Fulton Financial Corp's Q3 2024 Earnings: A Closer Look

Fulton Financial Corporation (FULT) recently reported its third-quarter 2024 earnings, providing valuable insights into the company's performance and strategic initiatives. The earnings call highlighted several key drivers behind the changes in net income and operating net income, as well as the impact of the Acquisition on the company's earnings and balance sheet.

One of the key drivers behind the increase in net interest income was the full-quarter impact of the Acquisition. This contributed to a $16.3 million increase in net interest income, which was largely due to the full-quarter impact of the Acquisition and an increase in on-balance sheet liquidity. The Acquisition also had an impact on non-interest income, with a $55.1 million change in the gain on acquisition (net of tax) resulting in a $7.7 million reduction recorded in the third quarter of 2024.

The decrease in non-interest income before investment securities gains (losses) was primarily due to the change in the gain on acquisition (net of tax). This was partially offset by an $8.2 million increase in salaries and benefits expense, driven by a $4.9 million increase in employee severance costs related to the FultonFirst initiative, a full-quarter impact of salaries and benefits from the Acquisition resulting in an increase of $2.7 million, and a $1.7 million increase in incentive compensation expense. The increase in salaries and benefits expense was partially offset by a $1.4 million decrease in consulting costs related to the FultonFirst initiative.

The Acquisition also had an impact on Fulton Financial Corp's balance sheet. Net loans totaled $24.2 billion, an increase of $69.8 million compared to $24.1 billion as of June 30, 2024. The increase was largely due to increases of $203.7 million and $53.8 million in commercial mortgage loans and residential mortgage loans, respectively, partially offset by decreases of $130.8 million, $53.1 million, and $40.4 million in construction loans, commercial and industrial loans, and consumer loans, respectively. Excluding the impact from the day 1 Purchased Credit Deteriorated ("PCD") adjustment of $55.9 million and purchase accounting accretion of $24.9 million, net loans acquired in the Acquisition declined approximately $82.3 million since the Acquisition Date.

In conclusion, Fulton Financial Corp's Q3 2024 earnings call provided valuable insights into the company's performance and strategic initiatives. The full-quarter impact of the Acquisition contributed to the increase in net interest income, while the change in the gain on acquisition (net of tax) impacted non-interest income. The Acquisition also had an impact on the company's balance sheet, with increases in certain loan categories and declines in others. As Fulton Financial Corp continues to execute on its strategic initiatives, investors will be watching closely to see how these factors continue to impact the company's earnings and balance sheet.