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Fulton Financial (FULT) - 2024 Q4 - Annual Report
FULTFulton Financial (FULT)2025-02-28 21:36
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Acquisition and Mergers - The Corporation completed the acquisition of Prudential Bancorp on July 1, 2022, with Prudential Bank merging into Fulton Bank on November 5, 2022[19]. - The Corporation has elected to utilize the CECL Transition Rule, allowing a five-year transition period to phase in the impact of the CECL standard on regulatory capital[65]. - The FDIC, OCC, and DOJ announced new rules impacting bank merger review processes on September 17, 2024[98]. - The OCC's final rule modifies procedures for reviewing bank merger applications, eliminating expedited reviews and streamlining application processes[99]. Financial Performance - FTE net interest income for 2024 was 978.2million,anincreaseof978.2 million, an increase of 106.1 million from 872.1millionin2023[240].−Averagenetloansincreasedby872.1 million in 2023[240]. - Average net loans increased by 2.2 billion, or 10.6%, in 2024 compared to 2023, primarily due to 2.4billionoftotalloansacquiredintheRepublicFirstTransaction[248].−Totalnon−interestincomegrewby2.4 billion of total loans acquired in the Republic First Transaction[248]. - Total non-interest income grew by 48.1 million, or 21.1%, to 275.7millionin2024,withsignificantcontributionsfromwealthmanagementandconsumerbanking[255].−Totalnon−interestexpenseroseby275.7 million in 2024, with significant contributions from wealth management and consumer banking[255]. - Total non-interest expense rose by 140.6 million, or 20.7%, to 819.8millionin2024,influencedbycostsfromtheRepublicFirstTransaction[258].−Theeffectivetaxrate(ETR)decreasedto16.2819.8 million in 2024, influenced by costs from the Republic First Transaction[258]. - The effective tax rate (ETR) decreased to 16.2% in 2024 from 18.5% in 2023, primarily due to lower ETR impacts from tax-exempt interest income[259]. Capital and Liquidity - As of December 31, 2024, Fulton Bank's capital ratios were above the minimum levels required to be considered "well capitalized" by the OCC, with a total risk-based capital ratio of 10.00% or greater[66]. - The Corporation's Total Risk-Based Capital ratio was 14.3%, exceeding the regulatory minimum of 8.0%[316]. - The Corporation's Common Equity Tier I capital ratio was 10.8%, above the minimum requirement of 4.5%[316]. - The Tier I Leverage Capital ratio stood at 9.0%, meeting the minimum requirement of 4.0%[316]. - The Corporation maintained a capital conservation buffer of 2.50% above the minimum risk-based capital requirements[313]. Regulatory Environment - The company operates under stringent regulations enforced by federal and state agencies, impacting operational costs and permissible activities[39]. - The Economic Growth Act raised the total asset threshold for mandatory applicability of enhanced prudential standards for bank holding companies to 250 billion[46]. - The company is subject to the CFPB's supervisory and enforcement authorities due to having total assets exceeding 10billion[52].−ThecompanyissubjecttoBaselIIIRulesforcapitalandliquidityregulation,applyingthestandardizedapproachinmeasuringRWAandregulatorycapital[56].RiskManagement−Thecybersecuritythreatenvironmentisdynamic,requiringcontinuousmonitoringandemployeetrainingtomitigaterisks[33].−TheCorporationidentifiedheightenedrisksintheofficeandmulti−familycommercialmortgageloanportfoliosandmoderatednewloanoriginationsaccordingly[282].−Non−accrualloansroseby10 billion[52]. - The company is subject to Basel III Rules for capital and liquidity regulation, applying the standardized approach in measuring RWA and regulatory capital[56]. Risk Management - The cybersecurity threat environment is dynamic, requiring continuous monitoring and employee training to mitigate risks[33]. - The Corporation identified heightened risks in the office and multi-family commercial mortgage loan portfolios and moderated new loan originations accordingly[282]. - Non-accrual loans rose by 67.7 million, or 55.6%, during 2024, with non-accrual loans as a percentage of net loans increasing to 0.79% from 0.57% in 2023[289]. - The allowance for credit losses (ACL) at the end of the period was 379.2million,representinganincreasefrom379.2 million, representing an increase from 293.4 million in 2023, driven by a 23.4millionCECLDay1ProvisionrelatedtotheRepublicFirstTransaction[300].EmployeeEngagementandCulture−TheCorporation′semployeeengagementprogramincludesannualsurveystoassessmoraleandidentifyareasforimprovement[27].−TheCorporation′sculture−shapingprogram,TheFultonExperience,aimstoenhancecollaborationandindividualroleswithintheorganization[28].−TheCorporationprovidesacomprehensiveTotalRewardsprogram,includingcompetitivesalariesandperformance−basedincentives[29].DepositsandLoans−Totaldepositsincreasedby23.4 million CECL Day 1 Provision related to the Republic First Transaction[300]. Employee Engagement and Culture - The Corporation's employee engagement program includes annual surveys to assess morale and identify areas for improvement[27]. - The Corporation's culture-shaping program, The Fulton Experience, aims to enhance collaboration and individual roles within the organization[28]. - The Corporation provides a comprehensive Total Rewards program, including competitive salaries and performance-based incentives[29]. Deposits and Loans - Total deposits increased by 4.6 billion, or 21.3%, from 21.5billionin2023to21.5 billion in 2023 to 26.1 billion in 2024[276]. - Average total deposits increased by 3.4billion,or16.03.4 billion, or 16.0%, to 24.5 billion in 2024 compared to 2023, primarily due to the Republic First Transaction[249]. - The total outstanding balance of the commercial mortgage multi-family non-owner occupied loan portfolio increased to 1,543.9millionasofDecember31,2024,upfrom1,543.9 million as of December 31, 2024, up from 1,147.6 million in 2023, reflecting a 34.5% growth[288]. Shareholder Information - The company's common stock is traded on the Nasdaq Global Select Market under the ticker symbol "FULT," with approximately 182 million shares outstanding as of December 31, 2024[38]. - Total shareholders' equity increased by 437.2million,or15.8437.2 million, or 15.8%, to 3.2 billion as of December 31, 2024[311]. - The Corporation raised 272.6millionfromapublicofferingof19,166,667sharesat272.6 million from a public offering of 19,166,667 shares at 15.00 per share, contributing to the increase in equity[311].