株探米国株
英語
エドガーで原本を確認する
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024, or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to              

Commission File No. 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(s) Name of each exchange on which registered
Common Stock, par value $2.50 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
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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically 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  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth 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 is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒

APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Common Stock, $2.50 Par Value – 182,025,441 shares outstanding as of November 1, 2024.
1

FULTON FINANCIAL CORPORATION
FORM 10-Q FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2024
INDEX

Description Page
Glossary of Terms
PART I. FINANCIAL INFORMATION
(a)
(b)
(c)
(d)
(e)
(f)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Defaults Upon Senior Securities - (not applicable)
Item 4. Mine Safety Disclosures - (not applicable)
Item 5. Other Information
Note: Some numbers contained in the document may not sum due to rounding The Corporation has made, and may continue to make, certain forward-looking statements with respect to its financial condition, results of operations and business.
2

GLOSSARY OF DEFINED ACRONYMS AND TERMS
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 subordinated notes
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
AOCI Accumulated other comprehensive (loss) income
ASC Accounting Standards Codification
ASU Accounting Standards Update
BHCA Bank Holding Company Act of 1956, as amended
bp or bps Basis point(s)
Capital Rules Regulatory capital requirements applicable to the Corporation and Fulton Bank
CDI Core deposit intangible
CECL Day 1 Provision Initial provision for credit losses required on non-PCD Loans acquired in the Republic First Transaction
Corporation, Company, we, our or us Fulton Financial Corporation
Directors' Plan Amended and Restated 2023 Director Equity Plan
Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act
Employee Equity Plan 2022 Amended and Restated Equity and Cash Incentive Compensation Plan
ETR Effective tax rate
Exchange Act Securities Exchange Act of 1934, as amended
FASB Financial Accounting Standards Board
FDIC Federal Deposit Insurance Corporation
Federal Reserve Board Board of Governors of the Federal Reserve System
FHLB Federal Home Loan Bank
FRB Federal Reserve Bank
FTE Fully taxable-equivalent
Fulton Bank or the Bank Fulton Bank, N.A.
GAAP U.S. generally accepted accounting principles
HTM Held to maturity
LGD Loss given default
LIBOR London Interbank Offered Rate
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 that was completed effective as of July 1, 2022
MSRs Mortgage servicing rights
Net loans Loan and lease receivables (net of unearned income)
NIM Net interest margin
N/M Not meaningful
OBS Off-balance-sheet
OCI Other comprehensive income
OREO Other real estate owned
PCD Loans Loans purchased with more-than-insignificant credit deterioration
3

PD   Probability of default
Pension Plan Defined Benefit Pension Plan
Postretirement Plan Postretirement Benefits Plan
Prudential Bancorp Prudential Bancorp, Inc.
PSU Performance-based restricted stock unit
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
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 United States Securities and Exchange Commission
SOFR Secured Overnight Financing Rate
TruPS Trust Preferred Securities

FORWARD-LOOKING STATEMENTS

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 increasing or elevated interest rates and elevated levels of inflation, on the performance of the Corporation's loan portfolio and demand for the Corporation's products and services;
•the potential impacts of recent 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 changes to earnings or shareholders' equity;
•the effects of changes in interest rates or disruptions in liquidity markets on the Corporation's sources of funding;
4

•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;
•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 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, including but not limited to the Republic First Transaction, may affect costs and the Corporation may not be able to successfully integrate the acquired business or realize the anticipated benefits from such acquisitions;
•the possibility that the anticipated benefits of the Republic First Transaction, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or challenges arising from, the integration of the acquired assets and assumed liabilities into the Corporation, potential adverse reactions or changes to business or employee relationships, or as a result of other unexpected factors or events;
•the Corporation's ability to successfully integrate into the Corporation's operations any assumed assets, liabilities, customers, systems, and management personnel the Corporation may acquire in connection with the Republic First Transaction, which may result in a disruption to the Corporation’s business;
•changes in the estimated fair value of the Republic First Assets and Liabilities in connection with the Republic First Transaction;
•the possibility of increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Republic First Transaction;
•potential exposure to unknown or contingent risks and liabilities the Corporation has acquired, or may acquire, or target for acquisition, including in connection with the purchase and assumption of certain assets and liabilities in connection with the Republic First Transaction;
•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 escalating conflict 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;
5

•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.

6


Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS 
(dollars in thousands, except per-share data)
September 30, 2024 December 31,
2023
(unaudited)
ASSETS
Cash and due from banks $ 296,500  $ 300,343 
Interest-bearing deposits with other banks 1,144,180  249,367 
        Cash and cash equivalents 1,440,680  549,710 
FRB and FHLB stock 143,212  124,405 
Loans held for sale 17,678  15,158 
Investment securities
AFS, at estimated fair value 3,313,296  2,398,352 
HTM, at amortized cost 1,231,982  1,267,922 
Net loans 24,176,075  21,351,094 
Less: ACL - loans (375,961) (293,404)
Loans, net 23,800,114  21,057,690 
Net premises and equipment 171,731  222,881 
Accrued interest receivable 115,903  107,972 
Goodwill and net intangible assets 641,739  560,687 
Other assets 1,309,391  1,267,138 
Total Assets $ 32,185,726  $ 27,571,915 
LIABILITIES
Deposits:
Noninterest-bearing $ 5,501,699  $ 5,314,094 
Interest-bearing 20,650,445  16,223,529 
Total Deposits 26,152,144  21,537,623 
Borrowings:
Federal funds purchased —  240,000 
Federal Home Loan Bank advances 950,000  1,100,000 
Senior debt and subordinated debt 535,917  535,384 
Other borrowings 566,310  612,142 
Total Borrowings 2,052,227  2,487,526 
Accrued interest payable 36,723  35,083 
Other liabilities 740,689  751,544 
Total Liabilities 28,981,783  24,811,776 
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 10,000,000 shares authorized; Series A, 200,000 shares authorized and issued as of September 30, 2024 and December 31, 2023, liquidation preference of $1,000 per share
 192,878  192,878 
Common stock, $2.50 par value, 600,000,000 shares authorized, 245,869,212 shares issued as of September 30, 2024 and 225,760,963 shares issued as of December 31, 2023
 614,673  564,402 
Additional paid-in capital 1,785,477  1,552,860 
Retained earnings 1,742,344  1,619,300 
Accumulated other comprehensive loss (243,302) (312,280)
Treasury stock, at cost, 63,912,691 shares as of September 30, 2024 and 61,959,552 shares as of December 31, 2023
 (888,127) (857,021)
Total Shareholders' Equity 3,203,943  2,760,139 
Total Liabilities and Shareholders' Equity $ 32,185,726  $ 27,571,915 
See Notes to Consolidated Financial Statements
7

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands, except per-share data) Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
Interest Income
Loans, including fees $ 373,247  $ 301,659  $ 1,037,160  $ 847,000 
Investment securities 36,342  25,339  93,543  76,221 
Other interest income 18,067  3,373  37,125  11,882 
Total Interest Income 427,656  330,371  1,167,828  935,103 
Interest Expense
Deposits 145,324  84,156  379,985  195,576 
Federal funds purchased —  8,950  2,881  24,097 
Federal Home Loan Bank advances 8,824  10,324  29,572  37,623 
Senior debt and subordinated debt 5,299  5,344  15,904  16,033 
Other borrowings and interest-bearing liabilities 10,200  7,755  32,820  19,493 
Total Interest Expense 169,647  116,529  461,162  292,822 
Net Interest Income 258,009  213,842  706,666  642,281 
Provision for credit losses 11,929  9,937  54,910  44,228 
Net Interest Income After Provision for Credit Losses 246,080  203,905  651,756  598,053 
Non-Interest Income
Wealth management 21,596  19,413  62,741  56,152 
Commercial banking 22,289  19,722  62,528  60,380 
Consumer banking 14,928  12,173  41,196  35,110 
Mortgage banking 3,142  3,190  10,183  8,100 
Gain on acquisition, net of tax (7,706) —  39,685  — 
Other 5,425  1,463  13,756  8,539 
Non-Interest Income Before Investment Securities (Losses) Gains, Net 59,674  55,961  230,089  168,281 
Investment securities (losses) gains, net (1) —  (20,283) 19 
Total Non-Interest Income 59,673  55,961  209,806  168,300 
Non-Interest Expense
Salaries and employee benefits 118,824  96,757  324,935  280,142 
Data processing and software 20,314  16,914  58,332  49,486 
Net occupancy 18,999  14,561  52,942  43,373 
Other outside services 15,839  12,094  46,055  33,054 
Intangible amortization 6,287  601  11,548  2,347 
FDIC insurance 5,109  4,738  17,909  14,427 
Equipment 4,860  3,475  13,461  10,395 
Professional fees 2,811  1,869  7,470  6,090 
Marketing 2,251  1,913  6,263  5,454 
Acquisition-related expenses 14,195  —  27,998  — 
Other 16,600  18,098  36,263  53,888 
Total Non-Interest Expense 226,089  171,020  603,176  498,656 
Income Before Income Taxes 79,664  88,846  258,386  267,697 
Income taxes 16,458  16,749  38,264  47,680 
Net Income 63,206  72,097  220,122  220,017 
Preferred stock dividends (2,562) (2,562) (7,686) (7,686)
Net Income Available to Common Shareholders $ 60,644  $ 69,535  $ 212,436  $ 212,331 
PER SHARE:
Net income available to common shareholders (basic) $ 0.33  $ 0.42  $ 1.23  $ 1.28 
Net income available to common shareholders (diluted) 0.33  0.42  1.21  1.27 
Cash dividends 0.17  0.16  0.51  0.47 
See Notes to Consolidated Financial Statements
8

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(dollars in thousands)
  Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
 
Net Income $ 63,206  $ 72,097  $ 220,122  $ 220,017 
Other Comprehensive Income (Loss), net of tax:
Unrealized gains (losses) on AFS investment securities
Net unrealized holding gains (losses) 68,560  (105,050) 37,696  (103,628)
Reclassification adjustment for securities net change realized in net income 1  —  15,689  14 
Amortization of net unrealized gains on AFS securities transferred to HTM 1,422  1,494  4,212  4,473 
         Net unrealized gains (losses) on AFS investment securities 69,983  (103,556) 57,597  (99,141)
Unrealized gains (losses) on interest rate derivatives used in cash flow hedges
         Net unrealized holding (losses) gains (6,624) 3,651  (71) (8,755)
Reclassification adjustment for net change realized in net income 3,979  6,420  11,769  20,573 
 Net unrealized (losses) gains on interest rate derivatives used in cash flow hedges (2,645) 10,071  11,698  11,818 
Defined benefit pension plan and postretirement benefits
Amortization of net unrecognized pension and postretirement items (106) 15  (317) 43 
Other Comprehensive Income (Loss), net of tax 67,232  (93,470) 68,978  (87,280)
Total Comprehensive Income $ 130,438  $ (21,373) $ 289,100  $ 132,737 
See Notes to Consolidated Financial Statements

9

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)
(in thousands, except per-share data)
  Preferred Stock Common Stock Additional Retained
Earnings		 Accumulated Other Comprehensive
Income (Loss)		 Treasury
Stock		 Total
  Shares Outstanding Amount Shares Outstanding Amount Paid-in
Capital
Three months ended September 30, 2024
Balance at June 30, 2024 200  $ 192,878  181,831  $ 614,523  $ 1,781,090  $ 1,712,646  $ (310,534) $ (888,994) $ 3,101,609 
Net income 63,206  63,206 
Other comprehensive loss 67,232  67,232 
Common stock issued(1)
 34  85  469  —  554 
Dividend reinvestment activity 75  300  1,026  1,326 
Stock-based compensation awards (repurchases) 17  65  3,618  (159) 3,524 
Preferred stock dividend (2,562) (2,562)
Common stock dividends - $0.17 per share
 (30,946) (30,946)
Balance at September 30, 2024 200  $ 192,878  181,957  $ 614,673  $ 1,785,477  $ 1,742,344  $ (243,302) $ (888,127) $ 3,203,943 
Three months ended September 30, 2023
Balance at June 30, 2023 200  $ 192,878  166,097  $ 564,137  $ 1,545,706  $ 1,542,163  $ (379,286) $ (823,446) $ 2,642,152 
Net income 72,097  72,097 
Other comprehensive loss (93,470) (93,470)
Common stock issued(1)
 50  125  529  7  661 
Dividend reinvestment activity 109  (154) 1,517  1,363 
Stock-based compensation awards (repurchases) 4  17  3,198  (26) 3,189 
Acquisition of treasury stock (2,176) (30,491) (30,491)
Preferred stock dividend (2,562) (2,562)
Common stock dividends - $0.16 per share
 (26,246) (26,246)
Balance at September 30, 2023 200  $ 192,878  164,084  $ 564,279  $ 1,549,279  $ 1,585,452  $ (472,756) $ (852,439) $ 2,566,693 
Nine months ended September 30, 2024
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 220,122  220,122 
Other comprehensive income 68,978  68,978 
Common stock issued(2)
 19,313  48,283  226,569  12  274,864 
Dividend reinvestment activity 252  574  3,502  4,076 
Stock-based compensation awards (repurchases) 525  1,988  5,474  (4,272) 3,190 
Acquisition of treasury stock (1,934) (30,348) (30,348)
Preferred stock dividend (7,686) (7,686)
Common stock dividends - $0.51 per share
 (89,392) (89,392)
Balance at September 30, 2024 200  $ 192,878  181,957  $ 614,673  $ 1,785,477  $ 1,742,344  $ (243,302) $ (888,127) $ 3,203,943 
Nine months ended September 30, 2023
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 220,017  220,017 
Other comprehensive loss (87,280) (87,280)
Common stock issued(1)
 185  463  2,001  27  2,491 
Dividend reinvestment activity 298  18  4,147  4,165 
Stock-based compensation awards (repurchases) 589  2,305  5,420  (3,919) 3,806 
Acquisition of treasury stock (4,587) (70,940) (70,940)
Preferred stock dividend (7,686) (7,686)
Common stock dividends - $0.47 per share
 (77,637) (77,637)
Balance at September 30, 2023 200  $ 192,878  164,084  $ 564,279  $ 1,549,279  $ 1,585,452  $ (472,756) $ (852,439) $ 2,566,693 
See Notes to Consolidated Financial Statements
(1) Issuance of common stock includes issuance in connection with the Corporation's Employee Stock Purchase Plan 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 Employee Stock Purchase Plan and exercised stock options.
10

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands) Nine months ended September 30
  2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 220,122  $ 220,017 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses 54,910  44,228 
Depreciation and amortization of premises and equipment 22,789  22,212 
Net amortization of investment securities premiums 725  8,650 
Net accretion of loan discounts (24,821) — 
Investment securities losses (gains), net 20,283  (19)
Gain on sales of mortgage loans held for sale (5,952) (4,150)
Proceeds from sales of mortgage loans held for sale 397,694  260,494 
Originations of mortgage loans held for sale (394,262) (269,448)
Intangible amortization 11,548  2,347 
Amortization of issuance costs and discounts on long-term borrowings 533  540 
Gain on acquisition, net of tax (39,685) — 
Gain on disposal of premises and equipment (44) — 
Gain on Sale-Leaseback Transaction (20,266) — 
Stock-based compensation 7,462  7,971 
Net change in deferred federal income tax 31,203  (10,773)
Net change in accrued salaries and benefits 11,035  (11,232)
Net change in life insurance cash surrender value (15,317) (23,655)
Other changes, net 10,714  173,206 
Total adjustments 68,549  200,371 
Net cash provided by operating activities 288,671  420,388 
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of AFS securities 2,300,487  80,666 
Proceeds from principal repayments and maturities of AFS securities 194,108  77,905 
Proceeds from principal repayments and maturities of HTM securities 40,561  46,301 
Purchase of AFS securities (1,450,128) (72,252)
Net change in FRB and FHLB stock (18,807) 23,823 
Net change in loans (277,669) (919,231)
Net purchases of premises and equipment (1,241) (17,860)
Settlement of bank-owned life insurance 1,053  100 
Proceeds from Sale-Leaseback Transaction 51,123  — 
Net cash received for acquisition 1,018,371  — 
Net change in tax credit investments (30,109) (17,945)
Net cash provided by (used in) investing activities 1,827,749  (798,493)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in demand and savings deposits 357,522  (811,325)
Net change in time deposits and brokered deposits 144,673  1,583,376 
Net change in other borrowings (1,871,808) (501,635)
Net proceeds from issuance of common stock 270,606  2,491 
Dividends paid (96,095) (85,323)
Acquisition of treasury stock (30,348) (70,940)
Net cash (used in) provided by financing activities (1,225,450) 116,644 
Net increase (decrease) in Cash and Cash Equivalents 890,970  (261,461)
Cash and Cash Equivalents at Beginning of Period 549,710  681,921 
Cash and Cash Equivalents at End of Period $ 1,440,680  $ 420,460 
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest $ 459,522  $ 276,159 
Income taxes 20,739  23,416 
Supplemental Schedule of Certain Noncash Activities:
Business Combination
Fair value of tangible assets acquired $ 4,708,947  $ — 
Intangible assets 92,600  — 
Liabilities assumed 5,560,160  — 
PCD Loans credit discount 54,767  — 
See Notes to Consolidated Financial Statements
11

FULTON FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 – Basis of Presentation

The accompanying unaudited Consolidated Financial Statements of the Corporation have been prepared in conformity with GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as of the date of the financial statements as well as revenues and expenses during the period. Actual results could differ from those estimates. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto included in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The Corporation evaluates subsequent events through the date of filing of this Quarterly Report on Form 10-Q with the SEC for potential recognition or disclosure in the Consolidated Financial Statements.

Significant Accounting Policies

The significant accounting policies used in preparation of the Consolidated Financial Statements are disclosed in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023. Those significant accounting policies are unchanged at September 30, 2024.

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.

Recently Issued Accounting Standards

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 will adopt ASU 2023-07 on December 15, 2024. The Corporation is not currently required to report segment information and, as such, does not expect the adoption of ASU 2023-07 to have an impact on its consolidated financial statements.

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.

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.
12


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 based on preliminary valuations 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 management finalizes its fair value estimates for the acquired assets and assumed liabilities, the preliminary gain on acquisition can be updated for a period not to exceed one year following the Acquisition Date. The preliminary fair value estimates of assets acquired and liabilities assumed, provide a reasonable basis for determining the preliminary gain on acquisition. During the third quarter of 2024, adjustments to the estimated fair values of certain assets acquired were recorded, resulting in a $7.7 million reduction 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 $39.7 million, net of income taxes.

























13

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 on the Acquisition Date:
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 2,496,902 
     Premises and equipment 1,211 
     CDI 92,600 
     FHLB Stock 37,931 
     Accrued interest receivable 16,164 
     Other assets 9,717 
          Total assets 4,801,547 
Liabilities assumed:
     Deposits 4,112,325 
Borrowings 1,413,751 
Accrued interest payable 33,444 
     Other liabilities 640 
          Total liabilities 5,560,160 
Net assets acquired: (758,613)
Gain on acquisition, before income taxes $ 51,307 
Gain on acquisition, net of income taxes $ 39,685 

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 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 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.











14

The following table presents information with respect to the estimated fair value and unpaid principal balance of acquired loans and leases at the Acquisition Date:
April 26, 2024
Unpaid Principal Balance Estimated Fair Value
(dollars in thousands)
Real estate - commercial mortgage $ 1,144,465  $ 1,024,004 
Commercial and industrial 545,374  487,962 
Real-estate - residential mortgage 947,135  752,328 
Real-estate - home equity 72,730  66,237 
Real-estate - construction 153,437  145,597 
Consumer 20,789  20,774 
     Total acquired loans $ 2,883,930  $ 2,496,902 

The following table summarizes PCD Loans:
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 896,316 
Fair value discount 118,243 
PCD Loans credit discount (54,767)
Non-credit discount $ 63,476 

The Republic First Transaction resulted in the addition of $78.2 million to the ACL, including the $54.8 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.


15

Acquisition-related expenses:

The Corporation developed a comprehensive integration plan under which it is incurring direct costs that are expensed as incurred. For the nine months ended, September 30, 2024, these direct costs included professional fees, a charitable donation, severance, and marketing expense. 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 incurred and classified as acquisition-related expenses:

Nine months ended September 30, 2024
(dollars in thousands)
Salaries and employee benefits $ 1,405 
Net occupancy 9,805 
Professional fees 8,792 
Charitable donation 5,000 
Other 2,996 
$ 27,998 

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 Fulton Bank's vision of advancing economic empowerment, particularly in underserved communities.

On July 18, 2024, the Corporation announced a plan to close 13 of the Bank's financial center offices and consolidate 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 include 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 three and nine months ended September 30, 2024, consisting of write-offs of premises and equipment and related expenses, and lease termination charges. The financial centers are expected to close on or about November 22, 2024.

Unaudited Pro Forma Information:

The amount of net interest income, non-interest income, non-interest expense and net income of $72.1 million, $45.1 million, $49.4 million and $44.3 million, respectively, attributable to the Republic First Transaction were included in the Corporation's unaudited Consolidated Statements of Income for the nine months ended September 30, 2024. Included in non-interest income above is $39.7 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 as of the date of the filing of this Quarterly Report on Form 10-Q.

Republic First Bank does not have historical financial information on which 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.

    
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 September 30, 2024 and December 31, 2023 were $35.9 million and $17.4 million, respectively.




16


NOTE 4 – Investment Securities

The following table presents the amortized cost and estimated fair values of investment securities:
September 30, 2024
Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Estimated
Fair
Value
Available for Sale (dollars in thousands)
State and municipal securities $ 963,138  $ 814  $ (112,619) $ 851,333 
Corporate debt securities 318,631  473  (22,524) 296,580 
Collateralized mortgage obligations 746,328  11,858  (8,718) 749,468 
Residential mortgage-backed securities 911,713  6,349  (22,427) 895,635 
Commercial mortgage-backed securities 604,376  —  (84,096) 520,280 
   Total $ 3,544,186  $ 19,494  $ (250,384) $ 3,313,296 
Held to Maturity
Residential mortgage-backed securities $ 373,313  $ —  $ (44,387) $ 328,926 
Commercial mortgage-backed securities 858,669  —  (123,291) 735,378 
Total $ 1,231,982  $ —  $ (167,678) $ 1,064,304 

December 31, 2023
Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Estimated
Fair
Value
Available for Sale (dollars in thousands)
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 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 $0.6 billion and $0.4 billion at September 30, 2024 and December 31, 2023, respectively, were pledged as collateral to secure public and trust deposits.







17

The amortized cost and estimated fair values of debt securities as of September 30, 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.
September 30, 2024
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 $ 9,727  $ 9,548  $ —  $ — 
Due from one year to five years 87,566  84,556  —  — 
Due from five years to ten years 340,494  319,163  —  — 
Due after ten years 843,982  734,646  —  — 
1,281,769  1,147,913  —  — 
Residential mortgage-backed securities(1)
 911,713  895,635  373,313  328,926 
Commercial mortgage-backed securities(1)
 604,376  520,280  858,669  735,378 
Collateralized mortgage obligations(1)
 746,328  749,468  —  — 
  Total $ 3,544,186  $ 3,313,296  $ 1,231,982  $ 1,064,304 
(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 realized gains and losses on the sales of securities:
Gross Realized Gains Gross Realized Losses Net Gains (Losses)
Three months ended (dollars in thousands)
September 30, 2024 $ 88  $ (89) $ (1)
September 30, 2023 —  —  — 
Nine months ended
September 30, 2024 $ 179  $ (20,462) $ (20,283)
September 30, 2023 283  (264) 19 























18

The following tables present the gross unrealized losses and estimated fair values of investment securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:
September 30, 2024
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
Available for Sale (dollars in thousands)
State and municipal securities 7  $ 19,919  $ (138) 273  $ 790,484  $ (112,481) $ 810,403  $ (112,619)
Corporate debt securities —  —  —  49  271,021  (22,524) 271,021  (22,524)
Collateralized mortgage obligations 2  39,917  (181) 78  91,327  (8,537) 131,244  (8,718)
Residential mortgage-backed securities 8  165,584  (486) 69  187,709  (21,941) 353,293  (22,427)
Commercial mortgage-backed securities —  —  —  135  520,280  (84,096) 520,280  (84,096)
Total available for sale 17  $ 225,420  $ (805) 604  $ 1,860,821  $ (249,579) $ 2,086,241  $ (250,384)
Held to Maturity
Residential mortgage-backed securities —  $ —  $ —  120  $ 328,926  $ (44,387) $ 328,926  $ (44,387)
Commercial mortgage-backed securities —  —  —  60  735,378  (123,291) 735,378  (123,291)
Total held to maturity —  $ —  $ —  180  $ 1,064,304  $ (167,678) $ 1,064,304  $ (167,678)

December 31, 2023
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
Available for Sale (dollars in thousands)
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 —  $ —  $ —  60  $ 355,270  $ (51,805) $ 355,270  $ (51,805)
Commercial mortgage-backed securities —  —  —  120  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. Therefore, the Corporation did not record a loss on these investments as of September 30, 2024 and December 31, 2023.

As of September 30, 2024 and December 31, 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 September 30, 2024 and December 31, 2023.

The majority of the corporate debt securities were rated at or above investment grade as of September 30, 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 September 30, 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 amortized cost, which may be at maturity.
19

Therefore, the Corporation did not record a loss on these investments as of September 30, 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:
September 30,
2024		 December 31, 2023
  (dollars in thousands)
Real estate - commercial mortgage $ 9,493,479  $ 8,127,728 
Commercial and industrial(1)
 4,914,734  4,545,552 
Real-estate - residential mortgage 6,302,624  5,325,923 
Real-estate - home equity 1,144,402  1,047,184 
Real-estate - construction 1,332,954  1,239,075 
Consumer 651,717  729,318 
Leases and other loans(2)
 336,165  336,314 
Net loans $ 24,176,075  $ 21,351,094 
(1) Includes $2.0 thousand of unearned income at September 30, 2024 and $41.0 thousand at December 31, 2023.
(2) Includes unearned income of $34.8 million at September 30, 2024 and $38.0 million at December 31, 2023.

Allowance for Credit Losses

The ACL consists of reserves against loans that have been 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 by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries. The reserve for OBS credit exposures includes estimated losses on unfunded loan commitments, letters of credit and other OBS credit exposures.

The following table summarizes the ACL - loans balance and the reserve for OBS credit exposures balance:
September 30,
2024		 December 31,
2023
(dollars in thousands)
ACL - loans $ 375,961  $ 293,404 
Reserve for OBS credit exposures(1)
 $ 14,188  $ 17,254 
(1) Included in other liabilities on the consolidated balance sheets.
















The following table presents the activity in the ACL - loans balances:
Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
(dollars in thousands)
Balance at beginning of period $ 375,941  $ 287,442  $ 293,404  269,366 
CECL Day 1 Provision(1)
 —  —  23,444  — 
Initial PCD allowance for credit losses (1,139) —  54,767  — 
Loans charged off (13,144) (7,279) (38,103) (28,969)
Recoveries of loans previously charged off 2,022  2,181  7,081  7,896 
Net loans (charged off) recovered (11,122) (5,098) (31,022) (21,073)
Provision for credit losses(1) (2)
 12,281  10,395  35,368  44,446 
Balance at end of period $ 375,961  $ 292,739  $ 375,961  $ 292,739 
Provision for OBS credit exposures(1)
 $ (352) $ (458) $ (3,902) $ (218)
Reserve for OBS credit exposures $ 14,188  $ 16,110  $ 14,188  $ 16,110 
(1) The sum of these amounts is 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 Home
Equity		 Real Estate
Construction		 Leases and other loans Total
  (dollars in thousands)
Three months ended September 30, 2024
June 30, 2024 $ 156,165  $ 94,623  $ 89,714  $ 17,533  $ 14,610  $ 3,296  $ 375,941 
CECL Day 1 Provision(1)
 —  —  —  —  —  —  — 
Initial PCD allowance for credit losses —  (1,139) —  —  —  —  (1,139)
Loans charged off (2,723) (6,256) (1,131) (2,308) —  (726) (13,144)
Recoveries of loans previously charged off 107  1,008  130  545  103  129  2,022 
Net loans (charged off) recovered (2,616) (5,248) (1,001) (1,763) 103  (597) (11,122)
Provision for loan losses(1) (2)
 (10,255) 13,128  1,614  1,357  6,284  153  12,281 
Balance at September 30, 2024 $ 143,294  $ 101,364  $ 90,327  $ 17,127  $ 20,997  $ 2,852  $ 375,961 
Three months ended September 30, 2023
June 30, 2023 $ 72,302  $ 75,189  $ 88,849  $ 28,982  $ 11,144  $ 10,976  $ 287,442 
Loans charged off (860) (3,220) —  (1,803) —  (1,396) (7,279)
Recoveries of loans previously charged off 101  620  37  1,023  —  400  2,181 
Net loans (charged off) recovered (759) (2,600) 37  (780) —  (996) (5,098)
Provision for loan and lease losses(1) (2)
 2,403  9,766  (2,685) 1,873  (2,873) 1,911  10,395 
Balance at September 30, 2023 $ 73,946  $ 82,355  $ 86,201  $ 30,075  $ 8,271  $ 11,891  $ 292,739 
Nine months ended September 30, 2024
Balance at December 31, 2023 $ 112,565  $ 74,266  $ 73,286  $ 17,604  $ 12,295  $ 3,388  $ 293,404 
CECL Day 1 Provision(1)
6,108  1,484  14,922  444  486  —  23,444 
Initial PCD allowance for credit losses 32,157  19,730  565  357  1,958  —  54,767 
Loans charged off (10,602) (16,843) (1,417) (6,312) —  (2,929) (38,103)
Recoveries of loans previously charged off 405  3,052  368  2,382  336  538  7,081 
Net loans (charged off) recovered (10,197) (13,791) (1,049) (3,930) 336  (2,391) (31,022)
Provision for loan losses(1) (2)
 2,661  19,675  2,603  2,652  5,922  1,855  35,368 
Balance at September 30, 2024 $ 143,294  $ 101,364  $ 90,327  $ 17,127  $ 20,997  $ 2,852  $ 375,961 
Nine months ended September 30, 2023
Balance at December 31, 2022 $ 69,456  $ 70,116  $ 83,250  $ 26,429  $ 10,743  $ 9,372  $ 269,366 
Loans charged off (14,452) (5,849) (62) (5,322) —  (3,284) (28,969)
Recoveries of loans previously charged off 916  2,694  143  2,643  771  729  7,896 
Net loans (charged off) recovered (13,536) (3,155) 81  (2,679) 771  (2,555) (21,073)
Provision for loan losses(1)(2)
 18,026  15,394  2,870  6,325  (3,243) 5,074  44,446 
Balance at September 30, 2023 $ 73,946  $ 82,355  $ 86,201  $ 30,075  $ 8,271  $ 11,891  $ 292,739 
(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 the ACL - loans as of September 30, 2024 was primarily due to loans acquired in the Republic First Transaction.

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 cost 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.

All loans individually evaluated for impairment are measured for losses on a quarterly basis. As of September 30, 2024 and December 31, 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 September 30, 2024 and December 31, 2023, approximately 95% 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:
September 30, 2024 December 31, 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 $ 12,683  $ 56,703  $ 69,386  $ 23,338  $ 21,467  $ 44,805 
Commercial and industrial 36,493  27,121  63,614  12,410  27,542  39,952 
Real estate - residential mortgage 22,413  2,018  24,431  18,806  2,018  20,824 
Real estate - home equity 7,961  86  8,047  4,649  104  4,753 
Real estate - construction 340  —  340  341  1,000  1,341 
Consumer 209  —  209  52  —  52 
Leases and other loans 194  9,640  9,834  9,255  638  9,893 
$ 80,293  $ 95,568  $ 175,861  $ 68,851  $ 52,769  $ 121,620 

As of September 30, 2024 and December 31, 2023, there were $95.6 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.

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, commercial and industrial, and commercial real estate, 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.











The following table summarizes designated internal risk rating categories by portfolio segment and loan class, by origination year, in the current period:
September 30, 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 $ 439,628  $ 927,412  $ 1,144,947  $ 1,304,578  $ 1,039,538  $ 3,409,730  $ 75,822  $ 324  $ 8,341,979 
Special Mention 2,514  61,815  175,721  209,161  58,007  217,361  11,271  —  735,850 
Substandard or Lower 214  36,240  63,601  77,690  73,501  162,421  1,983  —  415,650 
Total real estate - commercial mortgage 442,356  1,025,467  1,384,269  1,591,429  1,171,046  3,789,512  89,076  324  9,493,479 
Real estate - commercial mortgage
Current period gross charge-offs —  (126) (84) —  —  (10,366) —  (26) (10,602)
Commercial and industrial
Pass 329,172  531,373  543,678  306,525  292,198  774,293  1,380,049  6,201  4,163,489 
Special Mention 13,034  22,505  53,936  45,068  24,550  110,455  151,806  3,819  425,173 
Substandard or Lower 9,376  15,655  39,900  6,775  8,044  56,206  168,937  21,179  326,072 
Total commercial and industrial 351,582  569,533  637,514  358,368  324,792  940,954  1,700,792  31,199  4,914,734 
Commercial and industrial
Current period gross charge-offs (370) (2,093) (268) (606) (280) (5,486) (4,105) (3,635) (16,843)
 Real estate - construction(1)
Pass 138,942  430,449  203,827  51,226  6,138  43,116  31,078  —  904,776 
Special Mention —  14,619  87,643  65,668  3,282  527  2,324  —  174,063 
Substandard or Lower —  —  15,387  4,502  —  22,406  133  —  42,428 
Total real estate - construction 138,942  445,068  306,857  121,396  9,420  66,049  33,535  —  1,121,267 
Real estate - construction(1)
Current period gross charge-offs —  —  —  —  —  —  —  —  — 
Total
Pass 907,742  1,889,234  1,892,452  1,662,329  1,337,874  4,227,139  1,486,949  6,525  13,410,244 
Special Mention 15,548  98,939  317,300  319,897  85,839  328,343  165,401  3,819  1,335,086 
Substandard or Lower 9,590  51,895  118,888  88,967  81,545  241,033  171,053  21,179  784,150 
Total $ 932,880  $ 2,040,068  $ 2,328,640  $ 2,071,193  $ 1,505,258  $ 4,796,515  $ 1,823,403  $ 31,523  $ 15,529,480 
(1) Excludes real estate - construction - other.

Included in special mention loans were loans acquired in the Republic First Transaction with a balance of $721.0 million as of September 30, 2024. Included in substandard or lower loans were loans acquired in the Republic First Transaction with a balance of $171.7 million as of September 30, 2024.












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.















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:
September 30, 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 $ 341,970  $ 726,077  $ 1,531,033  $ 1,748,485  $ 1,041,766  $ 871,564  $ —  $ —  $ 6,260,895 
Nonperforming —  1,257  4,061  4,491  3,538  28,382  —  —  41,729 
    Total real estate - residential mortgage 341,970  727,334  1,535,094  1,752,976  1,045,304  899,946  —  —  6,302,624 
Real estate - residential mortgage
Current period gross charge-offs —  (161) (62) (12) (43) (888) —  (251) (1,417)
Consumer and real estate - home equity
Performing 170,366  124,431  231,555  70,197  51,484  213,316  899,502  22,439  1,783,290 
Nonperforming 6  210  754  1,225  254  6,285  2,002  2,093  12,829 
Total consumer and real estate - home equity 170,372  124,641  232,309  71,422  51,738  219,601  901,504  24,532  1,796,119 
Consumer and real estate - home equity
Current period gross charge-offs (77) (627) (1,240) (432) (292) (1,804) (3) (1,837) (6,312)
Leases and other loans
Performing 110,852  101,880  66,448  20,029  13,167  13,861  —  —  326,237 
Nonperforming —  —  531  63  38  9,296  —  —  9,928 
Leases and other loans 110,852  101,880  66,979  20,092  13,205  23,157  —  —  336,165 
Leases and other loans
Current period gross charge-offs (830) (694) (222) (237) (125) (510) (135) (176) (2,929)
Construction - other
Performing 84,451  100,710  22,764  2,356  —  —  —  —  210,281 
Nonperforming —  —  1,406  —  —  —  —  —  1,406 
Total construction - other 84,451  100,710  24,170  2,356  —  —  —  —  211,687 
Construction - other
Current period gross charge-offs —  —  —  —  —  —  —  —  — 
Total
Performing 707,639  1,053,098  1,851,800  1,841,067  1,106,417  1,098,741  899,502  22,439  8,580,703 
Nonperforming 6  1,467  6,752  5,779  3,830  43,963  2,002  2,093  65,892 
Total $ 707,645  $ 1,054,565  $ 1,858,552  $ 1,846,846  $ 1,110,247  $ 1,142,704  $ 901,504  $ 24,532  $ 8,646,595 
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
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 
Leases and other loans 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 






















The following table presents non-performing assets:
September 30,
2024		 December 31,
2023
  (dollars in thousands)
Non-accrual loans $ 175,861  $ 121,620 
Loans 90 days or more past due and still accruing 26,286  31,721 
Total non-performing loans 202,147  153,341 
OREO(1)
 2,844  896 
Total non-performing assets $ 204,991  $ 154,237 
(1) Excludes $15.1 million and $10.9 million of residential mortgage properties for which formal foreclosure proceedings were in process as of September 30,
2024 and December 31, 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)
September 30, 2024
Real estate - commercial mortgage $ 37,045  $ 13,818  $ 2,081  $ 69,386  $ 9,371,149  $ 9,493,479 
Commercial and industrial(1)
 20,795  5,066  836  63,614  4,824,423  4,914,734 
Real estate - residential mortgage 41,105  9,022  17,296  24,431  6,210,770  6,302,624 
Real estate - home equity 3,893  1,320  3,860  8,047  1,127,282  1,144,402 
Real estate - construction 2,533  832  1,406  340  1,327,843  1,332,954 
Consumer 6,082  1,992  714  209  642,720  651,717 
Leases and other loans(1)
 474  373  93  9,834  325,391  336,165 
Total $ 111,927  $ 32,423  $ 26,286  $ 175,861  $ 23,829,578  $ 24,176,075 
(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.

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
Amortization Cost Basis % of Class of Financing Receivable Amortization Cost Basis % of Class of Financing Receivable
(dollars in thousands)
Three months ended September 30
Real estate - commercial mortgage $ —  —  % $ 1,120  0.01  %
Commercial and industrial —  —  7  — 
Real estate - residential mortgage 2,976  0.05  1,933  0.04 
Real estate - home equity 256  0.02  —  — 
Total $ 3,232  $ 3,060 
Nine months ended September 30
Real estate - commercial mortgage $ 20,458  0.22  % $ 2,556  0.03  %
Commercial and industrial —  —  66  — 
Real estate - residential mortgage 8,643  0.14  5,343  0.10 
Real estate - home equity 394  0.03  —  — 
Real estate - construction 605  0.05  —  — 
Total $ 30,100  $ 7,965 

Interest Rate Reduction and Term Extension
2024 2023
Amortized Cost Basis % of Class of Financing Receivable Amortized Cost Basis % of Class of Financing Receivable
(dollars in thousands)
Three months ended September 30
Real estate - residential mortgage $ 622  0.01  % $ —  —  %
Total $ 622  $ — 
Nine months ended September 30
Real estate - residential mortgage $ 1,941  0.03  % $ —  —  %
Total $ 1,941  $ — 














The following table presents the financial effect of the modifications made to borrowers experiencing financial difficulty:

Term Extension
Financial Effect
Three months ended September 30, 2024
Real estate - residential mortgage
Added a weighted-average 10.22 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Real estate - home equity
Added a weighted-average 12.40 years to the life of loans, which reduced monthly payment amounts for borrowers.
Three months ended September 30, 2023
Real estate - commercial mortgage
Added a weighted-average 0.50 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 4.49 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Nine months ended September 30, 2024
Real estate - commercial mortgage
Added a weighted-average 2.00 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Real estate - residential mortgage
Added a weighted-average 8.43 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Real estate - home equity
Added a weighted-average 14.31 years to the life of loans, which reduced monthly payment amounts for borrowers.
Real estate - construction
Added a weighted-average 0.67 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Nine months ended September 30, 2023
Real estate - commercial mortgage
Added a weighted-average 2.43 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Commercial and industrial
Added a weighted-average 3.76 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Real estate - residential mortgage
Added a weighted-average 4.58 years to the life of loans, which reduced monthly payment amounts for the borrowers.
Interest Rate Reduction(1)
Financial Effect
Three months ended September 30, 2024
Real estate - residential mortgage
Reduced weighted-average interest rate from 4.02% to 2.49%
Nine months ended September 30, 2024
Real estate - residential mortgage
Reduced weighted-average interest rate from 2.86% to 1.71%
(1) There were no loan modifications with interest rate reductions for the three months and nine months ended September 30, 2023.

During the three months and nine months ended September 30, 2024 and 2023, there were no loans modified due to financial difficulty where there was a principal balance forgiveness.








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
September 30, 2024 (dollars in thousands)
Real estate - commercial mortgage $ 20,458  $ —  $ —  $ — 
Real estate - residential mortgage 7,690  3,633  3,035  6,668 
Real estate - home equity 214  173  7  180 
Real estate - construction 605  —  —  — 
Total $ 28,967  $ 3,806  $ 3,042  $ 6,848 

There were no commitments to lend additional funds to borrowers with loan modifications as a result of financial difficulty as of September 30, 2024.


NOTE 6 – 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:
Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
  (dollars in thousands)
Amortized cost:
Balance at beginning of period $ 30,646  $ 32,458  $ 31,602  $ 34,217 
Originations of MSRs 1,058  1,083  2,523  1,967 
Amortization (1,180) (1,193) (3,601) (3,836)
Balance at end of period $ 30,524  $ 32,348  $ 30,524  $ 32,348 
Estimated fair value of MSRs at end of period $ 48,971  $ 51,523  $ 48,971  $ 51,523 

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 September 30, 2024 and December 31, 2023. Actual and expected prepayments of the underlying mortgage loans can impact the fair values of the 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 $49.0 million and $49.7 million as of September 30, 2024 and December 31, 2023, respectively. Based on its fair value analysis as of September 30, 2024, the Corporation determined that no valuation allowance was required as of September 30, 2024.


NOTE 7 – Derivative Financial Instruments

The Corporation uses derivatives to manage its exposure to certain market risks, including interest rate and foreign currency risks, and to assist customers with their risk management objectives. 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.

20

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 original unrealized loss of $70.6 million included in AOCI will be recognized as a reduction to interest income when the previously forecasted hedged item affects earnings in future periods. During the nine months ended September 30, 2024, $21.2 million of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the Corporation's consolidated statements of income.

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. For the nine months ended September 30, 2024, the increase to other non-interest income to reflect market valuation movements from the transition from LIBOR to SOFR was $0.1 million. For the year ended December 31, 2023, the full-year reduction to other non-interest income related to the transition from LIBOR to SOFR was $1.9 million.

For additional information on our derivative accounting policies see Note 1 "Summary of Significant Accounting Policies" in our Annual Report on Form 10-K for the year ended December 31, 2023.

The following table presents a summary of the notional amounts and fair values of derivative financial instruments:
  September 30, 2024 December 31, 2023
  Notional
Amount		 Asset
(Liability)
Fair Value		 Notional
Amount		 Asset
(Liability)
Fair Value
  (dollars in thousands)
Interest Rate Locks with Customers
Positive fair values $ 209,060  $ 826  $ 119,558  $ 460 
Negative fair values 662  (2) 1,015  (2)
Forward Commitments
Positive fair values —  —  —  — 
Negative fair values 54,250  (419) 42,000  (854)
Interest Rate Derivatives with Customers(1)
Positive fair values 1,510,681  43,692  824,659  22,656 
Negative fair values 3,235,818  (158,225) 3,784,236  (222,530)
Interest Rate Derivatives with Dealer Counterparties
Positive fair values 3,235,818  89,902  3,784,236  128,235 
Negative fair values 1,510,681  (44,075) 824,659  (23,023)
Interest Rate Derivatives used in Cash Flow Hedges
Positive fair values 2,500,000  2,395  2,500,000  6,189 
Negative fair values 750,000  (144) 750,000  — 
Foreign Exchange Contracts with Customers
Positive fair values 18,184  345  4,159  40 
Negative fair values 11,714  (257) 13,353  (446)
Foreign Exchange Contracts with Correspondent Banks
Positive fair values 23,531  403  15,969  532 
Negative fair values 7,236  (225) 6,112  (31)
(1) Fair Values are net of a valuation allowance of $366.3 thousand as of September 30, 2024 and December 31, 2023.










21

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)
Three months ended September 30, 2024
Interest Rate Products $ 2,247  $ 2,247  $ —  Interest Income $ (7,109) $ (7,109) $ — 
Interest Rate Products (10,811) (10,811) —  Interest Expense 1,965  1,965  — 
Total $ (8,564) $ (8,564) $ —  $ (5,144) $ (5,144) $ — 
Three months ended September 30, 2023
Interest Rate Products $ 4,691  $ 4,691  —  Interest Income $ (6,248) $ (6,248) — 
Total $ 4,691  $ 4,691  —  $ (6,248) $ (6,248) — 
Nine months ended September 30, 2024
Interest Rate Products (3,794) (3,794) —  Interest Income (21,174) (21,174) — 
Interest Rate Products 3,702  3,702  —  Interest Expense 6,015  6,015  — 
Total (92) (92) —  (15,159) (15,159) — 
Nine months ended September 30, 2023
Interest Rate Products 9,975  9,975  —  Interest Income (20,437) (20,437) — 

During the next twelve months, the Corporation estimates that an additional $20.3 million of unrecognized losses will be reclassified as a decrease to net interest income.

























22

The following table presents the effect of fair value and cash flow hedge accounting on the income statement:

Consolidated Statements of Income Classification
2024 2023
Interest Income Interest Expense Interest Income Interest Expense
(dollars in thousands)
Three months ended September 30
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 $ (7,109) $ 1,965  $ (6,248) $ — 
Interest contracts:
Amount of (loss) gain reclassified from AOCI into income (7,109) 1,965  (6,248) — 
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 (7,109) 1,965  (6,248) — 
Amount of (loss) gain reclassified from AOCI into income - excluded component —  —  —  — 
Nine months ended September 30
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 $ (21,174) $ 6,015  $ (20,437) $ — 
Interest contracts:
Amount of (loss) gain reclassified from AOCI into income (21,174) 6,015  (20,437) — 
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 (21,174) 6,015  (20,437) — 
Amount of (loss) gain reclassified from AOCI into income - excluded component —  —  —  — 

The following table presents a summary of the net fair value gains (losses) on derivative financial instruments:

Consolidated Statements of Income Classification Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
(dollars in thousands)
Mortgage banking derivatives(1)
 Mortgage banking income $ (320) $ 134  $ 801  $ 1,003 
Interest rate derivatives Other income (138) (2,958) 149  (2,958)
Foreign exchange contracts Other income 48  (57) 170  127 
Net fair value gains (losses) on derivative financial instruments $ (410) $ (2,881) $ 1,120  $ (1,828)
(1) Includes interest rate locks with customers and forward commitments.






23

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:
September 30,
2024		 December 31,
2023
  (dollars in thousands)
Amortized cost(1)
 $ 17,348  $ 14,792 
Fair value 17,678  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 $0.2 million for the three months ended September 30, 2024 compared to a nominal amount for the three months ended September 30, 2023. Losses related to changes in fair values of mortgage loans held for sale were a nominal amount for the nine months ended September 30, 2024 compared to gains of $0.1 million for the nine months ended September 30, 2023.

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:

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)
September 30, 2024
Interest rate derivative assets $ 135,989  $ (24,343) $ —  $ 111,646 
Foreign exchange derivative assets with correspondent banks 403  (403) —  — 
Total $ 136,392  $ (24,746) $ —  $ 111,646 
Interest rate derivative liabilities $ 202,444  $ (26,594) $ (67,888) $ 107,962 
Foreign exchange derivative liabilities with correspondent banks 225  (403) —  (178)
Total $ 202,669  $ (26,997) $ (67,888) $ 107,784 
December 31, 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.









24

NOTE 8 – Accumulated Other Comprehensive (Loss) Income

The following table presents the components of other comprehensive income (loss):
Before-Tax Amount Tax Effect Net of Tax Amount
(dollars in thousands)
Three months ended September 30, 2024
Net unrealized gain on securities $ 88,637  $ (20,077) $ 68,560 
Reclassification adjustment for securities net change included in net income(1)
 1  —  1 
Amortization of net unrealized gains on AFS securities transferred to HTM(1)
 1,837  (415) 1,422 
Net unrealized holding losses arising during the period on interest rate derivatives used in cash flow hedges (8,564) 1,940  (6,624)
Reclassification adjustment for net change realized in net income on interest rate derivatives used in cash flow hedges 5,144  (1,165) 3,979 
Amortization of net unrecognized pension and postretirement items(2)
 (135) 29  (106)
Total Other Comprehensive Income $ 86,920  $ (19,688) $ 67,232 
Three months ended September 30, 2023
Net unrealized losses on securities $ (135,811) $ 30,761  $ (105,050)
Reclassification adjustment for securities net change included in net income(3)
 —  —  — 
Amortization of net unrealized gains on AFS securities transferred to HTM(1)
 1,932  (438) 1,494 
Net unrealized holding gains arising during the period on interest rate derivatives used in cash flow hedges 4,691  (1,040) 3,651 
Reclassification adjustment for net change realized in net income on interest rate derivatives used in cash flow hedges 6,248  172  6,420 
Amortization of net unrecognized pension and postretirement items(2)
 18  (3) 15 
Total Other Comprehensive Loss $ (122,922) $ 29,452  $ (93,470)
Nine months ended September 30, 2024
Unrealized gain on securities $ 48,735  $ (11,039) $ 37,696 
Reclassification adjustment for securities net change included in net income(3)
 20,283  (4,594) 15,689 
Amortization of net unrealized gains on AFS securities transferred to HTM(1)
5,445  (1,233) 4,212 
Net unrealized holding losses arising during the period on interest rate derivatives used in cash flow hedges (92) 21  (71)
Reclassification adjustment for net change realized in net income on interest rate swaps used in cash flow hedges 15,158  (3,389) 11,769 
Amortization of net unrecognized pension and postretirement item(2)
 (406) 89  (317)
Total Other Comprehensive Income $ 89,123  $ (20,145) $ 68,978 
Nine months ended September 30, 2023
Unrealized losses on securities $ (133,973) $ 30,345  $ (103,628)
Reclassification adjustment for securities net change included in net income(3)
 19  (5) 14 
Amortization of net unrealized gains on AFS securities transferred to HTM(1)
 5,783  (1,310) 4,473 
Net unrealized holding gains arising during the period on interest rate derivatives used in cash flow hedges 9,975  (18,730) (8,755)
Reclassification adjustment for change realized in net income on interest rate swaps used in cash flow hedges 20,437  136  20,573 
Amortization of net unrecognized pension and postretirement items(2)
 55  (12) 43 
Total Other Comprehensive Income $ (97,704) $ 10,424  $ (87,280)
(1) Amounts reclassified out of AOCI. Before-tax amounts included as a reduction to "Interest Income" on the Consolidated Statements of Income.
(2) Amounts reclassified out of AOCI. Before-tax amounts included in "Salaries and employee benefits" on the Consolidated Statements of Income. See "Note
12 - Employee Benefit Plans," for additional details.
(3) 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.

25

The following table presents changes in each component of accumulated other comprehensive income (loss), net of tax:
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)
Three months ended September 30, 2024
Balance at June 30, 2024 $ (287,248) $ (20,440) $ (2,846) $ (310,534)
OCI before reclassifications 68,560  (6,624) —  61,936 
Amounts reclassified from AOCI 1  3,979  (106) 3,874 
Amortization of net unrealized gains on AFS securities transferred to HTM 1,422  —  —  1,422 
Balance at September 30, 2024 $ (217,265) $ (23,085) $ (2,952) $ (243,302)
Three months ended September 30, 2023
Balance at June 30, 2023 $ (311,816) $ (60,029) $ (7,441) $ (379,286)
OCI before reclassifications (105,050) 3,651  —  (101,399)
Amounts reclassified from AOCI —  6,420  15  6,435 
Amortization of net unrealized losses on AFS securities transferred to HTM 1,494  —  —  1,494 
Balance at September 30, 2023 $ (415,372) $ (49,958) $ (7,426) $ (472,756)
Nine months ended September 30, 2024
Balance at December 31, 2023 $ (274,862) $ (34,783) $ (2,635) $ (312,280)
OCI before reclassifications 37,696  (71) —  37,625 
Amounts reclassified from AOCI 15,689  11,769  (317) 27,141 
Amortization of net unrealized gains on AFS securities transferred to HTM 4,212  —  —  4,212 
Balance at September 30, 2024 $ (217,265) $ (23,085) $ (2,952) $ (243,302)
Nine months ended September 30, 2023
Balance at December 31, 2022 $ (316,231) $ (61,776) $ (7,469) $ (385,476)
OCI before reclassifications (103,628) (8,755) —  (112,383)
Amounts reclassified from AOCI 14  20,573  43  20,630 
Amortization of net unrealized losses on AFS securities transferred to HTM 4,473  —  —  4,473 
Balance at September 30, 2023 $ (415,372) $ (49,958) $ (7,426) $ (472,756)


NOTE 9 – Fair Value Measurements

FASB ASC Topic 820 establishes 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 includes 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.






26

All assets and liabilities measured at fair value on both a recurring and nonrecurring basis have been categorized into the above three levels. The following tables present assets and liabilities measured at fair value on a recurring basis and reported on the consolidated balance sheets:
  September 30, 2024
  Level 1 Level 2 Level 3 Total
  (dollars in thousands)
Loans held for sale $ —  $ 17,678  $ —  $ 17,678 
Available for sale investment securities:
State and municipal securities —  851,333  —  851,333 
Corporate debt securities —  296,580  —  296,580 
Collateralized mortgage obligations —  749,468  —  749,468 
Residential mortgage-backed securities —  895,635  —  895,635 
Commercial mortgage-backed securities —  520,280  —  520,280 
Total available for sale investment securities —  3,313,296  —  3,313,296 
Other assets:
Investments held in Rabbi Trust 35,077  —  —  35,077 
Derivative assets 748  136,815  —  137,563 
Total assets $ 35,825  $ 3,467,789  $ —  $ 3,503,614 
Other liabilities:
Deferred compensation liabilities $ 35,077  $ —  $ —  $ 35,077 
Derivative liabilities 482  202,865  —  203,347 
Total liabilities $ 35,559  $ 202,865  $ —  $ 238,424 

  December 31, 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 



27

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 September 30, 2024 and December 31, 2023 were measured at the price that secondary market investors were offering for loans with similar characteristics.

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 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 debt and senior debt issued by financial institutions ($289.4 million at September 30, 2024 and $433.4 million at December 31, 2023) and other corporate debt issued by non-financial institutions ($7.2 million at September 30, 2024 and December 31, 2023). The fair values for these 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 represent 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 are classified as Level 1 assets ($0.7 million and $0.6 million at September 30, 2024 and December 31, 2023, respectively). The mutual funds and 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 September 30, 2024 and $0.5 million at December 31, 2023) and the fair value of interest rate derivatives ($136.0 million at September 30, 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 7 - 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 ($0.5 million at September 30, 2024 and December 31, 2023).

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 ($0.4 million at September 30, 2024 and $0.9 million at December 31, 2023) and the fair value of interest rate derivatives ($202.4 million at September 30, 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.

28

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:
  September 30,
2024		 December 31,
2023
  (dollars in thousands)
Loans, net $ 150,529  $ 102,135 
OREO 2,844  896 
MSRs(1)
 48,971  49,696 
Total assets $ 202,344  $ 152,727 
(1) Amounts shown are estimated fair value. MSRs are recorded on the Corporation's consolidated balance sheets at the lower of amortized cost or fair value.
See "Note 6 - 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 September 30, 2024 valuation were 7.8% and 9.5%, respectively. Management reviews the reasonableness of the significant inputs to the third-party valuation in comparison to market data. See "Note 6 - Mortgage Servicing Rights," for additional information.
























29

The following tables detail the book values and the estimated fair values of the Corporation's financial instruments:
  September 30, 2024
Estimated Fair Value
Carrying Amount Level 1 Level 2 Level 3 Total
(dollars in thousands)
FINANCIAL ASSETS
Cash and cash equivalents $ 1,440,680  $ 1,440,680  $ —  $ —  $ 1,440,680 
FRB and FHLB stock 143,212  —  143,212  —  143,212 
Loans held for sale 17,678  —  17,678  —  17,678 
AFS securities 3,313,296  —  3,313,296  —  3,313,296 
HTM securities 1,231,982  —  1,064,304  —  1,064,304 
Loans, net 23,800,114  —  —  22,681,492  22,681,492 
Accrued interest receivable 115,903  115,903  —  —  115,903 
Other assets 705,318  537,530  136,815  51,815  726,160 
FINANCIAL LIABILITIES    
Demand and savings deposits $ 21,021,766  $ 21,021,766  $ —  $ —  $ 21,021,766 
Brokered deposits 843,473  137,879  705,871  —  843,750 
Time deposits 4,286,905  —  4,298,383  —  4,298,383 
Accrued interest payable 36,723  36,723  —  —  36,723 
Federal Home Loan Bank advances 950,000  941,539  —  —  941,539 
Senior debt and subordinated debt 535,917  —  435,761  —  435,761 
Other borrowings 566,310  565,285  1,011  —  566,296 
Other liabilities 394,068  177,160  202,865  14,188  394,213 

December 31, 2023
Estimated Fair Value
Carrying Amount Level 1 Level 2 Level 3 Total
(dollars in thousands)
FINANCIAL ASSETS
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 
Federal Home Loan Bank 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 



30

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.

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 September 30, 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 deposits discussed above.


NOTE 10 – Net Income Per Share

Basic net income per share is calculated as net income available to common shareholders divided by the weighted average number of shares outstanding.

Diluted net income per 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 stock options, 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 shares outstanding used to calculate basic and diluted net income per share follows (in thousands, except per share data):
Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
Weighted average shares outstanding (basic) 181,905  164,566  173,337  165,667 
Impact of common stock equivalents 1,704  1,457  1,696  1,514 
Weighted average shares outstanding (diluted) 183,609  166,023  175,033  167,181 
Per share:
Basic $ 0.33  $ 0.42  $ 1.23  $ 1.28 
Diluted 0.33  0.42  1.21  1.27 




31

NOTE 11 – Stock-Based Compensation

The Corporation grants equity awards to employees in the form of restricted stock, RSUs or PSUs under its Employee Equity Plan. In addition, employees may purchase stock under the Corporation's Employee Stock Purchase Plan. The fair value of equity awards granted to employees is recognized as compensation expense over the period during which employees are required to provide service in exchange for such awards.

The Corporation also grants equity awards to non-employee members of its Board of Directors and the Bank's Board of Directors under the Directors' Plan. Under the Directors' Plan, the Corporation can grant equity awards to non-employee Corporation and 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.

As of September 30, 2024, the Employee Equity Plan had approximately 3.8 million shares reserved for future grants through 2032, and the Directors' Plan had approximately 328,000 shares reserved for future grants through 2033.

The following table presents compensation expense and the related tax benefits for equity awards recognized in the consolidated statements of income:
Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
  (dollars in thousands)
Compensation expense $ 3,507  $ 3,048  $ 6,932  $ 7,288 
Tax benefit (804) (673) (1,568) (1,600)
Total stock-based compensation, net of tax $ 2,703  $ 2,375  $ 5,364  $ 5,688 


NOTE 12 – Employee Benefit Plans

The net periodic pension cost for the Pension Plan consisted of the following components:
Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
  (dollars in thousands)
Interest cost $ 790  $ 856  $ 2,369  $ 2,567 
Expected return on plan assets (976) (878) (2,927) (2,632)
Net amortization and deferral —  81  —  242 
Net periodic pension cost $ (186) $ 59  $ (558) $ 177 

The components of the net benefit for the Postretirement Plan consisted of the following components:
Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
  (dollars in thousands)
Interest cost $ 10  $ 12  $ 29  $ 38 
Net accretion and deferral (135) (137) (406) (409)
Net periodic benefit $ (125) $ (125) $ (377) $ (371)

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.

The Corporation recognizes the funded status of its Pension Plan and Postretirement Plan on the consolidated balance sheets and recognizes the change in that funded status through OCI.

32


NOTE 13 – LEASES

The Corporation has operating leases for certain financial centers, corporate offices and land.

On May 10, 2024, the Bank and Fulton Financial Realty Company, a wholly owned subsidiary of the Corporation, entered into a sale-leaseback agreement 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 12 months of the lease terms, the aggregate base rental amount for the properties will be approximately $4.4 million. 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.

The following table presents the components of lease expense, which is included in net occupancy expense on the consolidated statements of income:
Three months ended September 30 Nine months ended September 30
2024 2023 2024 2023
(dollars in thousands)
Operating lease expense $ 8,822  $ 4,755  $ 21,519  $ 14,347 
Variable lease expense 826  887  2,306  2,444 
Sublease income (300) (289) (883) (829)
Total lease expense $ 9,348  $ 5,353  $ 22,942  $ 15,962 

Supplemental consolidated balance sheet information related to leases was as follows:
Operating Leases Balance Sheet Classification September 30, 2024 December 31, 2023
(dollars in thousands)
ROU assets Other assets $ 135,747  $ 88,188 
Lease liabilities Other liabilities $ 145,349  $ 95,230 
Weighted average remaining lease term 9.21 years 6.5 years
Weighted average discount rate 5.34  % 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:
Three months ended September 30 Nine months ended September 30
2024 2023 2024 2023
(dollars in thousands)
Cash paid for amounts included in the measurement of lease liabilities $ 6,153  $ 6,354  $ 17,425  $ 16,124 
ROU assets obtained in exchange for lease obligations 11,891  10,447  64,884  19,465 







33

Lease payment obligations for each of the next five years and thereafter, with a reconciliation to the Corporation's lease liabilities were as follows as of September 30, 2024 (dollars in thousands):
Year Operating Leases
Remaining in 2024 $ 6,845 
2025 25,113 
2026 23,833 
2027 21,568 
2028 18,344 
Thereafter 95,341 
Total lease payments 191,044 
Less: imputed interest (45,695)
Present value of lease liabilities $ 145,349 

As of September 30, 2024, the Corporation had not entered into any significant leases that have not yet commenced.


NOTE 14 – 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 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 an 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:
September 30,
2024		 December 31, 2023
  (dollars in thousands)
Commitments to extend credit $ 9,050,111  $ 8,790,511 
Standby letters of credit 265,042  264,440 
Commercial letters of credit 54,661  67,396 

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.

34

The Corporation maintains a reserve for estimated losses related to loans sold to investors. As of September 30, 2024 and December 31, 2023, the total reserve for losses on residential mortgage loans sold was $1.3 million and $1.8 million, respectively, including reserves for both representation and warranty and credit loss exposures. In addition, a component of ACL - OBS credit exposures of $1.2 million and $2.7 million, as of September 30, 2024 and December 31, 2023, respectively, related to additional credit exposures 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.

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.


35

Item 2. 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 corporation incorporated under the laws of the Commonwealth of Pennsylvania, and its wholly owned subsidiaries. This Management's Discussion should be read in conjunction with the consolidated financial statements and other financial information presented in this Quarterly Report on Form 10-Q.

OVERVIEW

The Corporation is a financial holding company, which, through its wholly owned banking subsidiary, provides a full range of retail 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:
Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
(dollars in thousands, except per share data)
Net income $ 63,206 $ 72,097 $ 220,122 $ 220,017
Net income available to common shareholders 60,644 69,535 212,436 212,331
Net income available to common shareholders (diluted) 0.33 0.42 1.21 1.27
Operating net income available to common shareholders per share(1)
 0.50 0.43 1.37 1.29
Return on average assets, annualized 0.79  % 1.04  % 0.98  % 1.08  %
Operating return on average assets, annualized(1)
 1.17  % 1.08  % 1.10  % 1.10  %
Return on average common shareholders' equity, annualized 8.13  % 11.25  % 10.25  % 11.62  %
Operating return on average common shareholders' equity (tangible), annualized(1)
 15.65  % 15.17  % 14.90  % 15.39  %
Net interest margin(2)
 3.49  % 3.40  % 3.42  % 3.44  %
Efficiency ratio(1)
 59.6  % 61.5  % 61.7  % 60.0  %
Non-performing assets to total assets 0.64  % 0.52  % 0.64  % 0.52  %
Net charge-offs (recoveries) to average loans 0.18  % 0.10  % 0.18  % 0.13  %
(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.




36

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 Bank’s vision of advancing economic empowerment, particularly in underserved communities.

On July 18, 2024, the Corporation announced a plan to close 13 of the Bank's financial center offices and consolidate 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 include 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 three and nine months ended September 30, 2024, consisting of write-offs of premises and equipment and related expenses, and lease termination charges. The financial centers are expected to close on or about November 22, 2024.

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 previously announced 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.

The Corporation intends to use the net proceeds of the offering for general corporate purposes, including to support new opportunities in connection with the Republic First Transaction.

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 13 - 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.

Financial Highlights

Net Income Available to Common Shareholders and Net Income Per Share - Net income available to common shareholders was $60.6 million for the three months ended September 30, 2024, an $8.9 million decrease compared to $69.5 million for the same period in 2023. Net income available to common shareholders per diluted share was $0.33 for the three months ended September 30, 2024, a $0.09 decrease compared to the same period in 2023. Net income available to common shareholders was $212.4 million for the nine months ended September 30, 2024, a $0.1 million increase compared to $212.3 million for the same period in 2023. Net income available to common shareholders per diluted share was $1.21 for the nine months ended September 30, 2024, a $0.06 decrease compared to the same period in 2023.

Nine Months Ended September 30, 2024 Results were Impacted by the Following Items:

•Preliminary gain on acquisition of $39.7 million (net of tax).

•CDI of $92.6 million in connection with the Republic First Transaction resulting in intangible amortization expense of $9.9 million.

•Provision for credit losses of $23.4 million related to non-PCD Loans acquired in the Republic First Transaction.
37


•Acquisition-related expenses of $28.0 million.

•FultonFirst implementation and asset disposal costs of $22.1 million.

Critical Accounting Policies

The Corporation's accounting policies are fundamental to understanding Management’s Discussion. Critical policies are those 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.

The Corporation's critical accounting policies are described in Part II, "Item 7. 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, 2023.

Supplemental Reporting of Non-GAAP Based Financial Measures

This Quarterly Report on Form 10-Q 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.































38

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow:
Three months ended September 30 Nine months ended September 30
2024 2023 2024 2023
(dollars in thousands, except per share data and share data)
Operating net income available to common shareholders
Net income available to common shareholders $ 60,644 $ 69,535 $ 212,436 $ 212,331
Less: Non-PCD Loans credit-related interest income from acquisition (815) —  (1,386) — 
Less: Interest rate derivative transition valuation(1)
 138 2,958 (149) 2,958
Less: Gain on acquisition, net of tax 7,706 — (39,685) —
Plus: Loss on securities restructuring — — 20,282 —
Plus: Core deposit intangible amortization 6,155 441 11,152 1,867
Plus: Acquisition-related expense 14,195 — 27,998 —
Plus: CECL Day 1 Provision — — 23,444 —
Plus: FDIC special assessment (16) — 940 —
Less: Gain on Sale-Leaseback Transaction — — (20,266) —
Plus: FultonFirst implementation and asset disposals 9,385 — 22,065 —
Less: Tax impact of adjustments (6,099) (714) (17,657) (1,013)
Operating net income available to common shareholders (numerator) $ 91,293 $ 72,220 $ 239,174 $ 216,143
Weighted average shares (diluted) (denominator) 183,609 166,023 175,033 167,181
Operating net income available to common shareholders, per share (diluted) $ 0.50 $ 0.43 $ 1.37 $ 1.29
Operating return on average assets(2)
Net income $ 63,206 $ 72,097 $ 220,122 $ 220,017
Less: Non-PCD Loans credit-related interest income from acquisition (815) — (1,386) —
Less: Interest rate derivative transition valuation(1)
 138 2,958 (149) 2,958
Less: Gain on acquisition, net of tax 7,706 — (39,685) —
Plus: Loss on securities restructuring — — 20,282 —
Plus: Core deposit intangible amortization 6,155 441 11,152 1,867
Plus: Acquisition-related expense 14,195 — 27,998 —
Plus: CECL Day 1 Provision — — 23,444 —
Plus: FDIC special assessment (16) — 940 —
Less: Gain on Sale-Leaseback Transaction — — (20,266) —
Plus: FultonFirst implementation and asset disposals 9,385 — 22,065 —
Less: Tax impact of adjustments (6,099) (714) (17,657) (1,013)
Operating net income (numerator) $ 93,855 $ 74,782 $ 246,860 $ 223,829
Total average assets 31,895,235 27,377,836 30,117,693 27,173,100
Less: Average net core deposit intangible (89,350) (5,548) (61,362) (6,296)
     Total operating average assets (denominator) $ 31,805,885 $ 27,372,288 $ 30,056,331 $ 27,166,804
Operating return on average assets 1.17  % 1.08  % 1.10  % 1.10  %
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Three months ended September 30 Nine months ended September 30
2024 2023 2024 2023
Operating return on average common shareholders' equity (tangible)(2)
Net income available to common shareholders $ 60,644 $ 69,535 $ 212,436 $ 212,331
Less: Non-PCD Loans credit-related interest income from acquisition (815) — (1,386) —
Less: Interest rate derivative transition valuation(1)
 138 2,958 (149) 2,958
Less: Gain on acquisition, net of tax 7,706 — (39,685) —
Plus: Loss on securities restructuring — — 20,282 —
Plus: Intangible amortization 6,287 601 11,548 2,347
Plus: Acquisition-related expense 14,195 — 27,998 — 
Plus: CECL Day 1 Provision — — 23,444 —
Plus: FDIC special assessment (16) — 940 —
Less: Gain on Sale-Leaseback Transaction — — (20,266) —
Plus: FultonFirst implementation and asset disposals 9,385 — 22,065 —
Less: Tax impact of adjustments (6,127) (747) (17,740) (1,114)
Adjusted net income available to common shareholders (numerator) $ 91,397 $ 72,347 $ 239,487 $ 216,522
Average shareholders' equity 3,160,322 2,645,977 2,960,710 2,635,705
Less: Average preferred stock (192,878) (192,878) (192,878) (192,878)
Less: Average goodwill and intangible assets (644,814) (561,578) (621,194) (562,155)
Average tangible common shareholders' equity (denominator) $ 2,322,630 $ 1,891,521 $ 2,146,638 $ 1,880,672
Operating return on average common shareholders' equity (tangible) 15.65  % 15.17  % 14.90  % 15.39  %
Efficiency ratio
Non-interest expense $ 226,089 $ 171,020 $ 603,176 $ 498,656
Less: Acquisition-related expense (14,195) — (27,998) —
Less: Intangible amortization (6,287) (601) (11,548) (2,347)
Less: FDIC special assessment 16 — (940) —
Plus: Gain on Sale-Leaseback Transaction — — 20,266 —
Less: FultonFirst implementation and asset disposals (9,385) — (22,065) —
Operating non-interest expense (numerator) $ 196,238 $ 170,419 $ 560,891 $ 496,309
Net interest income $ 258,009 $ 213,842 $ 706,666 $ 642,281
Tax equivalent adjustment 4,424 4,442 13,572 13,261
Plus: Total non-interest income 59,673 55,961 209,806 168,300
Less: Interest rate derivative transition valuation(1)
 138 2,958 (149) 2,958
Less: Non-PCD Loans credit-related interest income from acquisition (815) — (1,386) —
Less: Gain on acquisition, net of tax 7,706 — (39,685) —
Plus: Investment securities losses (gains), net 1 — 20,283 (19)
Total revenue (denominator) $ 329,136 $ 277,203 $ 909,107 $ 826,781
Efficiency ratio 59.6  % 61.5  % 61.7  % 60.0  %
(1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
(2) Results are annualized.
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RESULTS OF OPERATIONS

Three months ended September 30, 2024 compared to the three months ended September 30, 2023

Net Interest Income

FTE net interest income was $262.4 million for the three months ended September 30, 2024, an increase of $44.1 million, compared to $218.3 million for the same period in 2023. For the three months ended September 30, 2024, NIM increased to 3.49%, or 9 bps, compared to the same period in 2023. The Corporation manages the risk associated with changes in interest rates through the techniques described within Part 1, "Item 3, Quantitative and Qualitative Disclosures About Market Risk" in this Quarterly Report on Form 10-Q. The following table provides a comparative average balance sheet and net interest income analysis for those periods. Interest income and yields are presented on an FTE basis, using a 21% federal tax rate, and statutory interest expense disallowances. The discussion following this table is based on these taxable-equivalent amounts.

  Three months ended September 30
  2024 2023
Average
Balance
Interest (1)
 Yield/
Rate		 Average
Balance
Interest (1)
 Yield/
Rate
ASSETS (dollars in thousands)
Interest-earning assets:
Net loans(2)
 $ 24,147,801  $ 376,160  6.20  % $ 21,121,277  $ 304,167  5.72  %
   Investment securities(3)
 4,526,885  37,853  3.34  4,197,550  27,274  2.59 
Other interest-earning assets 1,338,592  18,068  5.37  263,244  3,372  5.11 
Total interest-earning assets 30,013,278  432,081  5.74  25,582,071  334,813  5.20 
Noninterest-earning assets:
Cash and due from banks 306,427  306,496 
Premises and equipment 181,285  217,447 
Other assets 1,772,052  1,562,233 
Less: ACL - loans(4)
 (377,807) (290,411)
Total Assets $ 31,895,235  $ 27,377,836 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 7,668,583  $ 38,768  2.01  % $ 5,740,229  $ 18,690  1.29  %
Savings and money market deposits 7,663,599  49,477  2.57  6,676,792  34,277  2.04 
Brokered deposits 842,661  11,344  5.36  937,657  12,250  5.18 
Time deposits 4,107,466  45,735  4.43  2,330,206  18,939  3.22 
Total interest-bearing deposits 20,282,309  145,324  2.85  15,684,884  84,156  2.13 
Borrowings and other interest-bearing liabilities 2,229,348  24,324  4.34  2,691,087  32,373  4.74 
Total interest-bearing liabilities 22,511,657  169,648  3.00  18,375,971  116,529  2.51 
Noninterest-bearing liabilities:
Demand deposits 5,495,950  5,672,411 
Other liabilities 727,306  683,477 
Total Liabilities 28,734,913  24,731,859 
Shareholders’ equity 3,160,322  2,645,977 
Total Liabilities and Shareholders’ Equity $ 31,895,235  $ 27,377,836 
Net interest income/net interest margin (FTE) 262,433  3.49  % 218,284  3.40  %
Tax equivalent adjustment (4,424) (4,442)
Net interest income $ 258,009  $ 213,842 
(1) Presented on a FTE basis using a 21% federal tax rate and statutory interest expense disallowances.
(2) Average balance includes non-performing loans.
(3) Balances include amortized historical cost for AFS. 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.
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The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average balances (volume) and changes in yields and rates for the three months ended September 30, 2024 in comparison to the same period in 2023:
  2024 vs. 2023
Increase (Decrease) due
to change in
  Volume Yield/Rate Net
  (dollars in thousands)
FTE Interest income on:
Net loans(1)
 $ 45,403  $ 26,590  $ 71,993 
Investment securities 2,255  8,324  10,579 
Other interest-earning assets 14,515  181  14,696 
Total interest income $ 62,173  $ 35,095  $ 97,268 
Interest expense on:
Demand deposits $ 7,544  $ 12,534  $ 20,078 
Savings and money market deposits 5,512  9,688  15,200 
Brokered deposits (1,306) 400  (906)
Time deposits 17,951  8,845  26,796 
Borrowings and other interest-bearing liabilities (5,395) (2,654) (8,049)
Total interest expense $ 24,306  $ 28,813  $ 53,119 
(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 direct changes that are attributable to each component.

Compared to the third quarter of 2023, FTE total interest income for the third quarter of 2024 increased $97.3 million, or 29.1%, primarily due to an increase of $62.2 million attributable to changes in volume, of which $45.4 million related to average net loans. Also contributing to the increase in FTE total interest income was $35.1 million attributable to changes in yield, of which $26.6 million related to net loans. The yield on average interest-earning assets increased 54 bps in the third quarter of 2024 compared to the same period in 2023. Overall, the increase in FTE interest income was largely due to net loans acquired and cash received in the Republic First Transaction.

In the third quarter of 2024, interest expense increased $53.1 million compared to the third quarter of 2023, primarily driven by an increase in the rate on interest-bearing liabilities resulting in a $28.8 million increase in interest expense. The increase in interest expense attributable to rate was driven by increases in the rates on demand deposits, savings and money market deposits and time deposits. The increase in interest expense attributable to volume was primarily due to increases in average time deposits. The increase in interest expense on deposits was in part due to deposits assumed in the Republic First Transaction.

Average loans and average FTE yields, by type, are summarized in the following table:
Three months ended September 30
  2024 2023 Increase (Decrease)
  Balance Yield Balance Yield $ %
  (dollars in thousands)
Real estate – commercial mortgage $ 9,318,273  6.59  % $ 7,912,801  6.14  % $ 1,405,472  17.8  %
Commercial and industrial 4,998,051  6.97  4,611,376  6.45  386,675  8.4 
Real estate – residential mortgage 6,268,922  4.38  5,209,105  3.84  1,059,817  20.3 
Real estate – home equity 1,122,313  7.48  1,045,806  7.21  76,507  7.3 
Real estate – construction 1,437,907  7.88  1,254,577  7.00  183,330  14.6 
Consumer 682,602  6.68  761,273  6.22  (78,671) (10.3)
Leases and other loans(1)
 319,733  5.76  326,339  4.78  (6,606) (2.0)
Total loans $ 24,147,801  6.20  % $ 21,121,277  5.72  % $ 3,026,524  14.3  %
(1) Consists of equipment lease financing, overdrafts and net origination fees and costs.

42

During the third quarter of 2024, average net loans increased $3.0 billion, or 14.3%, compared to the same period in 2023. The increase in average net loans was primarily due to $2.5 billion of average net loans acquired in the Republic First Transaction. Excluding the Republic First Transaction, average net loans increased $514.4 million largely due to increases of $371.1 million and $321.0 million in average commercial mortgage loans and average residential mortgage loans, respectively, partially offset by a decrease of $111.0 million in average commercial and industrial loans.

The yield on total loans increased 48 bps to 6.20% for the third quarter of 2024, compared to 5.72% for the same period in 2023, primarily due to net loans acquired in the Republic First Transaction being accounted for at current market interest rates.

Average deposits and average interest rates, by type, are summarized in the following table:
Three months ended September 30
  2024 2023 Increase (Decrease)
  Balance Rate Balance Rate $ %
  (dollars in thousands)
Noninterest-bearing demand $ 5,495,950  —  % $ 5,672,411  —  % $ (176,461) (3.1) %
Interest-bearing demand 7,668,583  2.01  5,740,229  1.29  1,928,354  33.6 
Savings and money market deposits 7,663,599  2.57  6,676,792  2.04  986,807  14.8 
Total demand deposits and savings and money market deposits 20,828,132  1.69  18,089,432  1.16  2,738,700  15.1 
Brokered deposits 842,661  5.36  937,657  5.18  (94,996) (10.1)
Time deposits 4,107,466  4.43  2,330,206  3.22  1,777,260  76.3 
Total deposits $ 25,778,259  2.24  % $ 21,357,295  1.56  % $ 4,420,964  20.7  %

The cost of deposits increased 68 bps, to 2.24%, for the third quarter of 2024 compared to 1.56% for the same period in 2023, primarily due to an increase in rates and a change in the mix of deposits.

Average deposits increased $4.4 billion during the third quarter of 2024 compared to the same period in 2023, primarily due to $3.8 billion of average deposits assumed in the Republic First Transaction. Excluding the Republic First Transaction, average deposits increased $632.2 million largely due to increases of $1.1 billion, $377.0 million, $127.5 million in average time deposits, average savings and money market deposits, and average interest-bearing demand deposits, respectively, partially offset by decreases of $868.3 million and $128.0 million in average noninterest-bearing demand deposits and average brokered deposits, respectively.

Average borrowings and interest rates, by type, are summarized in the following table:
Three months ended September 30
  2024 2023 Increase (Decrease)
  Balance Rate Balance Rate $ %
(dollars in thousands)
Federal funds purchased $ —  —  % $ 634,163  5.52  % $ (634,163) N/M
Federal Home Loan Bank advances 754,130  4.56  793,098  5.11  (38,968) (4.9)
Senior debt and subordinated debt 535,831  3.96  540,086  3.96  (4,255) (0.8)
Other borrowings and interest-bearing liabilities(1)
 939,387  4.05  723,740  4.25  215,647  29.8 
Total borrowings and other interest-bearing liabilities $ 2,229,348  4.34  % $ 2,691,087  4.74  % $ (461,739) (17.2) %
(1) Includes repurchase agreements, short-term promissory notes, capital leases and collateral liabilities.

Average borrowings and other interest-bearing liabilities decreased $461.7 million in the third quarter of 2024 compared to the same period in 2023. The decrease in average borrowings and other interest-bearing liabilities was primarily due to decreases in average Federal funds purchased and average FHLB advances of $634.2 million and $39.0 million, respectively, partially offset by an increase in average other borrowings and interest-bearing liabilities of $215.6 million.


43

Provision for Credit Losses

The provision for credit losses was $11.9 million for the three months ended September 30, 2024, a $2.0 million increase compared to $9.9 million in the same period in 2023.

Non-Interest Income

The following table presents the components of non-interest income:
  Three months ended September 30 Increase (Decrease)
  2024 2023 $ %
  (dollars in thousands)
Wealth management $ 21,596  $ 19,413  $ 2,183  11.2  %
Commercial banking:
   Merchant and card 7,496  7,626  (130) (1.7)
   Cash management 7,201  5,960  1,241  20.8 
   Capital markets 3,311  2,960  351  11.9 
   Other commercial banking 4,281  3,176  1,105  34.8 
Total commercial banking 22,289  19,722  2,567  13.0 
Consumer banking:
  Card 7,917  6,770  1,147  16.9 
  Overdraft 3,957  2,996  961  32.1 
  Other consumer banking 3,054  2,407  647  26.9 
Total consumer banking 14,928  12,173  2,755  22.6 
Mortgage banking 3,142  3,190  (48) (1.5)
Other 5,425  1,463  3,962  270.8 
Subtotal 67,380  55,961  11,419  20.4 
Gain on acquisition, net of tax (7,706) —  (7,706) N/M
Investment securities losses, net (1) —  (1) N/M
Total Non-Interest Income $ 59,673  $ 55,961  $ 3,712  6.6  %

Compared to the three months ended September 30, 2023, non-interest income before gain on acquisition, net of tax, and investment securities (losses) increased $11.4 million, or 20.4%. The increase in non-interest income was primarily due to a $3.0 million reduction to 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 in the third quarter of 2023 and $2.6 million from acquired operations in the Republic First Transaction. Also contributing to the increase in non-interest income were increases of $2.2 million in wealth management revenues due to an increase in assets under management, $1.2 million in cash management fee income due to an increase in account analysis fees with customers electing to move funds to interest-bearing deposit accounts and $1.1 million in other commercial banking income driven by $0.5 million in gains on SBA loan sales.













44

Non-Interest Expense

The following table presents the components of non-interest expense:
  Three months ended September 30 Increase (Decrease)
  2024 2023 $ %
  (dollars in thousands)
Salaries and employee benefits $ 112,810  $ 96,757  $ 16,053  16.6  %
Data processing and software 20,314  16,914  3,400  20.1 
Net occupancy 18,999  14,561  4,438  30.5 
Other outside services 12,090  12,094  (4) — 
Intangible amortization 6,287  601  5,686  N/M
FDIC insurance 5,109  4,738  371  7.8 
Equipment 4,860  3,475  1,385  39.9 
Professional fees 2,811  1,869  942  50.4 
Marketing 2,251  1,913  338  17.7 
Other 16,978  18,098  (1,120) (6.2)
Subtotal 202,509  171,020  31,489  18.4 
Acquisition-related expenses 14,195  —  14,195  N/M
FultonFirst implementation and asset disposals 9,385  —  9,385  N/M
Total non-interest expense $ 226,089  $ 171,020  $ 55,069  32.2  %

Non-interest expense increased $55.1 million, or 32.2%, for the three months ended September 30, 2024 compared to the same period in 2023. Excluding FultonFirst implementation and asset disposal costs and acquisition-related expenses, non-interest expense increased $31.5 million, or 18.4%, for the three months ended September 30, 2024 compared to the same period in 2023. The increase in non-interest expense was primarily due to $28.7 million from the acquired operations in the Republic First Transaction and $5.2 million in salaries and benefits expense driven by annual merit increases, an increase in the number of employees and higher incentive compensation expense.

Income Taxes

The Corporation's ETR was 20.7% for the three months ended September 30, 2024. Excluding the impact from the $(7.7) million adjustment on the gain on acquisition, net of tax, the Corporation's ETR was 18.8% for the three months ended September 30, 2024 compared to 18.9% for the same period in 2023.


















45



Nine months ended September 30, 2024 compared to the nine months ended September 30, 2023

Net Interest Income

FTE net interest income increased $64.7 million to $720.2 million for the nine months ended September 30, 2024, from $655.5 million for the same period in 2023. NIM decreased 2 bps to 3.42%, compared to 3.44% for the same period in 2023. The following table provides a comparative average balance sheet and net interest income analysis for those periods. Interest income and yields are presented on an FTE basis, using a 21% federal tax rate, and statutory interest expense disallowances. The discussion following this table is based on these taxable-equivalent amounts.
  Nine months ended September 30
  2024 2023
Average
Balance
Interest(1) 
 Yield/
Rate		 Average
Balance
Interest(1)
Yield/
Rate
ASSETS (dollars in thousands)
Interest-earning assets:
Net loans(2)
 $ 22,918,845  $ 1,045,573  6.09  % $ 20,819,280  $ 854,384  5.49  %
   Investment securities(3)
 4,303,048  98,701  3.05  4,240,093  82,098  2.58 
Other interest-earning assets 921,483  37,126  5.38  427,810  11,882  3.71 
Total interest-earning assets 28,143,376  1,181,400  5.60  25,487,183  948,364  4.97 
Noninterest-earning assets:
Cash and due from banks 297,268  193,083 
Premises and equipment 202,531  219,087 
Other assets 1,828,085  1,555,891 
Less: ACL - loans(4)
 (353,567) (282,144)
Total Assets $ 30,117,693  $ 27,173,100 
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 6,785,106  $ 91,016  1.79  % $ 5,535,671  $ 41,756  1.01  %
Savings and money market deposits 7,215,631  133,175  2.47  6,593,703  84,102  1.71 
Brokered deposits 1,015,823  41,073  5.40  779,191  29,557  5.07 
Time deposits 3,583,905  114,721  4.28  2,032,360  40,160  2.64 
Total interest-bearing deposits 18,600,465  379,985  2.73  14,940,925  195,575  1.75 
Borrowings and other interest-bearing liabilities 2,425,753  81,177  4.47  2,848,704  97,247  4.53 
Total interest-bearing liabilities 21,026,218  461,162  2.93  17,789,629  292,822  2.20 
Noninterest-bearing liabilities:
Demand deposits 5,339,590  6,108,197 
Other liabilities 791,175  639,569 
Total Liabilities 27,156,983  24,537,395 
Shareholders’ equity 2,960,710  2,635,705 
Total Liabilities and Shareholders’ Equity $ 30,117,693  $ 27,173,100 
Net interest income/net interest margin (FTE) 720,238  3.42  % 655,542  3.44  %
Tax equivalent adjustment (13,572) (13,261)
Net interest income $ 706,666  $ 642,281 
(1) Presented on a FTE basis using a 21% federal tax rate and statutory interest expense disallowances.
(2) Average balance includes non-performing loans.
(3) Balances include amortized historical cost for AFS. 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.







46


The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average balances (volume) and changes in yields and rates for the nine months ended September 30, 2024 in comparison to the same period in 2023:

2024 vs. 2023
Increase (Decrease) due
to change in
Volume Yield/Rate Net
(dollars in thousands)
FTE interest income on:
Net loans (1)
 $ 91,754  $ 99,435  $ 191,189 
Investment securities 1,251  15,352  16,603 
Other interest-earning assets 18,160  7,084  25,244 
Total interest income $ 111,165  $ 121,871  $ 233,036 
Interest expense on:
Demand deposits $ 11,141  $ 38,119  $ 49,260 
Savings and money market deposits 8,591  40,482  49,073 
Brokered deposits 9,483  2,033  11,516 
Time deposits 41,109  33,452  74,561 
Borrowings and other interest-bearing liabilities (14,754) (1,316) (16,070)
Total interest expense $ 55,570  $ 112,770  $ 168,340 
(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 direct changes that are attributable to each component.

Compared to the same period in 2023, FTE total interest income for the nine months ended September 30, 2024 increased $233.0 million due to increases of $121.9 million attributable to changes in yield, of which $99.4 million was attributable to net loans, and $111.2 million attributable to changes in volume, of which $91.8 million was attributable to average net loans. The yield on average interest-earning assets increased 63 bps in the nine months ended September 30, 2024 compared to the same period in 2023. The increase in FTE interest income was largely due to net loans and cash acquired in the Republic First Transaction.

For the nine months ended September 30, 2024, interest expense increased $168.3 million compared to the same period in 2023, primarily driven by an increase in the rate on interest-bearing liabilities resulting in an $112.8 million increase in interest expense. The increase in interest expense attributable to rate was driven by increases in the rates on average savings and money market deposits, average demand deposits and average time deposits. The increase in interest expense attributable to volume was $55.6 million primarily driven by increases in average time deposits and average demand deposits. The increase in interest expense on deposits was in part due to deposits assumed in the Republic First Transaction.















47

Average loans and average FTE yields, by type, are summarized in the following table:
Nine months ended September 30
  2024 2023 Increase (Decrease)
  Balance Yield Balance Yield $ %
  (dollars in thousands)
Real estate – commercial mortgage $ 8,803,503  6.48  % $ 7,803,775  5.88  % $ 999,728  12.8  %
Commercial and industrial 4,786,976  6.82  4,602,573  6.13  184,403  4.0 
Real estate - residential mortgage 5,844,317  4.20  5,004,289  3.71  840,028  16.8 
Real estate - home equity 1,091,526  7.61  1,066,003  6.84  25,523  2.4 
Real estate – construction 1,370,134  7.92  1,278,923  6.66  91,211  7.1 
Consumer 697,204  6.31  748,788  5.82  (51,584) (6.9)
Leases and other loans (1)
 325,185  5.50  314,929  4.46  10,256  3.3 
Total loans $ 22,918,845  6.09  % $ 20,819,280  5.49  % $ 2,099,565  10.1  %
(1) Consists of equipment lease financing, overdrafts and net origination fees and costs.

During the nine months ended September 30, 2024, average net loans increased $2.1 billion, or 10.1%, compared to the same period in 2023. The increase in average net loans was primarily due to $1.4 billion of average net loans acquired in the Republic First Transaction. Excluding the Republic First Transaction, average net loans increased $690.3 million largely due to increases of $437.3 million and $430.9 million in average residential mortgage loans and average commercial mortgage loans, respectively, partially offset by decreases of $101.0 million, $56.6 million and $18.6 million in average commercial and industrial loans, average consumer loans and average home equity loans, respectively.

The yield on total loans increased 60 bps for the first nine months of 2024 primarily due to net loans acquired in the Republic First Transaction being accounted for at current market interest rates.

Average deposits and average interest rates, by type, are summarized in the following table:
Nine months ended September 30
2024 2023 Increase (Decrease)
Balance Rate Balance Rate $ %
(dollars in thousands)
Noninterest-bearing demand $ 5,339,590  —  % $ 6,108,197  —  % $ (768,607) (12.6) %
Interest-bearing demand 6,785,106  1.79  5,535,671  1.01  1,249,435  22.6 
Savings and money market deposits 7,215,631  2.47  6,593,703  1.71  621,928  9.4 
Total demand deposits and savings and money market deposits 19,340,327  1.55  18,237,571  0.92  1,102,756  6.0 
Brokered deposits 1,015,823  5.40  779,191  5.07  236,632  30.4 
Time deposits 3,583,905  4.28  2,032,360  2.64  1,551,545  76.3 
Total deposits $ 23,940,055  2.12  % $ 21,049,122  1.24  % $ 2,890,933  13.7  %

The cost of total deposits increased 88 bps to 2.12% for the first nine months of 2024 compared to 1.24% for the same period of 2023, primarily due to higher interest rates and a change in the mix of deposits.

Average deposits increased $2.9 billion largely due to $2.2 billion of average deposits assumed in the Republic First Transaction. Excluding the Republic First Transaction, average deposits increased $694.5 million largely due to increases of $1.2 billion, $270.0 million, $216.2 million and $195.4 million in average time deposits, average savings and money market deposits, average brokered deposits and average interest-bearing demand deposits, respectively, partially offset by a decrease of $1.2 billion in noninterest-bearing demand deposits.




48

Average borrowings and interest rates, by type, are summarized in the following table:
Nine months ended September 30
  2024 2023 Increase (Decrease)
  Balance Rate Balance Rate $ %
(dollars in thousands)
Federal funds purchased $ 68,515  5.54  % $ 606,708  5.24  % $ (538,193) (88.7)
Federal Home Loan Bank advances 829,971  4.69  976,783  5.11  (146,812) (15.0)
Senior debt and subordinated debt 535,656  3.96  539,907  3.96  (4,251) (0.8)
Other borrowings and interest-bearing liabilities(1)
 991,611  4.11  725,306  3.59  266,305  36.7 
Total borrowings and other interest-bearing liabilities $ 2,425,753  4.47  % $ 2,848,704  4.53  % $ (422,951) (14.8) %
(1) Includes repurchase agreements, short-term promissory notes and capital leases.

Average borrowings and other interest-bearing liabilities decreased $423.0 million during the first nine months of 2024 compared to the same period in 2023. The decrease in average borrowings and other interest-bearing liabilities was primarily due to decreases in average Federal funds purchased and average FHLB advances of $538.2 million and $146.8 million, respectively, partially offset by an increase in average other borrowings and interest-bearing liabilities of $266.3 million.

Provision for Credit Losses

The provision for credit losses was $54.9 million for the nine months ended September 30, 2023, compared to $44.2 million for the same period 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 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.































49

Non-Interest Income

The following table presents the components of non-interest income:
  Nine months ended September 30 Increase (Decrease)
  2024 2023 $ %
  (dollars in thousands)
Wealth management $ 62,741  $ 56,152  $ 6,589  11.7  %
Commercial banking:
   Merchant and card 22,103  22,160  (57) (0.3)
   Cash management 20,473  17,310  3,163  18.3 
   Capital markets 8,236  11,396  (3,160) (27.7)
   Other commercial banking 11,716  9,514  2,202  23.1 
Total commercial banking 62,528  60,380  2,148  3.6 
Consumer banking:
  Card 22,850  19,604  3,246  16.6 
  Overdraft 10,120  8,425  1,695  20.1 
  Other consumer banking 8,226  7,081  1,145  16.2 
       Total consumer banking 41,196  35,110  6,086  17.3 
Mortgage banking 10,183  8,100  2,083  25.7 
Other 13,756  8,539  5,217  61.1 
Subtotal 190,404  168,281  22,123  13.1 
Gain on acquisition, net of tax 39,685  —  39,685  N/M
Investment securities (losses) gains, net (20,283) 19  (20,302) N/M
Total Non-Interest Income $ 209,806  $ 168,300  $ 41,506  24.7  %

Non-interest income before investment securities gains (losses) and gain on acquisition, net of tax, increased $22.1 million or 13.1%, during the nine months ended September 30, 2024 compared to the same period in 2023. The increase in non-interest income was partially due to $5.4 million from acquired operations in the Republic First Transaction. The remaining increase of $16.7 million included a $6.6 million increase in wealth management revenues due to an increase in assets under management, a $3.2 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 $3.0 million reduction to 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 in the third quarter of 2023, a $2.1 million increase in mortgage banking income primarily due to higher loan sale volumes and a $1.5 million increase in income from bank owned life insurance.

In May 2024, the Corporation sold $345.7 million of available for sale 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.















50

Non-Interest Expense

The following table presents the components of non-interest expense:
Nine months ended September 30 Increase (Decrease)
2024 2023 $ %
(dollars in thousands)
Salaries and employee benefits $ 317,496  $ 280,142  $ 37,354  13.3  %
Data processing and software 58,332  49,486  8,846  17.9 
Net occupancy 52,942  43,373  9,569  22.1 
Other outside services 34,672  33,054  1,618  4.9 
FDIC insurance 17,909  14,427  3,482  24.1 
Equipment 13,461  10,395  3,066  29.5 
Intangible amortization 11,548  2,347  9,201  N/M
Professional fees 7,470  6,090  1,380  22.7 
Marketing 6,263  5,454  809  14.8 
Other 53,286  53,888  (602) (1.1)
Subtotal 573,379  498,656  74,723  15.0 
Gain on Sale-Leaseback Transaction (20,266) —  (20,266) N/M
Acquisition-related expenses 27,998  —  27,998  N/M
FultonFirst implementation and asset disposals 22,065  —  22,065  N/M
Total non-interest expense $ 603,176  $ 498,656  $ 104,520  21.0  %

Non-interest expense increased $104.5 million, or 21.0%, for the nine months ended September 30, 2024 compared to the same period in 2023. Excluding the gain on the Sale-Leaseback Transaction, acquisition-related expenses and FultonFirst implementation and asset disposal costs, non-interest expense increased $74.7 million, or 15.0%, for the nine months ended September 30, 2024 compared to the same period in 2023. The increase in non-interest expense was largely due to $49.4 million from acquired operations in the Republic First Transaction and $25.8 million in salaries and benefits expense driven by annual merit increases, an increase in the number of employees, higher incentive compensation expense and lower deferred costs from loan origination activities.

Income Taxes

The Corporation's ETR was 14.8% for the nine months ended September 30, 2024. Excluding the impact from the $39.7 million gain on acquisition, net of tax, the Corporation's ETR was 17.5% for the nine months ended September 30, 2024 compared to 17.8% for the same period in 2023.


















51



FINANCIAL CONDITION

The table below presents condensed consolidated ending balance sheets:
September 30,
2024		 December 31,
2023		 Increase (Decrease)
  $ %
Assets (dollars in thousands)
Cash and cash equivalents $ 1,440,680  $ 549,710  $ 890,970  N/M
FRB and FHLB Stock 143,212  124,405  18,807  15.1 
Loans held for sale 17,678  15,158  2,520  16.6 
Investment securities 4,545,278  3,666,274  879,004  24.0 
Net loans, less ACL - loans 23,800,114  21,057,690  2,742,424  13.0 
Net premises and equipment 171,731  222,881  (51,150) (22.9)
Goodwill and intangibles 641,739  560,687  81,052  14.5 
Other assets 1,425,294  1,375,110  50,184  3.6 
Total Assets $ 32,185,726  $ 27,571,915  $ 4,613,811  16.7  %
Liabilities and Shareholders' Equity
Deposits $ 26,152,144  $ 21,537,623  $ 4,614,521  21.4  %
Borrowings 2,052,227  2,487,526  (435,299) (17.5)
Other liabilities 777,412  786,627  (9,215) (1.2)
Total Liabilities 28,981,783  24,811,776  4,170,007  16.8 
Total Shareholders' Equity 3,203,943  2,760,139  443,804  16.1 
Total Liabilities and Shareholders' Equity $ 32,185,726  $ 27,571,915  $ 4,613,811  16.7  %

Investment Securities

The following table presents the carrying amount of investment securities:
September 30,
2024		 December 31,
2023		 Increase (Decrease)
  $ %
Available for Sale (dollars in thousands)
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 851,333  1,072,013  (220,680) (20.6)
Corporate debt securities 296,580  440,551  (143,971) (32.7)
Collateralized mortgage obligations 749,468  111,434  638,034  N/M
Residential mortgage-backed securities 895,635  196,795  698,840  N/M
Commercial mortgage-backed securities 520,280  534,388  (14,108) (2.6)
   Total available for sale securities 3,313,296  2,398,352  914,944  38.1 
Held to Maturity
Residential mortgage-backed securities 373,313  407,075  (33,762) (8.3)
Commercial mortgage-backed securities 858,669  860,847  (2,178) (0.3)
Total held to maturity securities 1,231,982  1,267,922  (35,940) (2.8)
Total Investment Securities $ 4,545,278  $ 3,666,274  $ 879,004  24.0  %

Compared to December 31, 2023, total AFS securities at September 30, 2024 increased $914.9 million, or 38.1%. The increase in AFS securities at September 30, 2024 compared to December 31, 2023 was primarily due to increases in residential mortgage-backed securities and collateralized mortgage obligations of $698.8 million and $638.0 million, respectively, partially offset by decreases in state and municipal securities and corporate debt securities of $220.7 million and $144.0 million, respectively.
52


At September 30, 2024, total HTM securities decreased $35.9 million compared to December 31, 2023, primarily driven by a decrease of $33.8 million in residential mortgage-backed securities due to payments.

Loans

The following table presents ending net loans outstanding by type:
September 30,
2024		 December 31,
2023		 Increase (Decrease)
$ %
(dollars in thousands)
Real estate - commercial mortgage $ 9,493,479  $ 8,127,728  $ 1,365,751  16.8%
Commercial and industrial(1)
 4,914,734  4,545,552  369,182  8.1%
Real estate - residential mortgage 6,302,624  5,325,923  976,701  18.3%
Real estate - home equity 1,144,402  1,047,184  97,218  9.3%
Real estate - construction 1,332,954  1,239,075  93,879  7.6%
Consumer 651,717  729,318  (77,601) (10.6)%
Leases and other loans(2)
 336,165  336,314  (149) —%
Net loans $ 24,176,075  $ 21,351,094  $ 2,824,981  13.2%
(1) Includes unearned income of $2.0 thousand for September 30, 2024 and $41.0 thousand for December 31, 2023.
(2) Includes unearned income of $34.8 million for September 30, 2024 and $38.0 million for December 31, 2023.

During the nine months ended September 30, 2024, net loans increased $2.8 billion, or 13.2%, compared to December 31, 2023. The increase in net loans during the first nine months of 2024 was primarily due to net loans acquired in the Republic First Transaction of $2.5 billion based on preliminary fair values as of the Acquisition Date. Excluding net loans acquired in the Republic First Transaction, net loans increased $340.1 million, or 1.6%, largely due to increases of $341.7 million and $241.5 million in commercial mortgage loans and residential mortgage loans, respectively, partially offset by decreases of $116.0 million, $94.7 million and $61.5 million in commercial and industrial loans, consumer loans and construction loans, respectively.

The Corporation does not have a significant concentration of credit risk with any single borrower. As of September 30, 2024, approximately $10.8 billion, or 44.8%, 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. Recently, 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.










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The following table summarizes the industry concentrations within the commercial mortgage and the commercial and industrial loan portfolios:
September 30, 2024 December 31, 2023
Real estate(1)
 43.2  % 46.6  %
Health care 6.4  6.6 
Retail 5.9  3.3 
Manufacturing 5.5  6.1 
Other services 5.1  4.5 
Agriculture 5.0  5.6 
Hospitality and food services 4.2  3.6 
Construction(2)
 3.9  4.1 
Wholesale trade 2.8  3.2 
Educational services 2.8  2.9 
Professional, scientific and technical services 2.2  2.2 
Arts, entertainment and recreation 2.2  1.9 
Transportation and warehousing 1.7  1.7 
Finance and Insurance 1.4  1.3 
Public administration 1.2  1.0 
Administrative and Support 0.8  1.1 
Other 5.7  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 44.1% owner occupied commercial mortgage loans and 55.9% of non-owner occupied commercial mortgage loans as of September 30, 2024. The following table summarizes the non-owner occupied commercial mortgage loan portfolio and the percent to total net loans.

September 30, 2024 December 31, 2023
$ % $ %
(dollars in thousands)
Multi-family $ 1,552,414  6.4  % $ 1,147,612  5.4  %
Retail trade 1,125,050  4.7  893,029  4.2 
Industrial 867,990  3.6  634,533  3.0 
Office 768,234  3.2  640,403  3.0 
Hospitality and food services 483,555  2.0  453,305  2.1 
Other 505,524  2.1  498,122  2.3 
Total non-owner occupied commercial mortgage loans $ 5,302,767  21.9  % $ 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:

September 30, 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)
 $ 338,402  $ 373,611  62  % $ 241,596  $ 247,395  56  %
New York(3)
 94,905  100,049  63  60,149  62,565  71 
Washington, D.C.(4)
 88,438  88,438  55  97,270  97,847  56 
Baltimore (5)
 76,121  77,195  46  82,573  82,577  51 
Other 170,368  179,695  61  158,815  161,533  61 
Total office non-owner occupied commercial real estate $ 768,234  $ 818,988  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 non-owner occupied commercial mortgage office loan portfolio table above excludes commercial construction loans secured by office property collateral with a total outstanding balance of $50.7 million and outstanding loan commitment of $57.4 million as of September 30, 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:
September 30, 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)
 $ 782,045  $ 815,217  57  % $ 467,749  $ 480,942  57  %
New York(3)
 121,658  127,993  62  53,153  53,642  72 
Baltimore(4)
 71,981  72,887  56  54,675  54,879  56 
Washington, D.C.(5)
 28,287  31,581  48  87,020  92,483  51 
Lancaster, PA 142,164  151,283  72  159,691  169,437  66 
Other 406,279  466,422  59  325,324  361,693  65 
Total multi-family non-owner occupied commercial real estate $ 1,552,414  $ 1,665,383  59  % $ 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) Baltimore-Columbia-Towson, MD
(5) Washington-Arlington-Alexandria, DC-VA-MD-WV

The non-owner occupied commercial mortgage multi-family loan table above excludes commercial construction loans secured by multi-family property collateral with a total outstanding loan balance of $373.2 million and outstanding loan commitment of $732.5 million as of September 30, 2024.






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The following table presents the changes in non-accrual loans for the three months and nine months ended September 30, 2024:

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 June 30, 2024 $ 57,274  $ 46,192  $ 1,226  $ 24,463  $ 6,522  $ 9,953  $ 145,630 
Additions 18,740  33,634  —  3,570  4,660  726  61,330 
Payments (6,054) (7,584) (15) (2,116) (578) (119) (16,466)
Charge-offs (6,256) (2,723) —  (1,131) (2,308) (726) (13,144)
Transfers to accrual status —  —  —  —  (40) —  (40)
Transfers to OREO (90) (133) (871) (355) —  —  (1,449)
Balance at September 30, 2024 $ 63,614  $ 69,386  $ 340  $ 24,431  $ 8,256  $ 9,834  $ 175,861 
Nine months ended September 30, 2024
Balance at December 31, 2023 $ 39,952  $ 44,805  $ 1,341  $ 20,824  $ 4,805  $ 9,893  $ 121,620 
Additions 74,102  57,950  —  9,544  11,406  3,638  156,640 
Payments (25,504) (22,454) (130) (4,281) (1,275) (768) (54,412)
Charge-offs (16,843) (10,602) —  (1,417) (6,312) (2,929) (38,103)
Transfers to accrual status (8,003) (180) —  (142) (178) —  (8,503)
Transfers to OREO (90) (133) (871) (97) (190) —  (1,381)
Balance at September 30, 2024 $ 63,614  $ 69,386  $ 340  $ 24,431  $ 8,256  $ 9,834  $ 175,861 

During the nine months ended September 30, 2024, non-accrual loans increased by approximately $54.2 million, or 44.6%, largely due to additions to non-accrual loans acquired in the Republic First Transaction of $25.6 million. During the nine months ended September 30, 2024, non-accrual loans as a percentage of total net loans increased to 0.73%, compared to 0.57% as of December 31, 2023.

The following table summarizes non-performing assets as of the periods shown below:
September 30, 2024 December 31, 2023
  (dollars in thousands)
Non-accrual loans $ 175,861 $ 121,620
Loans 90 days or more past due and still accruing 26,286 31,721
Total non-performing loans 202,147 153,341
OREO(1)
 2,844 896
Total non-performing assets $ 204,991 $ 154,237
Non-accrual loans to total loans 0.73  % 0.57  %
Non-performing loans to total loans 0.84  % 0.72  %
Non-performing assets to total assets 0.64  % 0.56  %
ACL - loans to non-performing loans 186  % 191  %
(1) Excludes $15.1 million and $10.9 million of residential mortgage properties for which formal foreclosure proceedings were in process as of September 30, 2024 and December 31, 2023, respectively.

Non-performing loans at September 30, 2024 increased $48.8 million, or 31.8%, compared to $153.3 million as of December 31, 2023. The increase in non-performing loans during the first nine months of 2024 was primarily due to additions to non-performing loans from the Republic First Transaction of $26.6 million. Non-performing loans as a percentage of total net loans were 0.84% and 0.72% at September 30, 2024 and December 31, 2023, respectively. See "Note 5 - Loans and Allowance for Credit Losses," in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details on non-performing loans.
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The ability to identify potential problem loans in a timely manner is important to maintaining an adequate ACL. For commercial and industrial loans, commercial mortgages and commercial 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.

Total internally risk-rated loans were $15.5 billion and $13.7 billion as of September 30, 2024 and December 31, 2023, respectively, of which $2.1 billion and $0.9 billion were criticized and classified, respectively. For a description of the Corporation's risk ratings, see "Note 1 - Summary of Significant Accounting Policies - Allowance for Credit Losses" in the Notes to Consolidated Financial Statements in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023.

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
September 30,
2024		 December 31, 2023 $ % September 30, 2024 December 31, 2023 $ % September 30, 2024 December 31, 2023
(dollars in thousands)
Real estate - commercial mortgage $ 735,850 $ 302,553 $ 433,297  143.2% $ 415,650 $ 224,774 $ 190,876  84.9  % $ 1,151,500 $ 527,327
Commercial and industrial 425,173 135,837 289,336  213.0 326,072 196,500 129,572  65.9 751,245 332,337
Real estate -construction(3)
174,063 38,520 135,543  351.9 42,428 26,771 15,657  58.5 216,491 65,291
Total $ 1,335,086 $ 476,910 $ 858,176 179.9% $ 784,150 $ 448,045 $ 336,105 75.0% $ 2,119,236 $ 924,955
% of total risk rated loans 8.6  % 3.5  % 5.0  % 3.3  % 13.6  % 6.8  %

(1) Considered "criticized" loans by banking regulators.
(2) Considered "classified" loans by banking regulators.
(3) Excludes construction - other.

The increase of $858.2 million in special mention loans as of September 30, 2024 was primarily due to loans acquired in the Republic First Transaction with a balance of $721.0 million as of September 30, 2024. The increase of $336.1 million in substandard or lower loans as of September 30, 2024 was primarily due to loans acquired in the Republic First Transaction with a balance of $171.7 million as of September 30, 2024.

The Corporation accounts for the credit risk associated with lending activities through the ACL and the provision for credit losses.















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The following table presents the activity in the ACL:
  Three months ended September 30 Nine months ended September 30
  2024 2023 2024 2023
  (dollars in thousands)
Average balance of net loans $ 24,147,801 $ 21,121,277 $ 22,918,845 $ 20,819,280
Balance of ACL at beginning of period $ 375,941 $ 287,442 $ 293,404 $ 269,366
CECL Day 1 Provision(1)
 — — 23,444 —
Initial PCD allowance for credit losses (1,139) — 54,767 —
Loans charged off:
Real estate - commercial mortgage (2,723) (860) (10,602) (14,452)
Commercial and industrial (6,256) (3,220) (16,843) (5,849)
Real estate - residential mortgage (1,131) — (1,417) (62)
Consumer and real estate - home equity (2,308) (1,803) (6,312) (5,322)
Real estate - construction — — — —
Leases and other loans (726) (1,396) (2,929) (3,284)
Total loans charged off (13,144) (7,279) (38,103) (28,969)
Recoveries of loans previously charged off:
Real estate - commercial mortgage 107 101 405 916
Commercial and industrial 1,008 620 3,052 2,694
Real estate - residential mortgage 130 37 368 143
Consumer and real estate - home equity 545 1,023 2,382 2,643
Real estate - construction 103 — 336 771
Leases and other loans 129 400 538 729
Total recoveries 2,022 2,181 7,081 7,896
Net loans charged off (recoveries) (11,122) (5,098) (31,022) (21,073)
Provision for credit losses(1)(2)
 12,281 10,395 35,368 44,446
Balance of ACL at end of period $ 375,961 $ 292,739 $ 375,961 $ 292,739
Provision for OBS credit exposures(1)
 $ (352) $ (458) $ (3,902) $ (218)
Reserve for OBS credit exposures(3)
 $ 14,188 $ 16,110 $ 14,188 $ 16,110
Net charge-offs to average loans (annualized) 0.18  % 0.10  % 0.18  % 0.13  %
(1) These amounts are reflected in the provision for credit losses in the Consolidated Statements of Income.
(2) Provision included in the table only includes the portion related to Net loans.
(3) Reserve for OBS credit exposures is recorded with other liabilities on the consolidated balance sheets.

The provision for credit losses, specific to loans, for the three months ended September 30, 2024 was $12.3 million compared to a provision of $10.4 million recorded for the same period in 2023. The provision for credit losses, specific to loans, for the nine months ended September 30, 2024 was $35.4 million compared to a provision of $44.4 million recorded for the same period in 2023. For the nine months ended September 30, 2024, a provision for credit losses of $23.4 million was recorded for non-PCD Loans acquired in the Republic First Transaction. Additionally, included in the ACL as of September 30, 2024 was $54.8 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," in the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details on the provision for credit losses.




58

The following table summarizes the allocation of the ACL - loans:
September 30, 2024 December 31, 2023
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 $ 143,294  38.1  % 39.3  % $ 112,565  38.4  % 38.1  %
Commercial and industrial 101,364  27.0  20.3  74,266  25.3  21.3 
Real estate - residential mortgage 90,327  24.0  26.1  73,286  25.0  24.9 
Consumer, home equity and leases and other loans 19,979  5.3  8.8  20,992  7.1  9.9 
Real estate - construction 20,997  5.6  5.5  12,295  4.2  5.8 
Total ACL - loans $ 375,961  100.0  % 100.0  % $ 293,404  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.

Deposits and Borrowings

The following table presents ending deposits by type:
September 30,
2024		 December 31,
2023		 Increase (Decrease)
$ %
(dollars in thousands)
Noninterest-bearing demand $ 5,501,699  $ 5,314,094  $ 187,605  3.5  %
Interest-bearing demand 7,779,472  5,722,695  2,056,777  35.9 
Savings and money market deposits 7,740,595  6,616,901  1,123,694  17.0 
Total demand and savings 21,021,766  17,653,690  3,368,076  19.1 
Brokered deposits 843,473  1,144,692  (301,219) (26.3)
Time deposits 4,286,905  2,739,241  1,547,664  56.5 
Total deposits $ 26,152,144  $ 21,537,623  $ 4,614,521  21.4  %

During the nine months ended September 30, 2024, total deposits increased by $4.6 billion, or 21.4%, compared to December 31, 2023. The increase in total deposits was largely due to $3.9 billion of deposits assumed in the Republic First Transaction. Excluding the Republic First Transaction, total deposits increased approximately $750.8 million largely due to increases of $898.2 million, $506.4 million and $185.8 million in time deposits, savings and money market deposits and interest-bearing demand deposits, respectively, partially offset by decreases of $505.9 million and $333.8 million in noninterest-bearing demand deposits and brokered deposits, respectively.

Total uninsured deposits were estimated to be $9.5 billion and $7.2 billion at September 30, 2024 and December 31, 2023, respectively.

Time deposits of $250 thousand or more were $1.1 billion and $551.2 million at September 30, 2024 and December 31, 2023, respectively.












59

The following table presents ending borrowings by type:
  September 30,
2024		 December 31,
2023		 Increase (Decrease)
  $ %
  (dollars in thousands)
Federal funds purchased $ —  $ 240,000  $ (240,000) N/M
Federal Home Loan Bank advances 950,000  1,100,000  (150,000) (13.6)
Senior debt and subordinated debt 535,917  535,384  533  0.1 
Other borrowings(1)
 566,310  612,142  (45,832) (7.5)
Total borrowings $ 2,052,227  $ 2,487,526  $ (435,299) (17.5) %
(1) Includes repurchase agreements, short-term promissory notes and capital leases.

During the nine months ended September 30, 2024, total borrowings decreased $435.3 million, or 17.5%, compared to December 31, 2023. The decrease in total borrowings during the nine months ended September 30, 2024 was due to decreases in Federal funds purchased, FHLB advances and other borrowings of $240.0 million, $150.0 million and $45.8 million, respectively.

Shareholders' Equity

On December 19, 2023, the Corporation announced that its Board of Directors approved the 2024 Repurchase Program. The 2024 Repurchase Program will expire on December 31, 2024. Under the 2024 Repurchase Program, the Corporation is authorized to repurchase up to $125.0 million of shares of its common stock through December 31, 2024. Under this authorization, up to $25.0 million of the $125 million authorization may be used to repurchase shares of the Corporation's preferred stock and outstanding subordinated notes.

During the nine months ended September 30, 2024, 1,934,297 shares were repurchased under the 2024 Repurchase Program at a total cost of $30.3 million, or $15.69 per share. No shares were repurchased during the third quarter of 2024.

On May 1, 2024, the Corporation completed its previously announced 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.

The Corporation intends to use the net proceeds of the offering for general corporate purposes, including to support new opportunities in connection with the Republic First Transaction.

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.

60

As of September 30, 2024, the Corporation's capital levels met the minimum capital requirements, including the capital conservation buffers, as prescribed in the Capital Rules.

As of September 30, 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 since September 30, 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:
September 30,
2024		 December 31, 2023 Regulatory
Minimum
for Capital
Adequacy		 With Capital Conservation Buffer
Total Risk-Based Capital (to Risk-Weighted Assets) 14.0  % 14.0  % 8.0  % 10.5  %
Tier I Risk-Based Capital (to Risk-Weighted Assets) 11.3  % 11.2  % 6.0  % 8.5  %
Common Equity Tier I (to Risk-Weighted Assets) 10.5  % 10.3  % 4.5  % 7.0  %
Tier I Leverage Capital (to Average Assets) 9.0  % 9.5  % 4.0  % 4.0  %

Item 3. 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 the 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.
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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 September 30, 2024:
Rate Ramp(1)
 Annual change
in net interest income		 % change in net interest income
+400 bp + $28.7 million +2.6%
+300 bp + $23.4 million +2.1%
+200 bp + $17.5 million +1.6%
+100 bp + $10.7 million +1.0%
–100 bp - $14.1 million -1.3%
–200 bp - $28.2 million -2.5%
–300 bp - $41.6 million -3.7%
–400 bp - $53.1 million -4.8%
(1) These results include the effect of implicit and explicit interest rate floors that limit further reduction in interest rates.

The following table summarizes the expected impact of abrupt interest rate changes, that is, a non-parallel instantaneous shock, on net interest income as of September 30, 2024:
Rate Shock(1)
 Annual change
in net interest income		 % change in net interest income
+400 bp + $51.5 million +4.6%
+300 bp + $41.3 million +3.7%
+200 bp + $31.4 million +2.8%
+100 bp + $22.4 million +2.0%
–100 bp - $32.8 million -3.0%
–200 bp - $62.4 million -5.6%
–300 bp - $88.9 million -8.0%
–400 bp - $114.3 million -10.3%
(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 September 30, 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, with changes in fair value during the period recorded in other non-interest expense on the consolidated statements of income.






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Cash Flow Hedges

The Corporation's objectives in using interest rate derivatives are to reduce volatility in 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.

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 as interest payments are made on the Corporation's variable-rate liabilities.

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 a reduction to interest income when the previously forecasted hedged item affects earnings in future periods. During the nine months ended September 30, 2024, $21.2 million of these unrealized losses have been reclassified as a reduction of interest income on loans, including fees, on the consolidated statements of income.

In October 2024, the Corporation terminated a pay fixed, receive floating interest rate derivative designated as a cash flow hedge with a notional amount of $250.0 million. As the hedged transaction continues to be probable, the unrealized loss of $1.2 million included in AOCI will be recognized as an increase to interest expense when the previously forecasted hedged item affects earnings in future periods.

Additionally, 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 September 30, 2024, the Bank had total borrowing capacity of approximately $10.7 billion with $5.0 billion of advances and letters of credit outstanding, for a remaining available borrowing capacity of approximately $5.7 billion under these facilities. Advances from the FHLB are secured by qualifying commercial real estate and residential mortgage loans, investments and other assets.

As of September 30, 2024, the Corporation had aggregate federal funds lines borrowing capacity of $2.6 billion with no amounts outstanding against that amount. As of September 30, 2024, the Corporation had $1.5 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 $0.6 billion at September 30, 2024 and $0.4 billion at December 31, 2023 were pledged as collateral to secure public and trust deposits.

Liquidity must also be managed at the Corporation's 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.
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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 the nine months ended September 30, 2024 provided $288.7 million of cash. Cash provided by investing activities was $1.8 billion and was mainly due to the sale of AFS securities and net cash received in the Republic First Transaction. Cash used by financing activities was $1.2 billion primarily due to the repayment of borrowings.

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 September 30, 2024, the Corporation owned securities issued by various states and municipalities with a total fair value of $0.9 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 September 30, 2024, approximately 100% of state and municipal securities were supported by the general obligation of corresponding states or municipalities. Approximately 73% of these securities were school district issuances, which are also supported by the states of the issuing municipalities.


Item 4. Controls and Procedures

Evaluation of 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 the design and operation of the Corporation's disclosure controls and procedures pursuant to Rule 13a-15, promulgated under the Exchange Act. Based upon that evaluation, the Corporation's Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 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 Corporation reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

Changes in Internal Control Over Financial Reporting

We review our internal controls over financial reporting on a regular basis and make changes intended to ensure the quality of our financial reporting. During the second quarter of 2024, as the result of the Republic First Transaction, we commenced the evaluation of the applicable controls, and designed and implemented new controls as needed. The evaluation of the changes to processes, information technology systems and other components of internal control over financial reporting related to the Republic First Transaction is ongoing. Otherwise, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.





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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The information presented in the "Legal Proceedings" section of Note 14 "Commitments and Contingencies" in the Notes to Consolidated Financial Statements in this Quarterly Report on From 10-Q is incorporated herein by reference.


Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023 and Part II, Item 1A. Risk Factors of the Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)  None.
(b)  None.
(c) On December 19, 2023, the Corporation announced that its Board of Directors approved the 2024 Repurchase Program. The 2024 Repurchase Program will expire on December 31, 2024. Under the 2024 Repurchase Program, the Corporation is authorized to repurchase up to $125.0 million of shares of its common stock through December 31, 2024. Under this authorization, up to $25.0 million of the $125 million authorization may be used to repurchase shares of the Corporation's preferred stock and outstanding subordinated notes.

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 2024 Repurchase Program in open market or privately negotiated transactions, including without limitation, through accelerated share repurchase transactions. The 2024 Repurchase Program may be discontinued at any time.

During the three months ended September 30, 2024, no shares were repurchased under the 2024 Repurchase Program.


Item 5. Other Information

(c) 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 September 30, 2024.

On September 6, 2024, Curtis J. Myers, Chairman of the Board and Chief Executive Officer of the Corporation, adopted a Rule 10b5-1 trading arrangement for the sale of 24,192 shares of the Corporation's common stock. The trading arrangement will expire on March 14, 2025, unless terminated sooner in accordance with its terms.



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Item 6. Exhibits
2.1 
3.1 
3.2 
3.3 
4.1 
4.2 
4.3 
4.4 
31.1 
31.2 
32.1 
32.2 
101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Unaudited Consolidated Balance Sheets, (ii) Unaudited Consolidated Statements of Income, (iii) Unaudited Consolidated Statements of Comprehensive Income, (iv) Unaudited 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)
66

FULTON FINANCIAL CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements 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
Date: November 8, 2024 /s/ Curtis J. Myers
Curtis J. Myers
Chairman and Chief Executive Officer
Date: November 8, 2024 /s/ Richard S. Kraemer
Richard S. Kraemer
Senior Executive Vice President and Chief Financial Officer

67
EX-31.1 2 fult093024-exhibit311.htm EX-31.1 Document

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 quarterly report on Form 10-Q 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: November 8, 2024
/s/ Curtis J. Myers
     Curtis J. Myers
     Chairman and Chief Executive Officer



EX-31.2 3 fult093024-exhibit312.htm EX-31.2 Document

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 quarterly report on Form 10-Q 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: November 8, 2024
/s/ Richard Kraemer
Richard S. Kraemer
     Senior Executive Vice President and Chief Financial Officer


EX-32.1 4 fult093024-exhibit321.htm EX-32.1 Document


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-Q of Fulton Financial Corporation, containing the consolidated financial statements for the quarter ended September 30, 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-Q fairly presents, in all material respects, the financial condition and results of operations of Fulton Financial Corporation.

Date: November 8, 2024
/s/ Curtis J. Myers
     Curtis J. Myers
     Chairman and Chief Executive Officer



EX-32.2 5 fult093024-exhibit322.htm EX-32.2 Document

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-Q of Fulton Financial Corporation, containing the consolidated financial statements for the quarter ended September 30, 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-Q fairly presents, in all material respects, the financial condition and results of operations of Fulton Financial Corporation.
November 8, 2024
/s/ Richard S. Kraemer
Richard S. Kraemer
     Senior Executive Vice President and Chief Financial Officer