Fulton Financial Corporation priced a $300 million public offering of fixed‑to‑floating rate subordinated notes due 2036 on May 1, 2026. The notes carry a 5.950 % fixed coupon through May 15, 2031, after which they will pay a floating rate equal to the Three‑Month Term SOFR plus 217 basis points, payable quarterly in arrears.
The net proceeds will be used to repay $195 million of the company’s existing 3.250 % fixed‑to‑floating rate subordinated notes due 2030 and for general corporate purposes. The refinancing extends the debt maturity profile and preserves capital flexibility while keeping the notes within the Tier 2 capital framework.
The transaction supports Fulton’s strong capital position, which stood at a Common Equity Tier 1 ratio of 11.9 % as of March 31, 2026. It also aligns with the bank’s recent acquisition of Blue Foundry Bancorp, completed on April 1, 2026, which expanded Fulton’s asset base to $34 billion and increased the need for robust capital buffers.
The fixed‑to‑floating structure provides a predictable cost for the first five years, after which the notes will adjust to market rates. This hybrid approach balances cost certainty with exposure to the current low‑rate environment, a strategy that has been used by other banks to manage interest‑rate risk while maintaining flexibility.
Management emphasized that the financing “provides Fulton with additional capital flexibility while maintaining its strong capital ratios, and the notes’ hybrid fixed‑to‑floating structure aligns interest costs with market movements. The transaction is the latest in a series of strategic capital actions that support the bank’s growth and risk‑management objectives.”
The issuance follows a Q1 2026 earnings report in which Fulton reported operating earnings per share of $0.55, beating analyst expectations of $0.49. The strong earnings performance, combined with the new capital structure, underscores the bank’s continued focus on growth and prudent risk management.
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