Fulton Financial Corp. 10-Q Summary: Period Ended June 30, 2026
Business Context and Reporting Period
This is a Quarterly Report (Form 10-Q) for Fulton Financial Corporation for the period ended June 30, 2026. The Corporation is a financial holding company providing consumer and commercial financial services in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. The reporting period was significantly impacted by the completion of the Blue Foundry Merger on April 1, 2026, which added approximately $2.1 billion in assets and $1.8 billion in liabilities to the balance sheet.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Net Income | $102.4 million | $197.2 million |
| Net Income Available to Common Shareholders | $99.9 million | $192.1 million |
| Diluted EPS | $0.52 | $1.02 |
| Net Interest Income | $284.3 million | $546.3 million |
| Net Interest Margin (FTE) | 3.60% | 3.59% |
| Non-Interest Income | $79.3 million | $149.1 million |
| Non-Interest Expense | $231.0 million | $431.2 million |
| Provision for Credit Losses | $4.9 million | $19.3 million |
| Total Assets | $34.6 billion (as of June 30, 2026) | |
| Total Loans (Net) | $25.6 billion (as of June 30, 2026) | |
| Total Deposits | $28.3 billion (as of June 30, 2026) | |
| Allowance for Credit Losses (ACL) | $382.6 million (1.48% of net loans) | |
| Non-Performing Assets (NPA) | $187.1 million (0.54% of total assets) |
Material Changes vs. Prior Period
- Revenue Growth: Net interest income increased $29.3 million (Q2) and $40.2 million (YTD) compared to the prior year periods, driven primarily by a $1.6 billion increase in average net loans from the Blue Foundry Merger. NIM expanded 13 bps (Q2) and 14 bps (YTD) due to favorable rate environments.
- Expense Increases: Non-interest expense rose $38.1 million (Q2) and $49.0 million (YTD). This includes $13.8 million (Q2) and $16.5 million (YTD) in acquisition-related expenses. Excluding these and the merger impact, organic expense growth was driven by salaries and employee benefits.
- Asset Quality: Non-accrual loans decreased $7.4 million YTD to $146.5 million. Total criticized and classified loans decreased $193.2 million compared to December 31, 2025, despite the inclusion of $52.0 million in acquired loans from Blue Foundry.
- Capital Actions: The Corporation issued $300.0 million of subordinated notes in May 2026 and used $195.0 million of proceeds to redeem Subordinated Notes due 2030 in June 2026. Additionally, 1.74 million shares of common stock were repurchased under the 2026 Repurchase Program at a cost of $35.6 million.
Guidance, Outlook, and Risks
Management Commentary: Management highlighted the successful integration of Blue Foundry Bancorp, which expanded the Corporation's footprint in New Jersey. The merger is expected to generate cost savings and revenue synergies, though integration expenses are currently impacting earnings. The Corporation maintains a strong capital position, with all regulatory capital ratios exceeding well-capitalized requirements.
Risks and Contingencies:
- Merger Integration: Risks include the diversion of management attention, potential delays in realizing synergies, and higher-than-expected integration costs.
- Interest Rate Risk: The Corporation manages exposure through ALCO policies. Simulations indicate that a 100 bps parallel shock could decrease net interest income by approximately 1.0% (instantaneous) or 0.3% (rate ramp).
- Credit Risk: The loan portfolio is heavily weighted toward commercial mortgage and construction loans (45.7% of total loans). Management monitors concentrations in office and multi-family sectors, particularly in the Philadelphia and New York metropolitan areas.
- Regulatory and Legal: The Corporation faces standard regulatory risks and is involved in various legal proceedings, though management does not anticipate a material adverse effect from current matters.
Investor Verification Checklist
- Merger Synergies: Verify the timeline and realization of cost savings and revenue synergies from the Blue Foundry Merger against management's projections.
- Commercial Real Estate Exposure: Review the specific concentration of non-owner occupied office and multi-family loans, particularly in the New York and Philadelphia markets, and monitor delinquency trends in these sectors.
- Deposit Stability: Assess the composition of the $1.5 billion in deposits acquired from Blue Foundry and the cost of funds trends as the merger integration progresses.
- Provision Trends: Monitor the provision for credit losses, noting the $31.0 million initial ACL recorded for purchased loans in the merger, to ensure future provisions remain stable as the acquired portfolio is fully integrated.
- Capital Ratios: Confirm that the issuance of new subordinated debt and redemption of older debt maintains the Corporation's "well-capitalized" status under regulatory frameworks.