FULT 8-K
Fulton Financial Corp (FULT)
8-K
2020-01-21
For: 2020-01-21
View Original
Added on
April 12, 2026
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
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
(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):
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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 January 21, 2020, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the fourth quarter and year ended December 31, 2019. A copy of the Press Release and supplementary financial information which accompanied the Press Release, are attached as Exhibits 99.1 and 99.2, respectively, to this Current Report and are incorporated herein by reference. The Corporation also posted on its Investor Relations website, www.fult.com, presentation materials the Corporation intends to use during a conference call and webcast to discuss those results on Wednesday, January 22, 2020 at 10:00 a.m. Eastern Time. A copy of the presentation materials is attached as Exhibit 99.3 to this Current Report and is incorporated herein by reference.
Forward-Looking Statements
This Current Report on Form 8-K, 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. Statements relating to the "outlook" or "2020 Outlook" contained in Exhibit 99.3 to this Current Report are forward looking statements. These forward looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, 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, they 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, 2018 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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: January 21, 2020 | FULTON FINANCIAL CORPORATION |
By: /s/ Mark R. McCollom | |
Mark R. McCollom | |
Senior Executive Vice President and | |
Chief Financial Officer | |
Exhibit 99.1
FULTON FINANCIAL
CORPORATION
FOR IMMEDIATE RELEASE
Media Contact: Laura Wakeley (717) 291-2616
Investor Contact: Jason Weber (717) 327-2394
Fulton Financial reports fourth quarter and 2019 results
2019 Key Accomplishments
• | Termination of the remaining BSA/AML regulatory orders |
• | Successful consolidation of affiliate banks into Fulton Bank, N.A. |
• | Record year of revenues and net income |
• | Average loan growth of 4% and average deposit growth of 6% |
• | Net income grew 12% and pre-provision net revenue(1) increased 4% |
(January 21, 2020) - Lancaster, PA - Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income of $54 million, or $0.33 per diluted share, for the fourth quarter of 2019, and net income of $233 million, or $1.39 per diluted share, for 2019.
"Overall, 2019 was another good year for Fulton as we continued to execute on our growth strategies and completed the consolidation of our remaining affiliate banks into Fulton Bank,” said E. Philip Wenger, Chairman and CEO. “I’m extremely proud of our team’s hard work this year, and continued focus on driving shareholder value. We look forward to 2020 and believe we are well-positioned to continue to advance our strategic priorities.”
Net income per diluted share for the fourth quarter of 2019 decreased 11% to $0.33 in comparison to the $0.37 reported for the third quarter of 2019 and unchanged from the fourth quarter of 2018. The decline in net income from the third quarter of 2019 was primarily the result of a decrease in net interest income and an increase in the provision for credit losses, partially offset by a decrease in non-interest expense.
(1) | Non-GAAP financial measure. Please refer to the calculation and management’s reasons for using this measure on the page titled “Non-GAAP Reconciliation” in the accompanying tables. |
For the year ended December 31, 2019, net income per diluted share increased 18% to $1.39 in comparison to the $1.18 reported for 2018. The increase in net income was driven by a lower provision for credit losses and higher net interest income, non-interest income and securities gains, partially offset by higher non-interest expense.
Net Interest Income and Balance Sheet
Net interest income for the fourth quarter of 2019 was $159 million, a $2 million decrease from the third quarter of 2019. The decrease resulted from the impact of a 9 basis point decrease in net interest margin due mainly to the 25 basis point decrease in the federal funds rate in each of September and October 2019, partially offset by balance sheet growth. The decline in net interest margin resulted from the net impact of an 18 basis point decrease in the yield on interest-earning assets, partially offset by an 11 basis point decrease in average cost of funds. The decline in asset yields was primarily the result of a 24 basis point decrease in loan yields, partially offset by an 8 basis point increase in investment securities yields.
For the year ended December 31, 2019, net interest income increased $18 million, or 3%, driven mainly by a 4% increase in average interest-earning assets. The increase in average interest-earning assets was partially offset by the impact of a 4 basis point decrease in the net interest margin to 3.36%. The average yield on interest-earning assets increased 18 basis points and the average cost of interest-bearing liabilities increased 28 basis points from 2018.
Total average assets for the fourth quarter of 2019 were $22 billion, an increase of $356 million from the third quarter of 2019, with average loans, net of unearned income, increasing $332 million.
Average loans and yields, by type, for the fourth quarter of 2019 in comparison to the third quarter of 2019 are summarized in the following table:
Three Months Ended | ||||||||||||||||||||
December 31, 2019 | September 30, 2019 | Growth | ||||||||||||||||||
Balance | Yield (1) | Balance | Yield (1) | $ | % | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Average Loans, net of unearned income, by type: | ||||||||||||||||||||
Real estate - commercial mortgage | $ | 6,561,029 | 4.34 | % | $ | 6,489,456 | 4.57 | % | $ | 71,573 | 1.1 | % | ||||||||
Commercial - industrial, financial, and agricultural | 4,575,350 | 4.24 | % | 4,414,992 | 4.56 | % | 160,358 | 3.6 | % | |||||||||||
Real estate - residential mortgage | 2,606,136 | 4.00 | % | 2,512,899 | 4.06 | % | 93,237 | 3.7 | % | |||||||||||
Real estate - home equity | 1,331,088 | 4.97 | % | 1,364,161 | 5.27 | % | (33,073 | ) | (2.4 | )% | ||||||||||
Real estate - construction | 934,556 | 4.37 | % | 905,060 | 4.68 | % | 29,496 | 3.3 | % | |||||||||||
Consumer | 464,606 | 4.44 | % | 457,524 | 4.36 | % | 7,082 | 1.5 | % | |||||||||||
Leasing | 281,451 | 4.35 | % | 277,555 | 4.41 | % | 3,896 | 1.4 | % | |||||||||||
Other | 14,058 | N/A | 14,860 | N/A | (802 | ) | (5.4 | )% | ||||||||||||
Total Average Loans, net of unearned income | $ | 16,768,274 | 4.31 | % | $ | 16,436,507 | 4.55 | % | $ | 331,767 | 2.0 | % | ||||||||
(1) Presented on a tax-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. | ||||||||||||||||||||
N/A - Not applicable | ||||||||||||||||||||
For the year ended December 31, 2019, average loans increased $615 million, or 4%, compared to 2018. Ending loans at December 31, 2019 increased $171 million, or 1%, compared to September 30, 2019 and increased $692 million, or 4%, compared to December 31, 2018.
Total average liabilities for the fourth quarter of 2019 increased $329 million, or 2%, from the third quarter of 2019, with a $499 million, or 3%, increase in average deposits being partially offset by a $202 million, or 22%, decrease in average short-term borrowings.
Average deposits and interest rates, by type, for the fourth quarter of 2019 in comparison to the third quarter of 2019 are summarized in the following table:
Three Months Ended | ||||||||||||||||||||
December 31, 2019 | September 30, 2019 | Growth | ||||||||||||||||||
Balance | Rate | Balance | Rate | $ | % | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Average Deposits, by type: | ||||||||||||||||||||
Noninterest-bearing demand | $ | 4,324,568 | — | % | $ | 4,247,820 | — | % | $ | 76,748 | 1.8 | % | ||||||||
Interest-bearing demand | 4,699,040 | 0.71 | % | 4,448,112 | 0.82 | % | 250,928 | 5.6 | % | |||||||||||
Savings and money market deposits | 5,205,260 | 0.78 | % | 5,026,316 | 0.87 | % | 178,944 | 3.6 | % | |||||||||||
Total average demand and savings | 14,228,868 | 0.52 | % | 13,722,248 | 0.58 | % | 506,620 | 3.7 | % | |||||||||||
Brokered deposits | 261,689 | 1.94 | % | 253,426 | 2.40 | % | $ | 8,263 | 3.3 | % | ||||||||||
Time deposits | 2,959,008 | 1.86 | % | 2,974,993 | 1.86 | % | (15,985 | ) | (0.5 | )% | ||||||||||
Total Average Deposits | $ | 17,449,565 | 0.77 | % | $ | 16,950,667 | 0.84 | % | $ | 498,898 | 2.9 | % | ||||||||
For the year ended December 31, 2019, average deposits increased $934 million, or 6%, compared to 2018. Ending deposits at December 31, 2019 increased $1 billion, or 6%, compared to December 31, 2018.
Asset Quality
The provision for credit losses for the fourth quarter of 2019 was $13 million, up from $2 million for the third quarter of 2019, driven primarily by a higher allocation need for a certain commercial loan.
Non-performing assets were $168 million, or 0.77% of total assets, at December 31, 2019, compared to $144 million, or 0.66% of total assets, at September 30, 2019 and $150 million, or 0.73% of total assets, at December 31, 2018.
Annualized net charge-offs for the quarter ended December 31, 2019 were 0.17% of total average loans, compared to 0.15% for the quarter ended September 30, 2019. The allowance for credit losses as a percentage of non-performing loans was 111% at December 31, 2019, compared to 127% at September 30, 2019.
Non-interest Income
Non-interest income in the fourth quarter of 2019, excluding investment securities gains, was $55 million, essentially unchanged from the third quarter of 2019 and $6 million, or 12%, higher than the fourth quarter of 2018.
Wealth management income increased due to growth in trust and brokerage income, both organically and, with respect to brokerage income, through the acquisitions completed in the first and fourth quarters of 2019. Mortgage banking income decreased due to seasonally lower loan volumes. Consumer banking income decreased, driven by decreases in card income. Commercial banking income increased, as higher commercial loan interest rate swap fees were partially offset by declines in merchant and card income.
During the third quarter of 2019, Fulton completed a balance sheet restructuring involving the sale of approximately $400 million of investment securities and a corresponding prepayment of FHLB advances. As a result of these transactions, $5 million of investment securities gains were realized during the quarter.
For the year ended December 31, 2019, non-interest income, excluding investment securities gains, increased $16 million, or 8%, with increases across all major categories.
Non-interest Expense
Non-interest expense was $140 million in the fourth quarter of 2019, a decrease of $7 million, or 5%, compared to the third quarter of 2019 and a decrease of $1 million, or 1%, compared to the fourth quarter of 2018.
The fourth quarter of 2019 included decreases in other outside services, marketing and intangible amortization, partially offset by increases in FDIC insurance expense, due to lower assessment credits, net occupancy expense and other expenses.
The third quarter of 2019 included $5 million of expenses related to the consolidation of the remaining subsidiary banks, primarily in other outside services. The third quarter also included $4 million of penalties related to the prepayment of certain FHLB advances in conjunction with the previously mentioned balance sheet restructuring.
For the year ended December 31, 2019, non-interest expense increased $23 million, or 4%, compared to 2018. This increase was primarily due to increases in salaries and employee benefits, other outside services and other expense, partially offset by decreases in amortization of tax credit investments and FDIC insurance expense.
Expenses incurred for the years ended December 31, 2019 and 2018 related to the consolidation of the subsidiary banks were $11 million and $4 million, respectively, which were recognized in various categories in non-interest expense.
Income Tax Expense
The effective income tax rate for the fourth quarter of 2019 was 13%, as compared to 14% for the third quarter of 2019, with the decrease resulting mainly from lower income before income taxes.
The effective income tax rate for the year ended December 31, 2019 was 14%, as compared to 11% in 2018. The increase resulted mainly from higher income before income taxes.
Additional information on Fulton is available on the Internet at www.fult.com.
Safe Harbor Statement
This news 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, 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, they 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, 2018 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov).
Non-GAAP Financial Measures
The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.
FULTON FINANCIAL CORPORATION | ||||||||||||||||||||
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) | ||||||||||||||||||||
in thousands, except per-share data and percentages | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | ||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | ||||||||||||||||
Ending Balances | ||||||||||||||||||||
Investments | $ | 2,867,378 | $ | 2,705,610 | $ | 2,853,358 | $ | 2,748,249 | $ | 2,686,973 | ||||||||||
Loans, net of unearned income | 16,857,526 | 16,686,866 | 16,368,458 | 16,262,633 | 16,165,800 | |||||||||||||||
Total assets | 21,897,062 | 21,703,618 | 21,308,670 | 20,974,649 | 20,682,152 | |||||||||||||||
Deposits | 17,393,913 | 17,342,717 | 16,388,895 | 16,377,978 | 16,376,159 | |||||||||||||||
Shareholders' equity | 2,348,474 | 2,324,016 | 2,308,798 | 2,301,019 | 2,247,573 | |||||||||||||||
Average Balances | ||||||||||||||||||||
Investments | $ | 2,830,999 | $ | 2,829,672 | $ | 2,790,392 | $ | 2,699,130 | $ | 2,646,266 | ||||||||||
Loans, net of unearned income | 16,768,274 | 16,436,507 | 16,316,076 | 16,194,375 | 15,965,637 | |||||||||||||||
Total assets | 21,813,760 | 21,457,800 | 21,057,030 | 20,690,365 | 20,512,130 | |||||||||||||||
Deposits | 17,449,565 | 16,950,667 | 16,375,456 | 16,275,633 | 16,413,066 | |||||||||||||||
Shareholders' equity | 2,342,571 | 2,315,585 | 2,301,258 | 2,265,097 | 2,281,669 | |||||||||||||||
Income Statement | ||||||||||||||||||||
Net interest income | $ | 159,270 | $ | 161,260 | $ | 164,544 | $ | 163,315 | $ | 162,944 | ||||||||||
Provision for credit losses | 12,530 | 2,170 | 5,025 | 5,100 | 8,200 | |||||||||||||||
Non-interest income | 55,281 | 59,813 | 54,315 | 46,751 | 49,523 | |||||||||||||||
Non-interest expense | 139,874 | 146,770 | 144,168 | 137,824 | 140,685 | |||||||||||||||
Income before taxes | 62,147 | 72,133 | 69,666 | 67,142 | 63,582 | |||||||||||||||
Net income | 54,087 | 62,108 | 59,779 | 56,663 | 58,083 | |||||||||||||||
Pre-provision net revenue(1) | 76,324 | 76,741 | 76,114 | 73,775 | 78,320 | |||||||||||||||
Per Share | ||||||||||||||||||||
Net income (basic) | $ | 0.33 | $ | 0.38 | $ | 0.36 | $ | 0.33 | $ | 0.33 | ||||||||||
Net income (diluted) | $ | 0.33 | $ | 0.37 | $ | 0.35 | $ | 0.33 | $ | 0.33 | ||||||||||
Cash dividends | $ | 0.17 | $ | 0.13 | $ | 0.13 | $ | 0.13 | $ | 0.16 | ||||||||||
Tangible common equity(1) | $ | 11.04 | $ | 10.91 | $ | 10.63 | $ | 10.39 | $ | 10.08 | ||||||||||
Weighted average shares (basic) | 164,135 | 165,324 | 168,343 | 169,884 | 174,571 | |||||||||||||||
Weighted average shares (diluted) | 165,039 | 166,126 | 169,168 | 170,909 | 175,473 | |||||||||||||||
Asset Quality | ||||||||||||||||||||
Net charge-offs to average loans (annualized) | 0.17 | % | 0.15% | -0.04% | 0.10% | 0.17 | % | |||||||||||||
Non-performing loans to total loans | 0.96 | % | 0.81% | 0.90% | 0.85% | 0.86 | % | |||||||||||||
Non-performing assets to total assets | 0.77 | % | 0.66% | 0.73% | 0.70% | 0.73 | % | |||||||||||||
Allowance for credit losses to loans outstanding | 1.06 | % | 1.04% | 1.08% | 1.05% | 1.05 | % | |||||||||||||
Allowance for loan losses to loans outstanding | 1.04 | % | 1.00 | % | 1.04 | % | 1.00 | % | 0.99 | % | ||||||||||
Allowance for credit losses to non-performing loans | 111 | % | 127% | 120% | 123% | 121.00 | % | |||||||||||||
Allowance for loan losses to non-performing loans | 109 | % | 122% | 115% | 117% | 115.00 | % | |||||||||||||
Non-performing assets to tangible shareholders' equity and allowance for credit losses(1) | 8.44 | % | 7.32% | 7.94% | 7.63% | 7.97 | % | |||||||||||||
Profitability | ||||||||||||||||||||
Return on average assets | 0.98 | % | 1.15 | % | 1.14 | % | 1.11 | % | 1.12 | % | ||||||||||
Return on average shareholders' equity | 9.16 | % | 10.64% | 10.42% | 10.15% | 10.10 | % | |||||||||||||
Return on average shareholders' equity (tangible)(1) | 11.89 | % | 14.03% | 13.60% | 13.28% | 13.17 | % | |||||||||||||
Net interest margin | 3.22 | % | 3.31 | % | 3.44 | % | 3.49 | % | 3.44 | % | ||||||||||
Efficiency ratio(1) | 63.5 | % | 63.6 | % | 64.2 | % | 63.9 | % | 62.2 | % | ||||||||||
Capital Ratios | ||||||||||||||||||||
Tangible common equity ratio(1) | 8.49 | % | 8.45 | % | 8.54 | % | 8.64 | % | 8.52 | % | ||||||||||
Tier 1 leverage ratio(2) | 8.47% | 8.52% | 8.68% | 8.92% | 9.01 | % | ||||||||||||||
Common equity Tier 1 capital ratio(2) | 9.67 | % | 9.64 | % | 9.96 | % | 10.16 | % | 10.22 | % | ||||||||||
Tier 1 capital ratio(2) | 9.67 | % | 9.64 | % | 9.96 | % | 10.16% | 10.22 | % | |||||||||||
Total risk-based capital ratio(2) | 11.79 | % | 12.01 | % | 12.44 | % | 12.63% | 12.75 | % | |||||||||||
(1) Please refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this document. | ||||||||||||||||||||
(2) Regulatory capital ratios as of December 31, 2019 are preliminary and prior periods are actual. | ||||||||||||||||||||
Exhibit 99.2 | ||||||||||||||||||||||||||
FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||||||||||
dollars in thousands | ||||||||||||||||||||||||||
% Change from | ||||||||||||||||||||||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Dec 31 | ||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Cash and due from banks | $ | 132,283 | $ | 120,671 | $ | 107,091 | $ | 115,884 | $ | 103,436 | 9.6 | % | 27.9 | % | ||||||||||||
Other interest-earning assets | 482,930 | 572,499 | 488,968 | 411,037 | 421,534 | (15.6 | )% | 14.6 | % | |||||||||||||||||
Loans held for sale | 37,828 | 33,945 | 45,754 | 27,768 | 27,099 | 11.4 | % | 39.6 | % | |||||||||||||||||
Investment securities | 2,867,378 | 2,705,610 | 2,853,358 | 2,748,249 | 2,686,973 | 6.0 | % | 6.7 | % | |||||||||||||||||
Loans, net of unearned income | 16,857,526 | 16,686,866 | 16,368,458 | 16,262,633 | 16,165,800 | 1.0 | % | 4.3 | % | |||||||||||||||||
Allowance for loan losses | (175,622 | ) | (166,135 | ) | (170,233 | ) | (162,109 | ) | (160,537 | ) | 5.7 | % | 9.4 | % | ||||||||||||
Net loans | 16,681,904 | 16,520,731 | 16,198,225 | 16,100,524 | 16,005,263 | 1.0 | % | 4.2 | % | |||||||||||||||||
Premises and equipment | 240,046 | 237,344 | 243,300 | 239,004 | 234,529 | 1.1 | % | 2.4 | % | |||||||||||||||||
Accrued interest receivable | 60,898 | 60,447 | 62,984 | 62,207 | 58,879 | 0.7 | % | 3.4 | % | |||||||||||||||||
Goodwill and intangible assets | 535,303 | 534,178 | 535,249 | 535,356 | 531,556 | 0.2 | % | 0.7 | % | |||||||||||||||||
Other assets | 858,492 | 918,193 | 773,741 | 734,620 | 612,883 | (6.5 | )% | 40.1 | % | |||||||||||||||||
Total Assets | $ | 21,897,062 | $ | 21,703,618 | $ | 21,308,670 | $ | 20,974,649 | $ | 20,682,152 | 0.9 | % | 5.9 | % | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||
Deposits | $ | 17,393,913 | $ | 17,342,717 | $ | 16,388,895 | $ | 16,377,978 | $ | 16,376,159 | 0.3 | % | 6.2 | % | ||||||||||||
Short-term borrowings | 883,241 | 832,860 | 1,188,390 | 829,016 | 754,777 | 6.0 | % | 17.0 | % | |||||||||||||||||
Other liabilities | 389,665 | 477,311 | 435,171 | 401,324 | 311,364 | (18.4 | )% | 25.1 | % | |||||||||||||||||
FHLB advances and long-term debt | 881,769 | 726,714 | 987,416 | 1,065,312 | 992,279 | 21.3 | % | (11.1 | )% | |||||||||||||||||
Total Liabilities | 19,548,588 | 19,379,602 | 18,999,872 | 18,673,630 | 18,434,579 | 0.9 | % | 6.0 | % | |||||||||||||||||
Shareholders' equity | 2,348,474 | 2,324,016 | 2,308,798 | 2,301,019 | 2,247,573 | 1.1 | % | 4.5 | % | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 21,897,062 | $ | 21,703,618 | $ | 21,308,670 | $ | 20,974,649 | $ | 20,682,152 | 0.9 | % | 5.9 | % | ||||||||||||
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | ||||||||||||||||||||||||||
Loans, by type: | ||||||||||||||||||||||||||
Real estate - commercial mortgage | $ | 6,700,776 | $ | 6,604,634 | $ | 6,497,973 | $ | 6,428,688 | $ | 6,434,285 | 1.5 | % | 4.1 | % | ||||||||||||
Commercial - industrial, financial and agricultural | 4,466,701 | 4,494,496 | 4,365,248 | 4,429,538 | 4,404,548 | (0.6 | )% | 1.4 | % | |||||||||||||||||
Real estate - residential mortgage | 2,641,465 | 2,570,793 | 2,451,966 | 2,313,908 | 2,251,044 | 2.7 | % | 17.3 | % | |||||||||||||||||
Real estate - home equity | 1,314,944 | 1,346,115 | 1,386,974 | 1,413,500 | 1,452,137 | (2.3 | )% | (9.4 | )% | |||||||||||||||||
Real estate - construction | 971,079 | 913,644 | 922,547 | 953,087 | 916,599 | 6.3 | % | 5.9 | % | |||||||||||||||||
Consumer | 463,164 | 464,213 | 452,874 | 433,545 | 419,186 | (0.2 | )% | 10.5 | % | |||||||||||||||||
Leasing and other | 299,397 | 292,971 | 290,876 | 290,367 | 288,001 | 2.2 | % | 4.0 | % | |||||||||||||||||
Total Loans, net of unearned income | $ | 16,857,526 | $ | 16,686,866 | $ | 16,368,458 | $ | 16,262,633 | $ | 16,165,800 | 1.0 | % | 4.3 | % | ||||||||||||
Deposits, by type: | ||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 4,453,324 | $ | 4,240,478 | $ | 4,226,404 | $ | 4,255,043 | $ | 4,310,105 | 5.0 | % | 3.3 | % | ||||||||||||
Interest-bearing demand | 4,720,188 | 4,771,109 | 4,083,615 | 4,207,442 | 4,240,974 | (1.1 | )% | 11.3 | % | |||||||||||||||||
Savings and money market accounts | 5,153,941 | 5,094,387 | 4,938,998 | 4,907,346 | 4,926,937 | 1.2 | % | 4.6 | % | |||||||||||||||||
Total demand and savings | 14,327,453 | 14,105,974 | 13,249,017 | 13,369,831 | 13,478,016 | 1.6 | % | 6.3 | % | |||||||||||||||||
Brokered deposits | 264,531 | 256,870 | 246,116 | 251,395 | 176,239 | 3.0 | % | 50.1 | % | |||||||||||||||||
Time deposits | 2,801,929 | 2,979,873 | 2,893,762 | 2,756,752 | 2,721,904 | (6.0 | )% | 2.9 | % | |||||||||||||||||
Total Deposits | $ | 17,393,913 | $ | 17,342,717 | $ | 16,388,895 | $ | 16,377,978 | $ | 16,376,159 | 0.3 | % | 6.2 | % | ||||||||||||
Short-term borrowings, by type: | ||||||||||||||||||||||||||
Customer repurchase agreements | $ | 56,707 | $ | 58,853 | $ | 56,496 | $ | 54,440 | $ | 43,499 | (3.6 | )% | 30.4 | % | ||||||||||||
Customer short-term promissory notes | 326,534 | 279,007 | 281,894 | 299,576 | 326,278 | 17.0 | % | 0.1 | % | |||||||||||||||||
Short-term FHLB advances | 500,000 | 475,000 | 650,000 | 475,000 | 385,000 | 5.3 | % | 29.9 | % | |||||||||||||||||
Federal funds purchased | — | 20,000 | 200,000 | — | — | (100.0 | )% | N/M | ||||||||||||||||||
Total Short-term Borrowings | $ | 883,241 | $ | 832,860 | $ | 1,188,390 | $ | 829,016 | $ | 754,777 | 6.0 | % | 17.0 | % | ||||||||||||
N/M - Not meaningful | ||||||||||||||||||||||||||
FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||||||||||||||||||||||
in thousands | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended | % Change from | Year ended | |||||||||||||||||||||||||||||||||||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Dec 31 | December 31 | ||||||||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | % Change | ||||||||||||||||||||||||||||||||
Interest Income: | |||||||||||||||||||||||||||||||||||||||||
Interest income | $ | 202,159 | $ | 208,413 | $ | 210,034 | $ | 204,700 | $ | 200,609 | (3.0 | )% | 0.8 | % | $ | 825,306 | $ | 758,514 | 8.8 | % | |||||||||||||||||||||
Interest expense | 42,889 | 47,153 | 45,490 | 41,385 | 37,665 | (9.0 | )% | 13.9 | % | 176,917 | 128,058 | 38.2 | % | ||||||||||||||||||||||||||||
Net Interest Income | 159,270 | 161,260 | 164,544 | 163,315 | 162,944 | (1.2 | )% | (2.3 | )% | 648,389 | 630,456 | 2.8 | % | ||||||||||||||||||||||||||||
Provision for credit losses | 12,530 | 2,170 | 5,025 | 5,100 | 8,200 | N/M | 52.8 | % | 24,825 | 46,907 | (47.1 | )% | |||||||||||||||||||||||||||||
Net Interest Income after Provision | 146,740 | 159,090 | 159,519 | 158,215 | 154,744 | (7.8 | )% | (5.2 | )% | 623,564 | 583,549 | 6.9 | % | ||||||||||||||||||||||||||||
Non-Interest Income: | |||||||||||||||||||||||||||||||||||||||||
Wealth management | 14,419 | 13,867 | 14,153 | 13,239 | 13,408 | 4.0 | % | 7.5 | % | 55,678 | 52,148 | 6.8 | % | ||||||||||||||||||||||||||||
Mortgage banking | 5,076 | 6,658 | 6,593 | 4,772 | 4,774 | (23.8 | )% | 6.3 | % | 23,099 | 19,026 | 21.4 | % | ||||||||||||||||||||||||||||
Consumer banking: | |||||||||||||||||||||||||||||||||||||||||
Card | 4,991 | 5,791 | 5,047 | 4,686 | 4,966 | (13.8 | )% | 0.5 | % | 20,515 | 19,497 | 5.2 | % | ||||||||||||||||||||||||||||
Overdraft | 4,750 | 4,682 | 4,413 | 4,104 | 4,653 | 1.5 | % | 2.1 | % | 17,949 | 17,606 | 1.9 | % | ||||||||||||||||||||||||||||
Other consumer banking | 2,685 | 2,860 | 2,907 | 2,587 | 2,799 | (6.1 | )% | (4.1 | )% | 11,039 | 11,319 | (2.5 | )% | ||||||||||||||||||||||||||||
Total consumer banking | 12,426 | 13,333 | 12,367 | 11,377 | 12,418 | (6.8 | )% | 0.1 | % | 49,503 | 48,422 | 2.2 | % | ||||||||||||||||||||||||||||
Commercial banking: | |||||||||||||||||||||||||||||||||||||||||
Merchant and card | 5,841 | 6,166 | 6,512 | 5,558 | 5,656 | (5.3 | )% | 3.3 | % | 24,077 | 23,427 | 2.8 | % | ||||||||||||||||||||||||||||
Cash management | 4,697 | 4,696 | 4,638 | 4,361 | 4,340 | — | % | 8.2 | % | 18,392 | 17,581 | 4.6 | % | ||||||||||||||||||||||||||||
Commercial loan interest rate swap | 5,426 | 3,944 | 3,477 | 2,028 | 2,540 | 37.6 | % | 113.6 | % | 14,875 | 9,831 | 51.3 | % | ||||||||||||||||||||||||||||
Other commercial banking | 3,664 | 3,478 | 3,815 | 2,816 | 3,466 | 5.3 | % | 5.7 | % | 13,773 | 13,090 | 5.2 | % | ||||||||||||||||||||||||||||
Total commercial banking | 19,628 | 18,284 | 18,442 | 14,763 | 16,002 | 7.4 | % | 22.7 | % | 71,117 | 63,929 | 11.2 | % | ||||||||||||||||||||||||||||
Other | 3,732 | 3,179 | 2,584 | 2,535 | 2,921 | 17.4 | % | 27.8 | % | 12,030 | 11,963 | 0.6 | % | ||||||||||||||||||||||||||||
Non-Interest Income before Investment Securities Gains | 55,281 | 55,321 | 54,139 | 46,686 | 49,523 | (0.1 | )% | 11.6 | % | 211,427 | 195,488 | 8.2 | % | ||||||||||||||||||||||||||||
Investment securities gains, net | — | 4,492 | 176 | 65 | — | (100.0 | )% | — | % | 4,733 | 37 | N/M | |||||||||||||||||||||||||||||
Total Non-Interest Income | 55,281 | 59,813 | 54,315 | 46,751 | 49,523 | (7.6 | )% | 11.6 | % | 216,160 | 195,525 | 10.6 | % | ||||||||||||||||||||||||||||
Non-Interest Expense: | |||||||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | 77,875 | 78,211 | 78,991 | 77,757 | 75,745 | (0.4 | )% | 2.8 | % | 312,834 | 303,202 | 3.2 | % | ||||||||||||||||||||||||||||
Net occupancy | 13,080 | 12,368 | 14,469 | 12,909 | 12,708 | 5.8 | % | 2.9 | % | 52,826 | 51,678 | 2.2 | % | ||||||||||||||||||||||||||||
Data processing and software | 11,468 | 11,590 | 11,268 | 10,353 | 10,203 | (1.1 | )% | 12.4 | % | 44,679 | 41,286 | 8.2 | % | ||||||||||||||||||||||||||||
Other outside services | 8,215 | 12,163 | 11,259 | 8,352 | 8,944 | (32.5 | )% | (8.2 | )% | 39,989 | 33,758 | 18.5 | % | ||||||||||||||||||||||||||||
Equipment | 3,475 | 3,459 | 3,299 | 3,342 | 3,275 | 0.5 | % | 6.1 | % | 13,575 | 13,243 | 2.5 | % | ||||||||||||||||||||||||||||
Professional fees | 2,873 | 3,331 | 2,970 | 3,960 | 3,546 | (13.7 | )% | (19.0 | )% | 13,134 | 14,161 | (7.3 | )% | ||||||||||||||||||||||||||||
FDIC insurance | 2,177 | 239 | 2,755 | 2,609 | 2,563 | N/M | (15.1 | )% | 7,780 | 10,993 | (29.2 | )% | |||||||||||||||||||||||||||||
Amortization of tax credit investments | 1,505 | 1,533 | 1,492 | 1,491 | 6,538 | (1.8 | )% | (77.0 | )% | 6,021 | 11,449 | (47.4 | )% | ||||||||||||||||||||||||||||
Marketing | 1,503 | 3,322 | 2,863 | 2,160 | 1,577 | (54.8 | )% | (4.7 | )% | 9,848 | 8,854 | 11.2 | % | ||||||||||||||||||||||||||||
Intangible amortization | 142 | 1,071 | 107 | 107 | — | N/M | 100.0 | % | 1,427 | — | 100.0 | % | |||||||||||||||||||||||||||||
Prepayment penalty on FHLB advances | — | 4,326 | — | — | (100.0 | )% | — | % | 4,326 | — | 100.0 | % | |||||||||||||||||||||||||||||
Other | 17,561 | 15,157 | 14,695 | 14,784 | 15,586 | 15.9 | % | 12.7 | % | 62,197 | 57,480 | 8.2 | % | ||||||||||||||||||||||||||||
Total Non-Interest Expense | 139,874 | 146,770 | 144,168 | 137,824 | 140,685 | (4.7 | )% | (0.6 | )% | 568,636 | 546,104 | 4.1 | % | ||||||||||||||||||||||||||||
Income Before Income Taxes | 62,147 | 72,133 | 69,666 | 67,142 | 63,582 | (13.8 | )% | (2.3 | )% | 271,088 | 232,970 | 16.4 | % | ||||||||||||||||||||||||||||
Income tax expense | 8,060 | 10,025 | 9,887 | 10,479 | 5,499 | (19.6 | )% | 46.6 | % | 38,451 | 24,577 | 56.5 | % | ||||||||||||||||||||||||||||
Net Income | $ | 54,087 | $ | 62,108 | $ | 59,779 | $ | 56,663 | $ | 58,083 | (12.9 | )% | (6.9 | )% | $ | 232,637 | $ | 208,393 | 11.6 | % | |||||||||||||||||||||
PER SHARE: | |||||||||||||||||||||||||||||||||||||||||
Net income: | |||||||||||||||||||||||||||||||||||||||||
Basic | $ | 0.33 | $ | 0.38 | $ | 0.36 | $ | 0.33 | $ | 0.33 | (13.2 | )% | — | % | $ | 1.39 | $ | 1.19 | 16.8 | % | |||||||||||||||||||||
Diluted | 0.33 | 0.37 | 0.35 | 0.33 | 0.33 | (10.8 | )% | — | % | 1.39 | 1.18 | 17.8 | % | ||||||||||||||||||||||||||||
Cash dividends | 0.17 | 0.13 | 0.13 | 0.13 | 0.16 | 30.8 | % | 6.3 | % | 0.56 | 0.52 | 7.7 | % | ||||||||||||||||||||||||||||
Weighted average shares (basic) | 164,135 | 165,324 | 168,343 | 169,884 | 174,571 | (0.7 | )% | (6.0 | )% | 166,902 | 175,395 | (4.8 | )% | ||||||||||||||||||||||||||||
Weighted average shares (diluted) | 165,039 | 166,126 | 169,168 | 170,909 | 175,473 | (0.7 | )% | (5.9 | )% | 167,792 | 176,543 | (5.0 | )% | ||||||||||||||||||||||||||||
N/M - not meaningful | |||||||||||||||||||||||||||||||||||||||||
FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||||||||||||||||
dollars in thousands | |||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||
December 31, 2019 | September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||||||||||||||||
Balance | Interest (1) | Rate | Balance | Interest (1) | Rate | Balance | Interest (1) | Rate | |||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||||||
Loans, net of unearned income | $ | 16,768,274 | $ | 182,024 | 4.31% | $ | 16,436,507 | $ | 188,280 | 4.55% | $ | 15,965,637 | $ | 182,358 | 4.54% | ||||||||||||||||||
Taxable investment securities | 2,198,252 | 15,621 | 2.84% | 2,282,292 | 15,565 | 2.73% | 2,283,897 | 15,005 | 2.74% | ||||||||||||||||||||||||
Tax-exempt investment securities | 594,487 | 5,058 | 3.38% | 516,907 | 4,650 | 3.57% | 426,872 | 3.978 | 3.71% | ||||||||||||||||||||||||
Total Investment Securities | 2,792,739 | 20,679 | 2.96% | 2,799,199 | 20,215 | 2.88% | 2,710,769 | 18.983 | 2.80% | ||||||||||||||||||||||||
Loans held for sale | 30,062 | 295 | 3.93% | 31,898 | 466 | 5.83% | 22,361 | 271 | 4.85% | ||||||||||||||||||||||||
Other interest-earning assets | 492,560 | 2,370 | 1.92% | 509,579 | 2,709 | 2.12% | 492,529 | 2,177 | 1.76% | ||||||||||||||||||||||||
Total Interest-earning Assets | 20,083,635 | 205,368 | 4.07% | 19,777,183 | 211,670 | 4.25% | 19,191,296 | 203.789 | 4.22% | ||||||||||||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||||||||||||
Cash and due from banks | 128,417 | 120,967 | 111,252 | ||||||||||||||||||||||||||||||
Premises and equipment | 239,294 | 240,383 | 233,445 | ||||||||||||||||||||||||||||||
Other assets | 1,529,994 | 1,491,115 | 1,131,548 | ||||||||||||||||||||||||||||||
Less: allowance for loan losses | (167,580 | ) | (171,848 | ) | (155,411 | ) | |||||||||||||||||||||||||||
Total Assets | $ | 21,813,760 | $ | 21,457,800 | $ | 20,512,130 | |||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Demand deposits | $ | 4,699,040 | $ | 8,494 | 0.72% | $ | 4,448,112 | $ | 9,163 | 0.82% | $ | 4,225,157 | $ | 7,448 | 0.70% | ||||||||||||||||||
Savings deposits | 5,205,260 | 10,253 | 0.78% | 5,026,316 | 11,059 | 0.87% | 4,979,712 | 9,745 | 0.78% | ||||||||||||||||||||||||
Brokered deposits | 261,689 | 1,279 | 1.94% | 253,426 | 1,536 | 2.40% | 164,280 | 969 | 2.34% | ||||||||||||||||||||||||
Time deposits | 2,959,008 | 13,775 | 1.86% | 2,974,993 | 13,979 | 1.86% | 2,722,141 | 9,997 | 1.46% | ||||||||||||||||||||||||
Total Interest-bearing Deposits | 13,124,997 | 33,801 | 1.02% | 12,702,847 | 35,737 | 1.12% | 12,091,290 | 28,159 | 0.92% | ||||||||||||||||||||||||
Short-term borrowings | 717,811 | 2,343 | 1.29% | 919,697 | 4,156 | 1.78% | 504,550 | 1,410 | 1.11% | ||||||||||||||||||||||||
FHLB advances and long-term debt | 875,802 | 6,745 | 3.07% | 842,706 | 7,260 | 3.44% | 988,914 | 8,096 | 3.26% | ||||||||||||||||||||||||
Total Interest-bearing Liabilities | 14,718,610 | 42,889 | 1.16% | 14,465,250 | 47,153 | 1.29% | 13,584,754 | 37,665 | 1.10% | ||||||||||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||
Demand deposits | 4,324.568 | 4,247,820 | 4,321,776 | ||||||||||||||||||||||||||||||
Total Deposits | 17,449.565 | 16,950,667 | 16,413,066 | ||||||||||||||||||||||||||||||
Other | 428.011 | 429,145 | 323,931 | ||||||||||||||||||||||||||||||
Total Liabilities | 19,471.189 | 19,142,215 | 18,230,461 | ||||||||||||||||||||||||||||||
Total Interest-bearing liabilities and non interest-bearing deposits ("Cost of Funds") | 19,043.178 | 0.89% | 18,713,070 | 1.00% | 17,906,530 | 0.84% | |||||||||||||||||||||||||||
Shareholders' equity | 2,342.571 | 2,315,585 | 2,281,669 | ||||||||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 21,813,760 | $ | 21,457,800 | $ | 20,512,130 | |||||||||||||||||||||||||||
Net interest income/net interest margin (fully taxable equivalent) | 162,479 | 3.22% | 164,517 | 3.31% | 166,124 | 3.44% | |||||||||||||||||||||||||||
Tax equivalent adjustment | (3,209 | ) | (3,257 | ) | (3,180 | ) | |||||||||||||||||||||||||||
Net interest income | $ | 159,270 | $ | 161,260 | $ | 162,944 | |||||||||||||||||||||||||||
(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. | |||||||||||||||||||||||||||||||||
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | |||||||||||||||||||||||||||||||||
Three Months Ended | % Change from | ||||||||||||||||||||||||||||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Dec 31 | |||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||
Loans, by type: | |||||||||||||||||||||||||||||||||
Real estate - commercial mortgage | $ | 6,561,029 | $ | 6,489,456 | $ | 6,424,213 | $ | 6,378,145 | $ | 6,343,024 | 1.1 | % | 3.4 | % | |||||||||||||||||||
Commercial - industrial, financial and agricultural | 4,575,350 | 4,414,992 | 4,440,860 | 4,462,609 | 4,329,937 | 3.6 | % | 5.7 | % | ||||||||||||||||||||||||
Real estate - residential mortgage | 2,606,136 | 2,512,899 | 2,366,685 | 2,276,611 | 2,209,993 | 3.7 | % | 17.9 | % | ||||||||||||||||||||||||
Real estate - home equity | 1,331,088 | 1,364,161 | 1,404,141 | 1,433,574 | 1,459,647 | (2.4 | )% | (8.8 | )% | ||||||||||||||||||||||||
Real estate - construction | 934,556 | 905,060 | 943,080 | 930,246 | 931,724 | 3.3 | % | 0.3 | % | ||||||||||||||||||||||||
Consumer | 464,606 | 457,524 | 445,666 | 424,480 | 406,436 | 1.5 | % | 14.3 | % | ||||||||||||||||||||||||
Leasing and other | 295,509 | 292,415 | 291,431 | 288,710 | 284,876 | 1.1 | % | 3.7 | % | ||||||||||||||||||||||||
Total Loans, net of unearned income | $ | 16,768,274 | $ | 16,436,507 | $ | 16,316,076 | $ | 16,194,375 | $ | 15,965,637 | 2.0 | % | 5.0 | % | |||||||||||||||||||
Deposits, by type: | |||||||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 4,324,568 | $ | 4,247,820 | $ | 4,200,810 | $ | 4,222,875 | $ | 4,321,776 | 1.8 | % | 0.1 | % | |||||||||||||||||||
Interest-bearing demand | 4,699,040 | 4,448,112 | 4,186,280 | 4,153,984 | 4,225,157 | 5.6 | % | 11.2 | % | ||||||||||||||||||||||||
Savings and money market accounts | 5,205,260 | 5,026,316 | 4,925,788 | 4,912,856 | 4,979,712 | 3.6 | % | 4.5 | % | ||||||||||||||||||||||||
Total demand and savings | 14,228,868 | 13,722,248 | 13,312,878 | 13,289,715 | 13,526,645 | 3.7 | % | 5.2 | % | ||||||||||||||||||||||||
Brokered deposits | 261,689 | 253,426 | 246,154 | 220,115 | 164,280 | 3.3 | % | 59.3 | % | ||||||||||||||||||||||||
Time deposits | 2,959,008 | 2,974,993 | 2,816,425 | 2,765,803 | 2,722,141 | (0.5 | )% | 8.7 | % | ||||||||||||||||||||||||
Total Deposits | $ | 17,449,565 | $ | 16,950,667 | $ | 16,375,457 | $ | 16,275,633 | $ | 16,413,066 | 2.9 | % | 6.3 | % | |||||||||||||||||||
Short-term borrowings, by type: | |||||||||||||||||||||||||||||||||
Customer repurchase agreements | $ | 59,363 | $ | 61,230 | $ | 56,171 | $ | 56,707 | $ | 64,102 | (3.0 | )% | (7.4 | )% | |||||||||||||||||||
Customer short-term promissory notes | 318,166 | 271,663 | 288,696 | 312,092 | 310,296 | 17.1 | % | 2.5 | % | ||||||||||||||||||||||||
Federal funds purchased | 91,467 | 101,022 | 181,769 | 157,122 | 43 | (9.5 | )% | N/M | |||||||||||||||||||||||||
Short-term FHLB advances and other borrowings | 248,815 | 485,782 | 414,868 | 294,133 | 130,109 | (48.8 | )% | 91.2 | % | ||||||||||||||||||||||||
Total Short-term Borrowings | $ | 717,811 | $ | 919,697 | $ | 941,504 | $ | 820,054 | $ | 504,550 | (22.0 | )% | 42.3 | % | |||||||||||||||||||
FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||||||
dollars in thousands | |||||||||||||||||||||||
Year Ended December 31 | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||
Balance | Interest (1) | Yield/Rate | Balance | Interest (1) | Yield/Rate | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||
Loans, net of unearned income | $ | 16,430,402 | $ | 747,119 | 4.55 | % | $ | 15,815,263 | $ | 691,954 | 4.38 | % | |||||||||||
Taxable investment securities | 2,278,448 | 62,556 | 2.74 | % | 2,246,555 | 56,039 | 2.49 | % | |||||||||||||||
Tax-exempt investment securities | 500,398 | 17,998 | 3.57 | % | 416,119 | 15,285 | 3.65 | % | |||||||||||||||
Equity securities | — | — | — | % | 126 | 5 | 3.97 | % | |||||||||||||||
Total Investment Securities | 2,778,846 | 80,554 | 2.89 | % | 2,662,800 | 71,329 | 2.68 | % | |||||||||||||||
Loans held for sale | 25,795 | 1,351 | 5.24 | % | 22,970 | 1,159 | 5.05 | % | |||||||||||||||
Other interest-earning assets | 445,008 | 9,249 | 2.08 | % | 382,569 | 6,193 | 1.62 | % | |||||||||||||||
Total Interest-earning Assets | 19,680,051 | 838,273 | 4.26 | % | 18,883,602 | 770,635 | 4.08 | % | |||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||
Cash and due from banks | 119,144 | 104,595 | |||||||||||||||||||||
Premises and equipment | 239,376 | 231,762 | |||||||||||||||||||||
Other assets | 1,386,000 | 1,123,857 | |||||||||||||||||||||
Less: allowance for loan losses | (166,198 | ) | (160,614 | ) | |||||||||||||||||||
Total Assets | $ | 21,258,373 | $ | 20,183,202 | |||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||
Demand deposits | $ | 4,384,059 | $ | 33,348 | 0.76 | % | $ | 4,063,929 | $ | 22,789 | 0.56 | % | |||||||||||
Savings deposits | 5,018,381 | 41,823 | 0.83 | % | 4,684,023 | 27,226 | 0.58 | % | |||||||||||||||
Brokered deposits | 245,483 | 5,779 | 2.35 | % | 121,863 | 2,480 | 2.04 | % | |||||||||||||||
Time deposits | 2,869,344 | 50,825 | 1.77 | % | 2,675,670 | 35,217 | 1.32 | % | |||||||||||||||
Total Interest-bearing Deposits | 12,517,267 | 131,775 | 1.05 | % | 11,545,485 | 87,712 | 0.76 | % | |||||||||||||||
Short-term borrowings | 849,679 | 14,543 | 1.70 | % | 785,923 | 8,489 | 1.07 | % | |||||||||||||||
FHLB advances and long-term debt | 942,600 | 30,599 | 3.25 | % | 977,573 | 31,857 | 3.26 | % | |||||||||||||||
Total Interest-bearing Liabilities | 14,309,546 | 176,917 | 1.24 | % | 13,308,981 | 128,058 | 0.96 | % | |||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||
Demand deposits | 4,249,294 | 4,287,121 | |||||||||||||||||||||
Total Deposits | 16,766,561 | 15,832,606 | |||||||||||||||||||||
Other | 393,167 | 331,336 | |||||||||||||||||||||
Total Liabilities | 18,952,007 | 17,927,438 | |||||||||||||||||||||
Total Interest-bearing liabilities and non interest-bearing deposits ("Cost of Funds") | 18,558,840 | 0.95 | % | 17,596,102 | 0.73 | % | |||||||||||||||||
Shareholders' equity | 2,306,366 | 2,255,764 | |||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 21,258,373 | $ | 20,183,202 | |||||||||||||||||||
Net interest income/net interest margin (fully taxable equivalent) | 661,356 | 3.36 | % | 642,577 | 3.40 | % | |||||||||||||||||
Tax equivalent adjustment | (12,967 | ) | (12,121 | ) | |||||||||||||||||||
Net interest income | $ | 648,389 | $ | 630,456 | |||||||||||||||||||
(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. | |||||||||||||||||||||||
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | |||||||||||||||||||||||
Year Ended | |||||||||||||||||||||||
December 31 | |||||||||||||||||||||||
2019 | 2018 | % Change | |||||||||||||||||||||
Loans, by type: | |||||||||||||||||||||||
Real estate - commercial mortgage | $ | 6,463,783 | $ | 6,314,349 | 2.4 | % | |||||||||||||||||
Commercial - industrial, financial and agricultural | 4,473,604 | 4,314,584 | 3.7 | % | |||||||||||||||||||
Real estate - residential mortgage | 2,441,684 | 2,085,258 | 17.1 | % | |||||||||||||||||||
Real estate - home equity | 1,382,908 | 1,493,620 | (7.4 | )% | |||||||||||||||||||
Real estate - construction | 928,183 | 965,835 | (3.9 | )% | |||||||||||||||||||
Consumer | 448,205 | 361,186 | 24.1 | % | |||||||||||||||||||
Leasing and other | 292,035 | 280,431 | 4.1 | % | |||||||||||||||||||
Total Loans, net of unearned income | $ | 16,430,402 | $ | 15,815,263 | 3.9 | % | |||||||||||||||||
Deposits, by type: | |||||||||||||||||||||||
Noninterest-bearing demand | $ | 4,249,294 | $ | 4,287,121 | (0.9 | )% | |||||||||||||||||
Interest-bearing demand | 4,384,059 | 4,063,929 | 7.9 | % | |||||||||||||||||||
Savings and money market accounts | 5,018,381 | 4,684,023 | 7.1 | % | |||||||||||||||||||
Total demand and savings | 13,651,734 | 13,035,073 | 4.7 | % | |||||||||||||||||||
Brokered deposits | 245,483 | 121,863 | 101.4 | % | |||||||||||||||||||
Time deposits | 2,869,344 | 2,675,670 | 7.2 | % | |||||||||||||||||||
Total Deposits | $ | 16,766,561 | $ | 15,832,606 | 5.9 | % | |||||||||||||||||
Short-term borrowings, by type: | |||||||||||||||||||||||
Customer repurchase agreements | $ | 58,384 | $ | 137,198 | (57.4 | )% | |||||||||||||||||
Customer short-term promissory notes | 297,599 | 308,470 | (3.5 | )% | |||||||||||||||||||
Federal funds purchased | 132,578 | 229,715 | (42.3 | )% | |||||||||||||||||||
Short-term FHLB advances and other borrowings | 361,118 | 110,540 | N/M | ||||||||||||||||||||
Total Short-term Borrowings | $ | 849,679 | $ | 785,923 | 8.1 | % | |||||||||||||||||
N/M - not meaningful | |||||||||||||||||||||||
FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||
ASSET QUALITY INFORMATION (UNAUDITED) | ||||||||||||||||||||||||||||
dollars in thousands | ||||||||||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||||||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Dec 31 | |||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES: | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 172,797 | $ | 176,941 | $ | 170,372 | $ | 169,410 | $ | 167,826 | $ | 169,410 | $ | 176,084 | ||||||||||||||
Loans charged off: | ||||||||||||||||||||||||||||
Commercial - industrial, financial and agricultural | (10,547 | ) | (7,181 | ) | (1,895 | ) | (2,787 | ) | (6,263 | ) | (22,410 | ) | (52,441 | ) | ||||||||||||||
Real estate - commercial mortgage | (68 | ) | (394 | ) | (230 | ) | (1,145 | ) | (762 | ) | (1,837 | ) | (2,045 | ) | ||||||||||||||
Consumer and home equity | (1,416 | ) | (1,375 | ) | (1,001 | ) | (902 | ) | (1,884 | ) | (4,694 | ) | (6,127 | ) | ||||||||||||||
Real estate - residential mortgage | (223 | ) | (533 | ) | (134 | ) | (655 | ) | (446 | ) | (1,545 | ) | (1,574 | ) | ||||||||||||||
Real estate - construction | — | (45 | ) | (3 | ) | (95 | ) | (392 | ) | (143 | ) | (1,368 | ) | |||||||||||||||
Leasing and other | (727 | ) | (600 | ) | (448 | ) | (785 | ) | (889 | ) | (2,560 | ) | (2,521 | ) | ||||||||||||||
Total loans charged off | (12,981 | ) | (10,128 | ) | (3,711 | ) | (6,369 | ) | (10,636 | ) | (33,189 | ) | (66,076 | ) | ||||||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||||||||||
Commercial - industrial, financial and agricultural | 2,487 | 2,311 | 2,680 | 1,243 | 2,647 | 8,721 | 4,994 | |||||||||||||||||||||
Real estate - commercial mortgage | 1,453 | 444 | 169 | 136 | 94 | 2,202 | 1,622 | |||||||||||||||||||||
Consumer and home equity | 437 | 348 | 802 | 407 | 684 | 1,994 | 2,393 | |||||||||||||||||||||
Real estate - residential mortgage | 206 | 440 | 211 | 132 | 100 | 989 | 620 | |||||||||||||||||||||
Real estate - construction | 1,098 | 164 | 1,245 | 84 | 415 | 2,591 | 1,829 | |||||||||||||||||||||
Leasing and other | 182 | 107 | 148 | 229 | 80 | 666 | 1,037 | |||||||||||||||||||||
Recoveries of loans previously charged off | 5,863 | 3,814 | 5,255 | 2,231 | 4,020 | 17,163 | 12,495 | |||||||||||||||||||||
Net loans recovered (charged off) | (7,118 | ) | (6,314 | ) | 1,544 | (4,138 | ) | (6,616 | ) | (16,026 | ) | (53,581 | ) | |||||||||||||||
Provision for credit losses | 12,530 | 2,170 | 5,025 | 5,100 | 8,200 | 24,825 | 46,907 | |||||||||||||||||||||
Balance at end of period | $ | 178,209 | $ | 172,797 | $ | 176,941 | $ | 170,372 | $ | 169,410 | $ | 178,209 | $ | 169,410 | ||||||||||||||
Net charge-offs (recoveries) to average loans (annualized) | 0.17 | % | 0.15 | % | (0.04 | )% | 0.10 | % | 0.17 | % | 0.10 | % | 0.34 | % | ||||||||||||||
NON-PERFORMING ASSETS: | ||||||||||||||||||||||||||||
Non-accrual loans | $ | 145,098 | $ | 124,287 | $ | 133,118 | $ | 127,141 | $ | 128,572 | ||||||||||||||||||
Loans 90 days past due and accruing | 16,057 | 11,689 | 14,598 | 11,540 | 11,106 | |||||||||||||||||||||||
Total non-performing loans | 161,155 | 135,976 | 147,716 | 138,681 | 139,678 | |||||||||||||||||||||||
Other real estate owned | 6,831 | 7,706 | 7,241 | 9,012 | 10,518 | |||||||||||||||||||||||
Total non-performing assets | $ | 167,986 | $ | 143,682 | $ | 154,957 | $ | 147,693 | $ | 150,196 | ||||||||||||||||||
NON-PERFORMING LOANS, BY TYPE: | ||||||||||||||||||||||||||||
Commercial - industrial, financial and agricultural | $ | 69,491 | $ | 37,126 | $ | 47,260 | $ | 50,148 | $ | 51,269 | ||||||||||||||||||
Real estate - commercial mortgage | 37,279 | 45,710 | 43,850 | 29,817 | 32,153 | |||||||||||||||||||||||
Real estate - residential mortgage | 22,411 | 20,150 | 21,659 | 22,299 | 19,101 | |||||||||||||||||||||||
Consumer and home equity | 11,026 | 11,012 | 12,378 | 10,770 | 10,178 | |||||||||||||||||||||||
Real estate - construction | 4,306 | 4,312 | 4,632 | 7,039 | 7,390 | |||||||||||||||||||||||
Leasing | 16,642 | 17,666 | 17,937 | 18,608 | 19,587 | |||||||||||||||||||||||
Total non-performing loans | $ | 161,155 | $ | 135,976 | $ | 147,716 | $ | 138,681 | $ | 139,678 | ||||||||||||||||||
FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED) | ||||||||||||||||||||||||||||||||||
in thousands, except per share data and percentages | ||||||||||||||||||||||||||||||||||
Explanatory note: | This press release contains certain financial information, as detailed below, which 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 quarterly 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 | Year Ended | |||||||||||||||||||||||||||||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Dec 31 | Dec 31 | ||||||||||||||||||||||||||||
2019 | 2019 | 2019 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||
Shareholders' equity (tangible), per share | ||||||||||||||||||||||||||||||||||
Shareholders' equity | $2,348,474 | $2,324,016 | $2,308,798 | $2,301,019 | $2,247,573 | |||||||||||||||||||||||||||||
Less: Goodwill and intangible assets | (535,303 | ) | (534,178 | ) | (535,249 | ) | (535,356 | ) | (531,556 | ) | ||||||||||||||||||||||||
Tangible shareholders' equity (numerator) | $ | 1,813,171 | $ | 1,789,838 | $ | 1,773,549 | $ | 1,765,663 | $ | 1,716,017 | ||||||||||||||||||||||||
Shares outstanding, end of period (denominator) | 164,218 | 164,036 | 166,903 | 169,923 | 170,184 | |||||||||||||||||||||||||||||
Shareholders' equity (tangible), per share | $ | 11.04 | $ | 10.91 | $ | 10.63 | $ | 10.39 | $ | 10.08 | ||||||||||||||||||||||||
Return on average shareholders' equity (tangible) | ||||||||||||||||||||||||||||||||||
Net income | $ | 54,087 | $ | 62,108 | $ | 59,779 | $ | 56,663 | $ | 58,083 | $ | 232,637 | $ | 208,393 | ||||||||||||||||||||
Plus: Intangible amortization, net of tax | 112 | 846 | 85 | 85 | — | 1,127 | — | |||||||||||||||||||||||||||
Numerator | $ | 54,199 | $ | 62,954 | $ | 59,864 | $ | 56,748 | $ | 58,083 | $ | 233,764 | $ | 208,393 | ||||||||||||||||||||
Average shareholders' equity | $ | 2,342,571 | $ | 2,315,585 | $ | 2,301,258 | $ | 2,265,097 | $ | 2,281,669 | $ | 2,306,366 | $ | 2,255,764 | ||||||||||||||||||||
Less: Goodwill and intangible assets | (534,190 | ) | (535,184 | ) | (535,301 | ) | (531,767 | ) | (531,556 | ) | $ | (534,120 | ) | $ | (531,556 | ) | ||||||||||||||||||
Average tangible shareholders' equity (denominator) | $ | 1,808,381 | $ | 1,780,401 | $ | 1,765,957 | $ | 1,733,330 | $ | 1,750,113 | $ | 1,772,246 | $ | 1,724,208 | ||||||||||||||||||||
Return on average shareholders' equity (tangible), annualized | 11.89 | % | 14.03 | % | 13.60 | % | 13.28 | % | 13.17 | % | 13.19 | % | 12.09 | % | ||||||||||||||||||||
Tangible Common Equity to Tangible Assets (TCE Ratio) | ||||||||||||||||||||||||||||||||||
Shareholders' equity | $ | 2,348,474 | $ | 2,324,016 | $ | 2,308,798 | $ | 2,301,019 | $ | 2,247,573 | ||||||||||||||||||||||||
Less: Goodwill and intangible assets | (535,303 | ) | (534,178 | ) | (535,249 | ) | (535,356 | ) | (531,556 | ) | ||||||||||||||||||||||||
Tangible shareholders' equity (numerator) | $ | 1,813,171 | $ | 1,789,838 | $ | 1,773,549 | $ | 1,765,663 | $ | 1,716,017 | ||||||||||||||||||||||||
Total assets | $ | 21,897,062 | $ | 21,703,618 | $ | 21,308,670 | $ | 20,974,649 | $ | 20,682,152 | ||||||||||||||||||||||||
Less: Goodwill and intangible assets | (535,303 | ) | (534,178 | ) | (535,249 | ) | (535,356 | ) | (531,556 | ) | ||||||||||||||||||||||||
Total tangible assets (denominator) | $ | 21,361,759 | $ | 21,169,440 | $ | 20,773,421 | $ | 20,439,293 | $ | 20,150,596 | ||||||||||||||||||||||||
Tangible Common Equity to Tangible Assets | 8.49 | % | 8.45 | % | 8.54 | % | 8.64 | % | 8.52 | % | ||||||||||||||||||||||||
Efficiency ratio | ||||||||||||||||||||||||||||||||||
Non-interest expense | $ | 139,874 | $ | 146,770 | $ | 144,168 | $ | 137,824 | $ | 140,685 | $ | 568,636 | $ | 546,104 | ||||||||||||||||||||
Less: Intangible amortization | (142 | ) | (1,071 | ) | (107 | ) | (107 | ) | — | (1,427 | ) | — | ||||||||||||||||||||||
Less: Amortization of tax credit investments | (1,505 | ) | (1,533 | ) | (1,492 | ) | (1,491 | ) | (6,538 | ) | (6,021 | ) | (11,449 | ) | ||||||||||||||||||||
Less: Prepayment penalty on FHLB advances | — | (4,326 | ) | — | — | — | (4,326 | ) | — | |||||||||||||||||||||||||
Non-interest expense (numerator) | $ | 138,227 | $ | 139,840 | $ | 142,569 | $ | 136,226 | $ | 134,147 | $ | 556,862 | $ | 534,655 | ||||||||||||||||||||
Net interest income (fully taxable equivalent) | $ | 162,479 | $ | 164,517 | $ | 167,794 | $ | 166,564 | $ | 166,124 | $ | 661,356 | $ | 642,577 | ||||||||||||||||||||
Plus: Total Non-interest income | 55,281 | 59,813 | 54,315 | 46,751 | 49,523 | 216,160 | 195,525 | |||||||||||||||||||||||||||
Less: Investment securities gains | — | (4,492 | ) | (176 | ) | (65 | ) | — | (4,733 | ) | (37 | ) | ||||||||||||||||||||||
Net interest income (denominator) | $ | 217,760 | $ | 219,838 | $ | 221,933 | $ | 213,250 | $ | 215,647 | $ | 872,783 | $ | 838,065 | ||||||||||||||||||||
Efficiency ratio | 63.5 | % | 63.6 | % | 64.2 | % | 63.9 | % | 62.2 | % | 63.8 | % | 63.8 | % | ||||||||||||||||||||
Non-performing assets to tangible common shareholders' equity and allowance for credit losses | ||||||||||||||||||||||||||||||||||
Non-performing assets (numerator) | $ | 167,986 | $ | 143,682 | $ | 154,957 | $ | 147,693 | $ | 150,196 | ||||||||||||||||||||||||
Tangible shareholders' equity | $ | 1,813,171 | $ | 1,789,838 | 1,773,549 | 1,765,663 | $ | 1,716,017 | ||||||||||||||||||||||||||
Plus: Allowance for credit losses | 178,209 | 172,797 | 176,941 | 170,372 | 169,410 | |||||||||||||||||||||||||||||
Tangible shareholders' equity and allowance for credit losses (denominator) | $ | 1,991,380 | $ | 1,962,635 | $ | 1,950,490 | $ | 1,936,035 | $ | 1,885,427 | ||||||||||||||||||||||||
Non-performing assets to tangible shareholders' equity and allowance for credit losses | 8.44 | % | 7.32 | % | 7.94 | % | 7.63 | % | 7.97 | % | ||||||||||||||||||||||||
Pre-provision net revenue | ||||||||||||||||||||||||||||||||||
Net interest income | $ | 159,270 | $ | 161,260 | $ | 164,544 | $ | 163,315 | $ | 162,944 | $ | 648,389 | $ | 630,456 | ||||||||||||||||||||
Non-interest income | 55,281 | 59,813 | 54,315 | 46,751 | 49,523 | 216,160 | 195,525 | |||||||||||||||||||||||||||
Less: Investment securities gains | — | (4,492 | ) | (176 | ) | (65 | ) | — | (4,733 | ) | (37 | ) | ||||||||||||||||||||||
Total revenue | $ | 214,551 | $ | 216,581 | $ | 218,683 | $ | 210,001 | $ | 212,467 | $ | 859,816 | $ | 825,944 | ||||||||||||||||||||
Non-interest expense | $ | 139,874 | $ | 146,770 | $ | 144,168 | $ | 137,824 | $ | 140,685 | $ | 568,636 | $ | 546,104 | ||||||||||||||||||||
Less: Prepayment penalty on FHLB advances | — | (4,326 | ) | — | — | — | (4,326 | ) | — | |||||||||||||||||||||||||
Less: Amortization of tax credit investments | (1,505 | ) | (1,533 | ) | (1,492 | ) | (1,491 | ) | (6,538 | ) | (6,021 | ) | (11,449 | ) | ||||||||||||||||||||
Less: Intangible amortization | (142 | ) | (1,071 | ) | (107 | ) | (107 | ) | — | (1,427 | ) | — | ||||||||||||||||||||||
Total non-interest expense | $ | 138,227 | $ | 139,840 | $ | 142,569 | $ | 136,226 | $ | 134,147 | $ | 556,862 | $ | 534,655 | ||||||||||||||||||||
Pre-provision net revenue | $ | 76,324 | $ | 76,741 | $ | 76,114 | $ | 73,775 | $ | 78,320 | $ | 302,954 | $ | 291,289 | ||||||||||||||||||||
2019 AND FOURTH QUARTER RESULTS NASDAQ: FULT Data as of December 31, 2019 unless otherwise noted
FORWARD-LOOKING STATEMENTS 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, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results. Management’s 2020 Outlook contained herein is comprised of forward-looking statements. Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, they 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, 2018 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019, June 30, 2019 and September 30, 2019, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation’s website (www.fult.com) and on the Securities and Exchange Commission’s website (www.sec.gov). The Corporation uses certain non-GAAP financial measures in this presentation. These non-GAAP financial measures are reconciled to the most comparable GAAP measures at the end of this presentation. 2
2019 HIGHLIGHTS Net income of $233 million, or $1.39 per share. Key Accomplishments Termination of remaining BSA/AML regulatory orders Successful consolidation of affiliate banks into Fulton Bank, N.A. Continuation of organic growth into fast growing urban markets Record year of revenues and net income Average loan growth of 4% Average deposit growth of 6% Net income increased 12% and pre-provision net revenue(1) increased 4% (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. 3
QUARTER HIGHLIGHTS: 4Q19 vs 3Q19 Net income per diluted share: $0.33 in 4Q19, 11% decrease from 3Q19 Loan Growth: 2% increase in average balances driven by C&I, commercial and residential mortgages and construction. Deposit Growth: 3% increase in average balances, largely driven by interest bearing demand deposits. Net Interest Income & Margin: Net interest income decreased 1% from 3Q19, with the impact of a 9 basis point decrease in the net interest margin being partially offset by balance sheet growth. Non-Interest Income(1): Overall flat, with increases in wealth management fees, commercial banking income and other income, offset by decreases in mortgage and consumer banking income. Non-Interest Expense: 5% decrease, as 3Q19 included a $4 million prepayment penalty on certain FHLB advances and $5 million of charter consolidation costs, partially offset by FDIC insurance assessment credits. Asset Quality: Increases in provision for credit losses and non-accrual loans related to the C&I portfolio. (1) Excluding investment securities gains which were $0 and $4 million in the three months ended December 31, 2019 and September 30, 2019, respectively. 4
QUARTER HIGHLIGHTS: 4Q19 vs 4Q18 Net income per diluted share: $0.33 in 4Q19, unchanged from 4Q18 Loan Growth: 5% increase in average balances with growth in all categories, except for home equity. Deposit Growth: 6% increase in average balances with growth in all categories. Net Interest Income & Margin: 2% decrease in net interest income, reflecting a 22 basis point decrease in net interest margin, partially offset by the impact of interest-earning asset growth. Non-Interest Income(1): 12% increase realized in all primary fee categories. Non-Interest Expense: 1% decrease, with decreases in professional fees, FDIC insurance and amortization of tax credit investments, largely offset by increases in salaries and benefits, data processing and software and other expense. Asset Quality: Increase in provision for credit losses and non-accrual loans related to the C&I portfolio. (1) No investment securities gains were recorded for the three months ended December 31, 2019 or 2018. 5
INCOME STATEMENT SUMMARY – YEAR TO DATE Year Ended Dec 31, 2019 2018 Change (dollars in thousands, except per-share data) Net Interest Income $ 648,389 $ 630,456 $ 17,933 Provision for Credit Losses 24,825 46,907 (22,082) Non-Interest Income 211,427 195,488 15,939 Securities Gains 4,733 37 4,696 Non-Interest Expense 568,636 546,104 22,532 Income before Income Taxes 271,088 232,970 38,118 Income Taxes 38,451 24,577 13,874 Net Income $ 232,637 $ 208,393 $ 24,244 Net income per share (diluted) $ 1.39 $ 1.18 $ 0.21 ROA (1) 1.09% 1.03% 0.06% ROE (2) 10.09% 9.24% 0.85% ROE (tangible) (3) 13.19% 12.09% 1.10% Efficiency ratio (3) 63.8% 63.8% - (1) ROA is return an average assets determined by dividing net income for the period indicated by average assets. (2) ROE is return on average shareholders’ equity determined by dividing net income for the period indicated by average shareholders’ equity. (3) 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
INCOME STATEMENT SUMMARY – QUARTER TO DATE Change from 4Q19 3Q19 4Q18 (dollars in thousands, except per-share data) Net Interest Income $ 159,270 $ (1,990) $ (3,674) Provision for Credit Losses 12,530 10,360 4,330 Non-Interest Income 55,281 (40) 5,758 Securities Gains - (4,492) - Non-Interest Expense 139,874 (6,896) (811) Income before Income Taxes 62,147 (9,986) (1,435) Income Taxes 8,060 (1,965) 2,561 Net Income $ 54,087 $ (8,021) $ (3,996) Net income per share (diluted) $ 0.33 $ (0.04) $ - ROA (1) 0.98% (0.17%) (0.14%) ROE (2) 9.16% (1.48%) (0.94%) ROE (tangible) (3) 11.89% (2.14%) (1.28%) Efficiency ratio (3) 63.5% (0.1%) 1.3% (1) ROA is return an average assets determined by dividing net income for the period indicated by average assets, annualized. (2) ROE is return on average shareholders’ equity determined by dividing net income for the period indicated by average shareholders’ equity, annualized. (3) 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. 7
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields ($ IN MILLIONS) ($ IN BILLIONS) $20 5.00% $180.0 4.00% 4.00% $15 4.22% 4.35% 4.37% 4.25% 4.07% 3.00% 3.75% $10 $165 $163 $163 $16 $16 $16 $16 $17 2.00% $161 $159 $5 $160.0 3.50% ~ $730 1.00% million 3.49% $3 $3 $3 $3 $3 3.44% $0 0.00% 3.44% 3.25% 4Q18 1Q19 2Q19 3Q19 4Q19 3.31% ~ $610 3.22% million Securities & Other Loans Earning Asset Yield (FTE) $140.0 3.00% Average Liabilities & Rates 2.75% ($ IN BILLIONS) $20 5.00% $2 $2 $120.0 2.50% $2 $2 $2 4.00% $15 $17 $17 $16 $16 $16 2.25% 3.00% $10 2.00% 1.29% 1.10% 1.21% 1.29% 1.16% $100.0 2.00% $5 4Q18 1Q19 2Q19 3Q19 4Q19 1.00% Net Interest Income $0 0.00% 4Q18 1Q19 2Q19 3Q19 4Q19 Net Interest Margin (Fully-taxable equivalent basis, or FTE) Deposits Borrowings Cost of Interest-bearing Liabilities 8
ASSET QUALITY – ANNUAL COMPARISON ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans $200 2.00% $50 $47 $161 $160 $140 $132 $135 1.50% $40 $120 $30 1.00% $23 $25 $80 0.96% 0.90% 0.85% 0.86% $20 0.50% $13 $40 $10 $0 0.00% $0 2016 2017 2018 2019 2016 2017 2018 2019 NPL NPLs/Loans Net Charge-offs (NCOs) and NCOs to Average Loans Allowance for Credit Losses (Allowance) to NPLs & Loans $60 0.50% 140.0% $54 131% $50 130% 1.75% 130.0% $40 121% 120.0% $30 1.25% $19 111% $20 $13 $16 110.0% 1.17% 1.12% 1.05% $10 0.09% 0.34% 1.06% 0.10% 0.12% 100.0% 0.75% $0 0.00% 2016 2017 2018 2019 2016 2017 2018 2019 NCOs/(recoveries) NCOs/Average Loans (annualized) Allowance/NPLs Allowance/Loans 9
NON-INTEREST INCOME(1) Three months ended December 31, 2019 (percent of total non-interest income) 4Q19 3Q19 Change 7% (in thousands) 9% n Wealth management $ 14,419 $ 13,867 $ 552 22% n Mortgage banking 5,076 6,658 (1,582) n Consumer banking 12,426 13,333 (907) n Commercial banking 19,628 18,284 1,344 26% n Other 3,732 3,179 553 36% ~ $730 $ 55,281 million$ 55,321 (40) ~ $610 million Non-interest income(1) essentially unchanged from 3Q19 Three months ended September 30, 2019 Increases in: (percent of total non-interest income) n Brokerage and trust income 6% n Commercial loan interest rate swaps fees 12% n Additional investments in bank-owned life insurance 24% Decreases in: n Seasonally lower mortgage loan volumes n Consumer card income n Merchant and card income 33% 25% (1) Excluding investment securities gains 10
NON-INTEREST EXPENSES Three months ended December 31, 2019 (percent of total non-interest expense) 4Q19 3Q19 Change (in thousands) 21% n Salaries and benefits $ 77,875 $ 78,211 $ (336) n Occupancy 13,080 12,368 712 n Data Processing and software 11,468 11,590 (122) 6% n Other outside services 8,215 12,163 (3,948) n Other 29,236 32,438 (3,202) 56% $ 139,874 $ 146,770 (6,896) 8% 9% Non-interest expense decreased $7 million, or 5%: Three months ended September 30, 2019 (percent of total non-interest expense) Driven by decreases in: Subsidary bank consolidation costs in 3Q19 of $5 million, primarily: n $3 million in other outside services 22% n $1 million in other expense Balance sheet restructing costs in 3Q19 n $4 million in penalties related to the prepayment of certain FHLB advances 8% 53% Partially offset by increases in: n FDIC insurance, as assements credits decreased by $2 million 8% n Additional rent and depreciation expense for newer properties 9% 11
PROFITABILITY & CAPITAL ROA(1) ROE and ROE (tangible)(2) 1.40% 16.00% 1.20% 13.19% 1.03% 1.09% 12.09% 1.00% 0.88% 12.00% 10.30% 10.33% 10.09% 0.88% 9.24% 7.69% 7.83% 0.80% 8.00% 0.60% 4.00% 0.40% 0.20% 0.00% 2016 2017 2018 2019 0.00% 2016 2017 2018 2019 ROE ROE (tangible) Tangible Common Equity to Tangible Assets (TCE Ratio) (2) Net Income Per Diluted Share 12.0% $1.40 $1.39 $1.18 $1.20 8.6% 8.7% 8.5% 8.5% $0.98 8.0% $1.00 $0.93 $0.80 $0.60 4.0% $0.40 $0.20 0.0% $- 2016 2017 2018 2019 2016 2017 2018 2019 In 2019, approximately 6.8 million shares were repurchased at a cost of $111.3 million. (1) ROA is return an average assets determined by dividing net income for the period indicated by average assets, annualized. (2) Non-GAAP based 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. 12
2020 OUTLOOK • Loans & Deposits: Average annual loan and deposit growth rates in the low to mid single-digits • Net Interest Income: Low single digit growth rate • Net Interest Margin: 3.20% to 3.25% for the full year 2020; assumes a stable yield curve and one 25 bp rate cut in 2Q 2020 • Non-Interest Income: Mid single-digit growth rate • Non-Interest Expense: Excluding charter consolidation costs in 2019, low single-digit growth rate • Asset Quality: $25 million to $40 million provision for credit losses for full year 2020. CECL impact – 20% to 30% increase in allowance for credit losses. • Effective Tax Rate: Anticipated to range between 14% and 16% 13
NON-GAAP RECONCILIATION Note: The Corporation has presented the following non-GAAP (Generally Accepted Accounting Principles) 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 M onths Ended D ec 31, Sep 30, Jun 30, M ar 31, D ec 31, Year Ended Dec 31, 2019 2019 2019 2019 2018 2019 2018 Efficiency ratio (dollars in thousands) Non-interest expense $ 139,874 $ 146,770 $ 144,168 $ 137,824 $ 140,685 $ 568,636 $ 546,104 Less: intangible amortization (142) (1,071) (107) (107) - (1,427) - Less: Amortization of tax credit investments (1,505) (1,533) (1,492) (1,491) (6,538) (6,021) (11,449) Less: Loss on redemption of FHLB advances - (4,326) - - (4,326) - Numerator $ 138,227 $ 139,840 $ 142,569 $ 136,226 $ 134,147 $ 556,862 $ 534,655 Net interest income (fully taxable equivalent) $ 162,479 $ 164,517 $ 167,794 $ 166,564 $ 166,124 $ 661,356 $ 642,577 Plus: Total Non-interest income 55,281 59,813 54,315 46,751 49,523 216,160 195,525 Less: Investment securities (gains) losses - (4,492) (176) (65) - (4,733) (37) Denominator $ 217,760 $ 219,838 $ 221,933 $ 213,250 $ 215,647 $ 872,783 $ 838,065 Efficiency ratio 63.5% 63.6% 64.2% 63.9% 62.2% 63.8% 63.8% Three M onths Ended D ec 31, Sep 30, D ec 31, Year Ended Dec 31, 2019 2019 2018 2019 2018 2017 2016 (dollars in thousands) Return on Average Shareholders' Equity (ROE) (Tangible) Net income $ 54,087 $ 62,108 $ 58,083 $ 232,637 $ 208,393 $ 171,753 $ 161,625 Plus: Intangible amortization, net of tax 112 846 - 1,127 - - - Numerator $ 54,199 $ 62,954 $ 58,083 $ 233,764 $ 208,393 $ 171,753 $ 161,625 Average shareholders' equity $ 2,342,571 $ 2,315,585 $ 2,281,669 $ 2,306,366 $ 2,255,764 $ 2,193,863 $ 2,100,634 Less: Average goodwill and intangible assets (534,190) (535,184) (531,556) (534,120) (531,556) (531,556) (531,556) Average tangible shareholders' equity (denominator) $ 1,808,381 $ 1,780,401 $ 1,750,113 $ 1,772,246 $ 1,724,208 $ 1,662,307 $ 1,569,078 Return on average common shareholders' equity (tangible), annualized 11.89% 14.03% 13.17% 13.19% 12.09% 10.33% 10.30% 14
NON-GAAP RECONCILIATION Year Ended Dec 31, 2 0 19 2 0 18 2 0 17 2 0 16 (dollars in thousands) Tangible Common Equity to Tangible Assets (TCE Ratio) Shareholders' equity $ 2,348,474 $ 2,247,573 $ 2,229,857 $ 2,121,115 Less: Intangible assets (535,303) (531,556) (531,556) (531,556) Tangible shareholders' equity (numerator) $ 1,813,171 $ 1,716,017 $ 1,698,301 $ 1,589,559 Total assets $ 21,897,062 $ 20,682,152 $ 20,036,905 $ 18,944,247 Less: Intangible assets (535,303) (531,556) (531,556) (531,556) Total tangible assets (denominator) $ 21,361,759 $ 20,150,596 $ 19,505,349 $ 18,412,691 Tangible Common Equity to Tangible Assets 8 .4 9 % 8 .52 % 8 .71% 8 .6 3 % Three M onths Ended D ec 3 1, Sep 3 0 , Year Ended Dec 31, 2 0 19 2 0 19 2 0 19 2 0 18 2 0 17 2 0 16 (dollars in thousands) Pre-Provision Net Revenue Net interest income $ 159,270 $ 161,260 $ 648,389 $ 630,456 $ 575,364 $ 520,772 Non-interest income 55,281 59,813 216,160 195,525 207,974 190,178 Less: Investment securities gains - (4,492) (4,733) (37) (9,071) (2,550) Total Revenue 214,551 216,581 859,816 825,944 774,267 708,400 Non-interest expense 139,874 146,770 568,636 546,104 525,579 489,519 Less: Prepayment penalty on FHLB advances - (4,326) (4,326) - - - Less: Amortization of tax credit investments (1,505) (1,533) (6,021) (11,449) (11,028) - Less: Intangible amortization (142) (1,071) (1,427) - - - Total Non-interest expense, as adjusted 138,227 139,840 556,862 534,655 514,551 489,519 Pre-Provision Net Revenue $ 76,324 $ 76,741 $ 302,954 $ 291,289 $ 259,716 $ 218,881 15