The Corporation and the Bank are subject to regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can trigger certain mandatory – and possibly additional discretionary – actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

In July 2013, the FRB approved Basel III Rules establishing a new comprehensive capital framework for U.S. banking organizations and implementing the Basel Committee on Banking Supervision's December 2010 framework for strengthening international capital standards. The Basel III Rules substantially revised the risk-based capital requirements applicable to bank holding companies and depository institutions.

The minimum regulatory capital requirements established by the Basel III Rules became effective on January 1, 2015, and became fully phased in on January 1, 2019. The Basel III Rules require the Corporation and the Bank to:

•Maintain a "capital conservation buffer" of 2.50% above the minimum risk-based capital requirements, which must be maintained to avoid restrictions on capital distributions and certain discretionary bonus payments; and

•Comply with a revised definition of capital to improve the ability of regulatory capital instruments to absorb losses. Certain non-qualifying capital instruments, including cumulative preferred stock and TruPS, are excluded as a component of Tier 1 capital for institutions of the Corporation's size.

The Basel III Rules use a standardized approach for risk weightings that expand the risk-weightings for assets and off-balance sheet exposures from the previous 0%, 20%, 50% and 100% categories to a much larger and more risk-sensitive number of categories, depending on the nature of the assets and off-balance sheet exposures, resulting in higher risk weights for a variety of asset categories.

The Corporation and the Bank are required to maintain a "capital conservation buffer" of 2.50% above the minimum risk-based capital requirements. The rules provide that the failure to maintain the "capital conservation buffer" results in restrictions on capital distributions and discretionary cash bonus payments to executive officers. As a result, under the Basel III Rules, if the Bank fails to maintain the required minimum capital conservation buffer, the Corporation will be subject to limits, and possibly prohibitions, on its ability to obtain capital distributions from such subsidiaries. If the Corporation does not receive sufficient cash dividends from the Bank, it may not have sufficient funds to pay dividends on its common stock, service its debt obligations or repurchase its common stock.

As of December 31, 2021 and 2020, the Corporation's capital levels met the fully phased-in minimum capital requirements, including the new capital conservation buffers, as prescribed in the Basel III Rules.

As of December 31, 2021 and 2020, the Bank was well capitalized under the regulatory framework for prompt corrective action based on its capital ratio calculation. To be categorized as well capitalized, the bank was required to maintain minimum total risk-based, Tier I risk-based, Common Equity Tier I risk-based and Tier I leverage ratios as set forth in the table below.

The following tables present the Total risk-based, Tier I risk-based, Common Equity Tier I risk-based and Tier I leverage requirements under the Basel III Rules, as of December 31:


	2021
	Actual				For Capital Adequacy Purposes				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
Total Capital (to Risk-Weighted Assets):
Corporation	$	2,841,529	14.1	%	$	1,610,429	8.0	%	N/A		N/A
Fulton Bank, N.A.	2,591,332		12.9		1,602,597		8.0		$	2,003,246	10.0	%
Tier I Capital (to Risk-Weighted Assets):
Corporation	$	2,195,647	10.9	%	$	1,207,822	6.0	%	N/A		N/A
Fulton Bank, N.A	2,395,890		12.0		1,201,948		6.0		$	1,602,597	8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets):
Corporation	$	2,002,769	9.9	%	$	905,866	4.5	%	N/A		N/A
Fulton Bank, N.A	2,351,890		11.7		901,461		4.5		$	1,302,110	6.5	%
Tier I Leverage Capital (to Average Assets):
Corporation	$	2,195,647	8.6	%	$	1,023,787	4.0	%	N/A		N/A
Fulton Bank, N.A	2,395,890		9.4		1,017,083		4.0		$	1,271,354	5.0	%


	2020
	Actual				For Capital Adequacy Purposes				Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
Total Capital (to Risk-Weighted Assets):
Corporation	$	2,837,801	14.4	%	$	1,571,876	8.0	%	N/A		N/A
Fulton Bank, N.A.	2,758,963		14.1		1,562,322		8.0		$	1,952,903	10.0	%
Tier I Capital (to Risk-Weighted Assets):
Corporation	$	2,067,640	10.5	%	$	1,178,907	6.0	%	N/A		N/A
Fulton Bank, N.A	2,529,802		13.0		1,171,742		6.0		$	1,562,322	8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets):
Corporation	$	1,874,762	9.5	%	$	884,181	4.5	%	N/A		N/A
Fulton Bank, N.A	2,485,802		12.7		878,806		4.5		$	1,269,387	6.5	%
Tier I Leverage Capital (to Average Assets):
Corporation	$	2,067,640	8.2	%	$	1,009,469	4.0	%	N/A		N/A
Fulton Bank, N.A	2,529,802		10.1		1,001,313		4.0		$	1,251,641	5.0	%

The dividends that may be paid by the Bank to the Parent Company are subject to certain legal and regulatory limitations. The total amount available for payment of dividends by the Bank to the Parent Company was approximately $73.7 million as of December 31, 2021, based on the Bank maintaining enough capital to be considered well capitalized under the Basel III Rules.

Under current regulations, the Bank is limited in the amount it may loan to its affiliates, including the Parent Company. Loans to a single affiliate may not exceed 10%, and the aggregate of loans to all affiliates may not exceed 20% of the Bank's regulatory capital.