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
July 20, 2021
Date of Report (date of earliest event reported)
Fulton Financial Corporation
(Exact name of registrant as specified in its charter)
| PA | 0-10587 | 23-2195389 | |
|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |
| One Penn Square, | Lancaster, | PA | 17602 |
| (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 July 20, 2021, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the second quarter ended June 30, 2021. 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 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, July 21, 2021 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 in the preceding paragraph, as well as Exhibit 99.2 referenced therein, shall not be deemed "filed" for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"). The information included in Exhibit 99.1 shall be considered "filed" for purposes of the Exchange Act and therefore may be incorporated by reference in filings under the Securities Act.
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. 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 "2021 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, 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, 2020, Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission and are or will be 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.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated July 20, 2021 containing financial information for the quarter ended June 30, 2021, deemed "filed" under the Securities Exchange Act of 1934. |
| 99.2 | Presentation materials to be discussed during the conference call and webcast on July 21, 2021, 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: July 20, 2021 | 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: Laura Wakeley (717) 291-2616
Investor Contact: Matt Jozwiak (717) 327-2657
Fulton Financial Announces Second Quarter 2021 Results
(July 20, 2021) – Lancaster, PA – Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $62 million, or $0.38 per diluted share, for the second quarter of 2021.
"In the second quarter, Fulton Financial again achieved solid performance,” said E. Philip Wenger, Chairman and CEO of Fulton Financial Corporation. "Our results reflect stable to improving core business trends, a disciplined operating environment, growth in wealth management revenues and stable asset quality.”
Net Interest Income and Balance Sheet
Net interest income for the second quarter of 2021 was $162 million, $2 million lower than the first quarter of 2021. Net interest margin for the second quarter of 2021 decreased 6 basis points, to 2.73%, from 2.79% in the first quarter of 2021. The decreases in net interest income and net interest margin in comparison to the first quarter of 2021 were primarily due to lower fee income recognized related to the Paycheck Protection Program ("PPP") loans, which were $12 million in the second quarter of 2021 compared to $19 million for the first quarter of 2021, as well as lower yields on loans.
Total average interest-earning assets for the second quarter of 2021 were $24 billion, a decrease of $2 million from the first quarter of 2021, driven by a decline in PPP loans and other interest-earning assets, partially offset by growth in the commercial and residential real estate loan portfolios as well as investment securities. Average Net Loans1, which include loans originated under the PPP, were $18.9 billion, a decrease of $74 million compared to the first quarter of 2021. Average PPP loans were $1.5 billion for the second quarter of 2021 compared to $1.7 billion for the first quarter of 2021. Second quarter loan balances were impacted by the net effect of $639 million of PPP loans forgiven and $60 million of new loans originated under the third phase of the PPP in the second quarter of 2021.
1Loans and lease receivables, (net of unearned income)
Average loans and yields, by type, for the second quarter of 2021 in comparison to the first quarter of 2021 are summarized in the following table:
| March 31, 2021 | Growth | |||||||||
| Yield (1) | Balance | Yield (1) | % | |||||||
| Average Net Loans by type: | ||||||||||
| Real estate - commercial mortgage | 7,177,622 | 3.16 | % | $ | 7,128,997 | 3.15 | % | 0.7 | % | |
| Commercial and industrial(2) | 2.58 | % | 5,722,080 | 2.57 | % | (276,920) | (4.8) | % | ||
| Real estate - residential mortgage | 3.39 | % | 3,183,585 | 3.52 | % | 213,105 | 6.7 | % | ||
| Real estate - home equity | 3.71 | % | 1,175,218 | 3.75 | % | (35,660) | (3.0) | % | ||
| Real estate - construction | 3.05 | % | 1,054,718 | 3.09 | % | (249) | (0.0) | % | ||
| Consumer | 3.89 | % | 459,038 | 4.13 | % | (7,552) | (1.6) | % | ||
| Equipment lease financing | 3.74 | % | 266,405 | 4.11 | % | (10,157) | (3.8) | % | ||
| Other(3) | N/A | (9,455) | N/A | (5,222) | 55.2 | % | ||||
| Total Average Net Loans | 18,906,556 | 3.32 | % | $ | 18,980,586 | 3.53 | % | (0.4) | % | |
| (1) Presented on a fully-taxable equivalent basis using a 21% Federal tax rate and statutory interest expense disallowances. | ||||||||||
| (2) Includes average PPP loans of 1.5 billion and 1.7 billion for the three months ended June 30, 2021 and March 31, 2021, respectively. | ||||||||||
| (3) Consists of overdrafts and net origination fees and costs. |
All values are in US Dollars.
Total average liabilities decreased $98 million, to $23.3 billion, in the second quarter of 2021 compared to the first quarter of 2021 driven by decreases in short-term and long-term borrowings, partially offset by increases in average deposits. Average deposits and interest rates, by type, for the second quarter of 2021 in comparison to the first quarter of 2021 are summarized in the following table:
| Three months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | March 31, 2021 | Growth | |||||||||
| Balance | Rate | Balance | Rate | % | |||||||
| (dollars in thousands) | |||||||||||
| Average Deposits, by type: | |||||||||||
| Noninterest-bearing demand | $ | 7,203,696 | — | $ | 6,672,832 | — | 8.0 | % | |||
| Interest-bearing demand | 5,979,855 | 0.06 | % | 5,832,174 | 0.08 | % | 147,681 | 2.5 | % | ||
| Savings | 6,280,629 | 0.09 | % | 6,137,084 | 0.10 | % | 143,545 | 2.3 | % | ||
| Total average demand and savings | 19,464,180 | 0.05 | % | 18,642,090 | 0.06 | % | 822,090 | 4.4 | % | ||
| Brokered | 297,815 | 0.34 | % | 324,364 | 0.49 | % | (26,549) | (8.2) | % | ||
| Time | 2,003,606 | 1.09 | % | 2,150,570 | 1.23 | % | (146,964) | (6.8) | % | ||
| Total Average Deposits | $ | 21,765,601 | 0.15 | % | $ | 21,117,024 | 0.18 | % | 3.1 | % |
All values are in US Dollars.
Asset Quality
In the second quarter of 2021, a negative provision for credit losses of $4 million was recognized, as compared to a negative provision for credit losses of $6 million recognized in the first quarter of 2021. A $20 million provision for credit losses was recognized in the second quarter of 2020. Consistent with the first quarter of 2021, improved economic forecasts and a decrease in specific allocations within the
allowance for credit losses for loans evaluated individually reduced the level of the allowance for credit losses determined to be necessary at the end of the second quarter of 2021.
The $20 million provision for credit losses in the second quarter of 2020 reflected expected credit losses based on economic forecasts as of the end of the second quarter of 2020 and the assessment of the estimated impacts of the COVID-19 pandemic at that time.
Non-performing assets were $157 million, or 0.60% of total assets, at June 30, 2021, compared to $156 million, or 0.60% of total assets, and $145 million, or 0.59% of total assets at March 31, 2021 and June 30, 2020, respectively.
Annualized net charge-offs for the quarter ended June 30, 2021 were 0.15% of total average loans, compared to 0.13% and 0.09% for the quarters ended March 31, 2021 and June 30, 2020, respectively.
Non-interest Income
Non-interest income in the second quarter of 2021, excluding investment securities gains, was $52 million, a decrease of $10 million, or 16%, from the first quarter of 2021, primarily driven by decreases of $11 million in mortgage banking income and a $1 million decrease in capital markets income. The decrease in mortgage banking income was due to lower mortgage sales and gain-on-sale spreads on loans sold, as well as a $2 million addition to the valuation allowance for mortgage servicing assets. The $1 million decrease in capital markets income was the result of lower commercial loan interest rate swap revenues.
Compared to the second quarter of 2020, non-interest income, excluding investment securities gains, in the second quarter of 2021 decreased $1 million, or 2%, from $53 million, primarily driven by a $7 million decrease in mortgage banking income, resulting from a combination of lower mortgage sales gains and higher rates. During the second quarter of 2020, mortgage banking income was higher as a result of lower mortgage interest rates which drove an increase in activity. The decrease in mortgage banking income was partially offset by a $4 million increase in wealth management income and a $2 million increase in consumer banking income.
Net investment securities gains were $33 million lower compared to the first quarter of 2021. In the first quarter of 2021, Fulton completed a balance sheet restructuring involving gains on sales of Visa, Inc. Class B restricted shares of $34 million, which were offset in non-interest expense by corresponding debt extinguishment costs of $32 million, other securities losses of $0.4 million and a write-off of $1 million recognized in net interest income in connection with the purchase of certain of the Corporation's outstanding senior and subordinated notes and the prepayment of term Federal Home Loan Bank advances.
Non-interest Expense
Non-interest expense was $141 million in the second quarter of 2021, a decrease of $38 million compared to the first quarter of 2021, with the decrease driven by costs recognized during the first quarter of 2021 associated with the aforementioned balance sheet restructuring.
Compared to the second quarter of 2020, non-interest expense decreased $2 million, or 2%, in the second quarter of 2021, due primarily to a decrease in salaries and employee benefits and debt
extinguishment costs. In the second quarter of 2020 a $3 million prepayment penalty on redemption of FHLB advances was incurred. These decreases were partially offset by increases in multiple other non-interest expense categories.
Income Tax Expense
The effective income tax rate (ETR) was 16% for both the second and first quarters of 2021 as compared to 14% for second quarter of 2020. The increase was a result of higher income before income taxes, while net favorable permanent differences were relatively the same compared to the second quarter of 2020.
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, 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, 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, 2020, Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission and are or will be 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 | |||||||||||||||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |||||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||||||||||
| Ending Balances | |||||||||||||||||||||
| Investments | $ | 3,921,658 | $ | 3,612,010 | $ | 3,340,424 | $ | 3,097,721 | $ | 2,974,813 | |||||||||||
| Net Loans | 18,586,756 | 18,990,986 | 18,900,820 | 19,028,621 | 18,704,722 | ||||||||||||||||
| Total assets | 26,079,774 | 25,892,990 | 25,906,733 | 25,543,281 | 24,617,863 | ||||||||||||||||
| Deposits | 21,724,312 | 21,633,838 | 20,839,207 | 20,730,051 | 19,884,208 | ||||||||||||||||
| Shareholders' equity | 2,692,958 | 2,629,655 | 2,616,828 | 2,390,261 | 2,340,501 | ||||||||||||||||
| Average Balances | |||||||||||||||||||||
| Investments | $ | 3,670,333 | $ | 3,448,166 | $ | 3,221,289 | $ | 2,977,672 | $ | 3,096,632 | |||||||||||
| Net Loans | 18,906,556 | 18,980,586 | 18,994,514 | 18,880,519 | 18,331,797 | ||||||||||||||||
| Total assets | 26,017,542 | 26,082,816 | 25,749,405 | 25,169,508 | 24,139,116 | ||||||||||||||||
| Deposits | 21,765,601 | 21,117,024 | 20,791,522 | 20,388,447 | 19,276,658 | ||||||||||||||||
| Shareholders' equity | 2,669,413 | 2,637,098 | 2,544,866 | 2,374,091 | 2,309,133 | ||||||||||||||||
| Income Statement | |||||||||||||||||||||
| Net interest income | $ | 162,399 | $ | 164,448 | $ | 161,591 | $ | 154,116 | $ | 152,754 | |||||||||||
| Provision for credit losses | (3,500) | (5,500) | 6,240 | 7,080 | 19,570 | ||||||||||||||||
| Non-interest income | 51,890 | 95,397 | 55,574 | 63,248 | 55,922 | ||||||||||||||||
| Non-interest expense | 140,831 | 178,384 | 154,737 | 139,147 | 143,006 | ||||||||||||||||
| Income before taxes | 76,958 | 86,961 | 56,187 | 71,137 | 46,101 | ||||||||||||||||
| Net income available to common shareholders | 62,402 | 70,472 | 48,690 | 61,607 | 39,559 | ||||||||||||||||
| Pre-provision net revenue(1) | 75,575 | 81,795 | 64,092 | 80,043 | 67,125 | ||||||||||||||||
| Per Share | |||||||||||||||||||||
| Net income available to common shareholders (basic) | $ | 0.38 | $ | 0.43 | $ | 0.30 | $ | 0.38 | $ | 0.24 | |||||||||||
| Net income available to common shareholders (diluted) | $ | 0.38 | $ | 0.43 | $ | 0.30 | $ | 0.38 | $ | 0.24 | |||||||||||
| Cash dividends | $ | 0.14 | $ | 0.14 | $ | 0.17 | $ | 0.13 | $ | 0.13 | |||||||||||
| Common shareholders' equity | $ | 15.34 | $ | 14.99 | $ | 14.93 | $ | 14.74 | $ | 14.45 | |||||||||||
| Common shareholders' equity (tangible)(1) | $ | 12.05 | $ | 11.69 | $ | 11.62 | $ | 11.44 | $ | 11.15 | |||||||||||
| Weighted average shares (basic) | 162,785 | 162,441 | 162,242 | 162,061 | 161,715 | ||||||||||||||||
| Weighted average shares (diluted) | 163,858 | 163,737 | 163,071 | 162,579 | 162,267 | ||||||||||||||||
| (1) Non-GAAP financial measure. Refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this document. | |||||||||||||||||||||
| Three months ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |||||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||||||||||
| Asset Quality | |||||||||||||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.15 | % | 0.13 | % | (0.07) | % | (0.05) | % | 0.09 | % | |||||||||||
| Non-performing loans to total loans | 0.83 | % | 0.80 | % | 0.78 | % | 0.75 | % | 0.75 | % | |||||||||||
| Non-performing assets to total assets | 0.60 | % | 0.60 | % | 0.58 | % | 0.57 | % | 0.59 | % | |||||||||||
| ACL - loans(2) to total loans | 1.37 | % | 1.40 | % | 1.47 | % | 1.40 | % | 1.37 | % | |||||||||||
| ACL - loans(2) to non-performing loans | 166 | % | 174 | % | 189 | % | 188 | % | 183 | % | |||||||||||
| Asset Quality, excluding PPP(1)(3) | |||||||||||||||||||||
| Net charge-offs (recoveries) to adjusted average loans (annualized) | 0.16 | % | 0.14 | % | (0.08) | % | (0.06) | % | 0.10 | % | |||||||||||
| Non-performing loans to total adjusted loans | 0.88 | % | 0.88 | % | 0.85 | % | 0.83 | % | 0.83 | % | |||||||||||
| ACL - loans(2) to total adjusted loans | 1.46 | % | 1.54 | % | 1.60 | % | 1.56 | % | 1.53 | % | |||||||||||
| Profitability | |||||||||||||||||||||
| Return on average assets | 1.00 | % | 1.14 | % | 0.79 | % | 0.97 | % | 0.66 | % | |||||||||||
| Return on average common shareholders' equity | 9.38 | % | 10.84 | % | 7.61 | % | 10.32 | % | 6.89 | % | |||||||||||
| Return on average common shareholders' equity (tangible)(1) | 12.93 | % | 15.00 | % | 10.32 | % | 13.50 | % | 8.99 | % | |||||||||||
| Net interest margin | 2.73 | % | 2.79 | % | 2.75 | % | 2.70 | % | 2.81 | % | |||||||||||
| Efficiency ratio(1) | 63.8 | % | 63.0 | % | 62.5 | % | 62.3 | % | 66.4 | % | |||||||||||
| Capital Ratios | |||||||||||||||||||||
| Tangible common equity ratio(1) | 7.7 | % | 7.5 | % | 7.4 | % | 7.4 | % | 7.5 | % | |||||||||||
| Tier 1 leverage ratio(4) | 8.4 | % | 8.3 | % | 8.2 | % | 7.4 | % | 7.6 | % | |||||||||||
| Common equity Tier 1 capital ratio(4) | 9.9 | % | 9.8 | % | 9.5 | % | 9.5 | % | 9.5 | % | |||||||||||
| Tier 1 capital ratio(4) | 10.9 | % | 10.8 | % | 10.5 | % | 9.5 | % | 9.5 | % | |||||||||||
| Total risk-based capital ratio(4) | 14.3 | % | 14.2 | % | 14.4 | % | 13.9 | % | 13.8 | % | |||||||||||
| (1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document. | |||||||||||||||||||||
| (2) "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. | |||||||||||||||||||||
| (3) Asset quality information excluding Paycheck Protection Program ("PPP") loans. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document. | |||||||||||||||||||||
| (4) Regulatory capital ratios as of June 30, 2021 are preliminary and prior periods are actual. | |||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | |||||||||||||||||||||
| dollars in thousands | |||||||||||||||||||||
| % Change from | |||||||||||||||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | |||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | |||||||||||||||
| ASSETS | |||||||||||||||||||||
| Cash and due from banks | $ | 143,002 | $ | 102,570 | $ | 120,462 | $ | 139,304 | $ | 141,702 | 39.4 | % | 0.9 | % | |||||||
| Other interest-earning assets | 1,823,688 | 1,625,515 | 1,819,499 | 1,489,550 | 1,007,939 | 12.2 | % | 80.9 | % | ||||||||||||
| Loans held for sale | 41,924 | 34,092 | 83,886 | 93,621 | 77,415 | 23.0 | % | (45.8) | % | ||||||||||||
| Investment securities | 3,921,658 | 3,612,010 | 3,340,424 | 3,097,721 | 2,974,813 | 8.6 | % | 31.8 | % | ||||||||||||
| Net Loans | 18,586,756 | 18,990,986 | 18,900,820 | 19,028,621 | 18,704,722 | (2.1) | % | (0.6) | % | ||||||||||||
| Less: ACL - loans(1) | (255,032) | (265,986) | (277,567) | (266,825) | (256,537) | (4.1) | % | (0.6) | % | ||||||||||||
| Loans, net | 18,331,724 | 18,725,000 | 18,623,253 | 18,761,796 | 18,448,185 | (2.1) | % | (0.6) | % | ||||||||||||
| Net, premises and equipment | 228,353 | 229,035 | 231,480 | 236,943 | 239,596 | (0.3) | % | (4.7) | % | ||||||||||||
| Accrued interest receivable | 63,232 | 65,649 | 72,942 | 70,766 | 73,720 | (3.7) | % | (14.2) | % | ||||||||||||
| Goodwill and intangible assets | 536,847 | 536,544 | 536,659 | 534,907 | 535,039 | 0.1 | % | 0.3 | % | ||||||||||||
| Other assets | 989,346 | 962,575 | 1,078,128 | 1,118,673 | 1,119,454 | 2.8 | % | (11.6) | % | ||||||||||||
| Total Assets | $ | 26,079,774 | $ | 25,892,990 | $ | 25,906,733 | $ | 25,543,281 | $ | 24,617,863 | 0.7 | % | 5.9 | % | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||
| Deposits | $ | 21,724,312 | $ | 21,633,838 | $ | 20,839,207 | $ | 20,730,051 | $ | 19,884,208 | 0.4 | % | 9.3 | % | |||||||
| Short-term borrowings | 533,749 | 520,989 | 630,066 | 611,727 | 572,551 | 2.4 | % | (6.8) | % | ||||||||||||
| Other liabilities | 501,542 | 482,101 | 524,369 | 515,230 | 525,407 | 4.0 | % | (4.5) | % | ||||||||||||
| Long-term borrowings | 627,213 | 626,407 | 1,296,263 | 1,296,012 | 1,295,196 | 0.1 | % | (51.6) | % | ||||||||||||
| Total Liabilities | 23,386,816 | 23,263,335 | 23,289,905 | 23,153,020 | 22,277,362 | 0.5 | % | 5.0 | % | ||||||||||||
| Shareholders' equity | 2,692,958 | 2,629,655 | 2,616,828 | 2,390,261 | 2,340,501 | 2.4 | % | 15.1 | % | ||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 26,079,774 | $ | 25,892,990 | $ | 25,906,733 | $ | 25,543,281 | $ | 24,617,863 | 0.7 | % | 5.9 | % | |||||||
| LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | |||||||||||||||||||||
| Loans, by type: | |||||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,152,932 | $ | 7,142,137 | $ | 7,105,092 | $ | 7,046,330 | $ | 6,934,936 | 0.2 | % | 3.1 | % | |||||||
| Commercial and industrial | 3,870,462 | 3,986,858 | 4,088,561 | 4,007,278 | 4,033,439 | (2.9) | % | (4.0) | % | ||||||||||||
| Real estate - residential mortgage | 3,555,897 | 3,254,058 | 3,141,915 | 3,061,835 | 2,862,226 | 9.3 | % | 24.2 | % | ||||||||||||
| Real estate - home equity | 1,136,128 | 1,149,958 | 1,202,913 | 1,222,709 | 1,251,455 | (1.2) | % | (9.2) | % | ||||||||||||
| Real estate - construction | 1,070,755 | 1,083,494 | 1,047,218 | 1,007,534 | 972,909 | (1.2) | % | 10.1 | % | ||||||||||||
| Consumer | 448,433 | 451,857 | 466,772 | 469,551 | 465,610 | (0.8) | % | (3.7) | % | ||||||||||||
| Equipment lease financing | 252,158 | 260,907 | 279,118 | 280,286 | 281,897 | (3.4) | % | (10.5) | % | ||||||||||||
| Other(2) | (14,410) | (26,677) | (12,481) | (27,067) | (34,784) | (46.0) | % | (58.6) | % | ||||||||||||
| Net Loans before PPP | 17,472,355 | 17,302,592 | 17,319,108 | 17,068,456 | 16,767,688 | 1.0 | % | 4.2 | % | ||||||||||||
| PPP | 1,114,401 | 1,688,394 | 1,581,712 | 1,960,165 | 1,937,034 | (34.0) | % | (42.5) | % | ||||||||||||
| Total Net Loans | $ | 18,586,756 | $ | 18,990,986 | $ | 18,900,820 | $ | 19,028,621 | $ | 18,704,722 | (2.1) | % | (0.6) | % | |||||||
| Deposits, by type: | |||||||||||||||||||||
| Noninterest-bearing demand | $ | 7,442,132 | $ | 7,046,116 | $ | 6,531,002 | $ | 6,378,077 | $ | 6,239,055 | 5.6 | % | 19.3 | % | |||||||
| Interest-bearing demand | 5,795,404 | 5,959,909 | 5,818,564 | 5,813,935 | 5,099,405 | (2.8) | % | 13.6 | % | ||||||||||||
| Savings | 6,276,554 | 6,244,513 | 5,929,792 | 5,805,431 | 5,667,893 | 0.5 | % | 10.7 | % | ||||||||||||
| Total demand and savings | 19,514,090 | 19,250,538 | 18,279,358 | 17,997,443 | 17,006,353 | 1.4 | % | 14.7 | % | ||||||||||||
| Brokered | 277,444 | 309,873 | 335,185 | 317,588 | 310,689 | (10.5) | % | (10.7) | % | ||||||||||||
| Time | 1,932,778 | 2,073,427 | 2,224,664 | 2,415,020 | 2,567,166 | (6.8) | % | (24.7) | % | ||||||||||||
| Total Deposits | $ | 21,724,312 | $ | 21,633,838 | $ | 20,839,207 | $ | 20,730,051 | $ | 19,884,208 | 0.4 | % | 9.3 | % | |||||||
| Short-term borrowings, by type: | |||||||||||||||||||||
| Customer funding | $ | 533,749 | $ | 520,989 | $ | 630,066 | $ | 611,727 | $ | 572,551 | 2.4 | % | (6.8) | % | |||||||
| Total Short-term Borrowings | $ | 533,749 | $ | 520,989 | $ | 630,066 | $ | 611,727 | $ | 572,551 | 2.4 | % | (6.8) | % | |||||||
| (1) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures. | |||||||||||||||||||||
| (2) Consists of overdrafts and net origination fees and costs. | |||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||
| dollars in thousands | |||||||||||||||||||||
| Three Months Ended | % Change from | Six Months Ended | |||||||||||||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | Jun 30 | ||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | 2021 | 2020 | % Change | ||||||||||||
| Interest Income: | |||||||||||||||||||||
| Interest income | $ | 176,673 | $ | 184,936 | $ | 183,645 | $ | 179,159 | $ | 180,696 | (4.5) | % | (2.2) | % | $ | 361,609 | $ | 380,074 | (4.9) | % | |
| Interest expense | 14,274 | 20,488 | 22,054 | 25,043 | 27,942 | (30.3) | % | (48.9) | % | 34,762 | 66,574 | (47.8) | % | ||||||||
| Net Interest Income | 162,399 | 164,448 | 161,591 | 154,116 | 152,754 | (1.2) | % | 6.3 | % | 326,847 | 313,500 | 4.3 | % | ||||||||
| Provision for credit losses | (3,500) | (5,500) | 6,240 | 7,080 | 19,570 | (36.4) | % | (117.9) | % | (9,000) | 63,600 | (114.2) | % | ||||||||
| Net Interest Income after Provision | 165,899 | 169,948 | 155,351 | 147,036 | 133,184 | (2.4) | % | 24.6 | % | 335,847 | 249,900 | 34.4 | % | ||||||||
| Non-Interest Income: | |||||||||||||||||||||
| Commercial banking: | |||||||||||||||||||||
| Merchant and card | 6,786 | 5,768 | 5,953 | 6,237 | 5,326 | 17.6 | % | 27.4 | % | 12,554 | 10,950 | 14.6 | % | ||||||||
| Cash management | 5,341 | 4,921 | 4,737 | 4,742 | 4,503 | 8.5 | % | 18.6 | % | 10,262 | 9,245 | 11.0 | % | ||||||||
| Capital markets | 1,536 | 2,800 | 3,513 | 4,696 | 5,004 | (45.1) | % | (69.3) | % | 4,336 | 10,079 | (57.0) | % | ||||||||
| Other commercial banking | 3,466 | 2,853 | 2,606 | 2,636 | 1,914 | 21.5 | % | 81.1 | % | 6,319 | 4,892 | 29.2 | % | ||||||||
| Total commercial banking | 17,129 | 16,342 | 16,809 | 18,311 | 16,748 | 4.8 | % | 2.3 | % | 33,471 | 35,167 | (4.8) | % | ||||||||
| Consumer banking: | |||||||||||||||||||||
| Card | 5,733 | 5,878 | 5,123 | 5,002 | 4,966 | (2.5) | % | 15.4 | % | 11,611 | 9,651 | 20.3 | % | ||||||||
| Overdraft | 2,750 | 2,724 | 3,376 | 3,015 | 2,107 | 1.0 | % | 30.5 | % | 5,474 | 6,165 | (11.2) | % | ||||||||
| Other consumer banking | 2,377 | 2,152 | 2,298 | 2,406 | 2,065 | 10.5 | % | 15.1 | % | 4,529 | 4,561 | (0.7) | % | ||||||||
| Total consumer banking | 10,860 | 10,754 | 10,797 | 10,423 | 9,138 | 1.0 | % | 18.8 | % | 21,614 | 20,377 | 6.1 | % | ||||||||
| Wealth management | 17,634 | 17,347 | 15,653 | 14,943 | 13,407 | 1.7 | % | 31.5 | % | 34,981 | 28,462 | 22.9 | % | ||||||||
| Mortgage banking | 2,838 | 13,960 | 9,311 | 16,801 | 9,964 | (79.7) | % | (71.5) | % | 16,798 | 16,198 | 3.7 | % | ||||||||
| Other | 3,393 | 3,519 | 3,004 | 2,769 | 3,660 | (3.6) | % | (7.3) | % | 6,912 | 7,311 | (5.5) | % | ||||||||
| Non-interest income before investment securities gains | 51,854 | 61,922 | 55,574 | 63,246 | 52,917 | (16.3) | % | (2.0) | % | 113,776 | 107,515 | 5.8 | % | ||||||||
| Investment securities gains, net | 36 | 33,475 | — | 2 | 3,005 | (99.9) | % | (98.8) | % | 33,511 | 3,051 | N/M | |||||||||
| Total Non-Interest Income | 51,890 | 95,397 | 55,574 | 63,248 | 55,922 | (45.6) | % | (7.2) | % | 147,287 | 110,566 | 33.2 | % | ||||||||
| Non-Interest Expense: | |||||||||||||||||||||
| Salaries and employee benefits | 78,367 | 82,586 | 83,929 | 79,227 | 81,012 | (5.1) | % | (3.3) | % | 160,953 | 161,240 | (0.2) | % | ||||||||
| Net occupancy | 12,494 | 13,982 | 13,161 | 13,221 | 13,144 | (10.6) | % | (4.9) | % | 26,476 | 26,630 | (0.6) | % | ||||||||
| Data processing and software | 13,932 | 13,561 | 11,951 | 12,285 | 12,193 | 2.7 | % | 14.3 | % | 27,493 | 23,838 | 15.3 | % | ||||||||
| Other outside services | 8,178 | 8,490 | 8,334 | 7,617 | 7,600 | (3.7) | % | 7.6 | % | 16,668 | 15,481 | 7.7 | % | ||||||||
| Equipment | 3,424 | 3,428 | 3,563 | 3,711 | 3,193 | (0.1) | % | 7.2 | % | 6,852 | 6,611 | 3.6 | % | ||||||||
| Professional fees | 2,651 | 2,779 | 2,424 | 2,879 | 3,331 | (4.6) | % | (20.4) | % | 5,430 | 7,533 | (27.9) | % | ||||||||
| FDIC insurance | 2,282 | 2,624 | 2,346 | 1,578 | 2,133 | (13.0) | % | 7.0 | % | 4,906 | 4,941 | (0.7) | % | ||||||||
| Amortization of tax credit investments | 1,563 | 1,531 | 1,532 | 1,694 | 1,450 | 2.1 | % | 7.8 | % | 3,094 | 2,900 | 6.7 | % | ||||||||
| Marketing | 1,348 | 1,002 | 1,098 | 1,147 | 1,303 | 34.5 | % | 3.5 | % | 2,350 | 2,882 | (0.7) | % | ||||||||
| Intangible amortization | 178 | 115 | 132 | 132 | 132 | 54.8 | % | 34.8 | % | 293 | 264 | 11.0 | % | ||||||||
| Debt extinguishment | 412 | 32,163 | — | — | 2,878 | (98.7) | % | (98.7) | % | 32,575 | 2,878 | N/M | |||||||||
| Other | 16,002 | 16,123 | 26,268 | 15,654 | 14,637 | (0.8) | % | 9.3 | % | 32,125 | 30,360 | 5.8 | % | ||||||||
| Total Non-Interest Expense | 140,831 | 178,383 | 154,738 | 139,145 | 143,006 | (21.1) | % | (1.5) | % | 319,215 | 285,558 | 11.8 | % | ||||||||
| Income Before Income Taxes | 76,958 | 86,961 | 56,187 | 71,139 | 46,100 | (11.5) | % | 66.9 | % | 163,919 | 74,909 | 118.8 | % | ||||||||
| Income tax expense | 11,994 | 13,898 | 5,362 | 9,529 | 6,542 | (13.7) | % | 83.3 | % | 25,892 | 9,303 | N/M | |||||||||
| Net Income | 64,964 | 73,063 | 50,825 | 61,610 | 39,558 | (11.1) | % | 64.2 | % | 138,027 | 65,606 | 110.4 | % | ||||||||
| Preferred stock dividends | (2,562) | (2,591) | (2,135) | — | — | (1.1) | % | N/M | (5,153) | — | N/M | ||||||||||
| Net Income Available to Common Shareholders | $ | 62,402 | $ | 70,472 | $ | 48,690 | $ | 61,610 | $ | 39,558 | (11.5) | % | 57.7 | % | $ | 132,874 | $ | 65,606 | 102.5 | % | |
| PER SHARE: | |||||||||||||||||||||
| Net income: | |||||||||||||||||||||
| Basic | $ | 0.38 | $ | 0.43 | $ | 0.30 | $ | 0.38 | $ | 0.24 | (11.6) | % | 58.3 | % | $ | 0.81 | $ | 0.40 | 102.5 | % | |
| Diluted | 0.38 | 0.43 | 0.30 | 0.38 | 0.24 | (11.6) | % | 58.3 | % | 0.81 | 0.40 | 102.5 | % | ||||||||
| Cash dividends | 0.14 | 0.14 | 0.17 | 0.13 | 0.13 | — | % | 7.7 | % | 0.28 | 0.26 | 7.7 | % | ||||||||
| Weighted average shares (basic) | 162,785 | 162,441 | 162,242 | 162,061 | 161,715 | 0.2 | % | 0.7 | % | 162,614 | 162,582 | — | % | ||||||||
| Weighted average shares (diluted) | 163,858 | 163,737 | 163,071 | 162,579 | 162,267 | 0.1 | % | 1.0 | % | 163,738 | 163,326 | 0.3 | % |
N/M - Not meaningful
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| June 30, 2021 | March 31, 2021 | June 30, 2020 | |||||||||||||||||
| Average | Interest | Yield/ | Average | Interest | Yield/ | Average | Interest | Yield/ | |||||||||||
| Balance | (1) | Rate | Balance | (1) | Rate | Balance | (1) | Rate | |||||||||||
| ASSETS | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Net Loans | $ | 18,906,556 | $ | 156,525 | 3.32 | % | $ | 18,980,586 | $ | 165,462 | 3.53 | % | $ | 18,331,797 | $ | 160,613 | 3.52 | % | |
| Taxable investment securities | 2,630,090 | 13,898 | 1.93 | % | 2,438,496 | 13,691 | 2.08 | % | 2,200,870 | 15,171 | 2.76 | % | |||||||
| Tax-exempt investment securities | 961,141 | 7,494 | 3.11 | % | 911,648 | 7,156 | 3.13 | % | 830,836 | 6,737 | 3.23 | % | |||||||
| Total Investment Securities | 3,591,231 | 21,392 | 2.38 | % | 3,350,144 | 20,847 | 2.49 | % | 3,031,706 | 21,908 | 2.89 | % | |||||||
| Loans held for sale | 31,948 | 199 | 2.49 | % | 53,465 | 471 | 3.53 | % | 55,608 | 509 | 3.66 | % | |||||||
| Other interest-earning assets | 1,752,549 | 1,575 | 0.16 | % | 1,900,199 | 1,136 | 0.24 | % | 815,910 | 766 | 0.38 | % | |||||||
| Total Interest-earning Assets | 24,282,284 | 179,691 | 2.97 | % | 24,284,394 | 187,916 | 3.13 | % | 22,235,021 | 183,796 | 3.32 | % | |||||||
| Noninterest-earning assets: | |||||||||||||||||||
| Cash and due from banks | 129,927 | 120,181 | 153,728 | ||||||||||||||||
| Premises and equipment | 229,047 | 230,649 | 240,417 | ||||||||||||||||
| Other assets | 1,643,410 | 1,728,473 | 1,761,038 | ||||||||||||||||
| Less: ACL - loans(2) | (267,126) | (280,881) | (251,088) | ||||||||||||||||
| Total Assets | $ | 26,017,542 | $ | 26,082,816 | $ | 24,139,116 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | $ | 5,979,855 | $ | 932 | 0.06 | % | $ | 5,832,174 | $ | 1,160 | 0.08 | % | $ | 5,103,419 | $ | 2,219 | 0.17 | % | |
| Savings deposits | 6,280,629 | 1,363 | 0.09 | % | 6,137,084 | 1,526 | 0.10 | % | 5,446,368 | 3,331 | 0.25 | % | |||||||
| Brokered deposits | 297,815 | 253 | 0.34 | % | 324,364 | 395 | 0.49 | % | 312,121 | 422 | 0.54 | % | |||||||
| Time deposits | 2,003,606 | 5,434 | 1.09 | % | 2,150,570 | 6,521 | 1.23 | % | 2,624,962 | 11,145 | 1.71 | % | |||||||
| Total Interest-bearing Deposits | 14,561,905 | 7,982 | 0.22 | % | 14,444,192 | 9,602 | 0.27 | % | 13,486,870 | 17,118 | 0.51 | % | |||||||
| Short-term borrowings | 514,025 | 137 | 0.11 | % | 570,775 | 188 | 0.13 | % | 707,771 | 517 | 0.29 | % | |||||||
| Long-term borrowings | 626,795 | 6,155 | 3.93 | % | 1,271,170 | 10,698 | 3.38 | % | 1,361,421 | 10,307 | 3.03 | % | |||||||
| Total Interest-bearing Liabilities | 15,702,725 | 14,274 | 0.36 | % | 16,286,137 | 20,488 | 0.51 | % | 15,556,062 | 27,942 | 0.72 | % | |||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | 7,203,696 | 6,672,832 | 5,789,788 | ||||||||||||||||
| Total Deposits/Cost of Deposits | 21,765,601 | 0.15 | % | 21,117,024 | 0.18 | % | 19,276,658 | 0.36 | % | ||||||||||
| Other | 441,708 | 486,749 | 484,133 | ||||||||||||||||
| Total Liabilities | 23,348,129 | 23,445,718 | 21,829,983 | ||||||||||||||||
| Total Interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 22,906,421 | 0.25 | % | 22,958,969 | 0.36 | % | 21,345,850 | 0.53 | % | ||||||||||
| Shareholders' equity | 2,669,413 | 2,637,098 | 2,309,133 | ||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 26,017,542 | $ | 26,082,816 | $ | 24,139,116 | |||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 165,417 | 2.73 | % | 167,428 | 2.79 | % | 155,854 | 2.81 | % | ||||||||||
| Tax equivalent adjustment | (3,018) | (2,979) | (3,100) | ||||||||||||||||
| Net interest income | $ | 162,399 | $ | 164,449 | $ | 152,754 | |||||||||||||
| (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 SHORT-TERM BORROWINGS DETAIL (UNAUDITED): | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Three months ended | % Change from | ||||||||||||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Jun 30 | |||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | 2021 | 2020 | |||||||||||||
| Loans, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,177,622 | $ | 7,128,997 | $ | 7,101,363 | $ | 6,986,528 | $ | 6,875,872 | 0.7 | % | 4.4 | % | |||||
| Commercial and industrial | 3,920,771 | 4,033,367 | 4,024,879 | 4,030,750 | 4,451,228 | (2.8) | % | (11.9) | % | ||||||||||
| Real estate - residential mortgage | 3,396,690 | 3,183,585 | 3,087,529 | 2,975,516 | 2,769,682 | 6.7 | % | 22.6 | % | ||||||||||
| Real estate - home equity | 1,139,558 | 1,175,218 | 1,212,113 | 1,237,602 | 1,271,190 | (3.0) | % | (10.4) | % | ||||||||||
| Real estate - construction | 1,054,469 | 1,054,718 | 1,009,284 | 981,589 | 941,079 | — | % | 12.0 | % | ||||||||||
| Consumer | 451,486 | 459,038 | 468,678 | 464,851 | 465,728 | (1.6) | % | (3.1) | % | ||||||||||
| Equipment lease financing | 256,248 | 266,405 | 279,059 | 279,217 | 284,658 | (3.8) | % | (10.0) | % | ||||||||||
| Other(1) | (14,677) | (9,455) | (18,817) | (28,656) | 13,443 | 55.2 | % | N/M | |||||||||||
| Net Loans before PPP | 17,382,167 | 17,291,873 | 17,164,088 | 16,927,397 | 17,072,880 | 0.5 | % | 1.8 | % | ||||||||||
| PPP | 1,524,389 | 1,688,713 | 1,830,426 | 1,953,122 | 1,258,917 | (9.7) | % | 21.1 | % | ||||||||||
| Total Net Loans | $ | 18,906,556 | $ | 18,980,586 | $ | 18,994,514 | $ | 18,880,519 | $ | 18,331,797 | (0.4) | % | 3.1 | % | |||||
| Deposits, by type: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 7,203,696 | $ | 6,672,832 | $ | 6,477,228 | $ | 6,270,683 | $ | 5,789,788 | 8.0 | % | 24.4 | % | |||||
| Interest-bearing demand | 5,979,855 | 5,832,174 | 5,762,150 | 5,591,548 | 5,103,419 | 2.5 | % | 17.2 | % | ||||||||||
| Savings | 6,280,629 | 6,137,084 | 5,905,137 | 5,716,050 | 5,446,368 | 2.3 | % | 15.3 | % | ||||||||||
| Total demand and savings | 19,464,180 | 18,642,090 | 18,144,515 | 17,578,281 | 16,339,575 | 4.4 | % | 19.1 | % | ||||||||||
| Brokered | 297,815 | 324,364 | 340,451 | 314,721 | 312,121 | (8.2) | % | (4.6) | % | ||||||||||
| Time | 2,003,606 | 2,150,570 | 2,306,556 | 2,495,445 | 2,624,962 | (6.8) | % | (23.7) | % | ||||||||||
| Total Deposits | $ | 21,765,601 | $ | 21,117,024 | $ | 20,791,522 | $ | 20,388,447 | $ | 19,276,658 | 3.1 | % | 12.9 | % | |||||
| Short-term borrowings, by type: | |||||||||||||||||||
| Customer funding | $ | 514,025 | $ | 570,775 | $ | 622,623 | $ | 613,127 | $ | 546,716 | (9.9) | % | (6.0) | % | |||||
| Federal funds purchased | — | — | — | — | 74,231 | N/M | (100.0) | % | |||||||||||
| Short-term FHLB advances and other borrowings | — | — | — | — | 86,824 | N/M | (100.0) | % | |||||||||||
| Total Short-term borrowings | $ | 514,025 | $ | 570,775 | $ | 622,623 | $ | 613,127 | $ | 707,771 | (9.9) | % | (27.4) | % | |||||
| N/M - Not meaningful | |||||||||||||||||||
| (1) Consists of overdrafts and net origination fees and costs. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Six months ended June 30 | |||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||
| Average | Interest | Yield/ | Average | Interest | Yield/ | ||||||||||||||
| Balance | (1) | Rate | Balance | (1) | Rate | ||||||||||||||
| ASSETS | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Net Loans | $ | 18,943,367 | $ | 321,987 | 3.42 | % | $ | 17,595,932 | $ | 338,110 | 3.86 | % | |||||||
| Taxable investment securities | 2,534,821 | 27,588 | 2.00 | % | 2,242,663 | 31,465 | 2.81 | % | |||||||||||
| Tax-exempt investment securities | 936,531 | 14,651 | 3.12 | % | 775,530 | 12,698 | 3.26 | % | |||||||||||
| Total Investment Securities | 3,471,352 | 42,239 | 2.43 | % | 3,018,193 | 44,163 | 2.92 | % | |||||||||||
| Loans held for sale | 42,647 | 671 | 3.14 | % | 41,393 | 829 | 4.00 | % | |||||||||||
| Other interest-earning assets | 1,825,966 | 2,711 | 0.19 | % | 709,091 | 3,297 | 4.31 | % | |||||||||||
| Total Interest-earning Assets | 24,283,332 | 367,607 | 3.05 | % | 21,364,609 | 386,399 | 3.63 | % | |||||||||||
| Noninterest-earning assets: | |||||||||||||||||||
| Cash and due from banks | 125,081 | 145,988 | |||||||||||||||||
| Premises and equipment | 229,843 | 240,019 | |||||||||||||||||
| Other assets | 1,685,708 | 1,675,849 | |||||||||||||||||
| Less: ACL - loans(2) | (273,965) | (230,858) | |||||||||||||||||
| Total Assets | $ | 26,049,999 | $ | 23,195,607 | |||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | $ | 5,906,423 | $ | 2,092 | 0.07 | % | $ | 4,876,662 | $ | 8,020 | 0.33 | % | |||||||
| Savings deposits | 6,209,253 | 2,890 | 0.09 | % | 5,287,015 | 10,441 | 0.40 | % | |||||||||||
| Brokered deposits | 311,016 | 647 | 0.42 | % | 293,756 | 1,495 | 1.02 | % | |||||||||||
| Time deposits | 2,076,681 | 11,955 | 1.16 | % | 2,693,202 | 23,602 | 1.76 | % | |||||||||||
| Total Interest-bearing Deposits | 14,503,373 | 17,584 | 0.24 | % | 13,150,635 | 43,558 | 0.67 | % | |||||||||||
| Short-term borrowings | 542,243 | 325 | 0.12 | % | 1,005,409 | 4,590 | 0.91 | % | |||||||||||
| Long-term borrowings | 947,203 | 16,853 | 3.56 | % | 1,212,318 | 18,426 | 3.04 | % | |||||||||||
| Total Interest-bearing Liabilities | 15,992,819 | 34,762 | 0.44 | % | 15,368,362 | 66,574 | 0.87 | % | |||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | 6,939,731 | 5,048,408 | |||||||||||||||||
| Total Deposits/Cost of Deposits | 21,443,104 | 0.17 | % | 18,199,043 | 0.48 | % | |||||||||||||
| Other | 464,104 | 455,763 | |||||||||||||||||
| Total Liabilities | 23,396,654 | 20,872,533 | |||||||||||||||||
| Total Interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 22,932,550 | 0.30 | % | 20,416,770 | 0.65 | % | |||||||||||||
| Shareholders' equity | 2,653,345 | 2,323,074 | |||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 26,049,999 | $ | 23,195,607 | |||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 332,845 | 2.76 | % | 319,825 | 3.01 | % | |||||||||||||
| Tax equivalent adjustment | (5,998) | (6,325) | |||||||||||||||||
| Net interest income | $ | 326,847 | $ | 313,500 | |||||||||||||||
| (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 SHORT-TERM BORROWINGS DETAIL (UNAUDITED): | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Six months ended June 30 | |||||||||||||||||||
| 2021 | 2020 | % Change | |||||||||||||||||
| Loans, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,153,444 | $ | 6,811,318 | 5.0 | % | |||||||||||||
| Commercial and industrial | 3,976,758 | 4,448,990 | (10.6) | % | |||||||||||||||
| Real estate - residential mortgage | 3,290,726 | 2,719,851 | 21.0 | % | |||||||||||||||
| Real estate - home equity | 1,157,289 | 1,285,661 | (10.0) | % | |||||||||||||||
| Real estate - construction | 1,054,593 | 935,304 | 12.8 | % | |||||||||||||||
| Consumer | 455,241 | 466,071 | (2.3) | % | |||||||||||||||
| Equipment lease financing | 261,300 | 284,612 | (8.2) | % | |||||||||||||||
| Other(1) | (12,081) | 14,667 | N/M | ||||||||||||||||
| Net Loans before PPP | 17,337,270 | 16,966,474 | 2.2 | % | |||||||||||||||
| PPP | 1,606,097 | 629,458 | N/M | ||||||||||||||||
| Total Net Loans | $ | 18,943,367 | $ | 17,595,932 | 7.7 | % | |||||||||||||
| Deposits, by type: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 6,939,731 | $ | 5,048,408 | 37.5 | % | |||||||||||||
| Interest-bearing demand | 5,906,423 | 4,876,662 | 21.1 | % | |||||||||||||||
| Savings | 6,209,253 | 5,287,015 | 17.4 | % | |||||||||||||||
| Total demand and savings | 19,055,407 | 15,212,085 | 25.3 | % | |||||||||||||||
| Brokered | 311,016 | 293,756 | 5.9 | % | |||||||||||||||
| Time | 2,076,681 | 2,693,202 | (22.9) | % | |||||||||||||||
| Total Deposits | $ | 21,443,104 | $ | 18,199,043 | 17.8 | % | |||||||||||||
| Short-term borrowings, by type: | |||||||||||||||||||
| Customer funding | 542,243 | 487,478 | 11.2 | % | |||||||||||||||
| Federal funds purchased | — | 130,549 | N/M | ||||||||||||||||
| Short-term FHLB advances and other borrowings | — | 387,382 | N/M | ||||||||||||||||
| Total Short-term Borrowings | $ | 542,243 | $ | 1,005,409 | (46.1) | % | |||||||||||||
| N/M - Not meaningful | |||||||||||||||||||
| (1) Consists of overdrafts and net origination fees and costs. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| ASSET QUALITY INFORMATION (UNAUDITED) | |||||||||||||||||||
| dollars in thousands | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||||||||
| Allowance for credit losses related to Net Loans: | |||||||||||||||||||
| Balance at beginning of period | $ | 265,986 | $ | 277,567 | $ | 266,825 | $ | 256,537 | $ | 238,508 | |||||||||
| Loans charged off: | |||||||||||||||||||
| Commercial and industrial | (954) | (4,319) | (1,567) | (2,969) | (3,480) | ||||||||||||||
| Real estate - commercial mortgage | (6,506) | (1,837) | (300) | (746) | (2,324) | ||||||||||||||
| Consumer and home equity | (1,130) | (847) | (668) | (1,093) | (1,303) | ||||||||||||||
| Real estate - residential mortgage | (496) | (192) | — | (198) | (235) | ||||||||||||||
| Real estate - construction | — | (39) | — | — | (17) | ||||||||||||||
| Equipment lease financing and other | (436) | (968) | (483) | (483) | (688) | ||||||||||||||
| Total loans charged off | (9,522) | (8,202) | (3,018) | (5,489) | (8,047) | ||||||||||||||
| Recoveries of loans previously charged off: | |||||||||||||||||||
| Commercial and industrial | 693 | 769 | 4,581 | 2,103 | 2,978 | ||||||||||||||
| Real estate - commercial mortgage | 729 | 174 | 588 | 100 | 95 | ||||||||||||||
| Consumer and home equity | 634 | 440 | 594 | 491 | 649 | ||||||||||||||
| Real estate - residential mortgage | 105 | 95 | 199 | 95 | 112 | ||||||||||||||
| Real estate - construction | 254 | 384 | 179 | 4,873 | — | ||||||||||||||
| Equipment lease financing and other | 153 | 159 | 219 | 185 | 92 | ||||||||||||||
| Recoveries of loans previously charged off | 2,568 | 2,021 | 6,360 | 7,847 | 3,926 | ||||||||||||||
| Net loans recovered (charged off) | (6,954) | (6,181) | 3,342 | 2,358 | (4,121) | ||||||||||||||
| Provision for credit losses | (4,000) | (5,400) | 7,400 | 7,930 | 22,150 | ||||||||||||||
| Balance at end of period | $ | 255,032 | $ | 265,986 | $ | 277,567 | $ | 266,825 | $ | 256,537 | |||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.15 | % | 0.13 | % | (0.07) | % | (0.05) | % | 0.09 | % | |||||||||
| Allowance credit losses related to OBS Credit Exposures(1) | |||||||||||||||||||
| Balance at beginning of period | $ | 14,273 | $ | 14,373 | $ | 15,533 | $ | 16,383 | $ | 18,963 | |||||||||
| Provision for credit losses | 500 | (100) | (1,160) | (850) | (2,580) | ||||||||||||||
| Balance at end of period | $ | 14,773 | $ | 14,273 | $ | 14,373 | $ | 15,533 | $ | 16,383 | |||||||||
| NON-PERFORMING ASSETS: | |||||||||||||||||||
| Non-accrual loans | $ | 147,864 | $ | 143,889 | $ | 137,198 | $ | 128,321 | $ | 125,037 | |||||||||
| Loans 90 days past due and accruing | 5,865 | 8,559 | 9,929 | 13,761 | 14,767 | ||||||||||||||
| Total non-performing loans | 153,729 | 152,448 | 147,127 | 142,082 | 139,804 | ||||||||||||||
| Other real estate owned | 2,779 | 3,664 | 4,178 | 4,565 | 5,418 | ||||||||||||||
| Total non-performing assets | $ | 156,508 | $ | 156,112 | $ | 151,305 | $ | 146,647 | $ | 145,222 | |||||||||
| NON-PERFORMING LOANS, BY TYPE: | |||||||||||||||||||
| Commercial and industrial | $ | 33,522 | $ | 31,871 | $ | 32,610 | $ | 37,224 | $ | 39,730 | |||||||||
| Real estate - commercial mortgage | 53,693 | 54,164 | 52,647 | 43,426 | 42,374 | ||||||||||||||
| Real estate - residential mortgage | 38,185 | 36,152 | 30,793 | 28,287 | 22,887 | ||||||||||||||
| Consumer and home equity | 11,408 | 13,072 | 13,090 | 12,292 | 11,911 | ||||||||||||||
| Real estate - construction | 1,016 | 1,440 | 1,550 | 4,051 | 4,525 | ||||||||||||||
| Equipment lease financing and other | 15,905 | 15,749 | 16,437 | 16,802 | 18,377 | ||||||||||||||
| Total non-performing loans | $ | 153,729 | $ | 152,448 | $ | 147,127 | $ | 142,082 | $ | 139,804 | |||||||||
| (1) The allowance for credit losses related to OBS Credit Exposures is presented in "other liabilities" on the consolidated balance sheets. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) | |||||||||||||||||||
| in thousands, except per share data and percentages | |||||||||||||||||||
| Explanatory note: | This press release contains supplemental 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 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 | |||||||||||||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||||||||
| Common shareholders' equity (tangible), per share | |||||||||||||||||||
| Shareholders' equity | $ | 2,692,958 | $ | 2,629,655 | $ | 2,616,828 | $ | 2,390,261 | $ | 2,340,501 | |||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | — | — | ||||||||||||||
| Less: Goodwill and intangible assets | (536,847) | (536,544) | (536,659) | (534,907) | (535,039) | ||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 1,963,233 | $ | 1,900,233 | $ | 1,887,291 | $ | 1,855,354 | $ | 1,805,462 | |||||||||
| Shares outstanding, end of period (denominator) | 162,988 | 162,518 | 162,350 | 162,134 | 161,958 | ||||||||||||||
| Common shareholders' equity (tangible), per share | $ | 12.05 | $ | 11.69 | $ | 11.62 | $ | 11.44 | $ | 11.15 | |||||||||
| Return on average common shareholders' equity (tangible) | |||||||||||||||||||
| Net income available to common shareholders | $ | 62,402 | $ | 70,472 | $ | 48,690 | $ | 61,610 | $ | 39,558 | |||||||||
| Plus: Intangible amortization, net of tax | 140 | 90 | 104 | 103 | 104 | ||||||||||||||
| (Numerator) | $ | 62,542 | $ | 70,562 | $ | 48,794 | $ | 61,713 | $ | 39,662 | |||||||||
| Average shareholders' equity | $ | 2,669,413 | $ | 2,637,098 | $ | 2,544,866 | $ | 2,374,091 | $ | 2,309,133 | |||||||||
| Less: Average preferred stock | (192,878) | (192,878) | (127,639) | — | — | ||||||||||||||
| Less: Average goodwill and intangible assets | (536,470) | (536,601) | (535,474) | (534,971) | (535,103) | ||||||||||||||
| Average tangible common shareholders' equity (denominator) | $ | 1,940,065 | $ | 1,907,619 | $ | 1,881,753 | $ | 1,839,120 | $ | 1,774,030 | |||||||||
| Return on average common shareholders' equity (tangible), annualized | 12.93% | 15.00% | 10.32% | 13.50% | 8.99% | ||||||||||||||
| Tangible common equity to tangible assets (TCE Ratio) | |||||||||||||||||||
| Shareholders' equity | $ | 2,692,958 | $ | 2,629,655 | $ | 2,616,828 | $ | 2,390,261 | $ | 2,340,501 | |||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | — | — | ||||||||||||||
| Less: Goodwill and intangible assets | (536,847) | (536,544) | (536,659) | (534,907) | (535,039) | ||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 1,963,233 | $ | 1,900,233 | $ | 1,887,291 | $ | 1,855,354 | $ | 1,805,462 | |||||||||
| Total assets | $ | 26,079,774 | $ | 25,892,990 | $ | 25,906,733 | $ | 25,543,281 | $ | 24,617,863 | |||||||||
| Less: Goodwill and intangible assets | (536,847) | (536,544) | (536,659) | (534,907) | (535,039) | ||||||||||||||
| Total tangible assets (denominator) | $ | 25,542,927 | $ | 25,356,446 | $ | 25,370,074 | $ | 25,008,374 | $ | 24,082,824 | |||||||||
| Tangible common equity to tangible assets | 7.69% | 7.49% | 7.44% | 7.42% | 7.50% | ||||||||||||||
| Efficiency ratio | |||||||||||||||||||
| Non-interest expense | $ | 140,831 | $ | 178,383 | $ | 154,738 | $ | 139,145 | $ | 143,006 | |||||||||
| Less: Amortization of tax credit investments | (1,563) | (1,531) | (1,532) | (1,694) | (1,450) | ||||||||||||||
| Less: Intangible amortization | (178) | (115) | (132) | (132) | (132) | ||||||||||||||
| Less: 2020 cost savings initiatives | — | — | (15,400) | (800) | — | ||||||||||||||
| Less: Debt extinguishment costs | (412) | (32,163) | — | — | (2,878) | ||||||||||||||
| Non-interest expense (numerator) | $ | 138,678 | $ | 144,574 | $ | 137,674 | $ | 136,519 | $ | 138,546 | |||||||||
| Net interest income (fully taxable equivalent) | $ | 165,417 | $ | 167,428 | $ | 164,578 | $ | 157,106 | $ | 155,854 | |||||||||
| Plus: Total Non-interest income | 51,890 | 95,397 | 55,574 | 63,248 | 55,922 | ||||||||||||||
| Less: Investment securities gains, net | (36) | (33,475) | — | (2) | (3,005) | ||||||||||||||
| Total revenue (denominator) | $ | 217,271 | $ | 229,350 | $ | 220,152 | $ | 220,352 | $ | 208,771 | |||||||||
| Efficiency ratio | 63.8% | 63.0% | 62.5% | 62.0% | 66.4% | ||||||||||||||
| Three months ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | |||||||||||||||
| 2021 | 2021 | 2020 | 2020 | 2020 | |||||||||||||||
| Asset Quality, excluding PPP | |||||||||||||||||||
| Net loans recovered (charged-off) (numerator) | $ | (6,954) | $ | (6,181) | $ | 3,342 | $ | 2,358 | $ | (4,121) | |||||||||
| Average Net Loans | $ | 18,906,556 | $ | 18,980,586 | $ | 18,994,514 | $ | 18,880,519 | $ | 18,331,797 | |||||||||
| Less: Average PPP loans | (1,524,389) | (1,688,713) | (1,830,426) | (1,953,122) | (1,258,917) | ||||||||||||||
| Total adjusted average loans (denominator) | $ | 17,382,167 | $ | 17,291,873 | $ | 17,164,088 | $ | 16,927,397 | $ | 17,072,880 | |||||||||
| Net charge-offs (recoveries) to adjusted average loans (annualized) | 0.16% | 0.14% | (0.08)% | (0.06)% | 0.10% | ||||||||||||||
| Non-performing loans (numerator) | $ | 153,729 | $ | 152,448 | $ | 147,127 | $ | 142,082 | $ | 139,804 | |||||||||
| Net Loans | $ | 18,586,756 | $ | 18,990,986 | $ | 18,900,820 | $ | 19,028,621 | $ | 18,704,722 | |||||||||
| Less: PPP loans | (1,114,401) | (1,688,394) | (1,581,712) | (1,960,165) | (1,937,034) | ||||||||||||||
| Total adjusted loans (denominator) | $ | 17,472,355 | $ | 17,302,592 | $ | 17,319,108 | $ | 17,068,456 | $ | 16,767,688 | |||||||||
| Non-performing loans to total adjusted loans | 0.88% | 0.88% | 0.85% | 0.83% | 0.83% | ||||||||||||||
| ACL - loans (numerator) | $ | 255,032 | $ | 265,986 | $ | 277,567 | $ | 266,825 | $ | 256,537 | |||||||||
| Net Loans | $ | 18,586,756 | $ | 18,990,986 | $ | 18,900,820 | $ | 19,028,621 | $ | 18,704,722 | |||||||||
| Less: PPP loans | (1,114,401) | (1,688,394) | (1,581,712) | (1,960,165) | (1,937,034) | ||||||||||||||
| Total adjusted loans (denominator) | $ | 17,472,355 | $ | 17,302,592 | $ | 17,319,108 | $ | 17,068,456 | $ | 16,767,688 | |||||||||
| ACL - loans to total adjusted loans | 1.46% | 1.54% | 1.60% | 1.56% | 1.53% | ||||||||||||||
| Pre-provision net revenue | |||||||||||||||||||
| Net interest income | $ | 162,399 | $ | 164,448 | $ | 161,591 | $ | 154,116 | $ | 152,754 | |||||||||
| Non-interest income | 51,890 | 95,397 | 55,574 | 63,248 | 55,922 | ||||||||||||||
| Less: Investment securities gains, net | (36) | (33,475) | — | (2) | (3,005) | ||||||||||||||
| Total revenue | $ | 214,253 | $ | 226,370 | $ | 217,165 | $ | 217,362 | $ | 205,671 | |||||||||
| Non-interest expense | $ | 140,831 | $ | 178,383 | $ | 154,738 | $ | 139,145 | $ | 143,006 | |||||||||
| Less: Debt extinguishment | (412) | (32,163) | — | — | (2,878) | ||||||||||||||
| Less: Amortization on tax credit investments | (1,563) | (1,531) | (1,532) | (1,694) | (1,450) | ||||||||||||||
| Less: Intangible amortization | (178) | (115) | (132) | (132) | (132) | ||||||||||||||
| Total non-interest expense | $ | 138,678 | $ | 144,574 | $ | 153,074 | $ | 137,319 | $ | 138,546 | |||||||||
| Pre-provision net revenue | $ | 75,575 | $ | 81,796 | $ | 64,091 | $ | 80,043 | $ | 67,125 | |||||||||
| Note: numbers may not sum due to rounding. |
16
exhibit99263021earningsc
SECOND QUARTER 2021 RESULTS NASDAQ: FULT Data as of or for the three months ended June 30, 2021 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 2021 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, 2020, Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission and are or will be 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. FORWARD-LOOKING STATEMENTS 2
- ROA is return an average assets calculated as net income for the period divided by average assets, annualized. 2. ROE is return on average common shareholders’ equity calculated as net income available to common shareholders for the period divided by average common 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. INCOME STATEMENT SUMMARY 3 2Q21 1Q21 2Q20 (dollars in thousands, except per-share data) Net Interest Income $ 162,399 $ 164,448 $ 152,754 Provision for Credit Losses (3,500) (5,500) 19,570 Non-Interest Income 51,854 61,922 52,917 Securities Gains 36 33,475 3,005 Non-Interest Expense 140,831 178,383 143,006 Income before Income Taxes 76,958 86,961 46,100 Income Taxes 11,994 13,898 6,542 Net Income 64,964 73,063 39,558 Preferred Stock Dividends (2,562) (2,591) — Net Income Available to Common Shareholders $ 62,402 $ 70,472 $ 39,558 Net income per share (diluted) $ 0.38 $ 0.43 $ 0.24 ROA(1) 1.00 % 1.14 % 0.66 % ROE(2) 9.38 % 10.84 % 6.89 % ROE (tangible)(3) 12.93 % 15.00 % 8.99 % Efficiency ratio(3) 63.8 % 63.0 % 66.4 %
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields Average Liabilities & Rates ($ IN MILLIONS) ($ IN BILLIONS) ($ IN BILLIONS) 4 $19 $20 $21 $21 $22$2 $2 $2 $2 $1 0.72% 0.62% 0.54% 0.51% 0.36% Cost of Interest-bearing Liabilities Borrowings Deposits 2Q20 3Q20 4Q20 1Q21 2Q21 $— $5 $10 $15 $20 $25 0.00% 1.00% 2.00% 3.00% $153 $154 $162 $164 $162 2.81% 2.70% 2.75% 2.79% 2.73% Net Interest Income Net Interest Margin (Fully-taxable equivalent basis, or FTE) 2Q20 3Q20 4Q20 1Q21 2Q21 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% $18 $19 $19 $19 $19 $4 $4 $5 $5 $5 3.32% 3.13% 3.12% 3.13% 2.97% Loans Securities & Other Interest-Earning Asset Yield (FTE) 2Q20 3Q20 4Q20 1Q21 2Q21 $5 $10 $15 $20 $25 2.00% 4.00% 6.00% 8.00%
ASSET QUALITY ($ 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 51. The allowance for credit losses (“ACL”) relates specifically to "Loans, net of unearned income" and does not include the ACL related to off-balance-sheet credit exposures. 2. 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. $20 $7 $6 $(6) $(4) 2Q20 3Q20 4Q20 1Q21 2Q21 $— $10 $20 $30 $40 $50 $140 $142 $147 $152 $154 0.75% 0.75% 0.78% 0.80% 0.83% NPL NPLs/Loans 2Q20 3Q20 4Q20 1Q21 2Q21 $100 $125 $150 $175 $200 0.00% 0.50% 1.00% 1.50% $4 $(2) $(3) $6 $7 0.09% -0.05% -0.07% 0.13% 0.15% Net charge-offs/(recoveries) NCOs/Average Loans (annualized) 2Q20 3Q20 4Q20 1Q21 2Q21 $0 $10 $20 $30 $40 (1.00)% (0.50)% 0.00% 0.50% 1.00% 183% 188% 189% 174% 166% 1.53% 1.56% 1.60% 1.54% 1.46% 1.37% 1.40% 1.47% 1.40% 1.37% ACL/NPLs ACL/Loans excl PPP(2) ACL/Loans 2Q20 3Q20 4Q20 1Q21 2Q21 50% 75% 100% 125% 150% 175% 200% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00%
NON-INTEREST INCOME(1) (1) Excluding investment securities gains Three months ended June 30, 2021 (percent of total non-interest income) 6 Non-interest income(1) decreased 16% from 1Q21 Decreases in: n Mortgage Banking driven by lower mortgage sales and an increase of mortgage servicing rights valuation allowance of $2 million. 1Q21 included a decrease of $6 million to mortgage servicing rights valuation allowance. Partially offset by increases in: n Wealth management income, specifically brokerage income n Commercial banking income 34% 5% 22% 33% 6% Wealth Management Mortgage Banking Consumer Banking Commercial Banking Other 2Q21 1Q21 Change (dollars in thousands) n Wealth Management $ 17,634 $ 17,347 $ 287 n Mortgage Banking 2,838 13,960 (11,122) n Consumer Banking 10,860 10,754 106 n Commercial Banking 17,129 16,342 787 n Other 3,393 3,519 (126) Total $ 51,854 $ 61,922 $ (10,068)
NON-INTEREST EXPENSE Three months ended June 30, 2021 (percent of total non-interest expense) 7 56% 9% 10% 6% 20% Salaries and Benefits Occupancy Data Processing and Software Other Outside Services Debt extinguishment Other 2Q21 1Q21 Change (dollars in thousands) n Salaries and Benefits $ 78,367 $ 82,586 $ (4,219) n Occupancy 12,494 13,982 (1,488) n Data Processing and Software 13,932 13,561 371 n Other Outside Services 8,178 8,490 (312) n Debt Extinguishment 412 32,163 (31,751) n Other 27,448 27,601 (153) Total $ 140,831 $ 178,383 $ (37,552) Non-interest expense decreased 21% from 1Q21 Driven primarily by balance sheet restructuring: n $21 million in prepayment penalties of FHLB advances and $11 million in other long-term debt extinguishment costs during Q1 2021 Other decreases were due to: n Lower salaries and benefits n Seasonal reductions in occupancy expense
CAPITAL POSITION REMAINS STRONG 8 1. Regulatory capital ratios as of June 30, 2021 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. Dollars are in millions. 8.4% 10.9% 9.9% 14.3% Regulatory Minimums Excess(2) Tier 1 Leverage Tier 1 Risk Based CE Tier 1 Total Risk Based —% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% $876 $472 $576 $755 (as of June 30, 2021)
2021 OUTLOOK 9 Net interest income: $640 - $660 million Provision for credit losses: $10 - $20 million(1) Non-interest income: $220 - $230 million Non-interest expense: $560 - $570 million(2) (1) Updated as of 2Q 2021; previously $20 - $40 million. (2) Excluding charges related to the 1Q 2021 balance sheet restructuring. Updated as of 2Q 2021; previously $555 - $575 million.
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. 10 (dollars in thousands) Three months ended Jun 30 Mar 31 Jun 30 Return on average common shareholders' equity (tangible) 2021 2021 2020 Net income available to common shareholders $ 62,402 $ 70,472 $ 39,558 Plus: Intangible amortization, net of tax 140 90 104 (Numerator) 62,542 70,562 39,662 Average shareholders' equity $ 2,669,413 $ 2,637,098 $ 2,309,133 Less: Average preferred stock (192,878) (192,878) — Less: Average goodwill and intangible assets (536,470) (536,601) (535,103) Average tangible common shareholders' equity (denominator) 1,940,065 1,907,619 1,774,030 Return on average common shareholders' equity (tangible), annualized 12.93 % 15.00 % 8.99 %
NON-GAAP RECONCILIATION 11 (dollars in thousands) Three months ended Jun 30 Mar 31 Jun 30 Efficiency ratio 2021 2021 2020 Non-interest expense $ 140,831 $ 178,383 $ 143,006 Less: Debt extinguishment costs (412) (32,163) (2,878) Less: Amortization of tax credit investments (1,563) (1,531) (1,450) Less: Intangible amortization (178) (115) (132) Non-interest expense (numerator) $ 138,678 $ 144,574 $ 138,546 Net interest income (fully taxable equivalent) $ 165,417 $ 167,428 $ 155,854 Plus: Total Non-interest income 51,890 95,397 55,922 Less: Investment securities gains, net (36) (33,475) (3,005) Total revenue (denominator) $ 217,271 $ 229,350 $ 208,771 Efficiency ratio 63.8 % 63.0 % 66.4 % Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Asset Quality, excluding PPP 2021 2021 2020 2020 2020 ACL - loans (numerator) $ 255,032 $ 265,986 $ 277,567 $ 266,825 $ 256,537 Net Loans $ 18,586,756 $ 18,990,986 $ 18,900,820 $ 19,028,621 $ 18,704,722 Less: PPP loans (1,114,401) (1,688,394) (1,581,712) (1,960,165) (1,937,034) Total adjusted loans (denominator) $ 17,472,355 $ 17,302,592 $ 17,319,108 $ 17,068,456 $ 16,767,688 ACL - loans to total adjusted loans 1.46 % 1.54 % 1.60 % 1.56 % 1.53 %
APPENDIX • CREDIT DISCLOSURES • BALANCE SHEET RESTRUCTURING 12
Additional Detail on Deferrals (data as of June 30, 2021) 13 Commercial • At June 30, 2021, active deferrals declined to ~$122 million, or 0.9% of the commercial portfolio(2) • Majority of active deferrals are in the hospitality, entertainment, and food services • Anticipate continued downward trends in deferrals for the rest of the year Consumer • At June 30, 2021, active deferrals and forbearances declined to ~$57 million, or 1.1%, of the consumer portfolio(3) 1) Deferrals consist of deferrals of principal and interest payments or deferrals of principal payments. 2) Includes real estate - commercial mortgage, commercial and industrial and equipment lease financing. 3) Includes real estate - residential mortgage, real estate - home equity and consumer. Active COVID Deferrals(1) continue to decline
Selected Industries With Heightened Risk Due to COVID-19 (data as of June 30, 2021; all industry classifications based on NAICS codes) 14 (1) Based on regulatory classifications. Commercial Portfolio consists of Commercial and Industrial, Commercial Mortgage, and Construction loans to commercial borrowers. Note: "Pass," "Special Mention" and "Substandard or Lower" are the Corporation's internal risk rating categories. Please see Note 4 - Loans and Allowance for Credit Losses in the Corporation's Form 10-Q for the quarter ended March 31, 2021 for a description of these categories. some numbers may not sum due to rounding
2021 Balance Sheet Restructuring 15 Why: • Reduce exposure to interest rate risk • Opportunity to reduce interest expense What: • Sold Visa Class B restricted shares - $34 million pre-tax gain • Tendered for $75 million of 4.50% subordinated debt due 2024 • Tendered for $60 million of 3.60% senior notes due 2022 • Prepaid $535 million of term FHLB advances • Sold $23 million of auction rate securities • Executed $500 million of receive-fixed, pay-variable interest rate swaps 1Q21 Impact (restructuring completed late in 1Q21): Non-interest income: • $34 million gain on the sale of Visa Class B restricted Shares • $.5 million loss on the sale of other securities Non-interest expense: • $33 million in debt extinguishment costs, including: ◦ $21 million in prepayment penalties of FHLB advances; ◦ $11 million of expenses associated with tender offer to purchase subordinated and senior note debt ◦ $1 million of deferred issuance costs recognized in net interest income 2Q21 Impact: • Interest expense on long-term borrowings decreased $4.5 million compared to 1Q21 Anticipated Future Impact: • Increase in net interest income of ~$17 million on an annualized basis • Increase in earnings per share of ~$0.08 per share on an annualized basis