8-K
FULTON FINANCIAL CORP (FULT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
April 18, 2023
Date of Report (date of earliest event reported)
Fulton Financial Corporation
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-39680 | 23-2195389 | ||
|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
| One Penn Square, | P.O. Box 4887 | Lancaster, | Pennsylvania | 17604 |
| (Address of Principal Executive Offices) | (Zip Code) |
(717) 291-2411
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $2.50 | FULT | The Nasdaq Stock Market, LLC |
| Depositary Shares, Each Representing 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A | FULTP | The Nasdaq Stock Market, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 2.02 Results of Operations and Financial Condition.
On April 18, 2023, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the first quarter ended March 31, 2023. A copy of the Press Release and supplementary financial information which accompanied the Press Release are attached as Exhibit 99.1 to this Current Report on Form 8-K (this "Current Report") and are incorporated herein by reference. The Corporation also posted on its Investor Relations website, www.fultonbank.com, presentation materials the Corporation intends to use during a conference call and webcast to discuss those results on Wednesday, April 19, 2023 at 10:00 a.m. eastern time. A copy of the presentation materials is attached as Exhibit 99.2 to this Current Report and is incorporated herein by reference.
The information included in Exhibit 99.1 shall be deemed filed for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and therefore may be incorporated by reference in filings under the Securities Act of 1933, as amended (the "Securities Act"). The information included in Exhibit 99.2 is being furnished and shall not be deemed filed for purposes of the Exchange Act or be incorporated by reference in any filing under the Securities Act.
Forward-Looking Statements
This Current Report, including the Exhibits hereto, may contain forward-looking statements with respect to the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," "projects," the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation's future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation's business or financial results. Management’s "2023 Outlook" contained in Exhibit 99.2 to this Current Report is comprised of forward-looking statements.
Forward-looking statements are neither historical facts nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation's control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2022, and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated April 18, 2023, containing financial information for the quarter ended March 31, 2023, deemed filed under the Securities Exchange Act of 1934. |
| 99.2 | Presentation materials to be discussed during the conference call and webcast on April 19, 2023, deemed furnished under the Securities Exchange Act of 1934. |
| 104 | Cover page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 18, 2023 | FULTON FINANCIAL CORPORATION |
|---|---|
| By: /s/ Mark R. McCollom | |
| Mark R. McCollom | |
| Senior Executive Vice President and | |
| Chief Financial Officer |
Document
Exhibit 99.1
FULTON FINANCIAL
CORPORATION
FOR IMMEDIATE RELEASE
Media Contact: Lacey Dean (717) 735-8688
Investor Contact: Matt Jozwiak (717) 327-2657
Fulton Financial Corporation Announces First Quarter 2023 Results
(April 18, 2023) – Lancaster, PA – Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $65.8 million, or $0.39 per diluted share, for the first quarter of 2023, a decrease of $13.5 million, or 17.1%, in comparison to the fourth quarter of 2022.
“Our focus remains the same - the long-term financial wellbeing of our company, our customers and our communities,” said Curtis J. Myers, Chairman and CEO of Fulton. “During the quarter, we took actions to fortify our balance sheet, increase our liquidity, diversify our funding and enhance our reserves. By taking these actions, monitoring capital and communicating with customers, we’ve positioned ourselves to continue serving our stakeholders and growing our company.”
Net Interest Income and Balance Sheet
Net interest income for the first quarter of 2023 was $215.6 million, a decrease of $10.3 million in comparison to the fourth quarter of 2022. The net interest margin for the first quarter of 2023 decreased 16 basis points, to 3.53%, in comparison to 3.69% in the fourth quarter of 2022.
The linked-quarter decrease in net interest income was primarily due to a shift in funding mix from lower-cost demand deposits to higher-cost borrowings, time deposits and brokered deposits. An increase in the average balance for net loans of $458.6 million and higher loan yields in the first quarter of 2023 primarily contributed to an increase in interest income of $22.0 million to $289.8 million in comparison to $267.8 million in the fourth quarter of 2022. Interest expense from interest-bearing liabilities for the first quarter of 2023 increased by $32.3 million to $74.2 million in comparison to $41.9 million in the fourth quarter of 2022. The linked-quarter increase in interest expense in the first quarter of 2023 was primarily due to a decline in the average balance of noninterest-bearing deposits of $669.1 million and an increase in the average balance for higher-cost borrowings and other interest-bearing liabilities of $1.0 billion in comparison to the fourth quarter of 2022.
For the first quarter of 2023, net interest income was $215.6 million, an increase of $54.3 million, or 33.6%, in comparison to the first quarter of 2022. Interest income for the first quarter of 2023 increased by $116.8 million to $289.8 million in comparison to $173.0 million in the first quarter of 2022 primarily driven by rising interest rates resulting in increases in interest income from net loans, investment securities and other interest-earning assets of $110.9 million, $3.2 million and $2.7 million, respectively. Increases in the average balances for net loans and investment securities in the first quarter of 2023 of $2,080.0 million and $63.3 million, respectively, driven in part by the Prudential Bancorp, Inc. ("Prudential Bancorp") acquisition, also contributed to the increase in interest income. Interest expense from interest-bearing liabilities for the first quarter of 2023 increased by $62.5 million to $74.2 million in comparison to $11.7 million in the first quarter of 2022 primarily driven by rising interest rates resulting in increases in interest expense from interest-bearing deposits and borrowings and other interest-bearing liabilities of $36.0 million and $26.5 million, respectively. An increase in the average balance for borrowings and other interest-bearing liabilities of $2.0 billion in the first quarter of 2023 in comparison to the first quarter of 2022 also contributed to the increase in interest expense.
Total average interest-earning assets for the first quarter of 2023 was $25.2 billion, an increase of $450.6 million from the fourth quarter of 2022 primarily driven by the aforementioned increase in average net loans of $458.6 million and an increase in average other interest-earning assets of $33.0 million, partially offset by a decrease in average investment securities of $41.0 million.
Total average interest-earning assets for the first quarter of 2023 increased by $1.3 billion from the first quarter of 2022. Average net loans for the first quarter of 2023 were $20.5 billion, an increase of $2.1 billion from the same period in 2022. Compared to the first quarter of 2022, average other interest-earning assets decreased $793.6 million and average investment securities increased $63.3 million in the first quarter of 2023.
Total average interest-bearing liabilities increased $1.2 billion, to $17.0 billion, in the first quarter of 2023 in comparison to $15.7 billion in the fourth quarter of 2022 driven by increases in the average balance for borrowings and other interest-bearing liabilities and the average balance for total interest-bearing deposits of $1.0 billion and $215.8 million, respectively.
Total average interest-bearing liabilities for the first quarter of 2023 increased $1.9 billion in comparison to $15.1 billion in the first quarter of 2022, driven by an increase in the average balance for borrowings and other interest-bearing liabilities of $2.0 billion.
Asset Quality
In the first quarter of 2023, a provision for credit losses of $24.5 million was recorded in comparison to a provision for credit losses of $14.5 million in the fourth quarter of 2022, and a negative provision for credit losses of $7.0 million in the first quarter of 2022. The linked-quarter increase in the provision for credit losses of $10.0 million was primarily due to loan growth and changes to the macroeconomic outlook.
Non-performing assets were $167.9 million, or 0.62% of total assets, at March 31, 2023, in comparison to $177.7 million, or 0.66% of total assets, at December 31, 2022, and $163.0 million, or 0.64% of total assets, at March 31, 2022.
Net charge-offs for the first quarter of 2023 were 0.27% of total average loans in comparison to 0.23% and negative 0.02% in the fourth quarter of 2022 and the first quarter of 2022, respectively. Net charge-offs of $14.0 million for the first quarter of 2023 were primarily due to a charge-off of $13.3 million for a commercial office loan due to credit-related concerns; the same loan that received a partial charge-off in the fourth quarter of 2022.
Non-interest Income
Non-interest income before investment securities gains in the first quarter of 2023 was $51.7 million, a decrease of $2.6 million, or 4.8%, from the fourth quarter of 2022. The decrease in non-interest income was driven primarily by decreases in commercial banking income, income from equity method investments, reflected in other income, and consumer banking fees of $1.1 million, $1.0 million and $0.9 million, respectively, partially offset by an increase in wealth management revenues of $0.5 million.
Compared to the first quarter of 2022, non-interest income before investment securities gains in the first quarter of 2023 decreased $3.5 million, or 6.3%, from $55.2 million. The decrease in non-interest income was primarily due to decreases of $2.6 million in mortgage banking income due to lower loan sale volumes and lower spreads, $1.4 million in wealth management revenues primarily due to market performance and $1.1 million from lower income from equity method investments, reflected in other income, partially offset by an increase of $1.5 million in commercial banking income.
Non-interest Expense
Non-interest expense was $159.6 million in the first quarter of 2023, a decrease of $7.0 million, or 4.2%, compared to $166.6 million in the fourth quarter of 2022, which excludes merger-related expenses of $1.9 million. The decline was primarily due to decreases of $3.5 million in salaries and employee benefits expense, $0.7 million in other outside services expense, $0.6 million in professional fees and $0.5 million in marketing expense, partially offset by a $1.6 million increase in FDIC insurance expense primarily due to the adoption of a final rule to increase base deposit insurance assessment rates effective January 1, 2023. Additional contributors of the decline in noninterest expense were decreases of $1.2 million in charitable contributions, $1.1 million in other real estate owned assets due to gains on sales recorded in the first quarter of 2023 and $0.8 million in contingent liabilities, in each case, reflected in other expense.
Compared to the first quarter of 2022, non-interest expense, excluding merger-related expenses of $0.4 million in the first quarter of 2022, increased $14.0 million, or 9.6%. The increase was primarily due to increases of $4.8 million in salaries and employee benefits expense, $2.0 million in other outside services expense, $1.6 million in FDIC insurance expense, primarily due to the adoption of a final rule to increase base deposit insurance assessment rates effective January 1, 2023, $1.5 million in data processing and software expense, $0.6 million in professional fees, $0.6 million in marketing expense and $0.5 million in intangible amortization expense due to the acquisition of Prudential Bancorp. Additional drivers of the increase in noninterest expense were an unfavorable change in owned asset expense due to a $1.5 million gain on sale recorded on owned assets in the first quarter of 2022 and a $0.8 million contingent liability recorded in the first quarter of 2023, in each case, reflected in other expense.
Income Tax Expense
For the first quarter of 2023, the effective tax rate was 17.9%, in comparison to 17.3% for the full-year of 2022.
Additional information on Fulton is available on the Internet at www.fultonbank.com.
Safe Harbor Statement
This press release may contain forward-looking statements with respect to the Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results.
Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).
Non-GAAP Financial Measures
The Corporation uses certain financial measures in this press release that have been derived from methods other than generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this press release.
| FULTON FINANCIAL CORPORATION | |||||
|---|---|---|---|---|---|
| SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) | |||||
| dollars in thousands, except per share data | |||||
| Three months ended | |||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |
| 2023 | 2022 | 2022 | 2022 | 2022 | |
| Ending Balances | |||||
| Investment securities | |||||
| Net loans | 20,670,188 | 20,279,547 | 19,695,199 | 18,920,950 | 18,476,119 |
| Total assets | 27,112,176 | 26,931,702 | 26,146,042 | 25,252,686 | 25,598,310 |
| Deposits | 21,316,584 | 20,649,538 | 21,376,554 | 21,143,866 | 21,541,174 |
| Shareholders' equity | 2,618,998 | 2,579,757 | 2,471,159 | 2,471,093 | 2,569,535 |
| Average Balances | |||||
| Investment securities | 3,964,615 | 3,936,579 | 4,254,216 | 4,216,507 | 4,228,827 |
| Net loans | 20,463,096 | 20,004,513 | 19,563,825 | 18,637,175 | 18,383,118 |
| Total assets | 26,900,653 | 26,386,355 | 26,357,095 | 25,578,432 | 25,622,462 |
| Deposits | 20,574,323 | 21,027,656 | 21,788,052 | 21,523,713 | 21,480,183 |
| Shareholders' equity | 2,613,316 | 2,489,148 | 2,604,057 | 2,531,346 | 2,688,834 |
| Income Statement | |||||
| Net interest income | 215,587 | 225,911 | 215,582 | 178,831 | 161,310 |
| Provision for credit losses | 24,544 | 14,513 | 18,958 | 1,500 | (6,950) |
| Non-interest income | 51,753 | 54,321 | 59,162 | 58,391 | 55,256 |
| Non-interest expense | 159,616 | 168,462 | 169,558 | 149,730 | 145,978 |
| Income before taxes | 83,180 | 97,257 | 86,228 | 85,992 | 77,538 |
| Net income available to common shareholders | 65,752 | 79,271 | 68,309 | 67,427 | 61,726 |
| Pre-provision net revenue(1) | 108,375 | 115,049 | 113,631 | 89,384 | 71,842 |
| Per Share | |||||
| Net income available to common shareholders (basic) | 0.39 | 0.47 | 0.41 | 0.42 | 0.38 |
| Net income available to common shareholders (diluted) | 0.39 | 0.47 | 0.40 | 0.42 | 0.38 |
| Operating net income available to common shareholders(1) | 0.39 | 0.48 | 0.48 | 0.42 | 0.38 |
| Cash dividends | 0.15 | 0.21 | 0.15 | 0.15 | 0.15 |
| Common shareholders' equity | 14.67 | 14.24 | 13.61 | 14.15 | 14.79 |
| Common shareholders' equity (tangible)(1) | 11.26 | 10.90 | 10.26 | 10.81 | 11.44 |
| Weighted average shares (basic) | 166,605 | 167,504 | 167,353 | 160,920 | 160,588 |
| Weighted average shares (diluted) | 168,401 | 169,136 | 168,781 | 162,075 | 161,911 |
| (1) Non-GAAP financial measure. Refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this press release. |
All values are in US Dollars.
| Three months ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Asset Quality | |||||||||||||||||||
| Net charge-offs (recoveries) to average loans | 0.27 | % | 0.23 | % | 0.01 | % | (0.08) | % | (0.02) | % | |||||||||
| Non-performing loans to total loans | 0.80 | % | 0.85 | % | 0.98 | % | 0.92 | % | 0.87 | % | |||||||||
| Non-performing assets to total assets | 0.62 | % | 0.66 | % | 0.76 | % | 0.71 | % | 0.64 | % | |||||||||
| ACL - loans(1) to total loans | 1.35 | % | 1.33 | % | 1.35 | % | 1.31 | % | 1.32 | % | |||||||||
| ACL - loans(1) to non-performing loans | 169 | % | 157 | % | 138 | % | 143 | % | 151 | % | |||||||||
| Profitability | |||||||||||||||||||
| Return on average assets | 1.03 | % | 1.23 | % | 1.07 | % | 1.10 | % | 1.02 | % | |||||||||
| Operating return on average assets(2) | 1.04 | % | 1.26 | % | 1.25 | % | 1.11 | % | 1.02 | % | |||||||||
| Return on average common shareholders' equity | 11.02 | % | 13.70 | % | 11.24 | % | 11.57 | % | 10.03 | % | |||||||||
| Return on average common shareholders' equity (tangible)(2) | 14.46 | % | 18.59 | % | 17.31 | % | 15.23 | % | 12.88 | % | |||||||||
| Net interest margin | 3.53 | % | 3.69 | % | 3.54 | % | 3.04 | % | 2.78 | % | |||||||||
| Efficiency ratio(2) | 58.5 | % | 58.1 | % | 57.8 | % | 61.4 | % | 65.8 | % | |||||||||
| Non-interest expenses to total average assets | 2.41 | % | 2.53 | % | 2.55 | % | 2.35 | % | 2.31 | % | |||||||||
| Operating non-interest expenses to total average assets(2) | 2.40 | % | 2.48 | % | 2.43 | % | 2.32 | % | 2.29 | % | |||||||||
| Capital Ratios | |||||||||||||||||||
| Tangible common equity ratio ("TCE")(2) | 7.0 | % | 6.9 | % | 6.7 | % | 7.0 | % | 7.3 | % | |||||||||
| TCE ratio, (excluding AOCI)(2)(4) | 8.3 | % | 8.2 | % | 8.3 | % | 8.2 | % | 7.9 | % | |||||||||
| Tier 1 leverage ratio(3) | 9.3 | % | 9.5 | % | 9.2 | % | 9.1 | % | 8.9 | % | |||||||||
| Common equity Tier 1 capital ratio(3) | 9.8 | % | 10.0 | % | 10.0 | % | 9.9 | % | 10.0 | % | |||||||||
| Tier 1 risk-based capital ratio(3) | 10.7 | % | 10.9 | % | 10.9 | % | 10.8 | % | 10.9 | % | |||||||||
| Total risk-based capital ratio(3) | 13.5 | % | 13.6 | % | 13.6 | % | 13.7 | % | 13.8 | % | |||||||||
| (1) "ACL - loans" relates to the allowance for credit losses ("ACL") specifically on "Net Loans" and does not include the ACL related to off-balance-sheet ("OBS") credit exposures. | |||||||||||||||||||
| (2) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this press release. | |||||||||||||||||||
| (3) Regulatory capital ratios as of March 31, 2023 are preliminary and prior periods are actual. | |||||||||||||||||||
| (4) Tangible common equity ("TCE") ratio, excluding accumulated other comprehensive income ("AOCI"). | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 129,003 | $ | 126,898 | $ | 143,465 | $ | 158,605 | $ | 161,462 | |||||||||
| Other interest-earning assets | 545,355 | 685,209 | 467,164 | 383,715 | 1,054,232 | ||||||||||||||
| Loans held for sale | 6,507 | 7,264 | 14,411 | 17,528 | 27,675 | ||||||||||||||
| Investment securities | 3,950,101 | 3,968,023 | 3,936,694 | 4,117,801 | 4,288,674 | ||||||||||||||
| Net loans | 20,670,188 | 20,279,547 | 19,695,199 | 18,920,950 | 18,476,119 | ||||||||||||||
| Less: ACL - loans(1) | (278,695) | (269,366) | (266,838) | (248,564) | (243,705) | ||||||||||||||
| Loans, net | 20,391,493 | 20,010,181 | 19,428,361 | 18,672,386 | 18,232,414 | ||||||||||||||
| Net premises and equipment | 216,059 | 225,141 | 221,496 | 211,639 | 218,257 | ||||||||||||||
| Accrued interest receivable | 90,267 | 91,579 | 72,821 | 64,457 | 55,102 | ||||||||||||||
| Goodwill and intangible assets | 563,502 | 560,824 | 561,495 | 537,700 | 537,877 | ||||||||||||||
| Other assets | 1,219,889 | 1,256,583 | 1,300,135 | 1,088,855 | 1,022,617 | ||||||||||||||
| Total Assets | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Deposits | $ | 21,316,584 | $ | 20,649,538 | $ | 21,376,554 | $ | 21,143,866 | $ | 21,541,174 | |||||||||
| Borrowings | 2,446,770 | 2,871,207 | 1,424,681 | 1,013,315 | 1,008,934 | ||||||||||||||
| Other liabilities | 729,824 | 831,200 | 873,648 | 624,412 | 478,667 | ||||||||||||||
| Total Liabilities | 24,493,178 | 24,351,945 | 23,674,883 | 22,781,593 | 23,028,775 | ||||||||||||||
| Shareholders' equity | 2,618,998 | 2,579,757 | 2,471,159 | 2,471,093 | 2,569,535 | ||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | |||||||||
| LOANS, DEPOSITS AND BORROWINGS DETAIL: | |||||||||||||||||||
| Loans, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,746,920 | $ | 7,693,835 | $ | 7,554,509 | $ | 7,417,036 | $ | 7,289,376 | |||||||||
| Commercial and industrial | 4,596,096 | 4,473,004 | 4,240,865 | 4,170,975 | 4,156,562 | ||||||||||||||
| Real estate - residential mortgage | 4,880,919 | 4,737,279 | 4,574,228 | 4,203,827 | 3,946,741 | ||||||||||||||
| Real estate - home equity | 1,074,712 | 1,102,838 | 1,110,103 | 1,108,808 | 1,098,171 | ||||||||||||||
| Real estate - construction | 1,326,754 | 1,269,925 | 1,273,097 | 1,177,446 | 1,210,340 | ||||||||||||||
| Consumer | 730,775 | 699,179 | 633,666 | 538,747 | 481,551 | ||||||||||||||
| Leases and other loans(2) | 314,012 | 303,487 | 308,731 | 304,111 | 293,378 | ||||||||||||||
| Total Net Loans | $ | 20,670,188 | $ | 20,279,547 | $ | 19,695,199 | $ | 18,920,950 | $ | 18,476,119 | |||||||||
| Deposits, by type: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 6,403,484 | $ | 7,006,388 | $ | 7,372,896 | $ | 7,530,777 | $ | 7,528,391 | |||||||||
| Interest-bearing demand | 5,478,237 | 5,410,903 | 5,676,600 | 5,403,805 | 5,625,286 | ||||||||||||||
| Savings | 6,579,806 | 6,434,621 | 6,563,003 | 6,406,051 | 6,479,196 | ||||||||||||||
| Total demand and savings | 18,461,527 | 18,851,912 | 19,612,499 | 19,340,633 | 19,632,873 | ||||||||||||||
| Brokered | 960,919 | 208,416 | 226,883 | 243,172 | 248,833 | ||||||||||||||
| Time | 1,894,138 | 1,589,210 | 1,537,172 | 1,560,061 | 1,659,468 | ||||||||||||||
| Total Deposits | $ | 21,316,584 | $ | 20,649,538 | $ | 21,376,554 | $ | 21,143,866 | $ | 21,541,174 | |||||||||
| Borrowings, by type: | |||||||||||||||||||
| Federal funds purchased | $ | 525,000 | $ | 191,000 | $ | 136,000 | $ | 20,000 | $ | — | |||||||||
| Federal Home Loan Bank advances | 747,000 | 1,250,000 | 265,500 | — | — | ||||||||||||||
| Senior debt and subordinated debt | 539,814 | 539,634 | 539,461 | 555,748 | 555,594 | ||||||||||||||
| Other borrowings | 634,956 | 890,573 | 483,720 | 437,567 | 453,340 | ||||||||||||||
| Total Borrowings | $ | 2,446,770 | $ | 2,871,207 | $ | 1,424,681 | $ | 1,013,315 | $ | 1,008,934 | |||||||||
| (1) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures. | |||||||||||||||||||
| (2) Includes equipment lease financing, overdraft and net origination fees and costs. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||
| dollars in thousands, except per share | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Interest Income: | |||||||||||||||||||
| Interest income | $ | 289,820 | $ | 267,847 | $ | 233,691 | $ | 190,299 | $ | 173,001 | |||||||||
| Interest expense | 74,233 | 41,936 | 18,109 | 11,468 | 11,691 | ||||||||||||||
| Net Interest Income | 215,587 | 225,911 | 215,582 | 178,831 | 161,310 | ||||||||||||||
| Provision for credit losses | 24,544 | 14,513 | 18,958 | 1,500 | (6,950) | ||||||||||||||
| Net Interest Income after Provision | 191,043 | 211,398 | 196,624 | 177,331 | 168,260 | ||||||||||||||
| Non-Interest Income: | |||||||||||||||||||
| Commercial banking: | |||||||||||||||||||
| Merchant and card | 6,834 | 7,223 | 7,601 | 7,355 | 6,097 | ||||||||||||||
| Cash management | 5,515 | 5,756 | 6,483 | 6,062 | 5,428 | ||||||||||||||
| Capital markets | 2,344 | 2,627 | 4,060 | 3,893 | 1,676 | ||||||||||||||
| Other commercial banking | 2,820 | 2,998 | 2,664 | 3,049 | 2,807 | ||||||||||||||
| Total commercial banking | 17,513 | 18,604 | 20,808 | 20,359 | 16,008 | ||||||||||||||
| Consumer banking: | |||||||||||||||||||
| Card | 6,243 | 6,331 | 6,278 | 6,067 | 5,796 | ||||||||||||||
| Overdraft | 2,733 | 3,364 | 4,463 | 3,881 | 3,772 | ||||||||||||||
| Other consumer banking | 2,241 | 2,380 | 2,534 | 2,524 | 2,106 | ||||||||||||||
| Total consumer banking | 11,217 | 12,075 | 13,275 | 12,472 | 11,674 | ||||||||||||||
| Wealth management | 18,062 | 17,531 | 17,610 | 18,274 | 19,428 | ||||||||||||||
| Mortgage banking | 1,970 | 2,140 | 3,720 | 3,768 | 4,576 | ||||||||||||||
| Other | 2,968 | 3,972 | 3,802 | 3,510 | 3,551 | ||||||||||||||
| Non-interest income before investment securities gains (losses) | 51,730 | 54,322 | 59,215 | 58,383 | 55,237 | ||||||||||||||
| Investment securities gains (losses), net | 23 | (1) | (53) | 8 | 19 | ||||||||||||||
| Total Non-Interest Income | 51,753 | 54,321 | 59,162 | 58,391 | 55,256 | ||||||||||||||
| Non-Interest Expense: | |||||||||||||||||||
| Salaries and employee benefits | 89,283 | 92,733 | 94,283 | 85,404 | 84,464 | ||||||||||||||
| Data processing and software | 15,796 | 15,448 | 15,807 | 14,685 | 14,315 | ||||||||||||||
| Net occupancy | 14,438 | 14,061 | 14,025 | 13,587 | 14,522 | ||||||||||||||
| Other outside services | 10,126 | 10,860 | 9,361 | 8,764 | 8,167 | ||||||||||||||
| FDIC insurance | 4,795 | 3,219 | 3,158 | 2,961 | 3,209 | ||||||||||||||
| Equipment | 3,389 | 3,640 | 3,548 | 3,422 | 3,423 | ||||||||||||||
| Professional fees | 2,392 | 2,945 | 2,373 | 2,013 | 1,792 | ||||||||||||||
| Marketing | 1,886 | 2,380 | 1,859 | 1,326 | 1,320 | ||||||||||||||
| Intangible amortization | 674 | 688 | 690 | 177 | 176 | ||||||||||||||
| Merger-related expenses | — | 1,894 | 7,006 | 1,027 | 401 | ||||||||||||||
| Other | 16,837 | 20,594 | 17,448 | 16,364 | 14,189 | ||||||||||||||
| Total Non-Interest Expense | 159,616 | 168,462 | 169,558 | 149,730 | 145,978 | ||||||||||||||
| Income Before Income Taxes | 83,180 | 97,257 | 86,228 | 85,992 | 77,538 | ||||||||||||||
| Income tax expense | 14,866 | 15,424 | 15,357 | 16,003 | 13,250 | ||||||||||||||
| Net Income | 68,314 | 81,833 | 70,871 | 69,989 | 64,288 | ||||||||||||||
| Preferred stock dividends | (2,562) | (2,562) | (2,562) | (2,562) | (2,562) | ||||||||||||||
| Net Income Available to Common Shareholders | $ | 65,752 | $ | 79,271 | $ | 68,309 | $ | 67,427 | $ | 61,726 | |||||||||
| Three Months Ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| PER SHARE: | |||||||||||||||||||
| Net income available to common shareholders: | |||||||||||||||||||
| Basic | $0.39 | $0.47 | $0.41 | $0.42 | $0.38 | ||||||||||||||
| Diluted | $0.39 | $0.47 | $0.40 | $0.42 | $0.38 | ||||||||||||||
| Cash dividends | $0.15 | $0.21 | $0.15 | $0.15 | $0.15 | ||||||||||||||
| Weighted average shares (basic) | 166,605 | 167,504 | 167,353 | 160,920 | 160,588 | ||||||||||||||
| Weighted average shares (diluted) | 168,401 | 169,136 | 168,781 | 162,075 | 161,911 | ||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||
| Balance | Interest(1) | Rate | Balance | Interest(1) | Rate | Balance | Interest(1) | Rate | |||||||||||
| ASSETS | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Net loans | $ | 20,463,096 | $ | 263,065 | 5.21 | % | $ | 20,004,513 | $ | 241,453 | 4.80 | % | $ | 18,383,118 | $ | 151,127 | 3.32 | % | |
| Investment securities | 4,289,643 | 27,522 | 2.60 | % | 4,330,635 | 27,781 | 2.56 | % | 4,226,352 | 24,251 | 2.29 | % | |||||||
| Other interest-earning assets | 493,130 | 3,648 | 3.00 | % | 460,082 | 2,923 | 2.53 | % | 1,286,723 | 912 | 0.29 | % | |||||||
| Total Interest-Earning Assets | 25,245,869 | 294,235 | 4.73 | % | 24,795,230 | 272,157 | 4.36 | % | 23,896,193 | 176,290 | 2.98 | % | |||||||
| Noninterest-Earning assets: | |||||||||||||||||||
| Cash and due from banks | 141,254 | 149,472 | 162,320 | ||||||||||||||||
| Premises and equipment | 223,025 | 223,245 | 219,932 | ||||||||||||||||
| Other assets | 1,563,806 | 1,488,684 | 1,595,039 | ||||||||||||||||
| Less: ACL - loans(2) | (273,301) | (270,276) | (251,022) | ||||||||||||||||
| Total Assets | $ | 26,900,653 | $ | 26,386,355 | $ | 25,622,462 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Interest-Bearing liabilities: | |||||||||||||||||||
| Demand deposits | $ | 5,326,566 | $ | 8,455 | 0.64 | % | $ | 5,479,443 | $ | 4,589 | 0.33 | % | $ | 5,664,987 | $ | 728 | 0.05 | % | |
| Savings deposits | 6,469,468 | 20,535 | 1.29 | % | 6,466,775 | 11,539 | 0.71 | % | 6,436,548 | 1,021 | 0.06 | % | |||||||
| Brokered deposits | 439,670 | 5,173 | 4.77 | % | 215,729 | 1,947 | 3.58 | % | 250,350 | 216 | 0.35 | % | |||||||
| Time deposits | 1,696,878 | 7,458 | 1.78 | % | 1,554,885 | 4,302 | 1.10 | % | 1,697,063 | 3,640 | 0.87 | % | |||||||
| Total Interest-Bearing Deposits | 13,932,582 | 41,621 | 1.21 | % | 13,716,832 | 22,377 | 0.65 | % | 14,048,948 | 5,605 | 0.16 | % | |||||||
| Borrowings and other interest-bearing liabilities | 3,058,684 | 32,613 | 4.32 | % | 2,025,522 | 19,559 | 3.83 | % | 1,033,815 | 6,087 | 2.39 | % | |||||||
| Total Interest-Bearing Liabilities | 16,991,266 | 74,234 | 1.78 | % | 15,742,354 | 41,936 | 1.06 | % | 15,082,763 | 11,692 | 0.31 | % | |||||||
| Noninterest-Bearing liabilities: | |||||||||||||||||||
| Demand deposits | 6,641,741 | 7,310,824 | 7,431,235 | ||||||||||||||||
| Other noninterest-bearing liabilities | 654,330 | 844,029 | 419,630 | ||||||||||||||||
| Total Liabilities | 24,287,337 | 23,897,207 | 22,933,628 | ||||||||||||||||
| Total Deposits/Cost of Deposits | 20,574,323 | 0.82 | % | 21,027,656 | 0.42 | % | 21,480,183 | 0.11 | % | ||||||||||
| Total interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 23,633,007 | 1.27 | % | 23,053,178 | 0.72 | % | 22,513,998 | 0.21 | % | ||||||||||
| Shareholders' equity | 2,613,316 | 2,489,148 | 2,688,834 | ||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 26,900,653 | $ | 26,386,355 | $ | 25,622,462 | |||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 220,001 | 3.53 | % | 230,221 | 3.69 | % | 164,598 | 2.78 | % | ||||||||||
| Tax equivalent adjustment | (4,414) | (4,310) | (3,288) | ||||||||||||||||
| Net Interest Income | $ | 215,587 | $ | 225,911 | $ | 161,310 | |||||||||||||
| (1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. | |||||||||||||||||||
| (2) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| AVERAGE LOANS, DEPOSITS AND BORROWINGS DETAIL (UNAUDITED): | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Loans, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,720,975 | $ | 7,696,997 | $ | 7,566,259 | $ | 7,340,417 | $ | 7,294,914 | |||||||||
| Commercial and industrial | 4,565,923 | 4,372,935 | 4,250,573 | 4,155,436 | 4,213,014 | ||||||||||||||
| Real estate - residential mortgage | 4,790,868 | 4,643,784 | 4,485,649 | 4,052,666 | 3,887,428 | ||||||||||||||
| Real estate - home equity | 1,086,032 | 1,106,325 | 1,099,487 | 1,118,494 | 1,106,319 | ||||||||||||||
| Real estate - construction | 1,276,145 | 1,209,998 | 1,268,590 | 1,188,932 | 1,137,649 | ||||||||||||||
| Consumer | 721,248 | 679,108 | 604,634 | 485,095 | 471,129 | ||||||||||||||
| Leases and other loans(1) | 301,905 | 295,366 | 288,633 | 296,135 | 272,665 | ||||||||||||||
| Total Net Loans | $ | 20,463,096 | $ | 20,004,513 | $ | 19,563,825 | $ | 18,637,175 | $ | 18,383,118 | |||||||||
| Deposits, by type: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 6,641,741 | $ | 7,310,824 | $ | 7,535,791 | $ | 7,647,618 | $ | 7,431,235 | |||||||||
| Interest-bearing demand | 5,326,566 | 5,479,443 | 5,708,059 | 5,597,975 | 5,664,987 | ||||||||||||||
| Savings | 6,469,468 | 6,466,775 | 6,681,713 | 6,425,634 | 6,436,548 | ||||||||||||||
| Total demand and savings | 18,437,775 | 19,257,042 | 19,925,563 | 19,671,227 | 19,532,770 | ||||||||||||||
| Brokered | 439,670 | 215,729 | 247,105 | 244,200 | 250,350 | ||||||||||||||
| Time | 1,696,878 | 1,554,885 | 1,615,384 | 1,608,286 | 1,697,063 | ||||||||||||||
| Total Deposits | $ | 20,574,323 | $ | 21,027,656 | $ | 21,788,052 | $ | 21,523,713 | $ | 21,480,183 | |||||||||
| Borrowings, by type: | |||||||||||||||||||
| Federal funds purchased | $ | 505,142 | $ | 261,737 | $ | 96,965 | $ | 2,857 | $ | — | |||||||||
| Federal Home Loan Bank advances | 1,261,589 | 564,692 | 206,152 | — | — | ||||||||||||||
| Senior debt and subordinated debt | 539,726 | 539,550 | 554,735 | 555,701 | 608,961 | ||||||||||||||
| Other borrowings and other interest-bearing liabilities | 752,227 | 659,543 | 501,496 | 445,261 | 424,854 | ||||||||||||||
| Total Borrowings | $ | 3,058,684 | $ | 2,025,522 | $ | 1,359,348 | $ | 1,003,819 | $ | 1,033,815 | |||||||||
| (1) Includes equipment lease financing, overdraft and net origination fees and costs. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| ASSET QUALITY INFORMATION (UNAUDITED) | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||||||||||
| Allowance for credit losses related to net loans: | |||||||||||||||||||
| Balance at beginning of period | |||||||||||||||||||
| CECL Day 1 provision expense | — | — | 7,954 | — | — | ||||||||||||||
| Initial purchased credit deteriorated loans | — | — | 1,135 | — | — | ||||||||||||||
| Loans charged off: | |||||||||||||||||||
| Real estate - commercial mortgage | (13,362) | (12,235) | (86) | — | (152) | ||||||||||||||
| Commercial and industrial | (612) | (179) | (1,783) | (201) | (227) | ||||||||||||||
| Real estate - residential mortgage | — | — | — | (66) | — | ||||||||||||||
| Consumer and home equity | (2,206) | (1,311) | (1,172) | (877) | (1,052) | ||||||||||||||
| Real estate - construction | — | — | — | — | — | ||||||||||||||
| Leases and other loans(1) | (723) | (505) | (683) | (474) | (469) | ||||||||||||||
| Total loans charged off | (16,903) | (14,230) | (3,724) | (1,618) | (1,900) | ||||||||||||||
| Recoveries of loans previously charged off: | |||||||||||||||||||
| Real estate - commercial mortgage | 786 | 183 | 29 | 3,536 | 112 | ||||||||||||||
| Commercial and industrial | 1,086 | 961 | 2,213 | 739 | 1,980 | ||||||||||||||
| Real estate - residential mortgage | 48 | 10 | 101 | 92 | 222 | ||||||||||||||
| Consumer and home equity | 661 | 683 | 682 | 762 | 454 | ||||||||||||||
| Real estate - construction | 202 | 530 | — | 12 | 32 | ||||||||||||||
| Leases and other loans(1) | 116 | 132 | 247 | 226 | 154 | ||||||||||||||
| Recoveries of loans previously charged off | 2,899 | 2,499 | 3,272 | 5,367 | 2,954 | ||||||||||||||
| Net loans recovered (charged off) | (14,004) | (11,731) | (452) | 3,749 | 1,054 | ||||||||||||||
| Provision for credit losses | 23,333 | 14,259 | 9,637 | 1,110 | (6,350) | ||||||||||||||
| Balance at end of period | |||||||||||||||||||
| Net (recoveries) charge-offs to average loans | 0.27 | % | 0.23 | % | 0.01 | % | (0.08) | % | (0.02) | % | |||||||||
| Provision for credit losses related to OBS Credit Exposures | |||||||||||||||||||
| Provision for credit losses | 1,211 | 254 | 1,367 | 390 | (600) | ||||||||||||||
| NON-PERFORMING ASSETS: | |||||||||||||||||||
| Non-accrual loans | |||||||||||||||||||
| Loans 90 days past due and accruing | 30,336 | 27,463 | 14,559 | 11,016 | 24,182 | ||||||||||||||
| Total non-performing loans | 164,639 | 171,906 | 192,763 | 173,546 | 160,981 | ||||||||||||||
| Other real estate owned | 3,304 | 5,790 | 5,877 | 4,786 | 2,014 | ||||||||||||||
| Total non-performing assets | |||||||||||||||||||
| NON-PERFORMING LOANS, BY TYPE: | |||||||||||||||||||
| Real estate - commercial mortgage | |||||||||||||||||||
| Commercial and industrial | 33,555 | 28,288 | 29,831 | 44,713 | 30,193 | ||||||||||||||
| Real estate - residential mortgage | 46,576 | 46,509 | 41,597 | 42,922 | 39,308 | ||||||||||||||
| Consumer and home equity | 8,983 | 9,800 | 10,016 | 10,552 | 11,465 | ||||||||||||||
| Real estate - construction | 1,509 | 1,368 | 1,456 | 1,357 | 672 | ||||||||||||||
| Leases and other loans(1) | 12,694 | 13,307 | 13,582 | 14,062 | 15,153 | ||||||||||||||
| Total non-performing loans | |||||||||||||||||||
| (1) Includes equipment lease financing, overdraft and net origination fees and costs. |
All values are in US Dollars.
| FULTON FINANCIAL CORPORATION | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) | |||||||||||
| (dollars in thousands, except per share data) | |||||||||||
| Explanatory note: | This press release contains supplemental financial information, as detailed below, that has been derived by methods other than Generally Accepted Accounting Principles ("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. 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 condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow: | ||||||||||
| Three months ended | |||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||
| Operating net income available to common shareholders | |||||||||||
| Net income available to common shareholders | $ | 65,752 | $ | 79,271 | $ | 68,309 | $ | 67,427 | $ | 61,726 | |
| Plus: Core deposit intangible amortization | 514 | 514 | 514 | — | — | ||||||
| Plus: Merger-related expenses | — | 1,894 | 7,006 | 1,027 | 401 | ||||||
| Plus: CECL Day 1 Provision expense | — | — | 7,954 | — | — | ||||||
| Less: Tax impact of adjustments | (108) | (506) | (3,250) | (216) | (84) | ||||||
| Operating net income available to common shareholders (numerator) | $ | 66,158 | $ | 81,173 | $ | 80,533 | $ | 68,238 | $ | 62,043 | |
| Weighted average shares (diluted) (denominator) | 168,401 | 169,136 | 168,781 | 162,075 | 161,911 | ||||||
| Operating net income available to common shareholders, per share (diluted) | $ | 0.39 | $ | 0.48 | $ | 0.48 | $ | 0.42 | $ | 0.38 | |
| Common shareholders' equity (tangible), per share | |||||||||||
| Shareholders' equity | $ | 2,618,998 | $ | 2,579,757 | $ | 2,471,159 | $ | 2,471,093 | $ | 2,569,535 | |
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | ||||||
| Less: Goodwill and intangible assets | (563,502) | (560,824) | (561,495) | (537,700) | (537,877) | ||||||
| Tangible common shareholders' equity (numerator) | $ | 1,862,618 | $ | 1,826,055 | $ | 1,716,786 | $ | 1,740,515 | $ | 1,838,780 | |
| Shares outstanding, end of period (denominator) | 165,396 | 167,599 | 167,399 | 161,057 | 160,669 | ||||||
| Common shareholders' equity (tangible), per share | $ | 11.26 | $ | 10.90 | $ | 10.26 | $ | 10.81 | $ | 11.44 | |
| Operating return on average assets | |||||||||||
| Net income | $ | 68,314 | $ | 81,833 | $ | 70,871 | $ | 69,989 | $ | 64,288 | |
| Plus: Core deposit intangible amortization | 514 | 514 | 514 | — | — | ||||||
| Plus: Merger-related expenses | — | 1,894 | 7,006 | 1,027 | 401 | ||||||
| Plus: CECL Day 1 Provision expense | — | — | 7,954 | — | — | ||||||
| Less: Tax impact of adjustments | (108) | (506) | (3,250) | (216) | (84) | ||||||
| Operating net income (numerator) | $ | 68,720 | $ | 83,735 | $ | 83,095 | $ | 70,800 | $ | 64,605 | |
| Total average assets (denominator) | $ | 26,900,653 | $ | 26,386,355 | $ | 26,357,095 | $ | 25,578,432 | $ | 25,622,462 | |
| Operating return on average assets | 1.04% | 1.26% | 1.25% | 1.11% | 1.02% | ||||||
| Return on average common shareholders' equity (tangible) | |||||||||||
| Net income available to common shareholders | $ | 65,752 | $ | 79,271 | $ | 68,309 | $ | 67,427 | $ | 61,726 | |
| Plus: Intangible amortization | 674 | 688 | 690 | 177 | 176 | ||||||
| Plus: Merger-related expenses | — | 1,894 | 7,006 | 1,027 | 401 | ||||||
| Plus: CECL Day 1 Provision expense | — | — | 7,954 | — | — | ||||||
| Less: Tax impact of adjustments | (142) | (542) | (3,287) | (253) | (122) | ||||||
| Operating net income available to common shareholders (numerator) | $ | 66,284 | $ | 81,311 | $ | 80,672 | $ | 68,378 | $ | 62,181 | |
| Average shareholders' equity | $ | 2,613,316 | $ | 2,489,148 | $ | 2,604,057 | $ | 2,531,346 | $ | 2,688,834 | |
| Less: Average preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | ||||||
| Less: Average goodwill and intangible assets | (561,744) | (561,219) | (562,285) | (537,786) | (537,976) | ||||||
| Average tangible common shareholders' equity (denominator) | $ | 1,858,694 | $ | 1,735,051 | $ | 1,848,894 | $ | 1,800,682 | $ | 1,957,980 | |
| Return on average common shareholders' equity (tangible) | 14.46% | 18.59% | 17.31% | 15.23% | 12.88% | ||||||
| Three months ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||
| Tangible common equity to tangible assets (TCE Ratio) | |||||||||||
| Shareholders' equity | $ | 2,618,998 | $ | 2,579,757 | $ | 2,471,159 | $ | 2,471,093 | $ | 2,569,535 | |
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | ||||||
| Less: Goodwill and intangible assets | (563,502) | (560,824) | (561,495) | (537,700) | (537,877) | ||||||
| Tangible common shareholders' equity (numerator) | $ | 1,862,618 | $ | 1,826,055 | $ | 1,716,786 | $ | 1,740,515 | $ | 1,838,780 | |
| Total assets | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | |
| Less: Goodwill and intangible assets | (563,502) | (560,824) | (561,495) | (537,700) | (537,877) | ||||||
| Total tangible assets (denominator) | $ | 26,548,674 | $ | 26,370,878 | $ | 25,584,547 | $ | 24,714,986 | $ | 25,060,433 | |
| Tangible common equity to tangible assets | 7.02% | 6.92% | 6.71% | 7.04% | 7.34% | ||||||
| Tangible common equity to tangible assets (TCE Ratio) excluding AOCI | |||||||||||
| Shareholders' equity | $ | 2,618,998 | $ | 2,579,757 | $ | 2,471,159 | $ | 2,471,093 | $ | 2,569,535 | |
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | ||||||
| Less: Accumulated other comprehensive (income) loss | 350,992 | 385,476 | 442,947 | 304,210 | 158,855 | ||||||
| Less: Goodwill and intangible assets | (563,502) | (560,824) | (561,495) | (537,700) | (537,877) | ||||||
| Tangible common shareholders' equity (numerator) | $ | 2,213,610 | $ | 2,211,531 | $ | 2,159,733 | $ | 2,044,725 | $ | 1,997,635 | |
| Total assets | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | |
| Less: Goodwill and intangible assets | (563,502) | (560,824) | (561,495) | (537,700) | (537,877) | ||||||
| Plus: AOCI - unrealized losses/(gains) on AFS investments securities | 282,092 | 632,456 | 368,196 | 249,424 | 112,965 | ||||||
| Total tangible assets (denominator) | $ | 26,830,766 | $ | 27,003,334 | $ | 25,952,743 | $ | 24,964,410 | $ | 25,173,398 | |
| Tangible common equity to tangible assets, excluding AOCI | 8.25% | 8.19% | 8.32% | 8.19% | 7.94% | ||||||
| Efficiency ratio | |||||||||||
| Non-interest expense | $ | 159,616 | $ | 168,462 | $ | 169,558 | $ | 149,730 | $ | 145,978 | |
| Less: Amortization of tax credit investments | — | (696) | (696) | (696) | (696) | ||||||
| Less: Merger-related expenses | — | (1,894) | (7,006) | (1,027) | (401) | ||||||
| Less: Intangible amortization | (674) | (688) | (690) | (177) | (176) | ||||||
| Non-interest expense (numerator) | $ | 158,942 | $ | 165,184 | $ | 161,166 | $ | 147,830 | $ | 144,705 | |
| Net interest income | $ | 215,587 | $ | 225,911 | $ | 215,582 | $ | 178,831 | $ | 161,310 | |
| Tax equivalent adjustment | 4,414 | 4,310 | 3,970 | 3,427 | 3,288 | ||||||
| Plus: Total non-interest income | 51,753 | 54,321 | 59,162 | 58,391 | 55,256 | ||||||
| Less: Investment securities (gains) losses, net | (23) | 1 | 53 | (8) | (19) | ||||||
| Total revenue (denominator) | $ | 271,731 | $ | 284,543 | $ | 278,767 | $ | 240,641 | $ | 219,835 | |
| Efficiency ratio | 58.5% | 58.1% | 57.8% | 61.4% | 65.8% | ||||||
| Operating non-interest expenses to total average assets | |||||||||||
| Non-interest expense | $ | 159,616 | $ | 168,462 | $ | 169,558 | $ | 149,730 | $ | 145,978 | |
| Less: Amortization of tax credit investments | — | (696) | (696) | (696) | (696) | ||||||
| Less: Intangible amortization | (674) | (688) | (690) | (177) | (176) | ||||||
| Less: Merger-related expenses | — | (1,894) | (7,006) | (1,027) | (401) | ||||||
| Non-interest expense (numerator) | $ | 158,942 | $ | 165,184 | $ | 161,166 | $ | 147,830 | $ | 144,705 | |
| Total average assets (denominator) | $ | 26,900,653 | $ | 26,386,355 | $ | 26,357,095 | $ | 25,578,432 | $ | 25,622,462 | |
| Operating non-interest expenses to total average assets | 2.40% | 2.48% | 2.43% | 2.32% | 2.29% | ||||||
| Three months ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||
| 2023 | 2022 | 2022 | 2022 | 2022 | |||||||
| Pre-provision net revenue | |||||||||||
| Net interest income | $ | 215,587 | $ | 225,911 | $ | 215,582 | $ | 178,831 | $ | 161,310 | |
| Non-interest income | 51,753 | 54,321 | 59,162 | 58,391 | 55,256 | ||||||
| Less: Investment securities (gains) losses, net | (23) | 1 | 53 | (8) | (19) | ||||||
| Total revenue | $ | 267,317 | $ | 280,233 | $ | 274,797 | $ | 237,214 | $ | 216,547 | |
| Non-interest expense | $ | 159,616 | $ | 168,462 | $ | 169,558 | $ | 149,730 | $ | 145,978 | |
| Less: Amortization on tax credit investments | — | (696) | (696) | (696) | (696) | ||||||
| Less: Merger-related expenses | — | (1,894) | (7,006) | (1,027) | (401) | ||||||
| Less: Intangible amortization | (674) | (688) | (690) | (177) | (176) | ||||||
| Total non-interest expense | $ | 158,942 | $ | 165,184 | $ | 161,166 | $ | 147,830 | $ | 144,705 | |
| Pre-provision net revenue | $ | 108,375 | $ | 115,049 | $ | 113,631 | $ | 89,384 | $ | 71,842 | |
| Note: numbers may not sum due to rounding. |
16
exhibit99233123earningsc
FIRST QUARTER 2023 RESULTS NASDAQ: FULT Data as of or for the period ended March 31, 2023 unless otherwise noted
This presentation may contain forward-looking statements with respect to the Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results. Management’s "2023 Outlook "contained herein is comprised of forward-looking statements. Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation’s actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation’s website (www.fultonbank.com) and on the SEC’s website (www.sec.gov). The Corporation uses certain financial measures in this presentation that have been derived by methods other than generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are reconciled to the most comparable GAAP measures at the end of this presentation. FORWARD-LOOKING STATEMENTS 2
(1) Non-GAAP financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. INCOME STATEMENT SUMMARY 3 1Q23 4Q22 1Q22 (dollars in thousands, except per-share data) Net interest income $215,587 $225,911 $161,310 Provision for credit losses 24,544 14,513 (6,950) Non-interest income 51,730 54,322 55,237 Securities gains (losses) 23 (1) 19 Non-interest expense 159,616 166,568 145,577 Merger-related expenses — 1,894 401 Income before income taxes 83,180 97,257 77,538 Income taxes 14,866 15,424 13,250 Net income 68,314 81,833 64,288 Preferred stock dividends (2,562) (2,562) (2,562) Net income available to common shareholders $65,752 $79,271 $61,726 Net income available to common shareholders, per share (diluted) $0.39 $0.47 $0.38 Operating net income available to common shareholders, per share (diluted)(1) $0.39 $0.48 $0.38 ROAA 1.03% 1.23% 1.02% Operating ROAA(1) 1.04% 1.26% 1.02% ROAE 11.02% 13.70% 10.03% ROAE (tangible)(1) 14.46% 18.59% 12.88% Efficiency ratio(1) 58.5% 58.1% 65.8%
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields Average Deposits and Borrowings & Other & Cost of Funds (DOLLARS IN MILLIONS) (DOLLARS IN BILLIONS) (DOLLARS IN BILLIONS) 4 $21 $22 $22 $21 $21 $1 $1 $1 $2 $3 0.21% 0.20% 0.31% 0.72% 1.27% 0.11% 0.11% 0.18% 0.42% 0.82% Cost of Deposits Cost of Funds Borrowings & Other Deposits 1Q22 2Q22 3Q22 4Q22 1Q23 $12 $15 $18 $21 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% $161 $179 $216 $226 $216 2.78% 3.04% 3.54% 3.69% 3.53% Net Interest Income Net Interest Margin (Fully-taxable equivalent basis, or FTE) 1Q22 2Q22 3Q22 4Q22 1Q23 $50 $75 $100 $125 $150 $175 $200 $225 $250 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% $18 $19 $20 $20 $20 $6 $5 $5 $5 $5 2.98% 3.24% 3.83% 4.36% 4.73% Loans Securities & Other Interest-Earning Asset Yield (FTE) 1Q22 2Q22 3Q22 4Q22 1Q23 $5 $10 $15 $20 2.00% 4.00% 6.00% 8.00%
ASSET QUALITY (DOLLARS IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans Net Charge-offs (NCOs) and NCOs to Average Loans ACL(1) to NPLs & Loans 5(1) The allowance for credit losses (“ACL”) relates specifically to "Loans, net of unearned income" and does not include reserves related to off-balance-sheet credit exposures. (2) Includes the CECL Day 1 provision for credit losses of $8.0 million for the acquired Prudential Bancorp, Inc. loan portfolio. $(7) $2 $19 $15 $25 1Q22 2Q22 3Q22 4Q22 1Q23 $(10) $(5) $— $5 $10 $15 $20 $25 $161 $174 $193 $172 $165 0.87% 0.92% 0.98% 0.85% 0.80% NPL NPLs/Loans 1Q22 2Q22 3Q22 4Q22 1Q23 $100 $125 $150 $175 $200 0.00% 0.50% 1.00% $(1) $(4) $0 $12 $14 -0.02% -0.08% 0.01% 0.23% 0.27% Net charge-offs/(recoveries) NCOs/Average Loans (annualized) 1Q22 2Q22 3Q22 4Q22 1Q23 $(5) $0 $5 $10 $15 $20 $25 (0.50)% (0.25)% 0.00% 0.25% 0.50% 151% 143% 138% 157% 169% 1.32% 1.31% 1.35% 1.33% 1.35% ACL/NPLs ACL/Loans 1Q22 2Q22 3Q22 4Q22 1Q23 50% 75% 100% 125% 150% 175% 200% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25% (2)
LOAN MIX IS DIVERSIFIED AND GRANULAR WITH OFFICE LOANS REPRESENTING 3.4% OF TOTAL LOANS 6
THE OFFICE PORTFOLIO IS GRANULAR, DIVERSIFIED, AND TENURED 7
NON-INTEREST INCOME(1) (1) Excluding investment securities gains Three months ended March 31, 2023 (percent of total non-interest income) 8 Non-interest income decreased 5% from 4Q22(1) Driven primarily by: n Commercial banking customer swap fees and merchant and card fees. n Equity method investments. n Consumer banking overdraft fees. 35% 4% 21% 34% 6% Wealth Management Mortgage Banking Consumer Banking Commercial Banking Other 1Q23 4Q22 Change (dollars in thousands) n Wealth Management $18,062 $17,531 $531 n Commercial Banking 17,513 18,604 (1,091) n Consumer Banking 11,217 12,075 (858) n Mortgage Banking 1,970 2,140 (170) n Other 2,968 3,972 (1,004) Total $51,730 $54,322 ($2,592)
NON-INTEREST EXPENSE(1) Three months ended March 31, 2023 (percent of total non-interest expense) 9 56% 9% 10% 6% 19% Salaries and Benefits Occupancy Data Processing and Software Other Outside Services Other 1Q23 4Q22 Change (dollars in thousands) n Salaries and Benefits $89,283 $92,733 ($3,450) n Data Processing and Software 15,796 15,448 348 n Occupancy 14,438 14,061 377 n Other Outside Services 10,126 10,860 (734) n Other 29,973 33,466 (3,493) Total $159,616 $166,568 ($6,952) Non-interest expense, excluding merger-related expenses, decreased 4.2% from 4Q22 Driven primarily by: Decreases in: n Other expense primarily due to a $1.2 million decrease in charitable contributions, $1.1 million for other real estate owned gains on sale and an $0.8 million contingent liability. n Salaries and benefits of $3.5 million, primarily due to a decrease in variable compensation plan expense. n Other Outside Services driven by technology-related services. . (1) Excluding merger-related expenses
CAPITAL POSITION REMAINS STRONG(1) 10 (1) Regulatory capital ratios and excess capital amounts as of March 31, 2023 are preliminary. (2) Excesses shown are to regulatory minimums, including the 250 basis point capital conservation buffer, except for Tier 1 Leverage which is the well- capitalized minimum. 9.3% 9.8% 10.7% 13.5% Regulatory Minimums Excess(2) Tier 1 Leverage CE Tier 1 Tier 1 Risk-Based Total Risk-Based —% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% $1,120 $498 $647 $675 (as of March 31, 2023) (dollars in millions)
CAPITAL RATIOS ADJUSTED FOR UNREALIZED LOSSES ON INVESTMENT SECURITIES - RATIOS REMAIN STRONG(1) 11 (1) Regulatory capital ratios and excess capital amounts as of March 31, 2023 are preliminary. (2) Excesses shown are to regulatory minimums, including the 250 basis point capital conservation buffer, except for Tier 1 Leverage which is the well-capitalized minimum. (3) Tier 1 Leverage and CE Tier 1 capital ratios were adjusted to incorporate the unrealized loss, net of tax, on Held-to-Maturity investment securities of $94.0 million and the unrealized loss, net of tax, on Available-for-Sale investment securities of $282.1 million. (4) Non-GAAP financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 6.7% 8.1% 8.2% —% 2.5% 5.0% 7.5% 10.0% 12.5% $782 $271 (as of March 31, 2023) (dollars in millions) n Regulatory Minimums n Excess(2) | | | | | | | | | | | | | Tier 1 Leverage(3) CE Tier 1(3) TCE(4)
A COMMITTED AND HEALTHY LIQUIDITY PROFILE WITH SIGNIFICANT COVERAGE 12
A GRANULAR, TENURED AND DIVERSIFIED DEPOSIT PORTFOLIO 13
2023 OUTLOOK 14 Net interest income: $850 - $870 million(1) Non-interest income: $220 - $230 million(2) Provision for credit losses: $55 - $70 million Non-interest expense: $645 - $660 million(3) Effective tax rate: 18.5% +/-(4) (1) Assumes Fed Funds Rate increase of 25 bps in May 2023. Updated as of 1Q 22; previously $895 - $915 million. (2) Excludes investment securities gains. Updated as of 1Q 22; previously $220 - $235 million. (3) Previously $645 - $665 million. (4) Previously 19.0% +/-.
NON-GAAP RECONCILIATION 15 Note: The Corporation has presented the following 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. 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 condensed consolidated financial statements in their entirety. Three months ended (dollars in thousands) Mar 31 Dec 31 Mar 31 2023 2022 2022 Operating net income available to common shareholders Net income available to common shareholders $65,752 $79,271 $61,726 Plus: Core deposit intangible amortization 514 514 — Plus: Merger-related expenses — 1,894 401 Less: Tax impact of adjustments (108) (506) (84) Operating net income available to common shareholders (numerator) $66,158 $81,173 $62,043 Weighted average shares (diluted) (denominator) 168,401 169,136 161,911 Operating net income available to common shareholders, per share (diluted) $0.39 $0.48 $0.38
NON-GAAP RECONCILIATION 16 Three months ended (dollars in thousands) Mar 31 Dec 31 Mar 31 2023 2022 2022 Operating return on average assets Net income $68,314 $81,833 $64,288 Plus: Core deposit intangible amortization 514 514 — Plus: Merger-related expenses — 1,894 401 Less: Tax impact of adjustments (108) (506) (84) Operating net income (numerator) $68,720 $83,735 $64,605 Total average assets (denominator) $26,900,653 $26,386,355 $25,622,462 Operating return on average assets 1.04 % 1.26 % 1.02 %
NON-GAAP RECONCILIATION 17 Three months ended (dollars in thousands) Mar 31 Dec 31 Mar 31 2023 2022 2022 Return on average common shareholders' equity (tangible) Net income available to common shareholders $65,752 $79,271 $61,726 Plus: Intangible amortization 674 688 176 Plus: Merger-related expenses — 1,894 401 Less: Tax impact of adjustments (142) (542) (122) Operating net income available to common shareholders (numerator) $66,284 $81,311 $62,181 Average shareholders' equity $2,613,316 $2,489,148 $2,688,834 Less: Average preferred stock (192,878) (192,878) (192,878) Less: Average goodwill and intangible assets (561,744) (561,219) (537,976) Average tangible common shareholders' equity (denominator) $1,858,694 $1,735,051 $1,957,980 Return on average common shareholders' equity (tangible) 14.46 % 18.59 % 12.88 %
NON-GAAP RECONCILIATION 18 (dollars in thousands) Three months ended Mar 31 Dec 31 Mar 31 Efficiency ratio 2023 2022 2022 Non-interest expense $159,616 $168,462 $145,978 Less: Amortization of tax credit investments — (696) (696) Less: Merger-related expenses — (1,894) (401) Less: Intangible amortization (674) (688) (176) Non-interest expense (numerator) $158,942 $165,184 $144,705 Net interest income $215,587 $225,911 $161,310 Tax equivalent adjustment 4,414 4,310 3,288 Plus: Total non-interest income 51,753 54,321 55,256 Less: Investment securities (gains) losses, net (23) 1 (19) Total revenue (denominator) $271,731 $284,543 $219,835 Efficiency ratio 58.5% 58.1% 65.8%
19 Three months ended (dollars in thousands) Mar 31 2023 Adjusted tangible common equity to tangible assets (TCE Ratio) Shareholders' equity $ 2,618,998 Less: Preferred stock (192,878) Less: Goodwill and intangible assets (563,502) Less: Unrealized gain/(loss) - HTM (121,513) Less: Tax impact of adjustments 27,523 Adjusted tangible common shareholders' equity (numerator) $ 1,768,628 Total assets $ 27,112,176 Less: Goodwill and intangible assets (563,502) Less: Unrealized gain/(loss) - HTM (121,513) Less: Tax impact of adjustments 27,523 Adjusted total tangible assets (denominator) $ 26,454,684 Adjusted tangible common equity to tangible assets 6.7 % NON-GAAP RECONCILIATION