applicable: (i) $10,000 for outplacement services in the event of a Change In Control termination
and (ii) the estimated value of health and other benefit expenses during the severance period. In the case of Disability, the number
represents the estimated value of health and other benefit expenses through age 65. In the case of Death, the amount represents the
estimated value of health and other benefits expenses for 24 months.
(4) The cash amount listed for each NEO includes a severance payment based on the NEO’s 2024 base salary, assume no discretionary
bonus paid to the NEOs and assume a payment to the NEOs equal to their target 2024 VCP Awards.
(5) The cash amounts listed are a multiple of 2024 base salary as of December 31, 2024 and the highest VCP Awards paid for the past three
years, except for Mr. Myers it is the average annual VCP Award paid for the past three years and, for Mr. Kraemer, it is the 2024 VCP
Award at target. The cash payment amounts to Messrs. Myers, Kraemer and Sridharan and Ms. Snyder, Ms. Mueller and Ms. Chivinski
have been reduced in the table by $1,968,809, $626,043, $89,240, $325,913, $0 and $0, respectively, to limit a payment required to avoid
a federal excise tax imposition under Section 4999 of the Tax Code.
(6) Performance Shares awarded in 2022, 2023 and 2024 provide that the continuous service requirement is waived if an NEO terminates
employment when the NEO is Retirement eligible, and performance continues to be measured and the shares may vest based on the
original vesting schedule according to the performance level actually achieved. The amounts reported in the “Equity” row assume
the target level of performance for the 2022, 2023 and 2024 Performance Shares. As of December 31, 2024, only Ms. Snyder, Ms.
Mueller and Ms. Chivinski were Retirement eligible. Unvested RSUs automatically vest in full upon termination of employment due to
Retirement.
(7) The cash amount represents six months at full base salary followed by 60% of base salary through age 65 (less $15,000 per month
paid by our long-term disability insurer). Following such six-month period, the NEO receives an additional amount, equal to the lesser
of 60% of their monthly salary and $15,000 per month, on the same terms as all other benefit-eligible employees, and such amount is
not included in the table. For so long as the NEO continues to be disabled, the NEO will continue to receive at least 60% of the NEO’s
base salary until the earlier of the NEO’s death or December 31 of the calendar year in which the NEO attains age 65. In the event an
NEO terminates employment due to Disability, unvested RSUs automatically vest and unvested Performance Shares vest either on an
accelerated basis, subject to the HR Committee’s determination of the extent to which the performance goals have been met, or vest
subject to the achievement of the relevant performance goals.
(8) In the event of a termination of employment as a result of an NEO’s death, the NEO’s dependents, beneficiaries or estate, as the case
may be, receive such survivor’s income and other benefits as they may be entitled to under the terms of Fulton’s benefit programs,
including the life insurance benefit of two times base salary amount plus a tax reimbursement due as a result of the payment under the
“Death Benefits” described on page 46. In addition, unvested RSUs automatically vest and unvested Performance Shares vest either
on an accelerated basis, subject to the HR Committee’s determination of the extent to which the performance goals have been met, or
vest subject to the achievement of the relevant performance goals.
2025 Proxy Statement | 63 | Fulton Financial Corporation
2024 Pay Versus Performance Disclosure
Pay Versus Performance Disclosure
Pursuant to Section 953(a) of the Dodd-Frank Act
and Item 402(v) of Regulation S-K, Fulton is provid
ing the following information about the relation
ship between executive compensation actually
paid (“CAP”) to Fulton’s principal executive officer
(“PEO”) and non-PEO named executive officers (the
“Non-PEO NEOs”) and certain aspects of the finan-
cial performance of Fulton. The HR Committee does
not utilize CAP as the basis for making compensa
tion decisions. Please see the CD&A with respect
to additional information with respect to our com
pensation philosophy and how we align executive
compensation with our performance.
Pay Versus Performance Table
Year(1)
(a)
Summary
Compensation
Table Total for
PEO(2)
(b)
Compensation
Actually Paid
to PEO(3)
(c)
Average
Summary
Compensation
Table Total
for Non-PEO
NEOs(2)
(d)
Average
Compensation
Actually Paid
to Non-PEO
NEOs(3)
(e)
Value of Initial Fixed
$100 Investment
Based on:(4)
Net
Income
(GAAP)(6)
(h)
Company
Selected
Metric:
Adjusted
EPS(7)
(i)
TSR
(f)
Peer Group
TSR(5)
(g)
2024
$3,337,831
$4,335,378
$1,178,658
$1,073,637
$134.46
$111.09
$289
$1.68
2023
$2,309,440
$2,862,798
$999,817
$1,196,969
$111.42
$95.17
$284
$1.70
2022
$4,923,557
$5,537,243
$1,541,616
$1,675,245
$109.15
$102.00
$287
$1.76
2021
$4,207,894
$5,365,077
$1,395,455
$1,745,204
$106.37
$125.45
$275
$1.62
2020
$3,084,495
$2,225,418
$1,082,224
$821,870
$76.52
$88.19
$178
$1.08
(1) Mr. Myers served as the PEO for the entirety of 2024 and 2023. Mr. Wenger served as the PEO for the entirety of 2022, 2021 and
2020. Our Non-PEO NEOs for the applicable years were as follows:
•
2024: Mark R. McCollom, Beth Ann L. Chivinski, Richard S. Kraemer, Angela M. Snyder, Karthik K. Sridharan and
Meg R. Mueller;
•
2023: Mark R. McCollom, Angela M. Snyder, Meg R. Mueller and Beth Ann L. Chivinski;
•
2022: Mark R. McCollom, Curtis J. Myers, Natasha Luddington and Angela M. Snyder;
•
2021: Curtis J. Myers, Mark R. McCollom, Angela M. Snyder and Meg R. Mueller; and
•
2020: Mark R. McCollom, Curtis J. Myers, Angela M. Snyder and Beth Ann L. Chivinski.
(2) Amounts reported in these columns represent: (i) the total compensation reported in the SCT for the applicable year for the
PEO and (ii) the average of the total compensation reported in the SCT for the applicable year for our Non-PEO NEOs.
(3) Amounts reported in these columns represent CAP. Adjustments were made to the amounts reported in the SCT for the
applicable year. A reconciliation of the adjustments for the applicable PEO and for the average of the Non-PEO NEOs is set
forth in the following table.
(4) TSR is cumulative for the measurement periods beginning on December 31, 2019 and ending on December 31 of each of 2024,
2023, 2022, 2021 and 2020, respectively, calculated in accordance with Item 201(e) of Regulation S-K.
(5) Peer Group total shareholder return (“Peer Group TSR”) represents the Nasdaq Bank Index, which is used by Fulton for
purposes of compliance with Item 201(e) of Regulation S-K.
(6) Amounts in millions.
(7) Adjusted EPS is a Fulton selected measure. Values shown reflect EPS as calculated for purposes of our executive compensation
program for the applicable reporting year as set forth in detail under “Non-GAAP Reconciliations” in Annex A to this Proxy
Statement. No adjustments to EPS were made for 2021 and 2020.
2025 Proxy Statement | 64 | Fulton Financial Corporation
2024
2023
2022
2021
2020
PEO
Myers
Average
Non-PEO
NEOs
PEO
Myers
Average
Non-PEO
NEOs
PEO
Wenger
Average
Non-PEO
NEOs
PEO
Wenger
Average
Non-PEO
NEOs
PEO
Wenger
Average
Non-PEO
NEOs
Summary
Compensation
Table Total
$3,337,831 $1,178,658 $2,309,440
$999,817 $4,923,557 $1,541,616 $4,207,894 $1,395,455 $3,084,495 $1,082,224
Less Stock Award
Value & Option
Award Value
Reported in
SCT for the
Covered Year
$1,329,526
$441,951
$954,757
$379,503 $2,076,061
$462,213 $1,305,528
$395,464 $1,292,385
$393,958
Plus Year End
Fair Value of
Equity Awards
Granted During
the Covered Year
that Remain
Outstanding and
Unvested as of
Last Day of the
Covered Year
$1,432,754
$375,360 $1,616,090
$642,375 $2,517,933
$552,934 $1,335,263
$404,470 $1,423,841
$434,250
Plus Year over
Year Change in
Fair Value as of
the Last Day of the
Covered Year of
Outstanding and
Unvested Equity
Awards Granted in
Prior Years
$789,392
$177,116
$191,243
$111,252
$233,715
$57,715
$944,182
$285,212
($901,359)
($267,705)
Plus Fair Value
as of Vesting
Date of Equity
Awards Granted
and Vested in the
Covered Year
-
$80,075
-
-
-
-
-
-
-
-
Plus Year over
Year Change in
Fair Value as
of the Vesting
Date of Equity
Awards Granted
in Prior Years that
Vested During the
Covered Year
$104,927
$27,582
($299,218) ($176,972)
($61,901)
($14,807)
$183,267
$55,530
($89,174)
($32,941)
Minus Fair Value
at the End of
the Prior Year of
Equity Awards
that Failed to
Meet Vesting
Conditions in the
Covered Year
-
$323,203
-
-
-
-
-
-
-
-
2025 Proxy Statement | 65 | Fulton Financial Corporation
2024
2023
2022
2021
2020
PEO
Myers
Average
Non-PEO
NEOs
PEO
Myers
Average
Non-PEO
NEOs
PEO
Wenger
Average
Non-PEO
NEOs
PEO
Wenger
Average
Non-PEO
NEOs
PEO
Wenger
Average
Non-PEO
NEOs
Plus Value of
Dividends or other
Earnings Paid on
Stock or Option
Awards Prior to
the Vesting Date
Not Otherwise
Reflected in Total
Compensation for
the Covered Year
-
-
-
-
-
-
-
-
-
-
Compensation
Actually Paid
$4,335,378 $1,073,637 $2,862,798 $1,196,969 $5,537,243 $1,675,245 $5,365,077 $1,745,204 $2,225,418
$821,870
In the table above, the unvested equity values are
computed in accordance with ASC Topic 718. For
unvested awards subject to performance-based
vesting conditions, the change in equity value is
determined based on the probable outcome of
such performance-based vesting conditions as
of the last day of the covered year.
Performance Measures Used to Link
Company Performance and CAP
The following is a list of performance measures
that represent the most important performance
measures used by Fulton to link 2024 CAP to the
NEOs to performance:
•
TSR;
•
Adjusted EPS;
•
Adjusted ROE; and
•
Adjusted Operating Expenses/Average Assets.
2025 Proxy Statement | 66 | Fulton Financial Corporation
Pay Versus Performance Charts
Relationship between CAP and TSR. The graph below illustrates the relationship between Fulton’s TSR
and the Peer Group TSR as well as the relationship between TSR and CAP for the PEO and average
Non-PEO NEOs.
$4,335
$0
$25
$50
$75
$100
$125
$150
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
TSR Indexed to $100 Per Share
CAP ($000)
CAP Versus TSR
CAP to PEO
Avg. CAP to Non-PEO NEOs
Fulton TSR
NASDAQ Bank Index TSR
$2,225
$5,365
$5,537
$2,863
$822
$1,745
$1,675
$1,197
$1,074
$77
$106
$109
$111
$95
$134
$111
$88
$125
$102
2020
2021
2022
2023
2024
Relationship between CAP and Net Income. The graph below illustrates the relationship between Fulton’s
Net Income and CAP for the PEO and average Non-PEO NEOs.
$2,225
$5,365
$5,537
$2,863
$4,335
$822
$1,745
$1,675
$1,074
$1,197
$0
$55
$110
$165
$220
$275
$330
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Fulton Net Income ($M)
CAP ($000)
CAP Versus Net Income
CAP to PEO
Avg. CAP to Non-PEO NEOs
Fulton Net Income
$178
$284
$289
$275
$287
2020
2021
2022
2023
2024
Relationship between CAP and Adjusted EPS. The graph below illustrates the relationship between Ful-
ton’s Adjusted EPS and CAP for the PEO and average Non-PEO NEOs.
$0.00
$0.70
$1.40
$0.35
$1.05
$1.75
$2.10
$1.08
$1.76
$1.70
$1.68
$1.62
$2,225
$5,365
$5,537
$2,863
$4,335
$822
$1,745
$1,675
$1,074
$1,197
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
CAP ($000)
CAP to PEO
Avg. CAP to Non-PEO NEOs
Fulton Adjusted EPS
2020
2021
2022
2023
2024
CAP Versus Adjusted EPS
Fulton Adjusted EPS
2025 Proxy Statement | 67 | Fulton Financial Corporation
PROPOSAL 3
Ratification of Independent Auditor
Proposal
Fulton’s Audit Committee selected KPMG to con-
tinue as Fulton’s independent auditor for the fis-
cal year ending December 31, 2025. Although
shareholder approval of the selection of KPMG
is not required by our organizational documents,
the Board believes that it is advisable to allow our
shareholders an opportunity to ratify this selec-
tion as it is consistent with sound corporate gov-
ernance practices.
If Fulton’s shareholders do not approve this pro-
posal at the Annual Meeting, then the Audit Com-
mittee may consider the appointment of another
independent auditor, but it is not required to do so.
Representatives of KPMG will be present at the
Annual Meeting and will have the opportunity to
make a statement, if they desire to do so, and to
respond to appropriate questions.
Vote Required
The affirmative vote of a majority of the shares
for which votes are cast on the proposal at the
Annual Meeting is needed to approve this pro-
posal. Abstentions and broker non-votes will not
be counted as votes cast and, therefore, will not
affect this proposal. Further, the failure to vote,
either by proxy or in person, will not have an effect
on this proposal. Unless instructions to the con-
trary are specified in a proxy properly voted and
returned through available channels, the proxies
will be voted “FOR” this proposal.
The Board unanimously recommends that shareholders vote “FOR” the ratification of the
appointment of KPMG as Fulton’s independent auditor for the fiscal year ending December 31, 2025.
2025 Proxy Statement | 68 | Fulton Financial Corporation
Relationship with Independent Public Accountants
Independent Auditor
On February 18, 2025, Fulton’s Audit Committee
approved the appointment of KPMG for the fiscal
year ended December 31, 2024. The Audit Com-
mittee carefully considered KPMG’s qualifica-
tions and the services requiring independence.
The Audit Committee determined that such ser-
vices did not impair the independence of KPMG.
Fees
For the years ended December 31, 2024 and
December 31, 2023, Fulton engaged KPMG, inde-
pendent registered public accountants, to audit
Fulton’s financial statements. KPMG has served
as Fulton’s independent auditor since 2002. The
fees incurred for services rendered by KPMG for
the years ended December 31, 2024 and 2023 are
summarized in the following table:
Services and Fees
2024
2023
Audit Fees – Annual Audit and Quarterly Reviews(1)
$3,480,000
$2,275,000
Audit Fees – Issuance of Comfort Letters and Consents
225,000
70,000
Audit Fees – Statutory Audit
62,800
61,000
Audit Fees Subtotal
3,767,800
2,406,000
Audit-Related Fees – Attestation
450,000
154,000
Tax Fees
66,500
63,000
All Other Fees
-
-
TOTAL
$4,284,300
$2,623,000
(1) Amounts are based upon the audit engagement letter and additional fees paid. We do not anticipate final billings to differ
significantly from the amounts presented above.
Audit Fees. Fees related to the integrated audit of
Fulton’s annual financial statements for the years
ended December 31, 2024 and 2023, and for the
reviews of the financial statements included in
Fulton’s quarterly reports on Form 10-Q and 10-K
for 2024 and 2023.
Audit-Related Fees. Audit related fees for 2024
and 2023 relate to attestation engagements.
Tax Fees. Tax fees were paid for tax services relat-
ing to federal and state tax matters.
All Other Fees. There were no other fees for 2024
or 2023.
Audit Committee Pre-Approval Policies
and Procedures
The Audit Committee pre-approved all fees paid to
KPMG in 2024 and 2023. The Audit Committee pre-
approves all auditing and permitted non-auditing
services, including the fees and terms thereof,
to be performed by KPMG, subject to de minimis
exceptions for non-auditing services permitted by
the Exchange Act. The Audit Committee recom-
mended to the Board that the financial statements
be included in the Annual Report on Form 10-K for
the year ended December 31, 2024.
2025 Proxy Statement | 69 | Fulton Financial Corporation
Audit Committee Report
The Audit Committee reviewed and discussed with
management Fulton’s audited financial statements
as of, and for the year ended, December 31, 2024.
The Audit Committee discussed with representa-
tives of KPMG, Fulton’s independent auditor, the
matters required to be discussed by the applicable
requirements of the Public Company Accounting
Oversight Board (“PCAOB”) and the SEC.
The Audit Committee received, reviewed and dis-
cussed with KPMG the written disclosures and
the letter from the independent auditor required
by applicable PCAOB requirements regarding the
independent auditor’s communications.
Based on the reviews and discussions referred
to above, the Audit Committee recommended to
the Board that the audited consolidated finan-
cial statements of Fulton for 2024 be included in
Fulton’s Annual Report on Form 10-K for the year
ended December 31, 2024.
Denise L. Devine, Chair
Antoinette M. Pergolin, Vice Chair
James R. Moxley III
Ronald H. Spair
2025 Proxy Statement | 70 | Fulton Financial Corporation
MEETING AND OTHER INFORMATION
Proposal
Vote Requirement
Effect of
Abstentions
Effect of
Broker
Non-Votes
You May Vote
1.
Election of Directors
Highest number of votes cast No effect
No effect
For or Withhold
2. Advisory vote on
executive compensation Majority of the votes cast
No effect
No effect
For, Against or
Abstain
3. Ratification of
independent auditor
Majority of the votes cast
No effect
No effect
For, Against or
Abstain
Date, Time and Place of the
Annual Meeting
The Annual Meeting will be held Monday, May 20,
2025, at 10:00 a.m. eastern time at the Lancaster
Marriott at Penn Square, 25 South Queen Street, Lan-
caster, Pennsylvania 17603. To vote at the Annual
Meeting, please go to www.proxyvote.com.
Registered and beneficial shareholders may
choose to attend the Annual Meeting in person.
Each person attending the Annual Meeting must
bring his or her proof of ownership and a valid
photo identification.
Notice of Internet Availability of
Proxy Materials
In accordance with rules adopted by the SEC,
except for shareholders who have requested other-
wise, we have generally mailed to our shareholders
a Notice of Internet Availability of Proxy Materials
(the “Notice of Internet Availability”). The Notice
of Internet Availability provides instructions for
either: (i) accessing our proxy materials, includ-
ing the Notice of Annual Meeting of Sharehold-
ers (the “Notice”) and Proxy Statement, the 2024
Annual Report to Shareholders, which includes
our Annual Report on Form 10-K for the year
ended December 31, 2024 (collectively, the “Proxy
Materials”), at the website address referred to in
the Notice of Internet Availability or (ii) requesting
printed copies of the Proxy Materials by mail or
electronically. If you would like to receive a paper
or electronic copy of our Proxy Materials for this
Annual Meeting or for future meetings, you should
follow the instructions for requesting such materi-
als included in the Notice.
The Board provided the Notice and is making the
Proxy Materials available to you in connection with
the Annual Meeting. As a shareholder of record on
the Record Date, you are invited to attend the Annual
Meeting and are entitled to, and requested to, vote
on the proposals described in this Proxy Statement.
Information Contained in Proxy Statement
The information relates to the proposals to be voted
on at the Annual Meeting, the voting process, com-
pensation of our directors and most highly paid
executives, and certain other required information.
Shareholders Eligible to Vote and Attend
the Annual Meeting
Only those shareholders of record at the close of
business on the Record Date will be entitled to receive
notice of, attend and vote at the Annual Meeting.
Attendance at the Annual Meeting will be limited
to shareholders of record at the close of business
on the Record Date.
Shares Eligible to be Voted
At the close of business on the Record Date, Ful-
ton had 182,199,918 shares of common stock out-
standing and entitled to vote.
Vote Required
The vote required for each proposal presented at the
Annual Meeting and the effect of uninstructed shares
and abstentions on each proposal is as follows:
2025 Proxy Statement | 71 | Fulton Financial Corporation
Quorum Requirement
The holders of a majority of Fulton’s outstanding
shares of common stock must be present in per-
son or by proxy at the Annual Meeting to consti-
tute a quorum. Abstentions and broker non-votes
(i.e., proxies from banks, brokers or other nomi-
nees) will be counted as being present for pur-
poses of determining a quorum. Proxies returned
without voting instructions will not be counted for
purposes of determining a quorum.
A majority of the votes cast at a meeting at which
a quorum is present is required in order to approve
any matter submitted to a vote of the shareholders
except for: (i) the election of directors, in which the
director nominees receiving the highest number
of votes “for” will be elected or (ii) in cases where
the vote of a greater number of shares is required
by law or under Fulton’s Articles of Incorporation
or Bylaws. Each share is entitled to one vote on all
matters submitted to a vote of the shareholders.
Broker Non-Votes
If a broker indicates on the proxy card that it does
not have authority to vote certain shares held in
“street name,” the shares not voted are referred
to as “broker non-votes.” Broker non-votes occur
when brokers do not have discretionary voting
authority to vote certain shares held in “street
name” on particular proposals, and the “beneficial
owner” of those shares has not instructed the bro-
ker how to vote on those proposals. If you are a
beneficial owner and you do not provide instruc-
tions to your broker, bank or other nominee, your
broker, bank or other nominee is permitted to vote
your shares for or against “routine” matters such
as Proposal 3. All of the matters on which share-
holders will be asked to vote on at the Annual
Meeting, with the exception of Proposal 3, are
“non-routine” matters. Broker non-votes will not
be counted as votes cast and will have no effect
on the voting of non-routine matters.
How to Vote
There are several ways to vote your shares:
•
By mail. If you received printed Proxy Mate-
rials, you may submit your proxy card by
completing, signing and dating each proxy
card received and returning it in the prepaid
envelope. Proxy cards submitted by mail must
be received no later than 11:59 p.m. east-
ern time on May 19, 2025 to be voted at the
Annual Meeting;
•
By mobile device. Scan the QR code;
•
By telephone. Instructions are shown on your
proxy card or Notice;
•
Via the Internet. Instructions are shown on
your proxy card or Notice; and
•
At the Annual Meeting. You may vote your
shares at the Annual Meeting by casting a
ballot or voting online by following the instruc-
tions on the Proxy Materials sent to you.
If you are a beneficial owner of Fulton common
stock, you should receive the Notice or voting
instructions from your broker or other nominee
holding your shares. In accordance with SEC
rules, unless a shareholder elected to receive a
paper copy of Fulton’s Proxy Materials, Fulton
is furnishing Proxy Materials to Fulton’s share-
holders via the Internet at www.proxyvote.com.
Electronic delivery expedites the receipt of proxy
materials, significantly lowers costs, and helps
us conserve natural resources. If you hold shares
in “street name” or “nominee name” with a bank
or broker, then you should instruct your bank or
broker how to vote your shares and follow the
voting procedures required by your bank or bro-
ker to vote your shares.
If you submit a proxy card properly signed, dated
and returned through available channels without
giving specific voting instructions, the proxies will
vote the shares as recommended by the Board.
Revoking or Changing Your Vote
The execution and return of the enclosed proxy
card, or voting by another method, will not affect
a shareholder’s right to attend, and vote at, the
Annual Meeting. A shareholder may revoke his or
her proxy before it is counted at the Annual Meet-
ing by: (i) delivering written notice to the Corporate
Secretary, (ii) sending a new proxy card before his
or her shares are voted at the Annual Meeting or
(iii) voting by another method before the deadline
set forth on the proxy card. Unless revoked, any
proxy given pursuant to this solicitation will be
voted at the Annual Meeting in accordance with
the shareholder’s written instructions.
2025 Proxy Statement | 72 | Fulton Financial Corporation
The Cost of the Proxy Solicitation
This Proxy Statement is furnished in connec-
tion with the solicitation of proxies. Fulton is
making this solicitation and will pay the cost
of preparing, assembling, printing, mailing
and distributing Proxy Materials and soliciting
votes for the Annual Meeting. The solicitation
of proxies or votes may be made in person, by
mail, mobile device, telephone or by electronic
communication by Fulton’s directors, officers
and employees who will not receive any com-
pensation for such solicitation activities. Fulton
will reimburse brokers and other nominees for
costs incurred by them in mailing Proxy Mate-
rials in accordance with applicable laws. Ful-
ton has engaged Alliance Advisors to assist in
the solicitation of proxies at a cost of approxi-
mately $8,000, plus reimbursement for reason-
able out-of-pocket expenses.
How to Obtain Fulton’s Corporate
Governance Information
Our corporate governance information is available
on our website at www.fultonbank.com under the
“Investor Relations” section. Our shareholders
may also obtain written copies of our materials at
no cost by writing to the Corporate Secretary at
One Penn Square, P.O. Box 4887, Lancaster, Penn-
sylvania 17604.
Sign Up for Electronic Delivery
If you would like to save paper and reduce the
costs we incur in printing and mailing Proxy
Materials, you can consent to receiving all
future proxy statements, proxy cards and annual
reports electronically via e-mail or the Internet.
To sign up for electronic delivery, please go to
www.proxyvote.com and follow the instructions.
2025 Proxy Statement | 73 | Fulton Financial Corporation
COMPANY DOCUMENTS AND OTHER MATTERS
Shareholder Proposals
Shareholder proposals intended to be considered
for inclusion in Fulton’s proxy statement for the
2026 Annual Meeting must be received by Fulton’s
Corporate Secretary at One Penn Square, P.O. Box
4887, Lancaster, Pennsylvania 17604 no later
than December 2, 2025, 120 calendar days prior
to the anniversary date that this Proxy Statement
is released to shareholders in connection with
the Annual Meeting, and must satisfy the other
requirements of Rule 14a-8 under the Exchange
Act regarding the inclusion of shareholder propos-
als in company-sponsored proxy materials.
Shareholder proposals to be considered at the
2026 Annual Meeting but not included in our
Proxy Materials must be received by our Corpo-
rate Secretary no later than February 16, 2026 to
be considered timely.
Procedure for Shareholder Nominations
Our Bylaws permit shareholders to nominate direc-
tors for consideration at an annual meeting. To
nominate a director for consideration at an annual
meeting (but not for inclusion in our proxy state-
ment), a nominating shareholder must provide the
information required by our Bylaws and give timely
notice of the nomination to Fulton’s Corporate
Secretary in accordance with our Bylaws, and each
nominee must meet the qualifications required by
our Bylaws. To nominate a director for consider-
ation at the 2026 Annual Meeting, the notice must
be received by Fulton’s Corporate Secretary no
later than December 2, 2025, 120 days prior to
the date that this Proxy Statement is released to
shareholders in connection with the Annual Meet-
ing, unless the date of the 2026 Annual Meeting is
changed by more than 30 days from May 20, 2026,
the one-year anniversary of Fulton’s Annual Meet-
ing, in which case the proposal must be received a
reasonable time before Fulton begins to print and
send our Proxy Materials.
In addition, SEC Rule 14a-19 requires inclusion
on our proxy card of all nominees for director for
whom we have received notice under the rule,
which must be received no later than 60 cal-
endar days prior to the first anniversary of the
preceding year’s annual meeting. For the proxy
card relating to the 2026 Annual Meeting, notice
must be received by Fulton’s Corporate Secretary
of a shareholder’s intent to solicit proxies and the
names of their nominees no later than March 21,
2026 for the 2026 Annual Meeting. Such notice
must comply with the requirements set forth in
our Bylaws and the additional requirements of
Rule 14a-19(b).
Annual Report
A copy of our Annual Report, including the finan-
cial statements and schedules, is available with-
out charge to shareholders on our website at
www.fultonbank.com in the “Investor Relations”
section, from the website www.proxyvote.com,
from the SEC at its website at www.sec.gov and
upon written request addressed to the Corpo-
rate Secretary: Fulton Financial Corporation,
Attention Corporate Secretary, P.O. Box 4887,
One Penn Square, Lancaster, Pennsylvania
17604.
Householding of Proxy Materials
The SEC has adopted rules that permit companies
and intermediaries, such as brokers, to satisfy
delivery requirements for annual reports, proxy
statements, and Notices of Internet Availability
with respect to two or more shareholders sharing
the same address by delivering a single annual
report, proxy statement, and Notice of Internet
Availability addressed to those shareholders. This
process, which is commonly referred to as “house-
holding,” potentially provides extra convenience
for shareholders and cost savings for companies.
Only one Proxy Statement is being delivered to
multiple shareholders sharing an address unless
we receive contrary instructions from one or more
of the shareholders. If you are eligible for house-
holding and wish to receive one copy for all eligi-
ble shareholders in your household, or if you are
receiving multiple copies of this Proxy Statement
and wish to receive only one, then you may make a
written request to the Corporate Secretary: Fulton
Financial Corporation, Attention Corporate Secre-
tary, P.O. Box 4887, One Penn Square, Lancaster,
Pennsylvania 17604 or call 717-291-2411.
2025 Proxy Statement | 74 | Fulton Financial Corporation
Other Matters
The Board knows of no business that will be pre-
sented for consideration at the Annual Meeting
other than as stated in the Notice. If, however,
other matters are properly brought before the
Annual Meeting, it is the intention of the persons
named in the accompanying proxy to vote the
shares represented thereby on such matters in
accordance with his or her best judgment.
2025 Proxy Statement | 75 | Fulton Financial Corporation
ANNEX A
Non-Gaap Reconciliations
Fulton uses certain financial measures in this
Proxy Statement that have been derived from
methods other than GAAP to provide meaning-
ful supplemental information regarding its opera-
tional performance and to enhance the overall
understanding of such financial performance. The
non-GAAP measures used herein include Adjusted
EPS, Adjusted ROE, Adjusted Operating Expense/
Average Assets, Adjusted Efficiency Ratio and
Adjusted Non-performing Assets to Total Assets.
Fulton has presented these non-GAAP financial
measures because Fulton’s management believes
that these measures provide useful and com-
parative information to assess trends in Fulton’s
results of operations. Presentation of these non-
GAAP financial measures is consistent with how
Fulton 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 our industry. Management believes that these
non-GAAP financial measures, in addition to GAAP
measures, are also useful to investors to evalu-
ate Fulton’s results. Shareholders should recog-
nize that Fulton’s presentation of these non-GAAP
financial measures might not be comparable to
similarly-titled measures of other companies, and
that these non-GAAP financial measures should
not be considered a substitute for GAAP-basis
measures. Reconciliations of these non-GAAP
financial measures to the most directly compara-
ble GAAP measure are set forth below:
2024
2023
2022
Adjusted net income available to common shareholders
Net income available to common shareholders
$278,495,000
$274,032,000
$276,733,000
Less: Other revenue
(419,000)
-
-
Plus: Loss on securities restructuring
20,282,000
-
-
Plus: Acquisition-related and merger-related expenses
37,635,000
-
10,328,000
Plus: Current Expected Credit Losses day 1 provision
expense(1)
-
-
7,954,000
Plus: Interest rate derivative transition valuation(2)
-
1,855,000
-
Plus: Federal Deposit Insurance Corporation (“FDIC”) special
assessment
940,000
6,494,000
-
Less: Gain on sale-leaseback transaction
(20,266,000)
-
-
Plus: FultonFirst implementation and asset disposals
32,038,000
3,197,000
-
Less: Tax impact of adjustments
(14,744,100)
(2,424,660)
(3,839,220)
Less: Republic First Bank transaction impact
(50,455,000)
-
-
Less: Common stock issuance impact
(7,448,000)
-
-
Adjusted net income available to common shareholders
(numerator)
$276,057,900
$283,153,340
$291,175,780
Weighted average shares (diluted)
177,223,000
166,769,000
165,472,000
Less: Impact of common stock issuance
(12,673,000)
-
-
Adjusted weighted average shares (diluted) (denominator)
164,550,000
166,769,000
165,472,000
Adjusted net income available to common shareholders, per
share (diluted)
$1.678
$1.698
$1.760
(1) Initial provision for credit losses required on non-purchased credit deteriorated loans acquired in the acquisition by the
Company of Prudential Bancorp effective as of July 1, 2022.
(2) Resulting from the reference rate transition from the London Inter-Bank Offered Rate to the Secured Overnight Financing Rate
in the Company’s commercial customer interest rate swap program.
2025 Proxy Statement | 76 | Fulton Financial Corporation
2024
Adjusted return on common shareholders’ equity
Net income available to common shareholders
$278,495,000
Less: Other revenue
(419,000)
Plus: Loss on securities restructuring
20,282,000
Plus: Acquisition-related expenses
37,635,000
Plus: FDIC special assessment
940,000
Less: Gain on sale-leaseback transaction
(20,266,000)
Plus: FultonFirst implementation and asset disposals
32,038,000
Less: Tax impact of adjustments
(14,744,100)
Less: Republic First Bank transaction impact
(50,455,000)
Less: Common stock issuance impact
(7,448,000)
Adjusted net income available to common shareholders (numerator)
$276,057,900
Average shareholders’ equity
$3,025,642,000
Less: Average preferred stock
(192,878,000)
Less: Republic First Bank transaction impact
(35,833,000)
Less: Common stock issuance impact
(186,584,000)
Average common shareholders’ equity (denominator)
$2,610,347,000
Adjusted return on common shareholders’ equity
10.576%
2024
Adjusted operating expense/average assets
Total non-interest expense
$819,791,000
Less: FDIC special assessment
(940,000)
Less: Gain on sale-leaseback transaction
20,266,000
Less: FultonFirst implementation and asset disposals
(32,038,000)
Less: Republic First Bank transaction impact
(109,586,000)
Less: Common stock issuance impact
-
Adjusted total non-interest expense (numerator)
$697,493,000
Average assets
$30,473,130,000
Less: Republic First Bank transaction impact
(2,562,893,000)
Less: Common stock issuance impact
(181,914,150)
Adjusted average assets (denominator)
$27,728,322,850
Adjusted operating expense/average assets
2.515%
2025 Proxy Statement | 77 | Fulton Financial Corporation
2024
Adjusted efficiency ratio
Total non-interest expense
$819,791,000
Less: FDIC special assessment
(940,000)
Less: Gain on sale-leaseback transaction
20,266,000
Less: FultonFirst implementation and asset disposals
(32,038,000)
Less: Republic First Bank transaction impact
(109,586,000)
Less: Common stock issuance impact
-
Adjusted total non-interest expense (numerator)
$697,493,000
Net interest income
$960,325,000
Tax equivalent adjustment
17,915,000
Plus: Total non-interest income
275,731,000
Less: Other revenue
(1,805,000)
Less: Gain on acquisition, net of tax
(36,996,000)
Plus: Investment securities losses, net
20,283,000
Less: Republic First Bank transaction impact
(127,191,000)
Adjusted total revenue (denominator)
$1,108,262,000
Adjusted efficiency ratio
62.936%
2024
Adjusted non-performing assets to total assets
Total non-performing assets
$220,074,580
Less: Republic First Bank transaction impact
(21,102,914)
Adjusted total non-performing assets (numerator)
$198,971,666
Total Assets
$32,071,810,000
Less: Republic First Bank transaction impact
(4,616,682,000)
Less: Common stock issuance impact
(272,623,554)
Adjusted total assets (denominator)
$27,182,504,446
Adjusted non-performing assets to total assets
0.732%
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
______________________________________________________
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024, or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
Commission File Number: 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
Name of exchange on which registered
Common Stock, $2.50 par value
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
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
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 x No ¨
Indicate by check mark whether the registrant has submitted electronically if any, 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 x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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. (Check One):
Large accelerated filer
x Accelerated filer
¨ Emerging growth company
☐
Non-accelerated filer
¨ Smaller reporting 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ¨
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x
1
The aggregate market value of the voting Common Stock held by non-affiliates of the registrant, based on the average bid and asked prices on June 30, 2024,
the last business day of the registrant's most recently completed second fiscal quarter, was approximately $3.0 billion. The number of shares of the registrant's
Common Stock outstanding on February 25, 2025 was 182,199,510.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Definitive Proxy Statement of the Registrant for the Annual Meeting of Shareholders to be held on May 20, 2025 are incorporated by reference
in Part III.
2
TABLE OF CONTENTS
Description
Page
PART I
Item 1.
Business
9
Item 1A.
Risk Factors
21
Item 1B.
Unresolved Staff Comments
32
Item 1C.
Cybersecurity
32
Item 2.
Properties
33
Item 3.
Legal Proceedings
33
Item 4.
Mine Safety Disclosures
33
PART II
Item 5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
34
Item 6.
[Reserved]
37
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
37
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
64
Item 8.
Financial Statements and Supplementary Data:
Consolidated Balance Sheets
70
Consolidated Statements of Income
71
Consolidated Statements of Comprehensive Income
72
Consolidated Statements of Shareholders' Equity
73
Consolidated Statements of Cash Flows
74
Notes to Consolidated Financial Statements
76
Management Report On Internal Control Over Financial Reporting
137
Report of Independent Registered Public Accounting Firm
138
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
141
Item 9A.
Controls and Procedures
141
Item 9B.
Other Information
141
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
141
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
142
Item 11.
Executive Compensation
142
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
142
Item 13.
Certain Relationships and Related Transactions, and Director Independence
142
Item 14.
Principal Accountant Fees and Services
142
PART IV
Item 15.
Exhibits, Financial Statement Schedules
143
Item 16.
Form 10-K Summary
145
Signatures
146
Note: Some numbers contained in this Report may not sum due to rounding
3
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FULTON FINANCIAL CORPORATION
GLOSSARY OF DEFINED ACRONYMS AND TERMS
2023 Repurchase Program
The authorization, commencing on January 1, 2023 and expiring on
December 31, 2023, to repurchase up to $100 million of the Corporation's
common stock
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 subordinate notes
2025 Proxy Statement
Definitive Proxy Statement for the Corporation's 2025 Annual Meeting of
Shareholders
2025 Repurchase Program
The authorization, commencing on January 1, 2025 and expiring on
December 31, 2025, 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
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
AML
Anti-Money Laundering
AOCI
Accumulated other comprehensive (loss) income
APR
Annual Percentage Rate
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
ATM
Automated Teller Machine
Basel Committee
Basel Committee on Banking Supervision
Basel III Rules
Risked-based requirements and rules issued by federal banking agencies
BHCA
Bank Holding Company Act of 1956, as amended
BMA
Bank Merger Act
BOI
Beneficial ownership information
bp or bps
Basis Point(s)
BSA
Bank Secrecy Act of 1970, as amended
Capital Rules
Regulatory capital requirements applicable to the Corporation and Fulton
Bank
CCPA
California Consumer Privacy Act
CDI
Core Deposit Intangible
CECL
Current Expected Credit Losses
CECL Day 1 Provision
Initial provision for credit losses required on non-PCD Loans acquired in
the Republic First Transaction in 2024 and the Merger in 2022
CECL Transition Rule
Amendments to the Capital Rules adopted by the federal banking agencies
that delay the estimated impact on regulatory capital from the adoption of
CECL
CET1
Common Equity Tier 1
CFPB
Consumer Financial Protection Bureau
CFTC
Commodity Futures Trading Commission
CIRST
Cyber incident response support team
CISO
Chief Information Security Officer
Corporation, Company, we, our, or us
Fulton Financial Corporation
COVID-19
Coronavirus
4
CPI
Consumer Price Index
CRA
Community Reinvestment Act
CTA
Corporate Transparency Act of 2019
DIF
Federal Deposit Insurance Fund
Directors' Plan
Amended and Restated 2023 Director Equity Plan
Dodd-Frank Act
Dodd-Frank Wall Street Reform and Consumer Protection Act
DOJ
U.S. Department of Justice
DOL
U.S. Department of Labor
DTI
Debt-to-income
DTAs
Deferred Tax Assets
EAD
Exposure at default
Economic Growth Act
Economic Growth, Regulatory Relief, and Consumer Protection Act
ECOA
Equal Credit Opportunity Act
EEOC
Equal Employment Opportunity Commission
Employee Equity Plan
2022 Amended and Restated Equity and Cash Incentive Compensation Plan
ESPP
Employee Stock Purchase Plan
ETR
Effective Tax Rate
Exchange Act
Securities Exchange Act of 1934
FASB
Financial Accounting Standards Board
FDIC
Federal Deposit Insurance Corporation
FDICIA
Federal Deposit Insurance Corporation Improvement Act
Fed Funds Rate
Target Federal Funds Rate
Federal Reserve Board
Board of Governors of the Federal Reserve System
FHLB
Federal Home Loan Bank
FinCEN
Financial Crimes Enforcement Network
FinTechs
Financial Technology Companies
FOMC
Federal Open Market Committee
Foreign Currency Nostro Accounts
Foreign currency with international correspondent banks
FRB
Federal Reserve Bank
FSOC
Financial Stability Oversight Council
FTE
Fully taxable-equivalent
Fulton Bank or the Bank
Fulton Bank, N.A.
FultonFirst initiative
Strategic initiative implemented by the Corporation
GAAP
U.S. generally accepted accounting principles
GLBA
Gramm-Leach-Bliley Act
HTM
Held to maturity
ICIRP
Integrated cybersecurity incident response plan
IDI
Insured depository institution
LGD
Loss given default
LIBOR
London Interbank Offered Rate
LIBOR Act
Adjustable Interest Rate (LIBOR) Act
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 effective as of
July 1, 2022
MSRs
Mortgage servicing rights
NDAA
National Defense Authorization Act
5
Net loans
Loans and lease receivables, (net of unearned income)
NIM
Net interest margin
NIST
National Institute of Standards and Technology
N/M
Not meaningful
NMTC
New Market Tax Credits
OBS
Off-Balance-Sheet
OCC
Office of the Comptroller of the Currency
OCI
Other comprehensive income (loss)
OREO
Other real estate owned
P and A Agreement
Agreement for the acquisition of substantially all of the assets and
assumption of substantially all of the deposits and certain liabilities of
Republic First Bank dated as of April 26, 2024, between the Corporation
and the FDIC, as receiver of Republic First Bank
Parent Company
Fulton Financial Corporation individually
Patriot Act
USA PATRIOT Act of 2001
PCD Loans
Loans purchased with more-than-insignificant credit deterioration
PD
Probability of default
Pension Plan
Fulton Financial Affiliates' Defined Benefit Pension Plan
Postretirement Plan
Postretirement Benefits Plan
Prudential Bancorp
Prudential Bancorp, Inc.
Prudential Bancorp Pension Plan
The Pentegra Defined Benefits Plan for Financial Institutions, a
multiemployer defined benefit pension plan
PSU
Performance-based restricted stock unit
PWDP
Portfolio-weighted default probability approach
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
QM
Qualified mortgage
RESPA
Real Estate Settlement Procedures Act
Risk Committee
Risk Committee of the Corporation's Board of Directors
ROU
Right-of-use
RSU
Restricted stock unit
RWA
Risk-weighted assets
S&P 500
Standard and Poor's 500 index
SAB
Staff Accounting Bulletin
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
U.S. Securities and Exchange Commission
SOFR
Secured Overnight Financing Rate
Tax Act
Tax Cuts and Jobs Act of 2017
Tax Code
U.S. Internal Revenue Code of 1986, as amended
TCI
Tax credit investment
TDR
Troubled debt restructuring
TruPS
Trust Preferred Securities
TILA
Truth in Lending Act
UST
United States Treasury
6
VIEs
Variable Interest Entities
Visa Shares
Visa, Inc. Class B restricted shares
Volcker Rule Regulators
FDIC, Federal Reserve Board, OCC, Commodity Futures Trading
Commission and SEC
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 elevated interest rates, on the
performance of the Corporation's loan portfolio and demand for the Corporation's products and services;
•
the potential impacts of 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 charges 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;
7
•
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 law, 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;
•
The Corporation's ability to realize anticipated reductions in non-interest expense and increases in revenue from
strategic initiatives implemented from time to time intended to simplify its operating model, improve its relationship
banking focus, increase productivity and enhance the customer experience;
•
completed and potential acquisitions may affect costs and the Corporation may not be able to successfully integrate the
acquired business or realize the anticipated benefits from such acquisitions;
•
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
ongoing conflicts 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.
8
PART I
Item 1. Business
General
The Corporation was incorporated under the laws of Pennsylvania on February 8, 1982 and became a bank holding company
through the acquisition of all of the outstanding stock of Fulton Bank on June 30, 1982. In 2000, we became a financial holding
company as defined in the GLBA, which gave us the ability to expand our financial services activities under our holding
company structure. See "Item 1. Business - Competition and - Supervision and Regulation." We directly own 100% of the
common stock of Fulton Bank and five non-bank entities.
On April 26, 2024, the Corporation consummated the Republic First Transaction.
On July 1, 2022, the Corporation completed our acquisition of 100% of the outstanding common stock of Prudential Bancorp.
Prudential Bancorp's wholly-owned subsidiary, Prudential Bank, became our wholly-owned subsidiary. Prudential Bank
merged with and into Fulton Bank on November 5, 2022.
Our Internet address is www.fultonbank.com. Electronic copies of our 2024 Annual Report on Form 10-K are available free of
charge by visiting "Investor Relations - Documents" at www.fultonbank.com. Electronic copies of Quarterly Reports on Form
10-Q and Current Reports on Form 8-K are also available at this Internet address. These reports, as well as any amendments
thereto, are posted on our website as soon as reasonably practicable after they are electronically filed with the SEC. The
information contained on our website or in any websites linked by our website is not a part of this Annual Report on Form 10-
K.
Banking and Financial Services
Through our banking subsidiary, Fulton Bank, the Corporation delivers financial services primarily within our five-state market
area, comprised of Pennsylvania, Delaware, Maryland, New Jersey and Virginia, in a personalized, community-oriented style
that emphasizes relationship banking.
The Corporation operates in areas that are home to a wide range of manufacturing, healthcare, agriculture and other service
companies. Although a large portion of our loan portfolio is comprised of commercial loans, commercial mortgage loans and
construction loans, we are not dependent upon one or a few customers and the loss of any single customer or a few customers
would not have a material adverse impact on our business. See "Item 1A. Risk Factors - Interest Rate and Credit Risks - Our
loan portfolio composition subjects us to credit risk and A significant proportion of our loan portfolio consists of commercial
mortgage loans that may pose increased credit risk."
The Corporation offers a wide range of consumer and commercial banking products and services, as well as wealth
management products and services, to our customers and the communities the Corporation serves:
Consumer Banking - We offer a diversified suite of consumer banking products and services in our market area. Our consumer
banking products and services include various checking account and savings deposit products and certificates of deposit. We
offer home equity loans and lines of credit as well as a variety of fixed, variable and adjustable rate mortgage products,
including construction loans and jumbo residential mortgage loans, all of which are underwritten based upon loan-to-value
limits specified in our lending policy. Our consumer loan products also include automobile loans, student loans, personal loans
and lines of credit and checking account overdraft protection.
Commercial Banking - We provide commercial banking products and services primarily to small- and medium-sized businesses
(generally with annual gross revenue of less than $150 million) in our market area. Commercial lending products include
commercial real estate loans, commercial and industrial loans and construction loans. Variable, adjustable and fixed rate loans
are provided, with variable and adjustable rate loans generally tied to an index, such as the Prime Rate or SOFR, as well as
interest rate derivatives. Our commercial lending policy encourages relationship banking and provides guidelines related to
customer creditworthiness and collateral requirements for secured loans. We offer equipment lease financing, letters of credit,
cash management services and traditional deposit products to commercial customers. We have established lending limits based
on our internal risk rating of a borrower and for certain types of lending commitments.
9
Wealth Management - We offer wealth management services, which include investment management, trust, brokerage,
insurance and investment advisory services, to consumer and commercial customers in our market area through Fulton
Financial Advisors and Fulton Private Bank, both operating divisions of Fulton Bank.
We deliver these products and services through a network of financial center locations. Electronic delivery channels include a
network of ATMs and telephone, mobile and online banking. The variety of available delivery channels allows customers to
access their account information and perform certain transactions, such as depositing checks, transferring funds and paying
bills, at any time of the day. As of December 31, 2024, we had 216 financial centers, not including remote service facilities
(mainly stand-alone ATMs), and our main office located in Lancaster, Pennsylvania.
Human Capital
Our workforce, excluding temporary employees and interns, consisted of approximately 3,400 employees, at December 31,
2024 and December 31, 2023.
Employee Engagement and Retention - We place a premium on having a highly engaged workforce because engaged
employees tend to perform at a higher level, support our success, and are more likely to stay with the Corporation. We conduct
an annual survey of our workforce to measure employee engagement, assess employee morale, and help identify areas of the
employee experience that could be improved. We then task our leaders with developing and implementing communication and
action plans to gain a better understanding of the results of the assessment and to foster enhanced future engagement.
Culture and Inclusion - We place significant emphasis on shaping our corporate culture, and we consider our culture to be one
of the primary components of our continuing success. Our culture-shaping program, The Fulton Experience, is a highly
engaging program that is intended to create new ways of thinking about employees' individual roles, how employees
collaborate, and how we grow together. We recognize that having an inclusive culture fosters a culture of respect and is a
crucial element of our success.
Compensation and Rewards - The Corporation invests in its workforce by offering a comprehensive Total Rewards program
that includes competitive salaries, incentives, and benefits programs. We offer performance-based incentive programs designed
to drive results in the business units as well as at the corporate level.
Workforce Recruitment and Development - We recruit our workforce, filling replacement and new positions through employee
referrals, recruiting efforts, and by posting positions internally, on our website and on social media platforms. We provide for
professional development of new and existing employees through the efforts of our Learning and Development area that
develops and administers a wide variety of training programs. We also provide a number of third-party offerings in which
employees can further enhance their skills, knowledge and leadership potential.
Safety, Health and Wellness - The safety, health and wellness of our employees is a top priority. In addition to healthcare, paid
time off, paid parental leave and retirement benefits, we provide behavioral and mental health support and work-life services
through our Employee Assistance Program.
Cybersecurity
Cybersecurity is a major component of our overall risk management approach. By the very nature of our business, handling
sensitive data is a part of daily operations and is taken very seriously by all employees. The cybersecurity threat environment is
volatile and dynamic requiring all levels of the organization to be cognizant and aware of these threats at all times. As such, we
maintain a comprehensive cybersecurity strategy that includes, but is not limited to: regular employee cybersecurity training
and communications; continuous monitoring, detection, alerting, and defense in-depth technologies; regular internal and third-
party program oversight; policies and procedures regularly reviewed and designed with regulatory and industry guidance; and
regular reviews of vendors who maintain sensitive data on behalf of Fulton Bank.
Given that cybersecurity threat actors are continuously adapting their techniques, it is important to note that no cybersecurity
program is completely infallible. As we continue to offer new and innovative technologies for our customers, the risk of
cybersecurity attacks and our oversight of this risk will remain at a high level. See "Item 1C. Cybersecurity."
Climate Risk Management
At this time, we have not experienced material losses from climate change. However, we are aware that its impact may increase
in the future. We recognize the potential impact climate change may have on us, our clients, our suppliers, employees,
10
shareholders, and the communities we serve. We are cognizant of our responsibility to better understand the impact of our
operations on global climate change and are taking steps to help ensure our organization operates in a manner consistent with
responsible environmental stewardship. We are susceptible to losses and disruptions caused by fire, power shortages,
telecommunications failures, water shortages, floods, and other extreme weather conditions. Climate change may contribute to
or exacerbate these conditions. We are also susceptible to losses arising from policy changes, energy costs, and shifts in market
and customer sentiment that can impact us and our clients as well as other key stakeholders. As the potential impact of climate
change broadens, we will continue to assess and respond to climate risks as they evolve.
Non-Bank Subsidiaries
We own 100% of the outstanding equity of five non-bank subsidiaries, which are consolidated for financial reporting purposes:
(i) Fulton Financial Realty Company, which holds title to or leases certain properties where our financial centers and other
facilities are located; (ii) Central Pennsylvania Financial Corp., which owns limited partnership interests in partnerships
invested primarily in low- and moderate-income housing projects; (iii) FFC Penn Square, Inc., which owns TruPS issued by a
subsidiary of Fulton Bank; (iv) Fulton Insurance Services Group, Inc., which engages in the sale of various life insurance
products; and (v) Fulton Community Partner, LLC, whose mission is to change lives for the better by supporting community
and economic development projects in distressed and underserved communities through participation in the NMTC program.
Competition
The banking and financial services industries are highly competitive. Within our geographic region, we face direct competition
from other commercial banks, varying in size from local community banks to regional and national banks, credit unions and
non-bank entities. As a result of the wide availability of electronic delivery channels, we also face competition from financial
institutions that do not have a physical presence in our geographic markets.
The industry is also highly competitive due to the various types of entities that now compete aggressively for customers that
were traditionally served only by the banking industry. Under the current financial services regulatory framework, banks,
insurance companies and securities firms may affiliate under a financial holding company structure, allowing their expansion
into non-banking financial services activities that had previously been restricted. These activities include a full range of
banking, securities and insurance activities, including securities and insurance underwriting, issuing and selling annuities and
merchant banking activities. Moreover, we face increased competition from certain non-bank entities, such as FinTechs, private
equity funds, private debt funds and marketplace lenders, that in many cases, are not subject to the same regulatory compliance
requirements as us.
Stock Information
The Corporation's common stock is traded on the Nasdaq Global Select Market under the ticker symbol "FULT." There are 600
million authorized shares of the Corporation's common stock, with approximately 182 million shares outstanding as of
December 31, 2024. The Corporation has an additional 10 million authorized shares of preferred stock, of which approximately
200,000 shares with a liquidation preference of $1,000 per share were outstanding as of December 31, 2024.
Supervision and Regulation
We operate in an industry that is subject to laws and regulations that are enforced by a number of federal and state agencies.
Changes in these laws and regulations, including interpretation and enforcement activities, could impact the cost of operating in
the financial services industry, limit or expand permissible activities or affect competition among banks and other financial
institutions.
The Corporation is a registered bank holding company that has elected to be treated as a financial holding company under the
BHCA. The Corporation is regulated, supervised and examined by the Federal Reserve Board. Fulton Bank is a national
banking association chartered under the laws of the United States and is primarily regulated by the OCC. In addition, the CFPB
examines Fulton Bank for compliance with most federal consumer financial protection laws, including the laws relating to fair
lending and prohibiting unfair, deceptive or abusive acts or practices in connection with the offer, sale or provision of consumer
financial products or services and enforces such laws with respect to Fulton Bank and our affiliates.
Federal statutes that apply to us and our subsidiaries include the GLBA, the BHCA, the Dodd-Frank Act, the Federal Reserve
Act, the National Bank Act and the Federal Deposit Insurance Act, among others. In general, these statutes, regulations
promulgated thereunder, and related interpretations establish the eligible business activities we can engage in, certain
acquisition and merger restrictions, limitations on intercompany transactions (such as loans and dividends), cash reserve
requirements, lending limitations, compliance with unfair, deceptive and abusive acts and practices prohibitions, limitations on
11
investments, and capital adequacy requirements, among other things. Such laws and regulations are intended primarily for the
protection of depositors, customers and the DIF, as well as to minimize risk to the banking system as a whole, and, as a result,
these laws and regulations are not for the protection of our shareholders or non-depository creditors.
The following discussion is general in nature and seeks to highlight some of the more significant regulatory requirements to
which we are subject but does not purport to be complete or to describe all applicable laws and regulations.
BHCA - The Corporation is subject to regulation and examination by the Federal Reserve Board and is required to file periodic
reports and to provide additional information that the Federal Reserve Board may require. The BHCA regulates activities of
bank holding companies, including requirements and limitations relating to capital, transactions with officers, directors and
affiliates, securities issuances, dividend payments and extensions of credit, among others. The BHCA permits the Federal
Reserve Board, in certain circumstances, to issue cease and desist orders and other enforcement actions against bank holding
companies (and their non-banking affiliates) to correct or curtail unsafe or unsound banking practices. In addition, the Federal
Reserve Board must approve certain proposed changes in organizational structure or other business activities before they occur.
The BHCA imposes certain restrictions upon the Corporation regarding the acquisition of substantially all of the assets of, or
direct or indirect ownership or control of, any bank for which it is not already the majority owner.
Source of Strength - Federal banking law requires bank holding companies like us to act as a source of financial strength and to
commit capital and other financial resources to each of their banking subsidiaries. This support may be required at times when
we may not be able to provide such support without adversely affecting our ability to meet other obligations or when, absent
such requirements, we might not otherwise choose to provide such support. If we are unable to provide such support, the
Federal Reserve Board could instead require the divestiture of our subsidiaries and impose operating restrictions pending the
divestiture. If a bank holding company commits to a federal bank regulator that it will maintain the capital of its bank
subsidiary, whether in response to the Federal Reserve Board's invoking its source of strength authority or in response to other
regulatory measures, that commitment will be assumed by the bankruptcy trustee, and the bank will be entitled to priority
payment in respect of that commitment.
The Economic Growth Act - The Economic Growth Act amended certain provisions of the Dodd-Frank Act to raise the total
asset threshold for mandatory applicability of enhanced prudential standards for bank holding companies to $250 billion and to
allow the Federal Reserve Board to apply enhanced prudential standards to bank holding companies with between $100 billion
and $250 billion in total assets to address financial stability risks or safety and soundness concerns. The Economic Growth Act's
increased threshold took effect immediately for bank holding companies with total assets of less than $100 billion, including the
Corporation.
The Economic Growth Act also enacted other important changes, for which the banking agencies issued certain corresponding
guidance documents and implementing regulations, including:
•
Raising the total asset threshold for Dodd-Frank Act company-run stress tests from $10 billion to $250 billion;
•
Prohibiting federal banking agencies from imposing higher capital requirements for high volatility commercial real
estate exposures unless such exposures meet the statutory definition for high volatility acquisition, development or
construction loans in the Economic Growth Act;
•
Exempting from appraisal requirements certain transactions involving real property in rural areas and valued at less
than $400,000;
•
Providing that reciprocal deposits are not treated as brokered deposits in the case of a "well capitalized" institution that
received an "outstanding" or "good" rating on its most recent examination to the extent the amount of such deposits
does not exceed the lesser of $5 billion or 20% of the bank's total liabilities; and
•
Directing the CFPB to provide guidance on the applicability of the TILA-RESPA Integrated Disclosure rule to
mortgage assumption transactions and construction-to-permanent home loans, as well the extent to which lenders can
rely on model disclosures that do not reflect recent regulatory changes.
Given Fulton Bank's size, a number of additional benefits afforded to community banks under applicable asset thresholds are
not available to Fulton Bank.
Consumer Financial Protection Laws and Enforcement - The CFPB and the federal banking agencies continue to focus attention
on consumer protection laws and regulations. The CFPB is responsible for promoting fairness and transparency for mortgages,
credit cards, deposit accounts and other consumer financial products and services and for interpreting and enforcing the federal
consumer financial laws that govern the provision of such products and services. Federal consumer financial laws enforced by
the CFPB include, but are not limited to, the ECOA, the TILA, the Truth in Savings Act, the Home Mortgage Disclosure Act,
the RESPA, the Fair Debt Collection Practices Act, and the Fair Credit Reporting Act. The CFPB is also authorized to prevent
12
any institution under its authority from engaging in an unfair, deceptive, or abusive act or practice in connection with consumer
financial products and services. As a residential mortgage lender, we are subject to multiple federal consumer protection
statutes and regulations, including, but not limited to, those statutes and regulations referenced above.
In particular, fair lending laws prohibit discrimination in the provision of banking services. Fair lending laws include the ECOA
and the Fair Housing Act, both of which outlaw discrimination in credit and residential real estate transactions on the basis of
prohibited factors including, among others, race, color, national origin, gender, and religion. A lender may be liable for policies
that result in a disparate treatment of, or have a disparate impact on, a protected class of applicants or borrowers. If a pattern or
practice of lending discrimination is alleged by a regulator, then that agency may refer the matter to the DOJ for investigation.
Failure to comply with these and similar statutes and regulations could subject us to formal or informal enforcement actions, the
imposition of civil money penalties and litigation.
The CFPB has exclusive examination and primary enforcement authority with respect to compliance with federal consumer
financial protection laws and regulations by institutions under its supervision and is authorized, individually or jointly with the
federal banking agencies, to conduct investigations to determine whether any person is, or has, engaged in conduct that violates
such laws or regulations. The CFPB may bring an administrative enforcement proceeding or civil action in federal district court.
In addition, in accordance with a memorandum of understanding entered into between the CFPB and the DOJ, the two agencies
have agreed to coordinate efforts related to enforcing the fair lending laws, which includes information sharing and conducting
joint investigations; however, the extent to which such coordination may actually occur is unpredictable and may change over
time as the result of a number of factors, including changes in leadership at the DOJ and the CFPB, as well as changes in the
enforcement policies and priorities of each agency. As an independent bureau funded by the Federal Reserve Board, the CFPB
may impose requirements that are more stringent than those of the other bank regulatory agencies.
As an IDI with total assets of more than $10 billion, Fulton Bank is subject to the CFPB's supervisory and enforcement
authorities. The Dodd-Frank Act also permits states to adopt stricter consumer protection laws and authorizes state attorneys
general to enforce consumer protection rules issued by the CFPB. As a result, Fulton Bank operates in a stringent consumer
compliance environment.
Ability-to-pay rules and qualified mortgages - Under the CFPB rules that implement the TILA, mortgage lenders are required to
make a reasonable and good faith determination, based on verified and documented information, that a consumer applying for a
residential mortgage loan has a reasonable ability to repay the loan according to its terms. These rules prohibit creditors, such as
Fulton Bank, from extending residential mortgage loans without regard for the consumer's ability to repay and add restrictions
and requirements to residential mortgage origination and servicing practices. In addition, these rules restrict the imposition of
prepayment penalties and compensation practices relating to residential mortgage loan origination. Mortgage lenders are
required to determine a consumer's ability to repay in one of two ways. The first alternative requires the mortgage lender to
consider eight underwriting factors when making the credit decision. The mortgage lender may also originate "qualified
mortgages" which are entitled to a presumption that the creditor making the loan satisfied the ability-to-repay requirements. In
general, a QM is a residential mortgage loan that does not have certain high-risk features, such as negative amortization,
interest-only payments, balloon payments, or a term exceeding 30 years. In addition, to be a QM loan, the points and fees paid
by a consumer cannot exceed 3% of the total loan amount, and the borrower's total DTI ratio must be no higher than 43%
(subject to certain limited exceptions for loans eligible for purchase, guarantee or insurance by a government sponsored
enterprise or a federal agency).
In December 2020, the CFPB issued two final rules related to QM loans. The first rule replaces the strict DTI threshold for QM
loans and provides that, in addition to existing requirements, a loan receives a conclusive presumption that the consumer had
the ability to repay if the APR does not exceed the average prime offer rate for a comparable transaction by 1.5 percentage
points or more as of the date the interest rate is set. Further, a loan receives a rebuttable presumption that the consumer had the
ability to repay if the APR exceeds the average prime offer rate for a comparable transaction by 1.5 percentage points or more
but by less than 2.25 percentage points. The second rule creates a new category of "seasoned" QM loans for those that meet
certain performance requirements. Specifically, that rule allows a non-QM loan or a "rebuttable presumption" QM loan to
receive a safe harbor from APR liability at the end of a "seasoning" period of at least 36 months as a "seasoned QM" if it
satisfies certain product restrictions, points-and-fees limits, and underwriting requirements, and the loan meets the designated
performance and portfolio requirements during the "seasoning period."
Integrated disclosures under the RESPA and the TILA - Under the CFPB rules, mortgage lenders are required to provide a loan
estimate, not later than the third business day after submission of a loan application, and a closing disclosure at least three days
prior to the loan closing. The loan estimate must detail the terms of the loan, including, among other things, expenses, projected
monthly mortgage payments and estimated closing costs. The closing disclosure must include, among other things, closing
costs and a comparison of costs reported on the loan estimate to actual charges to be applied at closing.
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Volcker Rule - Provisions of the Dodd-Frank Act, commonly known as the "Volcker Rule," prohibit banks and their affiliates
from engaging in proprietary trading and investing in and sponsoring hedge funds and private equity funds and other private
funds that are, among other things, offered within specified exemptions to the Investment Company Act, known as "covered
funds," subject to certain exemptions. Volcker Rule compliance requirements are based on the size and scope of a banking
entity's trading activities. Our investing and trading activities have and will continue to depend on, among other things, further
rulemaking and guidance that may be issued by the Volcker Rule Regulators and the development of market practices and
standards.
Capital Requirements - The Corporation and Fulton Bank are subject to the Basel III Rules that are based upon the final
framework of the Basel Committee for strengthening capital and liquidity regulation. Under the Basel III Rules, the Corporation
and Fulton Bank apply the standardized approach in measuring RWA and regulatory capital.
Under the Basel III Rules, the Corporation and Fulton Bank are subject to the following minimum capital ratios:
•
A minimum CET1 capital ratio of 4.50% of RWA;
•
A minimum Tier 1 capital ratio of 6.00% of RWA;
•
A minimum Total capital ratio of 8.00% of RWA; and
•
A minimum Tier 1 leverage ratio (Tier 1 capital to a quarterly average of non-risk weighted total assets) of 4.00%.
The Basel III Rules also included a "capital conservation buffer" of 2.5%, composed entirely of CET1 capital, in addition to the
minimum capital to RWA ratios outlined above, resulting in effective minimum CET1, Tier 1 and total capital ratios of 7.0%,
8.5% and 10.5%, respectively. The capital conservation buffer is designed to absorb losses during periods of economic stress.
Banking institutions with a capital ratio above the minimum, but below the conservation buffer, will face restrictions on
dividends, equity repurchases, and executive compensation based on the amount of the shortfall and the institution's "eligible
retained income" (that is, four quarter trailing net income, net of distributions and tax effects not reflected in net income). As of
December 31, 2024, the Corporation and Fulton Bank exceeded the minimum capital requirements, including the capital
conservation buffer, as prescribed in the Basel III Rules.
The Basel III Rules also provide that the largest banking institutions must adhere to additional countercyclical buffer and
supplementary leverage ratio requirements. The Corporation and Fulton Bank are not presently subject to these requirements.
The Basel III Rules provide for a number of required deductions from and adjustments to CET1. These deductions and
adjustments include, for example, goodwill, other intangible assets, and DTAs that arise from net operating loss and tax credit
carryforwards net of any related valuation allowance. MSRs, DTAs arising from temporary differences that could not be
realized through net operating loss carrybacks and investments in non-consolidated financial institutions must also be deducted
from CET1 to the extent that they exceed certain thresholds. Through subsequent rulemaking, the federal banking agencies
provided certain forms of relief to banking organizations, such as the Corporation and Fulton Bank, that are not subject to the
advanced approaches framework. The Corporation and Fulton Bank made a one-time, permanent election under the Basel III
Rules to exclude the effects of certain components of AOCI included in shareholders' equity under GAAP in determining
regulatory capital ratios.
Under the Basel III Rules, certain off-balance sheet commitments and obligations are converted into RWA, that together with
on-balance sheet assets, are the base against which regulatory capital is measured. The Basel III Rules defined the risk-
weighting categories for bank holding companies and banks that follow the standardized approach, such as the Corporation and
Fulton Bank, based on a risk-sensitive analysis, depending on the nature of the exposure.
The Capital Rules eliminated the standalone prior approval requirement in the Basel III Rules for any repurchase of common
stock. In certain circumstances, repurchases of our common stock may be subject to a prior approval or notice requirement
under other regulations or policies of the Federal Reserve Board. Any redemption or repurchase of preferred stock or
subordinated debt remains subject to the prior approval of the Federal Reserve Board.
The Basel Committee published the last version of the Basel III accord in 2017, generally referred to as "Basel IV." Among
other things, these standards revise the Basel Committee's standardized approach for credit risk (including by recalibrating risk
weights and introducing new capital requirements for certain "unconditionally cancellable commitments," such as unused credit
card and home equity lines of credit) and provides a new standardized approach for operational risk capital. Under the Basel
framework, these standards became effective on January 1, 2022, with an aggregate output floor phasing in through January 1,
2027. Under the current U.S. capital rules, operational risk capital requirements and a capital floor apply only to advanced
approaches institutions, and not the Corporation or Fulton Bank. The impact of Basel IV on the Corporation and Fulton Bank
will depend on the manner in which it is implemented by the federal banking agencies. As of December 31, 2024, the
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Corporation and Fulton Bank exceeded all capital requirements necessary to be deemed "well-capitalized" for all regulatory
purposes under the U.S. capital rules.
Stress Testing and Capital Planning - As a result of the Economic Growth Act and implementing regulations adopted by the
Federal Reserve Board and the OCC, the Corporation and Fulton Bank are no longer subject to company-run stress testing
requirements under the Dodd-Frank Act. The Federal Reserve Board continues to supervise our capital planning and risk
management practices through its regular supervisory process which includes regular stress testing.
CECL Transitional Provisions – On August 26, 2020, the federal bank regulatory agencies adopted the CECL Transition Rule
that provides banking institutions an optional five-year transition period to phase in the impact of the CECL standard on their
regulatory capital. The final rule gives eligible institutions the option to mitigate the estimated capital effects of CECL for two
years, followed by a three-year transition period. Taken together, these measures offer institutions a transition period of up to
five years. We have elected to avail ourselves of the transition relief permitted under applicable regulations.
Prompt Corrective Action - The FDICIA established a system of prompt corrective action to attempt to resolve the problems of
undercapitalized institutions. The FDICIA, among other things, establishes five capital categories for FDIC-insured banks:
"well
capitalized,"
"adequately
capitalized,"
"undercapitalized,"
"significantly
undercapitalized"
and
"critically
undercapitalized." An IDI is treated as well capitalized if its total risk-based capital ratio is 10.00% or greater, its Tier 1 risk-
based capital ratio is 8.00% or greater, its CET1 risk-based capital ratio is 6.50% or greater and its Tier 1 leverage capital ratio
is 5.00% or greater, and it is not subject to any order or directive to meet a specific capital level. As of December 31, 2024,
Fulton Bank's capital ratios were above the minimum levels required to be considered "well capitalized" by the OCC.
Under this system, the federal banking agencies are required to take certain, and authorized to take other, prompt corrective
actions against undercapitalized institutions, the severity of which increase as the capital category of an institution declines,
including restrictions on growth of assets and other forms of expansion. Generally, a capital restoration plan must be filed with
the institution's primary federal regulator within 45 days of the date an institution receives notice that it is "undercapitalized,"
"significantly undercapitalized" or "critically undercapitalized." Although prompt corrective action regulations apply only to
depository institutions and not to bank holding companies, bank holding companies must guarantee any such capital restoration
plan in certain circumstances. The liability of a bank holding company under any such guarantee is limited to the lesser of
5.00% of the bank's relevant assets at the time it became "undercapitalized" or the amount needed to comply. A bank holding
company might also be liable for civil money damages for failure to fulfill that guarantee. In the event of the bankruptcy of a
bank holding company, such guarantee would take priority over the bank holding company's general unsecured creditors.
In addition, regulators consider both risk-based capital ratios and other factors that can affect a bank's financial condition,
including (i) concentrations of credit risk, (ii) interest rate risk, and (iii) risks from non-traditional activities, along with an
institution's ability to manage those risks, when determining capital adequacy. This evaluation is made during the institution's
safety and soundness examination. An institution may be downgraded to, or deemed to be in, a capital category that is lower
than is indicated by its capital ratios if it is determined to be in an unsafe or unsound condition or if it receives an unsatisfactory
examination rating with respect to certain matters.
Brokered Deposits - The FDICIA and FDIC regulations limit the ability of an IDI, such as Fulton Bank, to accept, renew or roll
over brokered deposits unless the institution is well-capitalized under the prompt corrective action framework described above,
or unless it is adequately capitalized and obtains a waiver from the FDIC. In addition, less than well-capitalized banks are
subject to restrictions on the interest rates they may pay on deposits. The characterization of deposits as "brokered" may result
in the imposition of higher deposit assessments on such deposits. There is a limited exception from the scope of “brokered”
deposits for reciprocal deposits for IDIs that are well-rated and well-capitalized (or adequately capitalized and for which the IDI
has obtained a waiver from the FDIC as mentioned above). Under this limited exception, qualified IDIs, like Fulton Bank, are
able to except from treatment as "brokered" deposits the lesser of up to $5 billion, or 20% of the institution's total liabilities, in
reciprocal deposits.
On July 30, 2024, the FDIC issued a proposed rule that would significantly revise the existing brokered deposits regulation as
outlined above. Among other things, the proposed rule would broaden the scope of deposits that IDIs would be required to
classify as brokered and narrow the exception to the definition of the term “deposit broker,” which would result in more
deposits being classified as brokered deposits. As a result of the change in the U.S. presidential administration, and based on
recent statements from the new Acting Chairman of the FDIC, the proposed rule is unlikely to be adopted as proposed and the
prospects and timing for any re-proposal or supervisory action in this area remain uncertain at this time.
Loans and Dividends from Bank Subsidiary - There are various restrictions on the extent to which Fulton Bank can make loans
and other extensions of credit (including credit exposure arising from repurchase and reverse repurchase agreements, securities
15
borrowing and derivative transactions) to, or enter into certain transactions with, its affiliates, which includes the Corporation
and its non-bank subsidiaries. In general, these restrictions require that such transactions: (i) with the Corporation or any of its
non-bank subsidiaries be limited to 10% of Fulton Bank's regulatory capital (20% in the aggregate to all such entities); (ii)
satisfy certain qualitative limitations, including that any covered transaction be made on an arm's length basis; and (iii) in the
case of extensions of credit, be secured by designated amounts of specified collateral.
For safety and soundness reasons, banking regulations also limit the amount of cash that can be transferred from Fulton Bank to
the Corporation in the form of dividends. Generally, dividends are limited to the lesser of the amounts calculated under an
earnings retention test and an undivided profits test. Under the earnings retention test, without the prior approval of the OCC, a
dividend may not be paid if the total of all dividends declared by a bank in any calendar year is in excess of the current year's
net income combined with the retained net income of the two preceding years. Under the undivided profits test, a dividend may
not be paid in excess of a bank's undivided profits. In addition, banks are prohibited from paying dividends when doing so
would cause them to fall below the regulatory minimum capital levels. See "Note 12 - Regulatory Matters," in the Notes to
Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data" for additional information
regarding regulatory capital and dividend and loan limitations.
Federal Deposit Insurance - The deposits of Fulton Bank are insured up to the applicable limits by the DIF, generally up to
$250,000 per insured depositor. Fulton Bank pays deposit insurance premiums based on assessment rates established by the
FDIC. The FDIC has established a risk-based assessment system under which institutions are classified and pay premiums
according to their perceived risk to the DIF. In addition, the FDIC possesses backup enforcement authority over a depository
institution holding company, like us, if the conduct or threatened conduct of such bank holding company poses a risk to the
DIF, although such authority may not be used if the bank holding company is generally in sound condition and does not pose a
foreseeable and material risk to the DIF.
FDIC assessment rates for large institutions that have more than $10 billion in assets, such as Fulton Bank, are calculated based
on a "scorecard" methodology that seeks to capture both the probability that an individual large institution will fail and the
magnitude of the impact on the DIF if such a failure occurs that is based primarily on the difference between the institution's
average of total assets and average tangible equity, or its assessment base. The FDIC has the ability to make discretionary
adjustments to the total score, up or down, based upon significant risk factors that are not adequately captured in the scorecard.
For large institutions, including Fulton Bank, after accounting for potential base-rate adjustments, the total assessment rate
could range from 1.5 to 40 bps on an annualized basis. An institution's assessment is determined by multiplying its assessment
rate by its assessment base.
In November 2023, the FDIC issued a final rule to implement a special assessment to recover losses to the DIF arising from the
protection of uninsured depositors following the closures of Silicon Valley Bank and Signature Bank in 2023. The special
assessment is based on an IDI's estimated uninsured deposits as of December 31, 2022, adjusted to exclude the first $5.0 billion
of estimated uninsured deposits, and will be assessed at a quarterly rate of 3.36 bps, over eight quarterly assessment periods,
beginning in the first quarter of 2024. As a result of this final rule, we accrued $6.5 million ($5.1 million after tax) related to
this assessment in the fourth quarter of 2023. This amount represents our current expectation of the full amount of the
assessment based on our total uninsured deposits as of December 31, 2022. Under the final rule, the estimated losses to the DIF
may be revised from time to time, and the FDIC has retained the ability to cease collection early, extend the special assessment
collection period and impose a final shortfall special assessment on a one-time basis. The extent to which any such additional
future assessments will impact our future deposit insurance expense is currently uncertain.
The Tax Act disallows the deduction of FDIC deposit insurance premium payments for banking organizations with total
consolidated assets of $50 billion or more. For banks with less than $50 billion in total consolidated assets, such as Fulton
Bank, the premium deduction is phased out based on the proportion of the bank's assets exceeding $10 billion.
BSA, AML Requirements and the Patriot Act - The Patriot Act amended the BSA and other AML laws and regulations and
imposed affirmative obligations on a wide range of financial institutions to maintain appropriate policies, procedures and
controls to detect, prevent and report money laundering and terrorist financing.
Among other requirements, the Patriot Act and related regulations impose the following requirements on financial institutions:
•
establishment of AML programs;
•
establishment of a program specifying procedures for obtaining identifying information from customers seeking to
open new accounts, including verifying the identity of customers within a reasonable period of time;
•
establishment of enhanced due diligence policies, procedures and controls designed to detect and report money
laundering; and
16
•
prohibition on correspondent accounts for foreign shell banks and compliance with recordkeeping obligations with
respect to correspondent accounts of foreign banks.
Failure to comply with the requirements of the Patriot Act and other AML laws and regulations could have serious legal,
financial, regulatory and reputational consequences. In addition, bank regulators will consider a bank holding company's
effectiveness in combating money laundering when ruling on BHCA and BMA applications. In addition, financial institutions
are subject to customer due diligence requirements, issued by the FinCEN, to identify and verify the identity of natural persons,
known as beneficial owners, who own, control, and profit from legal entity customers when those customers open accounts. We
have adopted policies, procedures and controls to address compliance with the Patriot Act and other BSA and AML laws and
regulations, and we will continue to revise and update our policies, procedures and controls to reflect required changes.
Commercial Real Estate Guidance — Under guidance issued by the federal banking agencies, the agencies have expressed
concerns with institutions that ease commercial real estate underwriting standards and have directed financial institutions to
maintain underwriting discipline and exercise risk management practices to identify, measure and monitor lending risks. The
agencies have also issued guidance that requires a financial institution to employ enhanced risk management practices if the
institution is exposed to significant concentration risk. Under that guidance, an institution is potentially exposed to significant
concentration risk if: (i) total reported loans for construction, land development, and other land represent 100% or more of total
capital or (ii) total reported loans secured by multi-family and non-farm residential properties, loans for construction, land
development, and other land loans otherwise sensitive to the general commercial real estate market, including loans to
commercial real estate related entities, represent 300% or more of total capital, and the outstanding balance of the institution's
commercial real estate loan portfolio has increased by 50% or more during the prior 36 months.
Community Reinvestment — Under the CRA, Fulton Bank has a continuing and affirmative obligation, consistent with its safe
and sound operation, to ascertain and meet the credit needs of its entire community, including low- and moderate-income areas.
The CRA does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution's
discretion to develop the types of products and services that it believes are best suited to its particular community. The CRA
requires an institution's primary federal regulator, in connection with its examination of the institution, to assess the institution's
record of meeting the credit needs of its community and to take such record into account in its evaluation of certain applications
by such institution. The assessment focuses on three tests: (i) a lending test, to evaluate the institution's record of making loans,
including community development loans, in its designated assessment areas; (ii) an investment test, to evaluate the institution's
record of investing in community development projects, affordable housing, and programs benefiting low- or moderate-income
individuals and areas and small businesses; and (iii) a service test, to evaluate the institution's delivery of banking services
throughout its CRA assessment area, including low- and moderate-income areas. The CRA also requires all institutions to make
public disclosure of their CRA ratings. As of December 31, 2024, Fulton Bank was rated as "outstanding." Current regulations
require that Fulton Bank publicly disclose certain agreements that are in fulfillment of CRA. Fulton Bank is not a party to any
such agreements at this time.
On October 24, 2023, the federal regulatory agencies jointly issued a final rule to strengthen and modernize regulations
implementing the CRA. On March 29, 2024, a federal district court in Texas granted a preliminary injunction barring
implementation of the final rule in response to a lawsuit filed by several trade groups. We will continue to monitor the litigation
until resolved. We have also begun efforts to evaluate the impact of the new rule and develop a strategy to ensure compliance.
Standards for Safety and Soundness - Pursuant to the requirements of the FDICIA, as amended by the Riegle Community
Development and Regulatory Improvement Act of 1994, the federal bank regulatory agencies adopted guidelines establishing
general standards relating to internal controls, information systems, internal audit systems, loan documentation, credit
underwriting, interest rate risk exposure, asset growth, asset quality, earnings, compensation, fees and benefits. In general, the
guidelines require, among other things, appropriate systems and practices to identify and manage the risks and exposures
specified in the guidelines. In addition, the agencies adopted regulations that authorize, but do not require, an agency to order an
institution that has been given notice by an agency that it is not satisfying any of such safety and soundness standards to submit
a compliance plan. If the institution fails to submit an acceptable compliance plan or fails in any material respect to implement
an accepted compliance plan, the regulator must issue an order directing corrective actions and may issue an order directing
other actions of the types to which a significantly undercapitalized institution is subject under the "prompt corrective action"
provisions of FDICIA. If the institution fails to comply with such an order, the regulator may seek to enforce such order in
judicial proceedings and to impose civil money penalties.
Incentive Compensation - Federal banking agencies have issued guidance on incentive compensation policies intended to
ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such
organizations by encouraging excessive risk-taking. The guidance, which covers all employees that have the ability to
materially affect the risk profile of an organization, is based upon the key principles that a banking organization's incentive
17
compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization's ability to
effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be
supported by strong corporate governance, including active and effective oversight by the organization's board of directors. In
accordance with the Dodd-Frank Act, the federal banking agencies prohibit incentive-based compensation arrangements that
encourage inappropriate risk taking by covered financial institutions (generally institutions, like us, that have over $1 billion in
assets) and are deemed to be excessive, or that may lead to material losses.
The Federal Reserve will review, as part of the regular, risk-focused examination process, the incentive compensation
arrangements of banking organizations, such as the Corporation, that are not "large, complex banking organizations." These
reviews will be tailored to each organization based on the scope and complexity of the organization's activities and the
prevalence of incentive compensation arrangements. The findings of the supervisory initiatives will be included in reports of
examination. Deficiencies will be incorporated into the organization's supervisory ratings, which can affect the organization's
ability to make acquisitions and take other actions. Enforcement actions may be taken against a banking organization if its
incentive compensation arrangements, or related risk-management control or governance processes, pose a risk to the
organization's safety and soundness, and the organization is not taking prompt and effective measures to correct the
deficiencies.
In accordance with SEC rules, securities exchanges have adopted rules mandating, in the case of an accounting restatement, the
recovery or "clawback" of excess incentive-based compensation paid to current or former executive officers and requiring listed
issuers to disclose any recovery analysis where recovery is triggered by a restatement.
The scope and content of the U.S. banking regulators' policies on executive compensation may continue to evolve in the near
future. It cannot be determined at this time whether compliance with such policies will adversely affect the Corporation's ability
to hire, retain, and motivate its key employees.
Privacy Protection and Cybersecurity — Fulton Bank is subject to regulations implementing the privacy protection provisions
of the GLBA. These regulations require Fulton Bank to disclose its privacy policy, including identifying with whom it shares
"nonpublic personal information," to customers at the time of establishing the customer relationship and annually thereafter.
The regulations also require Fulton Bank to provide its customers with initial and annual notices that accurately reflect its
privacy policies and practices. In addition, to the extent its sharing of such information is not covered by an exception, Fulton
Bank is required to provide its customers with the ability to "opt-out" of having Fulton Bank share a customer's nonpublic
personal information with unaffiliated third parties.
Fulton Bank is also subject to regulatory guidelines establishing standards for safeguarding customer information. These
regulations implement certain provisions of the GLBA. The guidelines describe the federal bank regulatory agencies'
expectations for the creation, implementation and maintenance of an information security program, that includes administrative,
technical and physical safeguards appropriate to the size and complexity of the institution and the nature and scope of its
activities. The standards set forth in the guidelines are intended to ensure the security and confidentiality of customer records
and information, protect against any anticipated threats or hazards to the security or integrity of such records and protect against
unauthorized access to or use of such records or information that could result in substantial harm or inconvenience to any
customer. These guidelines, along with related regulatory materials, increasingly focus on risk management and processes
related to information security and the use of third parties in the provision of financial services.
Certain states have enacted laws establishing consumer privacy protections and data security requirements in their respective
states. For example, the CCPA gives California residents rights to receive certain disclosures regarding the collection, use, and
sharing of "personal information" as well as rights to access, delete, and restrict the sale of certain personal information. The
CCPA, which was amended in November 2020 by a ballot initiative titled the California Privacy Rights Act, went into effect on
January 1, 2020, and Fulton Bank is required to comply with the CCPA in serving the small number of its customers that are
residents of California. Attempts by state and local governments to regulate consumer privacy have the potential to create a
patchwork of differing and/or conflicting state regulations. In July 2023, the SEC adopted rules requiring registrants to disclose
material cybersecurity incidents experienced and describe the material aspects of their nature, scope and timing. The rules,
which supersede their previously interpreted guidance published in February 2018, also require annual disclosures describing a
company's cybersecurity risk management, strategy and governance. These SEC rules, and any other regulatory guidance, are in
addition to notification and disclosure requirements under state and federal banking law and regulations.
Federal Reserve System — Federal Reserve Board regulations require depository institutions to maintain cash reserves against
specified deposit liabilities. The dollar amount of a depository institution's reserve requirement is determined by applying the
reserve ratios specified in the Federal Reserve Board's Regulation D to an institution's reservable liabilities (primarily net
transaction accounts such as negotiable order of withdrawal and demand deposit accounts). A reserve of 3% must be
18
maintained against aggregate transaction account balances of between $16.9 million and $127.5 million (subject to adjustment
by the Federal Reserve Board) plus a reserve of 10% (subject to adjustment by the Federal Reserve Board within a range of
between 8% and 14%) against that portion of total transaction account balances in excess of $127.5 million. The first $16.9
million of otherwise reservable balances (subject to adjustment by the Federal Reserve Board) are exempt from the reserve
requirements. Fulton Bank is in compliance with the foregoing requirements.
Required reserves must be maintained in the form of either vault cash, an account at a FRB or a pass-through account as
defined by the Federal Reserve Board. Pursuant to the Emergency Economic Stabilization Act of 2008, the FRB pays interest
on depository institutions' required and excess reserve balances. The interest rate paid on required reserve balances is currently
the average target Federal Funds Rate over the reserve maintenance period. The rate on excess balances will be set equal to the
lowest target Federal Funds Rate in effect during the reserve maintenance period.
On December 22, 2020, the Federal Reserve Board issued a final rule that amends Regulation D by lowering the reserve
requirement ratios on transaction accounts maintained at depository institutions to 0%. It is currently unclear if the reduction of
the reserve requirements on transaction accounts is permanent.
Acquisitions — The BHCA requires a bank holding company to obtain the prior approval of the Federal Reserve Board before:
•
the company acquires direct or indirect ownership or control of any voting shares of any bank or savings and loan
association, if after such acquisition the bank holding company will directly or indirectly own or control more than five
percent of any class of voting securities of the institution;
•
any of the company's subsidiaries, other than a bank, acquires all or substantially all of the assets of any bank or
savings and loan association; or
•
the company merges or consolidates with any other bank or financial holding company.
Prior regulatory approval is also generally required for mergers, acquisitions and consolidations involving other IDIs. In
reviewing acquisition and merger applications, bank regulatory authorities will consider, among other things, the competitive
effect of the transaction, financial and managerial issues, the capital position of the combined organization, convenience and
needs factors, including the applicant's CRA record, the effectiveness of the subject organizations in combating money
laundering activities, and the transaction's effect on the stability of the U.S. banking or financial system.
On September 17, 2024, the FDIC, the OCC and the DOJ, each announced new rules and policy statements impacting their
bank merger review processes.
Among these actions, the FDIC approved a final statement of policy on bank merger transactions and the OCC approved a final
rule updating the agency's regulations for business combinations involving national banks and federal savings associations. The
OCC's final rule modifies its procedures for reviewing bank merger applications under the BMA applications, including the
elimination of the expedited bank merger review and the streamlined application procedures. The OCC's final rule also includes
a new policy statement that addresses the substantive standards that it will use to evaluate bank merger applications, including
indicators that point in favor of likely approval or rejection. The FDIC's statement of policy adopts a principles-based approach
and clarifies its policies and expectations in the evaluation of bank merger transactions subject to FDIC approval under the
BMA. However, Acting FDIC Chairman Travis Hill has indicated the possibility of withdrawing the new statement of policy,
and it is unclear whether the OCC under anticipated new leadership will reconsider its new regulation and policy statement.
Concurrent with the FDIC and OCC announcements, the DOJ withdrew from its 1995 Bank Merger Guidelines and announced
that it would consider bank mergers under its 2023 Merger Guidelines, which are not industry specific, as well as under a
separate, recently adopted bank merger addendum.
The Change in Bank Control Act prohibits a person, entity or group of persons or entities acting in concert, from acquiring
"control" of a bank holding company or bank unless the Federal Reserve Board has been given prior notice and has not objected
to the transaction. Under Federal Reserve Board regulations, the acquisition of 10% or more (but less than 25%) of the voting
stock of a corporation would, under the circumstances set forth in the regulations, create a rebuttable presumption of acquisition
of control of the corporation.
Effective September 30, 2020, the Federal Reserve finalized a rule that simplifies and increases the transparency of its rules for
determining when one company controls another company for purposes of the BHCA and, on March 31, 2021, the Federal
Reserve Board published interpretive guidance regarding the final rule and related regulatory control matters. The amended
control rule has had, and will likely continue to have, a meaningful impact on control determinations related to investments in
banks and bank holding companies and investments by bank holding companies in nonbank companies.
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Permissible Activities — As a bank holding company, the Corporation may engage in the business of banking, managing or
controlling banks, performing servicing activities for subsidiaries, and engaging in activities that the Federal Reserve Board has
determined, by order or regulation, are so closely related to banking as to be a proper incident thereto. As a financial holding
company, the Corporation may also engage in or acquire and retain the shares of a company engaged in activities that are
financial in nature or incidental or complementary to activities that are financial in nature as long as the Corporation continues
to meet the eligibility requirements for financial holding companies, including that the Corporation and each of its U.S.
depository institution subsidiaries remain "well-capitalized" and "well-managed."
A depository institution is considered "well-capitalized" if it satisfies the requirements of the Prompt Corrective Action
framework described above. A depository institution is considered "well-managed" if it received a composite rating and
management rating of at least "satisfactory" in its most recent examination. If a financial holding company ceases to be well-
capitalized and well-managed, the financial holding company must enter into a non-public confidential agreement with the
Federal Reserve Board to comply with all applicable capital and management requirements. Until the financial holding
company returns to compliance, the Federal Reserve Board may impose limitations or conditions on the conduct of its
activities, and the company may not commence any new non-banking financial activities permissible for financial holding
companies or acquire a company engaged in such financial activities without prior approval of the Federal Reserve Board. If the
company does not timely return to compliance, the Federal Reserve Board may require divestiture of the financial holding
company's banking subsidiaries. Bank holding companies and banks must also be well-capitalized and well-managed in order to
acquire banks located outside their home state. A financial holding company will also be limited in its ability to commence non-
banking financial activities or acquire a company engaged in such financial activities if any of its IDI subsidiaries fails to
maintain a "satisfactory" rating under the CRA.
Activities that are "financial in nature" include securities underwriting, dealing and market making, advising mutual funds and
investment companies, insurance underwriting and agency, merchant banking, and activities that the Federal Reserve Board, in
consultation with the Secretary of the Treasury, determines to be financial in nature or incidental to such financial activity.
"Complementary activities" are activities that the Federal Reserve Board determines upon application to be complementary to a
financial activity and that do not pose a safety and soundness issue.
Enforcement Powers of Federal Banking Regulators — The Federal Reserve Board and other U.S. banking agencies have broad
enforcement powers with respect to an IDI and its holding company, including the power to (i) impose cease and desist orders,
substantial fines and other civil penalties, (ii) terminate deposit insurance, and (iii) appoint a conservator or receiver. Failure to
comply with applicable laws or regulations could subject the Corporation or Fulton Bank, as well as their officers and directors,
to administrative sanctions and potentially substantial civil and criminal penalties.
In addition, under the BHCA, the Federal Reserve Board has the authority to require a bank holding company to terminate any
activity or to relinquish control of a non-bank subsidiary upon the Federal Reserve Board's determination that such activity or
control constitutes a serious risk to the financial soundness and stability of a depository institution subsidiary of the bank
holding company.
Federal Securities Laws — The Corporation is subject to the periodic reporting, proxy solicitation, tender offer, insider trading,
corporate governance and other requirements under the Exchange Act and the rules of the Nasdaq that apply to companies listed
on the Nasdaq Global Select Market. Among other things, the federal securities laws require management to issue a report on
the effectiveness of its internal controls over financial reporting. In addition, the Corporation's independent registered public
accountants are required to issue an opinion on the effectiveness of its internal control over financial reporting. See "Item 8.
Financial Statements and Supplementary Data - Report of Independent Registered Public Accounting Firm." Certifications of
the Chief Executive Officer and the Chief Financial Officer as required by the Sarbanes-Oxley Act of 2002 and the resulting
SEC rules can be found in the Signatures and Exhibits sections.
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Item 1A. Risk Factors
An investment in our securities involves certain risks, including, among others, the risks described below. In addition to the
other information contained in this Annual Report on Form 10-K, you should carefully consider the following risk factors.
Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business
operations. If any of these risks actually occurs, our business, financial condition and results of operations could be materially,
adversely affected.
GENERAL ECONOMIC AND MARKET CONDITIONS RISKS
Difficult conditions in the economy and the financial markets may materially adversely affect our business, financial
condition and results of operations.
Our financial condition and results of operations are affected by conditions in the economy and the financial markets generally.
Our financial performance is highly dependent upon the business environment in the markets where we operate and in the
United States as a whole. Unfavorable or uncertain economic and market conditions can be caused by: declines in economic
growth, business activity or investor or business confidence; limitations on the availability, or increases in the cost, of credit and
capital; changes in the rate of inflation or in interest rates; high unemployment; labor shortages; governmental fiscal and
monetary policies; the level of, or changes in, prices of raw materials, goods or commodities; supply chain issues; global
economic conditions; immigration policies; trade policies and tariffs affecting other countries as well as retaliatory policies and
tariffs by such countries; geopolitical events, including the war between Russia and Ukraine and the ongoing conflict in the
Middle East; natural disasters; public health crises, such as epidemics and pandemics; acts of war or terrorism; or a combination
of these or other factors.
Specifically, the business environment impacts the ability of borrowers to pay interest on and repay principal of outstanding
loans and the value of collateral, if any, securing those loans, as well as demand for loans and other products and services we
offer. There continues to be economic uncertainty, including the possibility of a recession resulting from elevated levels of
inflation and a higher-for-longer interest rate environment, which could negatively impact the quality of our loan portfolio. As a
result, we may have to increase our provision for credit losses, which would negatively impact our results of operations, and
could result in charge-offs of a higher percentage of our loans. Unlike large, national institutions, we are not able to spread the
risks of unfavorable local economic conditions across a large number of diversified economies and geographic locations. If the
communities in which we operate do not grow, or if prevailing economic conditions locally or nationally are unfavorable, our
business could be adversely affected. In addition, increased market competition in a lower demand environment could adversely
affect our profit potential.
INTEREST RATE AND CREDIT RISKS
We are subject to interest rate risk.
We cannot predict or control changes in interest rates. We are affected by fiscal and monetary policies of the federal
government, including those of the Federal Reserve Board, many of which affect interest rates charged on loans and paid on
deposits.
In a series of actions to combat rising inflation that began in March 2022, the Federal Reserve Board raised the Fed Funds Rate
to 5.25% to 5.50% in July 2023. Beginning in September 2024, as inflation moderated toward the Federal Reserve Board's
policy objective, the Federal Reserve Board incrementally reduced the Fed Funds Rate to 4.25% to 4.50% as of February 1,
2025. The timing and magnitude of future Fed Funds Rate decreases are uncertain, and increases in Fed Funds Rates are
possible.
Changes in monetary policy, including changes in interest rates, influence not only the interest we receive on loans and
securities that we invest in and the interest we pay on deposits and borrowings, but such changes could affect our ability to
originate loans and obtain deposits, the fair value of financial assets and liabilities, and the average duration of our assets. Net
interest income is the difference between interest earned on interest-earning assets and interest paid on interest-bearing
liabilities. Net interest income is the most significant component of our net income, accounting for approximately 78% of total
revenues in 2024. Changes in market interest rates, in the shape of the yield curve or in spreads between different market
interest rates can have a material effect on our net interest margin. The rates on some interest-earning assets, such as loans and
investments, and interest-bearing liabilities, such as deposits and borrowings, adjust concurrently with, or within a brief period
after, changes in market interest rates, while others adjust only periodically or not at all during their terms. Thus, changes in
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market interest rates might, for example, result in a decrease in the interest earned on interest-earning assets that is not
accompanied by a corresponding decrease in the interest paid on interest-bearing liabilities, or the decrease in interest paid on
interest-bearing liabilities might be at a slower pace, or in a smaller amount, than the decrease in interest earned on interest-
earning assets, reducing our net interest income and/or net interest margin. In addition, we are dependent on lower-cost, core
deposits as our primary source of funding and changes in interest rates could increase our cost of funding, reduce our net
interest margin and/or create liquidity challenges.
We have policies and procedures designed to manage the risks associated with changes in interest rates and actively manage
these risks through hedging and other risk mitigation strategies. However, if our assumptions are wrong or overall economic
conditions are significantly different than anticipated, our hedging and other risk mitigation strategies may be ineffective and
may adversely impact our business, financial condition and results of operations.
An increase in interest rates could also have a negative impact on our results of operations by reducing the ability of borrowers
to repay current loan obligations. These circumstances could not only result in increased loan defaults, foreclosures and charge-
offs, but also reduce collateral values and necessitate further increases in the ACL.
Changes in interest rates may also affect the average life of loans and certain investment securities, including mortgage-backed
securities. Increases in interest rates may extend the average life of fixed rate assets potentially restricting our ability to reinvest
in higher yielding alternatives, reduce demand for loans and may result in customers withdrawing their certificates of deposit
early. Conversely, decreases in interest rates can result in increased prepayments of loans and certain investment securities, as
borrowers or issuers refinance to reduce their borrowing costs. Under those circumstances, we would be subject to reinvestment
risk to the extent that we are not able to reinvest the money received from such prepayments at rates that are comparable to the
rates on the loans and investment securities that are prepaid.
Changes in interest rates also affect the fair value of interest-earning investment securities. Generally, the value of interest-
earning investment securities moves inversely with changes in interest rates. Changes in interest rates can affect the fair value
of AFS investment securities, with any unrealized gain or loss reflected as a component of AOCI. As a result of elevated
interest rates in recent years, the fair value of our AFS investment securities declined resulting in unrealized losses of
approximately $276 million as of December 31, 2024 and is reflected in AOCI as a reduction to total shareholders' equity.
Further increases in interest rates could result in additional unrealized losses on AFS investment securities we hold. Any sale of
investment securities with a fair value below amortized cost will result in actual losses, which will adversely affect our results
of operations.
We cannot predict the nature or timing of any future changes in fiscal and monetary policies or of changes in interest rates;
however, policy or interest rate changes could have a material adverse effect on our business, financial condition and results of
operations.
Changes in interest rates can affect demand for our products and services.
Movements in interest rates can cause demand for some of our products and services to be cyclical. For example, demand for
residential mortgage loans historically has increased during periods when interest rates were declining and historically has
decreased during periods when interest rates were rising. As a result, we may need to periodically increase or decrease the size
of certain of our product and service offerings, including our personnel, to match increases and decreases in demand and
volume. The need to change the scale of our product and service offerings is challenging, and there is often a lag between
changes in the interest rate environment and our ability to react to these changes.
Price fluctuations in securities markets, as well as other market events, such as a disruption in credit and other markets and
the abnormal functioning of markets for securities, could have an impact on our results of operations.
The market value of our securities investments, which include mortgage-backed securities, state and municipal securities and
corporate debt securities, are particularly sensitive to price fluctuations and market events. Declines in the values of our
securities holdings, combined with adverse changes in the expected cash flows from these investments, could result in
impairment.
Our investment management and trust services revenue, which is partially based on the value of the underlying investment
portfolios, can also be impacted by fluctuations in the securities markets. If the values of those investment portfolios decrease,
whether due to factors influencing U.S. or international securities markets, in general, or otherwise, our non-interest income
could be negatively impacted. In addition, our ability to sell our securities brokerage services is dependent, in part, upon
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consumers' level of confidence in securities markets. Securities market volatility or other market disruptions may adversely
affect our ability to sell our securities brokerage services, which could negatively affect our fee-based non-interest income, and
as a result, our results of operations.
Our loan portfolio composition subjects us to credit risk.
At December 31, 2024, approximately 65% of our loan portfolio consisted of commercial loans, commercial mortgage loans,
and residential and commercial construction loans. Commercial loans, commercial mortgage loans and construction loans
generally involve a greater degree of credit risk than residential mortgage loans and consumer loans because these loans are
likely to be more sensitive to broader economic factors and conditions. Because payments on these loans often depend on the
successful operation and management of borrowers' businesses and properties, repayment of such loans may be affected by
factors outside of the borrower's control, including adverse conditions in the real estate markets, adverse economic conditions
or changes in governmental regulation. In addition, commercial loans typically have relatively large balances and the
deterioration of one or a few of these loans could cause a significant increase in the percentage of non-performing loans. An
increase in non-performing loans could result in a loss of earnings from these loans, an increase in the provision for loan losses
and an increase in charge-offs, all of which could have a material adverse effect on our business, financial condition and results
of operations.
A significant proportion of our loan portfolio consists of commercial mortgage loans that may pose increased credit risk.
At December 31, 2024, commercial mortgage loans represented approximately 40% of our loan portfolio. These loans are
secured by both owner-occupied and non-owner-occupied commercial real estate. The market for commercial real estate is
cyclical and a significant change in the real estate market that results in deterioration in the value of collateral or rental or
occupancy rates could adversely affect borrowers’ ability to repay loans. For example, the increased prevalence of remote and
hybrid working arrangements as a result of COVID-19 has impacted the demand for commercial office space putting pressure
on office rental and occupancy rates. In addition, the current elevated level of interest rates may make it more difficult for
commercial real estate borrowers to refinance or repay maturing loans and may adversely affect the market value of the
underlying real estate. Changes in the real estate market could also affect the value of foreclosed assets. Negative developments
in the commercial real estate market could result in an increase in non-performing loans, the need for us to increase the
provision for loan losses and an increase in charge-offs, all of which could have a material adverse effect on our business,
financial condition and results of operations.
LIQUIDITY AND CAPITAL RISKS
Changes in interest rates or disruption in liquidity markets may adversely affect our sources of funding.
We must maintain sufficient sources of liquidity to meet the demands of our depositors and borrowers, support our operations
and meet regulatory requirements. Our liquidity management policies and practices emphasize core deposits and repayments
and maturities of loans and investments as our primary sources of liquidity. These primary sources of liquidity can be
supplemented by FHLB advances, borrowings from the FRB, proceeds from the sales of loans and investment securities and
capital raising activities. Secondary sources of liquidity may be more costly to us than funding provided by lower-cost, core
deposit account balances having similar maturities. In addition, adverse changes in our financial condition or results of
operations, downgrades in our credit ratings, regulatory actions involving us, or changes in regulatory, industry or market
conditions could lead to an increase in the cost of these secondary sources of liquidity, the inability to refinance or replace these
secondary funding sources as they mature, or the withdrawal of unused borrowing capacity under these secondary funding
sources.
We are dependent on customer deposits as our primary source of funding. A substantial majority of our deposits are in non-
maturing accounts that customers can withdraw on demand or upon several days' notice. Factors, including competition with
bank and non-bank competitors, changes in interest rates, the availability of alternative investment options, customer
confidence in the industry and the liquidity needs of deposit customers, can cause fluctuations in both the level and cost of
customer deposits. Further, deposits from state and municipal entities, primarily in non-maturing, interest-bearing accounts, are
a significant source of deposit funding for us, representing approximately 13% of total deposits at December 31, 2024. State
and municipal customers frequently maintain large deposit account balances substantially in excess of the FDIC insurance limit,
and these depositors may be more sensitive than other depositors to changes in interest rates. Changes in any of these factors
could increase our funding costs, reduce our net interest margin and/or create liquidity challenges.
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Additionally, negative news about us or the banking industry in general could negatively impact market and/or customer
perceptions of us, which could lead to a loss of depositor confidence and an increase in deposit withdrawals, particularly among
those with uninsured deposits. As we and other regional banking organizations experienced in 2023, the failure of other
financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize
their amount of FDIC insurance, move deposits to banks deemed "too big to fail" or remove deposits from the banking system
entirely. At December 31, 2024, approximately 37% of our deposits were uninsured and we are dependent on these deposits for
liquidity.
If we are not able to continue to depend primarily on customer deposits to meet our liquidity and funding needs, access
secondary, non-deposit funding sources on favorable terms or otherwise fail to manage our liquidity effectively, our ability to
continue to grow may be constrained, and our liquidity, operating margins, business, financial condition and results of
operations may be materially adversely affected.
We may need to raise additional capital in the future and such capital may not be available when needed or at all.
We are required by regulatory agencies to maintain adequate levels of capital. We may need to raise additional capital in the
future to meet regulatory or other internal requirements. As a publicly traded company, a likely source of additional funds is the
capital markets, accomplished generally through the issuance of equity, both common and preferred stock, and the issuance of
debt. Our ability to raise additional capital, if needed, will depend on, among other things, conditions in the capital markets at
that time, which are outside of our control, and our financial performance.
We cannot provide any assurance that access to such capital will be available to us on acceptable terms or at all. Any
occurrence that may limit our access to the capital markets, such as a decline in the confidence of debt purchasers or
counterparties participating in the capital markets, may materially and adversely affect our capital costs and our ability to raise
capital and, in turn, our liquidity. If we need to raise capital in the future, we may have to do so when many other financial
institutions are also seeking to raise capital and would then have to compete with those institutions for investors. The inability
to raise additional capital on acceptable terms when needed could have a materially adverse effect on our business, financial
condition or results of operations.
We are subject to capital adequacy standards, and a failure to meet these standards could adversely affect our financial
condition.
The Corporation and Fulton Bank are each subject to capital adequacy and liquidity rules and other regulatory requirements
specifying the minimum amounts and types of capital that must be maintained. From time to time, the regulators implement
changes to these regulatory capital adequacy and liquidity guidelines. If we fail to meet these minimum capital and liquidity
guidelines and other regulatory requirements, we may be restricted in the types of activities we may conduct and may be
prohibited from taking certain capital actions, such as making payments on certain capital instruments, paying executive
bonuses or dividends, and repurchasing or redeeming capital securities.
RISKS RELATED TO RISK MANAGEMENT
We are exposed to many types of operational and other risks, and our framework for managing risks may not be effective in
mitigating risk.
We are exposed to many types of operational risks, including the risk of human error or fraud by employees and other third
parties, intentional and inadvertent misrepresentation by loan applicants, borrowers or guarantors, unsatisfactory performance
by employees and vendors, clerical and record-keeping errors, operational errors, computer and telecommunications systems
malfunctions or failures and reliance on data that may be faulty or incomplete. In an environment characterized by continual,
rapid technological change, when we introduce new products and services, or make changes to our information technology
systems and processes as we do from time to time, our operational risks are increased. Any of these operational risks could
result in the diminished ability to operate one or more of our businesses, financial loss, potential liability to customers, inability
to secure insurance, reputational damage and/or regulatory intervention, any or all of which could materially adversely affect
us.
Because the nature of the financial services business involves a high volume of transactions, certain errors may be repeated or
compounded before they are discovered and successfully rectified. Our large transaction volume and necessary dependence
upon automated systems to record and process these transactions results in the risk that technical flaws, tampering, or
manipulation of those automated systems, arising from events wholly or partially beyond our control, and may give rise to
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disruption of service to customers and to financial loss or liability. We are also exposed to the risk that our business continuity
and data security systems prove to be inadequate.
Furthermore, our risk management framework is subject to inherent limitations, and risks may exist, or develop in the future,
that we have not identified or anticipated. Management regularly reviews and updates our internal controls, disclosure controls
and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and
operated, is based in part on certain assumptions and can provide reasonable, but not absolute, assurances that the objectives of
the controls are met. Any failure or circumvention of our controls and procedures or failure to comply with regulations related
to controls and procedures could have a material adverse effect on our business, financial condition or results of operations. See
"Item 9A. Controls and Procedures."
Loss of, or failure to adequately safeguard, confidential or proprietary information may adversely affect our operations, net
income or reputation.
Our business is highly dependent on information systems and technology and the ability to collect, process, transmit and store
significant amounts of confidential information on a daily basis. While we perform some of the functions required to operate
our business directly, we also rely on third parties for significant business functions, such as processing customer transactions,
providing cloud-based infrastructure, software and data storage services, maintaining customer-facing websites, including our
online and mobile banking functions, and developing software for new products and services. These relationships require us to
allow third parties to access, store, process and transmit customer information. As a result, we may be subject to cybersecurity
risks directly, as well as indirectly, through the vendors to whom we outsource business functions and the downstream service
providers of those vendors. Cyber threats could result in unauthorized access, loss or destruction of confidential information or
customer data; unavailability, degradation or denial of service; introduction of computer viruses or ransomware; and other
adverse events causing us to incur additional costs repairing systems, restoring data or adding new personnel or protection
technologies. Cyber threats may also subject us to regulatory investigations, litigation or enforcement actions, require the
payment of fines, penalties or damages, or undertaking costly remediation efforts with respect to third parties affected by a
cybersecurity incident, all or any of which could adversely affect our business, financial condition or results of operations and/
or damage our reputation.
Critical infrastructure sectors, including the financial services sector, increasingly have been the targets of cyberattacks.
Cyberattacks involving large financial institutions, including denial of service attacks, nation-state cyberattacks, ransomware
attacks designed to deny access to key internal resources or systems, and targeted social engineering and email and text
message attacks designed to allow unauthorized persons to obtain access to an institution's information systems and data or that
of its customers, are becoming more common and increasingly sophisticated. Further, threat actors are increasingly seeking to
target vulnerabilities in software systems (and third-party vendors providing those systems) used by large numbers of banking
organizations in order to conduct malicious cyber activities.
Like other financial institutions, we experience malicious cyber activity on an ongoing basis directed at our websites, computer
systems, software, networks and our users. This malicious activity includes attempts at unauthorized access, implantation of
computer viruses or malware, and denial of service attacks. We also experience large volumes of phishing and other forms of
social engineering attempted for the purpose of perpetuating fraud against us, our employees or our customers. While, to date,
malicious cyber activity, cyberattacks and other information security breaches have not had a material adverse impact on us,
risk to our systems remains significant.
Cybersecurity risks for financial institutions also have evolved as a result of the use of cloud computing and new technologies,
devices and delivery channels to transmit and store data and conduct financial transactions. The adoption of new products,
services and delivery channels contribute to a more complex operating environment, which impacts operational risk and
presents the potential for additional structural vulnerabilities.
There can be no assurance that the measures we employ to detect and combat direct or indirect cyber threats will be effective. In
addition, because the methods of cyberattacks change frequently or, in some cases, are not recognized until launched, we may
be unable to implement effective preventive control measures to proactively address these methods. There can be no assurance
that any future third-party vendor data breach would not be material, and if we or a third-party vendor were to experience a
cyberattack or information security breach, we could suffer damage to our reputation, productivity losses, response costs
associated with investigation and resumption of services, and incur substantial additional expenses, including remediation
expenses costs associated with client notification and credit monitoring services, increased insurance premiums, regulatory
penalties and fines, and costs associated with civil litigation, any of which could have a materially adverse effect on our
business, financial condition, results of operations and reputation. Although we maintain insurance coverage that may, subject
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to policy terms and conditions, cover certain aspects of cyber risks, our insurance coverage may be inapplicable or otherwise
insufficient to cover any or all losses.
Additionally, account data compromise, malware and ransomware events affecting a broad spectrum of commercial businesses
and governmental entities in recent years have resulted in heightened legislative and regulatory focus on privacy, data
protection and information security. Changes in laws and regulations may significantly impact our current and planned privacy,
data protection and information security-related practices, the collection, use, sharing, retention and safeguarding of consumer
and employee information, and current or planned business activities. Compliance with current or future privacy, data
protection and information security laws could result in higher compliance and technology costs and could restrict our ability to
provide certain products and services that could materially and adversely affect our profitability.
We are subject to a variety of risks in connection with the origination and sale of loans.
We originate residential mortgage loans and other loans, such as loans guaranteed, in part, by the SBA, all or portions of which
are later sold in the secondary market to government sponsored enterprises or agencies, such as the Federal National Mortgage
Association (Fannie Mae) and other non-government sponsored investors. In connection with such sales, we make certain
representations and warranties with respect to matters such as the underwriting, origination, documentation or other
characteristics of the loans sold. We may be required to repurchase a loan, or to reimburse the purchaser of a loan for any
related losses, if it is determined that the loan sold was in violation of representations or warranties made at the time of the sale,
and, in some cases, if there is evidence of borrower fraud, in the event of early payment default by the borrower on the loan, or
for other reasons. We maintain reserves for potential losses on certain loans sold, however, it is possible that losses incurred in
connection with loan repurchases and reimbursement payments may be in excess of any applicable reserves, and we may be
required to increase reserves and may sustain additional losses associated with such loan repurchases and reimbursement
payments in the future, all of which could have a material adverse effect on our business, financial condition and results of
operations.
The sale of residential mortgage loans and other loans in the secondary market serves as a source of non-interest income and
liquidity for us and can reduce our exposure to interest rate risk. Efforts to reform government sponsored enterprises and
agencies, changes in the types of, or standards for, loans purchased by government sponsored enterprises or agencies and other
investors, or our failure to maintain our status as an eligible seller of such loans may limit our ability to sell these loans. Our
inability to continue to sell these loans could reduce our non-interest income, limit our ability to originate and fund these loans
in the future, and make managing interest rate risk more challenging, any of which could have a material adverse effect on our
business, financial condition and results of operations.
Our operational risks include risks associated with third-party vendors and other financial institutions.
We rely upon certain third-party vendors to provide products and services necessary to maintain our day-to-day operations,
including, notably, responsibility for the core processing system that services Fulton Bank. Accordingly, our operations are
exposed to the risk that these vendors might not perform in accordance with applicable contractual arrangements or service
level agreements. The failure of an external vendor to perform in accordance with applicable contractual arrangements or
service level agreements could be disruptive to our operations and could have a material adverse effect on our business,
financial condition or results of operations and/or damage our reputation. Further, third-party vendor risk management
continues to be a point of regulatory emphasis. A failure to follow applicable regulatory guidance in this area could expose us to
regulatory sanctions.
The commercial soundness of many financial institutions may be closely interrelated as a result of credit, trading, execution of
transactions or other relationships between the institutions. As a result, concerns about, or a default or threatened default by,
one institution could lead to significant market-wide liquidity and credit problems, losses or defaults by other institutions. This
risk is sometimes referred to as "systemic risk" and may adversely affect financial intermediaries, such as clearing agencies,
clearing houses, banks, securities firms and exchanges with which we interact on a daily basis, and, therefore, could have a
material adverse effect on our business, financial condition or results of operations.
Any of these operational or other risks could result in our diminished ability to operate one or more of our businesses, financial
loss, potential liability to customers, inability to secure insurance, reputational damage and regulatory intervention and could
materially adversely affect our business, financial condition and results of operations.
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Climate change may materially adversely affect our business and results of operations.
We operate in areas where our business and the activities of our customers could be impacted by the effects of climate change,
including increased frequency or severity of storms, hurricanes, floods, droughts, and rising sea levels. These effects can disrupt
business operations, damage property, devalue assets and change consumer and business preferences, which may adversely
affect borrowers, increase credit risk and reduce demand for our products and services. At this time, we have not experienced
material losses from climate change; however, we are aware that its impact may increase in the future. Climate change, its
effects and the resulting, unknown impacts could have a material adverse effect on our business, financial condition and results
of operations.
We are also susceptible to policy and regulatory changes with respect to banks' climate risk management practices. For
instance, the leadership of the federal banking agencies, including the OCC, have emphasized that climate-related risks are
faced by banking organizations of all types and sizes. If new regulations or supervisory guidance applicable to us came into
effect, our compliance costs and other compliance-related risks would be expected to increase and affect our financial position
and results of operations.
RISKS FROM ACCOUNTING AND OTHER ESTIMATES
Our consolidated financial statements are based in part on assumptions and estimates which, if incorrect, could cause
unexpected losses in the future.
We have made a number of estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and
expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Actual
results could differ from these estimates. Material estimates subject to change in the near term include, among other items: the
allowance for credit losses; the carrying value of goodwill or other intangible assets; the fair value estimates of certain assets
and liabilities; and the realization of deferred tax assets and liabilities. These estimates may be adjusted as more current
information becomes available and any adjustment may be significant.
There are risks resulting from the extensive use of models in our business.
We rely on quantitative models to measure risks and to estimate certain financial values. We use models in such processes as
determining the pricing of various products, measuring interest rate and other market risks, predicting or estimating losses and
assessing capital adequacy, as well as to estimate the value of financial instruments and balance sheet items. Our reliance on
models continues to increase as rules, guidance, and expectations change. The most recent example of this is the additional
models used in the determination of our ACL under CECL. Poorly designed or implemented models present the risk that our
business decisions based on information incorporating model output could be adversely affected due to the inaccuracy of that
information. Models are often based on historical experience to predict future outcomes, and, as a result, new experiences or
events which are not part of historical experience can significantly increase model imprecision and impact model reliability.
Model inputs can also include information provided by third parties, such as economic forecasts or macroeconomic variables
(unemployment rates, real GDP, etc.) upon which we rely. Some of the decisions that our regulators make, including those
related to capital actions, could be affected due to the perception that the quality of the models used to generate the relevant
information is insufficient, which could have a negative impact on our ability to take certain actions, including making dividend
payments or engaging in share repurchases.
LEGAL AND REGULATORY COMPLIANCE RISKS
We are subject to extensive regulation and supervision and may be adversely affected by changes in, or any failure to comply
with laws and regulations.
Virtually every aspect of our operations is subject to extensive regulation and supervision by federal and state regulatory
agencies, including the Federal Reserve Board, OCC, FDIC, CFPB, DOJ, UST, SEC, HUD, DOL, EEOC, state attorneys
general and state banking, financial services, securities and insurance regulators. Under this framework, regulatory agencies
have broad authority to carry out their supervisory, examination and enforcement responsibilities to address compliance with
applicable laws and regulations, including laws and regulations relating to capital adequacy, asset quality, earnings, liquidity,
risk management and financial accounting and reporting as well as laws and regulations governing consumer protection, fair
lending, privacy, information security and cybersecurity risk management, third-party vendor risk management, AML and
sanctions and anti-terrorism laws. Failure to comply with these regulatory requirements, including inadvertent or unintentional
27
violations, may result in the assessment of fines and penalties, the commencement of informal or formal regulatory enforcement
actions against us, or regulatory restrictions on our activities. Failure to comply may also affect our ability to grow through
acquisitions, discourage institutional investment managers to invest in our securities, result in reputational damage, or increase
our costs of doing business.
The U.S. Congress, state legislatures and federal and state regulatory agencies periodically review banking and other laws,
regulations and policies for possible changes. Changes in applicable federal or state laws, regulations or governmental policies,
including as a result of changes in U.S. presidential administrations that have different regulatory agendas, may affect us and
our business. The effects of such changes are difficult to predict and may produce unintended consequences, like limiting the
types of financial services and products we may offer, limiting the fees we may charge, altering demand for existing products
and services, increasing the ability of non-banks to offer competing financial services and products, increasing compliance
burdens, or otherwise adversely affecting our business, financial condition or results of operations.
The CFPB, established pursuant to the Dodd-Frank Act, has imposed enforcement actions against a variety of bank and non-
bank market participants with respect to a number of consumer financial products and services. These enforcement actions have
resulted in those participants expending significant time, money and resources to adjust to the initiatives being pursued by the
CFPB. These enforcement actions may also serve as precedent for how the CFPB interprets and enforces consumer protection
laws, including practices or acts that are deemed to be unfair, deceptive or abusive, with respect to supervised institutions and
may result in the imposition of higher standards of compliance with such laws. Other federal financial regulatory agencies,
including the OCC, as well as state attorneys general and state banking agencies and other state financial regulators have also
been active in this area with respect to institutions over which they have jurisdiction.
Compliance with banking and financial services statutes and regulations also impacts our ability to engage in new activities or
to expand existing activities. Federal and state banking agencies possess broad powers to take supervisory actions, as they deem
appropriate. These supervisory actions may result in higher capital requirements, higher deposit insurance premiums and
limitations on our operations and expansion activities that could have a material adverse effect on our business and profitability.
We have dedicated significant time, effort, and expense over time to comply with regulatory and supervisory standards and
requirements imposed by our regulators, and we expect that we will continue to do so. If we fail to develop the systems and
processes necessary to comply with the standards and requirements imposed by these rules at a reasonable cost, it could have a
material adverse effect on our business, financial condition or results of operations.
From time to time we may be the subject of litigation and governmental or administrative proceedings. Adverse outcomes of
any such litigation or proceedings may have a material adverse impact on our business, financial condition and results of
operations as well as our reputation.
Many aspects of our business involve a substantial risk of legal liability. From time to time, we have been named or threatened
to be named as a defendant in various lawsuits arising from our business activities and, in some cases, from the activities of
companies that we or our subsidiaries acquired. In addition, we are periodically the subject of governmental investigations and
other forms of regulatory or governmental inquiry. These lawsuits, investigations, inquiries and other matters could lead to
administrative, civil or criminal proceedings, result in adverse judgments, settlements, fines, penalties, restitution, injunctions or
other types of sanctions, the need for us to undertake remedial actions, or otherwise alter our business, financial or accounting
practices. Substantial legal liability or significant regulatory actions against us could materially adversely affect our business,
financial condition and results of operations and cause significant reputational harm.
Changes in U.S. federal, state or local tax laws may negatively impact our financial performance.
We are subject to changes in tax laws that could increase our effective tax rate. These law changes may be retroactive to
previous periods and, as a result, could negatively affect our current and future financial performance. The Tax Act reduced our
federal corporate income tax rate to 21% beginning in 2018. The Tax Act also imposed limitations on our ability to take certain
deductions, such as the deduction for FDIC deposit insurance premiums, which partially offset the increase in net income from
the lower tax rate. The Inflation Reduction Act of 2022 imposes a 1% excise tax on the value of our shares we repurchase that
exceeds $1 million in the aggregate during any taxable year, subject to certain adjustments.
In addition, a number of the changes to the Tax Code are set to expire at the end of 2025. There is substantial uncertainty
concerning whether those expiring provisions will be extended and whether future legislation will further revise the Tax Code.
Changes to the Tax Code may affect our business, financial condition and results of operations.
28
Regulations relating to privacy, information security, and data protection could increase our costs, affect or limit how we
collect and use personal information, and adversely affect our business opportunities.
We are subject to various federal and state privacy, information security, and data protection laws, such as the GLBA, that
among other things require privacy disclosures and maintenance of a robust security program that are increasingly subject to
change which could have a significant impact on our current and planned privacy, data protection, and information security-
related practices; our collection, use, sharing, retention, and safeguarding of consumer or employee information; disclosures
and notifications during a cyber or information security incident; and some of our current or planned business activities. Our
regulators also hold us responsible for privacy and data protection obligations performed by our third-party service providers
while providing services to us, as well as disclosures and notifications during a cyber or information security incident.
New or changes to existing laws increase our costs of compliance and business operations and could reduce income from
certain business initiatives, including increased privacy-related enforcement activity and higher compliance and technology
costs, and could restrict our ability to provide certain products and services. Our failure to comply with privacy, data protection,
and information security laws could result in potentially significant regulatory or governmental investigations or actions,
litigation, fines, sanctions, and damage to our reputation, which could have a material adverse effect on our business, financial
condition or results of operations.
RISKS RELATED TO STRATEGIC GROWTH
We face a variety of risks in connection with completed and potential acquisitions.
We may from time to time seek to supplement organic growth through acquisitions of banks, branches or other financial
businesses or assets. Potential acquisitions are typically subject to regulatory or other approvals, and there can be no assurance
that we would be able to obtain any such approvals in a timely manner, without restrictive conditions or at all. Even if required
approvals are obtained, acquisitions involve numerous risks, including lower than expected performance, higher than expected
costs, difficulties related to integration, diversion of management's attention from other business activities, the potential loss of
key employees, changes in relationships with customers, disruption of the operations of the acquired business and our business,
exposure to potential asset quality issues and unknown or contingent liabilities of the acquired business and changes in banking
or tax laws or regulations that may affect the acquired business.
The success of any future acquisitions we may consummate will depend on, among other things, our ability to realize the
expected revenue increases, cost savings, strategic gains, increases in geographic or product presence, and/or other anticipated
benefits. If we are not able to successfully achieve these objectives, the anticipated benefits of the subject acquisition may not
be realized fully or at all or may take longer to realize than expected and the subject acquisition could have a material adverse
effect on our business, financial condition and results of operations.
On September 17, 2024, the FDIC, the OCC and the DOJ, each announced new rules and policy statements
impacting their bank merger review processes.
Among these actions, the FDIC approved a final statement of policy on bank merger transactions and the OCC approved a final
rule updating the agency's regulations for business combinations involving national banks and federal savings associations. The
OCC's final rule modifies its procedures for reviewing bank merger applications under the BMA applications, including the
elimination of the expedited bank merger review and the streamlined application procedures. The OCC’s final rule also includes
as an appendix a policy statement which includes a list of characteristics of a merger transaction that the OCC would consider
to be consistent or inconsistent with approval. The FDIC and the OCC take a similar risk-based approach to bank merger
transactions, although there are some differences in how the FDIC and the OCC would consider each statutory factor under the
BMA. Each agency applies varying levels of enhanced scrutiny to transactions involving or resulting in institutions with $50
billion or more in total assets. However, Acting FDIC Chairman Travis Hill has indicated the possibility of withdrawing the
FDIC's statement of policy, and it is unclear whether the OCC will reconsider its new regulation and policy statement.
In addition, the DOJ withdrew from its 1995 Bank Merger Guidelines and announced that it would consider bank mergers
under its 2023 Merger Guidelines, which includes a brief bank merger addendum.
The coordinated agency actions have, for the moment, significantly modified the existing regulatory framework for bank
merger transactions such that future proposed bank merger transactions, including those involving us, may be subject to
heightened regulatory scrutiny. The extent to which the new U.S. presidential administration will affirmatively encourage each
of the agencies to return to a less restrictive approach to bank merger reviews, including possible rescission of modification
the recent pronouncements described above, is uncertain at this time. Any enhanced regulatory scrutiny of bank mergers and
29
acquisitions and revision of the framework for bank merger application review may adversely affect the marketplace for such
transactions, could result in our acquisitions in future periods being delayed, impeded or restricted in certain respects and result
in new rules that possibly limit the size of financial institutions we may be able to acquire in the future and alter the terms for
such transactions.
Acquisitions may dilute shareholder value.
Future mergers or acquisitions, if any, may involve cash, debt or equity securities as transaction consideration. Acquisitions
typically involve the payment of a premium over book and market values, and, therefore, some dilution of our stock's tangible
book value and net income per common share may occur in connection with any future transaction. We cannot say with any
certainty that we will be able to consummate, or if consummated, successfully integrate any future acquisitions, or that we will
not incur disruptions or unexpected expenses in integrating such acquisitions. Furthermore, failure to realize the expected
revenue increases, cost savings, strategic gains, increases in geographic or product presence, and/or other anticipated benefits
from pending or future acquisitions could have a material adverse effect on our business, financial condition and results of
operations.
If the goodwill that we have recorded or will record in the future in connection with our acquisitions becomes impaired, it
could have a negative impact on our results of operations.
We have supplemented our internal growth with strategic acquisitions of banks, branches and other financial services
companies. In the future, we may seek to supplement organic growth through additional acquisitions. If the purchase price of an
acquired company exceeds the fair value of the company's net assets, the excess is carried on the acquirer's balance sheet as
goodwill. As of December 31, 2024, we had $553 million of goodwill recorded on our balance sheet. We are required to
evaluate goodwill for impairment at least annually. Write-downs of the amount of any impairment, if necessary, are to be
charged to earnings in the period in which the impairment occurs. There can be no assurance that future evaluations of goodwill
will not result in impairment charges.
We may not be able to achieve our growth plans.
Our business plan includes the pursuit of profitable growth. To achieve profitable growth, we may pursue new lines of business
or offer new products or services, all of which can involve significant costs, uncertainties and risks. Any new activity we pursue
may require a significant investment of time and resources and may not generate the anticipated return on that investment. In
addition, we may not be able to effectively implement and manage any new activities. External factors, such as the need to
comply with additional regulations, the availability, or introduction, of competitive alternatives in the market, and changes in
customer preferences may also impact the successful implementation of any new activity. Any new activity could have a
significant impact on the effectiveness of our system of internal controls. Sustainable growth requires that we manage risks by
balancing loan and deposit growth at acceptable levels of risk, maintaining adequate liquidity and capital, hiring and retaining
qualified employees, and successfully managing the costs and implementation risks with respect to strategic projects and
initiatives. If we are not able to adequately identify and manage the risks associated with new activities, our business, financial
condition and results of operations could be materially and adversely impacted.
RISKS RELATED TO COMPETITION
Our ability to attract and retain qualified employees is critical to our success.
Our employees are our most important resource. Competition for qualified personnel is intense in many areas of the financial
services industry. We endeavor to attract talented new employees and retain and motivate our existing employees to assist in
executing our growth, acquisition and business strategies. We also seek to retain proven, experienced senior employees
augmented from time to time by external hires, to provide continuity of succession of our executive management team. Losses
of or changes in our current executive officers or other key personnel, or the inability to recruit and retain qualified personnel in
the future, could materially and adversely affect our financial condition and results of operations.
We face strong competition from financial services companies and other companies that offer banking services, which could
materially and adversely affect our business.
The financial services industry has become even more competitive as a result of legislative, regulatory, and technological
changes and continued banking consolidation, which may increase in connection with current economic, market, and political
conditions. We face substantial competition in all phases of our operations from a variety of competitors, including national
30
banks, regional banks, community banks and FinTechs. Many of our competitors offer the same banking services that we offer
and our success depends on our ability to adapt our products and services to evolving industry standards and customer
preferences. In addition to product and service offerings, we compete based on a number of other factors, including financial
and other terms, underwriting standards, technological capabilities, brand, and reputation. Increased competition in our market
may result in reduced new loan production and/or decreased deposit balances or less favorable terms on loans and leases and/or
deposit accounts. We also face competition from many other types of financial institutions, including without limitation, non-
bank specialty lenders, insurance companies, private investment funds, investment banks and other financial intermediaries, and
some of these competitors may not be subject to the same regulatory requirements that we are. Many of our competitors have
significantly greater resources, established customer bases, more locations, and longer operating histories. Should competition
in the financial services industry intensify, our ability to market our products and services may be adversely affected. If we are
unable to attract and retain banking customers, we may be unable to grow or maintain the levels of our loans and deposits, and
our financial condition and results of operations may be adversely affected as a result. Ultimately, we may not be able to
compete successfully against current and future competitors.
Failure to keep pace with technological change could adversely affect our business.
The financial services industry experiences continuous technological change with frequent introductions of new technology-
driven products and services. The effective use of technology increases efficiency and enables financial institutions to better
serve customers and to reduce costs. Our future success depends, in part, upon our ability to address the needs of our customers
by using technology to provide products and services that will satisfy customer demands, as well as to create additional
efficiencies in our operations. The costs of implementing new technology, including personnel, can be high, in both absolute
and relative terms, and we may not achieve intended benefits of new technology initiatives. Moreover, the implementation of
new technology can expose us to new or increased operational risks. For example, our implementation of certain new
technologies, such as those related to artificial intelligence, machine learning and automated decision making, in our business
processes may have unintended consequences due to their limitations or our failure to use them effectively. Many of our
competitors have substantially greater resources to invest in technological improvements or are technology focused start-ups
with internally developed cloud-native systems that offer improved user interfaces and experiences. In addition, new payment,
credit and investment and wealth management services developed and offered by non-bank or non-traditional competitors pose
an increasing threat to the products and services traditionally provided by financial institutions like us. We may not be able to
effectively implement new technology-driven products and services or be successful in marketing these products and services to
our customers, or effectively deploy new technologies to improve efficiency. In addition, we depend on internal and outsourced
technology to support all aspects of our business operations. Interruption or failure of these systems creates a risk of business
loss as a result of adverse customer experiences and possible diminishing of our reputation, damage claims or civil fines.
Failure to successfully keep pace with technological change affecting the financial services industry or to successfully
implement core processing strategies could have a material adverse impact on our business and, in turn, our financial condition
and results of operations.
RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES
We are a bank holding company and rely on dividends and other payments from our subsidiaries for substantially all of our
revenue and our ability to make dividend payments, distributions and other payments.
We are a bank holding company, a separate and distinct legal entity from our bank and non-bank subsidiaries, and we depend
on the payment of dividends and other payments and distributions from our subsidiaries, principally Fulton Bank, for
substantially all of our revenues. As a result, our ability to make dividend payments on our common and preferred stock
depends primarily on compliance with applicable federal regulatory requirements and the receipt of dividends and other
distributions from our subsidiaries. There are various regulatory and prudential supervisory restrictions, which may change
from time to time, that impact the ability of Fulton Bank to pay dividends or make other payments to us. There can be no
assurance that Fulton Bank will be able to pay dividends at past levels, or at all, in the future. If we do not receive sufficient
cash dividends or are unable to borrow from Fulton Bank, then we may not have sufficient funds to pay dividends to our
shareholders, repurchase our common stock or service our debt obligations.
We may reduce or discontinue the payment of dividends on, or repurchases of, our common stock.
We have pursued a strategy of capital management under which we have sought to deploy capital through stock repurchases
and dividends on our common stock, in a manner that is beneficial to our shareholders. Our shareholders are only entitled to
receive such dividends as our Board of Directors may declare out of funds legally available for such payments. We are not
required to pay dividends on, or effect repurchases of, our common stock and may reduce or eliminate our common stock
31
dividend and/or share repurchases in the future. Our ability to pay dividends to our stockholders is subject to the restrictions set
forth in Pennsylvania law, by the Federal Reserve, and by certain covenants contained in our subordinated debentures.
Notification to the Federal Reserve is also required prior to our declaring and paying a cash dividend to our shareholders during
any period in which our quarterly and/or cumulative twelve-month net earnings are insufficient to fund the dividend amount,
among other requirements. We may not pay a dividend if the Federal Reserve objects or until such time as we receive approval
from the Federal Reserve or we no longer need to provide notice under applicable regulations. In addition, we may be restricted
by applicable law or regulation or actions taken by our regulators, now or in the future, from paying dividends to, or
repurchasing shares of our common stock from, our shareholders. We cannot provide assurance that we will continue paying
dividends on, or repurchase shares of, our common stock at current levels or at all. A reduction or discontinuance of dividends
on our common stock or our share repurchases could have a material adverse effect on the market price of our common stock.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
The Corporation's cybersecurity risk management program is integrated into our enterprise risk management program and is
designed to expeditiously identify, analyze and protect against security threats to its computer systems, software, networks,
storage devices and other technology assets. Our management team, with oversight from our Board of Directors, proactively
manages the Corporation's cybersecurity risks to avoid or minimize the impacts of attacks by unauthorized parties attempting to
obtain access to confidential information, destroy data, disrupt service, sabotage systems or cause other damage. Specifically,
the Corporation has appointed a CISO to maintain a comprehensive information security program. Our strategy includes a
continuous improvement mindset along with a defense in depth approach to cybersecurity. We utilize industry standards that
include the NIST Cybersecurity Framework and the Financial Services Sector Cybersecurity Profile. Our layered security
architecture consists of innovative technology to detect, prevent, and mitigate cybersecurity threats. Ongoing proactive analysis
of cyber threat intelligence ensures that we are taking the appropriate counter measures to defend against the latest threats. We
use monitoring and preventive controls to detect and respond swiftly to data breaches and cyber threats involving our systems.
We regularly evaluate our systems and controls and implement upgrades as necessary. We also attempt to reduce our exposure
to our vendors' data privacy and cyber incidents by performing initial vendor due diligence that is updated periodically for
critical vendors, negotiating service level standards with vendors, negotiating for indemnification from vendors for
confidentiality and data breaches, and limiting third-party access to the least privileged level necessary to perform outsourced
functions. The additional cost to us of data and cybersecurity monitoring and protection systems and controls includes the cost
of hardware and software, third-party technology providers, consulting and forensic testing firms, insurance premium costs,
legal fees and the cost of personnel who focus a substantial portion of their responsibilities on data security and cybersecurity.
The Corporation uses an integrated cybersecurity incident response plan ICIRP designed to enable management to respond
timely to cybersecurity incidents, coordinate such responses within the Corporation and with our Board of Directors, notify law
enforcement and other government agencies, and notify customers and employees. The ICIRP provides a documented
framework for identifying and responding to actual or potential cybersecurity incidents, including timely notification of and
escalation to the CIRST. The CIRST facilitates coordination across key stakeholders of the Corporation. The Corporation's
CISO and key members of management are members of the ICIRP. The Corporation provides the CISO and the information
security team with a comprehensive suite of security tools and techniques to protect the confidentiality, integrity and
availability of the Corporation's data for the benefit of our customers, employees and shareholders. We periodically engage
third-party consultants to assess the effectiveness of our strategy, tools and techniques, and overall information security
program. Independent oversight and assurance activities include internal audits, vulnerability assessments and penetration
testing. The Corporation's cybersecurity professionals are well-trained on how to protect customer and employee information
through ongoing education and awareness initiatives.
The Corporation maintains a third-party risk management program designed to identify, analyze and monitor risks, including
cybersecurity risks, associated with vendors and outside service providers. Our vendor risk management team collaborates
closely with the information security team to ensure third parties meet certain information security control requirements. Our
information security team proactively monitors our internal systems and email gateways for phishing email attacks. Remote
connections are also assessed and monitored given a portion of our workforce works remotely.
Our Board of Directors provides direction and oversight over the Corporation's enterprise-wide risk management program,
including risks related to cybersecurity. The Risk Committee is responsible for overseeing the Corporation's information
security program and execution. The Risk Committee promotes collaboration and cooperation between various elements within
the Corporation relative to information security.
32
Cybersecurity incidents are managed through the ICIRP, which provides direction to management allowing for the timely
transfer of information throughout the organization. Our policy requires material incidents to be reported within four business
days after an incident is determined to be material with the materiality determination to be completed without unreasonable
delay. Management's Disclosure Committee has developed a plan to facilitate making timely determinations as to whether and
when incidents should be disclosed. If a material incident occurs, the Corporation will describe in detail the material aspects and
nature, scope and timing of the incident, along with the impact to its financial condition and results of operations.
To our knowledge, previous cybersecurity incidents have not materially affected the Corporation, its business strategy, financial
condition or results of operation. With regard to the possible impact of future cybersecurity threats or incidents, see "Item 1A.
Risk Factors."
Item 2. Properties
The Corporation's financial center properties as of December 31, 2024 totaled 216 financial centers. Of those financial centers,
54 were owned and 162 were leased. Remote service facilities (mainly stand-alone ATMs) are excluded from these totals. The
Corporation's headquarters is located in Lancaster, Pennsylvania. The Corporation owns an operations center located in East
Petersburg, Pennsylvania.
Item 3. Legal Proceedings
The information presented in the "Legal Proceedings" section of "Note 21 - Commitments and Contingencies" in the Notes to
Consolidated Financial Statements is incorporated herein by reference.
Item 4. Mine Safety Disclosures
Not applicable.
33
PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Common Stock
As of February 3, 2025, the Corporation had 182.2 million shares of $2.50 par value common stock outstanding held by
approximately 48,603 holders of record. The closing price per share of the Corporation's common stock on February 25, 2025
was $19.57. The common stock of the Corporation is traded on the Nasdaq Global Select Market under the symbol "FULT".
Restrictions on the Payments of Dividends
The Corporation is a separate and distinct legal entity from its banking and nonbanking subsidiaries and depends on the
payment of dividends from its subsidiaries, principally Fulton Bank, for substantially all of its revenues. As a result, the
Corporation's ability to make dividend payments on its common stock depends primarily on compliance with applicable federal
regulatory requirements and the receipt of dividends and other distributions from its subsidiaries. There are various regulatory
and prudential supervisory restrictions, which may change from time to time, that impact the ability of its banking subsidiary to
pay dividends or make other payments to the Corporation. In addition, dividends on the Corporation's common stock may not
be declared, paid or set aside for payment unless the full dividends for the immediately preceding dividend payment period for
the Corporation's Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A have been declared and paid or declared and
a sum sufficient for the payment thereof has been set aside. For additional information regarding the regulatory restrictions
applicable to the Corporation and its subsidiaries, see "Supervision and Regulation," in "Item 1. Business;" "Item 1A. Risk
Factors" - We are a bank holding company and rely on dividends and other payments from our subsidiaries for substantially all
of our revenue and our ability to make dividend payments, distributions and other payments;" and "Note 12 - Regulatory
Matters," in the Notes to Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary Data."
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information about options outstanding under the Corporation's Employee Equity Plan and the
number of securities remaining available for future issuance under the Employee Equity Plan, the Directors' Plan and the ESPP
as of December 31, 2024:
Plan Category
Number of securities to
be
issued upon exercise of
outstanding options,
warrants and rights (1)
Weighted-average exercise
price of outstanding,
options, warrants and
rights (2)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in first column) (3)
Equity compensation plans approved by security holders
2,702,997
$
12.61
5,030,550
Equity compensation plans not approved by security holders
—
—
—
Total
2,702,997
$
12.61
5,030,550
(1) The number of securities to be issued upon exercise of outstanding options, warrants and rights includes: (i) 1,094,846 PSUs, which is the target number of
PSUs that are payable under the Employee Equity Plan, though no shares will be issued until achievement of applicable performance goals, (ii) 1,315,836
time-vested RSUs granted under the Employee Equity Plan and (iii) 292,315 time-vested RSUs granted under the Directors' Plan.
(2) The weighted-average exercise price of outstanding warrants and rights does not take into account outstanding PSUs and RSUs granted under the
Employee Equity Plan and the Directors' Plan.
(3) Consists of: (i) 3,839,493 shares that may be awarded under the Employee Equity Plan, (ii) 325,059 shares that may be awarded under the Directors' Plan
and (iii) 865,998 shares that may be purchased under the ESPP. Excludes accrued purchase rights under the ESPP as of December 31, 2024 as the number
of shares to be purchased is indeterminable until the shares are issued.
34
Performance Graph
The following graph shows cumulative total shareholder return (i.e., price change, plus reinvestment of dividends) on the
common stock of the Corporation during the five-year period ended December 31, 2024, compared with (1) the Nasdaq Bank
Index and (2) the S&P 500. The graph is not indicative of future price performance.
The graph below is furnished under this Part II, Item 5 of this Annual Report on Form 10-K and shall not be deemed to be
"soliciting material" or to be "filed" with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the
Exchange Act.
Index Value
Fulton Financial Corporation
S&P 500
Nasdaq Bank Index
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
80.00
100.00
120.00
140.00
160.00
180.00
200.00
220.00
Year Ending December 31
Index
2019
2020
2021
2022
2023
2024
Fulton Financial Corporation ..........................
$
100.00 $
76.52 $
106.37 $
109.15 $
111.42 $
134.46
S&P 500 ..........................................................
$
100.00 $
118.40 $
152.39 $
124.79 $
157.59 $
197.02
Nasdaq Bank Index .........................................
$
100.00 $
88.19 $
125.45 $
102.00 $
95.17 $
111.09
35
Issuer Purchases of Equity Securities
There were no repurchases of our common stock during the fourth quarter of 2024.
During 2024, 1.9 million shares were repurchased at a total cost of $30.3 million, or $15.69 per share, under the 2024
Repurchase Program.
On December 17, 2024, the Corporation announced that its Board of Directors approved the 2025 Repurchase Program. The
2025 Repurchase Program will expire on December 31, 2025. Under the 2025 Repurchase Program, the Corporation is
authorized to repurchase up to $125.0 million of shares of its common stock. Under this authorization, up to $25.0 million of
the $125 million authorization may be used to repurchase the Corporation's Preferred Stock through December 31, 2025.
As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases may
be made from time to time under the 2025 Repurchase Program in open market or privately negotiated transactions, including
without limitation, through accelerated share repurchase transactions. The 2025 Repurchase Program may be discontinued at
any time.
36
Item 6. [Reserved]
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This Management's Discussion relates to the Corporation, a financial holding company registered under the BHCA and
incorporated under the laws of the Commonwealth of Pennsylvania, and its wholly-owned subsidiaries. Management's
Discussion should be read in conjunction with the Consolidated Financial Statements and other financial information presented
in this Annual Report on Form 10-K.
OVERVIEW
The Corporation is a financial holding company, which, through its wholly-owned banking subsidiary, provides a full range of
consumer and commercial financial services in Pennsylvania, Delaware, Maryland, New Jersey and Virginia.
The Corporation generates the majority of its revenue through net interest income, or the difference between interest earned on
loans and investments and interest paid on deposits and borrowings. Growth in net interest income is dependent upon balance
sheet growth and maintaining or increasing the NIM, which is FTE net interest income as a percentage of average interest-
earning assets. The Corporation also generates revenue through fees earned on the various services and products offered to its
customers and through gains on sales of assets, such as loans, investments and properties. Offsetting these revenue sources are
provisions for credit losses on loans and OBS credit risks, non-interest expenses and income taxes.
The following table presents a summary of the Corporation's earnings and selected performance ratios:
2024
2023
2022
(dollars in thousands, except per share)
Net income
$ 288,743
$ 284,280
$ 286,981
Net income available to common shareholders
$ 278,495
$ 274,032
$ 276,733
Net income available to common shareholders per share (diluted)
$
1.57
$
1.64
$
1.67
Operating net income available to common shareholders per share(1)
$
1.85
$
1.71
$
1.76
Return on average assets
0.95 %
1.04 %
1.10 %
Operating return on average assets(1)
1.11 %
1.08 %
1.16 %
Return on average common shareholders' equity
9.83 %
11.24 %
11.69 %
Operating return on average common shareholders' equity (tangible)(1)
14.81 %
15.21 %
16.08 %
Net interest margin(2)
3.42 %
3.42 %
3.27 %
Efficiency ratio(1)
60.8 %
60.5 %
60.5 %
Non-performing assets to total assets
0.69 %
0.56 %
0.66 %
Net charge-offs to average loans, annualized
0.19 %
0.14 %
0.04 %
(1)
Ratio represents a financial measure derived by methods other than GAAP. See reconciliation of this non-GAAP financial measure to the most directly
comparable GAAP measure under the "Supplemental Reporting of Non-GAAP Based Financial Measures" section of Management's Discussion.
(2)
Presented on a FTE basis using a 21% federal tax rate and statutory interest expense disallowances.
Acquisition of Substantially all of the Assets and Assumption of Substantially all of the Deposits and Certain Liabilities of
Republic First Bank from the FDIC
On the Acquisition Date, Fulton Bank acquired substantially all of the assets and assumed substantially all of the deposits and
certain liabilities of Republic First Bank from the FDIC, as receiver for Republic First Bank. As part of the Republic First
Transaction, the Bank acquired approximately $4.8 billion of assets of Republic First Bank and assumed approximately $5.6
billion of liabilities of Republic First Bank. The Bank received approximately $0.8 billion of cash from the FDIC in connection
with the Republic First Transaction.
As a result of the Republic First Transaction, the Bank enhanced its presence in Philadelphia, Pennsylvania and New Jersey.
In connection with the Republic First Transaction, Fulton Bank made a $5.0 million donation to the Fulton Forward Foundation
to provide additional impact grants to nonprofit community organizations across the region that share the Bank’s vision of
advancing economic empowerment, particularly in underserved communities.
37
During the fourth quarter of 2024, as part of the Bank's Republic First Transaction integration, the Corporation closed 13 of the
Bank's financial center locations and consolidated the operations of those locations into nearby financial center locations
operated by the Bank. The premises and equipment of the 13 locations included five locations owned by the Bank and eight
locations leased by the Bank. The Corporation recorded pre-tax costs of approximately $9.8 million reflected in acquisition-
related expenses in the Consolidated Statements of Income for the year ended December 31, 2024, consisting of write-offs of
premises and equipment and related expenses, severance expenses and lease termination charges.
See "Note 2 - Business Combinations" in the Notes to Consolidated Financial Statements in Part 1, "Item 1. Financial
Statements."
Common Stock Offering
On May 1, 2024, the Corporation completed its underwritten public offering of 19,166,667 shares of its common stock at a
price to the public of $15.00 per share, before underwriting discounts. The net proceeds to the Corporation from the offering
after deducting underwriting discounts and transaction expenses were approximately $272.6 million.
Sale-Leaseback Transaction
On May 10, 2024, the Bank and Fulton Financial Realty Company, a wholly owned subsidiary of the Corporation, entered into
the Sale-Leaseback Transaction and received an aggregate cash purchase price of $55.4 million. The Bank leased each of the
locations sold in the Sale-Leaseback Transaction for an initial term of 15 years, with the option to extend the term of each for
up to three successive terms of up to five years each. The Corporation recorded a pre-tax gain, after deduction of transaction-
related expenses, of approximately $20.3 million in connection with the Sale-Leaseback Transaction during the second quarter
of 2024. See "Note 18 - Leases" in the Notes to Consolidated Financial Statements in "Item 1. Financial Statements."
Securities Restructuring
In May 2024, the Corporation sold approximately $345.7 million AFS securities and recorded a pre-tax loss of $20.3 million
during the second quarter of 2024. The proceeds from the sale were reinvested into higher-yielding securities of a similar type
and similar duration.
Borrowings
In November 2024, the Corporation retired $168.8 million of subordinated notes issued in November 2014 and June 2015
which matured on November 15, 2024. See "Note 10 - Borrowings" in the Notes to Consolidated Financial Statements in "Item
1. Financial Statements."
Financial Highlights
Net Income Available to Common Shareholders and Net Income Per Share - Net income available to common shareholders was
$278.5 million for the year ended December 31, 2024, a $4.5 million increase compared to $274.0 million in 2023. Net income
available to common shareholders per diluted share was $1.57 for the year ended December 31, 2024, a $0.07 decrease
compared to $1.64 in 2023.
Year Ended December 31, 2024 Results were Impacted by the Following Items:
•
Preliminary gain on acquisition of $37.0 million (net of tax).
•
CDI of $92.6 million in connection with the Republic First Transaction resulting in intangible amortization expense of
$15.7 million.
•
Provision for credit losses of $23.4 million related to non-PCD Loans acquired in the Republic First Transaction.
•
Acquisition-related expenses of $37.6 million.
•
FultonFirst implementation and asset disposal costs of $32.0 million.
In the fourth quarter of 2024, in connection with the FultonFirst initiative, the Corporation recorded pre-tax costs of $8.5
million in connection with the Corporation's plan to consolidate 15 financial centers in early 2025. The pre-tax costs of $8.5
38
million consisted of write-offs of premises and equipment and related expenses, severance expenses and lease termination
charges.
Supplemental Reporting of Non-GAAP Based Financial Measures
This Annual Report on Form 10-K contains supplemental financial information, as detailed below, that has been derived by
methods other than 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 consolidated financial statements in their entirety.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow:
2024
2023
2022
(dollars in thousands, except per share data)
Operating net income available to common shareholders
Net income available to common shareholders
$
278,495
$
274,032
$
276,733
Less: Other revenue
(1,805)
1,855
—
Less: Gain on acquisition, net of tax
(36,996)
—
—
Plus: Loss on securities restructuring
20,282
—
—
Plus: Core deposit intangible amortization
17,307
2,308
1,029
Plus: Acquisition-related expense
37,635
—
10,328
Plus: CECL Day 1 Provision
23,444
—
7,954
Plus: FDIC special assessment
940
6,494
—
Less: Gain on Sale-Leaseback Transaction
(20,266)
—
—
Plus: FultonFirst implementation and asset disposals
32,038
3,197
—
Less: Tax impact of adjustments
(23,011)
(2,909)
(4,055)
Operating net income available to common shareholders (numerator)
$
328,063
$
284,977
$
291,989
Weighted average shares (diluted) (denominator)
177,223
166,769
165,472
Operating net income available to common shareholders, per share
(diluted)
$
1.85
$
1.71
$
1.76
39
2024
2023
2022
(dollars in thousands)
Operating return on average assets
Net income
$
288,743
$
284,280
$
286,981
Plus: Other revenue
(1,805)
1,855
—
Less: Gain on acquisition, net of tax
(36,996)
—
—
Plus: Loss on securities restructuring
20,282
—
—
Plus: Core deposit intangible amortization
17,307
2,308
1,029
Plus: Acquisition-related expense
37,635
—
10,328
Plus: CECL Day 1 Provision
23,444
—
7,954
Plus: FDIC special assessment
940
6,494
—
Less: Gain on Sale-Leaseback Transaction
(20,266)
—
—
Plus: FultonFirst implementation and asset disposals
32,038
3,197
—
Less: Tax impact of adjustments
(23,011)
(2,909)
(4,055)
Operating net income (numerator)
$
338,311
$
295,225
$
302,237
Total average assets
$ 30,473,130
$ 27,229,704
$ 25,971,484
Less: Average net core deposit intangible
(61,810)
(5,996)
(3,915)
Total average operating assets (denominator)
$ 30,411,320
$ 27,223,708
$ 25,967,569
Operating return on average assets
1.11 %
1.08 %
1.16 %
Operating return on average common shareholders' equity (tangible)
Net income available to common shareholders
$
278,495
$
274,032
$
276,733
Plus: Other revenue
(1,805)
1,855
—
Less: Gain on acquisition, net of tax
(36,996)
—
—
Plus: Loss on securities restructuring
20,282
—
Plus: Intangible amortization
17,830
2,944
1,731
Plus: Acquisition-related expense
37,635
—
10,328
Plus: CECL Day 1 Provision
23,444
—
7,954
Plus: FDIC special assessment
940
6,494
—
Less: Gain on Sale-Leaseback Transaction
(20,266)
—
—
Plus: FultonFirst implementation and asset disposals
32,038
3,197
—
Less: Tax impact of adjustments
(23,121)
(3,043)
(4,203)
Adjusted net income available to common shareholders (numerator)
$
328,476
$
285,479
$
292,543
Average shareholders' equity
$ 3,025,642
$ 2,631,249
$ 2,560,323
Less: Average goodwill and intangible assets
(615,156)
(561,858)
(548,102)
Less: Average preferred stock
(192,878)
(192,878)
(192,878)
Average tangible common shareholders' equity (denominator)
$ 2,217,608
$ 1,876,513
$ 1,819,343
Return on average common shareholders' equity (tangible)
14.81 %
15.21 %
16.08 %
40
2024
2023
2022
(dollars in thousands)
Efficiency ratio
Non-interest expense
$
819,791
$
679,207
$
633,728
Less: Amortization of tax credit investments
—
—
(2,783)
Less: Intangible amortization
(17,830)
(2,944)
(1,731)
Less: Acquisition-related expense
(37,635)
—
(10,328)
Less: Debt extinguishment gain (cost)
—
720
—
Less: FDIC special assessment
(940)
(6,494)
—
Less: Gain on Sale-Leaseback Transaction
20,266
—
—
Less: FultonFirst implementation and asset disposals
(32,038)
(3,197)
—
Non-interest expense (numerator)
$
751,614
$
667,292
$
618,886
Net interest income
$
960,325
$
854,286
$
781,634
Tax equivalent adjustment
17,915
17,811
14,995
Plus: Total non-interest income
275,731
227,678
227,130
Plus: Other revenue
(1,805)
1,855
—
Less: Gain on acquisition, net of tax
(36,996)
—
—
Plus: Investment securities losses (gains), net
20,283
733
27
Total revenue (denominator)
$ 1,235,453
$ 1,102,363
$ 1,023,786
Efficiency ratio
60.8 %
60.5 %
60.5 %
CRITICAL ACCOUNTING POLICIES
The following is a summary of those accounting policies that the Corporation considers to be most important to the presentation
of its financial condition and results of operations, because they require management's most difficult judgments as a result of
the need to make estimates about the effects of matters that are inherently uncertain. See additional information regarding these
critical accounting policies in "Note 1 - Summary of Significant Accounting Policies," in the Notes to the Consolidated
Financial Statements in "Item 8. Financial Statements and Supplementary Data."
Allowance for Credit Losses - The ACL is based on estimated losses over the remaining expected life of loans. Management's
determination of the appropriateness of the reserve is based on periodic evaluations of the loan portfolio, lending-related
commitments, current and forecasted economic factors and other relevant factors.
Loans Evaluated Collectively: Loans evaluated collectively for expected credit losses include all accruing loans and non-accrual
loans where the total commitment amount is less than $1 million. In determining the ACL, the Corporation uses three inputs to
model the estimate. These inputs are the PD rate which estimates the likelihood that a borrower will be unable to meet its debt
obligations, the LGD rate which estimates the percentage of an asset that is lost if a borrower defaults, and the EAD balance
which estimates the gross exposure under a facility upon default. The PD models were developed based on historical default
data. Both internal and external variables are evaluated in the process. The main internal variables are risk rating or delinquency
history and indicators of default. The external variables are economic variables obtained from third-party forecasts.
The PD models are transition matrix models that utilize historical credit observations and incorporate economic forecasts to
project future default rates using a linear regression methodology for each loan segment. The LGD model uses a vintage loss
approach that estimates LGD rates based on the bank’s historical loss experience for each loan segment. The EAD incorporates
a prepayment rate and applies the PD rates to estimate the projected exposure at default across the life of each loan. The ACL is
calculated by applying the LGD to the EAD at each period across the life of each loan.
The ACL incorporates the Corporation’s historical credit observations, current conditions, and reasonable and supportable
forecasts that are based on the projected performance of specific economic variables that are statistically correlated with
historical PD rates. The reasonable and supportable forecast extends to 24 months and reverts back to an average PD rate using
a straight-line reversion methodology over a 12 month period.
41
The ACL is highly sensitive to the economic forecasts used to develop the reserve. As such, the calculation of the ACL is
inherently subjective and requires management to exercise judgment.
The ACL may include qualitative adjustments intended to capture the impact of uncertainties not reflected in the quantitative
models. In determining qualitative adjustments, management considers changes in national, regional, and local economic and
business conditions and their impact on the lending environment, including underwriting standards and other factors affecting
credit losses over the remaining life of each loan.
The ACL for loans was $379.2 million and $293.4 million on December 31, 2024 and December 31, 2023, respectively. The
increase of $85.8 million was primarily a result of the Republic First Transaction, which included $54.6 million for PCD Loans
and $23.4 million recorded through the provision for credit losses at the Acquisition Date for non-PCD Loans.
The Corporation performs loan loss sensitivity analysis on a quarterly basis to determine the impact of varying economic
conditions based on third-party forecasts. Our sensitivity analysis does not represent management's view of expected credit
losses at the balance sheet date. One scenario identified includes a highly adverse economic environment. This scenario resulted
in a hypothetical increase to the ACL of approximately $39.5 million.
For further discussion of the methodology used in the determination of the ACL, refer to Note 1, "Summary of Significant
Accounting Policies" in the Notes to the Consolidated Financial Statements in "Item 8. Financial Statements and Supplementary
Data."
Income Taxes - Income tax expense is based upon income before taxes, adjusted for the effect of certain tax-exempt income,
non-deductible expenses and credits. In addition, certain items of income and expense are reported in different periods for
financial reporting and tax return purposes. The tax effects of these temporary differences are recognized currently in the
deferred income tax provision or benefit. DTAs or deferred tax liabilities are computed based on the difference between the
financial statement and income tax bases of assets and liabilities using the applicable enacted marginal tax rate.
The Corporation must also evaluate the likelihood that DTAs will be recovered through future taxable income. If any such
assets are determined to be more likely than not unrecoverable, then a valuation allowance must be recognized. The assessment
of the carrying value of DTAs is based on certain assumptions, the changes of which could have a material impact on the
Corporation's consolidated financial statements.
On a periodic basis, the Corporation evaluates its income tax expense based on tax laws, regulations and financial reporting
considerations and records adjustments as appropriate. Recognition and measurement of tax positions is based upon
management's evaluations of current taxing authorities' examinations of the Corporation's tax returns, recent positions taken by
the taxing authorities on similar transactions and the overall tax environment.
Income tax expense was $55.9 million and $64.4 million for the years ended December 31, 2024 and December 31, 2023,
respectively.
Recently Issued Accounting Standards
For a description of accounting standards recently issued, but not yet adopted by the Corporation, see "Recently Issued
Accounting Standards," in "Note 1 - Summary of Significant Accounting Policies" in the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data."
42
RESULTS OF OPERATIONS
Net Interest Income
FTE net interest income was $978.2 million for the year ended December 31, 2024, an increase of $106.1 million, compared to
$872.1 million for the same period in 2023. For the twelve months ended December 31, 2024 and December 31, 2023, NIM
was 3.42%. The Corporation manages the risk associated with changes in interest rates through the techniques described within
Item "7A. Quantitative and Qualitative Disclosures About Market Risk." The following table provides a comparative average
balance sheet and net interest income analysis for 2024 compared to 2023 and 2022. Interest income and yields are presented on
an FTE basis using a 21% federal tax rate as well as statutory interest expense disallowances. The discussion following this
table is based on these tax-equivalent amounts.
Average
Balance
Interest (1)
Yield/
Rate
Average
Balance
Interest (1)
Yield/
Rate
Average
Balance
Interest (1)
Yield/
Rate
(dollars in thousands)
ASSETS
Interest-earning assets:
Net loans(2)
$ 23,145,114
$ 1,406,216
6.08 %
$ 20,929,302
$ 1,166,376
5.57 %
$ 19,152,740
$ 765,603
4.00 %
Investment securities(3)
4,486,726
143,317
3.19
4,210,010
109,325
2.59
4,364,627
106,115
2.43
Other interest-earning assets
962,971
50,578
5.25
387,360
15,346
3.96
829,705
8,115
0.98
Total interest-earning assets
28,594,811
1,600,111
5.60
25,526,672
1,291,047
5.06
24,347,072
879,833
3.61
Noninterest-earning assets:
Cash and due from banks
295,156
215,649
156,050
Premises and equipment
197,823
219,315
220,982
Other assets
1,761,083
1,553,284
1,505,277
Less: ACL - loans (4)
(375,743)
(285,216)
(257,897)
Total Assets
$ 30,473,130
$ 27,229,704
$ 25,971,484
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits
$ 7,049,915
$ 128,969
1.83 %
$ 5,582,930
$
62,494
1.12 %
$ 5,593,942
$
8,219
0.15 %
Savings and money market deposits
7,364,106
180,455
2.45
6,616,087
122,340
1.85
6,458,165
16,642
0.26
Brokered deposits
981,060
51,691
5.27
847,795
43,635
5.15
262,359
4,097
1.56
Time deposits
3,747,029
160,744
4.29
2,170,245
63,735
2.94
1,617,804
14,871
0.92
Total interest-bearing deposits
19,142,110
521,859
2.73
15,217,057
292,204
1.92
13,932,270
43,829
0.31
Borrowings and other interest-bearing
liabilities
2,280,382
100,012
4.39
2,771,330
126,746
4.54
1,358,357
39,375
2.89
Total interest-bearing liabilities
21,422,492
621,871
2.90
17,988,387
418,950
2.32
15,290,627
83,204
0.54
Noninterest-bearing liabilities:
Demand deposits
5,394,518
5,939,799
7,522,304
Other liabilities
630,478
670,269
598,230
Total Liabilities
27,447,488
24,598,455
23,411,161
Shareholders' equity
3,025,642
2,631,249
2,560,323
Total Liabilities and
Shareholders' Equity
$ 30,473,130
$ 27,229,704
$ 25,971,484
Net interest income/net interest margin
(FTE)
978,240
3.42 %
872,097
3.42 %
796,629
3.27 %
Tax equivalent adjustment
(17,915)
(17,811)
(14,995)
Net interest income
$ 960,325
$ 854,286
$ 781,634
2024
2023
2022
(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances.
(2) Average balances include non-performing loans.
(3) Average balances include amortized historical cost for AFS securities; the related unrealized holding gains (losses) are included in other assets.
(4) ACL - loans relates to the ACL specifically for net loans and does not include the ACL for OBS credit exposures, which is included in other liabilities.
43
Comparison of 2024 to 2023
The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average
balances (volumes) and changes in yields and rates:
2024 versus 2023
Increase (decrease) due to change in
Volume
Yield/Rate
Net
(dollars in thousands)
FTE interest income on:
Net loans(1)
$
128,611
$
111,229
$
239,840
Investment securities
7,513
26,479
33,992
Other interest-earning assets
28,897
6,335
35,232
Total FTE interest income
$
165,021
$
144,043
$
309,064
Interest expense on:
Demand deposits
$
19,480
$
46,995
$
66,475
Savings and money market deposits
15,022
43,093
58,115
Brokered deposits
7,016
1,040
8,056
Time deposits
59,441
37,568
97,009
Borrowings and other interest-bearing liabilities
(22,532)
(4,202)
(26,734)
Total interest expense
$
78,427
$
124,494
$
202,921
(1) Average balance includes non-performing loans.
Note:
Changes which are partially attributable to both volume and rate are allocated to the volume and rate components presented above based on the
percentage of the direct changes that are attributable to each component.
Compared to 2023, FTE total interest income for 2024 increased $309.1 million due to increases of $144.0 million attributable
to changes in yield and $165.0 million attributable to changes in volume. The increase due to changes in yield was largely due
to an increase in net loans. The increase due to changes in volume was due to an increase in average net loans.
The yield on average interest-earning assets increased 54 bps in 2024 compared to 2023.
In 2024, interest expense increased $202.9 million compared to 2023, primarily driven by an increase in rate on interest-bearing
liabilities resulting in a $124.5 million increase in interest expense. The increase in interest expense attributable to rate was
driven by increases in interest-bearing demand deposits, savings and money market deposits and time deposits. The increase in
interest expense attributable to volume was $78.4 million primarily driven by increases in time deposits, interest-bearing
demand deposits and savings and money market deposits, partially offset by a decrease in borrowings and other interest-bearing
liabilities.
The rate on average interest-bearing liabilities increased 58 bps in 2024 compared to 2023.
Average loans and average FTE yields, by type, are summarized in the following table:
2024
2023
Increase (Decrease)
Balance
Yield
Balance
Yield
$
%
(dollars in thousands)
Real estate - commercial mortgage
$ 9,052,738
6.51 % $ 7,876,076
5.97 % $ 1,176,662
14.9 %
Commercial and industrial
4,779,254
6.67
4,596,742
6.27
182,512
4.0
Real estate - residential mortgage
5,925,708
4.31
5,079,739
3.76
845,969
16.7
Real estate - home equity
1,060,520
7.43
1,060,396
6.95
124
—
Real estate - construction
1,275,562
7.61
1,247,336
6.81
28,226
2.3
Consumer
725,308
6.67
748,089
5.94
(22,781)
(3.0)
Leases and other loans(1)
326,024
5.77
320,924
4.37
5,100
1.6
Total loans
$ 23,145,114
6.08 % $ 20,929,302
5.57 % $ 2,215,812
10.6 %
(1) Consists of equipment lease financing, overdrafts and net origination fees and costs.
44
During 2024, average net loans increased $2.2 billion, or 10.6%, compared to 2023. The increase in average net loans was
primarily due to approximately $2.4 billion of total loans acquired in the Republic First Transaction and outstanding as of
December 31, 2024. Overall, the increase in average net loans was largely driven by increases in average commercial mortgage
loans, average residential mortgage loans and average commercial and industrial loans of $1.2 billion, $846.0 million and
$182.5 million, respectively. The yield on total loans increased 51 bps to 6.08% in 2024 compared to 5.57% in 2023.
Average deposits and interest rates, by type, are summarized in the following table:
2024
2023
Increase (Decrease)
Balance
Rate
Balance
Rate
$
%
(dollars in thousands)
Noninterest-bearing demand
$ 5,394,518
— % $ 5,939,799
— % $ (545,281)
(9.2) %
Interest-bearing demand
7,049,915
1.83
5,582,930
1.12
1,466,985
26.3
Savings and money market deposits
7,364,106
2.45
6,616,087
1.85
748,019
11.3
Total demand deposits and savings and
money market deposits
19,808,539
1.56
18,138,816
1.02
1,669,723
9.2
Brokered deposits
981,060
5.27
847,795
5.15
133,265
15.7
Time deposits
3,747,029
4.29
2,170,245
2.94
1,576,784
72.7
Total deposits
$ 24,536,628
2.13 % $ 21,156,856
1.38 % $ 3,379,772
16.0 %
The cost of total deposits increased 75 bps to 2.13% in 2024 compared to 1.38% in 2023, primarily due to rising interest rates
and a change in mix of deposits. Average deposits increased $3.4 billion, or 16.0%, compared to 2023. The increase in average
total deposits was primarily due to approximately $3.7 billion of total deposits assumed in the Republic First Transaction and
outstanding as of December 31, 2024. The increase in average deposits occurred primarily in average time deposits, average
interest-bearing demand deposits and average savings and money market deposits, which increased $1.6 billion, $1.5 billion
and $748.0 million, respectively, partially offset by a decrease in average noninterest-bearing demand deposits of $545.3
million.
Average borrowings and interest rates, by type, are summarized in the following table:
2024
2023
Increase (Decrease)
Balance
Rate
Balance
Rate
$
%
(dollars in thousands)
Federal funds purchased
$
51,306
5.52 % $
566,379
5.30 % $ (515,073)
(90.9)
Federal Home Loan Bank advances
804,328
4.30
922,164
5.05
(117,836)
(12.8) %
Senior debt and subordinated debt
514,073
3.66
539,726
3.96
(25,653)
(4.8)
Other borrowings and other interest-
bearing liabilities(1)
910,675
3.66
743,061
3.77
167,614
22.6
Total borrowings and other interest-
bearing liabilities
$ 2,280,382
4.39 % $ 2,771,330
4.54 % $ (490,948)
(17.7) %
(1) Includes repurchase agreements, short-term promissory notes, capital leases and collateral liabilities.
Average borrowings and other interest-bearing liabilities decreased $490.9 million during 2024 compared to 2023. The
decrease in average borrowings and other interest-bearing liabilities was primarily due to decreases in federal funds purchased
and average FHLB advances of $515.1 million and $117.8 million, respectively, partially offset by an increase in average other
interest-bearing liabilities of $167.6 million.
In November 2024, the Corporation retired $168.8 million of subordinated notes issued in November 2014 and June 2015
which matured on November 15, 2024.
See "Note 10 - Borrowings" of the Notes to Consolidated Financial Statements for additional details.
Provision for Credit Losses
The provision for credit losses was $71.6 million in 2024 compared to $54.0 million in 2023. The increase was primarily due to
the Republic First Transaction, which included a provision for credit losses of $23.4 million for non-PCD Loans, partially offset
45
by an elevated level of provision for credit losses in the same period in 2023 due to a $13.3 million charge-off for a commercial
office loan.
Non-Interest Income
The following table presents the components of non-interest income:
Increase (Decrease)
2024
2023
$
%
(dollars in thousands)
Wealth management
$
84,743 $
75,541 $
9,202
12.2 %
Commercial banking:
Merchant and card
29,186
29,205
(19)
—
Cash management
28,106
23,340
4,766
20.4
Capital markets
11,033
15,654
(4,621)
(29.5)
Other commercial banking
16,657
12,961
3,696
28.5
Total commercial banking
84,982
81,160
3,822
4.7
Consumer banking:
Card
30,914
26,343
4,571
17.4
Overdraft
13,764
11,416
2,348
20.6
Other consumer banking
10,826
9,438
1,388
14.7
Total consumer banking
55,504
47,197
8,307
17.6
Mortgage banking
13,943
10,388
3,555
34.2
Other
19,846
14,125
5,721
40.5
Non-interest income before investment securities gains
(losses) and gain on acquisition, net of tax
259,018
228,411
30,607
13.4
Gain on acquisition, net of tax
36,996
—
36,996
N/M
Investment securities losses, net
(20,283)
(733)
(19,550)
N/M
Total Non-Interest Income
$
275,731 $
227,678 $
48,053
21.1 %
Non-interest income before investment securities losses and gain on acquisition, net of tax increased $30.6 million, or 13.4%,
during 2024 compared to 2023. The increase in non-interest income was partially due to $7.7 million from acquired operations
in the Republic First Transaction. The remaining increase of $22.9 million included a $9.2 million increase in wealth
management revenues due to an increase in assets under management, a $4.3 million increase in cash management fee income
due to an increase in account analysis fees with customers electing to move funds to interest-bearing deposit accounts, a $3.6
million increase in mortgage banking income primarily due to higher loan volumes and spreads, a $1.8 million increase in SBA
income largely due to higher loan sale volumes, a $1.6 million increase in income from bank owned life insurance and a $1.7
million increase in debit card fee income.
In May 2024, the Corporation sold $345.7 million of AFS securities and recorded a pre-tax loss of $20.3 million. The proceeds
from the sale were reinvested into higher yielding securities of a similar type and similar duration.
46
Non-Interest Expense
The following table presents the components of non-interest expense:
Increase (Decrease)
2024
2023
$
%
(dollars in thousands)
Salaries and employee benefits
$
424,733 $
376,795 $
47,938
12.7 %
Data processing and software
77,882
66,471
11,411
17.2
Net occupancy
69,359
58,019
11,340
19.5
Other outside services
47,811
45,149
2,662
5.9
FDIC insurance
23,829
25,565
(1,736)
(6.8)
Equipment
17,850
14,390
3,460
24.0
Marketing
8,958
9,004
(46)
(0.5)
Professional fees
10,681
8,392
2,289
27.3
Intangible amortization
17,830
2,944
14,886
N/M
Other
71,451
69,281
2,170
3.1
Subtotal
770,384
676,010
94,374
14.0 %
Gain on Sale-Leaseback Transaction
(20,266)
—
(20,266)
N/M
Acquisition-related expenses
37,635
—
37,635
N/M
FultonFirst implementation and asset disposals
32,038
3,197
28,841
N/M
Total Non-Interest Expense
$
819,791 $
679,207 $
140,584
20.7 %
Non-interest expense in 2024 increased $140.6 million, or 20.7%, compared to 2023. Excluding the gain on the Sale-Leaseback
Transaction, acquisition-related expenses and FultonFirst implementation and asset disposal costs, non-interest expense
increased $94.4 million, or 14.0%, in 2024 compared to 2023. The increase in non-interest expense was primarily due to $71.9
million from acquired operations in the Republic First Transaction, including $15.7 million of CDI amortization expense, and
$21.5 million in salaries and benefits expense driven by annual merit increases, higher incentive compensation expense and
lower deferred costs from loan origination activities.
Income Taxes
Income tax expense for 2024 was $55.9 million, an $8.6 million decrease compared to 2023. The Corporation's ETR was 16.2%
in 2024. Excluding the impact from the $37.0 million gain on acquisition, net of tax, the Corporation's ETR was 18.2%
compared to 18.5% in 2023. The decrease in income tax expense in 2024 resulted primarily from the lower ETR. The ETR is
generally lower than the federal statutory rate of 21% due to tax-exempt interest income earned on loans, investments in tax-
free municipal securities and TCIs that generate tax credits under various federal programs.
47
Comparison of 2023 to 2022
The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average
balances (volumes) and changes in yields and rates:
2023 versus 2022
Increase (decrease) due to change in
Volume
Yield/Rate
Net
(dollars in thousands)
FTE interest income on:
Net loans(1)
$
76,608 $
324,165 $
400,773
Investment securities
(3,763)
6,973
3,210
Other interest-earning assets
(6,298)
13,529
7,231
Total FTE interest income
$
66,547 $
344,667 $
411,214
Interest expense on:
Demand deposits
$
(17) $
54,292 $
54,275
Savings and money market deposits
421
105,277
105,698
Brokered deposits
19,464
20,074
39,538
Time deposits
6,577
42,287
48,864
Borrowings
56,410
30,961
87,371
Total interest expense
$
82,855 $
252,891 $
335,746
(1) Average balance includes non-performing loans.
Note:
Changes which are partially attributable to both volume and rate are allocated to the volume and rate components presented above based on the
percentage of the direct changes that are attributable to each component.
Compared to 2022, FTE total interest income for 2023 increased $411.2 million due to increases of $344.7 million attributable
to changes in yield and $66.5 million attributable to changes in volume. The increase due to changes in yield was largely due to
an increase in net loans. The increase due to changes in volume was due to an increase in average net loans, partially offset by
decreases in average other interest-earning assets and investment securities.
The yield on average interest-earning assets increased 145 bps in 2023 compared to 2022.
In 2023, interest expense increased $335.7 million compared to 2022, primarily driven by an increase in rate on interest-bearing
liabilities resulting in a $252.9 million increase in interest expense. The increase in interest expense attributable to rate was
driven by the increases in savings and money market deposits, interest-bearing demand deposits, time deposits, borrowings and
other interest-bearing liabilities and brokered deposits. The increase in interest expense attributable to volume was $82.9
million, primarily driven by increases in borrowings and other interest-bearing liabilities and brokered deposits.
The rate on average interest-bearing liabilities increased 178 bps in 2023 compared to 2022.
Average loans and average FTE yields, by type, are summarized in the following table:
2023
2022
Increase (Decrease)
Balance
Yield
Balance
Yield
$
%
(dollars in thousands)
Real estate - commercial mortgage
$ 7,876,076
5.97 % $ 7,523,806
4.00 % $ 352,270
4.7 %
Commercial and industrial
4,596,742
6.27
4,230,133
4.13
366,609
8.7
Real estate - residential mortgage
5,079,739
3.76
4,261,527
3.38
818,212
19.2
Real estate - home equity
1,060,396
6.95
1,101,142
4.60
(40,746)
(3.7)
Real estate - construction
1,247,336
6.81
1,178,550
4.14
68,786
5.8
Consumer
748,089
5.94
569,305
5.11
178,784
31.4
Leases and other loans (1)
320,924
4.37
288,277
6.04
32,647
11.3
Total loans
$ 20,929,302
5.57 % $ 19,152,740
4.00 % $ 1,776,562
9.3 %
(1) Consists of equipment lease financing, overdrafts and net origination fees and costs.
48
During 2023, average loans increased $1.8 billion, or 9.3%, compared to 2022. The increase was largely driven by increases in
average residential mortgage loans, average commercial and industrial loans, average commercial mortgage loans, average
consumer loans and average construction loans of $818.2 million, $366.6 million, $352.3 million, $178.8 million and $68.8
million, respectively. The yield on total loans increased 157 bps to 5.57% in 2023 compared to 4.00% in 2022.
Average deposits and interest rates, by type, are summarized in the following table:
2023
2022
Increase (Decrease)
Balance
Rate
Balance
Rate
$
%
(dollars in thousands)
Noninterest-bearing demand
$ 5,939,799
— % $ 7,522,304
— % $ (1,582,505)
(21.0) %
Interest-bearing demand
5,582,930
1.12
5,593,942
0.15
(11,012)
(0.2)
Savings and money market deposits
6,616,087
1.85
6,458,165
0.26
157,922
2.4
Total demand and savings and money
market deposits
18,138,816
1.02
19,574,411
0.13
(1,435,595)
(7.3)
Brokered deposits
847,795
5.15
262,359
1.56
585,436
N/M
Time deposits
2,170,245
2.94
1,617,804
0.92
552,441
34.1
Total deposits
$ 21,156,856
1.38 % $ 21,454,574
0.20 % $ (297,718)
(1.4) %
The cost of total deposits increased 118 bps to 1.38% in 2023 compared to 0.20% in 2022, primarily due to rising interest rates
and a change in mix of deposits. Average deposits decreased $297.7 million driven by a $1.6 billion decrease in average
noninterest-bearing demand deposits, partially offset by increases in average brokered deposits, average time deposits and
average savings and money market deposits of $585.4 million, $552.4 million and $157.9 million, respectively.
Average borrowings and interest rates, by type, are summarized in the following table:
2023
2022
Increase (Decrease)
Balance
Rate
Balance
Rate
$
%
(dollars in thousands)
Federal funds purchased
$ 566,379
5.30 % $
91,125
3.21 % $ 475,254
N/M
Federal Home Loan Bank advances
922,164
5.05
194,295
3.77
727,869
N/M
Senior debt and subordinated debt
539,726
3.96
564,337
3.94
(24,611)
(4.4)
Other borrowings and other interest-bearing
liabilities(1)
743,061
3.77
508,600
1.34
234,461
46.1
Total borrowings and other interest-bearing
liabilities
$ 2,771,330
4.54 % $ 1,358,357
2.89 % $ 1,412,973
104.0 %
(1) Includes repurchase agreements, short-term promissory notes, capital leases and collateral liabilities.
Average borrowings and other interest-bearing liabilities increased $1.4 billion during 2023 compared to 2022, primarily as a
result of an increase in average net loans and a decrease in average total deposits. Average FHLB advances, average federal
funds purchased and average other borrowings and other interest-bearing liabilities increased $727.9 million, $475.3 million
and $234.5 million, respectively. See "Note 10 - Borrowings" of the Notes to Consolidated Financial Statements for additional
details.
49
Non-Interest Income
The following table presents the components of non-interest income:
2023
2022
$
%
(dollars in thousands)
Wealth management
$
75,541 $
72,843 $
2,698
3.7
Commercial banking:
Merchant and card
29,205
28,276
929
3.3 %
Cash management
23,340
23,729
(389)
(1.6)
Capital markets
15,654
12,256
3,398
27.7
Other commercial banking
12,961
11,518
1,443
12.5
Total commercial banking
81,160
75,779
5,381
7.1
Consumer banking:
Card
26,343
24,472
1,871
7.6
Overdraft
11,416
15,480
(4,064)
(26.3)
Other consumer banking
9,438
9,544
(106)
(1.1)
Total consumer banking
47,197
49,496
(2,299)
(4.6)
Mortgage banking
10,388
14,204
(3,816)
(26.9)
Other
14,125
14,835
(710)
(4.8)
Non-interest income before investment securities gains
(losses)
228,411
227,157
1,254
0.6
Investment securities (losses) gains, net
(733)
(27)
(706)
N/M
Total Non-Interest Income
$
227,678 $
227,130 $
548
0.2 %
Increase (Decrease)
Non-interest income before investment securities gains (losses) increased $1.3 million, or 0.6%, during 2023 compared to 2022.
The increase in non-interest income was primarily due to increases in commercial banking revenues of $5.4 million, largely
driven by an increase in commercial customer interest rate swap fee income reflected in capital markets, an increase in wealth
management of $2.7 million, due to an increase in assets under management, and an increase in the cash surrender value of
bank owned life insurance agreements of $1.7 million, reflected in other non-interest income, partially offset by decreases in
mortgage banking income of $3.8 million, mainly due to lower sales volumes and lower gains on sales margins, consumer
banking income of $2.3 million, driven largely by decreases in overdraft fees, and a $1.8 million reduction in other non-interest
income to reflect market valuation movement in certain of the Corporation's legacy commercial customer back-to-back interest
rate swap transactions resulting from the transition from LIBOR to SOFR.
50
Non-Interest Expense
The following table presents the components of non-interest expense:
Increase (Decrease)
2023
2022
$
%
(dollars in thousands)
Salaries and employee benefits
$
376,795 $
356,884 $
19,911
5.6 %
Data processing and software
66,471
60,255
6,216
10.3
Net occupancy
58,019
56,195
1,824
3.2
Other outside services
45,149
37,152
7,997
21.5
FDIC insurance
25,565
12,547
13,018
103.8
Equipment
14,390
14,033
357
2.5
Marketing
9,004
6,885
2,119
30.8
Professional fees
8,392
9,123
(731)
(8.0)
Intangible amortization
2,944
1,731
1,213
70.1
Other
69,281
68,595
686
1.0
Subtotal
$
676,010 $
623,400 $
52,610
8.4 %
FultonFirst implementation and asset disposals
3,197
—
3,197
N/M
Acquisition-related expenses
—
10,328
(10,328)
N/M
Total non-interest expense
$
679,207 $
633,728 $
45,479
7.2 %
Non-interest expense in 2023 increased $45.5 million, or 7.2%, compared to 2022. Excluding acquisition-related expenses of
$10.3 million in 2022 and FultonFirst initiatives of $3.2 million in 2023, non-interest expense increased $52.6 million, or 8.4%,
in 2023 compared to 2022. The increase in noninterest expense, excluding acquisition-related expenses and FultonFirst
initiatives, was primarily due to increases of $19.9 million in salaries and employee benefits expense, $13.0 million in FDIC
insurance expense, primarily due to the adoption of a final rule to increase base deposit insurance assessment rates effective
January 1, 2023, and the special assessment of $6.5 million charged to recover the loss to the DIF in connection with the
closures of certain banks in 2023, $8.0 million in other outside services expense largely due to a number of corporate initiatives,
$6.2 million in data processing and software expense due to ongoing investment in technology and customer growth and $2.1
million in marketing expense primarily due to a targeted customer deposit acquisition program and brand marketing campaigns.
The $19.9 million increase in salaries and employee benefits expense was largely due to annual merit increases, an increase in
the number of employees, higher healthcare claims expense and higher pension expense.
Income Taxes
Income tax expense for 2023 was $64.4 million, a $4.4 million increase compared to 2022. The ETR was 18.5% in 2023
compared to 17.3% in 2022. The increase in income tax expense in 2023 resulted primarily from the higher ETR. The ETR is
generally lower than the federal statutory rate of 21% due to tax-exempt interest income earned on loans, investments in tax-
free municipal securities and TCIs that generate tax credits under various federal programs.
51
FINANCIAL CONDITION
The table below presents condensed consolidated ending balance sheets:
December 31,
Increase (Decrease)
2024
2023
$
%
(dollars in thousands)
Assets
Cash and cash equivalents
$ 1,063,871 $
549,710 $
514,161
93.5 %
FRB and FHLB Stock
139,574
124,405
15,169
12.2
Loans held for sale
25,618
15,158
10,460
69.0
Investment securities
4,806,468
3,666,274
1,140,194
31.1
Net loans, less ACL - loans
23,665,763 21,057,690
2,608,073
12.4
Net premises and equipment
195,527
222,881
(27,354)
(12.3)
Goodwill and net intangible assets
635,458
560,687
74,771
13.3
Other assets
1,539,531
1,375,110
164,421
12.0
Total Assets
$ 32,071,810 $ 27,571,915 $ 4,499,895
16.3 %
Liabilities and Shareholders' Equity
Deposits
$ 26,129,433 $ 21,537,623 $ 4,591,810
21.3 %
Borrowings
1,782,048
2,487,526
(705,478)
(28.4)
Other liabilities
963,004
786,627
176,377
22.4
Total Liabilities
28,874,485 24,811,776
4,062,709
16.4
Total Shareholders' Equity
3,197,325
2,760,139
437,186
15.8
Total Liabilities and Shareholders' Equity
$ 32,071,810 $ 27,571,915 $ 4,499,895
16.3 %
Investment Securities
The table below presents the carrying amount of investment securities:
December 31,
Increase (Decrease)
2024
2023
$
%
(dollars in thousands)
Available for Sale
U.S. Government securities
$
— $
42,161 $
(42,161)
N/M
U.S. Government-sponsored agency securities
—
1,010
(1,010)
N/M
State and municipal securities
814,887 1,072,013
(257,126)
(24.0)
Corporate debt securities
300,370
440,551
(140,181)
(31.8)
Collateralized mortgage obligations
788,885
111,434
677,451
N/M
Residential mortgage-backed securities
989,875
196,795
793,080
N/M
Commercial mortgage-backed securities
516,882
534,388
(17,506)
(3.3)
Total available for sale securities
$ 3,410,899 $ 2,398,352 $ 1,012,547
42.2 %
Held to Maturity
Residential mortgage-backed securities
$
537,856 $
407,075 $
130,781
32.1 %
Commercial mortgage-backed securities
857,713
860,847
(3,134)
(0.4)
Total held to maturity securities
$ 1,395,569 $ 1,267,922 $
127,647
10.1 %
Total investment securities
$ 4,806,468 $ 3,666,274 $ 1,140,194
31.1 %
Compared to December 31, 2023, total AFS securities at December 31, 2024 increased $1.0 billion, or 42.2%. The increase in
AFS securities at December 31, 2024 compared to December 31, 2023 was due to increases in residential mortgage-backed
52
securities and collateralized mortgage obligations of $793.1 million and $677.5 million, respectively, partially offset by
decreases in state and municipal securities and corporate debt securities of $257.1 million and $140.2 million, respectively.
Compared to December 31, 2023, total HTM securities at December 31, 2024 increased $127.6 million, or 10.1%. The increase
in HTM securities at December 31, 2024 compared to December 31, 2023 was largely driven by an increase in residential
mortgage-backed securities of $130.8 million.
Loans
The following table presents ending net loans outstanding, by type:
December 31,
Increase (Decrease)
2024
2023
$
%
(dollars in thousands)
Real estate - commercial mortgage
$
9,601,858 $
8,127,728 $
1,474,130
18.1 %
Commercial and industrial(1)
4,605,589
4,545,552
60,037
1.3
Real estate - residential mortgage
6,349,643
5,325,923
1,023,720
19.2
Real estate - home equity
1,160,616
1,047,184
113,432
10.8
Real estate - construction
1,394,899
1,239,075
155,824
12.6
Consumer
616,856
729,318
(112,462)
(15.4)
Leases and other loans(2)
315,458
336,314
(20,856)
(6.2)
Net loans
$ 24,044,919 $ 21,351,094 $
2,693,825
12.6 %
(1) Includes no unearned income for December 31, 2024 and $41.0 thousand at December 31, 2023.
(2) Includes unearned income of $35.6 million and $38.0 million as of December 31, 2024 and 2023, respectively.
During 2024, net loans increased $2.7 billion, or 12.6%, compared to December 31, 2023. The increase in net loans during 2024
was primarily due to $2.4 billion of net loans acquired in the Republic First Transaction and outstanding as of December 31,
2024. The overall increase in net loans was largely due to increases in commercial mortgage loans and residential mortgage
loans, of $1.5 billion and $1.0 billion, respectively.
The Corporation does not have a significant concentration of credit risk with any single borrower. As of December 31, 2024,
approximately $11.0 billion, or 45.7%, of the loan portfolio was comprised of commercial mortgage loans and construction
loans.
The Corporation has established lower total lending limits for certain types of commercial lending commitments and lower total
lending limits based on the Corporation's internal risk rating of an individual borrower at the time the lending commitment is
approved. The Corporation adheres to loan portfolio management practices, which include requiring an annual review of the
majority of loans. Additionally, management monitors the loan portfolio throughout the year taking into account, among other
things, the size, complexity and level risk of loans and individual borrowers. An independent loan review function assesses the
portfolio for internal risk rating accuracy and loan servicing policy requirements. The Corporation consolidates risk migrations to
identify emerging risks by industry and real estate property types, taking into consideration economic forecasts and industry
trends. In 2024, the Corporation identified the office and multi-family commercial mortgage loan portfolios as posing heightened
risks and consequently moderated the volume of new loan originations. The Corporation takes a risk-based approach when
reviewing a specific loan portfolio, such as the office loan or multi-family loan portfolios. The Corporation reviews portfolio
concentrations and adjusts the lending limits based on asset quality, economic forecasts and industry outlook.
53
The following table summarizes the industry concentrations within the commercial mortgage and the commercial and industrial
loan portfolios:
December 31,
2024
2023
Real estate(1)
39.5 %
46.6 %
Retail
6.6
3.3
Health care
6.3
6.6
Agriculture
5.3
5.6
Other services
5.3
4.5
Manufacturing
5.1
6.1
Construction(2)
4.3
4.1
Hospitality and food services
4.0
3.6
Wholesale trade
3.4
3.2
Educational services
3.0
2.9
Professional, scientific and technical services
2.7
2.2
Arts, entertainment and recreation
2.4
1.9
Finance and Insurance
1.6
1.3
Transportation and warehousing
1.5
1.7
Public administration
1.3
1.0
Administrative and Support
1.2
1.1
Other
6.5
4.3
Total
100.0 %
100.0 %
(1) Includes commercial loans to borrowers engaged in the business of: renting, leasing or managing real estate for others; selling and/or buying real estate for
others; and appraising real estate.
(2) Includes commercial loans to borrowers engaged in the construction industry.
The commercial mortgage loan portfolio consists of 46% owner occupied commercial mortgage loans and 54% of non-owner
occupied commercial mortgage loans as of December 31, 2024. The following table summarizes the non-owner occupied
commercial mortgage loan portfolio and the percent to total net loans.
December 31, 2024
December 31, 2023
$
%
$
%
(dollars in thousands)
Multi-family
$
1,543,943
6.4 % $
1,147,612
5.4 %
Retail trade
1,097,712
4.6
893,029
4.2
Industrial
829,354
3.4
634,533
3.0
Office
761,929
3.2
640,403
3.0
Hospitality and food services
470,907
2.0
453,305
2.1
Other
527,661
2.2
498,122
2.3
Total non-owner occupied commercial mortgage loans
$
5,231,506
21.8 % $
4,267,004
20.0 %
54
The following table summarizes the commercial mortgage office non-owner occupied loan portfolio outstanding balance, total
commitment and LTV ratio by Metropolitan Statistical Area:
December 31, 2024
December 31, 2023
Outstanding
Balance
Total
Commitment
Weighted
Average
LTV (1)
Outstanding
Balance
Total
Commitment
Weighted
Average
LTV (1)
(dollars in thousands)
Philadelphia(2)
$
339,164 $
369,758
62 % $
241,596 $
247,395
56 %
New York(3)
96,129
100,893
59
60,149
62,565
71
Washington, D.C.(4)
87,688
87,688
55
97,270
97,847
56
Baltimore (5)
75,318
76,453
58
82,573
82,577
51
Other
163,630
171,442
61
158,815
161,533
61
Total office non-owner occupied
commercial real estate
$
761,929 $
806,234
60 % $
640,403 $
651,917
58 %
(1) Weighted Average LTV as of origination.
(2) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD.
(3) New York-Newark-Jersey City, NY-NJ-PA.
(4) Washington-Arlington-Alexandria, DC-VA-MD-WV.
(5) Baltimore-Columbia-Towson, MD.
The commercial mortgage office non-owner occupied loan portfolio table above excludes commercial construction loans secured
by office property collateral with a total outstanding balance of $52.5 million and outstanding loan commitment of $57.4 million
as of December 31, 2024.
The following table summarizes the commercial mortgage multi-family non-owner occupied loan portfolio outstanding balance,
total commitment and LTV ratio by Metropolitan Statistical Area:
December 31, 2024
December 31, 2023
Outstanding
Balance
Total
Commitment
Weighted
Average
LTV (1)
Outstanding
Balance
Total
Commitment
Weighted
Average
LTV (1)
(dollars in thousands)
Philadelphia(2)
$
707,826 $
738,256
62 % $
467,749 $
480,942
57 %
New York(3)
124,321
130,238
64
53,153
53,642
72
Baltimore(4)
108,384
108,680
59
54,675
54,879
56
Washington, D.C.(5)
28,145
31,121
48
87,020
92,483
51
Lancaster, PA
135,891
146,593
69
159,691
169,437
66
Other
439,376
479,884
59
325,324
361,693
65
Total multi-family non-owner
occupied commercial real estate $ 1,543,943 $
1,634,772
62 % $ 1,147,612 $ 1,213,076
59 %
(1) Weighted Average LTV as of origination.
(2) Philadelphia-Camden-Wilmington, PA-NJ-DE-MD.
(3) New York-Newark-Jersey City, NY-NJ-PA.
(4) Washington-Arlington-Alexandria, DC-VA-MD-WV.
(5) Baltimore-Columbia-Towson, MD.
The commercial mortgage multi-family non-owner occupied loan portfolio table above excludes commercial construction loans
secured by multi-family property collateral with a total outstanding loan balance of $405.2 million and outstanding loan
commitment of $693.4 million as of December 31, 2024.
55
The following table presents the changes in non-accrual loans for the years ended December 31:
Commercial
and
Industrial
Real Estate -
Commercial
Mortgage
Real Estate -
Construction
Real Estate -
Residential
Mortgage
Consumer
and
Real Estate -
Home Equity
Leases and
Other Loans
Total
(dollars in thousands)
Balance at December 31, 2022
$
27,116
$
70,161
$
1,368
$
26,294
$
6,197
$
13,307
$
144,443
Additions
46,358
31,004
438
792
8,416
1,520
88,528
Payments
(24,276)
(38,296)
(465)
(1,881)
(2,245)
(554)
(67,717)
Charge-offs
(9,246)
(17,999)
—
(62)
(7,514)
(4,380)
(39,201)
Transfers to OREO
—
—
—
(1,793)
—
—
(1,793)
Transfers to accrual status
—
(65)
—
(2,526)
(49)
—
(2,640)
Balance at December 31, 2023
39,952
44,805
1,341
20,824
4,805
9,893
121,620
Additions
70,700
94,887
1,406
11,067
15,066
7,759
200,885
Payments
(33,580)
(25,757)
(130)
(4,780)
(2,414)
(825)
(67,486)
Charge-offs
(26,585)
(13,186)
—
(1,472)
(8,490)
(4,696)
(54,429)
Transfers to OREO
(90)
(133)
(871)
(97)
(190)
—
(1,381)
Transfers to accrual status
(8,180)
(1,119)
—
(142)
(178)
(297)
(9,916)
Balance at December 31, 2024
$
42,217
$
99,497
$
1,746
$
25,400
$
8,599
$
11,834
$
189,293
During 2024, non-accrual loans increased $67.7 million, or 55.6%, largely due to additions to non-accrual loans, partially offset
by payments and charge-offs. During 2024, non-accrual loans as a percentage of net loans increased to 0.79%, compared to
0.57% as of December 31, 2023.
The following table presents non-performing assets:
December 31,
2024
2023
2022
(dollars in thousands)
Non-accrual loans(1)(2)
$ 189,293
$ 121,620
$ 144,443
Loans 90 days or more past due and still accruing(2)
30,781
31,721
27,463
Total non-performing loans and leases
220,074
153,341
171,906
OREO(3)
2,621
896
5,790
Total non-performing assets
$ 222,695
$ 154,237
$ 177,696
Non-accrual loans to total loans
0.79 %
0.57 %
0.71 %
Non-performing loans to total loans
0.92 %
0.72 %
0.85 %
Non-performing assets to total assets
0.69 %
0.56 %
0.66 %
ACL to non-performing loans
172 %
191 %
157 %
(1) The amount of interest income on non-accrual loans that was recognized in 2024, 2023 and 2022 was approximately $1.0 million, $1.5 million and $2.2
million, respectively.
(2) Accrual of interest is generally discontinued when a loan becomes 90 days past due. In certain cases a loan may be placed on non-accrual status prior to being
90 days delinquent if there is an indication that the borrower is having difficulty making payments or the Corporation believes it is probable that all amounts
will not be collected according to the contractual terms of the agreement. When interest accruals are discontinued, unpaid interest previously credited to
income is reversed. Non-accrual loans may be restored to accrual status when all delinquent principal and interest has been paid currently for six consecutive
months or the loan is considered to be adequately secured and in the process of collection. Certain loans, primarily adequately collateralized residential
mortgage loans, may continue to accrue interest after reaching 90 days past due.
(3) Excludes $17.5 million, $10.9 million and $6.0 million of residential mortgage properties for which formal foreclosure proceedings were in process as of
December 31, 2024, 2023 and 2022, respectively.
56
The following table presents non-performing loans:
December 31,
2024
2023
2022
(dollars in thousands)
Real estate - commercial mortgage
$ 102,359
$
46,527
$
72,634
Commercial and industrial
43,677
41,020
28,288
Real estate - residential mortgage
45,901
42,029
46,509
Real estate - home equity
13,349
10,079
8,809
Real estate - construction
1,746
2,876
1,368
Consumer
1,025
799
991
Leases and other loans
12,017
10,011
13,307
Total non-performing loans
$ 220,074
$ 153,341
$ 171,906
Non-performing loans to total loans
0.92 %
0.72 %
0.85 %
The following table presents the amortized cost basis of loans modified to borrowers experiencing financial difficulty:
December 31,
2024
2023
(dollars in thousands)
Real estate - commercial mortgage
$
20,501 $
2,944
Commercial and industrial
3,913
11,970
Real estate - residential mortgage
13,969
9,092
Real estate - home equity
379
—
Real estate - construction
595
—
Total
$
39,357 $
24,006
There were no loans modified due to borrowers experiencing financial difficulty that defaulted during 2024.
The following table summarizes OREO, by property type:
December 31,
2024
2023
2022
(dollars in thousands)
Commercial properties
$
1,888 $
165 $
3,881
Residential properties
733
229
482
Undeveloped land
—
502
1,427
Total OREO
$
2,621 $
896 $
5,790
The Corporation's ability to identify potential problem loans in a timely manner is important to maintaining an adequate ACL.
For commercial and industrial loans, commercial mortgage loans and construction loans to commercial borrowers, an internal
risk rating process is used to monitor credit quality. The evaluation of credit risk for residential mortgages, home equity loans,
construction loans to individuals, consumer loans and leases and other loans is based on payment history through the monitoring
of delinquency levels and trends.
57
Total internally risk-rated loans were $15.4 billion and $13.7 billion as of December 31, 2024 and 2023, respectively, of which
$1.8 billion and $925.0 million were criticized and classified loans, respectively. The following table presents criticized and
classified loans, or those with internal risk ratings of special mention or substandard or lower for commercial mortgages,
commercial and industrial loans and construction loans to commercial borrowers, by class segment:
Special Mention(1)
Increase (Decrease)
Substandard or
Lower(2)
Increase
(Decrease)
Total Criticized and
Classified Loans
December 31,
December 31,
December 31,
2024
2023
$
%
2024
2023
$
%
2024
2023
(dollars in thousands)
Real estate - commercial
mortgage
$ 531,423
$ 302,553
$ 228,870
75.6 %
$ 522,377
$ 224,774
$ 297,603
132.4 %
$ 1,053,800 $ 527,327
Commercial and industrial
238,809
135,837
102,972
75.8
335,246
196,500
138,746
70.6
574,055
332,337
Real estate - construction(3)
161,310
38,520
122,790
N/M
47,183
26,771
20,412
76.2
208,493
65,291
Total
$ 931,542
$ 476,910
$ 454,632
95.3 %
$ 904,806
$ 448,045
$ 456,761
101.9 %
$ 1,836,348 $ 924,955
% of total risk-rated
loans
6.1 %
3.5 %
5.9 %
3.3 %
11.9 %
6.8 %
(1) Considered "criticized" loans by banking regulators.
(2) Considered "classified" loans by banking regulators.
(3) Excludes construction - other.
Total criticized and classified loans increased $911.4 million, or 98.5%, compared to December 31, 2023.
The increase of $454.6 million in special mention loans as of December 31, 2024 was primarily due to loans acquired in the
Republic First Transaction with a balance of $350.4 million as of December 31, 2024. The increase of $456.8 million in
substandard or lower loans as of December, 31, 2024 was partially due to loans acquired in the Republic First Transaction with a
balance of $193.0 million as of December 31, 2024.
The following table presents, by class segment, a summary of delinquency status and rates, as a percentage of loans in each
portfolio and in total, that do not have internal risk ratings:
Delinquent(1)
Non-performing(2)
Total
December 31,
December 31,
December 31,
December 31,
December 31,
December 31,
2024
2023
2024
2023
2024
2023
$
%
$
%
$
%
$
%
$
%
$
%
(dollars in thousands)
Consumer and real
estate - home
equity
$ 16,241
0.91 %
$ 20,345
1.15 %
$ 14,374
0.81 %
$ 10,878
0.61 %
$ 30,615
1.72 %
$
31,223
1.76 %
Real estate -
residential mortgage
65,539
1.03
59,983
1.13
45,901
0.72
42,029
0.79
111,440
1.76
102,012
1.92
Real estate -
construction
5,302
2.42
4,636
0.37
1,406
0.64
1,535
0.12
6,708
3.06
6,171
0.50
Leases and other
loans
374
0.12
868
0.26
12,017
3.81
10,011
2.98
12,391
3.93
10,879
3.23
Total
$ 87,456
1.01 %
$ 85,832
0.99 %
$ 73,698
0.85 %
$ 64,453
0.74 %
$ 161,154
1.86 %
$ 150,285
1.74 %
(1) Includes accruing loans 30 days to 89 days past due.
(2) Includes accruing loans 90 days or more past due and non-accrual loans and leases.
58
Allowance for Credit Losses
The Corporation accounts for the credit risk associated with lending activities through the ACL and the provision for credit
losses.
The following table presents the activity in the ACL:
December 31,
December 31,
December 31,
2024
2023
2022
(dollars in thousands)
Net loans
$
24,044,919
$
21,351,094
$
20,279,547
Average balance of net loans
$
23,145,114
$
20,929,302
$
19,152,740
Balance of ACL at beginning of period
$
293,404
$
269,366
$
249,001
CECL Day 1 Provision(1)
23,444
—
7,954
Initial purchased credit deteriorated loans
54,631
—
1,135
Loans charged off:
Real estate - commercial mortgage
(13,186)
(17,999)
(12,473)
Commercial and industrial
(26,585)
(9,246)
(2,390)
Real estate - residential mortgage
(1,472)
(62)
(66)
Consumer and real estate - home equity
(8,490)
(7,514)
(4,412)
Real estate - construction
—
—
—
Leases and other loans
(4,696)
(4,380)
(2,131)
Total loans charged off
(54,429)
(39,201)
(21,472)
Recoveries of loans previously charged off:
Real estate - commercial mortgage
603
1,076
3,860
Commercial and industrial
4,440
3,473
5,893
Real estate - residential mortgage
472
421
425
Consumer and real estate - home equity
3,357
3,198
2,581
Real estate - construction
382
858
574
Leases and other loans
730
1,103
759
Total recoveries
9,984
10,129
14,092
Net loans charged off (recoveries)
(44,445)
(29,072)
(7,380)
Provision for credit losses(1)(2)
52,122
53,110
18,656
Balance of ACL at end of period
$
379,156
$
293,404
$
269,366
Provision for OBS credit exposures(1)
$
(3,930)
$
926
$
1,411
Reserve for OBS credit exposures(3)
$
14,161
$
17,254
$
16,328
Selected Asset Quality Ratios %:
Net charge-offs to average loans
0.19 %
0.14 %
0.04 %
ACL - loans to total net loans
1.58
1.37
1.33
Non-performing assets(4) to total assets
0.69
0.56
0.66
Non-accrual loans to total net loans
0.79
0.57
0.71
ACL - loans to non-performing loans
172
191
157
ACL - loans to non-accrual loans
200
241
186
(1) These amounts are reflected in the provision for credit losses in the Consolidated Statements of Income.
(2) Provision for credit losses includes only the portion related to net loans.
(3) Reserve for OBS credit exposures is recorded within other liabilities on the Consolidated Balance Sheets.
(4) Includes accruing loans past due 90 days or more.
The provision for credit losses for 2024 was $71.6 million compared to a provision for credit losses of $54.0 million in 2023.
The increase in the provision for credit losses was primarily driven by a $23.4 million CECL Day 1 Provision related to the
Republic First Transaction in 2024. Additionally, included in the ACL as of December 31, 2024 was $54.6 million recorded for
PCD Loans acquired in the Republic First Transaction.
The ACL includes qualitative adjustments, as appropriate, intended to capture the impact of uncertainties not reflected in the
quantitative models. See "Note 5 - Loans and Allowance for Credit Losses" of the Notes to Consolidated Financial Statements
for additional details.
59
The following table summarizes the allocation of the ACL - loans:
December 31, 2024
December 31, 2023
December 31, 2022
ACL - loans
% to
Total
ACL -
loans(1)
% to
Total Net
Loans(2)
ACL - loans
% to
Total
ACL -
loans(1)
% to
Total Net
Loans(2)
ACL - loans
% to
Total
ACL -
loans(1)
% to
Total Net
Loans(2)
(dollars in thousands)
Real estate - commercial mortgage
$
158,181
41.7 %
39.9 % $
112,565
38.4 %
38.1 % $
69,456
25.8 %
37.9 %
Commercial and industrial
92,212
24.3
19.2
74,266
25.3
21.3
70,116
26.0
22.1
Real estate - residential mortgage
81,331
21.5
26.4
73,286
25.0
24.9
83,250
30.9
23.4
Consumer, home equity and leases
and other loans
22,292
5.9
8.7
20,992
7.1
9.9
35,801
13.3
10.3
Real estate - construction
25,140
6.6
5.8
12,295
4.2
5.8
10,743
4.0
6.3
Total
$
379,156
100.0 %
100.0 % $
293,404
100.0 %
100.0 % $
269,366
100.0 %
100.0 %
(1) Ending ACL - loan portfolio segment balance as a % of total ACL - loans.
(2) Ending loan portfolio segment balances as a % of total net loans for the periods presented.
Management believes that the $379.2 million ACL - loans as of December 31, 2024 is sufficient to cover expected credit losses
in the loan portfolio.
Premises and Equipment
The $58.6 million decrease in land and buildings and improvements was primarily due to $73.5 million of asset disposals in the
Sale-Leaseback Transaction, partially offset by $21.7 million of land and buildings and improvements purchased as part of the
Republic First Transaction in the fourth quarter of 2024. The $73.5 million of premises and equipment disposals in the Sale-
Leaseback Transaction included $42.5 million of related accumulated depreciation for a net disposal amount of $31.0 million.
Deposits and Borrowings
The following table presents ending deposits, by type:
December 31,
Increase (Decrease)
2024
2023
$
%
(dollars in thousands)
Noninterest-bearing demand
$
5,499,760 $
5,314,094 $
185,666
3.5 %
Interest-bearing demand
7,843,604
5,722,695
2,120,909
37.1
Savings and money market deposits
7,792,114
6,616,901
1,175,213
17.8
Total demand and savings
21,135,478
17,653,690
3,481,788
19.7
Brokered deposits
843,857
1,144,692
(300,835)
(26.3)
Time deposits
4,150,098
2,739,241
1,410,857
51.5
Total deposits
$ 26,129,433 $ 21,537,623 $ 4,591,810
21.3 %
During 2024, total deposits increased by $4.6 billion, or 21.3%, compared to December 31, 2023. The increase in total deposits
was primarily due to $3.7 billion of total deposits assumed in the Republic First Transaction and outstanding as of December 31,
2024. Overall, the increase in total deposits was largely due to increases in interest-bearing demand deposits, time deposits and
savings and money market deposits of $2.1 billion, $1.4 billion and $1.2 billion, respectively.
Total uninsured deposits (excluding intra-Company deposits) were estimated to be $9.4 billion and $7.2 billion at December 31,
2024 and December 31, 2023, respectively.
60
The following table presents ending borrowings, by type:
December 31,
Increase (Decrease)
2024
2023
$
%
(dollars in thousands)
Federal funds purchased
$
— $
240,000 $ (240,000)
N/M
Federal Home Loan Bank advances
850,000
1,100,000
(250,000)
(22.7)
Senior debt and subordinated debt
367,316
535,384
(168,068)
(31.4)
Other borrowings(1)
564,732
612,142
(47,410)
(7.7)
Total borrowings
$
1,782,048 $
2,487,526 $ (705,478)
(28.4) %
(1) Includes repurchase agreements, short-term promissory notes and capital leases.
During 2024, total borrowings decreased $705.5 million, or 28.4%, compared to December 31, 2023. The decrease in total
borrowings was primarily due to decreases in FHLB advances, federal funds purchased and senior debt and subordinated debt of
$250.0 million, $240.0 million and $168.1 million, respectively.
In November 2024, the Corporation retired $168.8 million of subordinated notes issued in November 2014 and June 2015 which
matured on November 15, 2024.
See "Note 10 - Borrowings" of the Notes to Consolidated Financial Statements for additional details.
Other Liabilities
During 2024, other liabilities increased $176.4 million, or 22.4%, compared to December 31, 2023, primarily due to increases in
the operating lease liability due to the Sale-Leaseback Transaction, accrued expenses and as a result of affordable housing
investments made in 2024.
Shareholders' Equity
During 2024, total shareholders' equity increased $437.2 million, or 15.8%, to $3.2 billion, or 10.0% of total assets, as of
December 31, 2024. The increase in total shareholders' equity was largely due to net proceeds of $272.6 million related to the
Corporation's underwritten public offering of 19,166,667 shares of its common stock at a price to the public of $15.00 per share,
and $156.3 million in retained earnings. See "Note 15 - Shareholders' Equity" in the Notes to the Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data" for details of accumulated comprehensive loss.
Regulatory Capital
The Corporation and its wholly-owned subsidiary bank, Fulton Bank, are subject to the Capital Rules administered by banking
regulators. Failure to meet minimum capital requirements can trigger certain actions by regulators that could have a material
effect on the Corporation's financial statements.
The Capital Rules require the Corporation and Fulton Bank to:
• Meet a minimum Common Equity Tier 1 capital ratio of 4.50% of risk-weighted assets;
• Meet a minimum Tier 1 Leverage capital ratio of 4.00% of average assets;
• Meet a minimum Total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 capital ratio of 6.00% of
risk-weighted assets;
• Maintain a "capital conservation buffer" of 2.50% above the minimum risk-based capital requirements, which must be
maintained to avoid restrictions on capital distributions and certain discretionary bonus payments; and
• Comply with a revised definition of capital to improve the ability of regulatory capital instruments to absorb losses.
Certain non-qualifying capital instruments, including cumulative preferred stock and TruPS, are excluded as a
component of Tier 1 capital for institutions of the Corporation's size.
61
As of December 31, 2024, the Corporation's capital levels met the minimum capital requirements, including the capital
conservation buffers, as prescribed in the Capital Rules.
As of December 31, 2024, Fulton Bank met the well-capitalized requirements under the regulatory framework for prompt
corrective action. To be categorized as well-capitalized, a bank must maintain minimum Total risk-based, Tier I risk-based,
Common Equity Tier I risk-based and Tier I leverage ratios as set forth in the Capital Rules. There were no other conditions or
events in 2024 that management believes have changed the Corporation's capital categories.
The following table summarizes the Corporation's capital ratios in comparison to regulatory requirements:
December 31,
2024
December 31,
2023
Regulatory
Minimum
for Capital
Adequacy
With Capital
Conservation Buffers
Total Risk-Based Capital (to Risk-Weighted Assets)
14.3%
14.0%
8.0%
10.5%
Tier I Risk-Based Capital (to Risk-Weighted Assets)
11.5%
11.2%
6.0%
8.5%
Common Equity Tier I (to Risk-Weighted Assets)
10.8%
10.3%
4.5%
7.0%
Tier I Leverage Capital (to Average Assets)
9.0%
9.5%
4.0%
4.0%
Contractual Obligations and Off-Balance Sheet Arrangements
The Corporation has various financial obligations that require future cash payments. These obligations include payments for
liabilities recorded on the Corporation's consolidated balance sheets as well as contractual obligations for purchased services.
Contractual purchase obligations to third parties that were fixed and determinable of approximately $72.4 million and $124.6
million at December 31, 2024 and 2023, respectively, include information technology, telecommunication and data processing
outsourcing contracts. The decrease is primarily due to contract changes to annual renewals.
The following table summarizes the contractual purchase obligations for each of the next five years (dollars in thousands):
Year
2025
$
28,062
2026
25,392
2027
7,365
2028
6,713
2029
4,835
Total
$
72,367
The Corporation is a party to financial instruments with OBS risk in the normal course of business to meet the financing needs of
its customers. These financial instruments include commitments to extend credit and standby and commercial letters of credit,
which involve, to varying degrees, elements of credit and interest rate risk that are not recognized on the consolidated balance
sheets. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition
established in the contract. Standby letters of credit are conditional commitments issued to guarantee the financial or
performance obligation of a customer to a third party. Commercial letters of credit are conditional commitments issued to
facilitate foreign or domestic trade transactions for customers. Commitments and standby and commercial letters of credit do not
necessarily represent future cash needs, as they may expire without being drawn.
62
The following table presents the Corporation's commitments to extend credit and letters of credit as of December 31, 2024
(dollars in thousands):
Commercial and industrial
$
4,967,334
Real estate - commercial mortgage and real estate - construction
1,706,879
Real estate - home equity
2,154,382
Total commitments to extend credit
$
8,828,595
Standby letters of credit
$
279,309
Commercial letters of credit
48,993
Total letters of credit
$
328,302
63
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the exposure to economic loss that arises from changes in the values of certain financial instruments. The types of
market risk exposures generally faced by financial institutions include interest rate risk, equity market price risk, debt security
market price risk, foreign currency price risk and commodity price risk. Due to the nature of its operations, foreign currency
price risk and commodity price risk are not significant to the Corporation.
Interest Rate Risk, Asset/Liability Management and Liquidity
Interest rate risk creates exposure in two primary areas. First, changes in rates have an impact on the Corporation's liquidity
position and could affect its ability to meet obligations and continue to grow. Second, movements in interest rates can create
fluctuations in the Corporation's net interest income and changes in its economic value of its equity.
The Corporation employs various management techniques to minimize its exposure to interest rate risk. The Corporation's
ALCO is responsible for reviewing the interest rate sensitivity and liquidity positions of the Corporation, approving asset and
liability management policies, and overseeing the formulation and implementation of strategies regarding balance sheet
positions.
The Corporation uses two complementary methods to measure and manage interest rate risk. They are a simulation of net
interest income and estimates of economic value of equity. Using these measurements in tandem provides a reasonably
comprehensive summary of the magnitude of the Corporation's interest rate risk, level of risk as time evolves, and exposure to
changes in interest rates.
Simulation of net interest income is performed for the next 12-month period. A variety of interest rate scenarios are used to
measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to
the results obtained in a flat or unchanged interest rate scenario. Simulation of net interest income is used primarily to measure
the Corporation's short-term earnings exposure to rate movements. The Corporation's policy limits the potential exposure of net
interest income, in a non-parallel instantaneous shock, to 10% of the base case net interest income for a 100 bps shock in
interest rates, 15% for a 200 bps shock, 20% for a 300 bps shock and 25% for a 400 bps shock. A "shock" is an immediate
upward or downward movement of interest rates. The shocks do not take into account changes in customer behavior that could
result in changes to mix and/or volumes in the balance sheet, nor does it take into account the potential effects of competition
on the pricing of deposits and loans over the forward 12-month period.
Contractual maturities and repricing opportunities of loans are incorporated in the simulation model as are prepayment
assumptions, maturity data and call options within the investment portfolio. Assumptions based on past experience are
incorporated into the model for non-maturity deposit accounts. The assumptions used are inherently uncertain and, as a result,
the model cannot precisely measure future net interest income or precisely predict the impact of fluctuations in market interest
rates on net interest income. Actual results will differ from the model's simulated results due to timing, amount and frequency
of interest rate changes as well as changes in market conditions and the application and timing of various management
strategies.
The following table summarizes the expected impact of interest rate changes in rate-ramp scenarios over a 12-month period,
that is, a gradual non-parallel shift, on net interest income as of December 31, 2024:
Rate Ramp(1)
Annual change
in net interest income
% change in net
interest income
+400 bp
+ $29.4 million
+2.6%
+300 bp
+ $25.0 million
+2.2%
+200 bp
+ $19.2 million
+1.7%
+100 bp
+ $11.8 million
+1.1%
–100 bp
- $7.3 million
-0.7%
–200 bp
- $14.3 million
-1.3%
–300 bp
- $21.4 million
-1.9%
–400 bp
- $29.0 million
-2.6%
(1) These results include the effect of implicit and explicit interest rate floors that limit further reduction in interest rates.
64
The following table summarizes the expected impact of abrupt interest rate changes, i.e. a non-parallel instantaneous shock, on
net interest income as of December 31, 2024:
Rate Shock(1)
Annual change
in net interest income
% Change in net
interest income
+400 bp
+$46.6 million
+4.2%
+300 bp
+ $41.1 million
+ 3.7%
+200 bp
+ $35.3 million
+ 3.2%
+100 bp
+ $27.4 million
+ 2.5%
-100 bp
- $18.7 million
- 1.7%
-200 bp
- $32.6 million
- 2.9%
-300 bp
- $49.3 million
- 4.4%
-400 bp
- $66.4 million
-6.0%
(1) These results include the effect of implicit and explicit interest rate floors that limit further reduction in interest rates.
Economic value of equity estimates the discounted present value of asset and liability cash flows. Discount rates are based upon
market prices for like assets and liabilities. Abrupt changes or "shocks" in interest rates, both upward and downward, are used
to determine the comparative effect of such interest rate movements relative to the unchanged environment. This measurement
tool is used primarily to evaluate the longer-term repricing risks and options in the Corporation's balance sheet. The
Corporation's policy limits the economic value of equity that may be at risk, in a non-parallel instantaneous shock, to 10% of
the base case economic value of equity for a 100 bps shock in interest rates, 20% for a 200 bps shock, 30% for a 300 bps shock
and 40% for a 400 bps shock. As of December 31, 2024, the Corporation was within economic value of equity policy limits for
every 100 bps shock.
Interest Rate Derivatives
The Corporation enters into interest rate derivatives with certain qualifying commercial loan customers to meet their interest
rate risk management needs. The Corporation simultaneously enters into interest rate derivatives with dealer counterparties,
with identical notional amounts and terms. The net result of these interest rate derivatives is that the customer pays a fixed rate
of interest and the Corporation receives a floating rate. These interest rate derivatives are derivative financial instruments, and
the gross fair values are recorded in other assets and liabilities on the consolidated balance sheets.
Cash Flow Hedges
The Corporation's objectives in using interest rate derivatives are to reduce volatility in net interest income and net interest
expense and to manage its exposure to interest rate movements. To accomplish this objective, the Corporation primarily uses
interest rate derivatives as part of its interest rate risk management strategy. The Corporation enters into interest rate derivatives
designated as cash flow hedges to hedge the variable cash flows associated with existing floating rate loans and borrowings.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative
is recorded in AOCI and subsequently reclassified into interest income or interest expense in the same period during which the
hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income or
interest expense as interest payments are made on the Corporation's loans or borrowings.
On October 10, 2024, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined
notional amount of $250 million. As the hedged transaction continues to be probable, the unrealized losses will be recorded in
AOCI and will be recognized as an increase to interest expense when the previously forecasted hedged items affects earnings in
future periods. During the year ended December 31, 2024, $0.2 million of these unrealized losses have been reclassified as an
increase to interest expense on borrowings, on the consolidated statements of income.
In January 2023, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional
amount of $1.0 billion. As the hedged transaction continues to be probable, the unrealized losses that have been recorded in
AOCI will be recognized as reduction to interest income, including fees, when the previously forecasted hedged item affects
earnings in future periods. During the years ended December 31, 2024 and 2023, $27.9 million and $22.1 million, respectively,
of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the consolidated
statements of income.
65
In the fourth quarter of 2024, the Corporation executed $900.0 million of receive fixed, pay floating interest rate derivatives that
qualify as cash flow hedges of interest rate risk to manage the Corporation's exposure to interest rate movements.
Liquidity
The Corporation must maintain a sufficient level of liquid assets to meet the cash needs of its customers, who, as depositors,
may want to withdraw funds or who, as borrowers, need credit availability. Liquidity is provided on a continuous basis through
scheduled and unscheduled principal and interest payments on investments and outstanding loans and through the availability of
deposits and borrowings. The Corporation also maintains secondary sources that provide liquidity on a secured and unsecured
basis to meet short- and long-term needs.
The Corporation maintains liquidity sources in the form of interest-bearing deposits and customer funding (short-term
promissory notes). The Corporation can access additional liquidity from these sources, if necessary, by increasing the rates of
interest paid on those instruments. The positive impact to liquidity resulting from paying higher interest rates could have a
detrimental impact on NIM and net interest income if rates on interest-earning assets do not experience a proportionate increase.
Borrowing availability with the FHLB and the FRB, along with federal funds lines at various correspondent banks, provides the
Corporation with additional liquidity.
Fulton Bank is a member of the FHLB and has access to FHLB overnight and term credit facilities. As of December 31, 2024,
the Bank had total borrowing capacity of approximately $11.1 billion with $5.1 billion of advances and letters of credit
outstanding, for a remaining available borrowing capacity of approximately $6.0 billion. Advances from the FHLB, when
utilized, are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets.
As of December 31, 2024, the Corporation had aggregate federal funds lines borrowing capacity of $2.6 billion with no
amounts outstanding against that amount. As of December 31, 2024, the Corporation had $3.1 billion of collateralized
borrowing capacity at the FRB discount window with no amounts outstanding and had no borrowings drawn against the Bank
Term Funding Program facility, which expired March 11, 2024.
A combination of commercial real estate loans, commercial loans, consumer loans and securities are pledged to the FRB of
Philadelphia to provide access to FRB discount window borrowings. Securities carried at $0.3 billion at December 31, 2024 and
$0.4 billion at December 31, 2023 were pledged as collateral to secure public and trust deposits.
The Corporation has commitments to extend credit and letters of credit. As of December 31, 2024, the balance of commitments
to extend credit was $8.8 billion and total letters of credit were $0.3 billion.
Liquidity must also be managed at the Parent Company level. For safety and soundness reasons, banking regulations limit the
amount of cash that can be transferred from subsidiary banks to the parent company in the form of loans and dividends.
Generally, these limitations are based on the subsidiary banks’ regulatory capital levels and their net income. Management
continues to monitor the liquidity and capital needs of the Parent Company including monitoring the granularity of the deposit
portfolio and level of uninsured deposits. Management will implement appropriate strategies, as necessary, to remain
adequately capitalized and to meet its cash needs.
The consolidated statements of cash flows provide additional information. The Corporation's operating activities during 2024
generated $416.6 million of cash, mainly due to net income of $288.7 million. Cash provided in investing activities was $1.6
billion, primarily due to $1.0 billion of net cash received for acquisitions in the Republic First Transaction. Net cash used by
financing activities was $1.5 billion, due largely to $2.1 billion in repayment of borrowings.
66
The following table presents the expected maturities of government, state and municipal and corporate AFS investment
securities, at estimated fair value, as of December 31, 2024 and the weighted average yields on such securities (calculated based
on historical cost):
Maturing
Within One Year
After One But
Within Five Years
After Five But
Within Ten Years
After Ten Years
Amount
Yield
Amount
Yield
Amount
Yield
Amount
Yield
Available for sale
(dollars in thousands)
State and municipal(1)
$
969
6.10%
$
—
— %
$ 111,762
3.88%
$ 702,156
3.85 %
Corporate debt securities
14,564
3.52
102,912
5.54
182,894
4.53
—
—
Total
$
15,533
3.68 % $ 102,912
5.54 % $ 294,656
4.28 % $ 702,156
3.85 %
(1) Weighted average yields on tax-exempt securities have been computed on a FTE basis assuming a federal tax rate of 21% and statutory interest expense
disallowances.
The Corporation's investment portfolio consists mainly of state and municipal securities, commercial mortgage-backed
securities, residential mortgage-backed securities, corporate debt securities and collateralized mortgage obligations.
Commercial mortgage-backed securities, residential mortgage-backed securities and collateralized mortgage obligations have
stated maturities that may differ from actual maturities due to borrowers' ability to prepay obligations. Cash flows from such
investments are dependent upon the performance of the underlying mortgage loans and are generally influenced by the level of
interest rates. As rates increase, cash flows generally decrease as prepayments on the underlying mortgage loans decrease. As
rates decrease, cash flows generally increase as prepayments increase.
The following table presents AFS residential mortgage-backed securities, commercial mortgage-backed securities and
collateralized mortgage obligations, at estimated fair value, and HTM residential mortgage-backed securities and commercial
mortgage-backed securities, at amortized cost, as of December 31, 2024, without stated maturities, including the weighted
average yields and estimated weighted average lives based on prepayment speeds on such securities:
Weighted
Amount
Yield
Average Life
(dollars in thousands)
(in years)
Available for sale
Residential mortgage-backed securities
$
989,875
4.94 %
8.7
Commercial mortgage-backed securities
516,882
2.70
4.2
Collateralized mortgage obligations
788,885
5.15
2.1
Held to maturity
Residential mortgage-backed securities
$
537,856
3.13 %
9.2
Commercial mortgage-backed securities
857,713
1.52
5.7
67
The following table presents the contractual maturities of fixed rate loans and loan types subject to changes in interest rates as
of December 31, 2024:
One Year
or Less
After One
Through
Five Years
After Five
Through
Fifteen
Years
After 15
Years
Total
(dollars in thousands)
Commercial and industrial:
Adjustable and floating rate
$ 1,160,844 $ 2,177,388 $
320,385 $
5,586 $
3,664,203
Fixed rate
387,190
509,344
44,001
851
941,386
Total commercial and industrial
1,548,034
2,686,732
364,386
6,437
4,605,589
Real estate - mortgage(1):
Adjustable and floating rate
2,591,921
5,341,646
2,615,788
277,102
10,826,457
Fixed rate
1,288,523
2,412,596
1,866,083
718,458
6,285,660
Total real estate - mortgage(1)
3,880,444
7,754,242
4,481,871
995,560
17,112,117
Real estate - construction:
Adjustable and floating rate
480,495
500,384
69,595
1,692
1,052,166
Fixed rate
254,477
84,382
3,874
—
342,733
Total real estate - construction
734,972
584,766
73,469
1,692
1,394,899
Consumer, leases and other:
Adjustable and floating rate
12,599
57,746
166
—
70,511
Fixed rate
265,592
505,255
123,130
3,430
897,407
Total consumer, leases and other
278,191
563,001
123,296
3,430
967,918
Unearned income
—
(35,604)
—
—
(35,604)
Total
$ 6,441,641 $ 11,553,137 $ 5,043,022 $ 1,007,119 $ 24,044,919
(1) Includes commercial and residential mortgages and home equity loans.
Contractual maturities of time deposits as of December 31, 2024 were as follows (dollars in thousands):
Year
2025
$ 3,801,297
2026
242,638
2027
40,071
2028
10,130
2029
11,908
Thereafter
44,054
Total
$ 4,150,098
Contractual maturities of the portion of time deposits estimated to be in excess of the FDIC insurance limit as of December 31,
2024 included in the table above, were as follows (dollars in thousands):
Three months or less
$
121,877
Over three through six months
108,934
Over six through twelve months
194,862
Over twelve months
13,867
Total
$
439,540
Total uninsured deposits (excluding intra-Company deposits) were estimated to be $9.4 billion at December 31, 2024 compared
with $7.2 billion at December 31, 2023.
68
Debt Security Market Price Risk
Debt security market price risk is the risk that changes in the values of debt securities, unrelated to interest rate changes, could
have a material impact on the financial position or results of operations of the Corporation. The Corporation's debt security
investments consist primarily of U.S. government-sponsored agency issued mortgage-backed securities and collateralized
mortgage obligations, state and municipal securities, and corporate debt securities. All of the Corporation's investments in
mortgage-backed securities and collateralized mortgage obligations have principal payments that are guaranteed by U.S.
government-sponsored agencies.
State and Municipal Securities
As of December 31, 2024, the Corporation owned securities issued by various states and municipalities with a total fair value of
$0.8 billion. Uncertainty with respect to the financial strength of state and municipal bond insurers places emphasis on the
underlying strength of issuers. Pressure on local tax revenues of issuers due to adverse economic conditions could have an
adverse impact on the underlying credit quality of issuers. The Corporation evaluates existing and potential holdings primarily
based on the underlying creditworthiness of the issuing state or municipality and then, to a lesser extent, on any credit
enhancement. State and municipal securities can be supported by the general obligation of the issuing state or municipality,
allowing the securities to be repaid by any means available to the issuing state or municipality. As of December 31, 2024,
approximately 100% of state and municipal securities were supported by the general obligation of corresponding states or
municipalities. Approximately 74% of these securities were school district issuances, which are also supported by the states of
the issuing municipalities.
69
Item 8. Financial Statements and Supplementary Data
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per-share data)
December 31,
2024
2023
ASSETS
Cash and due from banks
$
279,041 $
300,343
Interest-bearing deposits with other banks
784,830
249,367
Cash and Cash Equivalents
1,063,871
549,710
FRB and FHLB stock
139,574
124,405
Loans held for sale
25,618
15,158
Investment securities:
AFS, at estimated fair value
3,410,899
2,398,352
HTM, at amortized cost
1,395,569
1,267,922
Net loans
24,044,919
21,351,094
Less: ACL - loans
(379,156)
(293,404)
Loans, Net
23,665,763
21,057,690
Net premises and equipment
195,527
222,881
Accrued interest receivable
117,029
107,972
Goodwill and net intangible assets
635,458
560,687
Other assets
1,422,502
1,267,138
Total Assets
$ 32,071,810 $ 27,571,915
LIABILITIES
Deposits:
Noninterest-bearing
$
5,499,760 $
5,314,094
Interest-bearing
20,629,673
16,223,529
Total Deposits
26,129,433
21,537,623
Borrowings:
Federal funds purchased
—
240,000
FHLB advances
850,000
1,100,000
Senior debt and subordinated debt
367,316
535,384
Other borrowings and interest-bearing liabilities
564,732
612,142
Total Borrowings
1,782,048
2,487,526
Accrued interest payable
31,620
35,083
Other liabilities
931,384
751,544
Total Liabilities
28,874,485
24,811,776
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 10,000,000 shares authorized, Series A, 200,000 shares issued
as of December 31, 2024 and 2023, liquidation preference of $1,000 per share
192,878
192,878
Common stock, $2.50 par value, 600,000,000 shares authorized, 245,946,392 shares issued
as of December 31, 2024 and 225,760,963 issued as of December 31, 2023
614,866
564,402
Additional paid-in capital
1,789,214
1,552,860
Retained earnings
1,775,620
1,619,300
Accumulated other comprehensive loss
(287,819)
(312,280)
Treasury stock, at cost, 63,857,567 shares in 2024 and 61,959,552 shares in 2023
(887,434)
(857,021)
Total Shareholders' Equity
3,197,325
2,760,139
Total Liabilities and Shareholders' Equity
$ 32,071,810 $ 27,571,915
See Notes to Consolidated Financial Statements
70
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per-share data)
2024
2023
2022
Interest Income
Loans, including fees
$ 1,394,969 $ 1,156,373 $ 758,609
Investment securities
136,650
101,518
98,115
Other interest income
50,577
15,345
8,114
Total Interest Income
1,582,196 1,273,236
864,838
Interest Expense
Deposits
521,859
292,205
43,829
Federal funds purchased
2,881
30,417
2,967
FHLB advances
37,793
46,965
7,334
Senior debt and subordinated debt
20,255
21,361
22,257
Other borrowings and interest-bearing liabilities
39,083
28,002
6,817
Total Interest Expense
621,871
418,950
83,204
Net Interest Income
960,325
854,286
781,634
Provision for credit losses
71,636
54,036
28,021
Net Interest Income After Provision for Credit Losses
888,689
800,250
753,613
Non-Interest Income
Commercial banking
84,982
81,160
75,779
Wealth management
84,743
75,541
72,843
Consumer banking
55,504
47,197
49,496
Mortgage banking
13,943
10,388
14,204
Gain on acquisition, net of tax
36,996
—
—
Other
19,846
14,125
14,835
Non-Interest Income Before Investment Securities Gains (Losses), Net
296,014
228,411
227,157
Investment securities gains (losses), net
(20,283)
(733)
(27)
Total Non-Interest Income
275,731
227,678
227,130
Non-Interest Expense
Salaries and employee benefits
432,821
377,417
356,884
Data processing and software
77,882
66,471
60,255
Net occupancy
69,359
58,019
56,195
Other outside services
60,586
47,724
37,152
FDIC insurance
23,829
25,565
12,547
Equipment
17,850
14,390
14,033
Intangible amortization
17,830
2,944
1,731
Professional fees
10,857
8,392
9,123
Marketing
8,958
9,004
6,885
Acquisition-related expenses
37,635
—
10,328
Other
62,184
69,281
68,595
Total Non-Interest Expense
819,791
679,207
633,728
Income Before Income Taxes
344,629
348,721
347,015
Income taxes
55,886
64,441
60,034
Net Income
288,743
284,280
286,981
Preferred stock dividends
(10,248)
(10,248)
(10,248)
Net Income Available to Common Shareholders
$ 278,495 $ 274,032 $ 276,733
PER SHARE:
Net income available to common shareholders (basic)
$
1.59 $
1.66 $
1.69
Net income available to common shareholders (diluted)
1.57
1.64
1.67
Cash dividends
0.69
0.64
0.66
See Notes to Consolidated Financial Statements
71
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands)
2024
2023
2022
Net Income
$ 288,743
$ 284,280
$ 286,981
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on AFS investment securities:
Net unrealized holding gains (losses)
(22,425)
36,023
(312,169)
Reclassification adjustment for securities net change realized in net income
15,689
(567)
(20)
Amortization of net unrealized gains (losses) on AFS securities transferred to HTM
5,609
5,913
(44,483)
Net Unrealized Gains (Losses) on AFS Investment Securities
(1,127)
41,369
(356,672)
Unrealized gains (losses) on interest rate derivatives used in cash flow hedges:
Net unrealized holding gains (losses)
590
6,998
(62,963)
Reclassification adjustment for net change realized in net income
18,141
19,995
6,004
Net Unrealized Gains (Losses) on Interest Rate Derivatives Used in Cash Flow Hedges
18,731
26,993
(56,959)
Defined benefit pension plan and postretirement benefits:
Unrecognized pension and postretirement income (cost)
7,279
4,777
644
Amortization of net unrecognized pension and postretirement income (loss)
(422)
57
100
Net Unrealized Gains (Losses) on Defined Benefit Pension and Postretirement Plans
6,857
4,834
744
Other Comprehensive Income (Loss), Net of Tax
24,461
73,196
(412,887)
Total Comprehensive Income
$ 313,204
$ 357,476
$ (125,906)
See Notes to Consolidated Financial Statements
72
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands, except per share data)
Preferred Stock
Common Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
(Loss) Income
Shares
Outstanding
Amount
Shares
Outstanding
Amount
Retained
Earnings
Treasury
Stock
Total
Balance at December 31, 2021
200
$ 192,878
160,490
$ 559,766 $ 1,519,873
$ 1,282,383 $
27,411
$ (869,631) $ 2,712,680
Net income
286,981
286,981
Other comprehensive loss
(412,887)
(412,887)
Common stock issued(1)
261
653
3,677
4,330
Dividend reinvestment activity
362
85
5,149
5,234
Reissuance of treasury stock
pursuant to acquisition
6,209
4,547
85,166
89,713
Stock-based compensation
awards (repurchases)
277
1,092
13,658
(2,438)
12,312
Preferred stock dividend
(10,248)
(10,248)
Common stock dividends - $0.66
per share
(108,358)
(108,358)
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
284,280
284,280
Other comprehensive income
73,196
73,196
Common stock issued(1)
231
578
2,548
34
3,160
Dividend reinvestment activity
408
(132)
5,691
5,559
Stock-based compensation
awards (repurchases)
592
2,313
8,604
(3,936)
6,981
Acquisition of treasury stock
(5,029)
(77,056)
(77,056)
Preferred stock dividend
(10,248)
(10,248)
Common stock dividends - $0.64
per share
(105,490)
(105,490)
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
288,743
288,743
Other comprehensive income
24,461
24,461
Common stock issued(2)
19,339
48,348
227,052
12
275,412
Dividend reinvestment activity
322
902
4,753
5,655
Stock-based compensation
awards (repurchases)
561
2,116
8,400
(4,830)
5,686
Acquisition of treasury stock
(1,934)
(30,348)
(30,348)
Preferred stock dividend
(10,248)
(10,248)
Common stock dividends - $0.69
per share
(122,175)
(122,175)
Balance at December 31, 2024
200
$ 192,878
182,089
$ 614,866 $ 1,789,214
$ 1,775,620 $
(287,819) $ (887,434) $ 3,197,325
(1) Issuance of common stock includes issuance in connection with the Corporation's ESPP and exercised stock options.
(2) 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 ESPP and exercised stock options.
See Notes to Consolidated Financial Statements
73
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
2024
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
288,743
$
284,280
$
286,981
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
71,636
54,036
28,021
Depreciation and amortization of premises and equipment
39,164
30,055
30,201
Net amortization of investment securities premiums
764
11,231
12,824
Net accretion of loan discounts
(38,748)
—
—
Investment securities losses, net
20,283
733
27
Gain on sales of mortgage loans held for sale
(8,186)
(5,094)
(8,816)
Proceeds from sales of mortgage loans held for sale
547,691
363,406
455,607
Originations of mortgage loans held for sale
(549,965)
(366,206)
(418,287)
Intangible amortization
17,830
2,944
1,731
Amortization of issuance costs and discounts on long-term borrowings
710
750
724
Gain on acquisition, net of tax
(36,996)
—
—
Gain on disposal of premises and equipment
(30)
—
—
Gain on Sale-Leaseback Transaction
(20,266)
—
—
Stock-based compensation
10,516
12,540
14,000
Net change in deferred income tax
(23,187)
24,666
(117,849)
Net change in accrued salaries and benefits
19,463
(5,868)
12,826
Net change in life insurance cash surrender value
(19,872)
(27,664)
(95,702)
Other changes, net
97,015
(16,825)
392,503
Total adjustments
127,822
78,704
307,810
Net Cash Provided by Operating Activities
416,565
362,984
594,791
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of AFS securities
2,300,487
213,424
196,411
Proceeds from principal repayments and maturities of AFS securities
334,405
149,211
583,444
Proceeds from principal repayments and maturities of HTM securities
56,455
59,685
109,759
Purchase of AFS securities
(1,744,778)
(79,053)
(845,744)
Purchase of HTM securities
(177,947)
—
(30,959)
Net change in FRB and FHLB stock
22,762
5,781
(72,551)
Net change in loans
(149,081)
(1,100,816)
(1,407,289)
Net purchases of premises and equipment
(42,453)
(32,958)
(21,246)
Settlement of bank owned life insurance
2,687
2,264
3,474
Proceeds from Sale-Leaseback Transaction
51,123
—
—
Net cash received (paid) for acquisitions
1,018,371
—
(21,811)
Net change in tax credit investments
(42,699)
(26,753)
(29,071)
Net Cash Provided by (Used in) Investing Activities
1,629,332
(809,215)
(1,535,583)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand and savings deposits
478,593
(1,198,222)
(1,198,319)
Net change in time deposits and brokered deposits
1,074
2,086,307
(257,823)
Net change in other borrowings
(1,951,161)
(379,431)
1,629,870
Repayments of senior debt and subordinated debt
(168,778)
(5,000)
(81,496)
Net proceeds from common stock
270,582
3,160
7,876
Dividends paid
(131,698)
(115,738)
(116,009)
Acquisition of treasury stock
(30,348)
(77,056)
—
Net Cash (Used in) Provided by Financing Activities
(1,531,736)
314,020
(15,901)
Net increase (decrease) in Cash and Cash Equivalents
514,161
(132,211)
(956,693)
Cash and Cash Equivalents at Beginning of Period
549,710
681,921
1,638,614
Cash and Cash Equivalents at End of Period
$
1,063,871
$
549,710
$
681,921
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest
$
658,778
$
394,052
$
80,019
Income taxes
29,116
25,319
32,669
74
Supplemental Schedule of Certain Noncash Activities:
Transfer of AFS securities to HTM securities
$
—
$
—
$
479,008
Fair value of tangible assets acquired
4,707,290
—
—
Intangible assets
92,600
—
—
Liabilities assumed
5,561,979
—
—
PCD Loans credit discount
54,631
—
—
See Notes to Consolidated Financial Statements
75
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business: The Corporation is a financial holding company that provides a full range of banking and financial services to
businesses and consumers through its wholly-owned banking subsidiary, Fulton Bank. In addition, the Parent Company owns
the following non-bank subsidiaries: Fulton Financial Realty Company, Central Pennsylvania Financial Corp., FFC Penn
Square, Inc., Fulton Insurance Services Group, Inc. and Fulton Community Partner, LLC. Collectively, the Parent Company
and its subsidiaries are referred to as the Corporation.
The Corporation's primary sources of revenue are interest income on loans, investment securities and other interest-earning
assets and fee income earned on its products and services. Its expenses consist of interest expense on deposits and borrowed
funds, provision for credit losses, other operating expenses and income taxes. The Corporation's primary competition is other
financial services providers operating in its region. Competitors also include financial services providers located outside the
Corporation's geographic market as a result of the growth in electronic delivery channels. The Corporation is subject to the
regulations of certain federal and state agencies and undergoes periodic examinations by such regulatory agencies.
The Corporation offers, through its banking subsidiary, a full range of retail and commercial banking services in Pennsylvania,
Delaware, Maryland, New Jersey and Virginia.
Basis of Financial Statement Presentation: The consolidated financial statements have been prepared in accordance with
GAAP and include the accounts of the Parent Company and all wholly-owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated. The preparation of financial statements in accordance with GAAP requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosed amount
of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates. The Corporation evaluates subsequent events through the
date of the filing of this report with the SEC.
Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents consists of cash and due from banks and
interest-bearing deposits with other banks, which includes restricted cash. Restricted cash comprises cash balances required to
be maintained with the FRB, based on customer transaction deposit account levels, and cash balances provided as collateral on
derivative contracts and other contracts. See "Note 3 - Restrictions on Cash and Cash Equivalents" for additional information.
FRB and FHLB Stock: The Bank is a member of the FRB and FHLB and is required by federal law to hold stock in these
institutions according to predetermined formulas. These restricted investments are carried at cost on the consolidated balance
sheets and are periodically evaluated for impairment.
Investments: Debt securities are classified as HTM at the time of purchase when the Corporation has both the intent and ability
to hold these investments until they mature. Such debt securities are carried at cost, adjusted for amortization of premiums and
accretion of discounts using the effective yield method. The Corporation does not engage in trading activities; however, since
the investment portfolio serves as a source of liquidity, most debt securities are classified as AFS. AFS securities are carried at
estimated fair value with the related unrealized holding gains and losses reported in shareholders' equity as a component of
AOCI, net of tax. Realized securities gains and losses are computed using the specific identification method and are recorded on
a trade date basis.
HTM Debt Securities: Expected credit losses on HTM debt securities would be recorded in the ACL on HTM debt securities.
As of December 31, 2024, no HTM debt securities required an ACL as these investments consist solely of agency-guaranteed
residential mortgage-backed and commercial mortgage-backed securities.
AFS Debt Securities: The Bank's AFS rated debt securities are investment grade. In evaluating credit losses on debt securities,
management considers factors such as the credit quality of the investments, the credit rating of the security, and the delinquency
history of the security. As of December 31, 2024, no AFS debt securities required an ACL.
Fair Value Option: The Corporation has elected to measure mortgage loans held for sale at fair value. Derivative financial
instruments related to mortgage banking activities are also recorded at fair value, as detailed under the heading "Derivative
Financial Instruments," below. The Corporation determines fair value for its mortgage loans held for sale based on the price that
secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair
value is measured. Changes in fair values during the period are recorded as components of mortgage banking income on the
76
consolidated statements of income. Interest income earned on mortgage loans held for sale is classified in interest income on the
consolidated statements of income.
Loans: Loans are stated at amortized cost, except for mortgage loans held for sale, which are carried at fair value. Interest
income on loans is accrued as earned.
In general, loans are placed on non-accrual status once they become 90 days delinquent as to principal or interest. In certain
cases a loan may be placed on non-accrual status prior to being 90 days delinquent if there is an indication that the borrower is
having difficulty making payments, or the Corporation believes it is probable that all amounts will not be collected according to
the contractual terms of the loan agreement. When interest accruals are discontinued, unpaid interest previously credited to
income is reversed. Non-accrual loans may be restored to accrual status when all delinquent principal and interest has been paid
currently for six consecutive months or the loan is considered adequately secured and in the process of collection. The
Corporation generally applies payments received on non-accruing loans to principal until such time as the principal is paid off,
after which time any payments received are recognized as interest income. If the Corporation believes that all amounts
outstanding on a non-accrual loan will ultimately be collected, payments received subsequent to its classification as a non-
accrual loan are allocated between interest income and principal.
A loan that is 90 days delinquent may continue to accrue interest if the loan is both adequately secured and is in the process of
collection. Past due status is determined based on contractual due dates for loan payments. An adequately secured loan is one
that has collateral with a supported fair value that is sufficient to discharge the debt, and/or has an enforceable guarantee from a
financially responsible party. A loan is considered to be in the process of collection if collection is proceeding through legal
action or through other activities that are reasonably expected to result in repayment of the debt or restoration to current status
in the near future.
Loans deemed to be a loss are written off through a charge against the ACL. Closed-end consumer loans are generally charged-
off when they become 120 days past due (180 days for open-end consumer loans) if they are not adequately secured by real
estate. All other loans are evaluated for possible charge-off when it is probable that the balance will not be collected, based on
the ability of the borrower to pay and the value of the underlying collateral, if any. Principal recoveries of loans previously
charged-off are recorded as increases to the ACL.
Loan Origination Fees and Costs: Loan origination fees and the related direct origination costs are deferred and amortized
over the life of the loan as an adjustment to interest income using the effective yield method. For mortgage loans sold, net loan
origination fees and costs are included in the gain or loss on sale of the related loan, as components of mortgage banking.
Loan Modifications: Loans are accounted for and reported as modified when, for economic or legal reasons, the Corporation
grants a concession to a borrower experiencing financial difficulty that it would not otherwise consider. Concessions, whether
negotiated or imposed by bankruptcy, granted under a loan modification typically involve a more than insignificant deferral of
scheduled loan payments, an extension of a loan's stated maturity date, a reduction in the interest rate or a forgiveness of
principal.
Because the effect of most modifications made to loans to borrowers experiencing financial difficulty is already included in the
ACL, a change to the ACL is generally not recorded upon modification. When principal forgiveness is provided, the amortized
cost basis of the forgiven portion of the loan is written off against the ACL.
Allowance for Credit Losses:
The Corporation follows ASU 2016-13 Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses
on Financial Instruments. The measurement of expected credit losses under CECL is applicable to financial assets measured at
amortized cost, including loans and HTM debt securities. It also applies to OBS credit exposures, such as loan commitments,
standby letters of credit, financial guarantees, and other similar instruments, and net investments in leases recognized by a
lessor in accordance with ASC Topic 842.
The Corporation has elected to exclude accrued interest receivable from the measurement of its ACL. When a loan is placed on
non-accrual status, any outstanding accrued interest is reversed against interest income.
The ACL consists of loans evaluated collectively and individually for expected credit losses. The ACL represents an estimate of
expected credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans.
The ACL is increased or decreased (when the provision for credit losses is negative) through the provision for credit losses and
increased or decreased (when recoveries of loans previously charged off exceed loans charged off) by charge-offs, net of
77
recoveries. The reserve for OBS credit exposures includes estimated losses on unfunded loan commitments, letters of credit and
other OBS credit exposures.
Loans: The ACL is an estimate of the expected losses to be realized over the life of the loans in the portfolio. The ACL is
determined for two distinct categories of loans: (i) loans evaluated collectively for expected credit losses and (ii) loans
evaluated individually for expected credit losses.
Loans Evaluated Collectively: Loans evaluated collectively for expected credit losses include accruing loans and non-accrual
loans where the total commitment amount is less than $1 million. In determining the ACL, the Corporation uses three inputs to
model the estimate. These inputs are the PD rate which estimates the likelihood that a borrower will be unable to meet its debt
obligations, the LGD rate which estimates the percentage of an asset that is lost if a borrower defaults, and the EAD balance
which estimates the gross exposure under a facility upon default. The PD models were developed based on historical default
data. Both internal and external variables are evaluated in the process. The main internal variables are risk rating or delinquency
history and indicators of default. The external variables are economic variables obtained from third-party forecasts.
The PD models are transition matrix models that utilize historical credit observations and incorporate economic forecasts to
project future default rates using a linear regression methodology for each loan segment. The LGD model uses a vintage loss
approach that estimates LGD rates based on the bank’s historical loss experience for each loan segment. The EAD incorporates
a prepayment rate and applies the PD rates to estimate the projected exposure at default across the life of each loan. The ACL is
calculated by applying the LGD to the EAD at each period across the life of each loan.
The ACL incorporates the Corporation’s historical credit observations, current conditions, and reasonable and supportable
forecasts that are based on the projected performance of specific economic variables that are statistically correlated with
historical PD rates. The reasonable and supportable forecast extends to 24 months and reverts back to an average PD rate using
a straight-line reversion methodology over a 12 month period.
The ACL is highly sensitive to the economic forecasts used to develop the reserve. As such, the calculation of the ACL is
inherently subjective and requires management to exercise judgment.
The ACL may include qualitative adjustments intended to capture the impact of uncertainties not reflected in the quantitative
models. In determining qualitative adjustments, management considers changes in national, regional, and local economic and
business conditions and their impact on the lending environment, including underwriting standards and other factors affecting
credit losses over the remaining life of each loan.
Loans Evaluated Individually: Loans evaluated individually for expected credit losses include loans on non-accrual status
where the commitment amount equals or exceeds $1.0 million. The required ACL for such loans is determined using the
present value of expected future cash flows, observable market price or the fair value of collateral.
Loans evaluated individually may have specific allocations of the ACL assigned if the measured value of the loan using one of
the noted techniques is less than its current carrying value. For loans measured using the fair value of collateral, if the analysis
determines that sufficient collateral value would be available for repayment of the debt, then no allocations would be assigned
to those loans. Collateral could be in the form of real estate or business assets, such as accounts receivable or inventory, in the
case of commercial and industrial loans. Commercial and industrial loans may also be secured by real estate.
For loans secured by real estate, estimated fair values are determined primarily through appraisals performed by third-party
appraisers, discounted to arrive at expected net sale proceeds. For collateral-dependent loans, estimated real estate fair values
are also net of estimated selling costs. When a real estate secured loan is impaired, a decision is made regarding whether an
updated appraisal of the real estate is necessary. This decision is based on various considerations, including: the age of the most
recent appraisal; the loan-to-value ratio based on the original appraisal; the condition of the property; the Corporation's
experience and knowledge of the real estate market; the purpose of the loan; market factors; payment status; the strength of any
guarantors; and the existence and age of other indications of value such as broker price opinions, among others. The
Corporation generally obtains updated appraisals performed by third-party appraisers for impaired loans secured predominantly
by real estate every 12 months.
When updated appraisals are not obtained for loans secured by real estate, fair values are estimated based on the original
appraisal values, as long as the original appraisal indicated an acceptable loan-to-value position and there has not been a
significant deterioration in the collateral value since the original appraisal was performed.
78
For loans with principal balances greater than or equal to $1.0 million secured by non-real estate collateral, such as accounts
receivable or inventory, estimated fair values are determined based on borrower financial statements, inventory listings,
accounts receivable agings or borrowing base certificates provided by the borrower. Indications of value from these sources are
generally discounted based on the age of the financial information or the quality of the assets. Liquidation or collection
discounts are applied to these assets based upon existing loan evaluation policies.
Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan
classification. For commercial loans, commercial mortgages and construction loans to commercial borrowers, an internal risk
rating process is used. The Corporation believes that internal risk ratings are the most relevant credit quality indicator for these
types of loans. The migration of loans through the various internal risk rating categories is a significant component of the ACL
methodology for these loans, which bases the PD on this migration. Assigning risk ratings involves judgment. Risk ratings may
be changed based on ongoing monitoring procedures, or if specific loan review assessments identify a deterioration or an
improvement in the loan.
The following is a summary of the Corporation's internal risk rating categories:
•
Pass: These loans do not currently pose undue credit risk and can range from the highest to average quality, depending
on the degree of potential risk.
•
Special Mention: These loans have a heightened credit risk, but not to the point of justifying a classification of
Substandard. Loans in this category are currently acceptable but, are nevertheless potentially weak.
•
Substandard or Lower: These loans are inadequately protected by current sound worth and paying capacity of the
borrower. There exists a well-defined weakness or weaknesses that jeopardize the normal repayment of the debt.
The Corporation considers risk factors such as: local and national economic conditions; trends in delinquencies and non-accrual
loans; the diversity of borrower industry types; and the composition of the portfolio by loan type.
OBS Credit Exposures: The reserve for OBS credit exposures is recorded in other liabilities on the consolidated balance sheets,
and represents management's estimate of expected losses in its unfunded loan commitments and other OBS credit exposures.
The reserve for OBS credit exposures specific to unfunded commitments is determined by estimating future draws and applying
the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of
draws taken). The reserve for OBS credit exposures is increased or decreased by charges or reductions to expense, through the
provision for credit losses.
Premises and Equipment: Premises and equipment are stated at cost, less accumulated depreciation and amortization. The
provision for depreciation and amortization is generally computed using the straight-line method over the estimated useful lives
of the related assets, which are a maximum of 50 years for buildings and improvements, 8 years for furniture and 7 years for
equipment. Leasehold improvements are amortized over the shorter of the useful life or the non-cancelable lease term.
Premises and equipment acquired in a business combination are initially recorded at fair value and subsequently carried at cost
less depreciation and amortization. See "Note 6 - Premises and Equipment" for additional information.
OREO: Assets acquired in settlement of mortgage loan indebtedness are recorded as OREO and are included in other assets on
the consolidated balance sheets, initially at the lower of the estimated fair value of the asset, less estimated selling costs, or the
carrying amount of the loan. Costs to maintain the assets and subsequent gains and losses on sales are included in other non-
interest expense on the consolidated statements of income.
MSRs: The estimated fair value of MSRs related to residential mortgage loans sold and serviced by the Corporation is recorded
as an asset upon the sale of such loans. MSRs are amortized as a reduction to mortgage servicing income, included as a
component of mortgage banking income on the consolidated statements of income, over the estimated lives of the underlying
loans.
MSRs are stratified and evaluated for impairment by comparing each stratum's carrying amount to its estimated fair value. Fair
values are determined through a discounted cash flows valuation completed by a third-party valuation expert. Significant inputs
to the valuation include expected net servicing income, the discount rate and the expected lives of the underlying loans.
Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections. To the extent the amortized
cost of the MSRs exceeds their estimated fair value, a valuation allowance is established through a charge against servicing
income. If subsequent valuations indicate that impairment no longer exists, the valuation allowance is reduced through an
increase to servicing income. See "Note 8 - Mortgage Servicing Rights" for additional information.
79
Derivative Financial Instruments: The Corporation manages its exposure to certain interest rate risk through the use of
derivatives. Certain of the Corporation's outstanding derivative contracts are designated as hedges, and none are entered into for
speculative purposes. The Corporation enters into derivative contracts that are intended to economically hedge certain of its
risks, even if hedge accounting does not apply or the Corporation elects not to apply hedge accounting.
The Corporation records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of
derivatives depends on the intended use of the derivative, whether the Corporation has elected to designate a derivative in a
hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to
apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an
asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges.
The Corporation does not have any derivative instruments designated as fair value hedges. Derivatives designated and
qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are
considered cash flow hedges. For derivatives designated as cash flow hedges where hedge accounting is applied, changes in fair
value are recognized in OCI, net of tax. For derivatives where hedge accounting does not apply, changes in fair value are
recognized in earnings as components of non-interest income or non-interest expense on the consolidated statements of income.
Derivative contracts create counterparty credit risk with both the Corporation's customers and with institutional derivative
counterparties. The Corporation manages counterparty credit risk through its credit approval processes, monitoring procedures
and obtaining adequate collateral, when the Corporation determines it is appropriate to do so and in accordance with
counterparty contracts.
For each of the derivatives, gross derivative assets and liabilities are recorded in other assets and other liabilities, respectively,
on the consolidated balance sheets. Related gains and losses on these derivative instruments are recorded in other changes, net
on the consolidated statements of cash flows.
Mortgage Banking Derivatives
In connection with its mortgage banking activities, the Corporation enters into commitments to originate certain fixed-rate
residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward
commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the
effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales
commitments may also be in the form of commitments to sell individual mortgage loans at a fixed price at a future date. The
amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with
similar characteristics, including interest rate and term, as of the date fair value is measured.
Interest Rate Derivatives - Non-Designated Hedges
The Corporation enters into interest rate derivatives with certain qualifying commercial loan customers to meet their interest
rate risk management needs. The Corporation simultaneously enters into interest rate derivatives with dealer counterparties,
with identical notional amounts and terms. The net result of these interest rate derivatives is that the customer pays a fixed rate
of interest and the Corporation receives a floating rate. As the interest rate derivatives associated with this program do not meet
hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are
recognized directly in earnings.
The Corporation's existing OBS credit exposures result from participation in interest rate derivatives provided by external
lenders as part of loan participation arrangements and, therefore, are not used to manage interest rate risk in the Corporation's
assets or liabilities.
The Corporation is required to clear all eligible interest rate derivative contracts with a clearing agent and is subject to the
regulations of the Commodity Futures Trading Commission.
Cash Flow Hedges of Interest Rate Risk
The Corporation's objectives in using interest rate derivatives are to reduce volatility in net interest income and interest expense
and to manage its exposure to interest rate movements. To accomplish this objective, the Corporation primarily uses interest
rate derivatives as part of its interest rate risk management strategy. The Corporation enters into interest rate derivatives
designated as cash flow hedges to hedge the variable cash flows associated with existing floating rate loans and borrowings.
80
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative
is recorded in OCI, net of tax, and subsequently reclassified into interest income or interest expense in the same period during
which the hedged transaction affects earnings. Amounts reported in OCI related to derivatives will be reclassified to interest
income or interest expense as interest payments are made on the Corporation's variable-rate loans and borrowings.
Foreign Exchange Contracts
The Corporation enters into foreign exchange contracts to accommodate the needs of its customers. Foreign exchange contracts
are commitments to buy or sell foreign currency on a specific date at a contractual price. The Corporation limits its foreign
exchange exposure with customers by entering into contracts with institutional counterparties to mitigate its foreign exchange
risk. The Corporation also holds certain amounts of Foreign Currency Nostro Accounts. The Corporation limits the total
overnight net foreign currency open positions, which is defined as an aggregate of all outstanding contracts, to $0.5 million. See
"Note 11 - Derivative Financial Instruments" for additional information.
Balance Sheet Offsetting: Certain financial assets and liabilities may be eligible for offset on the consolidated balance sheets
because they are subject to master netting arrangements or similar agreements. The Corporation has elected to net its financial
assets and liabilities designated as cash flow hedges when offsetting is permitted. The Corporation has elected not to offset the
remaining assets and liabilities subject to such arrangements on the consolidated financial statements.
The Corporation is a party to interest rate derivatives with financial institution counterparties and customers. Under these
agreements, the Corporation has the right to net-settle multiple contracts with the same counterparty in the event of default on,
or termination of, any one contract. Cash collateral is posted by the party with a net liability position in accordance with
contract thresholds and can be used to settle the fair value of the interest rate derivatives in the event of default. A daily
settlement occurs through a clearing agent for changes in the fair value of centrally cleared derivatives. Not all derivatives are
required to be cleared through a daily clearing agent. As a result, the total fair values of interest rate derivative assets and
derivative liabilities recognized on the consolidated balance sheets are not equal and offsetting.
The Corporation is also a party to foreign exchange contracts with financial institution counterparties under which the
Corporation has the right to net-settle multiple contracts with the same counterparty in the event of default on, or termination of,
any one contract. As with interest rate derivatives, cash collateral is posted by the party with a net liability position in
accordance with contract thresholds and can be used to settle the fair value of the foreign exchange contracts in the event of
default.
For additional information on balance sheet offsetting, see "Note 11 - Derivative Financial Instruments."
Income Taxes: The Corporation utilizes the asset and liability method in accounting for income taxes. Under this method,
DTAs and deferred tax liabilities are determined based upon the difference between the values of the assets and liabilities as
reflected in the financial statements and their related tax basis using enacted tax rates in effect for the year in which the
differences are expected to be recovered or settled. As changes in tax law or rates are enacted, DTAs and deferred tax liabilities
are adjusted through income tax expense. In assessing the realizability of DTAs, management considers whether it is more
likely than not that some portion or all of the DTAs will not be realized. The ultimate realization of DTAs is dependent upon
the generation of future taxable income and tax planning strategies which will create taxable income during the periods in
which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities,
the amount of taxes paid in available carryback years, projected future taxable income, and, if necessary, tax planning strategies
in making this assessment. A valuation allowance is provided against DTAs unless it is more likely than not that such DTAs
will be realized.
ASC Topic 740, "Income Taxes" creates a single model to address uncertainty in tax positions, and clarifies the accounting for
uncertainty in income taxes recognized in an enterprise's financial statements by prescribing the minimum recognition threshold
a tax position is required to meet before being recognized in an enterprise's financial statements. It also provides guidance on
derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. The
liability for unrecognized tax benefits is included in other liabilities within the consolidated balance sheets.
See "Note 13 - Income Taxes" for additional information.
Stock-Based Compensation: The Corporation grants equity awards to employees, consisting of restricted stock, RSUs and
PSUs under its Employee Equity Plan. In addition, employees may purchase stock under the Corporation's ESPP.
The Corporation also grants equity awards to non-employee members of its Board of Directors and Fulton Bank's Board of
Directors under the Directors' Plan. Under the Directors' Plan, the Corporation can grant equity awards to non-employee
81
holding company and subsidiary bank directors in the form of restricted stock, RSUs or common stock. Recent grants of equity
awards under the Directors' Plan have been limited to RSUs.
Equity awards issued under the Employee Equity Plan are generally granted annually and become fully vested over or after a
three-year vesting period. The vesting period for non-performance-based awards represents the period during which employees
are required to provide service in exchange for such awards. Equity awards under the Directors' Plan are generally granted
annually and fully vest after a one-year vesting period. Certain events, as defined in the Employee Equity Plan and the
Directors' Plan, result in the acceleration of the vesting of equity awards. Restricted stock, RSUs and PSUs earn dividends
during the vesting period, which are forfeitable if the awards do not vest.
The fair value of stock options, restricted stock and RSUs granted to employees or directors is recognized as compensation
expense over the vesting period for such awards. Compensation expense for PSUs is also recognized over the vesting period
and service period, however, compensation expense for PSUs may vary based on the expectations for actual performance
relative to defined performance measures.
The fair value of restricted stock, RSUs and a majority of PSUs are based on the trading price of the Corporation's stock on the
date of grant. The fair value of certain PSUs are estimated through the use of the Monte Carlo valuation methodology as of the
date of grant. See "Note 16 - Stock-Based Compensation Plans" for additional information. The Corporation has not issued
stock options since 2014 and accordingly, there is no compensation expense for this instrument. All stock options have been
exercised or expired during 2024.
Disclosures about Segments of an Enterprise and Related Information: Fulton Financial Corporation is a single segment.
The Corporation's Chief Operating Decision Maker reviews consolidated results on a GAAP basis.
Financial Guarantees: Financial guarantees, which consist primarily of standby and commercial letters of credit, are accounted
for by recognizing a liability equal to the fair value of the guarantees and crediting the liability to income over the term of the
guarantee. Fair value is estimated based on the fees currently charged to enter into similar agreements with similar terms.
Goodwill and Intangible Assets: The Corporation accounts for its acquisitions using the purchase accounting method.
Purchase accounting requires that all assets acquired and liabilities assumed, including certain intangible assets that must be
recognized, be recorded at their estimated fair values as of the acquisition date. Any purchase price exceeding the fair value of
net assets acquired is recorded as goodwill. Any purchase price lower than the fair value of net assets acquired is recorded as a
gain on acquisition, net of tax.
Goodwill is not amortized to expense, but is evaluated for impairment at least annually. Write-downs of the balance, if
necessary as a result of the impairment test, are charged to expense in the period in which goodwill is determined to be
impaired. The Corporation performs its annual assessment of goodwill impairment in the fourth quarter of each year. If certain
events occur which indicate goodwill might be impaired between annual assessments, goodwill would be evaluated when such
events occur.
Intangible assets are amortized over their estimated lives. Some intangible assets have indefinite lives and are, therefore, not
amortized. All intangible assets must be evaluated for impairment if certain events occur. Any impairment write-downs are
recognized as non-interest expense on the consolidated statements of income. See "Note 7 - Goodwill and Intangible Assets,"
for additional information.
VIEs: ASC Topic 810 provides guidance on when to consolidate certain VIEs in the financial statements of the Corporation.
VIEs are entities in which equity investors do not have a controlling financial interest or do not have sufficient equity at risk for
the entity to finance activities without additional financial support from other parties. VIEs are assessed for consolidation under
ASC Topic 810 when the Corporation holds variable interests in these entities. The Corporation consolidates VIEs when it is
deemed to be the primary beneficiary. The primary beneficiary of a VIE is determined to be the party that has the power to
make decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb losses or
the right to receive benefits that in either case could potentially be significant to the VIE.
The Corporation makes investments in certain community development projects, the majority of which generate tax credits
under various federal programs, including TCIs. These investments are made throughout the Corporation's market area as a
means of supporting the communities it serves. The Corporation typically acts as a limited partner or member of a limited
liability company in its TCIs and does not exert control over the operating or financial policies of the partnership or limited
liability company. Tax credits earned are subject to recapture by federal taxing authorities based upon compliance requirements
to be met at the project level.
82
Because the Corporation owns 100% of the equity interests in its NMTC investments, these investments were consolidated
based on ASC Topic 810 as of December 31, 2024 and 2023. Investments in affordable housing projects were not consolidated
based on management's assessment of the provisions of ASC Topic 810.
TCIs are tested for impairment when events or changes in circumstances indicate that it is more likely than not that the carrying
amount of the investment will not be realized. An impairment loss is measured as the amount by which the current carrying
value exceeds its aggregated remaining value of the tax benefits of the investment. There were no impairment losses recognized
for the Corporation's TCIs in 2024, 2023 or 2022. For additional information, see "Note 13 - Income Taxes."
Fair Value Measurements: Assets and liabilities are categorized in a fair value hierarchy for the inputs to valuation techniques
used to measure assets and liabilities at fair value using the following three categories (from highest to lowest priority):
•
Level 1 - Inputs that represent quoted prices for identical instruments in active markets.
•
Level 2 - Inputs that represent quoted prices for similar instruments in active markets, or quoted prices for identical
instruments in non-active markets. Also included are valuation techniques whose inputs are derived principally from
observable market data other than quoted prices, such as interest rates or other market-corroborated means.
•
Level 3 - Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.
The Corporation has categorized all assets and liabilities required to be measured at fair value on both a recurring and
nonrecurring basis into the above three levels. See "Note 19 - Fair Value Measurements" for additional information.
Revenue Recognition: The sources of revenue for the Corporation are interest income from loans, leases and investments and
non-interest income. Non-interest income is earned from various banking and financial services that the Corporation offers
through its subsidiaries. Revenue is recognized as earned based on contractual terms, as transactions occur, or as services are
provided. Following is further detail of the various types of revenue the Corporation earns and when it is recognized:
Interest income: Interest income is recognized on an accrual basis according to loan and lease agreements, investment
securities contracts or other written contracts.
Wealth management services: Consists of income from trust commissions, brokerage, money market and insurance
commissions. Trust commissions consist of advisory fees that are based on market values of clients' managed portfolios and
transaction fees for fiduciary services performed, both of which are recognized when earned. Brokerage income includes
advisory fees which are recognized when earned on a monthly basis and transaction fees that are recognized when
transactions occur. Money market income is based on the balances held in trust accounts and is recognized monthly.
Insurance commissions are earned and recognized when policies are originated. Currently, no investment management and
trust service income is based on performance or investment results.
Commercial and consumer banking income: Consists of cash management, overdraft and other service charges on deposit
accounts as well as branch fees, ATM fees, debit and credit card income and merchant services fees. Also included are letter
of credit fees, foreign exchange income and interest rate derivative fees. Revenue is primarily transactional and recognized
when earned at the time the transactions occur.
Mortgage banking income: Consists of gains or losses on the sale of residential mortgage loans and mortgage loan servicing
income.
Other Income: Includes gains on sales of SBA loans, cash surrender value of life insurance, and other miscellaneous
income.
Leases: All leases with an initial term greater than 12 months recognize: (1) a ROU asset, which is an asset that represents the
lessee's right to use, or control the use of, a specified asset for the lease term; and (2) a lease liability, which is a lessee's
obligation to make lease payments arising from a lease, each measured on a discounted basis. The Corporation elected to not
separate lease and non-lease components.
As a lessee, the majority of the operating lease portfolio consists of real estate leases for the Corporation's financial centers,
land and office space. The operating leases have remaining lease terms of 1 year to 20 years, some of which include options to
extend the leases for 5 years or more. ROU assets and lease liabilities are not recognized for leases with an initial term of 12
months or less.
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Certain real estate leases have lease payments that adjust based on annual changes in the CPI or at a stated contractual rate. The
leases that are dependent upon the CPI or stated contractual rate are initially measured using the CPI or contractual rate at the
commencement date and are included in the measurement of the lease liability.
Operating lease expense represents fixed lease payments for operating leases recognized on a straight-line basis over the
applicable lease term. Variable lease expense represents expenses such as the payment of real estate taxes, insurance and
common area maintenance based on the Corporation's pro-rata share.
Sublease income consists mostly of operating leases for space within the Corporation's offices and financial centers and is
recorded as a reduction to net occupancy expense on the consolidated statements of income. See "Note 18 - Leases" for
additional information.
Defined Benefit Plan: Net periodic pension costs are funded based on the requirements of federal laws and regulations. The
determination of net periodic pension costs is based on assumptions about future events that will affect the amount and timing
of required benefit payments under the plan. These assumptions include demographic assumptions such as retirement age and
mortality, a discount rate used to determine the current benefit obligation, form of payment election and a long-term expected
rate of return on plan assets. Net periodic pension expense includes interest cost, based on the assumed discount rate, an
expected return on plan assets, amortization of prior service cost or credit and amortization of net actuarial gains or losses. The
Corporation curtailed the Pension Plan in 2008, with no additional benefits accruing. In connection with the Merger, the
Corporation assumed the obligations of Prudential Bancorp under a multiemployer defined benefit pension plan that had
previously been closed to new Prudential Bancorp participants. Net periodic pension cost is recognized in salaries and
employee benefits on the consolidated statements of income. For additional information, see "Note 17 - Employee Benefit
Plans."
Business Combinations: Business combinations are accounted for using the acquisition method of accounting. Under the
acquisition method, identifiable assets acquired and liabilities assumed are measured at fair value as of the acquisition date. The
difference between the purchase price and the fair value of net assets acquired is recorded as goodwill, unless the acquisition is
a bargain purchase. Results of the operations of the acquired entity are included in the consolidated statement of income from
the acquisition date. Acquisition costs are expensed as incurred.
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.
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 adopted ASU 2023-07 on December 15, 2024, and it did not have a material impact on its
consolidated financial statements.
Recently Issued Accounting Standards
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 a material impact on its consolidated financial statements.
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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. The Corporation does not expect the adoption of ASU 2024-01 to
have a material impact on its consolidated financial statements.
In November 2024, FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense
Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"). This update requires disaggregation of certain expenses in a
note to the consolidated financial statements. The Corporation will adopt ASU 2024-03 on January 25, 2027. The Corporation
does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.
In November 2024, FASB issued ASU 2024-04 – Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced
Conversions of Convertible Debt Instruments ("ASU 2024-04"). This update clarifies the requirements for determining whether
settlement of convertible debt should be accounted for as induced conversion. The Corporation will adopt ASU 2024-04 on
January 1, 2026. The Corporation does not expect the adoption of ASU 2024-04 to have an impact on its consolidated financial
statements.
Reclassifications
Certain amounts in the 2023 consolidated financial statements and notes have been reclassified to conform to the 2024
presentation.
NOTE 2 - BUSINESS COMBINATIONS
On the Acquisition Date, Fulton Bank acquired substantially all of the assets and assumed substantially all of the deposits and
certain liabilities of Republic First Bank from the FDIC, as receiver for Republic First Bank. As part of the Republic First
Transaction, the Bank acquired approximately $4.8 billion of assets of Republic First Bank and received approximately
$0.8 billion of cash from the FDIC. The Bank assumed approximately $5.6 billion of total liabilities of Republic First Bank.
The Bank did not enter into a loss sharing arrangement with the FDIC in connection with the Republic First Transaction.
As a result of the Republic First Transaction, the Bank enhanced its presence in Philadelphia, Pennsylvania and New Jersey.
The Republic First Transaction constitutes a business combination as defined by FASB ASC Topic 805, Business
Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their estimated fair values as of the
Acquisition Date. The determination of estimated fair values required management to make certain estimates about discount
rates, future expected cash flows and market conditions at the time of the Republic First Transaction.
The Bank is awaiting conclusion of the customary final settlement process to determine whether certain assets and liabilities of
Republic First Bank will be acquired by the Bank. Until the settlement process is finalized, the preliminary gain on acquisition
can be updated for a period not to exceed one year following the Acquisition Date. The fair value estimates of assets acquired
and liabilities assumed, provide a reasonable basis for determining the preliminary gain on acquisition. During the fourth
quarter of 2024, adjustments to the estimated fair values of certain assets acquired were recorded, resulting in a decrease of
$2.7 million in the preliminary gain on acquisition, net of income taxes.
The excess of the estimated fair value of net assets acquired and the cash consideration received from the FDIC over the
estimated fair value of liabilities assumed was recorded as a preliminary gain on acquisition of $37.0 million, net of income
taxes.
85
The following table summarizes the consideration transferred and the estimated fair values of identifiable assets acquired and
liabilities assumed in connection with the Republic First Transaction:
Estimated
Fair Value
(dollars in
thousands)
Cash payment received from FDIC
$
809,920
Assets acquired:
Cash and due from banks
208,451
Investment securities
1,938,571
Loans
2,495,810
Premises and equipment
184
CDI
92,600
FHLB Stock
37,931
Accrued interest receivable
16,164
Other assets
10,179
Total assets
4,799,890
Liabilities assumed:
Deposits
4,112,143
Borrowings
1,413,751
Accrued interest payable
33,444
Other liabilities
2,641
Total liabilities
5,561,979
Net assets acquired:
(762,089)
Gain on acquisition, before income taxes
$
47,831
Gain on acquisition, net of income taxes
$
36,996
In the fourth quarter of 2024, the Bank assumed 14 leases from the FDIC in accordance with the terms of the P and A
Agreement. Upon assignment of the leases, the Corporation recorded at fair market value, a $13.1 million ROU asset and a
corresponding $14.4 million lease liability, with the $1.3 million difference recognized as a decrease to gain on acquisition,
before income taxes. Additionally, in the fourth quarter of 2024, the Bank purchased 15 premises and related property, plant
and equipment in accordance with the P and A Agreement. Upon the purchase, the Corporation recorded at fair market value,
$21.7 million in premises and equipment, with a corresponding reduction of $1.0 million in gain on acquisition, before income
taxes.
The following is a description of the valuation methodologies used to estimate the fair values of major categories of assets
acquired and liabilities assumed.
Cash and due from banks: The fair values of cash and due from banks approximate their book values.
Investment securities: The investment portfolio acquired in the Republic First Transaction, with a fair value of $1.9 billion, was
sold by the Corporation shortly after the Acquisition Date. The fair value of the investment portfolio was based on the proceeds
from the sale.
Loans: The Corporation recorded $2.5 billion of acquired loans that were initially recorded at their estimated fair values as of
the Acquisition Date. The estimated fair value for the loans was based on a discounted cash flow methodology that considered
credit loss and prepayment expectations, market interest rates and other market factors from the perspective of a market
participant. Loan cash flows were generated on an individual loan basis. The PD, LGD, exposure at default and prepayment
assumptions are the key factors driving credit losses that are embedded in the estimated cash flows.
86
The following table presents information with respect to the estimated fair value and unpaid principal balance of acquired loans
at the Acquisition Date:
April 26, 2024
Unpaid
Principal
Balance
Estimated
Fair Value
(dollars in thousands)
Real estate - commercial mortgage
$
1,384,029 $
1,234,409
Commercial and industrial
310,190
279,309
Real-estate - residential mortgage
947,144
752,331
Real-estate - home equity
90,882
84,369
Real-estate - construction
149,047
142,768
Consumer
2,638
2,624
Total acquired loans
$
2,883,930 $
2,495,810
The following table summarizes PCD Loans acquired in the Republic First Transaction as of the Acquisition Date:
April 26, 2024
(dollars in thousands)
Book balance of loans with deteriorated credit quality at acquisition
$
1,014,559
Fair value of loans with deteriorated credit quality at acquisition
895,588
Fair value discount
118,971
PCD Loans credit discount
(54,631)
Non-credit discount
$
64,340
The Republic First Transaction resulted in the addition of $78.1 million to the ACL, including the $54.6 million identified in
the table above for PCD Loans, and $23.4 million recorded through the provision for credit losses at the Acquisition Date for
non-PCD Loans.
Intangible assets: The Corporation recorded $92.6 million of CDI reflected in other assets that is being amortized over seven
years using the sum-of-the-years'-digits method. The estimated fair value of the CDI was determined using the cost savings
approach. The cost savings approach is defined as the difference between the cost of funds of core deposits and an alternative
cost of funds for those deposits. The CDI estimated fair value was determined by projecting discounted net cash flows that
included assumptions related to customer attrition rates, discount rates, deposit interest rates, deposit account maintenance costs
and alternative cost of funding rates.
FHLB stock: The Corporation acquired $37.9 million of FHLB stock. The estimated fair value of the FHLB stock approximated
its book value.
Accrued interest receivable: The Corporation acquired $16.2 million of accrued interest receivable. The fair value of the
accrued interest receivable approximated its book value.
Core deposits: Demand deposits, savings and money market deposits and time deposits (less than $250,000) were recorded at
book value which approximated fair value. The Corporation recorded $92.6 million of CDI in other assets for these deposits.
Time deposits: Time deposits of $250,000 and greater were valued based on a comparison with the contractual cost of a
portfolio of brokered deposits having a similar tenor. As the time deposit portfolio had a remaining average life of
approximately three months, the estimated fair value of the time deposits approximated their book value and no adjustment was
recorded.
Borrowings: Borrowings assumed in the Republic First Transaction, with a fair value of $1.4 billion, were repaid shortly after
the Acquisition Date. The fair value of borrowings was based on the repayment amounts.
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Acquisition-related expenses:
The Corporation developed a comprehensive integration plan under which it incurred direct costs that are expensed as incurred.
Costs related to the Republic First Transaction are included in acquisition-related expenses in the unaudited Consolidated
Statements of Income.
The following table details the costs identified and classified as acquisition-related expenses:
Year ended
December 31, 2024
(dollars in thousands)
Salaries and employee benefits
$
2,023
Net occupancy
10,085
Professional fees
11,439
Charitable donation
C
h
5,000
Other
9,088
$
37,635
In connection with the Republic First Transaction, Fulton Bank made a $5.0 million donation to the Fulton Forward Foundation
to provide additional impact grants to nonprofit community organizations across the region that share the Bank's vision of
advancing economic empowerment, particularly in underserved communities.
During the fourth quarter of 2024, the Corporation closed 13 of the Bank's financial center offices and consolidated the
operations of those offices into nearby financial center offices operated by the Bank. The plan was adopted as part of the Bank's
integration of the assets acquired and the deposits and certain other liabilities assumed in the Republic First Transaction. The
premises and equipment of the 13 locations included five locations owned by the Bank and eight locations leased by the Bank.
The Corporation recorded pre-tax costs of approximately $9.8 million reflected in acquisition-related expenses in the
Consolidated Statements of Income for the year ended December 31, 2024, consisting of write-offs of premises and equipment
and related expenses, and lease termination charges.
Unaudited Pro Forma Information:
The amount of net interest income, non-interest income, non-interest expense and net income of $111.4 million, $44.7 million,
$71.9 million and $50.5 million, respectively, attributable to the Republic First Transaction were included in the Corporation's
Consolidated Statements of Income for the year ended December 31, 2024. Included in non-interest income above is
$37.0 million related to the gain on acquisition, net of tax. Net interest income, non-interest income, non-interest expense and
net income shown above reflect management's best estimates based on information available.
Republic First Bank does not have historical financial information that the Corporation could base pro forma information.
Additionally, the Bank did not acquire all of the assets or assume all of the liabilities of Republic First Bank. Therefore, it is
impracticable to provide pro forma information on revenues and earnings for the Republic First Transaction in accordance with
ASC 805-10-50-2.
Prudential Bancorp, Inc
On July 1, 2022, the Corporation completed its acquisition of Prudential Bancorp, a Pennsylvania chartered bank holding
company headquartered in Philadelphia, Pennsylvania that primarily served the Greater Philadelphia region. On that date, the
Corporation acquired 100% of the outstanding common stock of Prudential Bancorp. As of July 1, 2022, Prudential Bancorp
had approximately $930.6 million in assets, $554.1 million in loans and $532.2 million in deposits after purchase accounting
adjustments. The common shareholders of Prudential received 0.7974 shares of Fulton Financial common stock and $3.65 cash
for each Prudential Bancorp share they owned prior to the Merger. The total consideration for the Merger was $119.1 million
consisting of approximately 6,208,516 shares of the Corporation's common stock and $29.3 million in cash.
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NOTE 3 - RESTRICTIONS ON CASH AND CASH EQUIVALENTS
Cash collateral is posted by the Corporation with counterparties to secure derivatives and other contracts, which is included in
"interest-bearing deposits with other banks" on the consolidated balance sheets. The amounts of such collateral as of
December 31, 2024 and 2023 were $4.0 million and $17.4 million, respectively.
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NOTE 4 - INVESTMENT SECURITIES
The following tables present the amortized cost and estimated fair values of investment securities, as of December 31:
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair
Value
(dollars in thousands)
2024
Available for Sale
State and municipal securities
$
960,227 $
106 $
(145,446) $
814,887
Corporate debt securities
313,681
1,123
(14,434)
300,370
Collateralized mortgage obligations
798,157
4,629
(13,901)
788,885
Residential mortgage-backed securities
1,029,846
30
(40,001)
989,875
Commercial mortgage-backed securities
617,605
—
(100,723)
516,882
Total
$ 3,719,516 $
5,888 $
(314,505) $ 3,410,899
Held to Maturity
Residential mortgage-backed securities
$
537,856 $
2 $
(60,162) $
477,696
Commercial mortgage-backed securities
857,713
—
(151,960)
705,753
Total
$ 1,395,569 $
2 $
(212,122) $ 1,183,449
2023
Available for Sale
U.S. Government securities
$
42,475 $
— $
(314) $
42,161
U.S. Government-sponsored agency securities
1,038
—
(28)
1,010
State and municipal securities
1,200,571
1,089
(129,647)
1,072,013
Corporate debt securities
480,714
473
(40,636)
440,551
Collateralized mortgage obligations
122,824
—
(11,390)
111,434
Residential mortgage-backed securities
223,273
7
(26,485)
196,795
Commercial mortgage-backed securities
627,364
—
(92,976)
534,388
Total
$ 2,698,259 $
1,569 $
(301,476) $ 2,398,352
Held to Maturity
Residential mortgage-backed securities
$
407,075 $
— $
(51,805) $
355,270
Commercial mortgage-backed securities
860,847
—
(143,910)
716,937
Total
$ 1,267,922 $
— $
(195,715) $ 1,072,207
In May 2024, the Corporation sold $345.7 million of AFS securities and recorded a pre-tax loss of $20.3 million. The proceeds
from the sale were reinvested into higher-yielding securities of a similar type and similar duration.
Securities carried at $0.3 billion and $0.4 billion at December 31, 2024 and 2023, respectively, were pledged as collateral to
secure public and trust deposits.
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The amortized cost and estimated fair values of debt securities as of December 31, 2024, by contractual maturity, are shown in
the following table. Actual maturities may differ from contractual maturities because issuers may have the right to call or
borrowers may have the right to prepay with or without call or prepayment penalties.
Available for Sale
Held to Maturity
Amortized
Cost
Estimated
Fair Value
Amortized
Cost
Estimated
Fair Value
(dollars in thousands)
Due in one year or less
$
15,672 $
15,532 $
— $
—
Due from one year to five years
106,119
102,912
—
—
Due from five years to ten years
309,940
294,656
—
—
Due after ten years
842,177
702,157
—
—
1,273,908 1,115,257
—
—
Residential mortgage-backed securities(1)
1,029,846
989,875
537,856
477,696
Commercial mortgage-backed securities(1)
617,605
516,882
857,713
705,753
Collateralized mortgage obligations(1)
798,157
788,885
—
—
Total
$ 3,719,516 $ 3,410,899 $ 1,395,569 $ 1,183,449
(1) Maturities for mortgage-backed securities and collateralized mortgage obligations are dependent upon the interest rate environment and prepayments on the
underlying loans.
The following table presents information related to gross gains and losses on the sales of securities for the years presented:
Gross
Realized
Gains
Gross
Realized
Losses
Net Gains
(Losses)
(dollars in thousands)
2024
$
179 $
(20,462) $
(20,283)
2023
283
(1,016)
(733)
2022
1,587
(1,614)
(27)
91
The following tables present the gross unrealized losses and estimated fair values of investments aggregated by investment
category and length of time that individual securities have been in a continuous unrealized loss position, as of December 31:
Less than 12 months
12 Months or Longer
Total
Number
of
Securities
Estimated
Fair Value
Unrealized
Losses
Number
of
Securities
Estimated
Fair Value
Unrealized
Losses
Estimated
Fair Value
Unrealized
Losses
2024
(dollars in thousands)
Available for Sale
State and municipal securities
22
$
53,026
$
(1,692)
272
$
755,310
$ (143,754) $
808,336
$ (145,446)
Corporate debt securities
1
4,844
(13)
47
264,099
(14,421)
268,943
(14,434)
Collateralized mortgage obligations
12
288,871
(3,463)
77
85,485
(10,438)
374,356
(13,901)
Residential mortgage-backed securities
42
777,695
(9,178)
69
174,284
(30,823)
951,979
(40,001)
Commercial mortgage-backed securities
1
19,291
(875)
135
497,591
(99,848)
516,882
(100,723)
Total available for sale
78
$ 1,143,727
$
(15,221)
600
$ 1,776,769
$ (299,284) $ 2,920,496
$ (314,505)
Held to Maturity
Residential mortgage-backed securities
7
$
155,726
$
(1,754)
120
$
303,220
$
(58,408) $
458,946
$
(60,162)
Commercial mortgage-backed securities
—
—
—
60
705,753
(151,960)
705,753
(151,960)
Total held to maturity
7
$
155,726
$
(1,754)
180
$ 1,008,973
$ (210,368) $ 1,164,699
$ (212,122)
Less than 12 months
12 Months or Longer
Total
Number
of
Securities
Estimated
Fair Value
Unrealized
Losses
Number
of
Securities
Estimated
Fair Value
Unrealized
Losses
Estimated
Fair Value
Unrealized
Losses
2023
(dollars in thousands)
Available for Sale
U.S. Government Securities
—
$
—
$
—
1
$
42,161
$
(314) $
42,161
$
(314)
U.S. Government-sponsored agency
securities
—
—
—
1
1,010
(28)
1,010
(28)
State and municipal securities
40
76,155
(858)
314
917,274
(128,789)
993,429
(129,647)
Corporate debt securities
8
42,945
(1,326)
60
370,523
(39,310)
413,468
(40,636)
Collateralized mortgage obligations
—
—
—
93
111,434
(11,390)
111,434
(11,390)
Residential mortgage-backed securities
6
409
(3)
69
195,453
(26,482)
195,862
(26,485)
Commercial mortgage-backed securities
2
26,907
(1,053)
133
507,481
(91,923)
534,388
(92,976)
Total available for sale
56
$
146,416
$
(3,240)
671
$ 2,145,336
$ (298,236) $ 2,291,752
$ (301,476)
Held to maturity
Residential mortgage-backed securities
—
$
—
$
—
120
$
355,270
$
(51,805) $
355,270
$
(51,805)
Commercial mortgage-backed securities
—
—
—
60
716,937
(143,910)
716,937
(143,910)
Total held to maturity
—
$
—
$
—
180
$ 1,072,207
$ (195,715) $ 1,072,207
$ (195,715)
The Corporation's collateralized mortgage obligations, residential mortgage-backed securities and commercial mortgage-backed
securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized
cost of the investment. The change in fair value of these securities is attributable to changes in interest rates and not credit
quality. The Corporation does not have the intent to sell, and does not believe it will more likely than not be required to sell,
any of these securities prior to a recovery of their fair value to amortized cost. In addition, these securities have principal
payments that are guaranteed by U.S. government-sponsored agencies. Therefore, the Corporation does not have an ACL for
these investments as of December 31, 2024 and 2023, respectively.
As of December 31, 2024 and 2023, no ACL was required for the Corporation's state and municipal securities. The Corporation
does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to
a recovery of their fair value to amortized cost, which may be at maturity. Therefore, the Corporation did not record a loss on
these investments as of December 31, 2024 and December 31, 2023, respectively.
The majority of the corporate debt securities were rated at or above investment grade as of December 31, 2024 and December
31, 2023. Based on the payment status, rating and management's evaluation of these securities, no ACL was required for
corporate debt securities as of December 31, 2024 and December 31, 2023. The Corporation does not have the intent to sell and
does not believe it will more likely than not to be required to sell any of these securities prior to a recovery of their fair value to
92
amortized cost, which may be at maturity. Therefore, the Corporation did not record a loss on these investments as of December
31, 2024 and December 31, 2023.
NOTE 5 - LOANS AND ALLOWANCE FOR CREDIT LOSSES
Loans and leases, net of unearned income
Loans and leases, net of unearned income are summarized as follows as of December 31:
2024
2023
(dollars in thousands)
Real estate - commercial mortgage
$ 9,601,858 $ 8,127,728
Commercial and industrial(1)
4,605,589
4,545,552
Real-estate - residential mortgage
6,349,643
5,325,923
Real-estate - home equity
1,160,616
1,047,184
Real-estate - construction
1,394,899
1,239,075
Consumer
616,856
729,318
Leases and other loans(2)
315,458
336,314
Net loans
$ 24,044,919 $ 21,351,094
(1) Includes no unearned income for December 31, 2024 and $41.0 thousand at December 31, 2023.
(2) Includes unearned income of $35.6 million and $38.0 million at December 31, 2024 and December 31, 2023, respectively.
The Corporation has extended credit to officers and directors of the Corporation and to their associates. These related-party
loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for
comparable transactions with unrelated persons and do not involve more than the normal risk of collection or present other
unfavorable features. The aggregate dollar amount of these loans, including unadvanced commitments, was $166.2 million and
$162.5 million as of December 31, 2024 and 2023, respectively. During 2024, additions totaled $9.1 million and repayments
totaled $5.4 million for related-party loans.
Allowance for Credit Losses
The following table summarizes the ACL - loans balance and the reserve for OBS credit exposures balance as of December 31,
2024 and 2023:
2024
2023
(dollars in thousands)
ACL - loans
$
379,156 $
293,404
Reserve for OBS credit exposures(1)
$
14,161 $
17,254
(1) Included in other liabilities on the Consolidated Balance Sheets.
93
The following table presents the activity in the ACL for the years ended December 31:
2024
2023
2022
(dollars in thousands)
Balance at beginning of period
$
293,404 $
269,366 $
249,001
CECL Day 1 Provision(1)
23,444
—
7,954
Initial PCD allowance for credit losses
54,631
—
1,135
Loans charged off
(54,429)
(39,201)
(21,472)
Recoveries of loans previously charged off
9,984
10,129
14,092
Net loans (charged off) recovered
(44,445)
(29,072)
(7,380)
Provision for credit losses(1) (2)
52,122
53,110
18,656
Balance at end of period
$
379,156 $
293,404 $
269,366
Provision for OBS credit exposures(1)
$
(3,930) $
926 $
1,411
Reserve for OBS credit exposures
$
14,161 $
17,254 $
16,328
(1) The sum of these amounts are reflected in the provision for credit losses in the Consolidated Statements of Income.
(2) Provision only includes the portion related to net loans.
The following table presents the activity in the ACL by portfolio segment:
Real Estate -
Commercial
Mortgage
Commercial
and Industrial
Real Estate -
Residential
Mortgage
Consumer and
Real Estate -
Home
Equity
Real Estate -
Construction
Leases and
other loans
Total
(dollars in thousands)
Balance at December 31, 2022
$
69,456
$
70,116
$
83,250
$
26,429
$
10,743
$
9,372
$
269,366
Loans charged off
(17,999)
(9,246)
(62)
(7,514)
—
(4,380)
(39,201)
Recoveries of loans previously charged off
1,076
3,473
421
3,198
858
1,103
10,129
Net loans (charged off) recovered
(16,923)
(5,773)
359
(4,316)
858
(3,277)
(29,072)
Provision for loan losses(1)(2)
60,032
9,923
(10,323)
(4,509)
694
(2,707)
53,110
Balance at December 31, 2023
112,565
74,266
73,286
17,604
12,295
3,388
293,404
CECL Day 1 Provision(1)
6,648
1,121
14,920
445
310
—
23,444
Initial PCD allowance for credit losses
41,559
10,463
565
357
1,687
—
54,631
Loans charged off
(13,186)
(26,585)
(1,472)
(8,490)
—
(4,696)
(54,429)
Recoveries of loans previously charged off
603
4,440
472
3,357
382
730
9,984
Net loans (charged off) recovered
(12,583)
(22,145)
(1,000)
(5,133)
382
(3,966)
(44,445)
Provision for loan losses(1)(2)
9,992
28,507
(6,440)
6,124
10,466
3,473
52,122
Balance at December 31, 2024
$
158,181
$
92,212
$
81,331
$
19,397
$
25,140
$
2,895
$
379,156
(1) These amounts are reflected in the provision for credit loss in the Consolidated Statements of Income.
(2) Provision included in the table only includes the portion related to net loans.
The ACL may include qualitative adjustments intended to capture the impact of uncertainties not reflected in the quantitative
models. In determining qualitative adjustments, management considers changes in national, regional, and local economic and
business conditions and their impact on the lending environment, including underwriting standards and other factors affecting
credit losses over the remaining life of each loan.
The increase in ACL in 2024 was largely due to loans acquired in the Republic First Transaction. The increase in ACL in 2023
was primarily due to loan growth, changes to the macroeconomic outlook, net charge-offs and risk migration.
Collateral-Dependent Loans
A loan or a lease is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is
expected to be provided substantially through the sale or operation of the collateral. For all classes of loans and leases deemed
collateral-dependent, the Corporation elected the practical expedient to estimate expected credit losses based on the collateral’s
fair value less costs to sell. Substantially all of the collateral supporting collateral-dependent loans or leases consists of various
types of real estate, including residential properties, commercial properties, such as retail centers, office buildings, and lodging,
agricultural land, and vacant land. Commercial and industrial loans may also be secured by real estate.
94
All loans individually evaluated for impairment are measured for losses on a quarterly basis. As of December 31, 2024 and
2023, substantially all of the Corporation's individually evaluated loans with total commitments greater than or equal to $1.0
million were measured based on the estimated fair value of each loan's collateral, if any.
As of December 31, 2024 and 2023, approximately 90% and 78%, respectively, of loans evaluated individually for impairment
with principal balances greater than or equal to $1.0 million, whose primary collateral consisted of real estate, were measured at
estimated fair value using appraisals performed by state certified third-party appraisers that had been updated in the preceding
12 months.
Non-accrual Loans
The following table presents total non-accrual loans, by class segment:
2024
2023
With a
Related
Allowance
Without a
Related
Allowance
Total
With a
Related
Allowance
Without a
Related
Allowance
Total
(dollars in thousands)
Real estate - commercial mortgage
$
31,654
$
67,843
$
99,497 $
23,338 $
21,467
$
44,805
Commercial and industrial
17,011
25,206
42,217
12,410
27,542
39,952
Real estate - residential mortgage
23,387
2,013
25,400
18,806
2,018
20,824
Real estate - home equity
8,513
78
8,591
4,649
104
4,753
Real estate - construction
1,746
—
1,746
341
1,000
1,341
Consumer
8
—
8
52
—
52
Leases and other loans
1,801
10,033
11,834
9,255
638
9,893
Total
$
84,120
$
105,173
$
189,293 $
68,851 $
52,769
$
121,620
As of December 31, 2024 and December 31, 2023, there were $105.2 million and $52.8 million, respectively, of non-accrual
loans that did not have a specific valuation allowance within the ACL. The estimated fair values of the collateral securing these
loans exceeded their carrying amount, or the loans were previously charged down to realizable collateral values. Accordingly,
no specific valuation allowance was considered to be necessary. The amount of interest income on non-accrual loans that was
recognized was approximately $1.0 million in 2024 and $1.5 million in 2023.
Asset Quality
Maintaining an appropriate ACL is dependent on various factors, including the ability to identify potential problem loans in a
timely manner. For commercial construction loans, commercial and industrial loans, and commercial real estate loans, an
internal risk rating process is used. The Corporation believes that internal risk ratings are the most relevant credit quality
indicator for these types of loans. The migration of loans through the various internal risk categories is a significant component
of the ACL methodology for these loans, which bases the PD on this migration. Assigning risk ratings involves judgment. The
Corporation's loan review officers provide a separate assessment of risk rating accuracy. Risk ratings may be changed based on
the ongoing monitoring procedures performed by loan officers or credit administration staff, or if specific loan review
assessments identify a deterioration or an improvement in a loan.
95
The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination
year, in the current period:
December 31, 2024
(dollars in thousands)
Term Loans Amortized Cost Basis by Origination Year
Revolving
Loans
Revolving
Loans
converted
to Term
Loans
Amortized
Amortized
2024
2023
2022
2021
2020
Prior
Cost Basis
Cost Basis
Total
Real estate - commercial mortgage
Pass
$
623,742 $
898,296 $ 1,138,669 $ 1,316,000 $ 1,077,625 $ 3,414,138 $
69,942 $
9,646 $ 8,548,058
Special Mention
4,441
73,348
149,280
157,543
28,734
107,099
10,978
—
531,423
Substandard or Lower
4,831
44,665
102,952
95,617
75,097
193,922
1,380
3,913
522,377
Total real estate -
commercial mortgage
633,014 1,016,309 1,390,901 1,569,160 1,181,456
3,715,159
82,300
13,559
9,601,858
Real estate - commercial mortgage
Current period gross
charge-offs
—
(126)
(84)
—
—
(12,950)
—
(26)
(13,186)
Commercial and industrial
Pass
435,917
486,720
512,622
261,603
268,194
684,931 1,375,201
6,346
4,031,534
Special Mention
9,928
8,333
19,931
18,888
4,844
58,632
117,940
313
238,809
Substandard or Lower
10,795
16,593
34,748
10,183
12,496
49,439
176,755
24,237
335,246
Total commercial and
industrial
456,640
511,646
567,301
290,674
285,534
793,002 1,669,896
30,896
4,605,589
Commercial and industrial
Current period gross
charge-offs
(612)
(3,709)
(2,560)
(4,587)
(317)
(7,612)
(3,553)
(3,635)
(26,585)
Real estate - construction(1)
Pass
197,206
494,072
157,296
37,438
8,784
41,480
30,608
619
967,503
Special Mention
—
10,612
80,651
69,109
938
—
—
—
161,310
Substandard or Lower
—
—
14,407
10,399
—
20,350
121
1,906
47,183
Total real estate -
construction
197,206
504,684
252,354
116,946
9,722
61,830
30,729
2,525
1,175,996
Real estate - construction(1)
Current period gross
charge-offs
—
—
—
—
—
—
—
—
—
Total
Pass
$ 1,256,865 $ 1,879,088 $ 1,808,587 $ 1,615,041 $ 1,354,603 $ 4,140,549 $ 1,475,751 $
16,611 $ 13,547,095
Special Mention
14,369
92,293
249,862
245,540
34,516
165,731
128,918
313
931,542
Substandard or Lower
15,626
61,258
152,107
116,199
87,593
263,711
178,256
30,056
904,806
Total
$ 1,286,860 $ 2,032,639 $ 2,210,556 $ 1,976,780 $ 1,476,712 $ 4,569,991 $ 1,782,925 $
46,980 $ 15,383,443
(1) Excludes real estate - construction - other.
Total criticized and classified loans increased $911.4 million, or 98.5%, compared to December 31, 2023.
The increase of $454.6 million in special mention loans as of December 31, 2024 was primarily due to loans acquired in the
Republic First Transaction with a balance of $350.4 million as of December 31, 2024. The increase of $456.8 million in
substandard or lower loans as of December, 31, 2024 was partially due to loans acquired in the Republic First Transaction with
a balance of $193.0 million as of December 31, 2024.
96
The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination
year, in the prior period:
December 31, 2023
(dollars in thousands)
Term Loans Amortized Cost Basis by Origination Year
Revolving
Loans
Revolving
Loans
converted to
Term Loans
Amortized
Amortized
2023
2022
2021
2020
2019
Prior
Cost Basis
Cost Basis
Total
Real estate - commercial mortgage
Pass
$
783,673 $
993,017 $ 1,203,852 $
984,958 $
721,857 $ 2,822,155 $
59,253 $
31,636 $ 7,600,401
Special Mention
2,767
43,904
105,185
7,862
35,289
105,786
1,760
—
302,553
Substandard or Lower
366
20,958
31,304
49,142
26,579
95,621
804
—
224,774
Total real estate -
commercial mortgage
786,806
1,057,879
1,340,341
1,041,962
783,725
3,023,562
61,817
31,636
8,127,728
Real estate - commercial mortgage
Current period gross
charge-offs
—
—
—
—
—
(424)
—
(17,575)
(17,999)
Commercial and industrial
Pass
626,386
590,132
330,576
341,218
272,126
598,838
1,443,203
10,736
4,213,215
Special Mention
7,936
9,548
16,499
3,577
6,817
18,487
72,775
198
135,837
Substandard or Lower
247
25,184
4,611
3,843
18,988
31,663
105,230
6,734
196,500
Total commercial and
industrial
634,569
624,864
351,686
348,638
297,931
648,988
1,621,208
17,668
4,545,552
Commercial and industrial
Current period gross
charge-offs
—
(299)
—
—
—
(249)
(682)
(8,016)
(9,246)
Real estate - construction(1)
Pass
322,922
258,080
261,583
37,426
9,510
34,097
13,677
—
937,295
Special Mention
—
12,622
25,898
—
—
—
—
—
38,520
Substandard or Lower
—
521
2,229
—
340
21,284
168
2,229
26,771
Total real estate -
construction
322,922
271,223
289,710
37,426
9,850
55,381
13,845
2,229
1,002,586
Real estate - construction(1)
Current period gross
charge-offs
—
—
—
—
—
—
—
—
—
Total
Pass
$ 1,732,981 $ 1,841,229 $ 1,796,011 $ 1,363,602 $ 1,003,493 $ 3,455,090 $ 1,516,133 $
42,372 $ 12,750,911
Special Mention
10,703
66,074
147,582
11,439
42,106
124,273
74,535
198
476,910
Substandard or Lower
613
46,663
38,144
52,985
45,907
148,568
106,202
8,963
448,045
Total
$ 1,744,297 $ 1,953,966 $ 1,981,737 $ 1,428,026 $ 1,091,506 $ 3,727,931 $ 1,696,870 $
51,533 $ 13,675,866
(1) Excludes real estate - construction - other.
97
The Corporation considers the performance of the loan portfolio and its impact on the ACL. The Corporation does not assign
internal risk ratings to smaller balance, homogeneous loans, such as home equity, residential mortgage, construction loans to
individuals secured by residential real estate, consumer and other loans. For these loans, the most relevant credit quality
indicator is delinquency status, and the Corporation evaluates credit quality based on the aging status of the loan. The following
tables present the amortized cost of these loans based on payment activity, by origination year, for the periods shown:
December 31, 2024
(dollars in thousands)
Term Loans Amortized Cost Basis by Origination Year
Revolving
Loans
Revolving
Loans
converted
to Term
Loans
Amortized
Amortized
2024
2023
2022
2021
2020
Prior
Cost Basis
Cost Basis
Total
Real estate - residential mortgage
Performing
$
470,918 $
728,630 $ 1,515,521 $ 1,726,991 $ 1,022,116 $
839,566 $
— $
— $
6,303,742
Nonperforming
87
1,358
5,118
3,232
5,523
30,583
—
—
45,901
Total real estate - residential mortgage
471,005
729,988
1,520,639
1,730,223
1,027,639
870,149
—
—
6,349,643
Real estate - residential mortgage
Current period gross charge-offs
—
(172)
(106)
(12)
(43)
(888)
—
(251)
(1,472)
Consumer and real estate - home equity
Performing
178,722
116,370
211,647
65,412
48,201
188,442
913,920
40,384
1,763,098
Nonperforming
236
848
918
963
753
4,571
2,893
3,192
14,374
Total consumer and real estate - home
equity
178,958
117,218
212,565
66,375
48,954
193,013
916,813
43,576
1,777,472
Consumer and real estate - home equity
Current period gross charge-offs
(118)
(1,016)
(1,552)
(790)
(398)
(2,704)
(75)
(1,837)
(8,490)
Leases and other loans
Performing
123,991
89,006
52,724
16,894
10,830
9,996
—
—
303,441
Nonperforming
—
—
1,922
744
23
9,328
—
—
12,017
Total leases and other loans
123,991
89,006
54,646
17,638
10,853
19,324
—
—
315,458
Leases and other loans
Current period gross charge-offs
(1,977)
(913)
(335)
(334)
(192)
(770)
—
(175)
(4,696)
Construction - other
Performing
138,440
61,848
15,710
1,499
—
—
—
—
217,497
Nonperforming
—
—
1,406
—
—
—
—
—
1,406
Total construction - other
138,440
61,848
17,116
1,499
—
—
—
—
218,903
Construction - other
Current period gross charge-offs
—
—
—
—
—
—
—
—
—
Total
Performing
$
912,071 $
995,854 $ 1,795,602 $ 1,810,796 $ 1,081,147 $ 1,038,004 $
913,920 $
40,384 $
8,587,778
Nonperforming
323
2,206
9,364
4,939
6,299
44,482
2,893
3,192
73,698
Total
$
912,394 $
998,060 $ 1,804,966 $ 1,815,735 $ 1,087,446 $ 1,082,486 $
916,813 $
43,576 $
8,661,476
98
December 31, 2023
(dollars in thousands)
Term Loans Amortized Cost Basis by Origination Year
Revolving
Loans
Revolving
Loans
converted to
Term Loans
Amortized
Amortized
2023
2022
2021
2020
2019
Prior
Cost Basis
Cost Basis
Total
Real estate - residential mortgage
Performing
$
623,247 $ 1,126,656 $ 1,682,759 $
984,050 $
260,049 $
607,133 $
— $
— $ 5,283,894
Nonperforming
—
1,720
4,888
4,701
6,233
24,487
—
—
42,029
Total real estate - residential
mortgage
623,247
1,128,376
1,687,647
988,751
266,282
631,620
—
—
5,325,923
Real estate - residential mortgage
Current period gross charge-offs
—
—
—
—
—
—
—
(62)
(62)
Consumer and real estate - home equity
Performing
272,571
276,373
85,985
62,426
37,667
204,913
805,645
20,044
1,765,624
Nonperforming
295
455
866
282
354
5,526
1,439
1,661
10,878
Total consumer and real estate -
home equity
272,866
276,828
86,851
62,708
38,021
210,439
807,084
21,705
1,776,502
Consumer and real estate - home equity loans
Current period gross charge-offs
(119)
—
—
—
—
(525)
(283)
(6,587)
(7,514)
Leases and other loans
Performing
166,490
83,641
27,755
22,304
16,246
9,867
—
—
326,303
Nonperforming
—
118
—
—
—
9,893
—
—
10,011
Total leases and other
166,490
83,759
27,755
22,304
16,246
19,760
—
—
336,314
Leases and other loans
Current period gross charge-offs
(471)
(521)
(246)
(128)
(82)
(656)
(765)
(1,511)
(4,380)
Construction - other
Performing
127,382
93,319
13,698
555
—
—
—
—
234,954
Nonperforming
—
1,535
—
—
—
—
—
—
1,535
Total construction - other
127,382
94,854
13,698
555
—
—
—
—
236,489
Construction - other
Current period gross charge-offs
—
—
—
—
—
—
—
—
—
Total
Performing
$ 1,189,690 $ 1,579,989 $ 1,810,197 $ 1,069,335 $
313,962 $
821,913 $
805,645 $
20,044 $ 7,610,775
Nonperforming
295
3,828
5,754
4,983
6,587
39,906
1,439
1,661
64,453
Total
$ 1,189,985 $ 1,583,817 $ 1,815,951 $ 1,074,318 $
320,549 $
861,819 $
807,084 $
21,705 $ 7,675,228
99
The following table presents non-performing assets:
December 31,
2024
December 31,
2023
(dollars in thousands)
Non-accrual loans
$
189,293 $
121,620
Loans 90 days or more past due and still accruing
30,781
31,721
Total non-performing loans
220,074
153,341
OREO(1)
2,621
896
Total non-performing assets
$
222,695 $
154,237
(1) Excludes $17.5 million and $10.9 million of residential mortgage properties for which formal foreclosure proceeding were in process as of December 31,
2024 and 2023, respectively.
The following tables present the aging of the amortized cost basis of loans, by class segment:
30-59
60-89
≥ 90 Days
Days Past
Days Past
Past Due
Non-
Due
Due
and
Accruing
Accrual
Current
Total
(dollars in thousands)
December 31, 2024
Real estate - commercial mortgage
$ 32,715 $ 16,684 $
2,862 $ 99,497 $ 9,450,100 $ 9,601,858
Commercial and industrial(1)
6,031
3,636
1,460
42,217 4,552,245 4,605,589
Real estate - residential mortgage
59,593
5,946
20,501
25,400 6,238,203 6,349,643
Real estate - home equity
6,778
1,057
4,758
8,591 1,139,432 1,160,616
Real estate - construction
3,549
5,163
—
1,746 1,384,441 1,394,899
Consumer
6,779
1,627
1,017
8
607,425
616,856
Leases and other loans(1)
269
105
183
11,834
303,067
315,458
Total
$ 115,714 $ 34,218 $
30,781 $ 189,293 $ 23,674,913 $ 24,044,919
(1) Includes unearned income.
30-59 Days
Past
Due
60-89
Days Past
Due
≥ 90 Days
Past Due
and
Accruing
Non-
accrual
Current
Total
(dollars in thousands)
December 31, 2023
Real estate - commercial mortgage
$
4,408 $
1,341 $
1,722 $ 44,805 $ 8,075,452 $
8,127,728
Commercial and industrial(1)
5,620
1,656
1,068
39,952
4,497,256
4,545,552
Real estate - residential mortgage
49,145
10,838
21,205
20,824
5,223,911
5,325,923
Real estate - home equity
8,142
2,075
5,326
4,753
1,026,888
1,047,184
Real estate - construction
4,185
451
1,535
1,341
1,231,563
1,239,075
Consumer
8,361
1,767
747
52
718,391
729,318
Leases and other loans(1)
146
722
118
9,893
325,435
336,314
Total
$
80,007 $ 18,850 $
31,721 $ 121,620 $ 21,098,896 $ 21,351,094
(1) Includes unearned income.
Loan Modifications to Borrowers Experiencing Financial Difficulty
The Corporation modifies loans by providing a concession when deemed appropriate. Depending on the circumstances, a term
extension, interest rate reduction or principal forgiveness may be granted. In certain instances a combination of concessions
may be provided to a borrower.
100
When principal forgiveness is provided, the amount of principal forgiven is deemed to be uncollectible and the amortized cost
basis of the loan is reduced by the amount of the forgiven portion, with a corresponding reduction to the ACL.
The following table presents the amortized cost basis of the loans modified to borrowers experiencing financial difficulty,
disaggregated by class of financing receivable and type of concession granted:
Term Extension
2024
2023
Amortized
Cost Basis
% of Class of
Financing
Receivable
Amortization
Cost Basis
% of Class of
Financing
Receivable
(dollars in thousands)
Real estate - commercial mortgage
$
20,501
0.21 % $
2,944
0.04 %
Commercial and industrial
3,913
0.08
11,970
0.26
Real estate - residential mortgage
11,604
0.18
8,182
0.15
Real estate - home equity
379
0.03
—
—
Real estate - construction
595
0.04
—
—
Total
$
36,992
$
23,096
Interest Rate Reduction and Term Extension
2024
2023
Amortized
Cost Basis
% of Class of
Financing
Receivable
Amortization
Cost Basis
% of Class of
Financing
Receivable
(dollars in thousands)
Real estate - residential mortgage
$
2,365
0.04 % $
910
0.02 %
Total
$
2,365
$
910
101
The following table presents the financial effect of the modifications made to borrowers experiencing financial difficulty:
Term Extension
Financial Effect
2024
Real estate - commercial mortgage
Added a weighted-average 1.99 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
Commercial and industrial
Added a weighted-average 0.67 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
Real estate - residential mortgage
Added a weighted-average 8.98 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
Real estate - home equity
Added a weighted-average 14.30 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
Real estate - construction
Added a weighted-average 0.67 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
2023
Real estate - commercial mortgage
Added a weighted-average 1.22 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
Commercial and industrial
Added a weighted-average 0.92 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
Real estate - residential mortgage
Added a weighted-average 8.10 years to the life of loans, which
reduced monthly payment amounts for the borrowers.
Interest Rate Reduction
Financial Effect
2024
Real estate - residential mortgage
Reduced weighted-average interest rate from 2.35% to 1.40%
2023
Real estate - residential mortgage
Reduced weighted-average interest rate from 3.76% to 2.30%
During the years ended December 31, 2024 and 2023, there were no loans modified due to financial difficulty where there was
a principal balance forgiveness.
During the years ended December 31, 2024 and 2023, there were no loans modified due to financial difficulty that defaulted
subsequent to modification.
The following table presents the performance of loans that have been modified due to financial difficulty in the previous 12
months.
30-89
90+
Total
Days Past
Past Due
Past
Current
Due
and Accruing
Due
(dollars in thousands)
Real estate - commercial mortgage
$
16,321 $
123 $
— $
123
Commercial and industrial
3,913
—
—
—
Real estate - residential mortgage
11,448
1,918
642
2,560
Real estate - home equity
379
—
—
—
Real estate - construction
595
—
—
—
Total
$
32,656 $
2,041 $
642 $
2,683
102
There were no commitments to lend additional funds to borrowers with loan modifications as a result of financial difficulty as
of December 31, 2024.
NOTE 6 - PREMISES AND EQUIPMENT
The following is a summary of premises and equipment as of December 31:
2024
2023
(dollars in thousands)
Land
$
36,080 $
39,742
Buildings and improvements
310,786
365,744
Furniture and equipment
173,778
161,244
Construction in progress
4,872
12,313
Total premises and equipment
525,516
579,043
Less: Accumulated depreciation and amortization
(329,989)
(356,162)
Net premises and equipment
$
195,527 $
222,881
The $58.6 million decrease in land and buildings and improvements was primarily due to $73.5 million of asset disposals in the
Sale-Leaseback Transaction, partially offset by $21.7 million of land and buildings and improvements purchased as part of the
Republic First Transaction in the fourth quarter of 2024. The $73.5 million of premises and equipment disposals in the Sale-
Leaseback Transaction included $42.5 million of related accumulated depreciation for a net disposal amount of $31.0 million.
NOTE 7 - GOODWILL AND INTANGIBLE ASSETS
Goodwill totaled $553.3 million as of December 31, 2024 and 2023, respectively. There were no goodwill impairment charges
in 2024 based on the annual assessment.
The estimated fair values of the Corporation's reporting units are subject to uncertainty, including future changes in fair values
of banks in general and future operating results of reporting units, which could differ significantly from the assumptions used in
the current valuation of reporting units.
The following table summarizes intangible assets, which are included in goodwill and net intangible assets on the consolidated
balance sheets:
December 31,
2024
2023
(dollars in thousands)
Amortizing intangible assets
$
106,196 $
13,596
Accumulated amortization
(24,085)
(6,255)
Net intangibles
$
82,111 $
7,341
103
Net intangibles included CDI of $80.2 million and $4.9 million as of December 31, 2024 and 2023, respectively. The CDI was
recorded as part of the Republic First Transaction and the Merger and is being amortized over seven years using the sum-of-the-
years' digits method.
The following table summarizes CDI amortization expense for each of the next five years and thereafter (dollars in thousands):
Year
2025
$
22,010
2026
18,667
2027
15,066
2028
11,213
2029
7,717
Thereafter
5,512
Total
$
80,185
NOTE 8 - MORTGAGE SERVICING RIGHTS
The following table summarizes the changes in MSRs, which are included in other assets on the consolidated balance sheets,
with adjustments to the carrying value included in mortgage banking income on the consolidated statements of income:
2024
2023
2022
(dollars in thousands)
Amortized cost:
Balance at beginning of period
$
31,602 $
34,217 $
35,993
Originations of MSRs
3,758
2,475
4,067
Amortization
(4,669)
(5,090)
(5,843)
Balance at end of period
$
30,691 $
31,602 $
34,217
Valuation allowance:
Balance at beginning of period
$
— $
— $
(600)
Reduction (addition) to valuation allowance
—
—
600
Balance at end of period
$
— $
— $
—
Net MSRs at end of period
$
30,691 $
31,602 $
34,217
Estimated fair value of MSRs at end of period
$
53,972 $
49,696 $
50,044
MSRs represent the economic value of contractual rights to service mortgage loans that have been sold. The total portfolio of
mortgage loans serviced by the Corporation for unrelated third parties was $4.1 billion as of December 31, 2024 and 2023,
respectively. Actual and expected prepayments of the underlying mortgage loans can impact the fair value of MSRs. The
Corporation accounts for MSRs at the lower of amortized cost or fair value.
The fair value of MSRs is estimated by discounting the estimated cash flows from servicing income, net of expense, over the
expected life of the underlying loans at a discount rate commensurate with the risk associated with these assets. Expected life is
based on the contractual terms of the loans, as adjusted for prepayment projections. The fair values of MSRs were $54.0
million, $49.7 million and $50.0 million as of December 31, 2024, 2023 and 2022, respectively. Based on its fair value analysis
as of December 31, 2024, 2023, and 2022, the Corporation determined that no valuation allowances were required.
Total servicing income, included in mortgage banking income in the consolidated statements of income, was $10.2 million,
$10.2 million and $10.6 million as of December 31, 2024, 2023 and 2022, respectively.
Total MSRs amortization expense, recognized as a reduction to mortgage banking income in the consolidated statements of
income, was $4.7 million, $5.1 million and $5.8 million in 2024, 2023 and 2022, respectively. Estimated future MSRs
104
amortization expense, based on balances as of December 31, 2024, and the estimated remaining lives of the underlying loans, is
as follows (dollars in thousands):
Year
2025
$
3,509
2026
3,169
2027
2,856
2028
2,577
2029
2,331
Thereafter
16,249
Total estimated amortization expense
$
30,691
NOTE 9 - DEPOSITS
Deposits consisted of the following as of December 31:
2024
2023
(dollars in thousands)
Noninterest-bearing demand
$ 5,499,760 $ 5,314,094
Interest-bearing demand
7,843,604
5,722,695
Savings and money market accounts
7,792,114
6,616,901
Total demand and savings
21,135,478 17,653,690
Brokered deposits
843,857
1,144,692
Time deposits
4,150,098
2,739,241
Total Deposits
$ 26,129,433 $ 21,537,623
The scheduled maturities of time deposits as of December 31, 2024 were as follows (dollars in thousands):
Year
2025
$ 3,801,297
2026
242,638
2027
40,071
2028
10,130
2029
11,908
Thereafter
44,054
Total
$ 4,150,098
Included in time deposits were certificates of deposit equal to or greater than $100,000 of $2.5 billion and $1.5 billion as of
December 31, 2024 and 2023, respectively. Time deposits equal or greater than $250,000 were $1.0 billion and $551.2 million
as of December 31, 2024 and 2023, respectively.
105
NOTE 10 - BORROWINGS
Borrowings as of December 31, 2024 and 2023 and the related maximum amounts outstanding at the end of any month in each
of the two years then ended are presented below.
December 31
Maximum Outstanding
2024
2023
2024
2023
(dollars in thousands)
Federal funds purchased
$
— $
240,000 $
125,000 $
862,000
FHLB advances
850,000
1,100,000
1,706,621
1,720,000
Other borrowings:
Short-term promissory notes issued to customers and
customer repurchase agreements
563,831
611,304
625,829
646,439
Other borrowings
901
838
1,155
1,151
Total other borrowings
$
564,732
As of December 31, 2024, the Corporation had aggregate federal funds line borrowing capacity of $2.6 billion, with no amount
outstanding. A combination of commercial real estate loans, commercial loans, consumer loans and investment securities were
pledged to the FRB to provide access to the FRB discount window borrowings. The Corporation had $3.1 billion of
collateralized borrowing availability at the FRB discount window with no amount outstanding as of December 31, 2024.
As of December 31, 2024, the Corporation had total FHLB borrowing capacity of $11.1 billion with $5.1 billion of advances
and letters of credit outstanding, for a remaining borrowing capacity of approximately $6.0 billion. Advances from the FHLB,
when utilized, are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets.
The following is included in senior and subordinated debt as of December 31:
2024
2023
(dollars in thousands)
Subordinated debt
$
370,000 $
538,778
Unamortized discounts and issuance costs
(2,684)
(3,394)
Total senior debt and subordinated debt
$
367,316 $
535,384
The following table summarizes the scheduled maturities of senior and subordinated debt with an original maturity of one year
or more as of December 31, 2024 (dollars in thousands):
Year
2025
$
—
2026
—
2027
—
2028
—
2029
—
Thereafter
370,000
Unamortized discounts and issuance costs
(2,684)
Total
$
367,316
In November 2024, the Corporation retired $168.8 million of subordinated notes issued in June 2015 and November 2014
which matured on November 15, 2024. The subordinated notes issued June 2015 carried a fixed rate of 4.50% and an effective
rate of 4.69% as a result of discounts and issuance costs. Interest was paid semi-annually in May and November. The
subordinated notes issued November 2014, carried a fixed rate of 4.50% and an effective rate of 4.87% as a result of discounts
and issuance costs. Interest was paid semi-annually in May and November.
In December 2023, the Corporation retired $5.0 million of subordinated debt with a fixed-to-floating rate of 3.25% and
effective rate of 3.35% maturing in 2030.
106
On March 16, 2022, $65 million of senior notes with a fixed rate of 3.60% were repaid upon their maturity.
In March 2020, the Corporation issued $200.0 million and $175.0 million of subordinated notes due in 2030 and 2035,
respectively. The subordinated notes maturing in 2030 were issued with a fixed-to-floating rate of 3.25% and an effective rate
of 3.35%, due to issuance costs, and the subordinated notes maturing in 2035 were issued with a fixed-to-floating rate of 3.75%
and an effective rate of 3.85%, due to issuance costs.
NOTE 11 - DERIVATIVE FINANCIAL INSTRUMENTS
The following table presents a summary of notional amounts and fair values of derivative financial instruments as of December
31:
2024
2023
Notional
Amount
Asset
(Liability)
Fair Value
Notional
Amount
Asset
(Liability)
Fair Value
(dollars in thousands)
Interest Rate Locks with Customers
Positive fair values
$
171,933 $
389 $
119,558 $
460
Negative fair values
3,888
(58)
1,015
(2)
Forward Commitments
Positive fair values
51,250
363
—
—
Negative fair values
—
—
42,000
(854)
Interest Rate Derivatives with Customers(1)
Positive fair values
767,905
8,480
824,659
22,656
Negative fair values
3,976,294
(239,058)
3,784,236
(222,530)
Interest Rate Derivatives with Dealer Counterparties
Positive fair values
3,976,294
150,480
3,784,236
128,235
Negative fair values
767,905
(10,734)
824,659
(23,023)
Interest Rate Derivatives used in Cash Flow Hedges
Positive fair values
2,500,000
227
2,500,000
6,189
Negative fair values
1,400,000
(2,971)
750,000
—
Foreign Exchange Contracts with Customers
Positive fair values
28,327
1,619
4,159
40
Negative fair values
693
(27)
13,353
(446)
Foreign Exchange Contracts with Correspondent Banks
Positive fair values
4,059
63
15,969
532
Negative fair values
32,406
(1,569)
6,112
(31)
(1) Fair values are net of a valuation allowance of $366.3 thousand as of December 31, 2024 and 2023, respectively.
In the third quarter of 2023, the Corporation transitioned certain of the Corporation's legacy commercial customer back-to-back
interest rate swap transactions from LIBOR to SOFR. During 2024, the increase to other non-interest income to reflect market
valuation movements from the transition from LIBOR to SOFR was $0.4 million. During 2023, the reduction to other non-
interest income related to the transition from LIBOR to SOFR was $1.9 million.
107
The following table presents the effect of cash flow hedge accounting on AOCI:
Amount of
Gain (Loss)
Recognized
in OCI on
Derivative
Amount of
Gain (Loss)
Recognized
in OCI
Included
Component
Amount of
Gain (Loss)
Recognized
in OCI
Excluded
Component
Location of
Gain (Loss)
Recognized
from AOCI
into Income
Amount of
Gain (Loss)
Reclassified
from AOCI
into Income
Amount of
Gain (Loss)
Reclassified
from AOCI
into Income
Included
Component
Amount of
Gain (Loss)
Reclassified
from AOCI
into Income
Excluded
Component
(dollars in thousands)
Year ended December 31, 2024
Interest Rate Products
$
(10,261) $
(10,261) $
—
Interest
Income
$
(29,899) $
(29,899) $
—
Interest Rate Products
11,025
11,025
—
Interest
Expense
6,446
6,446
—
Total
$
764 $
764 $
—
$
(23,453) $
(23,453) $
—
Year ended December 31, 2023
Interest Rate Products
$
19,598 $
19,598 $
—
Interest
Income
$
(27,546) $
(27,546) $
—
Interest Rate Products
(10,550)
(10,550)
—
Interest
Expense
1,696
1,696
—
Total
$
9,048 $
9,048 $
—
$
(25,850) $
(25,850) $
—
The following table presents the effect of fair value and cash flow hedge accounting on the income statement for the year ended
December 31:
Consolidated Statements of Income Classification
2024
2023
Interest
Income
Interest
Expense
Interest
Income
Interest
Expense
(dollars in thousands)
Total amounts of income line items presented in the
consolidated statements of income in which the effects of fair
value or cash flow hedges are recorded
$
(29,899) $
6,446 $
(27,546) $
1,696
The effects of fair value and cash flow hedging:
Amount of gain or (loss) on cash flow hedging
relationships
—
—
—
—
Interest contracts:
Amount of (loss) gain reclassified from AOCI into income
(29,899)
6,446
(27,546)
1,696
Amount of (loss) gain reclassified from AOCI into income
as a result that a forecasted transaction is no longer
probable of occurring
—
—
—
—
Amount of (loss) gain reclassified from AOCI into income
- included component
(29,899)
6,446
(27,546)
1,696
Amount of (loss) gain reclassified from AOCI into income
- excluded component
—
—
—
—
During the next twelve months, the Corporation estimates that an additional $16.5 million will be reclassified as a decrease to
interest income.
108
The following table presents the fair value gains (losses) on derivative financial instruments for the years ended December 31:
Consolidated
Statements of Income
Classification
2024
2023
2022
(dollars in thousands)
Mortgage banking derivatives(1)
Mortgage banking
$ 1,090 $
(380) $ (2,360)
Interest rate derivatives
Other income
419 (1,855)
—
Foreign exchange contracts
Other income
(9)
7
81
Net fair value gains (losses) on derivative financial instruments
$ 1,500 $ (2,228) $ (2,279)
(1) Includes interest rate locks with customers and forward commitments.
Fair Value Option
The Corporation has elected to measure mortgage loans held for sale at fair value. The following table presents a summary of
mortgage loans held for sale and the impact of the fair value election on the consolidated financial statements as of
December 31:
2024
2023
(dollars in thousands)
Amortized Cost (1)
$
25,316 $
14,792
Fair value
25,618
15,158
(1) Cost basis of mortgage loans held for sale represents the unpaid principal balance.
Losses related to changes in fair values of mortgage loans held for sale were $0.1 million for the year ended December 31,
2024. Gains related to changes in fair values of mortgage loans held for sale were $0.3 million for the year ended December 31,
2023, and losses related to changes in fair values of mortgage loans held for sale were $0.6 million for the year ended
December 31, 2022. The gains and losses are recorded on the consolidated income statements as an adjustment to mortgage
banking income.
109
Balance Sheet Offsetting
The fair values of interest rate derivative agreements and foreign exchange contracts the Corporation enters into with customers
and dealer counterparties may be eligible for offset on the consolidated balance sheets if they are subject to master netting
arrangements or similar agreements. The Corporation has elected to net its financial assets and liabilities designated as interest
rate derivatives when offsetting is permitted. The following table presents the Corporation's financial instruments that are
eligible for offset, and the effects of offsetting, on the consolidated balance sheets as of December 31:
Gross Amounts
Gross Amounts Not Offset
Recognized
on the Consolidated
on the
Balance Sheets
Consolidated
Financial
Cash
Net
Balance Sheets
Instruments(1)
Collateral(2)
Amount
(dollars in thousands)
2024
Interest rate derivative assets
$
159,187 $
(12,739) $
— $ 146,448
Foreign exchange derivative assets with correspondent banks
63
(63)
—
—
Total
$
159,250 $
(12,802) $
— $ 146,448
Interest rate derivative liabilities
$
252,763 $
(9,995) $
(94,339) $ 148,429
Foreign exchange derivative liabilities with correspondent banks
1,569
(63)
—
1,506
Total
$
254,332 $
(10,058) $
(94,339) $ 149,935
2023
Interest rate derivative assets
$
157,080 $
(15,154) $
— $ 141,926
Foreign exchange derivative assets with correspondent banks
532
(532)
—
—
Total
$
157,612 $
(15,686) $
— $ 141,926
Interest rate derivative liabilities
$
245,553 $
(21,343) $
(93,841) $ 130,369
Foreign exchange derivative liabilities with correspondent banks
31
(532)
—
(501)
Total
$
245,584 $
(21,875) $
(93,841) $ 129,868
(1) For interest rate derivative assets, amounts represent any derivative liability fair values that could be offset in the event of counterparty or customer default.
For interest rate derivative liabilities, amounts represent any derivative asset fair values that could be offset in the event of counterparty or customer default.
(2) Amounts represent cash collateral received from the counterparty or posted by the Corporation on interest rate derivative transactions and foreign
exchange contracts with financial institution counterparties. Interest rate derivatives with customers are collateralized by the same collateral securing the
underlying loans to those borrowers. Cash and securities collateral amounts are included in the table only to the extent of the net derivative fair values.
Cash Flow Hedge Terminations
On October 10, 2024, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined
notional amount of $250 million. As the hedged transaction continues to be probable, the unrealized losses will be recorded in
AOCI and will be recognized as an increase to interest expense when the previously forecasted hedged items affect earnings in
future periods. During the year ended December 31, 2024, $0.2 million of these unrealized losses were reclassified as an
increase to interest expense on borrowings on the Consolidated Statements of Income.
In January 2023, the Corporation terminated interest rate derivatives designated as cash flow hedges with a combined notional
amount of $1.0 billion. As the hedged transaction continues to be probable, the unrealized losses that have been recorded in
AOCI are recognized as reduction to interest income, including fees, when the previously forecasted hedged item affects
earnings in future periods. During the years ended December 31, 2024 and 2023, $27.9 million and $22.1 million, respectively,
of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the consolidated
statements of income.
110
NOTE 12 - REGULATORY MATTERS
Regulatory Capital Requirements
The Corporation and the Bank are subject to regulatory capital requirements administered by banking regulators. Failure to
meet minimum capital requirements can trigger certain mandatory - and possibly additional discretionary - actions by regulators
that, if undertaken, could have a direct material effect on the Corporation's financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that
involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators
about components, risk weightings, and other factors.
Basel III Rules
The Basel III Rules provide a comprehensive framework and require the Corporation and the Bank to:
• Meet a minimum Common Equity Tier 1 capital ratio of 4.50% of risk-weighted assets and a minimum Tier 1 capital
of 6.00% of risk-weighted assets;
• Meet a minimum Total capital ratio of 8.00% of risk-weighted assets and a minimum Tier 1 leverage capital ratio of
4.00% of average assets;
• Maintain a "capital conservation buffer" of 2.50% above the minimum risk-based capital requirements, which must be
maintained to avoid restrictions on capital distributions and certain discretionary bonus payments; and
• Comply with a revised definition of capital to improve the ability of regulatory capital instruments to absorb losses.
Certain non-qualifying capital instruments, including cumulative preferred stock and TruPS, are excluded as a
component of Tier 1 capital for institutions of the Corporation's size.
The Corporation and the Bank are required to maintain a "capital conservation buffer" of 2.50% above the minimum risk-based
capital requirements. The rules provide that the failure to maintain the "capital conservation buffer" results in restrictions on
capital distributions and discretionary cash bonus payments to executive officers. As a result, under the Basel III Rules, if the
Bank fails to maintain the required minimum capital conservation buffer, the Corporation will be subject to limits, and possibly
prohibitions, on its ability to obtain capital distributions from such subsidiaries. If the Corporation does not receive sufficient
cash dividends from the Bank, it may not have sufficient funds to pay dividends on its common stock, service its debt
obligations or repurchase its common stock.
As of December 31, 2024 and 2023, the Corporation's capital levels met the minimum capital requirements, including the
capital conservation buffers, as prescribed in the Basel III Rules.
As of December 31, 2024 and 2023, the Bank was well capitalized under the regulatory framework for prompt corrective action
based on its capital ratio calculation. To be categorized as well capitalized, the Bank was required to maintain minimum total
risk-based, Tier I risk-based, Common Equity Tier I risk-based and Tier I leverage ratios as set forth in the table below.
There are no conditions or events since December 31, 2024, that management believes have changed the Corporation and the
Bank's categories.
111
The following tables present the Total risk-based, Tier I risk-based, Common Equity Tier I risk-based and Tier I leverage
requirements under the Basel III Rules as of December 31:
2024
Actual
For Capital
Adequacy Purposes
Well Capitalized
Amount
Ratio
Amount
Ratio
Amount
Ratio
(dollars in thousands)
Total Capital (to Risk-Weighted Assets):
Corporation
$ 3,544,021
14.3 % $ 1,986,754
8.0 %
N/A
N/A
Fulton Bank, N.A.
3,338,891
13.5
1,976,697
8.0
$ 2,470,871
10.0 %
Tier I Capital (to Risk-Weighted Assets):
Corporation
$ 2,866,143
11.5 % $ 1,490,065
6.0 %
N/A
N/A
Fulton Bank, N.A
3,029,881
12.3
1,482,523
6.0
$ 1,976,697
8.0 %
Common Equity Tier I Capital (to Risk-Weighted Assets):
Corporation
$ 2,673,265
10.8 %
$ 1,117,549
4.5 %
N/A
N/A
Fulton Bank, N.A
2,985,881
12.1
1,111,892
4.5
$ 1,606,066
6.5 %
Tier I Leverage Capital (to Average Assets):
Corporation
$ 2,866,143
9.0 %
$ 1,269,248
4.0 %
N/A
N/A
Fulton Bank, N.A
3,029,881
9.6
1,265,809
4.0
$ 1,582,261
5.0 %
N/A - Not applicable as "well capitalized" applies to banks only.
2023
Actual
For Capital
Adequacy Purposes
Well Capitalized
Amount
Ratio
Amount
Ratio
Amount
Ratio
(dollars in thousands)
Total Capital (to Risk-Weighted Assets):
Corporation
$ 3,184,496
14.0 % $ 1,817,712
8.0 %
N/A
N/A
Fulton Bank, N.A.
2,896,908
12.8
1,809,836
8.0
$ 2,262,295
10.0 %
Tier I Capital (to Risk-Weighted Assets):
Corporation
$ 2,541,819
11.2 % $ 1,363,284
6.0 %
N/A
N/A
Fulton Bank, N.A
2,620,837
11.6
1,357,377
6.0
$ 1,809,836
8.0 %
Common Equity Tier I Capital (to Risk-Weighted Assets):
Corporation
$ 2,348,941
10.3 %
$ 1,022,463
4.5 %
N/A
N/A
Fulton Bank, N.A
2,576,837
11.4
1,018,033
4.5
$ 1,470,492
6.5 %
Tier I Leverage Capital (to Average Assets):
Corporation
$ 2,541,819
9.5 % $ 1,072,189
4.0 %
N/A
N/A
Fulton Bank, N.A
2,620,837
9.6
1,089,195
4.0
$ 1,361,494
5.0 %
N/A - Not applicable as "well capitalized" applies to banks only.
Dividend and Loan Limitations
The dividends that may be paid by the Bank to the Parent Company are subject to certain legal and regulatory limitations. The
total amount available for payment of dividends by the Bank to the Parent Company calculated using the three-year earnings
test was approximately $334.4 million as of December 31, 2024 based on the Bank maintaining enough capital to be considered
well capitalized under the Basel III Rules. A condition of the OCC’s approval of the Republic First Transaction requires that the
Bank, for a period of two years following the Acquisition Date, request and receive a written determination of no supervisory
objection from the OCC prior to declaring or paying any dividend to the Parent Company
Under current regulations, the Bank is limited in the amount it may lend to its affiliates, including the Parent Company. Loans
to a single affiliate may not exceed 10%, and the aggregate of loans to all affiliates may not exceed 20% of the Bank's
regulatory capital.
112
NOTE 13 - INCOME TAXES
The components of income taxes are as follows:
2024
2023
2022
(dollars in thousands)
Current tax expense:
Federal
$
66,817 $
49,707 $
44,478
State
12,256
11,137
6,906
Total current tax expense
79,073
60,844
51,384
Deferred tax (benefit) expense:
Federal
(20,248)
3,021
8,974
State
(2,939)
576
(324)
Total deferred tax (benefit) expense
(23,187)
3,597
8,650
Total income tax expense
$
55,886 $
64,441 $
60,034
The differences between the effective income tax rate and the federal statutory income tax rate are as follows:
2024
2023
2022
Statutory tax rate
21.0 %
21.0 %
21.0 %
Tax credit investments
(0.3)
(1.3)
(2.0)
Tax-exempt income
(4.3)
(4.2)
(3.5)
Bargain purchase gain
(2.3)
—
—
Bank owned life insurance
(0.9)
(0.8)
(0.7)
State income taxes, net of federal benefit
1.9
2.6
1.2
Executive compensation
0.1
0.3
0.3
FDIC Premium
0.8
0.5
0.3
Other, net
0.2
0.4
0.7
Effective income tax rate
16.2 %
18.5 %
17.3 %
113
The net DTA recorded by the Corporation is included in other assets and consists of the following tax effects of temporary
differences as of December 31:
2024
2023
(dollars in thousands)
Deferred tax assets:
Unrealized holding losses on securities
$
85,516 $
90,671
Allowance for credit losses
90,148
71,013
Lease liability
34,921
21,570
State loss carryforwards
26,118
27,948
Other accrued expenses
16,142
11,082
Deferred compensation
11,138
10,215
Intangible assets
5,889
7,460
Stock-based compensation
5,458
5,129
Tax credit carryforwards
—
4,995
Other
7,444
5,469
Total gross deferred tax assets
$
282,774 $
255,552
Deferred tax liabilities:
Equipment lease financing
45,644
47,345
Right-of-use-asset
31,960
20,022
Acquisition premiums/discounts
16,360
5,508
MSRs
6,952
7,158
Postretirement and defined benefit plans
5,560
3,438
Tax credit investments
2,033
1,747
Premises and equipment
736
1,678
Total gross deferred tax liabilities
$
109,245 $
86,896
Net deferred tax asset, before valuation allowance
173,529
168,656
Valuation allowance
(26,118)
(27,948)
Net deferred tax asset
$
147,411 $
140,708
In assessing the realizability of DTAs, management considers whether it is more likely than not that some or all of the DTAs
will not be realized. The ultimate realization of DTAs is dependent upon the generation of future taxable income and/or capital
gain income during periods in which those temporary differences become deductible. Management considers the scheduled
reversal of deferred tax liabilities, projected future taxable income and tax planning strategies, such as those that may be
implemented to generate capital gains, in making this assessment.
The valuation allowance relates to state net operating loss carryforwards for which realizability is uncertain. As of
December 31, 2024 and 2023, the Corporation had state net operating loss carryforwards of approximately $389.3 million and
$354.1 million, respectively, which are available to offset future state taxable income, and expire at various dates through 2044.
As of December 31, 2024, based on the level of historical taxable income and projections for future taxable income over the
periods in which the DTAs are deductible, management believes it is more likely than not that the Corporation will realize the
benefits of its DTAs, net of the valuation allowance.
Uncertain Tax Positions
The following table summarizes the changes in unrecognized tax benefits for the years ended December 31:
2024
2023
2022
(dollars in thousands)
Balance at beginning of year
$
1,044 $
1,228 $
1,673
Current period tax positions
120
147
112
Lapse of statute of limitations
(104)
(331)
(557)
Balance at end of year
$
1,060 $
1,044 $
1,228
114
Virtually all of the Corporation's unrecognized tax benefits are for positions that are taken on an annual basis on state tax
returns. Increases to unrecognized tax benefits will occur as a result of accruing for the nonrecognition of the position for the
current year.
Decreases will occur as a result of the lapsing of the statute of limitations for the oldest outstanding year which includes the
position. These offsetting increases and decreases are likely to continue in the future, including over the next twelve months.
While the net effect on total unrecognized tax benefits during this period cannot be reasonably estimated, approximately
$82 thousand is expected to reverse in 2025 due to lapsing of the statute of limitations. Decreases can also occur throughout the
settlement of positions with taxing authorities.
As of December 31, 2024, if recognized, all of the Corporation's unrecognized tax benefits would impact the effective tax rate.
Not included in the table above is $134 thousand of federal income tax benefit on unrecognized state tax benefits which, if
recognized, would also impact the effective tax rate. Interest accrued related to unrecognized tax benefits is recorded as a
component of income tax expense. Penalties, if incurred, would also be recognized in income tax expense. The Corporation
recognized approximately $168 thousand and $138 thousand of recoveries in 2024 and 2023, respectively, for interest and
penalties in income tax expense related to unrecognized tax positions. As of December 31, 2024 and 2023, total accrued interest
and penalties related to unrecognized tax positions were approximately $177 thousand and $0.3 million, respectively.
The Corporation files income tax returns in the federal and various state jurisdictions. In most cases, unrecognized tax benefits
are related to tax years that remain subject to examination by the relevant taxing authorities. With few exceptions, the
Corporation is no longer subject to federal, state and local examinations by tax authorities for years before 2021.
Tax Credit Investments
The TCIs are included in other assets, with any unfunded equity commitments recorded in other liabilities on the consolidated
balance sheets and changes are reflected in change in tax credit investments in the consolidated statements of cash flows.
In 2023, the Corporation adopted ASU 2023-02, which allows all TCIs to qualify for the proportional amortization method if:
(1) it is probable that the income tax credits allocatable to the Corporation will be available; (2) the Corporation does not have
the ability to exercise significant influence over the operating and financial policies of the underlying project; (3) substantially
all of the projected benefits are from income tax credits and other income tax benefits; (4) the Corporation's projected yield
based solely on the cash flows from the income tax credits and other income tax benefits is positive; and (5) the Corporation is
a limited liability investor in the limited liability entity for both legal and tax purposes, and the Corporation’s liability is limited
to its capital investment. See "Note 1 - Summary of Significant Accounting Policies" in the Notes to the Consolidated Financial
Statements.
All TCIs held as of December 31, 2024 that qualify for the proportional amortization method are amortized over the period the
Corporation expects to receive the tax credits, with the expense included within income taxes on the Consolidated Statements of
Income and net income in the Consolidated Statements of Cash Flows.
All TCIs are evaluated for impairment at the end of each reporting period. There were no impairments recorded against TCIs
during 2024.
The following table presents the balances of the Corporation's TCIs and related unfunded commitments as of December 31:
2024
2023
Included in other assets:
(dollars in thousands)
Affordable housing tax credit investments, net
$
211,572 $
170,115
Other tax credit investments, net
29,649
35,907
Total TCIs, net
$
241,221 $
206,022
Included in other liabilities:
Unfunded affordable housing tax credit commitments
$
84,572 $
58,312
Other tax credit liabilities
24,109
28,361
Total unfunded tax credit commitments and liabilities
$
108,681 $
86,673
The following table presents other information relating to the Corporation's TCIs for the years ended December 31:
115
2024
2023
2022
(dollars in thousands)
Components of income taxes:
Tax credits and benefits
$ (26,762) $ (28,748) $ (27,154)
Amortization of tax credits and benefits, net of tax benefits
25,069
23,446
19,298
Deferred tax expense
559
610
766
Total reduction in income tax expense
$
(1,134) $
(4,692) $
(7,090)
Amortization of TCIs:
Total amortization of TCIs
$
— $
— $
2,783
NOTE 14 - NET INCOME PER COMMON SHARE
Basic net income per common share is calculated as net income available to common shareholders divided by the weighted
average number of shares outstanding.
Diluted net income per common share is calculated as net income available to common shareholders divided by the weighted
average number of shares outstanding plus the incremental number of shares added as a result of converting common stock
equivalents, calculated using the treasury stock method. The Corporation's common stock equivalents consist of outstanding
restricted stock, RSUs and PSUs. PSUs are required to be included in weighted average diluted shares outstanding if
performance measures, as defined in each PSU award agreement, are met as of the end of the period.
A reconciliation of weighted average common shares outstanding used to calculate basic and diluted net income per share
follows:
2024
2023
2022
(in thousands)
Weighted average common shares outstanding (basic)
175,523
165,241
164,119
Impact of common stock equivalents
1,700
1,528
1,353
Weighted average common shares outstanding (diluted)
177,223
166,769
165,472
116
NOTE 15 - SHAREHOLDERS' EQUITY
Preferred Stock
On October 29, 2020, the Corporation issued 8.0 million depositary shares ("Depositary Shares"), each representing a 1/40th
interest in a share of the Corporation's 5.125% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, of which
200,000 are authorized and issued, with a liquidation preference of $1,000 per share (equivalent to $25.00 per Depositary
Share), for an aggregate offering amount of $200 million. The preferred stock is redeemable, at the Corporation's option, in
whole or in part, on and after January 15, 2026, and redeemable in whole, but not in part, prior to January 15, 2026 within 90
days following the occurrence of a regulatory capital treatment event.
Common Stock Offering
On May 1, 2024, the Corporation completed its underwritten public offering of 19,166,667 shares of its common stock at a
price to the public of $15.00 per share, before underwriting discounts. The net proceeds to the Corporation from the offering
after deducting underwriting discounts and transaction expenses were approximately $272.6 million.
Stock Reissuance
On July 1, 2022, the Corporation reissued 6,208,516 shares of common stock that had been held as Treasury stock in
connection with the Merger.
117
Accumulated Other Comprehensive Income (Loss)
The following table presents the components of OCI for the years ended December 31:
Before-Tax
Amount
Tax Effect
Net of Tax
Amount
(dollars in thousands)
2024
Net unrealized gains (losses) on securities
$
(28,993)
$
6,568
$
(22,425)
Reclassification adjustment for securities gains (losses) included in net income(1)
20,283
(4,594)
15,689
Amortization of net unrealized gains (losses) on AFS transferred to HTM(2)
7,251
(1,642)
5,609
Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in
cash flow hedges
764
(174)
590
Reclassification adjustment for net gains (losses) realized in net income on interest rate derivatives
used in cash flow hedges
23,453
(5,312)
18,141
Unrecognized pension and postretirement income
9,411
(2,132)
7,279
Amortization of net unrecognized pension and postretirement items(3)
(541)
119
(422)
Total Other Comprehensive Income (Loss)
$
31,628
$
(7,167)
$
24,461
2023
Net unrealized gains (losses) on securities
$
46,572
$
(10,549)
$
36,023
Reclassification adjustment for securities gains (losses) included in net income(1)
(733)
166
(567)
Amortization of net unrealized gains (losses) on AFS transferred to HTM(2)
7,644
(1,731)
5,913
Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in
cash flow hedges
9,048
(2,050)
6,998
Reclassification adjustment for net gains (losses) realized in net income on interest rate derivatives
used in cash flow hedges
25,850
(5,855)
19,995
Unrecognized pension and postretirement income
6,162
(1,385)
4,777
Amortization of net unrecognized pension and postretirement items(3)
73
(16)
57
Total Other Comprehensive Income (Loss)
$
94,616
$
(21,420)
$
73,196
2022
Net unrealized gains (losses) on securities
$
(403,606)
$
91,437
$
(312,169)
Reclassification adjustment for securities gains (losses) included in net income(1)
(27)
7
(20)
Amortization of net unrealized gains (losses) on AFS transferred to HTM(2)
(57,509)
13,026
(44,483)
Net unrealized holding gains (losses) arising during the period on interest rate derivatives used in
cash flow hedges
(81,400)
18,437
(62,963)
Reclassification adjustment for net gains (losses) loss realized in net income on interest rate swaps
used in cash flow hedges
7,761
(1,757)
6,004
Unrecognized pension and postretirement income
825
(181)
644
Amortization of net unrecognized pension and postretirement items(3)
128
(28)
100
Total Other Comprehensive Income (Loss)
$
(533,828)
$
120,941
$
(412,887)
(1) Amounts reclassified out of AOCI. Before-tax amounts included in "Investment securities gains, net" on the Consolidated Statements of Income. See "Note 4
- Investment Securities," for additional details.
(2) Amounts reclassified out of AOCI. Before-tax amounts included as a reduction to "Interest Income" on the Consolidated Statements of Income.
(3) Amounts reclassified out of AOCI. Before-tax amounts included in "Salaries and employee benefits" on the Consolidated Statements of Income. See "Note
17 - Employee Benefit Plans," for additional details.
118
The following table presents changes in each component of AOCI, net of tax, for the years ended December 31:
Unrealized
Gains (Losses)
on Investment
Securities
Net Unrealized
Gain (Loss) on
Interest Rate
Derivatives used
in Cash Flow
Hedges
Unrecognized
Pension and
Postretirement
Plan Income
(Costs)
Total
(dollars in thousands)
Balance at December 31, 2021
$
40,441
$
(4,817) $
(8,213) $
27,411
OCI before reclassifications
(312,169)
(62,963)
644
(374,488)
Amounts reclassified from AOCI
(20)
6,004
100
6,084
Amortization of net unrealized gains (losses) on AFS securities
transferred to HTM
(44,483)
—
—
(44,483)
Balance at December 31, 2022
(316,231)
(61,776)
(7,469)
(385,476)
OCI before reclassifications
36,023
6,998
4,777
47,798
Amounts reclassified from AOCI
(567)
19,995
57
19,485
Amortization of net unrealized gains (losses) on AFS securities
transferred to HTM
5,913
—
—
5,913
Balance at December 31, 2023
(274,862)
(34,783)
(2,635)
(312,280)
OCI before reclassifications
(22,425)
590
7,279
(14,556)
Amounts reclassified from AOCI
15,689
18,141
(422)
33,408
Amortization of net unrealized gains (losses) on AFS securities
transferred to HTM
5,609
—
—
5,609
Balance at December 31, 2024
$
(275,989) $
(16,052) $
4,222
$
(287,819)
Common Stock Repurchase Programs
On December 17, 2024, the Corporation announced that its Board of Directors approved the 2025 Repurchase Program. The
2025 Repurchase Program will expire on December 31, 2025. Under the 2025 Repurchase Program, the Corporation is
authorized to repurchase up to $125.0 million of shares of its common stock. Under this authorization, up to $25.0 million of
the $125 million authorization may be used to repurchase the Corporation's Preferred Stock. The 2025 Repurchase Program
may be discontinued at any time.
On December 19, 2023, the Corporation announced that its Board of Directors approved the 2024 Repurchase Program. The
2024 Repurchase Program expired on December 31, 2024. Under the 2024 Repurchase Program, the Corporation was
authorized to repurchase up to $125.0 million of shares of its common stock. Under this authorization, up to $25.0 million of
the $125 million authorization may be used to repurchase the Corporation's Preferred Stock and outstanding subordinated notes
through December 31, 2024. During 2024, 1.9 million shares were repurchased at a total cost of $30.3 million, or $15.69 per
share, under the 2024 Repurchase Program.
On December 20, 2022, the Corporation announced that its Board of Directors approved the 2023 Repurchase Program. Under
the 2023 Repurchase Program, the Corporation was authorized to repurchase up to $100.0 million of its common stock through
December 31, 2023. During 2023, 5.0 million shares were repurchased at a total cost of $77.1 million, or $15.32 per share,
under the 2023 Repurchase Program.
Under these repurchase programs, repurchased shares are added to treasury stock, at cost. As permitted by securities laws and
other legal requirements, and subject to market conditions and other factors, purchases may be made from time to time in open
market or privately negotiated transactions, including, without limitation, through accelerated share repurchase transactions.
119
NOTE 16 - STOCK-BASED COMPENSATION PLANS
The following table presents compensation expense and related tax benefits for all equity awards recognized in the consolidated
statements of income for the years ended December 31:
2024
2023
2022
(dollars in thousands)
Compensation expense
$
10,907 $
11,265 $
15,081
Tax benefit
(2,466)
(2,484)
(2,690)
Total stock-based compensation, net of tax
$
8,441 $
8,781 $
12,391
The tax benefits as a percentage of compensation expense, as shown in the preceding table, were 22.6%, 22.1% and 17.8% in
2024, 2023 and 2022, respectively. These percentages differ from the Corporation's federal statutory tax rate of 21%. Tax
benefits are only recognized over the vesting period for awards that ordinarily will generate a tax deduction when exercised, in
the case of non-qualified stock options, or upon vesting, in the case of restricted stock, RSUs, and PSUs. Tax benefits in excess
of the tax rate resulted from incentive stock option exercises that triggered a tax deduction when they were exercised and excess
tax benefits realized on vesting RSUs and PSUs during the period.
The following table provides information about stock option activity for the year ended December 31, 2024:
Stock
Options
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(in millions)
Outstanding and exercisable as of December 31, 2023
40,135 $
12.61
Granted
—
—
Exercised
(39,310)
12.61
Forfeited
—
—
Expired
(825)
12.61
Outstanding and exercisable as of December 31, 2024
— $
12.61
0.0 years
$
—
The following table presents information about stock options exercised for the years ended December 31:
2024
2023
2022
(dollars in thousands)
Number of options exercised
39,310
68,134
130,503
Total intrinsic value of options exercised
$
116 $
249 $
842
Cash received from options exercised
$
496 $
805 $
1,402
Tax benefit from options exercised
$
23 $
47 $
163
Upon exercise, the Corporation issues shares from its authorized, but unissued, common stock to satisfy the options.
The following table provides information about nonvested restricted stock, RSUs and PSUs granted under the Employee Equity
Plan and Directors' Plan for the year ended December 31, 2024:
Restricted Stock/RSUs/PSUs(1)
Shares
Weighted
Average
Grant Date
Fair Value
Nonvested as of December 31, 2023
2,662,471 $
14.24
Granted
933,962
15.22
Vested
(739,626)
16.14
Forfeited
(153,810)
14.30
Nonvested as of December 31, 2024
2,702,997 $
14.57
(1) There were no nonvested stock options at December 31, 2024 or 2023.
120
As of December 31, 2024, there was $11.4 million of total unrecognized compensation cost (pre-tax) related to restricted stock,
RSUs and PSUs that will be recognized as compensation expense over a weighted average period of 1.89 years. As of
December 31, 2024, the Employee Equity Plan had 3.8 million shares reserved for future grants through 2032, and the
Directors' Plan had 325.1 thousand shares reserved for future grants through 2033.
The fair value of certain PSUs with market-based performance conditions granted under the Employee Equity Plan was
estimated on the grant date using the Monte Carlo valuation methodology performed by a third-party valuation expert. This
valuation is dependent upon certain assumptions, as summarized in the following table:
2024
2023
2022
Risk-free interest rate
4.75 %
3.84 %
2.84 %
Volatility of Corporation’s stock
30.54 %
35.63 %
43.46 %
Expected life of PSUs
3 years
3 years
3 years
The expected life of the PSUs with fair values measured using the Monte Carlo valuation methodology was based on the
defined performance period of three years. Volatility of the Corporation's stock was based on historical volatility for the period
commensurate with the expected life of the PSUs. The risk-free interest rate is the zero-coupon U.S. Treasury rate
commensurate with the expected life of the PSUs on the date of the grant. Based on the assumptions above, the Corporation
calculated an estimated fair value per PSU with market-based performance conditions granted in 2024, 2023 and 2022 of
$19.59, $10.63 and $14.93, respectively.
Under the ESPP, eligible employees can purchase stock of the Corporation at 85% of the fair market value of the stock on the
date of purchase. The ESPP is considered to be a compensatory plan and, as such, compensation expense is recognized for the
15% discount on shares purchased. The following table summarizes activity under the ESPP:
2024
2023
2022
ESPP shares purchased
133,019
162,667
134,645
Average purchase price per share (85% of market value)
$
14.55 $
11.68 $
14.06
Compensation expense recognized (in thousands)
$
342 $
348 $
334
NOTE 17 - EMPLOYEE BENEFIT PLANS
The following summarizes retirement plan expense for the years ended December 31:
2024
2023
2022
(dollars in thousands)
401(k) Retirement Plan
$
13,739 $
11,930 $
10,988
Pension Plan
(1,036)
464
(1,347)
Total
$
12,703 $
12,394 $
9,641
The 401(k) Retirement Plan is a defined contribution plan under which eligible employees may defer a portion of their pre-tax
covered compensation on an annual basis, with employer matches of up to 5% of employee compensation. Employee and
employer contributions under these features are 100% vested.
Contributions to the Pension Plan are actuarially determined and funded annually, if necessary. The Corporation recognizes the
funded status of its Pension Plan on the consolidated balance sheets and recognizes the changes in that funded status through
OCI. The Pension Plan has been curtailed, with no additional benefits accruing to participants.
121
Pension Plan
The net periodic pension cost for the Pension Plan, as determined by consulting actuaries, consisted of the following
components for the years ended December 31:
2024
2023
2022
(dollars in thousands)
Interest cost
$
3,159 $
3,269 $
2,393
Expected return on assets
(3,903)
(3,436)
(4,393)
Net amortization and deferral
—
631
653
Gain on settlement
(292)
—
—
Net periodic pension cost
$
(1,036) $
464 $
(1,347)
The following table summarizes the changes in the projected benefit obligation and fair value of Pension Plan assets for the
plan years ended December 31:
2024
2023
(dollars in thousands)
Projected benefit obligation at beginning of year
$
68,952 $
68,716
Interest cost
3,159
3,269
Benefit payments
(8,843)
(4,687)
Change in assumptions
(4,323)
1,492
Experience gain
484
162
Projected benefit obligation at end of year
$
59,429 $
68,952
Fair value of plan assets at beginning of year
$
84,659 $
78,137
Actual return on plan assets
9,779
11,209
Benefit payments
(8,843)
(4,687)
Fair value of plan assets at end of year
$
85,595 $
84,659
The following table presents the funded status of the Pension Plan, included in other assets and other liabilities on the
consolidated balance sheets, as of December 31:
2024
2023
(dollars in thousands)
Projected benefit obligation
$
(59,429) $
(68,952)
Fair value of plan assets
85,595
84,659
Funded status
$
26,166 $
15,707
The following table summarizes the changes in the unrecognized net loss included as a component of AOCI:
Unrecognized Net Loss
(Gain)
Before tax
Net of tax
(dollars in thousands)
Balance as of December 31, 2022
$
12,070 $
9,384
Recognized as a component of 2023 periodic pension cost
(631)
(492)
Unrecognized gains arising in 2023
(6,119)
(4,775)
Balance as of December 31, 2023
5,320
4,117
Recognized as a component of 2024 periodic pension cost
—
—
Unrecognized gains arising in 2024
(9,417)
(7,284)
Balance as of December 31, 2024
$
(4,097) $
(3,167)
122
The following rates were used to calculate the net periodic pension cost and the present value of benefit obligations as of
December 31:
2024
2023
2022
Discount rate-projected benefit obligation
5.38 %
4.73 %
4.93 %
Expected long-term rate of return on plan assets
5.00 %
5.00 %
5.00 %
The discount rates used were determined using the FTSE Pension Discount Curve (formerly, the Citigroup Average Life
discount rate table), as adjusted based on the Pension Plan's expected benefit payments.
The 5.00% long-term rate of return on plan assets used to calculate the net periodic pension cost was based on historical returns,
adjusted for expectations of long-term asset returns based on the December 31, 2024 weighted average asset allocations. The
expected long-term return is considered to be appropriate based on the asset mix and the historical returns realized.
The following table presents a summary of the fair values of the Pension Plan's assets as of December 31:
2024
2023
Estimated
Fair Value
% of Total
Assets
Estimated
Fair Value
% of Total
Assets
(dollars in thousands)
Equity mutual funds
$
31,369
$
27,998
Equity common trust funds
16,486
20,246
Equity securities
47,855
55.9 %
48,244
57.0 %
Cash and money market funds
5,534
6,276
Fixed income mutual funds
13,590
12,639
Corporate debt securities
4,090
2,600
U.S. Government agency securities
9,493
9,908
Fixed income securities and cash
32,707
38.2 %
31,423
37.1 %
Other alternative investment funds
5,033
5.9 %
4,992
5.9 %
Total
$
85,595
100.0 % $
84,659
100.0 %
Investment allocation decisions are made by a retirement plan committee. The goal of the investment allocation strategy is to
match certain benefit obligations with maturities of fixed income securities. Alternative investments may include managed
futures, commodities, real estate investment trusts, master limited partnerships, and long-short strategies with traditional stocks
and bonds. All alternative investments are in the form of mutual funds, not individual contracts, to enable daily liquidity.
The fair values for assets held by the Pension Plan are based on quoted prices for identical instruments and would be
categorized as Level 1 assets under the fair value hierarchy.
Estimated future benefit payments are as follows (in thousands):
Year
2025
$
4,938
2026
5,005
2027
5,050
2028
5,058
2029
5,039
Thereafter
24,533
Total
$
49,623
Multiemployer Defined Benefit Pension Plan
In connection with the Merger, the Corporation assumed the pension plan obligations of Prudential Bancorp, under the
Prudential Bancorp Pension Plan, that had previously been closed to new Prudential Bancorp participants.
123
The Prudential Bancorp Pension Plan is structured as a multiple employer plan under Internal Revenue Code Section 413(c). It
maintains a single trust and all assets are commingled and invested on a pooled basis. All amounts payable by the Plan are a
general charge upon all its assets. This structure gives rise to the risk if a participating employer fails before funding up to cover
the liabilities of its participants and orphans, contributions for all remaining employers will increase, as assets have to be re-
allocated to cover such shortfall.
Information regarding the Prudential Bancorp Pension Plan as of December 31, 2024 is as follows:
Legal Name of Plan
Prudential Bancorp
Pension Plan
(dollars in thousands)
Plan Employer Identification Number
23-1928421
The Corporation's contribution for the year ended December 31, 2024(1)
$
355
Are the Corporation's contributions more than 5% of total contributions?
No
Funded Status
80.81 %
(1) Includes 2025 prepayment of $138 thousand.
Postretirement Benefits
The Corporation provides medical benefits and life insurance benefits under the Postretirement Plan to certain retired full-time
employees who were employees of the Corporation prior to January 1, 1998. Prior to February 1, 2014, certain full-time
employees became eligible for these discretionary benefits if they reached retirement age while working for the Corporation.
The Corporation recognizes the funded status of the Postretirement Plan on the consolidated balance sheets and recognizes the
changes in that funded status through OCI.
The components of the net benefit for Postretirement Plan other than pensions are as follows:
2024
2023
2022
(dollars in thousands)
Interest cost
$
38 $
42 $
34
Net amortization and deferral
(541)
(558)
(525)
Net postretirement benefit
$
(503) $
(516) $
(491)
This table summarizes the changes in the accumulated postretirement benefit obligation for the years ended December 31:
2024
2023
(dollars in thousands)
Accumulated postretirement benefit obligation at beginning of year
$
844 $
972
Interest cost
38
42
Benefit payments
(135)
(147)
Change in experience
42
(31)
Change in assumptions
(36)
8
Accumulated postretirement benefit obligation at end of year
$
753 $
844
The fair values of the Postretirement Plan assets were $0 as of both December 31, 2024 and 2023. The funded status for the
Postretirement Plan included in other liabilities was $0.8 million in the consolidated balance sheets as of December 31, 2024
and 2023, respectively.
124
The following table summarizes the changes in items recognized as a component of accumulated other comprehensive income
(loss):
Before tax
Unrecognized
Prior Service
Cost
Unrecognized
Net Loss
(Gain)
Total
Net of tax
(dollars in thousands)
Balance as of December 31, 2022
$
(2,084) $
(818) $
(2,902) $
(2,264)
Recognized as a component of 2023 postretirement cost
464
94
558
435
Unrecognized gains arising in 2023
—
(23)
(23)
(18)
Balance as of December 31, 2023
(1,620)
(747)
(2,367)
(1,847)
Recognized as a component of 2024 postretirement cost
464
77
541
422
Unrecognized loss arising in 2024
—
6
6
5
Balance as of December 31, 2024
$
(1,156) $
(664) $
(1,820) $
(1,420)
The following rates were used to calculate net periodic postretirement benefit cost and the present value of benefit obligations
as of December 31:
2024
2023
2022
Discount rate-projected benefit obligation
5.38 %
4.73 %
4.93 %
Expected long-term rate of return on plan assets
3.00 %
3.00 %
3.00 %
The discount rates used to calculate the accumulated postretirement benefit obligation were determined using the FTSE Pension
Discount Curve (formerly, the Citigroup Average Life discount rate table), as adjusted based on the Postretirement Plan's
expected benefit payments.
Estimated future benefit payments under the Postretirement Plan are as follows (dollars in thousands):
Year
2025
$
129
2026
116
2027
103
2028
92
2029
81
Thereafter
270
Total
$
791
125
NOTE 18 - LEASES
The Corporation has operating leases for certain financial centers, corporate offices and land.
The following table presents the components of lease expense, which is included in net occupancy expense on the consolidated
statements of income (dollars in thousands):
2024
2023
2022
Operating lease expense
$
27,893 $
19,372 $
17,766
Variable lease expense
3,147
3,160
3,017
Sublease income
(1,224)
(1,111)
(964)
Total lease expense
$
29,816 $
21,421 $
19,819
Supplemental consolidated balance sheet information related to leases was as follows as of December 31 (dollars in thousands):
Operating Leases
Balance Sheet Classification
2024
2023
ROU assets
Other assets
$
140,997
$
88,188
Lease liabilities
Other liabilities
$
154,176
$
95,230
Weighted average remaining lease term
9.30 years
6.48 years
Weighted average discount rate
5.51 %
3.34 %
The discount rate used in determining the lease liability for each individual lease is the Bank's incremental borrowing rate
which corresponds with the remaining lease term.
Supplemental cash flow information related to operating leases was as follows (dollars in thousands):
2024
2023
Cash paid for amounts included in the measurement of lease liabilities
$
25,161 $
20,898
ROU assets obtained in exchange for lease obligations
78,278
20,184
Lease payment obligations for each of the next five years and thereafter, with a reconciliation to the Corporation's lease liability
were as follows (dollars in thousands):
Year
Operating Leases
2025
$
27,122
2026
25,744
2027
23,464
2028
20,254
2029
16,669
Thereafter
91,077
Total lease payments
204,330
Less: imputed interest
(50,154)
Present value of lease liabilities
$
154,176
On May 10, 2024, the Bank and Fulton Financial Realty Company, a wholly owned subsidiary of the Corporation, entered into
the Sale-Leaseback Transaction for 40 financial center office locations for an aggregate cash purchase price of $55.4 million.
The Bank entered into a lease for each of the locations sold in the Sale-Leaseback Transaction for an initial term of 15 years,
with the option to extend the term of each for up to three successive terms of up to five years each. During the initial lease
terms, the base rental amount will increase annually at a rate of 2.25%. The Corporation recorded a pre-tax gain, after deduction
of transaction-related expenses, of approximately $20.3 million in connection with the Sale-Leaseback Transaction. The
properties are located in Pennsylvania, New Jersey, Delaware, and Maryland.
As of December 31, 2024, the Corporation had not entered into any significant leases that have not yet commenced.
126
NOTE 19 - FAIR VALUE MEASUREMENTS
The following tables present assets and liabilities measured at fair value on a recurring basis and reported on the consolidated
balance sheets:
2024
Level 1
Level 2
Level 3
Total
(dollars in thousands)
Loans held for sale
$
—
$
25,618
$
—
$
25,618
Available for sale investment securities:
State and municipal securities
—
814,887
—
814,887
Corporate debt securities
—
300,370
—
300,370
Collateralized mortgage obligations
—
788,885
—
788,885
Residential mortgage-backed securities
—
989,875
—
989,875
Commercial mortgage-backed securities
—
516,882
—
516,882
Total available for sale investment securities
—
3,410,899
—
3,410,899
Other assets:
Investments held in Rabbi Trust
35,093
—
—
35,093
Derivative assets
1,682
159,939
—
161,621
Total assets
$
36,775
$
3,596,456
$
—
$
3,633,231
Other liabilities:
Deferred compensation liabilities
$
35,093
$
—
$
—
$
35,093
Derivative liabilities
1,596
252,821
—
254,417
Total liabilities
$
36,689
$
252,821
$
—
$
289,510
2023
Level 1
Level 2
Level 3
Total
(dollars in thousands)
Loans held for sale
$
—
$
15,158
$
—
$
15,158
Available for sale investment securities:
U.S. Government securities
42,161
—
—
42,161
U.S. Government-sponsored agency securities
—
1,010
—
1,010
State and municipal securities
—
1,072,013
—
1,072,013
Corporate debt securities
—
440,551
—
440,551
Collateralized mortgage obligations
—
111,434
—
111,434
Residential mortgage-backed securities
—
196,795
—
196,795
Commercial mortgage-backed securities
—
534,388
—
534,388
Total available for sale investment securities
42,161
2,356,191
—
2,398,352
Other assets:
Investments held in Rabbi Trust
29,819
—
—
29,819
Derivative assets
572
157,540
—
158,112
Total assets
$
72,552
$
2,528,889
$
—
$
2,601,441
Other liabilities:
Deferred compensation liabilities
$
29,819
$
—
$
—
$
29,819
Derivative liabilities
477
246,157
—
246,634
Total liabilities
$
30,296
$
246,157
$
—
$
276,453
The valuation techniques used to measure fair value for the items in the preceding tables are as follows:
Loans held for sale - This category includes mortgage loans held for sale that are measured at fair value. Fair values as of
December 31, 2024 and 2023, were measured as the price that secondary market investors were offering for loans with similar
characteristics. See "Note 1 - Summary of Significant Accounting Policies" for details related to the Corporation's election to
measure assets and liabilities at fair value.
Available for sale investment securities - Included in this asset category are debt securities. Level 2 investment securities are
valued by a third-party pricing service. The pricing service uses pricing models that vary based on asset class and incorporate
available market information, including quoted prices of investment securities with similar characteristics. Because many fixed
127
income securities do not trade on a daily basis, pricing models use available information, as applicable, through processes such
as benchmark yield curves, benchmarking of like securities, sector groupings and matrix pricing.
Standard market inputs include: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets,
benchmark securities, bids, offers and reference data, including market research publications. For certain security types,
additional inputs may be used, or some of the standard market inputs may not be applicable.
•
U.S. Government securities - These securities are classified as Level 1. Fair values are based on quoted prices
with active markets.
•
U.S. Government-sponsored agency securities/State and municipal securities/Collateralized mortgage
obligations/Residential mortgage-backed securities/Commercial mortgage-backed securities - These debt
securities are classified as Level 2. Fair values are determined by a third-party pricing service, as detailed
above.
•
Corporate debt securities - These securities are classified as Level 2. This category consists of subordinated
and senior debt issued by financial institutions ($293.1 million at December 31, 2024 and $433.4 million at
December 31, 2023) and other corporate debt issued by non-financial institutions ($7.3 million at
December 31, 2024 and $7.2 million at December 31, 2023). The fair values for corporate debt securities are
determined by a third-party pricing service as detailed above.
Investments held in Rabbi Trust - This category consists of mutual funds that are held in trust for employee deferred
compensation plans that the Corporation has elected to measure at fair value. Shares of mutual funds are valued based on net
asset value, which represents quoted market prices for the underlying shares held in the mutual funds, and as such, are classified
as Level 1.
Derivative assets - Fair value of foreign currency exchange contracts classified as Level 1 assets ($1.7 million at December 31,
2024 and $0.6 million at December 31, 2023). The foreign exchange prices used to measure these items at fair value are based
on quoted prices for identical instruments in active markets.
Level 2 assets, representing the fair value of mortgage banking derivatives in the form of interest rate locks and forward
commitments with secondary market investors ($0.8 million at December 31, 2024 and $0.5 million at December 31, 2023) and
the fair value of interest rate derivatives ($159.2 million at December 31, 2024 and $157.1 million at December 31, 2023). The
fair values of the interest rate locks, forward commitments and interest rate derivatives represent the amounts that would be
required to settle the derivative financial instruments at the balance sheet date. See "Note 11 - Derivative Financial
Instruments," for additional information.
Deferred compensation liabilities - Fair value of amounts due to employees under deferred compensation plans, classified as
Level 1 liabilities and are included in other liabilities on the consolidated balance sheets. The fair values of these liabilities are
determined in the same manner as the related assets, as described under the heading "Investments held in Rabbi Trust" above.
Derivative liabilities - Level 1 liabilities, representing the fair value of foreign currency exchange contracts ($1.6 million and
$0.5 million at December 31, 2024 and 2023, respectively).
Level 2 liabilities, representing the fair value of mortgage banking derivatives in the form of interest rate locks and forward
commitments with secondary market investors ($0.1 million at December 31, 2024 and $0.9 million at December 31, 2023) and
the fair value of interest rate derivatives ($252.8 million at December 31, 2024 and $245.6 million at December 31, 2023).
The fair values of these liabilities are determined in the same manner as the related assets, as described under the heading
"Derivative assets" above.
128
Certain financial instruments are not measured at fair value on an ongoing basis but are subject to fair value measurement in
certain circumstances, such as upon their acquisition or when there is evidence of impairment. The following table presents
Level 3 financial assets measured at fair value on a nonrecurring basis:
2024
2023
(dollars in thousands)
Loans, Net
$
168,668 $ 102,135
OREO
2,621
896
MSRs(1)
53,972
49,696
SBA servicing asset
3,120
—
Total assets
$
228,381 $ 152,727
(1) Amounts shown are estimated fair value. MSRs are recorded on the Corporation's consolidated balance sheets at lower of amortized cost or fair value. See
"Note 8 - Mortgage Servicing Rights" for additional information.
The valuation techniques used to measure fair value for the items in the table above are as follows:
•
Loans, net – This category consists of loans that were individually evaluated for impairment and have been classified
as Level 3 assets. The amount shown is the balance of non-accrual loans, net of related ACL. See "Note 5 - Loans and
Allowance for Credit Losses," for additional details.
•
OREO – This category consists of OREO classified as Level 3 assets, for which the fair values were based on
estimated selling prices less estimated selling costs for similar assets in active markets.
•
MSRs – This category consists of MSRs, which were initially recorded at fair value upon the sale of residential
mortgage loans to secondary market investors, and subsequently carried at the lower of amortized cost or fair value.
MSRs are amortized as a reduction to servicing income over the estimated lives of the underlying loans. MSRs are
stratified by product type and evaluated for impairment by comparing each stratum's carrying amount to its estimated
fair value. Fair values are determined at the end of each quarter through a discounted cash flows valuation performed
by a third-party valuation expert. Significant inputs to the valuation included expected net servicing income, the
discount rate and the expected life of the underlying loans. Expected life is based on the contractual terms of the loans,
as adjusted for prepayment projections. The weighted average annual constant prepayment rate and the weighted
average discount rate used in the December 31, 2024 valuation were 7.9% and 9.5%, respectively. Management
reviews the reasonableness of the significant inputs to the third-party valuation in comparison to market data. See
"Note 8 - Mortgage Servicing Rights," for additional information. Changes in any of those inputs, in isolation, could
result in a significantly different fair value measurement, as depicted in the table below:
Significant Input
Scenario Shock
% Change in Valuation
Prepayment Rate
+ 15%
(4)%
Prepayment Rate
- 15%
4%
Discount Rate
- 200 bps
10%
Discount Rate
+ 200 bps
(9)%
•
SBA servicing asset – This category consists of the retained servicing rights on SBA-guaranteed loans sold to
investors. The standard sale structure under the SBA Secondary Participation Guaranty Agreement provides for the
Corporation to retain a portion of the cash flow from the interest payment received on the SBA guaranteed portion of
the loan, which is commonly known as a servicing spread. A third-party valuation expert is utilized to perform the
modeling to estimate the fair value of the SBA servicing asset. Since the valuation model uses significant unobservable
inputs, the SBA servicing asset is classified within Level 3.
129
The following table details the book values and the estimated fair values of the Corporation's financial instruments as of
December 31, 2024 and 2023. A general description of the methods and assumptions used to estimate such fair values is also
provided.
2024
Estimated Fair Value
Carrying
Amount
Level 1
Level 2
Level 3
Total
FINANCIAL ASSETS
(dollars in thousands)
Cash and cash equivalents
$ 1,063,871 $ 1,063,871 $
— $
— $ 1,063,871
FRB and FHLB stock
139,574
—
139,574
—
139,574
Loans held for sale
25,618
—
25,618
—
25,618
AFS securities
3,410,899
—
3,410,899
—
3,410,899
HTM securities
1,395,569
—
1,183,449
—
1,183,449
Loans, net
23,665,763
—
— 22,555,687 22,555,687
Accrued interest receivable
117,029
117,029
—
—
117,029
Other assets
736,502
543,251
159,939
59,713
762,903
FINANCIAL LIABILITIES
Demand and savings deposits
$ 21,135,478 $ 21,135,478 $
— $
— $ 21,135,478
Brokered deposits
843,857
145,056
698,647
—
843,703
Time deposits
4,150,098
—
4,154,726
—
4,154,726
Accrued interest payable
31,620
31,620
—
—
31,620
FHLB advances
850,000
851,470
—
—
851,470
Senior debt and subordinated debt
367,316
—
253,818
—
253,818
Other borrowings
564,732
544,908
901
—
545,809
Other liabilities
467,011
200,029
252,821
14,161
467,011
2023
Estimated Fair Value
Carrying
Amount
Level 1
Level 2
Level 3
Total
FINANCIAL ASSETS
(dollars in thousands)
Cash and cash equivalents
$
549,710 $
549,710 $
— $
— $
549,710
FRB and FHLB stock
124,405
—
124,405
—
124,405
Loans held for sale
15,158
—
15,158
—
15,158
AFS securities
2,398,352
42,161
2,356,191
—
2,398,352
HTM securities
1,267,922
—
1,072,207
—
1,072,207
Loans, net
21,057,690
—
— 19,930,560 19,930,560
Accrued interest receivable
107,972
107,972
—
—
107,972
Other assets
661,067
452,935
157,540
50,592
661,067
FINANCIAL LIABILITIES
Demand and savings deposits
$ 17,653,690 $ 17,653,690 $
— $
— $ 17,653,690
Brokered deposits
1,144,692
145,987
999,392
—
1,145,379
Time deposits
2,739,241
—
2,714,709
—
2,714,709
Accrued interest payable
35,083
35,083
—
—
35,083
Federal funds purchased
240,000
240,000
—
—
240,000
FHLB advances
1,100,000
1,094,013
—
—
1,094,013
Senior debt and subordinated debt
535,384
—
463,270
—
463,270
Other borrowings
612,142
611,269
837
—
612,106
Other liabilities
429,046
165,635
246,157
17,254
429,046
Fair values of financial instruments are significantly affected by the assumptions used, principally the timing of future cash
flows and discount rates. Because assumptions are inherently subjective in nature, the estimated fair values cannot be
substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily
be realized in an immediate sale or settlement of the instrument. The aggregate fair value amounts presented do not necessarily
represent management's estimate of the underlying value of the Corporation.
130
For short-term financial instruments, defined as those with remaining maturities of 90 days or less, and excluding those
recorded at fair value on the Corporation's consolidated balance sheets, book value was considered to be a reasonable estimate
of fair value.
The following instruments are predominantly short-term:
Assets
Liabilities
Cash and cash equivalents
Demand and savings deposits
Accrued interest receivable
Other borrowings
Accrued interest payable
FRB and FHLB stock represent restricted investments and are carried at cost on the consolidated balance sheets, which is a
reasonable estimate of fair value.
As of December 31, 2024, fair values for loans and time deposits were estimated by discounting future cash flows using the
current rates, as adjusted for liquidity considerations, at which similar loans would be made to borrowers and similar deposits
would be issued to customers for the same remaining maturities. Fair values of loans also include estimated credit losses that
would be assumed in a market transaction, which represents estimated exit prices.
Brokered deposits consist of demand and saving deposits, which are classified as Level 1, and time deposits, which are
classified as Level 2. The fair value of these deposits is determined in a manner consistent with the respective type of deposit
discussed above.
NOTE 20 - SEGMENT REPORTING
The Corporation has one reportable segment whose primary sources of revenue are interest income on loans, investment
securities and other interest-earning assets and fee income earned on its products and services. Its expenses consist of interest
expense on deposits and borrowed funds, provision for credit losses, other operating expenses and income taxes. The
Corporation manages its business activities on a consolidated basis.
The accounting policies of the segment are the same as those described in “Note 1 – Summary of Significant Accounting
Policies.”
The Chief Operating Decision Maker is the Chairman and Chief Executive Officer (“CEO”) who assesses performance of the
segment based on net income available to common shareholders and net income available to common shareholders per share
(diluted), which is reported in the Consolidated Statements of Income.
Net income available to common shareholders and net income available to common shareholders per share (diluted), are used to
monitor actual results versus budget, in competitive analyses by benchmarking to the Corporation’s peers, and in decision-
making pertaining to executive compensation levels, common stock and preferred stock dividend levels, common share
repurchases and capital expenditure spending.
The measure of segment assets is reported on the Consolidated Balance Sheet.
131
The following table presents segment results as of December 31:
(dollars in thousands, except per-share data)
2024
2023
2022
Interest Income
Loans, including fees
$
1,394,969 $
1,156,373 $
758,609
Investment securities
136,650
101,518
98,115
Other interest income
50,577
15,345
8,114
Total Interest Income
1,582,196
1,273,236
864,838
Interest Expense
Deposits
521,859
292,205
43,829
Federal funds purchased
2,881
30,417
2,967
FHLB advances
37,793
46,965
7,334
Senior debt and subordinated debt
20,255
21,361
22,257
Other borrowings and interest-bearing liabilities
39,083
28,002
6,817
Total Interest Expense
621,871
418,950
83,204
Net Interest Income
960,325
854,286
781,634
Provision for credit losses
71,636
54,036
28,021
Net Interest Income After Provision for Credit
Losses
888,689
800,250
753,613
Total Non-Interest Income
275,731
227,678
227,130
Non-Interest Expense
Salaries and employee benefits
432,821
377,417
356,884
Data processing and software
77,882
66,471
60,255
Net occupancy
69,359
58,019
56,195
Other outside services
60,586
47,724
37,152
FDIC insurance
23,829
25,565
12,547
Equipment
17,850
14,390
14,033
Intangible amortization
17,830
2,944
1,731
Professional fees
10,857
8,392
9,123
Marketing
8,958
9,004
6,885
Acquisition-related expenses
37,635
—
10,328
Other
62,184
69,281
68,595
Total Non-Interest Expense
819,791
679,207
633,728
Income Before Income Taxes
344,629
348,721
347,015
Income taxes
55,886
64,441
60,034
Net Income
288,743
284,280
286,981
Preferred stock dividends
(10,248)
(10,248)
(10,248)
Net Income Available to Common Shareholders
$
278,495 $
274,032 $
276,733
Net income available to common shareholders per share
(diluted)
$
1.57 $
1.64 $
1.67
NOTE 21 - COMMITMENTS AND CONTINGENCIES
Commitments
The Corporation is a party to financial instruments with OBS risk in the normal course of business to meet the financing needs
of its borrowers or obligors.
Commitments to extend credit are agreements to lend to a borrower or obligor as long as there is no violation of any condition
established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require
payment of a fee by the borrower or obligor. Since a portion of the commitments is expected to expire without being drawn
132
upon, the total commitment amounts do not necessarily represent future cash requirements. The Corporation evaluates each
borrower's or obligor's creditworthiness on a case-by-case basis. The amount of collateral, if any, obtained upon extension of
credit is based on management's credit evaluation of the borrower or obligor. Collateral held varies but may include accounts
receivable, inventory, property, equipment and income-producing commercial properties.
Standby letters of credit are conditional commitments issued to guarantee the financial or performance obligation of a borrower
or obligor to a third party. Commercial letters of credit are conditional commitments issued to facilitate foreign and domestic
trade transactions for borrowers or obligors. The credit risk involved in issuing letters of credit is similar to that involved in
extending loan facilities. These obligations are underwritten consistent with commercial lending standards. The maximum
exposure to loss for standby and commercial letters of credit is equal to the contractual (or notional) amount of the instruments.
The following table presents the Corporation's commitments to extend credit and letters of credit:
2024
2023
(dollars in thousands)
Commercial and industrial
$ 4,967,334 $ 4,929,981
Real estate - commercial mortgage and real estate - construction
1,706,879
1,867,830
Real estate - home equity
2,154,382
1,992,700
Total commitments to extend credit
$ 8,828,595 $ 8,790,511
Standby letters of credit
$
279,309 $
264,440
Commercial letters of credit
48,993
67,396
Total letters of credit
$
328,302 $
331,836
Residential Lending
The Corporation originates and sells residential mortgages to secondary market investors. The Corporation provides customary
representations and warranties to secondary market investors that specify, among other things, that the loans have been
underwritten to the standards of the secondary market investor. The Corporation may be required to repurchase specific loans or
reimburse the investor for a credit loss incurred on a sold loan if it is determined that the representations and warranties have
not been met. Under some agreements with secondary market investors, the Corporation may have additional credit exposure
beyond customary representations and warranties, based on the specific terms of those agreements.
The Corporation maintains a reserve for estimated losses related to loans sold to investors. As of December 31, 2024 and 2023,
the total reserve for losses on residential mortgage loans sold was $1.5 million and $1.8 million, respectively, including reserves
for both representation and warranty and credit loss exposures. In addition, included as a component of ACL for OBS credit
exposures was $1.2 million and $2.7 million as of December 31, 2024 and December 31, 2023, respectively, related to
additional credit exposure for potential loan repurchases.
Legal Proceedings
The Corporation is involved in various pending and threatened claims and other legal proceedings in the ordinary course of its
business activities. The Corporation evaluates the possible impact of these matters, taking into consideration the most recent
information available. A loss reserve is established for those matters for which the Corporation believes a loss is both probable
and reasonably estimable. Once established, the reserve is adjusted as appropriate to reflect any subsequent developments.
Actual losses with respect to any such matter may be more or less than the amount estimated by the Corporation. For matters
where a loss is not probable, or the amount of the loss cannot be reasonably estimated by the Corporation, no loss reserve is
established.
In addition, from time to time, the Corporation is involved in investigations or other forms of regulatory or governmental
inquiry covering a range of possible issues and, in some cases, these may be part of similar reviews of the specified activities of
other companies. These inquiries or investigations could lead to administrative, civil or criminal proceedings involving the
Corporation, and could result in fines, penalties, restitution, other types of sanctions, or the need for the Corporation to
undertake remedial actions, or to alter its business, financial or accounting practices. The Corporation's practice is to cooperate
fully with regulatory and governmental inquiries and investigations.
133
As of the date of this report, the Corporation believes that any liabilities, individually or in the aggregate, that may result from
the final outcomes of pending legal proceedings, or regulatory or governmental inquiries or investigations, will not have a
material adverse effect on the financial condition of the Corporation. However, legal proceedings, inquiries and investigations
are often unpredictable, and it is possible that the ultimate resolution of any such matters, if unfavorable, may be material to the
Corporation's results of operations in any future period, depending, in part, upon the size of the loss or liability imposed and the
operating results for the period, and could have a material adverse effect on the Corporation's business. In addition, regardless
of the ultimate outcome of any such legal proceeding, inquiry or investigation, any such matter could cause the Corporation to
incur additional expenses, which could be significant, and possibly material, to the Corporation's results of operations in any
future period.
NOTE 22 - CONDENSED FINANCIAL INFORMATION - PARENT COMPANY ONLY
CONDENSED BALANCE SHEETS
December 31,
2024
2023
(dollars in thousands)
ASSETS
Cash and cash equivalents
$
78,566 $
171,433
Other assets
68,375
62,500
Receivable from subsidiaries
126,430
276,215
Investments in:
Bank subsidiary
3,309,613
2,794,106
Non-bank subsidiaries
47,666
42,496
Total Assets
$ 3,630,650 $ 3,346,750
LIABILITIES AND EQUITY
Senior and subordinated debt
$
367,316 $
535,384
Other liabilities
66,009
51,227
Total Liabilities
433,325
586,611
Shareholders' equity
3,197,325
2,760,139
Total Liabilities and Shareholders' Equity
$ 3,630,650 $ 3,346,750
134
CONDENSED STATEMENTS OF INCOME
2024
2023
2022
(dollars in thousands)
Income:
Dividends from subsidiaries
$
75,000 $ 300,000 $ 207,000
Other
2,237
794
725
77,237 300,794 207,725
Expenses
42,572
37,448
51,887
Income before income taxes and equity in undistributed net income of subsidiaries
34,665 263,346 155,838
Income tax benefit
(9,070)
(7,861) (12,331)
43,735 271,207 168,169
Equity in undistributed net income (loss) of:
Bank subsidiaries
239,677
8,932 121,388
Non-bank subsidiaries
5,331
4,141
(2,576)
Net Income
288,743 284,280 286,981
Preferred stock dividends
(10,248)
(10,248) (10,248)
Net Income Available to Common Shareholders
$ 278,495 $ 274,032 $ 276,733
135
CONDENSED STATEMENTS OF CASH FLOWS
2024
2023
2022
(dollars in thousands)
Cash Flows From Operating Activities:
Net Income
$ 288,743 $ 284,280 $ 286,981
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of issuance costs and discount of long-term debt
710
750
724
Stock-based compensation
10,516
12,540
14,000
Net change in other assets
(83,081) (37,591)
44,790
Equity in undistributed net (income) loss of subsidiaries
(245,009) (13,073) (120,213)
Net change in other liabilities and payables to non-bank subsidiaries
(4,504) (50,047) (198,349)
Total adjustments
(321,368) (87,421) (259,048)
Net cash (used in) provided by operating activities
(32,625) 196,859
27,933
Cash Flows From Investing Activities
Net cash paid for acquisition
—
— (21,811)
Net cash used in investing activities
—
— (21,811)
Cash Flows From Financing Activities:
Repayments of long-term borrowings
(168,778)
(5,000) (81,496)
Net proceeds from common stock
270,582
3,160
7,876
Dividends paid
(131,698) (115,738) (116,009)
Acquisition of treasury stock
(30,348) (77,056)
—
Net cash used in financing activities
(60,242) (194,634) (189,629)
Net (decrease) increase in Cash and Cash Equivalents
(92,867)
2,225 (183,507)
Cash and Cash Equivalents at Beginning of Year
171,433 169,208 352,715
Cash and Cash Equivalents at End of Year
$ 78,566 $ 171,433 $ 169,208
136
Management Report on Internal Control Over Financial Reporting
The management of Fulton Financial Corporation is responsible for establishing and maintaining adequate internal control over
financial reporting. Fulton Financial Corporation's internal control system is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with U.S. generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Republic First Transaction was completed on April 26, 2024, as further discussed in "Note 2—Business Combinations."
System conversion was completed in the fourth quarter of 2024. The Corporation acquired substantially all of the assets and
assumed substantially all of the deposits and certain liabilities of Republic First Bank from the FDIC, as receiver for Republic
First Bank. The scope of management's assessment of effectiveness of the Corporation's internal control over financial reporting
as of December 31, 2024, excludes the internal control over financial reporting associated with total acquired assets of
approximately $4.8 billion and total net revenues of $156.2 million for the year ended December 31, 2024.
Management assessed the effectiveness of the Corporation's internal control over financial reporting as of December 31, 2024,
using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control - Integrated Framework (2013). Based on this assessment, management concluded that, as of December 31, 2024, the
Corporation's internal control over financial reporting is effective based on those criteria.
/s/ CURTIS J. MYERS
Curtis J. Myers
Chairman and Chief Executive Officer
/s/ RICHARD S. KRAEMER
Richard S. Kraemer
Senior Executive Vice President and Chief Financial Officer
137
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors
Fulton Financial Corporation:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Fulton Financial Corporation and subsidiaries (the
Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income,
shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related
notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial
reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
The Company acquired substantially all of the assets and assumed substantially all of the deposits and certain liabilities of
Republic First Bank from the FDIC, as receiver for Republic First Bank. The scope of management's assessment of
effectiveness of the Company's internal control over financial reporting as of December 31, 2024, excludes the internal control
over financial reporting associated with total acquired assets of approximately $4.8 billion and total net revenues of $156.2
million for the year ended December 31, 2024. Our audit of internal control over financial reporting of the Company also
excluded an evaluation of the internal control over financial reporting of Republic First Bank.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
138
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of the allowance for credit losses related to loans evaluated collectively for expected credit losses
As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for credit losses related to
loans evaluated collectively for expected credit losses (collective ACL) was $362.3 million of a total allowance for credit losses
of $379.2 million as of December 31, 2024. The collective ACL includes the measure of expected credit losses on a collective
(pooled) basis for those loans and leases that share similar risk characteristics and uses an undiscounted approach. The
Company estimates the collective ACL by applying a probability of default (PD) and loss given default (LGD) to the exposure
at default (EAD) at the loan level. The PD models are econometric regression models that utilize the Company’s historical
credit loss experience and incorporate a reasonable and supportable economic forecast through the use of externally developed
macroeconomic scenarios. After a reasonable and supportable forecast period, the forecasted PD rates revert back to a historical
average PD rate. The LGD model calculates an LGD estimate for each loan pool utilizing a loss rate approach that is based on
the Company’s historical charge-off experience. The EAD calculation incorporates constant pre-payment rates, and inputs
related to loan level cash flows, maturity dates, and interest rates. The constant pre-payment rates utilized in the EAD
calculation are sourced from a prepayment calculation that utilizes the Company’s historical loan prepayment history to develop
prepayment speeds. The collective ACL also includes qualitative reserve adjustments for factors that are not fully captured in
the quantitative models.
We identified the assessment of the valuation of the collective ACL as a critical audit matter. Such assessment involved
significant measurement uncertainty requiring especially complex auditor judgment, and specialized skills and knowledge of
the industry. In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained. The assessment
of the collective ACL encompassed the evaluation of the overall ACL methodology, which includes the methods and models
used to estimate the PD, LGD, and EAD and their key assumptions and inputs. Key assumptions and inputs used in the
estimation of the PD rate include historical default observations, the historical observation period, loan pool segmentation
including the use of credit risk ratings for commercial and industrial loans, commercial mortgages and construction loans, and a
reasonable and supportable economic forecast which includes reversion to historical average default rates. Key assumptions and
inputs used in the estimation of the LGD rate include the loan pool segmentation, historical loss observations, and the historical
observation period. Key assumptions and inputs used in the estimation of the EAD include a constant prepayment rate (CPR)
and loan level cash flow adjustments. Key assumptions and inputs used in the estimation of the CPR include historical
prepayment observations, interest rates, the historical observation period, and loan pool segmentation. The assessment also
included an evaluation of the qualitative adjustments, including an evaluation of the methods used by management in estimating
this reserve. The collective ACL estimate is sensitive to changes in the assumptions discussed above, such that changes in these
assumptions can cause significant changes to the estimate.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested
the operating effectiveness of certain internal controls related to the Company’s measurement of the collective ACL estimate,
including controls over the:
•
development of the collective ACL methodology
•
development of the PD and LGD models and of the methods used to calculate the CPR and EAD
139
•
identification and determination of the key inputs and assumptions used in the PD and LGD models, and EAD
calculation which included key inputs and assumptions within the pre-payment model
•
performance monitoring of the PD and LGD models
•
development of the qualitative adjustments
•
measurement and on-going monitoring of the overall ACL estimate.
We evaluated the Company’s process to develop the collective ACL estimate by testing certain sources of data, factors, and
assumptions that the Company used, and considered the relevance and reliability of such data, factors, assumptions, and related
methodologies. In addition, we involved credit risk professionals with specialized skills and knowledge who assisted in:
•
evaluating the Company's collective ACL methodology for compliance with U.S. generally accepted accounting
principles
•
evaluating the assumptions and methodologies used in developing the PD rates, LGD rates, and EAD estimate and
judgments made by the Company relative to performance monitoring by inspecting management's model and
methodology documentation and through comparisons against Company specific metrics, the Company's business
environment, and applicable industry and regulatory practices
•
determining whether loans are pooled by similar risk characteristics by comparing to the Company's business
environment and relevant industry practices
•
testing individual credit ratings for a selection of borrowers by evaluating the financial performance of the
borrower, sources of repayment, and any relevant guarantees and underlying collateral
•
evaluating the methodology used to develop the qualitative adjustments by inspecting management's methodology
and development documentation and assessing the effects of these factors on the collective ACL estimate
compared with relevant industry practices and Company specific metrics.
We also assessed the sufficiency of the audit evidence obtained related to the collective ACL estimate by evaluating the
cumulative results of the audit procedures, qualitative aspects of the Company’s accounting practices, and potential bias in the
accounting estimate.
/s/ KPMG LLP
We have served as the Company's auditor since 2002.
Philadelphia, Pennsylvania
February 28, 2025
140
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
The Corporation carried out an evaluation, under the supervision and with the participation of the Corporation's management,
including the Corporation's Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls
and procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based upon the evaluation, the Corporation's Chief
Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, the Corporation's disclosure controls
and procedures are effective. Disclosure controls and procedures are controls and procedures that are designed to ensure that
information required to be disclosed in the Corporation's reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and
forms.
The "Management Report on Internal Control over Financial Reporting" and the "Report of Independent Registered Public
Accounting Firm" may be found in "Item 8, Financial Statements and Supplementary Data" of this document.
Changes in Internal Control over Financial Reporting
Beth Ann L. Chivinski became interim Chief Financial Officer on February 8, 2024. Richard S. Kraemer became Chief
Financial Officer on November 1, 2024.
The Republic First Transaction was completed on April 26, 2024, as further discussed in "Note 2—Business Combinations."
System conversion was completed in the fourth quarter of 2024. The Corporation acquired substantially all of the assets and
assumed substantially all of the deposits and certain liabilities of Republic First Bank from the FDIC, as receiver for Republic
First Bank. The scope of management's assessment of effectiveness of the Corporation's internal control over financial reporting
as of December 31, 2024, excludes the internal control over financial reporting associated with total acquired assets of
approximately $4.8 billion and total net revenues of $156.2 million for the year ended December 31, 2024.
Other than the above, there have been no changes in the Corporation's internal control over financial reporting during the
Corporation's fiscal year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect,
the Corporation's internal control over financial reporting as of December 31, 2024.
Item 9B. Other Information
Except as disclosed below, none of the Corporation's directors or "officers" (as defined in Rule 16a-1(f) (17 C.F.R. §
240.16a-1(f))) adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (as
those terms are defined in Item 408 of Regulation S-K (17 C.F.R. § 229.408)) during the fiscal quarter ended December 31,
2024.
On October 28, 2024, Angela M. Snyder, President of the Corporation, adopted a Rule 10b5-1 trading arrangement for the sale
of up to 13,322 shares of the Corporation's common stock. The trading arrangement will expire on January 26, 2026, unless
terminated sooner in accordance with its terms.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
141
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Except as furnished below, the information required to be furnished pursuant to this Item 10 is incorporated herein by reference
to the Corporation’s 2025 Proxy Statement, which the Corporation intends to file with the SEC not later than 120 days after the
end of the 2024 fiscal year.
The Corporation has adopted a code of ethics (Code of Conduct) that applies to all directors, officers and employees, including
the Corporation's principal executive officer, principal financial officer and principal accounting officer or controller. A copy of
the Code of Conduct may be obtained free of charge by writing to the Corporate Secretary at Fulton Financial Corporation, P.O.
Box 4887, Lancaster, Pennsylvania 17604-4887, and is also available via the Internet at www.fultonbank.com. We intend to
satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the
Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions, by posting such information on our website, at the Internet address specified
above.
The Corporation has adopted an Insider Trading Policy governing the purchase, sale and/or other dispositions of the
Corporation's securities by directors, officers and employees of the Corporation. It is the Corporation's policy to comply with
all applicable securities laws, including those relating to insider trading, when engaging in transactions in the Corporation's
securities. The Corporation believes that its policies and procedures are reasonably designed to promote compliance with
insider trading laws, rules and regulations, and listing standards applicable to the Corporation. A copy of the Corporation's
Insider Trading Policy is filed as Exhibit 19 to this Annual Report on Form 10-K.
Item 11. Executive Compensation
The information required to be furnished pursuant to this Item 11 is incorporated herein by reference to the Corporation’s 2025
Proxy Statement, which the Corporation intends to file with the SEC not later than 120 days after the end of the 2024 fiscal
year.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required to be furnished pursuant to this Item 12 is incorporated herein by reference to the Corporation’s 2025
Proxy Statement, which the Corporation intends to file with the SEC not later than 120 days after the end of the 2024 fiscal
year.
Incorporated by reference herein is the information appearing under the heading "Securities Authorized for Issuance under
Equity Compensation Plans" within "Item 5, Market for Registrant's Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities" in this Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required to be furnished pursuant to this Item 13 is incorporated herein by reference to the Corporation’s 2025
Proxy Statement, which the Corporation intends to file with the SEC not later than 120 days after the end of the 2024 fiscal
year.
Item 14. Principal Accountant Fees and Services
Except as furnished below, the information required to be furnished pursuant to this Item 14 is incorporated herein by reference
to the Corporation’s 2025 Proxy Statement, which the Corporation intends to file with the SEC not later than 120 days after the
end of the 2024 fiscal year.
The Corporation's independent registered accounting firm is KPMG LLP, Philadelphia, PA.
Auditor Firm ID: 185.
142
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this report:
1. Financial Statements — The following consolidated financial statements of Fulton Financial Corporation and
subsidiaries are incorporated herein by reference in response to Item 8 above:
(i)
Consolidated Balance Sheets - December 31, 2024 and 2023.
(ii)
Consolidated Statements of Income - Years ended December 31, 2024, 2023 and 2022.
(iii) Consolidated Statements of Comprehensive Income - Years ended December 31, 2024, 2023 and 2022.
(iii) Consolidated Statements of Shareholders' Equity - Years ended December 31, 2024, 2023 and 2022.
(iv) Consolidated Statements of Cash Flows - Years ended December 31, 2024, 2023 and 2022.
(v)
Notes to Consolidated Financial Statements.
(vi) Report of Independent Registered Public Accounting Firm.
2. Financial Statement Schedules — All financial statement schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not required under the related instructions or
are inapplicable and have therefore been omitted.
(b) The following exhibits are filed with or incorporated by reference in this Annual Report on Form 10-K, and this list
includes the Exhibit Index.
2.1
Purchase and Assumption Agreement – Whole Bank, All Deposits, effective as of April 26, 2024, with the
Federal Deposit Insurance Corporation, as receiver of Republic First Bank, the Federal Deposit Insurance
Corporation, and Fulton Bank, National Association (Incorporated by reference to Exhibit 2.1 of the Fulton
Financial Corporation Current Report on Form 8-K filed on May 2, 2024).
3.1
Articles of Incorporation, as amended and restated, of Fulton Financial Corporation as amended (Incorporated by
reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report Form 8-K filed June 24, 2011).
3.2
Statement with Respect to Shares of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A of Fulton
Financial Corporation, dated October 23, 2020, filed with the Pennsylvania Department of State (Incorporated by
reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report on Form 8-K filed on October 29,
2020).
3.3
Bylaws of Fulton Financial Corporation as amended (Incorporated by reference to Exhibit 3.1 of the Fulton
Financial Corporation Current Report on a Form 8-K filed May 14, 2021).
4.1
An Indenture entered into on November 17, 2014 between Fulton Financial Corporation and Wilmington Trust,
National Association as trustee, relating to the issuance by Fulton Financial Corporation of $250 million
aggregate principal amount of 4.50% subordinated notes due November 15, 2024 (Incorporated by reference to
Exhibit 4.1 of the Fulton Financial Corporation Current Report on Form 8-K filed November 17, 2014).
4.2
First Supplemental Indenture entered into on November 17, 2014 between Fulton Financial Corporation and
Wilmington Trust, National Association as trustee, relating to the issuance by Fulton Financial Corporation of
$250 million aggregate principal amount of 4.50% subordinated notes due November 15, 2024 (Incorporated by
reference to Exhibit 4.2 of the Fulton Financial Corporation Current Report on Form 8-K filed November 17,
2014).
4.3
Form of 4.50% Subordinated Notes due 2024 (Included in Exhibit 4.2).
4.4
Second Supplemental Indenture entered into March 3, 2020, between Fulton Financial Corporation and
Wilmington Trust, National Association, as trustee, relating to the issuance by Fulton Financial Corporation of
$200 million aggregate principal amount of 3.25% subordinated notes due March 15, 2030 (Incorporated by
reference to Exhibit 4.2 of the Fulton Financial Corporation Current Report on Form 8-K filed March 3, 2020).
4.5
Form of 3.250% Fixed-to-Floating Rate Subordinated Notes due 2030 (Included in Exhibit 4.4).
4.6
Third Supplemental Indenture entered into March 3, 2020, between Fulton Financial Corporation and
Wilmington Trust, National Association, as trustee, relating to the issuance by Fulton Financial Corporation of
$175 million aggregate principal amount of 3.75% subordinated notes due March 15, 2035 (Incorporated by
reference to Exhibit 4.3 of the Fulton Financial Corporation Current Report on Form 8-K filed March 3, 2020).
4.7
Form of 3.750% Fixed-to-Floating Rate Subordinated Notes due 2035 (Included in Exhibit 4.6).
4.8
Statement with Respect to Shares of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A of Fulton
Financial Corporation, dated October 23, 2020, filed with the Pennsylvania Department of State (Incorporated by
reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report on Form 8-K filed on October 29,
2020).
143
4.9
Stock Certificate (Incorporated by reference as Exhibit 4.1 of Fulton Financial Corporation Registration
Statement on Form S-4 filed on April 21, 2022).
4.10
Deposit Agreement, dated October 29, 2020, among Fulton Financial Corporation, Equiniti Trust Company, as
depositary, and the holders from time to time of the depositary receipts described therein (Incorporated by
reference to Exhibit 4.1 of the Fulton Financial Corporation Current Report on Form 8-K filed on October 29,
2020).
4.11
Form of depositary receipt representing the Depositary Shares (Included in Exhibit 4.10).
4.12
Description of Fulton Financial Corporation Securities (Incorporated by reference to Exhibit 4.7 of the Fulton
Financial Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2019).
10.1
Form of Executive Employment Agreement between Fulton Financial Corporation and certain Executive
Officers of Fulton Financial Corporation (Incorporated by reference to Exhibit 10.1 of the Fulton Financial
Corporation Current Report on Form 8-K filed January 4, 2018). *
10.2
Form of Key Employee Change in Control Agreement between Fulton Financial Corporation and certain
Executive Officers of Fulton Financial Corporation (Incorporated by reference to Exhibit 10.2 of the Fulton
Financial Corporation Current Report on Form 8-K filed January 4, 2018). *
10.3
Form of Death Benefit Only Agreement (Incorporated by reference to Exhibit 10.9 of the Fulton Financial
Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2006). *
10.4
Fulton Financial Corporation 2022 Amended and Restated Equity and Cash Incentive Compensation Plan
(Incorporated by reference to Exhibit 10.1 of the Fulton Financial Corporation Current Report on Form 8-K filed
May 19, 2022). *
10.5
Amended Executive Employment Agreement between Fulton Financial Corporation and Curtis J. Myers, dated
January 1, 2023 (Incorporated by reference to exhibit 10.1 of the Fulton Financial Corporation Current Report on
Form 8-K filed December 22, 2022). *
10.6
Amended Key Employee Change in Control Agreement between Fulton Financial Corporation and Curtis J.
Myers, dated January 1, 2023 (Incorporated by reference to exhibit 10.2 of the Fulton Financial Corporation
Current Report on Form 8-K filed December 22, 2022). *
10.7
Form of Option Award and Form of Restricted Stock Award between Fulton Financial Corporation and Officers
of the Corporation (Incorporated by reference to Exhibits 10.1 and 10.2, respectively, of the Fulton Financial
Corporation Current Report on Form 8-K filed June 19, 2013). *
10.8
Form of Time-Vested Restricted Stock Unit Award Agreement, Form of Performance Restricted Stock Unit
Award Agreement Total Shareholder Return ("TSR") Component and Form of Performance Restricted Stock
Unit Award Agreement Profit Trigger Component (Incorporated by reference to Exhibits 10.1, 10.2 and 10.3
respectively, of the Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2023). *
10.9
Form of Time-Vested Restricted Stock Unit Award Agreement and Form of Performance Restricted Stock Unit
Award Agreement Total Shareholder Return ("TSR") Component (Incorporated by reference to Exhibits 10.2
and 10.3, respectively, of the Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2024). *
10.10
Amended and Restated Fulton Financial Corporation Employee Stock Purchase Plan (Incorporated by reference
to Exhibit A to Fulton Financial Corporation's definitive proxy statement, filed March 26, 2014). *
10.11
Amendment No. 1 to the Amended and Restated Fulton Financial Corporation Employee Stock Purchase Plan
(Incorporated by reference to Exhibit 10.10 of the Fulton Financial Corporation Annual Report on Form 10-K for
the fiscal year ended December 31, 2019). *
10.12
Fulton Financial Corporation Deferred Compensation Plan, as amended and restated effective December 1, 2015
(Incorporated by reference to Exhibit 10.12 of the Fulton Financial Corporation Annual Report on Form 10-K for
the fiscal year ended December 31, 2015). *
10.13
First Amendment effective January 1, 2019 to the Fulton Financial Corporation Deferred Compensation Plan
(Incorporated by reference to Exhibit 10.1 of the Fulton Financial Corporation Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 2019). *
10.14
Second Amendment effective January 1, 2021 to the Fulton Financial Corporation Deferred Compensation Plan
(Incorporated by reference to Exhibit 10.13 of the Fulton Financial Corporation Annual Report on Form 10-K for
the fiscal year ended December 31, 2020). *
10.15
Third Amendment effective March 11, 2021 to the Fulton Financial Corporation Deferred Compensation Plan
(Incorporated by reference to Exhibit 10.1 of the Fulton Financial Corporation Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2021). *
10.16
Fourth Amendment effective July 20, 2021 to the Fulton Financial Corporation Deferred Compensation Plan
(Incorporated by reference to Exhibit 10.2 of the Fulton Financial Corporation Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 2021). *
144
10.17
Fifth Amendment, effective January 1, 2022, to the Fulton Financial Corporation Deferred Compensation Plan
(Incorporated by reference to Exhibit 10.1 of the Fulton Financial Corporation Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 2021). *
10.18
Form of Performance Share Restricted Stock Unit Award Agreement between Fulton Financial Corporation and
Certain Employees of the Corporation as of May 1, 2021 (Incorporated by reference to Exhibit 10.1 of the Fulton
Financial Corporation Current Report on Form 8-K filed May 3, 2021). *
10.19
Form of Non-Employee Director Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.1 of the
Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023).
10.20
Form of Non-Employee Director Stock Unit Award Agreement (Incorporated by reference to Exhibit 10.1 of the
Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024).
10.21
Consulting Agreement between Beth Ann L. Chivinski and Fulton Financial Corporation dated November 1,
2024 - Filed herewith. *
10.22
Fulton Financial Corporation Amended and Restated 2023 Director Equity Plan (Incorporated by reference to
Exhibit 10.1 of Fulton Financial Corporation's Current Report on Form 8-K filed May 16, 2023).
10.23
Agreement between Fulton Financial Corporation and Fiserv Solutions, LLC dated July 11, 2016 (Incorporated
by reference to Exhibit 10.1 of the Fulton Financial Corporation Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2016. (Portions of this exhibit have been redacted and are subject to a confidential
treatment request filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The redacted material was filed separately with the Securities and
Exchange Commission).
10.24
Amendment to Agreement between Fulton Financial Corporation and Fiserv Solutions, LLC dated December 20,
2021. (Portions of this exhibit have been omitted in accordance with Item 601(b)(10) of Regulation S-K.
Incorporated by reference to Exhibit 10.23 of the Fulton Financial Corporation Annual Report 10-K for the year
ended December 31, 2021).
10.25
Agreement for Purchase and Sale of Real Property dated May 10, 2024 (Incorporated by reference to Exhibit
10.1 of the Fulton Financial Corporation Current Report on Form 8-K filed on May 15, 2024).
10.26
Separation Agreement and General Release (Incorporated by reference to Exhibit 10.1 of the Fulton Financial
Corporation Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024). *
19
Fulton Financial Corporation Insider Trading Policy - Filed herewith.
21
Subsidiaries of the Registrant.
23
Consent of Independent Registered Public Accounting Firm.
24
Power of Attorney
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97
Fulton Financial Corporation Mandatory Recovery of Compensation Policy. (Incorporated by reference to
Exhibit 97 of the Fulton Financial Corporation Annual Report 10-K for the year ended December 31, 2023.)
101
Interactive data files pursuant to Rule 405 of Regulation S-T (i) Consolidated Balance Sheets, (ii) Consolidated
Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of
Shareholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial
Statements.
104
Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101)
*
Management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
Not applicable.
145
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
Report to be signed on its behalf by the undersigned, thereunto duly authorized.
FULTON FINANCIAL CORPORATION
(Registrant)
Dated: February 28, 2025
By: /S/ CURTIS J. MYERS
Curtis J. Myers,
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been executed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Capacity
Date
/S/ JENNIFER CRAIGHEAD CAREY
*
Director
February 28, 2025
Jennifer Craighead Carey
/S/ ANTHONY L. COSSETTI
Executive Vice President, Chief
Accounting Officer and Controller
(Principal Accounting Officer)
February 28, 2025
Anthony L. Cossetti
/S/ LISA CRUTCHFIELD
*
Director
February 28, 2025
Lisa Crutchfield
/S/ DENISE L. DEVINE
*
Director
February 28, 2025
Denise L. Devine
/S/ STEVEN S. ETTER
*
Director
February 28, 2025
Steven S. Etter
/S/ RICHARD S. KRAEMER
Senior Executive Vice President
February 28, 2025
Richard S. Kraemer
and Chief Financial Officer
(Principal Financial Officer)
/S/GEORGE K. MARTIN
*
Director
February 28, 2025
George K. Martin
/S/ JAMES R. MOXLEY, III
*
Director
February 28, 2025
James R. Moxley, III
/S/ CURTIS J. MYERS
Chairman and Chief Executive
Officer (Principal Executive
Officer)
February 28, 2025
Curtis J. Myers
146
Signature
Capacity
Date
/S/ ANTOINETTE M. PERGOLIN
*
Director
February 28, 2025
Antoinette M. Pergolin
/S/ SCOTT A. SNYDER
*
Director
February 28, 2025
Scott A. Snyder
/S/ RONALD H. SPAIR
*
Director
February 28, 2025
Ronald H. Spair
/S/ E. PHILIP WENGER
Director
February 28, 2025
E. Philip Wenger
*By /S/ NATASHA R. LUDDINGTON
February 28, 2025
Natasha R. Luddington
Attorney-in-Fact
147
Exhibit 21 - Subsidiaries of the Registrant
The following are the subsidiaries of Fulton Financial Corporation:
Subsidiary
State of Incorporation or
Organization
Name Under Which Business is
Conducted
Fulton Bank, N.A.
United States of America
Fulton Financial Advisors
One Penn Square
Fulton Private Bank
P.O. Box 4887
Fulton Mortgage Company
Lancaster, Pennsylvania 17604
Fulton Financial Realty Company
Pennsylvania
Fulton Financial Realty Company
One Penn Square
P.O. Box 4887
Lancaster, Pennsylvania 17604
Central Pennsylvania Financial Corp.
Pennsylvania
Central Pennsylvania Financial Corp.
100 W. Independence Street
Shamokin, PA 17872
Fulton Insurance Services Group, Inc.
Pennsylvania
Fulton Insurance Services Group, Inc.
One Penn Square
P.O. Box 7989
Lancaster, Pennsylvania 17604
FFC Penn Square, Inc.
Delaware
FFC Penn Square, Inc.
P.O. Box 609
Georgetown, DE 19947
Fulton Community Partner, LLC
Delaware
Fulton Community Partner, LLC
One Penn Square
P.O. Box 7989
Lancaster, Pennsylvania, 17604
Exhibit 23
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statements (No. 333-05471, No. 333- 05481, No. 333-44788,
No. 333-81377, No. 333-64744, No. 333-76594, No. 333-76600, No. 333-76596, No. 333-107625, No. 333-114206, No.
333-116625, No. 333-121896, No. 333-126281, No. 333-131706, No. 333-135839, No. 333-145542, No. 333-168237, No.
333-175065, No. 333-189457, No. 333-128894, No. 333-197728, No.333-175065, No. 333-236579, No. 333-116625 and No.
333-271985) on Form S-8 and in the registration statements (No. 033-37835, No. 333-61268, No. 333-123532, No.
333-130718, No. 333-156339, No. 333-189459, No. 333-189488, No. 333-156396, No. 333-197730, No. 333-221393, No.
333-249588 and No. 333-274624) on Form S-3 of Fulton Financial Corporation and subsidiaries of our report dated
February 28, 2025, with respect to the consolidated financial statements of Fulton Financial Corporation and subsidiaries and
the effectiveness of internal control over financial reporting.
/s/ KPMG LLP
Philadelphia, Pennsylvania
February 28, 2025
Exhibit 31.1 – Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Curtis J. Myers, certify that:
1.
I have reviewed this annual report on Form 10-K of Fulton Financial Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date:
February 28, 2025
/s/ Curtis J. Myers
Curtis J. Myers
Chairman and Chief Executive Officer
Exhibit 31.2 – Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Richard S. Kraemer, certify that:
1.
I have reviewed this annual report on Form 10-K of Fulton Financial Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Date:
February 28, 2025
/s/ Richard S. Kraemer
Richard S. Kraemer
Senior Executive Vice President and Chief Financial Officer
Exhibit 32.1 - Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Curtis J. Myers, Chief Executive Officer of Fulton Financial Corporation, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, certify that:
The Form10-K of Fulton Financial Corporation, containing the consolidated financial statements for the year ended
December 31, 2024, fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934.
The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of
operations of Fulton Financial Corporation.
Date:
February 28, 2025
/s/ Curtis J. Myers
Curtis J. Myers
Chairman and Chief Executive Officer
Exhibit 32.2 - Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Richard S. Kraemer, Chief Financial Officer of Fulton Financial Corporation, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, certify that:
The Form 10-K of Fulton Financial Corporation, containing the consolidated financial statements for the year ended
December 31, 2024, fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934.
The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of
operations of Fulton Financial Corporation.
February 28, 2025
/s/ Richard S. Kraemer
Richard S. Kraemer
Senior Executive Vice President and Chief Financial Officer
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Fulton Financial Corporation
One Penn Square
P.O. Box 4887
Lancaster, PA 17604-4887
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