FULT 8-K
Fulton Financial Corp (FULT)
8-K
2020-04-22
For: 2020-04-21
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 April 21, 2020, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the first quarter ended March 31, 2020. 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, April 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 "Q2 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, 2019 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 will address risks and uncertainties associated with the COVID-19 pandemic.
In addition, the COVID-19 pandemic is having an adverse impact on the Corporation, its customers and the communities it serves. The adverse effect of the COVID-19 pandemic on the Corporation, its customers and the communities where it operates may adversely affect the Corporation’s business, results of operations and financial condition for an indefinite period of time.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | ||||
| Press Release dated April 21, 2020. | |||||
| Supplementary financial information for the quarter ended March 31, 2020. | |||||
| Presentation materials to be discussed during the conference call and webcast on April 22, 2020. | |||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: April 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 Responds to the COVID-19 Pandemic, “It’s Personal”, and Announces First quarter Earnings
(April 21, 2020) – Lancaster, PA – Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income of $26 million, or $0.16 per diluted share, for the first quarter of 2020.
“The COVID-19 pandemic and unprecedented public health response have created extraordinary personal and societal challenges across our nation and world,” said E. Philip Wenger, Chairman and CEO. “Fulton began to experience the effects of these challenges midway through the first quarter and our financial results reflect these challenges. But, as we have seen before, extreme hardship often gives rise to extraordinary efforts, and we have seen that with respect to the heroic efforts of our health care workers, first responders and countless other citizens on the front lines of essential businesses that are enabling us to ‘Stay Together, Apart.’ We are all very thankful for their selfless efforts, including from our own employees.”
“In this crisis, more than ever before, our Fulton brand – ‘It’s Personal’– reflects our own bias for action, rather than just words, and that is exemplified in how Fulton is dealing with COVID-related challenges. We have undertaken a number of measures to help our employees and their families through this difficult time, both to keep them safe and also to reward them for keeping us open for business so that we can continue to provide essential banking services to our customers and communities. I am extremely proud of the efforts our employees have made. One outstanding example is how I have seen our people rally to support the SBA’s efforts to assist small businesses and their employees with the Paycheck Protection Program of the CARES Act. Our employees worked 24/7 the last two weeks to have the SBA approve $1.7 billion in forgiveable loans that Fulton Bank is making to our small business customers so that those businesses can maintain employees on their payrolls and, hopefully, reopen for business sometime in the not-too-distant future.”
“No one can predict when our communities and nation will again enjoy a sense of normalcy, but I can tell you that Fulton Bank is strong – it is ‘well-capitalized,’ it is liquid, and it stands ready to continue to deploy its considerable resources in support of customers and communities across our footprint as we continue to navigate through these difficult times in the days and months ahead.”
Net Interest Income and Balance Sheet
Net interest income for the first quarter of 2020 was $161 million, an increase of $1 million from the fourth quarter of 2019, driven by interest-earning asset growth, primarily in loans and investment securities. Net interest margin for the first quarter of 2020 decreased to 3.21% from 3.22% in the fourth quarter of 2019.
Total average assets for the first quarter of 2020 were $22.3 billion, an increase of $440 million from the fourth quarter of 2019. Average loans, net of unearned income, of $16.9 billion were consistent with the fourth quarter of 2019.
Average loans and yields, by type, for the first quarter of 2020 in comparison to the fourth quarter of 2019 are summarized in the following table:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | Growth | |||||||||||||||||||||||||||||||||
| Balance | Yield (1) | Balance | Yield (1) | $ | % | ||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Average Loans, net of unearned income, by type: | |||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,746,766 | 4.20 | % | $ | 6,561,029 | 4.34 | % | $ | 185,737 | 2.8 | % | |||||||||||||||||||||||
| Commercial and industrial | 4,446,750 | 4.21 | % | 4,575,133 | 4.24 | % | (128,383) | (2.8) | % | ||||||||||||||||||||||||||
| Real estate - residential mortgage | 2,670,019 | 3.97 | % | 2,606,136 | 4.00 | % | 63,883 | 2.5 | % | ||||||||||||||||||||||||||
| Real estate - home equity | 1,300,132 | 4.73 | % | 1,331,088 | 4.97 | % | (30,956) | (2.3) | % | ||||||||||||||||||||||||||
| Real estate - construction | 929,529 | 4.13 | % | 934,556 | 4.37 | % | (5,027) | (0.5) | % | ||||||||||||||||||||||||||
| Consumer | 466,415 | 4.34 | % | 464,606 | 4.44 | % | 1,809 | 0.4 | % | ||||||||||||||||||||||||||
| Equipment lease financing | 284,566 | 4.32 | % | 281,451 | 4.35 | % | 3,115 | 1.1 | % | ||||||||||||||||||||||||||
| Other | 15,890 | N/A | 14,058 | N/A | 1,832 | 13.0 | % | ||||||||||||||||||||||||||||
| Total Average Loans, net of unearned income | $ | 16,860,067 | 4.23 | % | $ | 16,768,057 | 4.31 | % | $ | 92,010 | 0.5 | % | |||||||||||||||||||||||
| (1) Presented on a fully-taxable equivalent basis using a 21% Federal tax rate and statutory interest expense disallowances. | |||||||||||||||||||||||||||||||||||
Total average liabilities increased $444 million, from the fourth quarter of 2019 driven by increases in borrowings of $773 million, while average deposits decreased $328 million. Average deposits and interest rates, by type, for the first quarter of 2020 in comparison to the fourth quarter of 2019 are summarized in the following table:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | Growth | |||||||||||||||||||||||||||||||||
| Balance | Rate | Balance | Rate | $ | % | ||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Average Deposits, by type: | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,307,027 | — | % | $ | 4,324,568 | — | % | $ | (17,541) | (0.4) | % | |||||||||||||||||||||||
| Interest-bearing demand | 4,649,905 | 0.49 | % | 4,699,040 | 0.72 | % | (49,135) | (1.0) | % | ||||||||||||||||||||||||||
| Savings and money market deposits | 5,127,662 | 0.56 | % | 5,205,260 | 0.78 | % | (77,598) | (1.5) | % | ||||||||||||||||||||||||||
| Total average demand and savings | 14,084,594 | 0.36 | % | 14,228,868 | 0.52 | % | (144,274) | (1.0) | % | ||||||||||||||||||||||||||
| Brokered deposits | 275,359 | 1.57 | % | 261,689 | 1.94 | % | 13,670 | 5.2 | % | ||||||||||||||||||||||||||
| Time deposits | 2,761,474 | 1.84 | % | 2,959,008 | 1.86 | % | (197,534) | (6.7) | % | ||||||||||||||||||||||||||
| Total Average Deposits | $ | 17,121,427 | 0.62 | % | $ | 17,449,565 | 0.77 | % | $ | (328,138) | (1.9) | % | |||||||||||||||||||||||
Asset Quality
Effective January 1, 2020, Fulton adopted Accounting Standards Update 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” referred to as the current expected credit loss model (“CECL”). This accounting standard requires that credit losses for financial assets and off-balance-sheet credit exposures be measured based on expected credit losses, rather than on incurred credit losses as in prior periods. As a result of the adoption of CECL, the allowance for credit losses was increased by $58 million, and retained earnings was decreased by $44 million.
The provision for credit losses for the first quarter of 2020 was $44 million, applying the expected credit losses measurement standard under CECL. The expected credit losses in the first quarter of 2020 were based on forecasted economic assumptions, including the estimated impacts of COVID-19, over the remaining expected lives of financial assets and off-balance-sheet credit exposures.
Non-performing assets were $147 million, or 0.64% of total assets, at March 31, 2020, relatively unchanged from December 31, 2019 and March 31, 2019.
Annualized net charge-offs for the quarter ended March 31, 2020 were 0.26% of total average loans, compared to 0.65% and 0.10% for the quarters ended December 31, 2019 and March 31, 2019, respectively. A $20 million charge-off was recorded for one credit in the fourth quarter of 2019, accounting for most of the difference in this metric for that period in comparison to the first quarter of 2020.
Non-interest Income
Non-interest income in the first quarter of 2020, excluding investment securities gains, was $55 million, relatively unchanged from the fourth quarter of 2019 and an increase of $8 million, or 17%, compared to the first quarter of 2019. Drivers of non-interest income growth in the first quarter of 2020 were mortgage banking and wealth management, offset by decreases in capital markets, consumer card income and merchant and commercial card income compared to the fourth quarter of 2019.
Mortgage banking revenue increased $1 million from the fourth quarter of 2019, reflecting the net result of a $2 million increase in gains on mortgage loan sales, partially offset by a $1 million mortgage servicing rights impairment charge recorded in the first quarter of 2020 as a result of rapidly declining interest rates and related increases in prepayment speeds.
Non-interest Expense
Non-interest expense was $143 million in the first quarter of 2020, an increase of $4 million, or 3%, compared to the fourth quarter of 2019. The increase was driven by salaries and employee benefits, professional fees, and FDIC insurance expense.
Compared to the first quarter of 2019, non-interest expenses increased $5 million, or 3% due primarily to higher salaries and employee benefits, data processing and software and one additional day.
Income Tax Expense
The effective income tax rate for the first quarter of 2020 was 10%, as compared to 13% and 16% for the fourth quarter of 2019 and first quarter of 2019, respectively. The decrease in the effective income tax rate in 2020 was related to a decline in 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, 2019 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 will address risks and uncertainties associated with the COVID-19 pandemic.
In addition, the COVID-19 pandemic is having an adverse impact on the Corporation, its customers and the communities it serves. The adverse effect of the COVID-19 pandemic on the
Corporation, its customers and the communities where it operates may adversely affect the Corporation’s business, results of operations and financial condition for an indefinite period of time.
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 | ||||||||||||||||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||||||
| Ending Balances | ||||||||||||||||||||||||||||||||
| Investments | $ | 3,141,440 | $ | 2,867,378 | $ | 2,705,610 | $ | 2,853,358 | $ | 2,748,249 | ||||||||||||||||||||||
| Loans, net of unearned income | 17,077,403 | 16,837,526 | 16,686,866 | 16,368,458 | 16,262,633 | |||||||||||||||||||||||||||
| Total assets | 22,929,859 | 21,886,040 | 21,703,618 | 21,308,670 | 20,974,649 | |||||||||||||||||||||||||||
| Deposits | 17,365,026 | 17,393,913 | 17,342,717 | 16,388,895 | 16,377,978 | |||||||||||||||||||||||||||
| Shareholders' equity | 2,285,748 | 2,342,176 | 2,324,016 | 2,308,798 | 2,301,019 | |||||||||||||||||||||||||||
| Average Balances | ||||||||||||||||||||||||||||||||
| Investments | $ | 3,071,828 | $ | 2,830,999 | $ | 2,829,672 | $ | 2,790,392 | $ | 2,699,130 | ||||||||||||||||||||||
| Loans, net of unearned income | 16,860,067 | 16,768,057 | 16,436,507 | 16,316,076 | 16,194,375 | |||||||||||||||||||||||||||
| Total assets | 22,252,099 | 21,812,438 | 21,457,800 | 21,057,030 | 20,690,365 | |||||||||||||||||||||||||||
| Deposits | 17,121,427 | 17,449,565 | 16,950,667 | 16,375,457 | 16,275,633 | |||||||||||||||||||||||||||
| Shareholders' equity | 2,337,016 | 2,341,397 | 2,315,585 | 2,301,258 | 2,265,097 | |||||||||||||||||||||||||||
| Income Statement | ||||||||||||||||||||||||||||||||
| Net interest income | $ | 160,746 | $ | 159,270 | $ | 161,260 | $ | 164,544 | $ | 163,315 | ||||||||||||||||||||||
| Provision for credit losses | 44,030 | 20,530 | 2,170 | 5,025 | 5,100 | |||||||||||||||||||||||||||
| Non-interest income | 54,644 | 55,281 | 59,813 | 54,316 | 46,751 | |||||||||||||||||||||||||||
| Non-interest expense | 142,552 | 138,974 | 146,770 | 144,168 | 137,824 | |||||||||||||||||||||||||||
| Income before taxes | 28,808 | 55,047 | 72,133 | 69,667 | 67,142 | |||||||||||||||||||||||||||
| Net income | 26,047 | 47,789 | 62,108 | 59,780 | 56,663 | |||||||||||||||||||||||||||
Pre-provision net revenue(1) | 74,374 | 77,224 | 76,741 | 76,114 | 73,775 | |||||||||||||||||||||||||||
| Per Share | ||||||||||||||||||||||||||||||||
| Net income (basic) | $ | 0.16 | $ | 0.29 | $ | 0.38 | $ | 0.36 | $ | 0.33 | ||||||||||||||||||||||
| Net income (diluted) | $ | 0.16 | $ | 0.29 | $ | 0.37 | $ | 0.35 | $ | 0.33 | ||||||||||||||||||||||
| Cash dividends | $ | 0.13 | $ | 0.17 | $ | 0.13 | $ | 0.13 | $ | 0.13 | ||||||||||||||||||||||
Tangible common equity(1) | 10.84 | 11.00 | 10.91 | 10.63 | 10.39 | |||||||||||||||||||||||||||
| Weighted average shares (basic) | 163,475 | 164,135 | 165,324 | 168,343 | 169,884 | |||||||||||||||||||||||||||
| Weighted average shares (diluted) | 164,417 | 165,039 | 166,126 | 169,168 | 170,909 | |||||||||||||||||||||||||||
Asset Quality(2) | ||||||||||||||||||||||||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.26 | % | 0.65 | % | 0.15 | % | (0.04) | % | 0.10 | % | ||||||||||||||||||||||
| Non-performing loans to total loans | 0.82 | % | 0.84 | % | 0.81 | % | 0.90 | % | 0.85 | % | ||||||||||||||||||||||
| Non-performing assets to total assets | 0.64 | % | 0.68 | % | 0.66 | % | 0.73 | % | 0.70 | % | ||||||||||||||||||||||
ACL - loans(3) to loans outstanding | 1.40 | % | 0.97 | % | 1.00 | % | 1.04 | % | 1.00 | % | ||||||||||||||||||||||
ACL - loans(3) to non-performing loans | 170 | % | 116 | % | 122 | % | 115 | % | 117 | % | ||||||||||||||||||||||
Non-performing assets to tangible shareholders' equity and ACL - loans (1)(3) | 7.37 | % | 7.51 | % | 7.35 | % | 7.97 | % | 7.66 | % | ||||||||||||||||||||||
| Profitability | ||||||||||||||||||||||||||||||||
| Return on average assets | 0.47 | % | 0.87 | % | 1.15 | % | 1.14 | % | 1.11 | % | ||||||||||||||||||||||
| Return on average shareholders' equity | 4.48 | % | 8.10 | % | 10.64 | % | 10.42 | % | 10.15 | % | ||||||||||||||||||||||
Return on average shareholders' equity (tangible)(1) | 5.84 | % | 10.52 | % | 14.03 | % | 13.60 | % | 13.28 | % | ||||||||||||||||||||||
| Net interest margin | 3.21 | % | 3.22 | % | 3.31 | % | 3.44 | % | 3.49 | % | ||||||||||||||||||||||
Efficiency ratio(1) | 64.5 | % | 63.1 | % | 63.6 | % | 64.2 | % | 63.9 | % | ||||||||||||||||||||||
| Capital Ratios | ||||||||||||||||||||||||||||||||
Tangible common equity ratio(1) | 7.8 | % | 8.5 | % | 8.5 | % | 8.5 | % | 8.6 | % | ||||||||||||||||||||||
Tier 1 leverage ratio(4) | 7.9 | % | 8.4 | % | 8.5 | % | 8.7 | % | 8.9 | % | ||||||||||||||||||||||
Common equity Tier 1 capital ratio(4) | 9.4 | % | 9.7 | % | 9.6 | % | 10.0 | % | 10.2 | % | ||||||||||||||||||||||
Tier 1 capital ratio(4) | 9.4 | % | 9.7 | % | 9.6 | % | 10.0 | % | 10.2 | % | ||||||||||||||||||||||
Total risk-based capital ratio(4) | 13.8 | % | 11.8 | % | 12.0 | % | 12.4 | % | 12.6 | % | ||||||||||||||||||||||
| (1) Please refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this document. | ||||||||||||||||||||||||||||||||
| (2) Effective January 1, 2020, Fulton adopted Accounting Standards Update 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” referred to as the current expected credit loss model (“CECL”). This accounting standard requires that credit losses for financial assets and off-balance-sheet ("OBS") credit exposures be measured based on expected credit losses, rather than on incurred credit losses as in prior periods. | ||||||||||||||||||||||||||||||||
| (3) "ACL - loans" relates to the allowance for credit losses ("ACL") specifically on "Loans, net of unearned income" and does not include the ACL related to OBS credit exposures. | ||||||||||||||||||||||||||||||||
| (4) Regulatory capital ratios as of March 31, 2020 are preliminary and prior periods are actual. | ||||||||||||||||||||||||||||||||
| Exhibit 99.2 | ||||||||||||||||||||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||||||||||||||||||||||||
| % Change from | ||||||||||||||||||||||||||||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 181,777 | $ | 132,283 | $ | 120,671 | $ | 107,091 | $ | 115,884 | 37.4 | % | 56.9 | % | ||||||||||||||||||||||||||||||
| Other interest-earning assets | 793,572 | 482,930 | 572,499 | 488,968 | 411,037 | 64.3 | % | 93.1 | % | |||||||||||||||||||||||||||||||||||
| Loans held for sale | 40,645 | 37,828 | 33,945 | 45,754 | 27,768 | 7.4 | % | 46.4 | % | |||||||||||||||||||||||||||||||||||
| Investment securities | 3,141,440 | 2,867,378 | 2,705,610 | 2,853,358 | 2,748,249 | 9.6 | % | 14.3 | % | |||||||||||||||||||||||||||||||||||
| Loans, net of unearned income | 17,077,403 | 16,837,526 | 16,686,866 | 16,368,458 | 16,262,633 | 1.4 | % | 5.0 | % | |||||||||||||||||||||||||||||||||||
ACL - loans, net of unearned income(1) | (238,508) | (163,622) | (166,135) | (170,233) | (162,109) | 45.8 | % | 47.1 | % | |||||||||||||||||||||||||||||||||||
| Net loans | 16,838,895 | 16,673,904 | 16,520,731 | 16,198,225 | 16,100,524 | 1.0 | % | 4.6 | % | |||||||||||||||||||||||||||||||||||
| Premises and equipment | 236,908 | 240,046 | 237,344 | 243,300 | 239,004 | (1.3) | % | (0.9) | % | |||||||||||||||||||||||||||||||||||
| Accrued interest receivable | 59,365 | 60,898 | 60,447 | 62,984 | 62,207 | (2.5) | % | (4.6) | % | |||||||||||||||||||||||||||||||||||
| Goodwill and intangible assets | 535,171 | 535,303 | 534,178 | 535,249 | 535,356 | — | % | — | % | |||||||||||||||||||||||||||||||||||
| Other assets | 1,102,086 | 855,470 | 918,193 | 773,741 | 734,620 | 28.8 | % | 50.0 | % | |||||||||||||||||||||||||||||||||||
| Total Assets | $ | 22,929,859 | $ | 21,886,040 | $ | 21,703,618 | $ | 21,308,670 | $ | 20,974,649 | 4.8 | % | 9.3 | % | ||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||
| Deposits | $ | 17,365,026 | $ | 17,393,913 | $ | 17,342,717 | $ | 16,388,895 | $ | 16,377,978 | (0.2) | % | 6.0 | % | ||||||||||||||||||||||||||||||
| Short-term borrowings | 1,386,808 | 883,241 | 832,860 | 1,188,390 | 829,016 | 57.0 | % | 67.3 | % | |||||||||||||||||||||||||||||||||||
| Other liabilities | 513,811 | 384,941 | 477,311 | 435,171 | 401,324 | 33.5 | % | 28.0 | % | |||||||||||||||||||||||||||||||||||
| FHLB advances and long-term debt | 1,378,466 | 881,769 | 726,714 | 987,416 | 1,065,312 | 56.3 | % | 29.4 | % | |||||||||||||||||||||||||||||||||||
| Total Liabilities | 20,644,111 | 19,543,864 | 19,379,602 | 18,999,872 | 18,673,630 | 5.6 | % | 10.6 | % | |||||||||||||||||||||||||||||||||||
| Shareholders' equity | 2,285,748 | 2,342,176 | 2,324,016 | 2,308,798 | 2,301,019 | (2.4) | % | (0.7) | % | |||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 22,929,859 | $ | 21,886,040 | $ | 21,703,618 | $ | 21,308,670 | $ | 20,974,649 | 4.8 | % | 9.3 | % | ||||||||||||||||||||||||||||||
| LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | ||||||||||||||||||||||||||||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,895,069 | $ | 6,700,776 | $ | 6,604,634 | $ | 6,497,973 | $ | 6,428,688 | 2.9 | % | 7.3 | % | ||||||||||||||||||||||||||||||
| Commercial and industrial | 4,451,239 | 4,446,701 | 4,494,496 | 4,365,248 | 4,429,538 | 0.1 | % | 0.5 | % | |||||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | 2,718,290 | 2,641,465 | 2,570,793 | 2,451,966 | 2,313,908 | 2.9 | % | 17.5 | % | |||||||||||||||||||||||||||||||||||
| Real estate - home equity | 1,292,677 | 1,314,944 | 1,346,115 | 1,386,974 | 1,413,500 | (1.7) | % | (8.5) | % | |||||||||||||||||||||||||||||||||||
| Real estate - construction | 947,768 | 971,079 | 913,644 | 922,547 | 953,087 | (2.4) | % | (0.6) | % | |||||||||||||||||||||||||||||||||||
| Consumer | 468,172 | 463,164 | 464,213 | 452,874 | 433,545 | 1.1 | % | 8.0 | % | |||||||||||||||||||||||||||||||||||
| Equipment lease financing and other | 304,188 | 299,397 | 292,971 | 290,876 | 290,367 | 1.6 | % | 4.8 | % | |||||||||||||||||||||||||||||||||||
| Total Loans, net of unearned income | $ | 17,077,403 | $ | 16,837,526 | $ | 16,686,866 | $ | 16,368,458 | $ | 16,262,633 | 1.4 | % | 5.0 | % | ||||||||||||||||||||||||||||||
| Deposits, by type: | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,531,872 | $ | 4,453,324 | $ | 4,240,478 | $ | 4,226,404 | $ | 4,255,043 | 1.8 | % | 6.5 | % | ||||||||||||||||||||||||||||||
| Interest-bearing demand | 4,724,520 | 4,720,188 | 4,771,109 | 4,083,615 | 4,207,442 | 0.1 | % | 12.3 | % | |||||||||||||||||||||||||||||||||||
| Savings and money market accounts | 5,092,865 | 5,153,941 | 5,094,387 | 4,938,998 | 4,907,346 | (1.2) | % | 3.8 | % | |||||||||||||||||||||||||||||||||||
| Total demand and savings | 14,349,257 | 14,327,453 | 14,105,974 | 13,249,017 | 13,369,831 | 0.2 | % | 7.3 | % | |||||||||||||||||||||||||||||||||||
| Brokered deposits | 313,337 | 264,531 | 256,870 | 246,116 | 251,395 | 18.5 | % | 24.6 | % | |||||||||||||||||||||||||||||||||||
| Time deposits | 2,702,432 | 2,801,929 | 2,979,873 | 2,893,762 | 2,756,752 | (3.6) | % | (2.0) | % | |||||||||||||||||||||||||||||||||||
| Total Deposits | $ | 17,365,026 | $ | 17,393,913 | $ | 17,342,717 | $ | 16,388,895 | $ | 16,377,978 | (0.2) | % | 6.0 | % | ||||||||||||||||||||||||||||||
| Short-term borrowings, by type: | ||||||||||||||||||||||||||||||||||||||||||||
| Customer repurchase agreements | $ | 52,919 | $ | 56,707 | $ | 58,853 | $ | 56,496 | $ | 54,440 | (6.7) | % | (2.8) | % | ||||||||||||||||||||||||||||||
| Customer short-term promissory notes | 408,889 | 326,534 | 279,007 | 281,894 | 299,576 | 25.2 | % | 36.5 | % | |||||||||||||||||||||||||||||||||||
| Short-term FHLB advances | 725,000 | 500,000 | 475,000 | 650,000 | 475,000 | 45.0 | % | 52.6 | % | |||||||||||||||||||||||||||||||||||
| Federal funds purchased | 200,000 | — | 20,000 | 200,000 | — | N/M | N/M | |||||||||||||||||||||||||||||||||||||
| Total Short-term Borrowings | $ | 1,386,808 | $ | 883,241 | $ | 832,860 | $ | 1,188,390 | $ | 829,016 | 57.0 | % | 67.3 | % | ||||||||||||||||||||||||||||||
| N/M - Not meaningful | ||||||||||||||||||||||||||||||||||||||||||||
| (1) "ACL - loans" relates to the ACL specifically on "Loans, net of unearned income" and does not include the ACL related to OBS credit exposures. | ||||||||||||||||||||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | % Change from | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 199,378 | $ | 202,159 | $ | 208,413 | $ | 210,034 | $ | 204,700 | (1.4) | % | (2.6) | % | ||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 38,632 | 42,889 | 47,153 | 45,490 | 41,385 | (9.9) | % | (6.7) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net Interest Income | 160,746 | 159,270 | 161,260 | 164,544 | 163,315 | 0.9 | % | (1.6) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 44,030 | 20,530 | 2,170 | 5,025 | 5,100 | 114.5 | % | N/M | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net Interest Income after Provision | 116,716 | 138,740 | 159,090 | 159,519 | 158,215 | (15.9) | % | (26.2) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-Interest Income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wealth management | 15,055 | 14,419 | 13,867 | 14,153 | 13,239 | 4.4 | % | 13.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage banking | 6,234 | 5,076 | 6,658 | 6,593 | 4,772 | 22.8 | % | 30.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Consumer banking income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Card | 4,685 | 4,991 | 5,791 | 5,047 | 4,686 | (6.1) | % | — | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Overdraft | 4,058 | 4,750 | 4,682 | 4,413 | 4,104 | (14.6) | % | (1.1) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other consumer banking | 2,496 | 2,688 | 2,860 | 2,907 | 2,587 | (7.1) | % | (3.5) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total consumer banking | 11,239 | 12,429 | 13,333 | 12,367 | 11,377 | (9.6) | % | (1.2) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial banking income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Merchant and card | 5,624 | 5,841 | 6,166 | 6,512 | 5,558 | (3.7) | % | 1.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash management | 4,742 | 4,697 | 4,696 | 4,638 | 4,361 | 1.0 | % | 8.7 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Capital markets | 5,075 | 5,939 | 4,448 | 4,053 | 2,515 | (14.5) | % | 101.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other commercial banking | 2,978 | 3,664 | 3,478 | 3,815 | 2,816 | (18.7) | % | 5.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial banking | 18,419 | 20,141 | 18,788 | 19,018 | 15,250 | (8.5) | % | 20.8 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 3,651 | 3,216 | 2,675 | 2,009 | 2,048 | 13.5 | % | 78.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest income before investment securities gains | 54,598 | 55,281 | 55,321 | 54,140 | 46,686 | (1.2) | % | 16.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Investment securities gains, net | 46 | — | 4,492 | 176 | 65 | N/M | (29.2) | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total Non-Interest Income | 54,644 | 55,281 | 59,813 | 54,316 | 46,751 | (1.2) | % | 16.9 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-Interest Expense: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 80,228 | 76,975 | 78,211 | 78,991 | 77,757 | 4.2 | % | 3.2 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net occupancy | 13,486 | 13,080 | 12,368 | 14,469 | 12,909 | 3.1 | % | 4.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other outside services | 7,881 | 8,215 | 12,163 | 11,259 | 8,352 | (4.1) | % | (5.6) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Data processing and software | 11,645 | 11,468 | 11,590 | 11,268 | 10,353 | 1.5 | % | 12.5 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Equipment | 3,418 | 3,475 | 3,459 | 3,299 | 3,342 | (1.6) | % | 2.3 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Professional fees | 4,202 | 2,873 | 3,331 | 2,970 | 3,960 | 46.3 | % | 6.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Marketing | 1,579 | 1,503 | 3,322 | 2,863 | 2,160 | 5.1 | % | (26.9) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of tax credit investments | 1,450 | 1,505 | 1,533 | 1,492 | 1,491 | (3.7) | % | (2.7) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| FDIC insurance | 2,808 | 2,177 | 239 | 2,755 | 2,609 | 29.0 | % | 7.6 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Intangible amortization | 132 | 142 | 1,071 | 107 | 107 | (7.0) | % | 23.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Prepayment penalty on FHLB advances | — | — | 4,326 | — | — | — | % | — | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Other | 15,723 | 17,561 | 15,157 | 14,695 | 14,784 | (10.5) | % | 6.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total Non-Interest Expense | 142,552 | 138,974 | 146,770 | 144,168 | 137,824 | 2.6 | % | 3.4 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Income Before Income Taxes | 28,808 | 55,047 | 72,133 | 69,667 | 67,142 | (47.7) | % | (57.1) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | 2,761 | 7,258 | 10,025 | 9,887 | 10,479 | (62.0) | % | (73.7) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Net Income | $ | 26,047 | $ | 47,789 | $ | 62,108 | $ | 59,780 | $ | 56,663 | (45.5) | % | (54.0) | % | ||||||||||||||||||||||||||||||||||||||||||
| PER SHARE: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.16 | $ | 0.29 | $ | 0.38 | $ | 0.36 | $ | 0.33 | (44.8) | % | (51.5) | % | ||||||||||||||||||||||||||||||||||||||||||
| Diluted | 0.16 | 0.29 | 0.37 | 0.35 | 0.33 | (44.8) | % | (51.5) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends | 0.13 | 0.17 | 0.13 | 0.13 | 0.13 | (23.5) | % | — | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average shares (basic) | 163,475 | 164,135 | 165,324 | 168,343 | 169,884 | (0.4) | % | (3.8) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average shares (diluted) | 164,417 | 165,039 | 166,126 | 169,168 | 170,909 | (0.4) | % | (3.8) | % | |||||||||||||||||||||||||||||||||||||||||||||||
| N/M - not meaningful | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| dollars in thousands | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 16,860,067 | $ | 177,496 | 4.23% | $ | 16,768,057 | $ | 182,024 | 4.31% | $ | 16,194,375 | $ | 186,122 | 4.65% | ||||||||||||||||||||||||||||||||||||||||||||
| Taxable investment securities | 2,284,457 | 16,294 | 2.85% | 2,198,252 | 15,621 | 2.84% | 2,285,724 | 15,435 | 2.70% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax-exempt investment securities | 720,223 | 5,960 | 3.29% | 594,487 | 5,058 | 3.38% | 444,132 | 4,150 | 3.71% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Investment Securities | 3,004,680 | 22,254 | 2.96% | 2,792,739 | 20,679 | 2.96% | 2,729,856 | 19,585 | 2.87% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans held for sale | 27,178 | 320 | 4.71% | 30,062 | 295 | 3.93% | 16,434 | 240 | 5.85% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other interest-earning assets | 602,270 | 2,532 | 1.69% | 492,560 | 2,370 | 1.92% | 366,175 | 2,002 | 2.20% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest-earning Assets | 20,494,195 | 202,602 | 3.97% | 20,083,418 | 205,368 | 4.07% | 19,306,840 | 207,949 | 4.35% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 138,248 | 128,417 | 110,693 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premises and equipment | 239,619 | 239,294 | 237,124 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | 1,590,666 | 1,528,758 | 1,197,034 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: ACL - loans(2) | (210,629) | (167,449) | (161,326) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 22,252,099 | $ | 21,812,438 | $ | 20,690,365 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 4,649,905 | $ | 5,643 | 0.49% | $ | 4,699,040 | $ | 8,494 | 0.72% | $ | 4,153,984 | $ | 7,519 | 0.73% | ||||||||||||||||||||||||||||||||||||||||||||
| Savings deposits | 5,127,662 | 7,110 | 0.56% | 5,205,260 | 10,253 | 0.78% | 4,912,856 | 9,962 | 0.82% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Brokered deposits | 275,359 | 1,073 | 1.57% | 261,689 | 1,279 | 1.94% | 220,115 | 1,382 | 2.55% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Time deposits | 2,761,474 | 12,614 | 1.84% | 2,959,008 | 13,775 | 1.86% | 2,765,803 | 10,826 | 1.59% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest-bearing Deposits | 12,814,400 | 26,440 | 0.83% | 13,124,997 | 33,801 | 1.02% | 12,052,758 | 29,689 | 1.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings | 1,303,047 | 4,073 | 1.25% | 717,811 | 2,343 | 1.29% | 820,054 | 3,582 | 1.76% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| FHLB advances and long-term debt | 1,063,214 | 8,119 | 3.06% | 875,802 | 6,745 | 3.07% | 1,002,463 | 8,114 | 3.26% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest-bearing Liabilities | 15,180,661 | 38,632 | 1.02% | 14,718,610 | 42,889 | 1.16% | 13,875,275 | 41,385 | 1.21% | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | 4,307,027 | 4,324,568 | 4,222,875 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total deposits | 17,121,427 | 17,449,565 | 16,275,633 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 427,395 | 427,863 | 327,118 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | 19,915,083 | 19,471,041 | 18,425,268 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 19,487,688 | 0.80 | % | 19,043,178 | 0.89 | % | 18,098,150 | 0.93 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 2,337,016 | 2,341,397 | 2,265,097 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 22,252,099 | $ | 21,812,438 | $ | 20,690,365 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 163,970 | 3.21% | 162,479 | 3.22% | 166,564 | 3.49% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax equivalent adjustment | (3,224) | (3,209) | (3,249) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 160,746 | $ | 159,270 | $ | 163,315 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | % Change from | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Mar 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | 2019 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loans, by type: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,746,766 | $ | 6,561,029 | $ | 6,489,456 | $ | 6,424,213 | $ | 6,378,145 | 2.8 | % | 5.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 4,446,750 | 4,574,047 | 4,414,992 | 4,440,860 | 4,462,609 | (2.8) | % | (0.4) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | 2,670,019 | 2,606,136 | 2,512,899 | 2,366,685 | 2,276,611 | 2.5 | % | 17.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - home equity | 1,300,132 | 1,331,088 | 1,364,161 | 1,404,141 | 1,433,574 | (2.3) | % | (9.3) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - construction | 929,529 | 934,556 | 905,060 | 943,080 | 930,246 | (0.5) | % | (0.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer | 466,415 | 464,606 | 457,524 | 445,666 | 424,480 | 0.4 | % | 9.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Equipment lease financing and other | 300,456 | 296,595 | 292,415 | 291,431 | 288,710 | 1.3 | % | 4.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Loans, net of unearned income | $ | 16,860,067 | $ | 16,768,057 | $ | 16,436,507 | $ | 16,316,076 | $ | 16,194,375 | 0.5 | % | 4.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Deposits, by type: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,307,027 | $ | 4,324,568 | $ | 4,247,820 | $ | 4,200,810 | $ | 4,222,875 | (0.4) | % | 2.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand | 4,649,905 | 4,699,040 | 4,448,112 | 4,186,280 | 4,153,984 | (1.0) | % | 11.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Savings and money market accounts | 5,127,662 | 5,205,260 | 5,026,316 | 4,925,788 | 4,912,856 | (1.5) | % | 4.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total demand and savings | 14,084,594 | 14,228,868 | 13,722,248 | 13,312,878 | 13,289,715 | (1.0) | % | 6.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Brokered deposits | 275,359 | 261,689 | 253,426 | 246,154 | 220,115 | 5.2 | % | 25.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Time deposits | 2,761,474 | 2,959,008 | 2,974,993 | 2,816,425 | 2,765,803 | (6.7) | % | (0.2) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Deposits | $ | 17,121,427 | $ | 17,449,565 | $ | 16,950,667 | $ | 16,375,457 | $ | 16,275,633 | (1.9) | % | 5.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Short-term borrowings, by type: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Customer repurchase agreements | $ | 52,399 | $ | 59,363 | $ | 61,230 | $ | 56,171 | $ | 56,707 | (11.7) | % | (7.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Customer short-term promissory notes | 375,841 | 318,166 | 271,663 | 288,696 | 312,092 | 18.1 | % | 20.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Federal funds purchased | 186,868 | 91,467 | 101,022 | 181,769 | 157,122 | 104.3 | % | 18.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term FHLB advances | 687,937 | 248,815 | 485,782 | 414,868 | 294,133 | 176.5 | % | 133.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Short-term Borrowings | $ | 1,303,045 | $ | 717,811 | $ | 919,697 | $ | 941,504 | $ | 820,054 | 81.5 | % | 58.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| (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 "Loans, net of unearned income" and does not include the ACL related to OBS credit exposures. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||||||
| ASSET QUALITY INFORMATION (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||||||||||||
| Allowance for credit losses related to Loans, net of unearned income | ||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 163,620 | $ | 166,135 | $ | 170,233 | $ | 162,109 | $ | 160,537 | ||||||||||||||||||||||||||||
| Impact of adopting CECL | 45,724 | — | — | — | — | |||||||||||||||||||||||||||||||||
| Loans charged off: | ||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | (10,899) | (30,547) | (7,181) | (1,895) | (2,787) | |||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | (855) | (68) | (394) | (230) | (1,145) | |||||||||||||||||||||||||||||||||
| Consumer and home equity | (1,529) | (1,416) | (1,375) | (1,001) | (902) | |||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | (187) | (223) | (533) | (134) | (655) | |||||||||||||||||||||||||||||||||
| Real estate - construction | — | — | (45) | (3) | (95) | |||||||||||||||||||||||||||||||||
| Equipment lease financing and other | (533) | (727) | (600) | (448) | (785) | |||||||||||||||||||||||||||||||||
| Total loans charged off | (14,003) | (32,981) | (10,128) | (3,711) | (6,369) | |||||||||||||||||||||||||||||||||
| Recoveries of loans previously charged off: | ||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 1,734 | 2,487 | 2,311 | 2,680 | 1,243 | |||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | 244 | 1,453 | 444 | 169 | 136 | |||||||||||||||||||||||||||||||||
| Consumer and home equity | 646 | 437 | 348 | 802 | 407 | |||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | 85 | 206 | 440 | 211 | 132 | |||||||||||||||||||||||||||||||||
| Real estate - construction | 70 | 1,098 | 164 | 1,245 | 84 | |||||||||||||||||||||||||||||||||
| Equipment lease financing and other | 108 | 182 | 107 | 148 | 229 | |||||||||||||||||||||||||||||||||
| Recoveries of loans previously charged off | 2,887 | 5,863 | 3,814 | 5,255 | 2,231 | |||||||||||||||||||||||||||||||||
| Net loans recovered charged off | (11,116) | (27,118) | (6,314) | 1,544 | (4,138) | |||||||||||||||||||||||||||||||||
| Provision for credit losses | 40,280 | 24,603 | 2,216 | 6,580 | 5,710 | |||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 238,508 | $ | 163,620 | $ | 166,135 | $ | 170,233 | $ | 162,109 | ||||||||||||||||||||||||||||
| Net charge-offs to average loans (annualized) | 0.26 | % | 0.65 | % | 0.15 | % | (0.04) | % | 0.10 | % | ||||||||||||||||||||||||||||
Allowance credit losses related to OBS Credit Exposures(1) | ||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 2,588 | $ | 6,662 | $ | 6,708 | $ | 8,263 | $ | 8,873 | ||||||||||||||||||||||||||||
| Impact of adopting CECL | 12,625 | — | — | — | — | |||||||||||||||||||||||||||||||||
| Provision for credit losses | 3,750 | (4,074) | (46) | (1,555) | (610) | |||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 18,963 | $ | 2,588 | $ | 6,662 | $ | 6,708 | $ | 8,263 | ||||||||||||||||||||||||||||
| NON-PERFORMING ASSETS: | ||||||||||||||||||||||||||||||||||||||
| Non-accrual loans | $ | 120,345 | $ | 125,098 | $ | 124,287 | $ | 133,118 | $ | 127,141 | ||||||||||||||||||||||||||||
| Loans 90 days past due and accruing | 19,593 | 16,057 | 11,689 | 14,598 | 11,540 | |||||||||||||||||||||||||||||||||
| Total non-performing loans | 139,938 | 141,155 | 135,976 | 147,716 | 138,681 | |||||||||||||||||||||||||||||||||
| Other real estate owned | 6,593 | 6,831 | 7,706 | 7,241 | 9,012 | |||||||||||||||||||||||||||||||||
| Total non-performing assets | $ | 146,531 | $ | 147,986 | $ | 143,682 | $ | 154,957 | $ | 147,693 | ||||||||||||||||||||||||||||
| NON-PERFORMING LOANS, BY TYPE: | ||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | $ | 41,318 | $ | 49,491 | $ | 37,126 | $ | 47,260 | $ | 50,148 | ||||||||||||||||||||||||||||
| Real estate - commercial mortgage | 36,538 | 37,279 | 45,710 | 43,850 | 29,817 | |||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | 25,832 | 22,411 | 20,150 | 21,659 | 22,299 | |||||||||||||||||||||||||||||||||
| Consumer and home equity | 11,226 | 11,026 | 11,012 | 12,378 | 10,770 | |||||||||||||||||||||||||||||||||
| Real estate - construction | 4,379 | 4,306 | 4,312 | 4,632 | 7,039 | |||||||||||||||||||||||||||||||||
| Leasing | 20,645 | 16,642 | 17,666 | 17,937 | 18,608 | |||||||||||||||||||||||||||||||||
| Total non-performing loans | $ | 139,938 | $ | 141,155 | $ | 135,976 | $ | 147,716 | $ | 138,681 | ||||||||||||||||||||||||||||
| (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 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | ||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity (tangible), per share | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,285,748 | $ | 2,342,176 | $ | 2,324,016 | $ | 2,308,798 | $ | 2,301,019 | ||||||||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (535,171) | (535,303) | (534,178) | (535,249) | (535,356) | |||||||||||||||||||||||||||||||||||||||||||||
| Tangible shareholders' equity (numerator) | $ | 1,750,577 | $ | 1,806,873 | $ | 1,789,838 | $ | 1,773,549 | $ | 1,765,663 | ||||||||||||||||||||||||||||||||||||||||
| Shares outstanding, end of period (denominator) | 161,435 | 164,218 | 164,036 | 166,903 | 169,923 | |||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity (tangible), per share | $ | 10.84 | $ | 11.00 | $ | 10.91 | $ | 10.63 | $ | 10.39 | ||||||||||||||||||||||||||||||||||||||||
| Return on average shareholders' equity (tangible) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 26,047 | $ | 47,789 | $ | 62,108 | $ | 59,779 | $ | 56,663 | ||||||||||||||||||||||||||||||||||||||||
| Plus: Intangible amortization, net of tax | 104 | 112 | 846 | 85 | 85 | |||||||||||||||||||||||||||||||||||||||||||||
| (Numerator) | $ | 26,151 | $ | 47,901 | $ | 62,954 | $ | 59,864 | $ | 56,748 | ||||||||||||||||||||||||||||||||||||||||
| Average shareholders' equity | $ | 2,337,016 | $ | 2,341,397 | $ | 2,315,585 | $ | 2,301,258 | $ | 2,265,097 | ||||||||||||||||||||||||||||||||||||||||
| Less: Average goodwill and intangible assets | (535,235) | (534,190) | (535,184) | (535,301) | (531,767) | |||||||||||||||||||||||||||||||||||||||||||||
| Average tangible shareholders' equity (denominator) | $ | 1,801,781 | $ | 1,807,207 | $ | 1,780,401 | $ | 1,765,957 | $ | 1,733,330 | ||||||||||||||||||||||||||||||||||||||||
| Return on average shareholders' equity (tangible), annualized | 5.84 | % | 10.52 | % | 14.03 | % | 13.60 | % | 13.28 | % | ||||||||||||||||||||||||||||||||||||||||
| Tangible Common Equity to Tangible Assets (TCE Ratio) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,285,748 | $ | 2,342,176 | $ | 2,324,016 | $ | 2,308,798 | $ | 2,301,019 | ||||||||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (535,171) | (535,303) | (534,178) | (535,249) | (535,356) | |||||||||||||||||||||||||||||||||||||||||||||
| Tangible shareholders' equity (numerator) | $ | 1,750,577 | $ | 1,806,873 | $ | 1,789,838 | $ | 1,773,549 | $ | 1,765,663 | ||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 22,929,859 | $ | 21,886,040 | $ | 21,703,618 | $ | 21,308,670 | $ | 20,974,649 | ||||||||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (535,171) | (535,303) | (534,178) | (535,249) | (535,356) | |||||||||||||||||||||||||||||||||||||||||||||
| Total tangible assets (denominator) | $ | 22,394,688 | $ | 21,350,737 | $ | 21,169,440 | $ | 20,773,421 | $ | 20,439,293 | ||||||||||||||||||||||||||||||||||||||||
| Tangible Common Equity to Tangible Assets | 7.82 | % | 8.46 | % | 8.45 | % | 8.54 | % | 8.64 | % | ||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-interest expense | $ | 142,552 | $ | 138,974 | $ | 146,770 | $ | 144,168 | $ | 137,824 | ||||||||||||||||||||||||||||||||||||||||
| Less: Intangible amortization | (132) | (142) | (1,071) | (107) | (107) | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Amortization of tax credit investments | (1,450) | (1,505) | (1,533) | (1,492) | (1,491) | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Loss on redemption of FHLB advances | — | — | (4,326) | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Non-interest expense (numerator) | $ | 140,970 | $ | 137,327 | $ | 139,840 | $ | 142,569 | $ | 136,226 | ||||||||||||||||||||||||||||||||||||||||
| Net interest income (fully taxable equivalent) | $ | 163,970 | $ | 162,479 | $ | 164,517 | $ | 167,794 | $ | 166,564 | ||||||||||||||||||||||||||||||||||||||||
| Plus: Total Non-interest income | 54,644 | 55,281 | 59,813 | 54,315 | 46,751 | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Investment securities gains | (46) | — | (4,492) | (176) | (65) | |||||||||||||||||||||||||||||||||||||||||||||
| Net interest income (denominator) | $ | 218,568 | $ | 217,760 | $ | 219,838 | $ | 221,933 | $ | 213,250 | ||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio | 64.5 | % | 63.1 | % | 63.6 | % | 64.2 | % | 63.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Non-performing assets to tangible shareholders' equity and ACL - loans(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-performing assets (numerator) | $ | 146,531 | $ | 147,986 | $ | 143,682 | $ | 154,957 | $ | 147,693 | ||||||||||||||||||||||||||||||||||||||||
| Tangible shareholders' equity | $ | 1,750,577 | $ | 1,806,873 | 1,789,838 | 1,773,549 | $ | 1,765,663 | ||||||||||||||||||||||||||||||||||||||||||
| Plus: ACL - loans | 238,508 | 163,620 | 166,135 | 170,233 | 162,109 | |||||||||||||||||||||||||||||||||||||||||||||
| Tangible shareholders' equity and ACL - loans (denominator) | $ | 1,989,085 | $ | 1,970,493 | $ | 1,955,973 | $ | 1,943,782 | $ | 1,927,772 | ||||||||||||||||||||||||||||||||||||||||
| Non-performing assets to tangible shareholders' equity and ACL - loans | 7.37 | % | 7.51 | % | 7.35 | % | 7.97 | % | 7.66 | % | ||||||||||||||||||||||||||||||||||||||||
| Pre-provision net revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 160,746 | $ | 159,270 | $ | 161,260 | $ | 164,544 | $ | 163,315 | ||||||||||||||||||||||||||||||||||||||||
| Non-interest income | 54,644 | 55,281 | 59,813 | 54,315 | 46,751 | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Investment securities gains | (46) | — | (4,492) | (176) | (65) | |||||||||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 215,344 | $ | 214,551 | $ | 216,581 | $ | 218,683 | $ | 210,001 | ||||||||||||||||||||||||||||||||||||||||
| Non-interest expense | $ | 142,552 | $ | 138,974 | $ | 146,770 | $ | 144,168 | $ | 137,824 | ||||||||||||||||||||||||||||||||||||||||
| Less: Loss on redemption of FHLB advances | — | — | (4,326) | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Amortization of tax credit investments | (1,450) | (1,505) | (1,533) | (1,492) | (1,491) | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Intangible amortization | (132) | (142) | (1,071) | (107) | (107) | |||||||||||||||||||||||||||||||||||||||||||||
| Total non-interest expense | $ | 140,970 | $ | 137,327 | $ | 139,840 | $ | 142,569 | $ | 136,226 | ||||||||||||||||||||||||||||||||||||||||
| Pre-provision net revenue | $ | 74,374 | $ | 77,224 | $ | 76,741 | $ | 76,114 | $ | 73,775 | ||||||||||||||||||||||||||||||||||||||||
| (1) "ACL - loans" relates to the ACL specifically on "Loans, net of unearned income" and does not include the ACL related to OBS credit exposures. | ||||||||||||||||||||||||||||||||||||||||||||||||||
2020 FIRST QUARTER RESULTS NASDAQ: FULT Data as of March 31, 2020 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, 2019 which has been 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 will address risks and uncertainties associated with the COVID-19 pandemic. In addition, the COVID-19 pandemic is having an adverse impact on the Corporation, its customers and the communities it serves. The adverse effect of the COVID-19 pandemic on the Corporation, its customers and the communities where it operates may adversely affect the Corporation’s business, results of operations and financial condition for an indefinite period of time. 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
IT’S PERSONAL Some of the COVID-19 assistance programs being offered to our customers: CONSUMER COMMERCIAL • Temporary forbearance up to six • SBA Paycheck Protection Program (PPP) months on residential mortgage loans • Small Business Unsecured Line of Credit and closed-end consumer loans with introductory rate offer secured by real estate • For commercial online banking users, • Consumer loan payments deferral up we are offering mobile remote deposit to three months capture and ACH payment options • Overdraft/NSF fee waivers, and • Commercial loan payment deferral monthly maintenance service fee program waivers • Temporary suspension of late fees and adverse credit reporting • An early withdrawal penalty waiver for one Certificate of Deposit 3
COVID-19 IMPACT: COMMERCIAL & CONSUMER Commercial Portfolio Ending Commitments Balances P&I Deferrals %(1) ($s in MMs) ($s in MMs) C&I Portfolio $ 10,491 $ 6,885 13.5% CRE Portfolio 6,211 5,382 13.8% Commercial Portfolio $ 16,702 $ 12,266 13.6% Consumer Portfolio Ending Commitments Balances FICO LTV Forbearance %(1) ($s in MMs) ($s in MMs) (WAVG) (WAVG) Residential Mtg $ 2,676 $ 2,676 761 76 7.2% HELOC 2,761 1,288 764 72 0.2% Other Consumer 1,042 847 755 - 0.1% Consumer Portfolio $ 6,480 $ 4,811 761 75 4.1% (1) Percentages of total ending loan balances by each category as of April 17, 2020. 4
PAYCHECK PROTECTION PROGRAM (“PPP”) PPP Results as of April 20, 2020 • Over 500 Fulton team members re-deployed to help support this effort • Focus has been initially on existing Fulton customers • Results to date: o Applications confirmed: ~6,500 o Dollars confirmed: ~$1.7 billion o Average Fee: ~3.00% o Estimated job retention: ~80,000 • Fulton is considering various funding sources for PPP – has been approved to participate in PPP Loan Facility • Application processing efficiency has greatly improved, should additional funds be made available to the program 5
COVID-19 IMPACT ON BUSINESS SECTORS Limited exposure to some of the asset classes that were hit hardest initially from COVID-19, such as hotels, restaurants, energy and entertainment. Most of the loans are secured by real estate or other forms of collateral, which should help mitigate losses in the event of default. Loan Portfolio P&I Deferrals/ Commitments Balances Forbearances (1) ($s in M M s) ($s in M M s) Hotels & Restaurants (2) $ 495 $ 473 57.9% Energy (2) 179 93 10.1% Entertainment (2) 305 247 16.1% Other Loan Portfolios 22,203 16,264 8.5% $ 23,182 $ 17,077 10.9% (1) Percentages of total ending loan balances by each category as of April 17, 2020. (2) Fulton internal classifications 6
INCOME STATEMENT SUMMARY Change from 1Q20 4Q19 1Q19 (dollars in thousands, except per-share data) Net Interest Income $ 160,746 $ 1,476 $ (2,569) Provision for Credit Losses 44,030 23,500 38,930 Non-Interest Income 54,598 (683) 7,912 Securities Gains 46 46 (19) Non-Interest Expense 142,552 3,578 4,728 Income before Income Taxes 28,808 (26,239) (38,334) Income Taxes 2,761 (4,497) (7,718) Net Income $ 26,047 $ (21,742) $ (30,616) Net income per share (diluted) $ 0.16 $ (0.13) $ (0.17) ROA (1) 0.47% (0.40%) (0.64%) ROE (2) 4.48% (3.62%) (5.67%) ROE (tangible) (3) 5.84% (4.68%) (7.44%) Efficiency ratio (3) 64.5% 1.4% 0.6% (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 4.35% 4.37% 4.25% 4.07% 3.97% 3.00% $10 $17 3.75% $16 $16 $16 $17 2.00% $163 $165 $5 $161 $161 1.00% $159 $160.0 3.50% $3 $3 ~ $730$3 $3 $3 $0 0.00% million 1Q19 2Q19 3Q19 4Q19 1Q20 3.49% 3.44% 3.25% 3.31% Securities & Other Loans Earning Asset~ $610 Yield (FTE) million 3.22% 3.21% $140.0 3.00% Average Liabilities & Rates 2.75% ($ IN BILLIONS) $20 5.00% $2 $2 $120.0 2.50% $2 $2 $2 4.00% $15 $17 $17 $16 $16 $17 2.25% 3.00% $10 2.00% 1.29% 1.29% 1.21% 1.16% 1.02% $100.0 2.00% $5 1Q19 2Q19 3Q19 4Q19 1Q20 1.00% Net Interest Income $0 0.00% 1Q19 2Q19 3Q19 4Q19 1Q20 Net Interest Margin (Fully-taxable equivalent basis, or FTE) Deposits Borrowings Cost of Interest-bearing Liabilities 8
ADOPTION OF CECL(1) Three Months Ended March 31, 2020 (in thousands) Allowance for Credit Losses Rollforward (1) Balance at beginning of period, December 31, 2019 $ 166,208 Impact of adopting CECL 58,349 Loans charged-off (14,003) Recoveries of loans previously charged off 2,887 Net loans charged off (11,116) Provision for credit losses 44,030 Balance at end of period, March 31, 2020 $ 257,471 • CECL approach based on segment level models developed in coordination with Big 4 accounting firm and supplemented with overlays and general qualitative additions. • Base models leverage Moody’s baseline economic forecast which incorporates their most probable economic scenario associated with the COVID-19 pandemic. • Additional model overlays and qualitative adjustments were added to account for potential forecast imprecision and additional risk not accounted for in modeled results. (1) Effective January 1, 2020, Fulton adopted Accounting Standards Update 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” referred to as the current expected credit loss model (“CECL”). This accounting standard requires that credit losses for financial assets and off- balance-sheet ("OBS") credit exposures be measured based on expected credit losses, rather than on incurred credit losses as in prior periods. 9
ASSET QUALITY ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans $160.0 $147.7 2.00% $141.2 $50.0 $138.7 $136.0 $139.9 $44.0 $40.0 $120.0 1.50% $30.0 $80.0 1.00% $20.5 $20.0 0.90% 0.85% 0.81% 0.84% 0.82% $40.0 0.50% $10.0 $5.1 $5.0 $2.2 $0.0 0.00% $- 1Q19 2Q19 3Q19 4Q19 1Q20(1) 1Q19 2Q19 3Q19 4Q19 1Q20 NPL NPLs/Loans Net Charge-offs (NCOs) and NCOs to Average Loans ACL(1) to NPLs & Loans 180.0% 170% $40.0 1.00% 170.0% 1.75% 0.65% 160.0% $30.0 150.0% 0.26% 0.50% 0.15% $27.1 $20.0 140.0% -0.04% 130.0% 1.40% 1.25% $11.1 0.00% 115% 122% 0.10% 117% $10.0 $6.3 120.0% 116% $4.1 $(1.5) -0.50% 110.0% 1.00% 1.04% $- 1.00% 0.97% 1Q19 2Q19 3Q19 4Q19 1Q20 100.0% 0.75% 1Q19 2Q19 3Q19 4Q19 1Q20(2) $(10.0) -1.00% NCOs/(recoveries) NCOs/Average Loans (annualized) Allowance/NPLs Allowance/Loans (1) 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. 10 (2) See slide 7 for note around CECL adoption.
NON-INTEREST INCOME(1) Three months ended March 31, 2020 (percent of total non-interest income) 1Q20 4Q19 Change 6% (in thousands) 11% n Wealth management $ 15,055 $ 14,419 $ 636 21% n Mortgage banking 6,234 5,076 1,158 n Consumer banking 11,239 12,429 (1,190) n Commercial banking 18,419 20,140 (1,721) 28% 34% n Other 3,651 ~ $730 3,217 434 $ 54,598 $ million 55,281 (683) ~ $610 million Non-interest income(1) decreased 1% from 4Q19 Three months ended December 31, 2019 (percent of total non-interest income) Increases in: n Brokerage and trust income 7% n Higher mortgage loan volumes, partial offset by $1.1 million in 9% 22% valuation allowance on MSRs. Decreases in: n Consumer card income n Capital markets, merchant income and commercial card income 36% 26% (1) Excluding investment securities gains 11
NON-INTEREST EXPENSES Three months ended March 31, 2020 (percent of total non-interest expense) 1Q20 4Q19 Change 20% (in thousands) n Salaries and benefits $ 80,228 $ 76,975 $ 3,253 n Occupancy 13,486 13,080 406 6% n Data Processing and software 11,645 11,468 177 56% n Other outside services 7,881 8,215 (334) 8% n Other 29,312 29,236 76 $ 142,552 $ 138,974 3,578 10% Three months ended December 31, 2019 (percent of total non-interest expense) Non-interest expense increased $4 million, or 3%: Driven by: 21% n Seasonal increases due to payroll taxes in the first quarter, incentive plan true-ups. Q1 2020 also includes severance compensation for branch closures targeted for Q2 2020. n Additional rent and depreciation expense for new properties 6% 55% 8% 10% 12
LIQUIDITY POSITION COMMENTARY AVAILABLE LIQUIDITY . Liquidity remains strong and diverse As of March 31, 2020 (in thousands) . Continue efforts to increase Cash On-Hand $272,501 capacity with the FHLB and Federal Federal Reserve Capacity 465,000 Reserve Outstanding Loans - . Sitting on excess cash reserves Total Available @ Federal Reserve 465,000 since mid-March FHLB Capacity 6,450,000 Advances (1,344,000) . Currently evaluating Federal Letters of Credit (1,762,000) Reserve facility for funding of PPP Total Available @ FHLB 3,344,000 loans Unencumbered Securities (1) 2,511,000 • Have applied and received Total Committed 6,320,000 approval (1) 5% haircut applied to market value of unencumbered securities . Additional liquidity is available through Federal funds lines and brokered deposits 13
CAPITAL POSITION COMMENTARY CAPITAL RATIOS(1) . Capital remains strong 13.8% 14.00% . Suspended share repurchases 12.00% $630 in Mid-March 10.00% 9.4% 9.4% $170 7.9% . Dividend elected to remain at 8.00% $450 $0.13 quarterly $650 6.00% . Internal stress analyses 4.00% indicate sufficient capital 2.00% currently Tier 1 Leverage Tier 1 Risk Based CE Tier 1 Total Risk-Based Regulatory Limits Excess(2) 1) Regulatory capital ratios as of March 31, 2020 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. 14
Q2 2020 OUTLOOK All previous guidance for 2020 has been withdrawn due to the impact from COVID-19. At this time, select guidance will be provided on the following areas as it relates to the second quarter of 2020: • Loans: Current approved PPP applications ~ $1.7 billion. Expect the PPP loan growth to be $1.2 - $1.4 billion. For other loan categories, expect growth on an annualized basis to be in the low single digits overall. • Deposits: Excluding the impact of PPP, modest run-off to slight growth • Net Interest Income: In the range of $150 - $160 million • Non-Interest Income: Decline 5% -15% from first quarter 2020 levels • Non-Interest Expense: In the range of $140 - $144 million • Effective Tax Rate: Between 11.5% - 12.5% 15
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. Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2019 2019 2019 2019 2020 Tangible Common Equity to Tangible Assets (TCE Ratio) (dollars in thousands) Shareholders' equity $ 2,301,019 $ 2,308,798 $ 2,324,016 $ 2,342,176 $ 2,285,748 Less: Goowdill and intangible assets (535,356) (535,249) (534,178) (535,303) (535,171) Tangible shareholders' equity (numerator) $ 1,765,663 $ 1,773,549 $ 1,789,838 $ 1,806,873 $ 1,750,577 Total assets $ 20,974,649 $ 21,308,670 $ 21,703,618 $ 21,886,040 $ 22,929,859 Less: Goowdill and intangible assets (535,356) (535,249) (534,178) (535,303) (535,171) Total tangible assets (denominator) $ 20,439,293 $ 20,773,421 $ 21,169,440 $ 21,350,737 $ 22,394,688 Tangible Common Equity to Tangible Assets 8.6% 8.5% 8.5% 8.5% 7.8% 16
NON-GAAP RECONCILIATION Three Months Ended Mar 31 Dec 31 Mar 31 2019 2019 2020 Efficiency ratio (dollars in thousands) Non-interest expense $ 137,824 $ 138,974 $ 142,552 Less: Intangible amortization (107) (142) (132) Less: Amortization of tax credit investments (1,491) (1,505) (1,450) Less: Loss on redemption of FHLB advances - - - Non-interest expense (numerator) $ 136,226 $ 137,327 $ 140,970 Net interest income (fully taxable-equivalent) $ 166,564 $ 162,479 $ 163,970 Plus: Total Non-interest income 46,751 55,281 54,644 Less: Investment securities gains (65) - (46) Net interest income (denominator) $ 213,250 $ 217,760 $ 218,568 Efficiency ratio 63.9% 63.1% 64.5% Three Months Ended Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2019 2019 2019 2019 2020 (dollars in thousands) Return on Average Shareholders' Equity (ROE) (Tangible) Net income $ 56,663 $ 59,779 $ 62,108 $ 47,789 $ 26,047 Plus: Intangible amortization, net of tax 85 85 846 112 104 Net income (numerator) $ 56,748 $ 59,864 $ 62,954 $ 47,901 $ 26,151 Average shareholders' equity $ 2,265,097 $ 2,301,258 $ 2,315,585 $ 2,341,397 $ 2,337,016 Less: Average goodwill and intangible assets (531,767) (535,301) (535,184) (534,190) (535,235) Average tangible shareholders' equity (denominator) $ 1,733,330 $ 1,765,957 $ 1,780,401 $ 1,807,207 $ 1,801,781 Return on average shareholders' equity (tangible), annualized 13.28% 13.60% 14.03% 10.52% 5.84% 17