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Item 5. Market for Registrant’s Common Equity

2022-02-28 compared with 2021-03-01 · 14 added, 92 removed, 52 unchanged (67% of the section changed)

39 unchanged sentences

Total 2,302,330 $ 11.57 11,073,621

(1) The number of securities to be issued upon exercise of outstanding options, warrants and rights includes 1,101,418 PSUs, which is the target number of PSUs that are payable under the Employee Equity Plan, though no shares will be issued until achievement of applicable performance goals, and includes 683,264 time-vested RSUs granted under the Employee Equity Plan and 112,698 time-vested RSUs granted under the Directors' Plan.

(1) The number of securities to be issued upon exercise of outstanding options, warrants and rights includes 1,162,030 PSUs, which is the target number of PSUs that are payable under the Employee Equity Plan, though no shares will be issued until achievement of applicable performance goals, 239,591 stock option units, 738,201 time-vested RSUs granted under the Employee Equity Plan and 162,508 time-vested RSUs granted under the Directors' Plan.

(2) The weighted-average exercise price of outstanding options, warrants and rights does not take into account outstanding PSUs and RSUs granted under the Employee Equity and the Directors' Plan.

2 unchanged sentences

Performance Graph

The following graph shows cumulative total shareholder return (i.e., price change, plus reinvestment of dividends) on the common stock of Fulton Financial Corporation during the five-year period ended December 31, 2020, compared with (1) the Nasdaq Bank Index and (2) the Standard and Poor's 500 index ("S&P 500").

The following graph shows cumulative total shareholder return (i.e., price change, plus reinvestment of dividends) on the common stock of the Corporation during the five-year period ended December 31, 2021, compared with (1) the Nasdaq Bank Index and (2) the Standard and Poor's 500 index ("S&P 500").

The graph is not indicative of future price performance.

5 unchanged sentences

Nasdaq Bank Index $ 100.00 $ 104.14 $ 86.09 $ 102.99 $ 90.82 $ 129.20

Issuer Purchases of Equity Securities

The following table presents the Corporation's monthly repurchases of our common stock during the fourth quarter of 2021:

Period Total Number of Shares Purchased 1

Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 2

October 1, 2021 to October 31, 2021 200,430 $ 15.74 200,430 $ 45,754,230

November 1, 2021 to November 30, 2021 54,773 15.75 54,773 44,891,823

December 1, 2021 to December 31, 2021 856,290 16.05 856,290 31,147,473

1 Excludes immaterial shares repurchased to settle employee tax withholding related to the vesting of stock awards.

2 On February 9, 2021, the Corporation announced that its board of directors approved the repurchase of up to $75.0 million of the Corporation's outstanding common stock

through December 31, 2021.

On November 19, 2021, the Corporation announced that its board of directors had approved the extension of this program through March 31, 2022.

Selected Financial Data

5-YEAR CONSOLIDATED SUMMARY OF FINANCIAL RESULTS

(dollars in thousands, except per-share data)

2020 2019 2018 2017 2016

SUMMARY OF INCOME

Interest income $ 742,878 $ 825,306 $ 758,514 $ 668,866 $ 603,100

Interest expense 113,671 176,917 128,058 93,502 82,328

Net interest income 629,207 648,389 630,456 575,364 520,772

Provision for credit losses (1)

76,920 32,825 46,907 23,305 13,182

Investment securities gains, net 3,053 4,733 37 9,071 2,550

Non-interest income, excluding net investment securities gains 226,335 211,427 195,488 198,903 187,628

Prepayment penalty on FHLB advances 2,878 4,326 — — —

Non-interest expense (2)

576,562 563,410 546,104 525,579 489,519

Income before income taxes 202,235 263,988 232,970 234,454 208,249

Income taxes 24,194 37,649 24,577 62,701 46,624

Net income $ 178,040 $ 226,339 $ 208,393 $ 171,753 $ 161,625

Preferred stock dividends (2,135) — — — —

Net income available to common shareholders $ 175,905 $ 226,339 $ 208,393 $ 171,753 $ 161,625

Net income (basic) $ 1.08 $ 1.36 $ 1.19 $ 0.98 $ 0.93

Net income (diluted) 1.08 1.35 1.18 0.98 0.93

Cash dividends 0.56 0.56 0.52 0.47 0.41

Return on average assets 0.73 % 1.06 % 1.03 % 0.88 % 0.88 %

Return on average equity 7.44 9.81 9.24 7.83 7.69

Return on average tangible equity (3)

9.66 12.84 12.09 10.33 10.30

Net interest margin 2.86 3.36 3.40 3.28 3.18

Efficiency ratio (3)

65.7 63.7 63.8 64.5 67.2

Dividend payout ratio 51.9 41.5 44.1 48.0 44.1

Average equity to assets ratio 9.83 10.85 11.18 11.20 11.43

PERIOD-END BALANCES

Total assets $ 25,906,733 $ 21,886,040 $ 20,682,152 $ 20,036,905 $ 18,944,247

Investment securities 3,340,424 2,867,378 2,686,973 2,547,956 2,559,227

Net Loans 18,900,820 16,837,526 16,165,800 15,768,247 14,699,272

Deposits 20,839,207 17,393,913 16,376,159 15,797,532 15,012,864

Short-term borrowings 630,066 883,241 754,777 617,524 541,317

Long-term borrowings 1,296,263 881,769 992,279 1,038,346 929,403

Shareholders’ equity 2,616,828 2,342,176 2,247,573 2,229,857 2,121,115

AVERAGE BALANCES

Total assets $ 24,333,717 $ 21,258,040 $ 20,183,202 $ 19,580,367 $ 18,371,173

Investment securities 3,007,467 2,778,846 2,662,800 2,547,914 2,469,564

Net Loans 18,270,390 16,430,347 15,815,263 15,236,612 14,128,064

Deposits 19,401,046 16,766,561 15,832,606 15,481,221 14,585,545

Short-term borrowings 810,583 849,679 785,923 533,564 395,727

Long-term borrowings 1,254,300 942,600 977,573 1,034,444 959,142

Shareholders’ equity 2,391,649 2,306,070 2,255,764 2,193,863 2,100,634

(1) Beginning January 1, 2020, provision is determined under CECL methodology.

Prior to January 1, 2020, provision was determined based on incurred loss methodology.

(2) Excluding prepayment penalty on FHLB advances.

(3) 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 following heading, "Supplemental Reporting of Non-GAAP Based Financial Measures" below.

Supplemental Reporting of Non-GAAP Based Financial Measures

This Annual Report on Form 10-K contains supplemental financial information, as detailed below, which 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 and financial condition.

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.

Following are reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure as of and for the year ended December 31:

2020 2019 2018 2017 2016

(in thousands, except per share data and percentages)

Return on average common shareholders' equity (tangible)

Net income available to common shareholders $ 175,905 $ 226,339 $ 208,393 $ 171,753 $ 161,625

Intangible amortization, net of tax 417 1,127 — — —

Numerator $ 176,322 $ 227,466 $ 208,393 $ 171,753 $ 161,625

Average common shareholders' equity $ 2,391,649 $ 2,306,070 $ 2,255,764 $ 2,193,863 $ 2,100,634

Average goodwill and intangible assets (535,196) (534,120) (531,556) (531,556) (531,556)

Average preferred stock (32,084) — — — —

Average tangible common shareholders' equity (denominator) $ 1,824,369 $ 1,771,950 $ 1,724,208 $ 1,662,307 $ 1,569,078

Return on average common shareholders' equity (tangible) 9.66 % 12.84 % 12.09 % 10.33 % 10.30 %

Efficiency ratio

Non-interest expense $ 579,440 $ 567,736 $ 546,104 $ 525,579 $ 489,519

Amortization of tax credit investments (6,126) (6,021) (11,449) (11,028) —

Intangible amortization (529) (1,427) — — —

Prepayment penalty on FHLB advances (2,878) (4,326) — — —

Numerator $ 569,908 $ 555,962 $ 534,655 $ 514,551 $ 489,519

Net interest income FTE (1)

$ 641,510 $ 661,356 $ 642,577 $ 598,565 $ 541,271

Total non-interest income 229,388 216,159 195,525 207,974 190,178

Investment securities gains, net (3,053) (4,733) (37) (9,071) (2,550)

Denominator $ 867,845 $ 872,782 $ 838,065 $ 797,468 $ 728,899

Efficiency ratio 65.7 % 63.7 % 63.8 % 64.5 % 67.2 %

Non-performing assets to common shareholders' equity (tangible) and ACL - loans

Non-performing assets (numerator) $ 151,305 $ 147,986 $ 150,196 $ 144,582 $ 144,453

Tangible common shareholders' equity $ 1,887,291 $ 1,806,873 $ 1,716,017 $ 1,698,301 $ 1,589,559

ACL - loans 277,567 166,209 169,410 176,084 171,325

Tangible common shareholders' equity and ACL - loans (denominator) $ 2,164,858 $ 1,973,082 $ 1,885,427 $ 1,874,385 $ 1,760,884

Non-performing assets to tangible common shareholders' equity and ACL - loans 6.99 % 7.50 % 7.97 % 7.71 % 8.20 %

(1) Presented on a fully taxable equivalent basis, using a 21% federal tax rate for 2018 through 2020 and 35% for 2016 and 2017.

The information previously required by Item 6 of this 10-K has been intentionally omitted, as permitted by the SEC in connection with its adoption of its final rules regarding the amendment to modernize, simplify, and enhance financial disclosure requirements of registrants.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity