LANCASTER, PA — Fulton Financial Corp. (NASDAQ: FULT) reported higher second-quarter profit as its Blue Foundry Bancorp acquisition expanded loans, deposits and net interest income, though integration costs and added personnel drove a sharp increase in expenses.
Net income available to common shareholders rose to $99.9 million, or $0.52 per diluted share, from $92.2 million, or $0.51 per share, in the first quarter.
Operating net income increased to $115.9 million, or $0.60 per diluted share, from $99.7 million, or $0.55 per share, in the prior quarter.
Fulton completed its acquisition of Blue Foundry Bancorp on April 1, adding a New Jersey-focused banking operation to its regional footprint. Blue Foundry Bank merged into Fulton Bank on July 11.
The transaction brought approximately $2.1 billion in assets to Fulton, including $1.6 billion in loans and $226.5 million in investments, based on preliminary fair values. Fulton assumed about $1.8 billion in liabilities, including $1.5 billion in deposits and $276 million in borrowings.
Chairman, Chief Executive Officer and President Curtis J. Myers framed the acquisition as a platform for expanding customer relationships across the enlarged market.
“With the successful integration of Blue Foundry Bank already occurring earlier this month, we are well positioned to deepen existing relationships and drive growth in this expanded footprint,” Myers stated.
Net interest income increased $22.2 million from the first quarter to $284.3 million, including a $17.5 million contribution from the Blue Foundry transaction. Fulton’s net interest margin rose two basis points to 3.60%.
Interest income on loans increased $32.6 million, while income from investment securities and other interest-earning assets rose by a combined $5.5 million.
Those gains were partly offset by a $10.9 million increase in deposit interest expense and a $4.9 million increase in interest expense on borrowings and other liabilities.
Non-interest income rose $9.5 million to $79.3 million, primarily because of higher income from equity-method investments. The total included $6.9 million recognized from an investment sold during the quarter.
Mortgage banking income increased by $1 million from the prior quarter.
Non-interest expense climbed $30.7 million to $231 million, reflecting acquisition costs, additional compensation and expenses tied to the Blue Foundry business. Operating non-interest expense rose $19.9 million to $210.6 million.
Acquisition-related expenses increased $11.2 million, while salaries and employee benefits rose $10.3 million. The compensation increase included $6.2 million associated with Blue Foundry and $3.5 million in higher incentive compensation.
The quarter also included a $2.1 million charge related to combining two employee pension plans and $800,000 in debt-extinguishment costs.
Fulton ended June with $25.9 billion in net loans, up $1.7 billion from March 31. Blue Foundry accounted for about $1.6 billion of the increase.
Excluding the acquisition, net loans increased $102.6 million as a $206.9 million rise in consumer lending outweighed a $104.3 million decline in commercial loans.
Deposits increased $1.5 billion to $28.3 billion, including $1.2 billion attributed to Blue Foundry. Excluding the acquisition, deposits rose $249.2 million, supported by increases in brokered, savings and time deposits.
Fulton issued $300 million of 5.95% fixed-to-floating-rate subordinated notes due in 2036 on May 5. The company redeemed $195 million of 3.25% subordinated notes due in 2030 on June 15.
The provision for credit losses declined to $4.9 million from $14.4 million in the first quarter.
Fulton’s allowance for credit losses on net loans increased to $382.6 million from $367.5 million, largely because of a $28.7 million addition related to Blue Foundry. The allowance represented 1.48% of net loans, down from 1.51% at the end of March.
Non-performing assets increased to $187.1 million from $177.5 million, including $16.4 million acquired through the Blue Foundry transaction. They represented 0.54% of total assets, compared with 0.55% in the prior quarter.
Annualized net charge-offs rose to 0.34% of average loans from 0.25%.
Fulton’s estimated common equity Tier 1 capital ratio increased to 12.1% from 11.9%.
The company repurchased 525,000 shares during the quarter for $11.1 million, paying an average of $21.19 per share. Repurchases under its 2026 program totaled $35.6 million through June 30.
For the first six months of 2026, net income available to common shareholders increased to $192.1 million from $187.1 million a year earlier. Diluted earnings remained unchanged at $1.02 per share.
Operating net income for the six-month period rose to $215.5 million, or $1.15 per diluted share, from $196.1 million, or $1.07 per share, a year earlier.
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