Fulton Financial Corporation (NASDAQ:FULT) ("Fulton" or the "Corporation") reported net income available to common shareholders of $61.7 million, or $0.38 per diluted share, for the first quarter of 2022, an increase of $2.4 million, or 4.0%, in comparison to the fourth quarter of 2021.

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"Overall, we are pleased with our first quarter results. Our consumer and commercial businesses had solid loan growth during the quarter despite the volatile rate environment. We again saw record income in our wealth management business. Our asset quality remained stable, and we saw a decline in operating expenses linked quarter," said E. Phillip Wenger, Chairman and CEO. "On the corporate front, we were pleased to be able to raise our quarterly dividend. And our announcement of our intent to acquire Prudential Bancorp, Inc. later this year will help grow Fulton's presence in Philadelphia, which is a strategically important market for us."

Net Interest Income and Balance Sheet

Net interest income for the first quarter of 2022 was $161.3 million, $4.3 million lower than the fourth quarter of 2021. The net interest margin for the first quarter of 2022 increased 1 basis point, to 2.78%, from 2.77% in the fourth quarter of 2021.

The linked-quarter decrease in net interest income was primarily due to a decrease in loan fees related to Paycheck Protection Program ("PPP") loans, which were $4.4 million in the first quarter of 2022 compared to $10.0 million in the fourth quarter of 2021, partially offset by lower interest expense. The linked-quarter increase in net interest margin was primarily due to an increase in average net loans to $18.4 billion from $18.2 billion coupled with a decrease in lower yielding other interest-earning assets to $1.3 billion from $2.1 billion. The PPP loan balance was $164.3 million and $301.3 million as of March 31, 2022 and December 31, 2021, respectively.

For the first quarter of 2022, net interest income was $161.3 million, a decrease of $3.1 million, or 1.9%, in comparison to the first quarter of 2021. The net interest margin for the first quarter of 2022 decreased 1 basis point, to 2.78% from 2.79% in the first quarter of 2021. The yield on average interest-earning assets declined 15 basis points and the rate on average interest-bearing liabilities declined 20 basis points in the first quarter of 2022 in comparison to the first quarter of 2021.

The year-over-year decrease in net interest income was primarily due to a decline in interest income on loans of $14.4 million, from $165.5 million in the first quarter of 2021 compared to $151.1 million for the first quarter of 2022. The decline in interest income on loans was primarily due to a decline of $15.0 million in PPP loan fees. Interest expense on interest-bearing deposits and long-term borrowings declined by $4.0 million and $4.7 million, respectively, in the first quarter of 2022 in comparison to the first quarter of 2021. The decline in interest expense on interest-bearing deposits in the first quarter of 2022 was primarily due to a decrease in rate of 11 basis points. The decline in interest expense on long-term borrowings in the first quarter of 2022 was driven by a $661.3 million decrease in average balance due to the balance sheet restructuring in the first quarter of 2021, which included the prepayment of $536.0 million of long-term Federal Home Loan Bank ("FHLB") advances and the cash tender offer for $75 million and $60.0 million of the Corporation's outstanding subordinated and senior notes, respectively.

Total average interest-earning assets for the first quarter of 2022 was $23.9 billion, a decrease of $382.2 million from the fourth quarter of 2021, primarily due to a decrease of $842.2 million in average other interest-earning assets, partially offset by increases in average taxable investment securities and average net loans of $271.7 million and $162.6 million, respectively.

Total average interest-earning assets for the first quarter of 2022 decreased $388.2 million from the first quarter of 2021. Average net loans for the first quarter of 2022 were $18.4 billion, a decrease of $597.5 million from the same period in 2021. Included in average net loans for the first quarter of 2022 were PPP loans with an average balance of $226.1 million, a decrease of $1.5 billion from the first quarter of 2021. The decrease in average PPP loans for the first quarter of 2022 was partially offset by increases in average residential mortgage loans, average commercial mortgage loans and average real estate construction loans of $703.8 million, $165.9 million and $82.9 million, respectively. Average taxable investment securities increased $635.1 million for the first quarter of 2022 compared to the first quarter of 2021.

Total average interest-bearing liabilities decreased $374.6 million, to $15.1 billion, in the first quarter of 2022 compared to the fourth quarter of 2021, driven by decreases of $268.8 million in demand deposits and $59.6 million in time deposits.

Total average interest-bearing liabilities for the first quarter of 2022 decreased $1.2 billion from the first quarter of 2021, driven by a decrease in total interest-bearing deposits of $395.2 million and a decrease in long-term borrowings of $661.3 million. Average noninterest-bearing deposits increased $758.4 million for the first quarter of 2022 compared to the first quarter of 2021.

On March 21, 2022, the Corporation announced that its Board of Directors approved the repurchase of up to $75 million of shares of Fulton's common stock commencing on April 1, 2022 and expiring on December 31, 2022.

Asset Quality

In the first quarter of 2022, a negative provision for credit losses of $7.0 million was recognized, as compared to a negative provision for credit losses of $5.0 million in the fourth quarter of 2021, and a negative provision for credit losses of $5.5 million in the first quarter of 2021. The negative provision for credit losses for the first quarter of 2022 was recorded to adjust the allowance for credit losses as a result of improved economic conditions.

Non-performing assets were $163.0 million, or 0.64% of total assets, at March 31, 2022, compared to $153.9 million, or 0.60% of total assets, and $156.1 million, or 0.60% of total assets, at December 31, 2021 and March 31, 2021, respectively.

Annualized net charge-offs (recoveries) for the quarter ended March 31, 2022, were (0.02)% of total average loans, compared to 0.07% and 0.13% for the quarters ended December 31, 2021 and March 31, 2021, respectively.

Non-interest Income

Non-interest income before investment securities gains in the first quarter of 2022 was $55.2 million, a decrease of $8.6 million, or 13.5%, from the fourth quarter of 2021. The decrease in non-interest income was primarily due to declines in income from equity method investments of $4.0 million reflected in other income, mortgage banking income of $2.7 million due to lower gains on sales, and capital markets income of $1.3 million primarily due to lower fee income from commercial customer interest rate swaps, partially offset by an increase of $1.1 million in wealth management income.

Compared to the first quarter of 2021, non-interest income before investment securities gains in the first quarter of 2022 decreased $6.7 million, or 10.8%, from $61.9 million. The decrease in non-interest income was primarily due to a $9.4 million decrease in mortgage banking income due to lower gains on sale, partially offset by a $2.1 million increase in wealth management income.

In the first quarter of 2021, Fulton completed balance sheet restructurings involving sales of investment securities and corresponding prepayments of FHLB advances, subordinated debt and senior notes. The balance sheet restructuring involved gains on sales of Visa, Inc. Class B restricted shares of $34.0 million that were offset in non-interest expense by debt extinguishment of costs of $33.2 million.

Non-interest Expense

Non-interest expense was $146.0 million in the first quarter of 2022, a decrease of $8.0 million, or 5.2%, compared to the fourth quarter of 2021. The decrease was primarily due to decreases in charitable contributions and donations of $2.2 million, state-related taxes of $1.7 million and a net gain for owned fixed assets of $1.5 million, all reflected in other expense. Additionally, the decrease in non-interest expense was also driven by decreases in other outside services of $1.5 million and salaries and benefits of $1.0 million. Included in non-interest expense was $0.4 million for merger-related expenses associated with the pending acquisition of Prudential Bancorp, Inc.

Compared to the first quarter of 2021, non-interest expense decreased $32.4 million, or 18.2%, in the first quarter of 2022, primarily due to debt extinguishment costs of $33.2 million related to the prepayment of FHLB advances, subordinated debt and senior notes during the first quarter of 2021.

Income Tax Expense

For the first quarter of 2022, the effective tax rate was moderately lower at 17.1%, compared to 17.6% for the full-year of 2021.

Additional information on Fulton is available on the Internet at www.fultonbank.com.

Safe Harbor Statement

This news release may contain forward-looking statements with respect to the Corporation's 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.

A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation'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 the Corporation's Annual Report on Form 10-K for the year ended December 31, 2021 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission (the "SEC"), including the risks, uncertainties and assumptions regarding the Corporation's pending acquisition of Prudential Bancorp, Inc. set forth under the heading "Safe Harbor Statement" in the Corporation's Current Report on Form 8-K filed on March 2, 2022, and are or will be available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).

Non-GAAP Financial Measures

The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release (GAAP: Generally Accepted Accounting Principles).

FULTON FINANCIAL CORPORATION
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
in thousands, except per-share data and percentages
	Three months ended
	Mar 31			Dec 31			Sep 30			Jun 30			Mar 31
	2022			2021			2021			2021			2021
Ending Balances
Investments	$	4,288,674		$	4,167,774		$	4,000,760		$	3,921,658		$	3,612,010
Net loans		18,476,119			18,325,350			18,269,407			18,586,756			18,990,986
Total assets		25,598,310			25,796,398			26,390,832			26,079,774			25,892,990
Deposits		21,541,174			21,573,499			22,074,041			21,724,312			21,633,838
Shareholders' equity		2,569,535			2,712,680			2,699,818			2,692,958			2,629,655

Average Balances
Investments	$	4,228,827		$	3,980,045		$	3,914,627		$	3,670,333		$	3,448,166
Net loans		18,383,118			18,220,550			18,414,153			18,906,556			18,980,586
Total assets		25,622,462			26,136,536			26,440,876			26,017,542			26,082,816
Deposits		21,480,183			21,876,938			22,123,480			21,765,601			21,117,024
Shareholders' equity		2,688,834			2,713,198			2,722,833			2,669,413			2,637,098

Income Statement
Net interest income	$	161,310		$	165,613		$	171,270		$	162,399		$	164,448
Provision for credit losses		(6,950	)		(5,000	)		(600	)		(3,500	)		(5,500	)
Non-interest income		55,256			63,881			62,577			51,890			95,397
Non-interest expense		145,978			154,019			144,596			140,831			178,384
Income before taxes		77,538			80,475			89,851			76,958			86,961
Net income available to common shareholders		61,726			59,325			73,021			62,402			70,472
Pre-provision net revenue⁽¹⁾		71,842			77,837			90,947			75,575			81,795

Per Share
Net income available to common shareholders (basic)	$	0.38		$	0.37		$	0.45		$	0.38		$	0.43
Net income available to common shareholders (diluted)	$	0.38		$	0.37		$	0.45		$	0.38		$	0.43
Cash dividends	$	0.15		$	0.22		$	0.14		$	0.14		$	0.14
Common shareholders' equity	$	14.79		$	15.70		$	15.53		$	15.34		$	14.99
Common shareholders' equity (tangible)⁽¹⁾	$	11.44		$	12.35		$	12.21		$	12.05		$	11.69
Weighted average shares (basic)		160,588			161,210			162,506			162,785			162,441
Weighted average shares (diluted)		161,911			162,355			163,456			163,858			163,737

⁽¹⁾ Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.

	Three months ended
	Mar 31			Dec 31			Sep 30			Jun 30			Mar 31
	2022			2021			2021			2021			2021
Asset Quality
Net (recoveries) charge offs to average loans (annualized)		(0.02	)%		0.07	%		(0.05	)%		0.15	%		0.13	%
Non-performing loans to total loans		0.87	%		0.83	%		0.82	%		0.83	%		0.80	%
Non-performing assets to total assets		0.64	%		0.60	%		0.58	%		0.60	%		0.60	%
ACL - loans⁽²⁾ to total loans		1.32	%		1.36	%		1.41	%		1.37	%		1.40	%
ACL - loans⁽²⁾ to non-performing loans		151	%		164	%		171	%		166	%		174	%

Asset Quality, excluding PPP⁽¹⁾⁽³⁾
Net (recoveries) charge offs to adjusted average loans (annualized)		(0.02	)%		0.07	%		(0.05	)%		0.16	%		0.14	%
Non-performing loans to total adjusted loans		0.88	%		0.84	%		0.85	%		0.88	%		0.88	%
ACL - loans⁽²⁾to total adjusted loans		1.33	%		1.38	%		1.45	%		1.46	%		1.54	%

Profitability
Return on average assets		1.02	%		0.94	%		1.13	%		1.00	%		1.14	%
Return on average common shareholders' equity		10.03	%		9.34	%		11.45	%		10.01	%		11.73	%
Return on average common shareholders' equity (tangible)⁽¹⁾		12.88	%		11.89	%		14.56	%		12.93	%		15.00	%
Net interest margin		2.78	%		2.77	%		2.82	%		2.73	%		2.79	%
Efficiency ratio⁽¹⁾		65.8	%		65.2	%		60.3	%		63.8	%		63.0	%
Non-interest expenses to total average assets⁽¹⁾		2.29	%		2.30	%		2.14	%		2.14	%		2.25	%

Capital Ratios
Tangible common equity ratio⁽¹⁾		7.3	%		7.8	%		7.6	%		7.7	%		7.5	%
Tier 1 leverage ratio⁽⁴⁾		8.9	%		8.6	%		8.4	%		8.5	%		8.2	%
Common equity Tier 1 capital ratio⁽⁴⁾		10.0	%		9.9	%		10.1	%		10.0	%		9.7	%
Tier 1 risk-based capital ratio⁽⁴⁾		10.9	%		10.9	%		11.1	%		11.0	%		10.7	%
Total risk-based capital ratio⁽⁴⁾		13.8	%		14.1	%		14.4	%		14.5	%		14.3	%

(1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.
(2) "ACL - loans" relates to the allowance for credit losses ("ACL") specifically on "Net Loans" and does not include the ACL related to off-balance-sheet ("OBS") credit exposures.
(3) Asset quality information excluding Paycheck Protection Program ("PPP") loans. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.
(4) Regulatory capital ratios as of March 31, 2022 are preliminary and prior periods are actual.

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
dollars in thousands
																	% Change from
		Mar 31			Dec 31			Sep 30			Jun 30			Mar 31			Dec 31		Mar 31
		2022			2021			2021			2021			2021			2021		2021
ASSETS
	Cash and due from banks	$	161,462		$	172,276		$	260,564		$	143,002		$	102,570		(6.3	)%	57.4	%
	Other interest-earning assets		1,054,232			1,523,973			2,271,738			1,823,688			1,625,515		(30.8	)%	(35.1	)%
	Loans held for sale		27,675			35,768			43,123			41,924			34,092		(22.6	)%	(18.8	)%
	Investment securities		4,288,674			4,167,774			4,000,760			3,921,658			3,612,010		2.9	%	18.7	%
	Net loans		18,476,119			18,325,350			18,269,407			18,586,756			18,990,986		0.8	%	(2.7	)%
	Less: ACL - loans⁽¹⁾		(243,705	)		(249,001	)		(256,727	)		(255,032	)		(265,986	)	(2.1	)%	(8.4	)%
	Loans, net		18,232,414			18,076,349			18,012,680			18,331,724			18,725,000		0.9	%	(2.6	)%
	Net, premises and equipment		218,257			220,357			228,179			228,353			229,035		(1.0	)%	(4.7	)%
	Accrued interest receivable		55,102			57,451			57,902			63,232			65,649		(4.1	)%	(16.1	)%
	Goodwill and intangible assets		537,877			538,053			536,697			536,847			536,544		—	%	0.2	%
	Other assets		1,022,617			1,004,397			979,189			989,346			962,575		1.8	%	6.2	%
	Total Assets	$	25,598,310		$	25,796,398		$	26,390,832		$	26,079,774		$	25,892,990		(0.8	)%	(1.1	)%
LIABILITIES AND SHAREHOLDERS' EQUITY
	Deposits	$	21,541,174		$	21,573,499		$	22,074,041		$	21,724,312		$	21,633,838		(0.1	)%	(0.4	)%
	Short-term borrowings		452,440			416,764			468,967			533,749			520,989		8.6	%	(13.2	)%
	Other liabilities		478,667			472,110			520,620			501,542			482,101		1.4	%	(0.7	)%
	Long-term borrowings		556,494			621,345			627,386			627,213			626,407		(10.4	)%	(11.2	)%
	Total Liabilities		23,028,775			23,083,718			23,691,014			23,386,816			23,263,335		(0.2	)%	(1.0	)%
	Shareholders' equity		2,569,535			2,712,680			2,699,818			2,692,958			2,629,655		(5.3	)%	(2.3	)%
	Total Liabilities and Shareholders' Equity	$	25,598,310		$	25,796,398		$	26,390,832		$	26,079,774		$	25,892,990		(0.8	)%	(1.1	)%

LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Loans, by type:
	Real estate - commercial mortgage	$	7,289,376		$	7,279,080		$	7,145,115		$	7,152,932		$	7,142,137		0.1	%	2.1	%
	Commercial and industrial		3,992,285			3,906,791			3,863,154			3,870,462			3,986,858		2.2	%	0.1	%
	Real estate - residential mortgage		3,946,741			3,846,750			3,719,684			3,555,897			3,254,058		2.6	%	21.3	%
	Real estate - home equity		1,098,171			1,118,248			1,126,628			1,136,128			1,149,958		(1.8	)%	(4.5	)%
	Real estate - construction		1,210,340			1,139,779			1,111,487			1,070,755			1,083,494		6.2	%	11.7	%
	Consumer		481,551			464,657			458,595			448,433			451,857		3.6	%	6.6	%
	Equipment lease financing		253,521			236,344			242,967			252,158			260,907		7.3	%	(2.8	)%
	Other⁽²⁾		39,857			32,448			11,330			(14,410	)		(26,677	)	22.8	%	N/M
	Net loans before PPP		18,311,842			18,024,097			17,678,960			17,472,355			17,302,592		1.6	%	5.8	%
	PPP		164,277			301,253			590,447			1,114,401			1,688,394		(45.5	)%	(90.3	)%
	Total Net Loans	$	18,476,119		$	18,325,350		$	18,269,407		$	18,586,756		$	18,990,986		0.8	%	(2.7	)%
Deposits, by type:
	Noninterest-bearing demand	$	7,528,391		$	7,370,963		$	7,434,155		$	7,442,132		$	7,046,116		2.1	%	6.8	%
	Interest-bearing demand		5,625,286			5,819,539			6,187,096			5,795,404			5,959,909		(3.3	)%	(5.6	)%
	Savings		6,479,196			6,403,995			6,401,619			6,276,554			6,244,513		1.2	%	3.8	%
	Total demand and savings		19,632,873			19,594,497			20,022,870			19,514,090			19,250,538		0.2	%	2.0	%
	Brokered		248,833			251,526			262,617			277,444			309,873		(1.1	)%	(19.7	)%
	Time		1,659,468			1,727,476			1,788,554			1,932,778			2,073,427		(3.9	)%	(20.0	)%
	Total Deposits	$	21,541,174		$	21,573,499		$	22,074,041		$	21,724,312		$	21,633,838		(0.1	)%	(0.4	)%
Short-term borrowings, by type:
	Customer funding

Fulton Financial Announces First Quarter 2022 Results