Fulton Financial (FULT) Q2 2024 earnings summary

Executive summary

• Net income available to common shareholders rose to $92.4 million ($0.52 per diluted share), up $33.0 million from Q1 2024 and $15.4 million year-over-year, with operating EPS at $0.47.

• Results were driven by the Republic First Bank acquisition, which added $4.8 billion in assets, $2.5 billion in loans, and $4.1 billion in deposits, and contributed a $47.4 million after-tax gain.

• Net interest income increased to $241.7 million, with an 11 basis point improvement in NIM to 3.43%, mainly due to the acquisition.

• The quarter included a $20.3 million pre-tax gain from a sale-leaseback transaction and a $20.3 million pre-tax loss on securities sales.

• Integration of Republic is progressing, with most work expected to complete by year-end and continued investment in strategic initiatives.

Financial highlights

• Net interest income rose by $34.8 million sequentially, with $30.7 million from the acquisition.

• Non-interest income before investment securities gains/losses was $113.3 million, up from $57.1 million in Q1, driven by the acquisition gain and higher wealth management and mortgage banking revenues.

• Non-interest expense (excluding sale-leaseback gain) was $219.8 million, up from $177.6 million, mainly due to acquisition-related costs and Republic Bank operations.

• Provision for credit losses was $32.1 million, up from $10.9 million, primarily due to the acquisition.

• Return on average assets was 1.24%; return on average common equity was 13.47%.

Outlook and guidance

• 2024 net interest income expected between $925 million and $950 million, assuming a 25 basis point Fed funds rate cut in September.

• Provision for credit losses forecasted at $40 million–$60 million, excluding a $23 million non-PCD provision.

• Non-interest income (excluding securities and bargain purchase gain) projected at $240 million–$260 million.

• Operating non-interest expense guidance set at $750 million–$770 million; effective tax rate expected at 16%–18%.

• Closure of 13 financial centers in PA and NJ planned for Q4 2024, with $10 million pre-tax costs and $8 million annual pre-tax savings starting Q1 2025.