Fulton Financial Corp. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Fulton Financial Corporation is a financial holding company operating primarily in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. A significant corporate development occurred immediately following the reporting period: on April 1, 2026, the Corporation completed its acquisition of Blue Foundry Bancorp, with the merger of Blue Foundry Bank into Fulton Bank expected in Q3 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Income | $94.8 million | $93.0 million |
| Net Income Available to Common Shareholders | $92.2 million | $90.4 million |
| Diluted EPS | $0.51 | $0.49 |
| Net Interest Income | $262.0 million | $251.2 million |
| Net Interest Margin (FTE) | 3.58% | 3.43% |
| Non-Interest Income | $69.8 million | $67.2 million |
| Non-Interest Expense | $200.3 million | $189.5 million |
| Efficiency Ratio | 56.7% | 56.7% |
| Provision for Credit Losses | $14.4 million | $13.9 million |
| Total Assets | $32.24 billion | $31.97 billion (Avg) |
| Total Loans (Net) | $23.90 billion | $23.78 billion (Dec 2025) |
| Total Deposits | $26.77 billion | $26.59 billion (Dec 2025) |
| Non-Performing Assets (NPA) | $177.5 million (0.55% of assets) | $185.2 million (0.62% of assets) |
| Cash Flow from Operations | $114.7 million | $0.7 million |
Material Changes vs. Prior Period
- Net Interest Income: Increased $10.8 million year-over-year, driven by a 15 basis point expansion in Net Interest Margin (NIM) to 3.58%. This was achieved despite a 13 bps decrease in the yield on interest-earning assets, as the cost of funds decreased by 38 bps.
- Expense Growth: Non-interest expense rose $10.8 million (5.7%) compared to Q1 2025. This increase was primarily due to a $6.2 million rise in salaries and employee benefits and a $3.4 million increase in professional fees. Acquisition-related expenses were $2.6 million in Q1 2026 versus $0.4 million in Q1 2025.
- Asset Quality: Non-performing assets decreased $7.7 million to $177.5 million. Non-accrual loans declined to $142.0 million (0.59% of net loans) from $153.9 million in the prior quarter. Net charge-offs were $14.9 million, resulting in an annualized net charge-off rate of 0.25%.
- Loan Portfolio: Net loans increased $121.5 million from the prior quarter, led by growth in commercial mortgage ($164.4M increase) and residential mortgage ($65.3M increase) loans. This was partially offset by a $93.8M decrease in construction loans.
- Investment Securities: Held-to-Maturity (HTM) securities increased $167.2 million due to the purchase of $166.0 million in collateralized mortgage obligations. Available-for-Sale (AFS) securities decreased $138.9 million.
Guidance, Outlook, and Risks
- Acquisition Integration: The Corporation is integrating Blue Foundry Bancorp. Management anticipates potential risks including diversion of management attention, integration delays, and higher-than-expected merger expenses.
- Interest Rate Risk: The Corporation maintains a policy to limit exposure to interest rate shocks. As of March 31, 2026, the Corporation was within all policy limits for net interest income and economic value of equity under various rate shock scenarios.
- Capital Management: The Corporation repurchased 1.21 million shares of common stock for $24.5 million during the quarter under its 2026 Repurchase Program. Capital ratios remain well above regulatory minimums, with a Common Equity Tier 1 ratio of 11.9%.
- Subsequent Event: In May 2026, the Corporation issued $300.0 million of subordinated notes due 2036 at a fixed-to-floating rate of 5.95% to repay maturing debt and for general corporate purposes.
- Risk Factors: Key risks include the impact of economic conditions on the loan portfolio, cybersecurity threats, regulatory changes, and the successful realization of synergies from the Blue Foundry merger.
Investor Verification Checklist
- Blue Foundry Merger Accounting: Verify the final fair value assessments and integration costs associated with the April 1, 2026 acquisition of Blue Foundry Bancorp in the next filing.
- Commercial Real Estate Exposure: Review the concentration of non-owner occupied commercial mortgage loans, particularly in the office sector, which represents 3.0% of total net loans.
- Unrealized Losses: Monitor the $266.6 million in gross unrealized losses on AFS investment securities and the $166.3 million on HTM securities to assess potential future impacts on equity or earnings if sales become necessary.
- Expense Trajectory: Track the sustainability of the $10.8 million increase in non-interest expenses, specifically regarding the $2.6 million in acquisition-related costs and the $1.6 million in FultonFirst implementation costs.
- Deposit Mix: Analyze the shift in deposit composition, noting the $139.2 million decrease in brokered deposits and the $362.4 million increase in savings and money market deposits.