8-K: Fulton Financial Corporation Announces Record 2024 Results Driven by Strategic Progress

Fulton Financial Corporation reports a strong fourth quarter and record full-year results for 2024, driven by strategic initiatives and operational improvements.

Summary

• Fulton Financial Corporation (NASDAQ: FULT) reported net income available to common shareholders of $66.1 million, or $0.36 per diluted share, for the fourth quarter of 2024.
• This represents an increase of $5.4 million, or $0.03 per share, compared to the third quarter of 2024.
• Operating net income available to common shareholders for the fourth quarter was $88.9 million, or $0.48 per diluted share, a decrease of $2.4 million, or $0.02 per share, compared to the prior quarter.
• For the full year 2024, net income available to common shareholders was $278.5 million, or $1.57 per diluted share.
• Operating net income available to common shareholders for the year was $328.1 million, or $1.85 per diluted share, an increase of $43.1 million, or $0.14 per diluted share, compared to 2023.
• The net interest margin was 3.41% for the fourth quarter of 2024.
• Non-interest expense decreased by $9.5 million to $216.6 million compared to the prior quarter.
• The provision for credit losses was $16.7 million, resulting in an allowance for credit losses attributable to net loans of $379.2 million, or 1.58% of total net loans.
• Net loans totaled $24.0 billion, a decrease of $131.2 million compared to the previous quarter.
• Deposits totaled $26.1 billion, a decrease of $22.7 million compared to the previous quarter.

Sentiment

Score: 7

Explanation: The sentiment is positive due to record full-year results and strategic progress, although there are some challenges related to net interest income and deposit levels.

Positives

• Operating diluted earnings per share of $1.85 represents an 8% increase over the prior year.
• Solid net interest margin of 3.41% with a decrease in total cost of funds of 14 basis points compared to the prior quarter.
• Non-interest expense decreased $9.5 million to $216.6 million compared to $226.1 million in the prior quarter.
• Average noninterest-bearing deposits increased $62.2 million compared to the prior quarter.
• Common equity tier 1 capital ratio increased to approximately 10.6% compared to 10.5% in the prior quarter.

Negatives

• Net interest income totaled $253.7 million, a decrease of $4.4 million, largely due to a decline in short-term interest rates.
• Net loans totaled $24.0 billion, a decrease of $131.2 million, compared to $24.2 billion as of September 30, 2024.
• Deposits totaled $26.1 billion, a decrease of $22.7 million, compared to $26.2 billion as of September 30, 2024.
• Non-performing assets were $222.7 million, or 0.69% of total assets, at December 31, 2024, in comparison to $205.0 million, or 0.64% of total assets, at September 30, 2024.

Risks

• The press release contains forward-looking statements that are subject to inherent uncertainties, risks, and changes in circumstances.
• Actual results and financial condition may differ materially from those indicated in the forward-looking statements.
• A decline in short-term interest rates negatively impacted net interest income.
• The company is undertaking financial center consolidations which may have unforseen impacts.

Future Outlook

Management expects continued success in 2025, driven by operational and strategic progress.

Management Comments

• '2024 was a record year for Fulton. Operating diluted earnings per share of $1.85 represents an 8% increase over the prior year,' said Curtis J. Myers, Chairman and CEO of Fulton.
• 'We made significant progress, both operationally and strategically, and are now realizing the benefits of these efforts in our results.
• With a strong quarter and year, we are very excited and well positioned for continued success in 2025.'

Industry Context

The results reflect the ongoing challenges and opportunities in the banking sector, including managing net interest margins in a changing interest rate environment, controlling expenses, and maintaining asset quality.

Comparison to Industry Standards

• It is difficult to make a direct comparison to industry standards without more specific peer data.
• However, the reported net interest margin of 3.41% is within a reasonable range compared to other regional banks.
• The efficiency ratio of 58.4% indicates good cost control compared to some peers.
• The common equity tier 1 capital ratio of 10.6% suggests a strong capital position.

Stakeholder Impact

• Shareholders will likely react positively to the record full-year results and increased operating efficiency.
• Employees may be affected by the FultonFirst initiative, which includes financial center consolidations.
• Customers may experience changes in service as a result of the FultonFirst initiative and financial center consolidations.

Next Steps

• The Corporation intends to use presentation materials during a conference call and webcast to discuss the results on Wednesday, January 22, 2025 at 10:00 a.m. eastern time.

Key Dates