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
October 18, 2022
Date of Report (date of earliest event reported)
Fulton Financial Corporation
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-39680 | 23-2195389 | ||
|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
| One Penn Square, | P.O. Box 4887 | Lancaster, | Pennsylvania | 17604 |
| (Address of Principal Executive Offices) | (Zip Code) |
(717) 291-2411
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $2.50 | FULT | The Nasdaq Stock Market, LLC |
| Depositary Shares, Each Representing 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A | FULTP | The Nasdaq Stock Market, LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 2.02 Results of Operations and Financial Condition.
On October 18, 2022, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the third quarter ended September 30, 2022. A copy of the Press Release and supplementary financial information which accompanied the Press Release are attached as Exhibit 99.1 to this Current Report on Form 8-K (this "Current Report") and are incorporated herein by reference. The Corporation also posted on its Investor Relations website, www.fultonbank.com, presentation materials the Corporation intends to use during a conference call and webcast to discuss those results on Wednesday, October 19, 2022 at 10:00 a.m. Eastern Time. A copy of the presentation materials is attached as Exhibit 99.2 to this Current Report and is incorporated herein by reference.
The information included in Exhibit 99.1 shall be deemed "filed" for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and therefore may be incorporated by reference in filings under the Securities Act of 1933, as amended (the "Securities Act"). The information included in Exhibit 99.2 is being furnished and shall not be deemed "filed" for purposes of the Exchange Act or be incorporated by reference in any filing under the Securities Act.
Forward-Looking Statements
This Current Report, including the Exhibits hereto, may contain forward-looking statements with respect to the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," "projects," the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation's future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation's business or financial results. Management’s "2022 Outlook" contained in Exhibit 99.2 to this Current Report is comprised of forward-looking statements.
Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation's control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission (the "SEC") and are or will be available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release dated October 18, 2022, containing financial information for the quarter ended September 30, 2022, deemed "filed" under the Securities Exchange Act of 1934. |
| 99.2 | Presentation materials to be discussed during the conference call and webcast on October 19, 2022, 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: October 18, 2022 | 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 Corporation Announces Third Quarter 2022 Results
(October 18, 2022) – Lancaster, PA – Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $68.3 million, or $0.40 per diluted share, for the third quarter of 2022, an increase of $0.9 million, or 1.3%, in comparison to the second quarter of 2022. The Corporation reported net income available to common shareholders of $197.5 million, or $1.20 per diluted share, for the nine months ended September 30, 2022, a decrease of $8.4 million or 4.1%, in comparison to the nine months ended September 30, 2021. The results for the third quarter of 2022 include the impact of the consummation of the acquisition by the Corporation of Prudential Bancorp, Inc. ("Prudential Bancorp") on July 1, 2022.
"I'm pleased to report that we had a strong third quarter, with operating earnings being at an all-time high for Fulton," said E. Phillip Wenger, Chairman and CEO. "As I retire from my current role on December 31, I have tremendous confidence in my successor, Curt Myers, our senior management team and directors, and the more than 3,300 talented team members to continue to change lives for the better for our customers and our shareholders."
"We are grateful to Phil Wenger for all the contributions he has made over his 43 years of service to Fulton, and we look forward to carrying on his legacy" said Curtis J. Myers, President and COO. "As Phil noted, our third quarter performance was strong, driven primarily by increased net interest income, which was helped by rising interest rates, good loan growth, consistent fee income, and the effect of our acquisition of Prudential Bancorp completed on July 1, 2022."
Operating net income available to common shareholders was $80.5 million, or $0.48 per diluted share, for the third quarter of 2022, calculated as shown below.
| Three months ended | |
|---|---|
| (in thousands except per share data) | September 30, 2022 |
| Net income available to common shareholders | $68,309 |
| Plus: Core deposit intangible amortization, net of tax | 406 |
| Plus: Merger-related expenses, net of tax | 5,535 |
| Plus: Current expected credit losses ("CECL") day 1 provision expense, net of tax | 6,283 |
| Operating net income available to common shareholders | $80,533 |
| Weighted average shares (diluted) (denominator) | 168,781 |
| Operating net income available to common shareholders per share (diluted) | $0.48 |
Net Interest Income and Balance Sheet
Net interest income for the third quarter of 2022 was $215.6 million, an increase of $36.8 million in comparison to the second quarter of 2022. The net interest margin for the third quarter of 2022 increased 50 basis points, to 3.54%, in comparison to 3.04% in the second quarter of 2022.
The linked-quarter increase in net interest income was primarily due to rising interest rates resulting in increases in interest income from net loans and investment securities of $41.3 million and $1.7 million, respectively. An increase in the average balances for net loans and investment securities of $926.7 million and $102.0 million, respectively, driven in part by the Prudential Bancorp acquisition, also contributed to the increase in interest income. Interest income from Prudential Bancorp was approximately $10.9 million in the third quarter of 2022. Interest expense from interest-bearing liabilities for the third quarter of 2022 increased by $6.6 million in comparison to $11.5 million in the second quarter of 2022, and included $2.7 million from Prudential Bancorp.
For the third quarter of 2022, net interest income was $215.6 million, an increase of $44.3 million, or 25.9%, in comparison to the third quarter of 2021 primarily driven by higher interest rates resulting in an increase in interest income from net loans of $43.6 million. An increase in the average balances for net loans and investment securities of $1,149.7 million and $678.9 million, respectively, driven in part by the Prudential Bancorp acquisition, also contributed to the increase in interest income. Interest income from Prudential Bancorp was approximately $10.9 million in the third quarter of 2022. Interest expense from interest-bearing liabilities for the third quarter of 2022 increased by $5.3 million in comparison to $12.8 million in the third quarter of 2021, and included $2.7 million from Prudential Bancorp.
Total average interest-earning assets for the third quarter of 2022 was $24.7 billion, an increase of $709.0 million from the second quarter of 2022, primarily driven by the aforementioned increases in
average net loans of $926.7 million and average investment securities of $102.0 million, partially offset by a decrease in other interest-earning assets of $315.6 million.
Total average interest-earning assets for the third quarter of 2022 increased by $122.6 million from the third quarter of 2021. Average net loans for the third quarter of 2022 were $19.6 billion, an increase of $1,149.7 million from the same period in 2021. Included in average net loans for the third quarter of 2022 were Paycheck Protection Program ("PPP") loans with an average balance of $49.2 million, a decrease of $801.4 million from the third quarter of 2021. Compared to the third quarter of 2021, average other interest-earning assets decreased $1,678.7 million and average investment securities increased $678.9 million, respectively.
Total average interest-bearing liabilities increased $731.7 million, to $15.6 billion, in the third quarter of 2022 in comparison to $14.9 billion in the second quarter of 2022, due in part to the Prudential Bancorp acquisition, and driven overall by increases in average balances of interest-bearing deposits, long-term borrowings and short-term borrowings of $376.2 million, $204.5 million and $151.0 million, respectively.
Total average interest-bearing liabilities for the third quarter of 2022 decreased $194.3 million in comparison to $15.8 billion in the third quarter of 2021, driven by a decrease in the average total interest-bearing deposits of $431.6 million, partially offset by increases in average balances of long-term borrowings and short-term borrowings of $134.2 million and $103.1 million, respectively.
Asset Quality
In the third quarter of 2022, a provision for credit losses of $19.0 million was recorded in comparison to a provision for credit losses of $1.5 million in the second quarter of 2022, and a negative provision for credit losses of $0.6 million in the third quarter of 2021. Included in the third quarter of 2022 provision for credit losses was a CECL "Day 1" provision for credit losses of $8.0 million for the acquired Prudential Bancorp loan portfolio (the "CECL "Day 1" Provision"). Excluding the CECL "Day 1" Provision for credit losses, the provision for credit losses was $11.0 million and was primarily due to an increase in non-performing loans, as well as increases in reserves for the office building and residential mortgage loan portfolios.
Non-performing assets were $198.6 million, or 0.76% of total assets, at September 30, 2022, in comparison to $178.3 million, or 0.71% at June 30, 2022, and $152.1 million, or 0.58% of total assets, at September 30, 2021.
Annualized net charge-offs (recoveries) for the third quarter of 2022, was 0.01% of total average loans, in comparison to (0.08%) and (0.05)% in the second quarter of 2022 and the third quarter of 2021, respectively.
Non-interest Income
Non-interest income before investment securities gains in the third quarter of 2022 was $59.2 million, an increase of $0.8 million, or 1.4%, from the second quarter of 2022. The increase in non-interest income was driven primarily by an increase of $0.8 million in consumer banking fees.
Compared to the third quarter of 2021, non-interest income before investment securities gains in the third quarter of 2022 decreased $3.4 million, or 5.4%, from $62.6 million. The decrease in non-interest income was due to decreases of $5.8 million in mortgage banking income, $2.2 million in other income primarily due to equity method investments, and $0.9 million in wealth management revenues, partially offset by increases of $4.1 million in commercial banking revenues and $1.5 million in consumer banking fees.
Non-interest Expense
Non-interest expense, excluding merger-related expenses of $7.0 million and intangible amortization of $0.7 million, was $161.9 million in the third quarter of 2022, an increase of $13.3 million, or 9.0%, compared to the second quarter of 2022. The increase was primarily due to an $8.9 million increase in salaries and employee benefits expense that included $2.6 million in additional performance-based accruals and $2.0 million of salaries and employee benefits costs from Prudential Bancorp. In addition, compared to the second quarter of 2022, data processing and software expense increased $1.1 million, charitable contributions, reflected in other expense, increased $0.8 million due to contributions made to the Fulton Forward Foundation, and other outside services increased $0.6 million. The total impact on non-interest expense from Prudential Bancorp in the third quarter of 2022 was $3.6 million.
Compared to the third quarter of 2021, non-interest expense, excluding merger-related expenses of $7.0 million and intangible amortization of $0.7 million, increased $17.4 million, or 12.1%, in the third quarter of 2022, primarily due to an increase in salaries and employee benefits expense of $11.6 million. In addition, compared to the third quarter of 2021, data processing and software expense increased $1.5 million, other outside services increased $1.5 million and net occupancy costs increased $1.1 million.
Income Tax Expense
For the third quarter of 2022, the effective tax rate was 17.8%, in comparison to 17.6% for the full-year of 2021.
Additional information on Fulton is available on the Internet at www.fultonbank.com.
Safe Harbor Statement
This press release may contain forward-looking statements with respect to the Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results.
Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission (the "SEC") and are or will be available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).
Non-GAAP Financial Measures
The Corporation uses certain financial measures in this press release that have been derived from methods other than generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this press release.
| FULTON FINANCIAL CORPORATION | |||||
|---|---|---|---|---|---|
| SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) | |||||
| in thousands, except per-share data and percentages | |||||
| Three months ended | |||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |
| 2022 | 2022 | 2022 | 2021 | 2021 | |
| Ending Balances | |||||
| Investments | |||||
| Net loans | 19,695,199 | 18,920,950 | 18,476,119 | 18,325,350 | 18,269,407 |
| Total assets | 26,146,042 | 25,252,686 | 25,598,310 | 25,796,398 | 26,390,832 |
| Deposits | 21,376,554 | 21,143,866 | 21,541,174 | 21,573,499 | 22,074,041 |
| Shareholders' equity | 2,471,159 | 2,471,093 | 2,569,535 | 2,712,680 | 2,699,818 |
| Average Balances | |||||
| Investments | |||||
| Net loans | 19,563,825 | 18,637,175 | 18,383,118 | 18,220,550 | 18,414,153 |
| Total assets | 26,357,095 | 25,578,432 | 25,622,462 | 26,136,536 | 26,440,876 |
| Deposits | 21,788,052 | 21,523,713 | 21,480,183 | 21,876,938 | 22,123,480 |
| Shareholders' equity | 2,604,057 | 2,531,346 | 2,688,834 | 2,713,198 | 2,722,833 |
| Income Statement | |||||
| Net interest income | |||||
| Provision for credit losses | 18,958 | 1,500 | (6,950) | (5,000) | (600) |
| Non-interest income | 59,162 | 58,391 | 55,256 | 63,881 | 62,577 |
| Non-interest expense | 169,558 | 149,730 | 145,978 | 154,019 | 144,596 |
| Income before taxes | 86,228 | 85,992 | 77,538 | 80,475 | 89,851 |
| Net income available to common shareholders | 68,309 | 67,427 | 61,726 | 59,325 | 73,021 |
| Pre-provision net revenue(1) | 113,631 | 89,384 | 71,842 | 77,837 | 90,947 |
| Per Share | |||||
| Net income available to common shareholders (basic) | 0.41 | 0.42 | 0.38 | 0.37 | 0.45 |
| Net income available to common shareholders (diluted) | 0.40 | 0.42 | 0.38 | 0.37 | 0.45 |
| Operating net income available to common shareholders(1) | 0.48 | 0.42 | 0.38 | 0.37 | 0.45 |
| Cash dividends | 0.15 | 0.15 | 0.15 | 0.22 | 0.14 |
| Common shareholders' equity | 13.61 | 14.15 | 14.79 | 15.70 | 15.53 |
| Common shareholders' equity (tangible)(1) | 10.26 | 10.81 | 11.44 | 12.35 | 12.21 |
| Weighted average shares (basic) | 167,353 | 160,920 | 160,588 | 161,210 | 162,506 |
| Weighted average shares (diluted) | 168,781 | 162,075 | 161,911 | 162,355 | 163,456 |
| (1) Non-GAAP financial measure. Refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this press release. |
All values are in US Dollars.
| Three months ended | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||
| Asset Quality | ||||||||||||||||||||||
| Net (recoveries) charge offs to average loans (annualized) | 0.01 | % | (0.08) | % | (0.02) | % | 0.07 | % | (0.05) | % | ||||||||||||
| Non-performing loans to total loans | 0.98 | % | 0.92 | % | 0.87 | % | 0.83 | % | 0.82 | % | ||||||||||||
| Non-performing assets to total assets | 0.76 | % | 0.71 | % | 0.64 | % | 0.60 | % | 0.58 | % | ||||||||||||
| ACL - loans(2) to total loans | 1.35 | % | 1.31 | % | 1.32 | % | 1.36 | % | 1.41 | % | ||||||||||||
| ACL - loans(2) to non-performing loans | 138 | % | 143 | % | 151 | % | 164 | % | 171 | % | ||||||||||||
| Asset Quality, excluding PPP(1)(3) | ||||||||||||||||||||||
| Net (recoveries) charge offs to adjusted average loans (annualized) | 0.01 | % | (0.08) | % | (0.02) | % | 0.07 | % | (0.05) | % | ||||||||||||
| Non-performing loans to total adjusted loans | 0.98 | % | 0.92 | % | 0.88 | % | 0.84 | % | 0.85 | % | ||||||||||||
| ACL - loans(2) to total adjusted loans | 1.36 | % | 1.32 | % | 1.33 | % | 1.38 | % | 1.45 | % | ||||||||||||
| Profitability | ||||||||||||||||||||||
| Return on average assets, annualized | 1.07 | % | 1.10 | % | 1.02 | % | 0.94 | % | 1.13 | % | ||||||||||||
| Operating return on average assets, annualized(1) | 1.25 | % | 1.11 | % | 1.02 | % | 0.94 | % | 1.13 | % | ||||||||||||
| Return on average common shareholders' equity, annualized | 11.24 | % | 11.57 | % | 10.03 | % | 9.34 | % | 11.45 | % | ||||||||||||
| Return on average common shareholders' equity (tangible), annualized(1) | 17.31 | % | 15.23 | % | 12.88 | % | 11.89 | % | 14.56 | % | ||||||||||||
| Net interest margin | 3.54 | % | 3.04 | % | 2.78 | % | 2.77 | % | 2.82 | % | ||||||||||||
| Efficiency ratio(1) | 57.8 | % | 61.4 | % | 65.8 | % | 65.2 | % | 60.3 | % | ||||||||||||
| Non-interest expenses to total average assets | 2.55 | % | 2.35 | % | 2.31 | % | 2.34 | % | 2.17 | % | ||||||||||||
| Operating non-interest expenses to total average assets(1) | 2.43 | % | 2.32 | % | 2.29 | % | 2.30 | % | 2.14 | % | ||||||||||||
| Capital Ratios | ||||||||||||||||||||||
| Tangible common equity ratio ("TCE")(1) | 6.7 | % | 7.0 | % | 7.3 | % | 7.8 | % | 7.6 | % | ||||||||||||
| TCE ratio, (excluding AOCI)(1)(5) | 8.3 | % | 8.2 | % | 7.9 | % | 7.8 | % | 7.5 | % | ||||||||||||
| Tier 1 leverage ratio(4) | 9.3 | % | 9.1 | % | 8.9 | % | 8.6 | % | 8.4 | % | ||||||||||||
| Common equity Tier 1 capital ratio(4) | 10.0 | % | 9.9 | % | 10.0 | % | 9.9 | % | 10.1 | % | ||||||||||||
| Tier 1 risk-based capital ratio(4) | 10.9 | % | 10.8 | % | 10.9 | % | 10.9 | % | 11.1 | % | ||||||||||||
| Total risk-based capital ratio(4) | 13.7 | % | 13.7 | % | 13.8 | % | 14.1 | % | 14.4 | % | ||||||||||||
| (1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this press release. | ||||||||||||||||||||||
| (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 PPP loans. | ||||||||||||||||||||||
| (4) Regulatory capital ratios as of September 30, 2022 are preliminary and prior periods are actual. | ||||||||||||||||||||||
| (5) Tangible common equity ("TCE") ratio, excluding accumulated other comprehensive income ("AOCI") | ||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||
| % Change from | ||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | ||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | 2022 | 2021 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Cash and due from banks | $ | 143,465 | $ | 158,605 | $ | 161,462 | $ | 172,276 | $ | 260,564 | (9.5) | % | (44.9) | % | ||||||||
| Other interest-earning assets | 467,164 | 383,715 | 1,054,232 | 1,523,973 | 2,271,738 | 21.7 | % | (79.4) | % | |||||||||||||
| Loans held for sale | 14,411 | 17,528 | 27,675 | 35,768 | 43,123 | (17.8) | % | (66.6) | % | |||||||||||||
| Investment securities | 3,936,694 | 4,117,801 | 4,288,674 | 4,167,774 | 4,000,760 | (4.4) | % | (1.6) | % | |||||||||||||
| Net loans | 19,695,199 | 18,920,950 | 18,476,119 | 18,325,350 | 18,269,407 | 4.1 | % | 7.8 | % | |||||||||||||
| Less: ACL - loans(1) | (266,838) | (248,564) | (243,705) | (249,001) | (256,727) | (7.4) | % | (3.9) | % | |||||||||||||
| Loans, net | 19,428,361 | 18,672,386 | 18,232,414 | 18,076,349 | 18,012,680 | 4.0 | % | 7.9 | % | |||||||||||||
| Net, premises and equipment | 221,496 | 211,639 | 218,257 | 220,357 | 228,179 | 4.7 | % | (2.9) | % | |||||||||||||
| Accrued interest receivable | 72,821 | 64,457 | 55,102 | 57,451 | 57,902 | 13.0 | % | 25.8 | % | |||||||||||||
| Goodwill and intangible assets | 561,495 | 537,700 | 537,877 | 538,053 | 536,697 | 4.4 | % | 4.6 | % | |||||||||||||
| Other assets | 1,300,135 | 1,088,855 | 1,022,617 | 1,004,397 | 979,189 | 19.4 | % | 32.8 | % | |||||||||||||
| Total Assets | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | $ | 25,796,398 | $ | 26,390,832 | 3.5 | % | (0.9) | % | ||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
| Deposits | $ | 21,376,554 | $ | 21,143,866 | $ | 21,541,174 | $ | 21,573,499 | $ | 22,074,041 | 1.1 | % | (3.2) | % | ||||||||
| Short-term borrowings | 618,457 | 456,185 | 452,440 | 416,764 | 468,967 | 35.6 | % | 31.9 | % | |||||||||||||
| Other liabilities | 873,648 | 624,412 | 478,667 | 472,110 | 520,620 | 39.9 | % | 67.8 | % | |||||||||||||
| Long-term borrowings | 806,224 | 557,130 | 556,494 | 621,345 | 627,386 | 44.7 | % | 28.5 | % | |||||||||||||
| Total Liabilities | 23,674,883 | 22,781,593 | 23,028,775 | 23,083,718 | 23,691,014 | 3.9 | % | (0.1) | % | |||||||||||||
| Shareholders' equity | 2,471,159 | 2,471,093 | 2,569,535 | 2,712,680 | 2,699,818 | — | % | (8.5) | % | |||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | $ | 25,796,398 | $ | 26,390,832 | 3.5 | % | (0.9) | % | ||||||||
| LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | ||||||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,554,509 | $ | 7,417,036 | $ | 7,289,376 | $ | 7,279,080 | $ | 7,145,115 | 1.9 | % | 5.7 | % | ||||||||
| Commercial and industrial | 4,208,775 | 4,098,552 | 3,992,285 | 3,906,791 | 3,863,154 | 2.7 | % | 8.9 | % | |||||||||||||
| Real estate - residential mortgage | 4,574,228 | 4,203,827 | 3,946,741 | 3,846,750 | 3,719,684 | 8.8 | % | 23.0 | % | |||||||||||||
| Real estate - home equity | 1,110,103 | 1,108,808 | 1,098,171 | 1,118,248 | 1,126,628 | 0.1 | % | (1.5) | % | |||||||||||||
| Real estate - construction | 1,273,097 | 1,177,446 | 1,210,340 | 1,139,779 | 1,111,487 | 8.1 | % | 14.5 | % | |||||||||||||
| Consumer | 633,666 | 538,747 | 481,551 | 464,657 | 458,595 | 17.6 | % | 38.2 | % | |||||||||||||
| Equipment lease financing | 255,060 | 254,897 | 253,521 | 236,344 | 242,967 | 0.1 | % | 5.0 | % | |||||||||||||
| Other(2) | 53,671 | 49,214 | 39,857 | 32,448 | 11,330 | 9.1 | % | N/M | ||||||||||||||
| Net loans before PPP | 19,663,109 | 18,848,527 | 18,311,842 | 18,024,097 | 17,678,960 | 4.3 | % | 11.2 | % | |||||||||||||
| PPP | 32,090 | 72,423 | 164,277 | 301,253 | 590,447 | (55.7) | % | (94.6) | % | |||||||||||||
| Total Net Loans | $ | 19,695,199 | $ | 18,920,950 | $ | 18,476,119 | $ | 18,325,350 | $ | 18,269,407 | 4.1 | % | 7.8 | % | ||||||||
| Deposits, by type: | ||||||||||||||||||||||
| Noninterest-bearing demand | $ | 7,372,896 | $ | 7,530,777 | $ | 7,528,391 | $ | 7,370,963 | $ | 7,434,155 | (2.1) | % | (0.8) | % | ||||||||
| Interest-bearing demand | 5,676,600 | 5,403,805 | 5,625,286 | 5,819,539 | 6,187,096 | 5.0 | % | (8.3) | % | |||||||||||||
| Savings | 6,563,003 | 6,406,051 | 6,479,196 | 6,403,995 | 6,401,619 | 2.5 | % | 2.5 | % | |||||||||||||
| Total demand and savings | 19,612,499 | 19,340,633 | 19,632,873 | 19,594,497 | 20,022,870 | 1.4 | % | (2.0) | % | |||||||||||||
| Brokered | 226,883 | 243,172 | 248,833 | 251,526 | 262,617 | (6.7) | % | (13.6) | % | |||||||||||||
| Time | 1,537,172 | 1,560,061 | 1,659,468 | 1,727,476 | 1,788,554 | (1.5) | % | (14.1) | % | |||||||||||||
| Total Deposits | $ | 21,376,554 | $ | 21,143,866 | $ | 21,541,174 | $ | 21,573,499 | $ | 22,074,041 | 1.1 | % | (3.2) | % | ||||||||
| Short-term borrowings, by type: | ||||||||||||||||||||||
| Customer funding | $ | 482,457 | $ | 436,185 | $ | 452,440 | $ | 416,764 | $ | 468,967 | 10.6 | % | 2.9 | % | ||||||||
| Federal funds purchased | 136,000 | 20,000 | — | — | — | N/M | N/M | |||||||||||||||
| Total Short-Term Borrowings | $ | 618,457 | $ | 456,185 | $ | 452,440 | $ | 416,764 | $ | 468,967 | 35.6 | % | 31.9 | % | ||||||||
| (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. | ||||||||||||||||||||||
| N/M - Not meaningful | ||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||
| Three Months Ended | % Change from | Nine Months Ended | ||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | Sep 30 | |||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | 2022 | 2021 | 2022 | 2021 | % Change | |||||||||||||
| Interest Income: | ||||||||||||||||||||||
| Interest income | $ | 233,691 | $ | 190,299 | $ | 173,001 | $ | 177,724 | $ | 184,079 | 22.8 | % | 27.0 | % | $ | 596,991 | $ | 545,688 | 9.4 | % | ||
| Interest expense | 18,109 | 11,468 | 11,691 | 12,111 | 12,809 | 57.9 | % | 41.4 | % | 41,268 | 47,570 | (13.2) | % | |||||||||
| Net Interest Income | 215,582 | 178,831 | 161,310 | 165,613 | 171,270 | 20.6 | % | 25.9 | % | 555,723 | 498,118 | 11.6 | % | |||||||||
| Provision for credit losses | 18,958 | 1,500 | (6,950) | (5,000) | (600) | N/M | N/M | 13,508 | (9,600) | N/M | ||||||||||||
| Net Interest Income after <br> Provision | 196,624 | 177,331 | 168,260 | 170,613 | 171,870 | 10.9 | % | 14.4 | % | 542,215 | 507,718 | 6.8 | % | |||||||||
| Non-Interest Income: | ||||||||||||||||||||||
| Commercial banking: | ||||||||||||||||||||||
| Merchant and card | 7,601 | 7,355 | 6,097 | 6,588 | 6,979 | 3.3 | % | 8.9 | % | 21,053 | 19,533 | 7.8 | % | |||||||||
| Cash management | 6,483 | 6,062 | 5,428 | 5,318 | 5,285 | 6.9 | % | 22.7 | % | 17,973 | 15,547 | 15.6 | % | |||||||||
| Capital markets | 4,060 | 3,893 | 1,676 | 2,982 | 2,063 | 4.3 | % | 96.8 | % | 9,629 | 6,399 | 50.5 | % | |||||||||
| Other commercial banking | 2,664 | 3,049 | 2,807 | 3,592 | 2,411 | (12.6) | % | 10.5 | % | 8,520 | 8,730 | (2.4) | % | |||||||||
| Total commercial banking | 20,808 | 20,359 | 16,008 | 18,480 | 16,738 | 2.2 | % | 24.3 | % | 57,175 | 50,209 | 13.9 | % | |||||||||
| Consumer banking: | ||||||||||||||||||||||
| Card | 6,278 | 6,067 | 5,796 | 5,953 | 5,941 | 3.5 | % | 5.7 | % | 18,141 | 17,552 | 3.4 | % | |||||||||
| Overdraft | 4,463 | 3,881 | 3,772 | 3,896 | 3,474 | 15.0 | % | 28.5 | % | 12,116 | 8,948 | 35.4 | % | |||||||||
| Other consumer banking | 2,534 | 2,524 | 2,106 | 2,280 | 2,386 | 0.4 | % | 6.2 | % | 7,164 | 6,915 | 3.6 | % | |||||||||
| Total consumer banking | 13,275 | 12,472 | 11,674 | 12,129 | 11,801 | 6.4 | % | 12.5 | % | 37,421 | 33,415 | 12.0 | % | |||||||||
| Wealth management | 17,610 | 18,274 | 19,428 | 18,285 | 18,532 | (3.6) | % | (5.0) | % | 55,312 | 53,513 | 3.4 | % | |||||||||
| Mortgage banking | 3,720 | 3,768 | 4,576 | 7,243 | 9,535 | (1.3) | % | (61.0) | % | 12,064 | 26,333 | (54.2) | % | |||||||||
| Other | 3,802 | 3,510 | 3,551 | 7,739 | 5,971 | 8.3 | % | (36.3) | % | 10,863 | 12,883 | (15.7) | % | |||||||||
| Non-interest income before<br> investment securities gains (losses) | 59,215 | 58,383 | 55,237 | 63,876 | 62,577 | 1.4 | % | (5.4) | % | 172,835 | 176,353 | (2.0) | % | |||||||||
| Investment securities gains (losses), net | (53) | 8 | 19 | 5 | — | N/M | N/M | (26) | 33,511 | (100.1) | % | |||||||||||
| Total Non-Interest Income | 59,162 | 58,391 | 55,256 | 63,881 | 62,577 | 1.3 | % | (5.5) | % | 172,809 | 209,864 | (17.7) | % | |||||||||
| Non-Interest Expense: | ||||||||||||||||||||||
| Salaries and employee benefits | 94,283 | 85,404 | 84,464 | 85,506 | 82,679 | 10.4 | % | 14.0 | % | 264,151 | 243,632 | 8.4 | % | |||||||||
| Data processing and software | 15,807 | 14,685 | 14,315 | 14,612 | 14,335 | 7.6 | % | 10.3 | % | 44,807 | 41,828 | 7.1 | % | |||||||||
| Net occupancy | 14,025 | 13,587 | 14,522 | 14,366 | 12,957 | 3.2 | % | 8.2 | % | 42,134 | 39,433 | 6.8 | % | |||||||||
| Other outside services | 9,361 | 8,764 | 8,167 | 9,637 | 7,889 | 6.8 | % | 18.7 | % | 26,292 | 24,557 | 7.1 | % | |||||||||
| Equipment | 3,548 | 3,422 | 3,423 | 3,539 | 3,416 | 3.7 | % | 3.9 | % | 10,393 | 10,268 | 1.2 | % | |||||||||
| FDIC insurance | 3,158 | 2,961 | 3,209 | 3,032 | 2,727 | 6.7 | % | 15.8 | % | 9,328 | 7,633 | 22.2 | % | |||||||||
| Professional fees | 2,373 | 2,013 | 1,792 | 1,946 | 2,271 | 17.9 | % | 4.5 | % | 6,178 | 7,701 | (19.8) | % | |||||||||
| Marketing | 1,859 | 1,326 | 1,320 | 1,477 | 1,448 | 40.2 | % | 28.4 | % | 4,505 | 3,798 | 18.6 | % | |||||||||
| Intangible amortization | 690 | 177 | 176 | 146 | 150 | N/M | N/M | 1,043 | 443 | 135.4 | % | |||||||||||
| Debt extinguishment | — | — | — | 674 | — | N/M | N/M | — | 32,575 | (100.0) | % | |||||||||||
| Merger-related expenses | 7,006 | 1,027 | 401 | — | — | N/M | N/M | 8,434 | — | N/M | ||||||||||||
| Other | 17,448 | 16,364 | 14,189 | 19,084 | 16,724 | 6.6 | % | 4.3 | % | 48,001 | 51,943 | (7.6) | % | |||||||||
| Total Non-Interest Expense | 169,558 | 149,730 | 145,978 | 154,019 | 144,596 | 13.2 | % | 17.3 | % | 465,266 | 463,811 | 0.3 | % | |||||||||
| Income Before Income Taxes | 86,228 | 85,992 | 77,538 | 80,475 | 89,851 | 0.3 | % | (4.0) | % | 249,758 | 253,771 | (1.6) | % | |||||||||
| Income tax expense | 15,357 | 16,003 | 13,250 | 18,588 | 14,268 | (4.0) | % | 7.6 | % | 44,610 | 40,160 | 11.1 | % | |||||||||
| Net Income | 70,871 | 69,989 | 64,288 | 61,887 | 75,583 | 1.3 | % | (6.2) | % | 205,148 | 213,611 | (4.0) | % | |||||||||
| Preferred stock dividends | (2,562) | (2,562) | (2,562) | (2,562) | (2,562) | — | % | — | % | (7,686) | (7,715) | 0.4 | % | |||||||||
| Net Income Available to <br> Common Shareholders | $ | 68,309 | $ | 67,427 | $ | 61,726 | $ | 59,325 | $ | 73,021 | 1.3 | % | (6.5) | % | $ | 197,462 | $ | 205,896 | (4.1) | % | ||
| Three Months Ended | % Change from | Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | Sep 30 | |||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | 2022 | 2021 | 2022 | 2021 | % Change | |||||||||||||
| PER SHARE: | ||||||||||||||||||||||
| Net income available to common shareholders: | ||||||||||||||||||||||
| Basic | $0.41 | $0.42 | $0.38 | $0.37 | $0.45 | (2.4) | % | (8.9) | % | $1.21 | $1.27 | (4.7) | % | |||||||||
| Diluted | $0.40 | $0.42 | $0.38 | $0.37 | $0.45 | (4.8) | % | (11.1) | % | $1.20 | $1.26 | (4.8) | % | |||||||||
| Cash dividends | $0.15 | $0.15 | $0.15 | $0.22 | $0.14 | — | % | 7.1 | % | $0.45 | $0.42 | 7.1 | % | |||||||||
| Weighted average shares (basic) | 167,353 | 160,920 | 160,588 | 161,210 | 162,506 | 4.0 | % | 3.0 | % | 162,979 | 162,577 | 0.2 | % | |||||||||
| Weighted average shares (diluted) | 168,781 | 162,075 | 161,991 | 162,355 | 163,456 | 4.1 | % | 3.3 | % | 164,254 | 163,634 | 0.4 | % | |||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | ||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||
| September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||||||||||||||||
| Average | Interest | Yield/ | Average | Interest | Yield/ | Average | Interest | Yield/ | ||||||||||||||
| Balance | (1) | Rate | Balance | (1) | Rate | Balance | (1) | Rate | ||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Net loans | $ | 19,563,825 | $ | 207,343 | 4.21 | % | $ | 18,637,175 | $ | 165,682 | 3.56 | % | $ | 18,414,153 | $ | 163,343 | 3.53 | % | ||||
| Investment securities | 4,500,461 | 28,022 | 2.49 | % | 4,398,424 | 26,061 | 2.37 | % | 3,821,513 | 21,663 | 2.27 | % | ||||||||||
| Loans held for sale | 9,098 | 194 | 8.51 | % | 13,260 | 260 | 7.84 | % | 36,427 | 299 | 3.28 | % | ||||||||||
| Other interest-earning assets | 622,673 | 2,103 | 1.34 | % | 938,244 | 1,723 | 0.74 | % | 2,301,326 | 1,888 | 0.18 | % | ||||||||||
| Total Interest-Earning Assets | 24,696,057 | 237,662 | 3.83 | % | 23,987,103 | 193,726 | 3.24 | % | 24,573,419 | 187,193 | 3.03 | % | ||||||||||
| Noninterest-Earning assets: | ||||||||||||||||||||||
| Cash and due from banks | 152,349 | 160,240 | 200,315 | |||||||||||||||||||
| Premises and equipment | 223,880 | 216,798 | 228,861 | |||||||||||||||||||
| Other assets | 1,545,812 | 1,463,332 | 1,695,767 | |||||||||||||||||||
| Less: ACL - loans(2) | (261,003) | (249,041) | (257,486) | |||||||||||||||||||
| Total Assets | $ | 26,357,095 | $ | 25,578,432 | $ | 26,440,876 | ||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
| Interest-Bearing liabilities: | ||||||||||||||||||||||
| Demand deposits | $ | 5,708,059 | $ | 1,886 | 0.13 | % | $ | 5,597,975 | $ | 797 | 0.06 | % | $ | 6,168,908 | $ | 814 | 0.05 | % | ||||
| Savings deposits | 6,681,713 | 3,414 | 0.20 | % | 6,425,634 | 1,125 | 0.07 | % | 6,392,537 | 1,054 | 0.07 | % | ||||||||||
| Brokered deposits | 247,105 | 1,346 | 2.16 | % | 244,200 | 619 | 1.02 | % | 270,168 | 229 | 0.34 | % | ||||||||||
| Time deposits | 1,615,384 | 3,404 | 0.84 | % | 1,608,286 | 3,255 | 0.81 | % | 1,852,223 | 4,428 | 0.95 | % | ||||||||||
| Total Interest-Bearing Deposits | 14,252,261 | 10,050 | 0.28 | % | 13,876,095 | 5,796 | 0.17 | % | 14,683,836 | 6,525 | 0.18 | % | ||||||||||
| Short-term borrowings | 597,883 | 1,149 | 0.76 | % | 446,838 | 190 | 0.17 | % | 494,811 | 131 | 0.11 | % | ||||||||||
| Long-term borrowings | 761,465 | 6,911 | 3.62 | % | 556,992 | 5,482 | 3.94 | % | 627,300 | 6,153 | 3.92 | % | ||||||||||
| Total Interest-Bearing Liabilities | 15,611,609 | 18,110 | 0.47 | % | 14,879,925 | 11,468 | 0.31 | % | 15,805,947 | 12,809 | 0.32 | % | ||||||||||
| Noninterest-Bearing liabilities: | ||||||||||||||||||||||
| Demand deposits | 7,535,791 | 7,647,618 | 7,439,644 | |||||||||||||||||||
| Other | 605,638 | 519,543 | 472,452 | |||||||||||||||||||
| Total Liabilities | 23,753,038 | 23,047,086 | 23,718,043 | |||||||||||||||||||
| Total Deposits/Cost of Deposits | 21,788,052 | 0.18 | % | 21,523,713 | 0.11 | % | 22,123,480 | 0.12 | % | |||||||||||||
| Total interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 23,147,400 | 0.31 | % | 22,527,543 | 0.20 | % | 23,245,591 | 0.22 | % | |||||||||||||
| Shareholders' equity | 2,604,057 | 2,531,346 | 2,722,833 | |||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 26,357,095 | $ | 25,578,432 | $ | 26,440,876 | ||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 219,552 | 3.54 | % | 182,258 | 3.04 | % | 174,384 | 2.82 | % | |||||||||||||
| Tax equivalent adjustment | (3,970) | (3,427) | (3,114) | |||||||||||||||||||
| Net Interest Income | $ | 215,582 | $ | 178,831 | $ | 171,270 | ||||||||||||||||
| (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 | |||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | ||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | 2022 | 2021 | ||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,566,259 | $ | 7,340,417 | $ | 7,294,914 | $ | 7,157,906 | $ | 7,134,177 | 3.1 | % | 6.1 | % | ||||||||
| Commercial and industrial | 4,201,399 | 4,040,587 | 3,986,900 | 3,898,559 | 3,878,767 | 4.0 | % | 8.3 | % | |||||||||||||
| Real estate - residential mortgage | 4,485,649 | 4,052,666 | 3,887,428 | 3,773,156 | 3,642,822 | 10.7 | % | 23.1 | % | |||||||||||||
| Real estate - home equity | 1,099,487 | 1,118,494 | 1,106,319 | 1,122,042 | 1,128,076 | (1.7) | % | (2.5) | % | |||||||||||||
| Real estate - construction | 1,268,590 | 1,188,932 | 1,137,649 | 1,117,592 | 1,085,846 | 6.7 | % | 16.8 | % | |||||||||||||
| Consumer | 604,634 | 485,095 | 471,129 | 462,346 | 452,844 | 24.6 | % | 33.5 | % | |||||||||||||
| Equipment lease financing | 252,810 | 253,659 | 236,388 | 238,349 | 247,776 | (0.3) | % | 2.0 | % | |||||||||||||
| Other(1) | 35,823 | 42,476 | 36,277 | 15,558 | (6,773) | (15.7) | % | N/M | ||||||||||||||
| Net loans before PPP | 19,514,651 | 18,522,326 | 18,157,004 | 17,785,508 | 17,563,535 | 5.4 | % | 11.1 | % | |||||||||||||
| PPP | 49,174 | 114,849 | 226,114 | 435,042 | 850,618 | (57.2) | % | (94.2) | % | |||||||||||||
| Total Net Loans | $ | 19,563,825 | $ | 18,637,175 | $ | 18,383,118 | $ | 18,220,550 | $ | 18,414,153 | 5.0 | % | 6.2 | % | ||||||||
| Deposits, by type: | ||||||||||||||||||||||
| Noninterest-bearing demand | $ | 7,535,791 | $ | 7,647,618 | $ | 7,431,235 | $ | 7,516,656 | $ | 7,439,644 | (1.5) | % | 1.3 | % | ||||||||
| Interest-bearing demand | 5,708,059 | 5,597,975 | 5,664,987 | 5,933,780 | 6,168,908 | 2.0 | % | (7.5) | % | |||||||||||||
| Savings | 6,681,713 | 6,425,634 | 6,436,548 | 6,413,638 | 6,392,537 | 4.0 | % | 4.5 | % | |||||||||||||
| Total demand and savings | 19,925,563 | 19,671,227 | 19,532,770 | 19,864,074 | 20,001,089 | 1.3 | % | (0.4) | % | |||||||||||||
| Brokered | 247,105 | 244,200 | 250,350 | 256,192 | 270,168 | 1.2 | % | (8.5) | % | |||||||||||||
| Time | 1,615,384 | 1,608,286 | 1,697,063 | 1,756,672 | 1,852,223 | 0.4 | % | (12.8) | % | |||||||||||||
| Total Deposits | $ | 21,788,052 | $ | 21,523,713 | $ | 21,480,183 | $ | 21,876,938 | $ | 22,123,480 | 1.2 | % | (1.5) | % | ||||||||
| Short-term borrowings, by type: | ||||||||||||||||||||||
| Customer funding | $ | 483,429 | $ | 443,970 | $ | 423,949 | $ | 474,022 | $ | 494,811 | 8.9 | % | (2.3) | % | ||||||||
| Federal funds purchased | 96,965 | 2,857 | — | — | — | N/M | N/M | |||||||||||||||
| Short-term FHLB advances and other borrowings | 17,489 | 11 | — | — | — | N/M | N/M | |||||||||||||||
| Total Short-Term borrowings | $ | 597,883 | $ | 446,838 | $ | 423,949 | $ | 474,022 | $ | 494,811 | 33.8 | % | 20.8 | % | ||||||||
| (1) Consists of overdrafts and net origination fees and costs. | ||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | ||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||
| Nine months ended September 30 | ||||||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||||
| Average | Interest | Yield/ | Average | Interest | Yield/ | |||||||||||||||||
| Balance | (1) | Rate | Balance | (1) | Rate | |||||||||||||||||
| ASSETS | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Net loans | $ | 18,865,672 | $ | 524,150 | 3.71 | % | $ | 18,765,024 | $ | 485,330 | 3.46 | % | ||||||||||
| Investment securities | 4,376,084 | 78,334 | 2.39 | % | 3,589,357 | 63,902 | 2.37 | % | ||||||||||||||
| Loans held for sale | 16,898 | 694 | 5.48 | % | 40,551 | 969 | 3.19 | % | ||||||||||||||
| Other interest-earning assets | 937,369 | 4,498 | 0.64 | % | 1,986,161 | 4,599 | 0.18 | % | ||||||||||||||
| Total Interest-Earning Assets | 24,196,023 | 607,676 | 3.35 | % | 24,381,093 | 554,799 | 3.04 | % | ||||||||||||||
| Noninterest-Earning assets: | ||||||||||||||||||||||
| Cash and due from banks | 158,267 | 150,435 | ||||||||||||||||||||
| Premises and equipment | 220,218 | 229,513 | ||||||||||||||||||||
| Other assets | 1,534,314 | 1,689,094 | ||||||||||||||||||||
| Less: ACL - loans(2) | (253,725) | (268,412) | ||||||||||||||||||||
| Total Assets | $ | 25,855,097 | $ | 26,181,723 | ||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
| Interest-Bearing liabilities: | ||||||||||||||||||||||
| Demand deposits | $ | 5,657,165 | $ | 3,411 | 0.08 | % | $ | 5,994,878 | $ | 2,905 | 0.06 | % | ||||||||||
| Savings deposits | 6,515,529 | 5,561 | 0.11 | % | 6,271,019 | 3,944 | 0.08 | % | ||||||||||||||
| Brokered deposits | 254,100 | 2,181 | 1.14 | % | 297,250 | 876 | 0.39 | % | ||||||||||||||
| Time deposits | 1,633,053 | 10,299 | 0.84 | % | 2,001,043 | 16,383 | 1.09 | % | ||||||||||||||
| Total Interest-Bearing Deposits | 14,059,847 | 21,452 | 0.20 | % | 14,564,190 | 24,108 | 0.22 | % | ||||||||||||||
| Short-term borrowings | 490,194 | 1,459 | 0.40 | % | 526,259 | 456 | 0.12 | % | ||||||||||||||
| Long-term borrowings | 643,330 | 18,357 | 3.81 | % | 839,396 | 23,006 | 3.66 | % | ||||||||||||||
| Total Interest-Bearing Liabilities | 15,193,371 | 41,268 | 0.36 | % | 15,929,845 | 47,570 | 0.40 | % | ||||||||||||||
| Noninterest-Bearing liabilities: | ||||||||||||||||||||||
| Demand deposits | 7,538,597 | 7,108,199 | ||||||||||||||||||||
| Other | 515,615 | 466,917 | ||||||||||||||||||||
| Total Liabilities | 23,247,583 | 23,504,961 | ||||||||||||||||||||
| Total Deposits/Cost of Deposits | 21,598,444 | 0.13 | % | 21,672,389 | 0.15 | % | ||||||||||||||||
| Total interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 22,731,968 | 0.24 | % | 23,038,044 | 0.28 | % | ||||||||||||||||
| Shareholders' equity | 2,607,514 | 2,676,762 | ||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 25,855,097 | $ | 26,181,723 | ||||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 566,408 | 3.13 | % | 507,229 | 2.78 | % | ||||||||||||||||
| Tax equivalent adjustment | (10,685) | (9,111) | ||||||||||||||||||||
| Net Interest Income | $ | 555,723 | $ | 498,118 | ||||||||||||||||||
| (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 | ||||||||||||||||||||||
| Nine months ended September 30 | ||||||||||||||||||||||
| 2022 | 2021 | % Change | ||||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,401,094 | $ | 7,146,951 | 3.6 | % | ||||||||||||||||
| Commercial and industrial | 4,075,838 | 3,943,736 | 3.3 | % | ||||||||||||||||||
| Real estate - residential mortgage | 4,143,850 | 3,409,381 | 21.5 | % | ||||||||||||||||||
| Real estate - home equity | 1,099,310 | 1,147,444 | (4.2) | % | ||||||||||||||||||
| Real estate - construction | 1,197,947 | 1,065,125 | 12.5 | % | ||||||||||||||||||
| Consumer | 532,396 | 454,434 | 17.2 | % | ||||||||||||||||||
| Equipment lease financing | 247,674 | 256,741 | (3.5) | % | ||||||||||||||||||
| Other(1) | 38,165 | (10,292) | N/M | |||||||||||||||||||
| Net loans before PPP | 18,736,274 | 17,413,520 | 7.6 | % | ||||||||||||||||||
| PPP | 129,398 | 1,351,504 | (90.4) | % | ||||||||||||||||||
| Total Net Loans | $ | 18,865,672 | $ | 18,765,024 | 0.5 | % | ||||||||||||||||
| Deposits, by type: | ||||||||||||||||||||||
| Noninterest-bearing demand | $ | 7,538,597 | $ | 7,108,199 | 6.1 | % | ||||||||||||||||
| Interest-bearing demand | 5,657,165 | 5,994,878 | (5.6) | % | ||||||||||||||||||
| Savings | 6,515,529 | 6,271,019 | 3.9 | % | ||||||||||||||||||
| Total demand and savings | 19,711,291 | 19,374,096 | 1.7 | % | ||||||||||||||||||
| Brokered | 254,100 | 297,250 | (14.5) | % | ||||||||||||||||||
| Time | 1,633,053 | 2,001,043 | (18.4) | % | ||||||||||||||||||
| Total Deposits | $ | 21,598,444 | $ | 21,672,389 | (0.3) | % | ||||||||||||||||
| Short-term borrowings, by type: | ||||||||||||||||||||||
| Customer funding | $ | 450,667 | $ | 526,259 | (14.4) | % | ||||||||||||||||
| Federal funds purchased | 33,629 | — | N/M | |||||||||||||||||||
| Short-term FHLB advances and other borrowings | 5,898 | — | N/M | |||||||||||||||||||
| Total Short-Term Borrowings | $ | 490,194 | $ | 526,259 | (6.9) | % | ||||||||||||||||
| 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 | Nine Month Ended | |||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Sep 30 | Sep 30 | ||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | 2022 | 2021 | ||||||||||||||||
| Allowance for credit losses related to net loans: | ||||||||||||||||||||||
| Balance at beginning of period | $ | 248,564 | $ | 243,705 | $ | 249,001 | $ | 256,727 | $ | 255,032 | $ | 249,001 | $ | 277,567 | ||||||||
| CECL Day 1 provision expense | 7,954 | — | — | — | — | 7,954 | — | |||||||||||||||
| Purchased credit deteriorated loans | 1,135 | — | — | — | — | 1,135 | — | |||||||||||||||
| Loans charged off: | ||||||||||||||||||||||
| Commercial and industrial | (1,783) | (201) | (227) | (9,417) | (647) | (2,211) | (5,920) | |||||||||||||||
| Real estate - commercial mortgage | (86) | — | (152) | (369) | (14) | (238) | (8,357) | |||||||||||||||
| Consumer and home equity | (1,172) | (877) | (1,052) | (828) | (504) | (3,101) | (2,481) | |||||||||||||||
| Real estate - residential mortgage | — | (66) | — | — | (602) | (66) | (1,290) | |||||||||||||||
| Real estate - construction | — | — | — | — | — | — | (39) | |||||||||||||||
| Equipment lease financing and other | (683) | (474) | (469) | (380) | (467) | (1,626) | (1,871) | |||||||||||||||
| Total loans charged off | (3,724) | (1,618) | (1,900) | (10,994) | (2,234) | (7,242) | (19,958) | |||||||||||||||
| Recoveries of loans previously charged off: | ||||||||||||||||||||||
| Commercial and industrial | 2,213 | 739 | 1,980 | 5,795 | 2,330 | 4,932 | 3,792 | |||||||||||||||
| Real estate - commercial mortgage | 29 | 3,536 | 112 | 1,007 | 564 | 3,677 | 1,467 | |||||||||||||||
| Consumer and home equity | 682 | 762 | 454 | 767 | 504 | 1,898 | 1,578 | |||||||||||||||
| Real estate - residential mortgage | 101 | 92 | 222 | 89 | 86 | 415 | 286 | |||||||||||||||
| Real estate - construction | — | 12 | 32 | 77 | 697 | 44 | 1,335 | |||||||||||||||
| Equipment lease financing and other | 247 | 226 | 154 | 283 | 358 | 627 | 670 | |||||||||||||||
| Recoveries of loans previously charged off | 3,272 | 5,367 | 2,954 | 8,018 | 4,539 | 11,593 | 9,128 | |||||||||||||||
| Net loans recovered (charged off) | (452) | 3,749 | 1,054 | (2,976) | 2,305 | 4,351 | (10,830) | |||||||||||||||
| Provision for credit losses | 9,637 | 1,110 | (6,350) | (4,750) | (610) | 4,397 | (10,010) | |||||||||||||||
| Balance at end of period | $ | 266,838 | $ | 248,564 | $ | 243,705 | $ | 249,001 | $ | 256,727 | $ | 266,838 | $ | 256,727 | ||||||||
| Net (recoveries) charge offs to average loans (annualized) | 0.01 | % | (0.08) | % | (0.02) | % | 0.07 | % | (0.05) | % | (0.05) | % | 0.08 | % | ||||||||
| Allowance credit losses related to OBS Credit Exposures(1) | ||||||||||||||||||||||
| Balance at beginning of period | $ | 14,323 | $ | 13,933 | $ | 14,533 | $ | 14,783 | $ | 14,773 | ||||||||||||
| Provision for credit losses | 1,367 | 390 | (600) | (250) | 10 | |||||||||||||||||
| Balance at end of period | $ | 15,690 | $ | 14,323 | $ | 13,933 | $ | 14,533 | $ | 14,783 | ||||||||||||
| NON-PERFORMING ASSETS: | ||||||||||||||||||||||
| Non-accrual loans | $ | 178,204 | $ | 162,530 | $ | 136,799 | $ | 143,666 | $ | 138,833 | ||||||||||||
| Loans 90 days past due and accruing | 14,559 | 11,016 | 24,182 | 8,453 | 11,389 | |||||||||||||||||
| Total non-performing loans | 192,763 | 173,546 | 160,981 | 152,119 | 150,222 | |||||||||||||||||
| Other real estate owned | 5,877 | 4,786 | 2,014 | 1,817 | 1,896 | |||||||||||||||||
| Total non-performing assets | $ | 198,640 | $ | 178,332 | $ | 162,995 | $ | 153,936 | $ | 152,118 | ||||||||||||
| NON-PERFORMING LOANS, BY TYPE: | ||||||||||||||||||||||
| Commercial and industrial | $ | 29,831 | $ | 44,713 | $ | 30,193 | $ | 30,629 | $ | 32,697 | ||||||||||||
| Real estate - commercial mortgage | 96,281 | 59,940 | 64,190 | 54,044 | 52,100 | |||||||||||||||||
| Real estate - residential mortgage | 41,597 | 42,922 | 39,308 | 39,399 | 37,077 | |||||||||||||||||
| Consumer and home equity | 10,016 | 10,552 | 11,465 | 11,505 | 11,509 | |||||||||||||||||
| Real estate - construction | 1,456 | 1,357 | 672 | 901 | 965 | |||||||||||||||||
| Equipment lease financing and other | 13,582 | 14,062 | 15,153 | 15,641 | 15,874 | |||||||||||||||||
| Total non-performing loans | $ | 192,763 | $ | 173,546 | $ | 160,981 | $ | 152,119 | $ | 150,222 | ||||||||||||
| (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, that has been derived by methods other than Generally Accepted Accounting Principles ("GAAP"). The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Management believes that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate the Corporation's results. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow: | |||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||
| Operating net income available to common shareholders | ||||||||||||||||||||||
| Net income available to common shareholders | $ | 68,309 | $ | 67,427 | $ | 61,726 | $ | 59,325 | $ | 73,021 | ||||||||||||
| Plus: Core deposit intangible amortization, net of tax | 406 | — | — | — | — | |||||||||||||||||
| Plus: Merger-related expenses, net of tax | 5,535 | 811 | 317 | — | — | |||||||||||||||||
| Plus: CECL day 1 provision expense, net of tax | 6,283 | — | — | — | — | |||||||||||||||||
| Operating net income available to common shareholders (numerator) | $ | 80,533 | $ | 68,238 | $ | 62,043 | $ | 59,325 | $ | 73,021 | ||||||||||||
| Weighted average shares (diluted) (denominator) | 168,781 | 162,075 | 161,991 | 162,355 | 163,456 | |||||||||||||||||
| Operating net income available to common shareholders, per share (diluted) | $ | 0.48 | $ | 0.42 | $ | 0.38 | $ | 0.37 | $ | 0.45 | ||||||||||||
| Common shareholders' equity (tangible), per share | ||||||||||||||||||||||
| Shareholders' equity | $ | 2,471,159 | $ | 2,471,093 | $ | 2,569,535 | $ | 2,712,680 | $ | 2,699,818 | ||||||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||
| Less: Goodwill and intangible assets | (561,495) | (537,700) | (537,877) | (538,053) | (536,697) | |||||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 1,716,786 | $ | 1,740,515 | $ | 1,838,780 | $ | 1,981,749 | $ | 1,970,243 | ||||||||||||
| Shares outstanding, end of period (denominator) | 167,399 | 161,057 | 160,669 | 160,490 | 161,429 | |||||||||||||||||
| Common shareholders' equity (tangible), per share | $ | 10.26 | $ | 10.81 | $ | 11.44 | $ | 12.35 | $ | 12.21 | ||||||||||||
| Operating return on average assets | ||||||||||||||||||||||
| Net income | $ | 70,871 | $ | 69,989 | $ | 64,288 | $ | 61,887 | $ | 75,583 | ||||||||||||
| Plus: Core deposit intangible amortization, net of tax | 406 | — | — | — | — | |||||||||||||||||
| Plus: Merger-related expenses, net of tax | 5,535 | 811 | 317 | — | — | |||||||||||||||||
| Plus: CECL day 1 provision expense, net of tax | 6,283 | — | — | — | — | |||||||||||||||||
| Operating net income (numerator) | $ | 83,095 | $ | 70,800 | $ | 64,605 | $ | 61,887 | $ | 75,583 | ||||||||||||
| Total average assets (denominator) | $ | 26,357,095 | $ | 25,578,432 | $ | 25,622,462 | $ | 26,136,536 | $ | 26,440,876 | ||||||||||||
| Operating return on average assets, annualized | 1.25% | 1.11% | 1.02% | 0.94% | 1.13% | |||||||||||||||||
| Return on average common shareholders' equity (tangible) | ||||||||||||||||||||||
| Net income available to common shareholders | $ | 68,309 | $ | 67,427 | $ | 61,726 | $ | 59,325 | $ | 73,021 | ||||||||||||
| Plus: Merger-related expenses, net of tax | 5,535 | 811 | 317 | — | — | |||||||||||||||||
| Plus: CECL day 1 provision expense, net of tax | 6,283 | — | — | — | — | |||||||||||||||||
| Plus: Intangible amortization, net of tax | 545 | 140 | 138 | 114 | 118 | |||||||||||||||||
| Operating net income available to common shareholders (numerator) | $ | 80,672 | $ | 68,378 | $ | 62,181 | $ | 59,439 | $ | 73,139 | ||||||||||||
| Average shareholders' equity | $ | 2,604,057 | $ | 2,531,346 | $ | 2,688,834 | $ | 2,713,198 | $ | 2,722,833 | ||||||||||||
| Less: Average preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||
| Less: Average goodwill and intangible assets | (562,285) | (537,786) | (537,976) | (536,638) | (536,772) | |||||||||||||||||
| Average tangible common shareholders' equity (denominator) | $ | 1,848,894 | $ | 1,800,682 | $ | 1,957,980 | $ | 1,983,682 | $ | 1,993,183 | ||||||||||||
| Return on average common shareholders' equity (tangible), annualized | 17.31% | 15.23% | 12.88% | 11.89% | 14.56% | |||||||||||||||||
| Three months ended | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||
| Tangible common equity to tangible assets (TCE Ratio) | ||||||||||||||||||||||
| Shareholders' equity | $ | 2,471,159 | $ | 2,471,093 | $ | 2,569,535 | $ | 2,712,680 | $ | 2,699,818 | ||||||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||
| Less: Goodwill and intangible assets | (561,495) | (537,700) | (537,877) | (538,053) | (536,697) | |||||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 1,716,786 | $ | 1,740,515 | $ | 1,838,780 | $ | 1,981,749 | $ | 1,970,243 | ||||||||||||
| Total assets | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | $ | 25,796,398 | $ | 26,390,832 | ||||||||||||
| Less: Goodwill and intangible assets | (561,495) | (537,700) | (537,877) | (538,053) | (536,697) | |||||||||||||||||
| Total tangible assets (denominator) | $ | 25,584,547 | $ | 24,714,986 | $ | 25,060,433 | $ | 25,258,345 | $ | 25,854,135 | ||||||||||||
| Tangible common equity to tangible assets | 6.71% | 7.04% | 7.34% | 7.85% | 7.62% | |||||||||||||||||
| Tangible common equity to tangible assets (TCE Ratio) excluding AOCI | ||||||||||||||||||||||
| Shareholders' equity | $ | 2,471,159 | $ | 2,471,093 | $ | 2,569,535 | $ | 2,712,680 | $ | 2,699,818 | ||||||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||
| Less: Accumulated other comprehensive income (loss) | (442,947) | (304,210) | (158,855) | 27,411 | 25,615 | |||||||||||||||||
| Less: Goodwill and intangible assets | (561,495) | (537,700) | (537,877) | (538,053) | (536,697) | |||||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 2,159,733 | $ | 2,044,725 | $ | 1,997,635 | $ | 1,954,338 | $ | 1,944,628 | ||||||||||||
| Total assets | $ | 26,146,042 | $ | 25,252,686 | $ | 25,598,310 | $ | 25,796,398 | $ | 26,390,832 | ||||||||||||
| Less: Goodwill and intangible assets | (561,495) | (537,700) | (537,877) | (538,053) | (536,697) | |||||||||||||||||
| Plus: AOCI - unrealized losses/(gains) on AFS investments securities | 368,196 | 249,424 | 112,965 | (40,444) | (41,787) | |||||||||||||||||
| Total tangible assets (denominator) | $ | 25,952,743 | $ | 24,964,410 | $ | 25,173,398 | $ | 25,217,901 | $ | 25,812,348 | ||||||||||||
| Tangible common equity to tangible assets, excluding AOCI | 8.32% | 8.19% | 7.94% | 7.75% | 7.53% | |||||||||||||||||
| Efficiency ratio | ||||||||||||||||||||||
| Non-interest expense | $ | 169,558 | $ | 149,730 | $ | 145,978 | $ | 154,019 | $ | 144,596 | ||||||||||||
| Less: Amortization of tax credit investments | (696) | (696) | (696) | (1,547) | (1,546) | |||||||||||||||||
| Less: Merger-related expenses | (7,006) | (1,027) | (401) | — | — | |||||||||||||||||
| Less: Intangible amortization | (690) | (177) | (176) | (146) | (150) | |||||||||||||||||
| Less: Debt extinguishment costs | — | — | — | (674) | — | |||||||||||||||||
| Non-interest expense (numerator) | $ | 161,166 | $ | 147,830 | $ | 144,705 | $ | 151,652 | $ | 142,900 | ||||||||||||
| Net interest income | $ | 215,582 | $ | 178,831 | $ | 161,310 | $ | 165,613 | $ | 171,270 | ||||||||||||
| Tax equivalent adjustment | 3,970 | 3,427 | 3,288 | 3,184 | 3,114 | |||||||||||||||||
| Plus: Total non-interest income | 59,162 | 58,391 | 55,256 | 63,881 | 62,577 | |||||||||||||||||
| Less: Investment securities (gains) losses, net | 53 | (8) | (19) | (5) | — | |||||||||||||||||
| Total revenue (denominator) | $ | 278,767 | $ | 240,641 | $ | 219,835 | $ | 232,673 | $ | 236,961 | ||||||||||||
| Efficiency ratio | 57.8% | 61.4% | 65.8% | 65.2% | 60.3% | |||||||||||||||||
| Operating non-interest expenses to total average assets (annualized) | ||||||||||||||||||||||
| Non-interest expense | $ | 169,558 | $ | 149,730 | $ | 145,978 | $ | 154,019 | $ | 144,596 | ||||||||||||
| Less: Amortization of tax credit investments | (696) | (696) | (696) | (1,547) | (1,546) | |||||||||||||||||
| Less: Intangible amortization | (690) | (177) | (176) | (146) | (150) | |||||||||||||||||
| Less: Merger-related expenses | (7,006) | (1,027) | (401) | — | — | |||||||||||||||||
| Less: Debt extinguishment costs | — | — | — | (674) | — | |||||||||||||||||
| Non-interest expense (numerator) | $ | 161,166 | $ | 147,830 | $ | 144,705 | $ | 151,652 | $ | 142,900 | ||||||||||||
| Total average assets (denominator) | $ | 26,357,095 | $ | 25,578,432 | $ | 25,622,462 | $ | 26,136,536 | $ | 26,440,876 | ||||||||||||
| Operating non-interest expenses to total average assets, (annualized) | 2.43% | 2.32% | 2.29% | 2.30% | 2.14% | |||||||||||||||||
| Three months ended | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||
| 2022 | 2022 | 2022 | 2021 | 2021 | ||||||||||||||||||
| Asset Quality, excluding PPP | ||||||||||||||||||||||
| Net loans recovered (charged-off) (numerator) | $ | (452) | $ | 3,749 | $ | 1,054 | $ | (2,976) | $ | 2,305 | ||||||||||||
| Average net loans | $ | 19,563,825 | $ | 18,637,175 | $ | 18,383,118 | $ | 18,220,550 | $ | 18,414,153 | ||||||||||||
| Less: Average PPP loans | (49,174) | (114,849) | (226,114) | (435,042) | (850,618) | |||||||||||||||||
| Total adjusted average loans (denominator) | $ | 19,514,651 | $ | 18,522,326 | $ | 18,157,004 | $ | 17,785,508 | $ | 17,563,535 | ||||||||||||
| Net charge-offs (recoveries) to adjusted average loans (annualized) | 0.01% | (0.08)% | (0.02)% | 0.07% | (0.05)% | |||||||||||||||||
| Non-performing loans (numerator) | $ | 192,763 | $ | 173,546 | $ | 160,981 | $ | 152,119 | $ | 150,222 | ||||||||||||
| Net loans | $ | 19,695,199 | $ | 18,920,950 | $ | 18,476,119 | $ | 18,325,350 | $ | 18,269,407 | ||||||||||||
| Less: PPP loans | (32,090) | (72,423) | (164,277) | (301,253) | (590,447) | |||||||||||||||||
| Total adjusted loans (denominator) | $ | 19,663,109 | $ | 18,848,527 | $ | 18,311,842 | $ | 18,024,097 | $ | 17,678,960 | ||||||||||||
| Non-performing loans to total adjusted loans | 0.98% | 0.92% | 0.88% | 0.84% | 0.85% | |||||||||||||||||
| ACL - loans (numerator) | $ | 266,838 | $ | 248,564 | $ | 243,705 | $ | 249,001 | $ | 256,727 | ||||||||||||
| Net loans | $ | 19,695,199 | $ | 18,920,950 | $ | 18,476,119 | $ | 18,325,350 | $ | 18,269,407 | ||||||||||||
| Less: PPP loans | (32,090) | (72,423) | (164,277) | (301,253) | (590,447) | |||||||||||||||||
| Total adjusted loans (denominator) | $ | 19,663,109 | $ | 18,848,527 | $ | 18,311,842 | $ | 18,024,097 | $ | 17,678,960 | ||||||||||||
| ACL - loans to total adjusted loans | 1.36% | 1.32% | 1.33% | 1.38% | 1.45% | |||||||||||||||||
| Pre-provision net revenue | ||||||||||||||||||||||
| Net interest income | $ | 215,582 | $ | 178,831 | $ | 161,310 | $ | 165,613 | $ | 171,270 | ||||||||||||
| Non-interest income | 59,162 | 58,391 | 55,256 | 63,881 | 62,577 | |||||||||||||||||
| Less: Investment securities (gains) losses, net | 53 | (8) | (19) | (5) | — | |||||||||||||||||
| Total revenue | $ | 274,797 | $ | 237,214 | $ | 216,547 | $ | 229,489 | $ | 233,847 | ||||||||||||
| Non-interest expense | $ | 169,558 | $ | 149,730 | $ | 145,978 | $ | 154,019 | $ | 144,596 | ||||||||||||
| Less: Amortization on tax credit investments | (696) | (696) | (696) | (1,547) | (1,546) | |||||||||||||||||
| Less: Merger-related expenses | (7,006) | (1,027) | (401) | — | — | |||||||||||||||||
| Less: Intangible amortization | (690) | (177) | (176) | (146) | (150) | |||||||||||||||||
| Less: Debt extinguishment | — | — | — | (674) | — | |||||||||||||||||
| Total non-interest expense | $ | 161,166 | $ | 147,830 | $ | 144,705 | $ | 151,652 | $ | 142,900 | ||||||||||||
| Pre-provision net revenue | $ | 113,631 | $ | 89,384 | $ | 71,842 | $ | 77,837 | $ | 90,947 | ||||||||||||
| Note: numbers may not sum due to rounding. |
18
exhibit99293022earningsc
THIRD QUARTER 2022 RESULTS NASDAQ: FULT Data as of or for the period ended September 30, 2022 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 "2022 Outlook "contained herein is comprised of forward-looking statements. Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation’s actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission (the "SEC") and are or will be available in the Investor Relations section of the Corporation’s website (www.fultonbank.com) and on the SEC’s website (www.sec.gov). The Corporation uses certain financial measures in this presentation that have been derived by methods other than Generally Accepted Accounting Principles ("GAAP"). These non-GAAP financial measures are reconciled to the most comparable GAAP measures at the end of this presentation. FORWARD-LOOKING STATEMENTS 2
(1) Non-GAAP financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. INCOME STATEMENT SUMMARY 3 3Q22 2Q22 3Q21 (dollars in thousands, except per-share data) Net Interest Income $215,582 $178,831 $171,270 Provision for Credit Losses 18,958 1,500 (600) Non-Interest Income 59,215 58,383 62,577 Securities Gains (53) 8 — Non-Interest Expense 162,552 148,703 144,596 Merger-Related Expenses 7,006 1,027 — Income before Income Taxes 86,228 85,992 89,851 Income Taxes 15,357 16,003 14,268 Net Income 70,871 69,989 75,583 Preferred Stock Dividends (2,562) (2,562) (2,562) Net Income Available to Common Shareholders $68,309 $67,427 $73,021 Net income available to common shareholders, per share (diluted) $0.40 $0.42 $0.45 Operating net income available to common shareholders, per share (diluted)(1) $0.48 $0.42 $0.45 ROAA 1.07% 1.10% 1.13% Operating ROAA(1) 1.25% 1.11% 1.13% ROAE 11.24% 11.57% 11.45% ROAE (tangible)(1) 17.31% 15.23% 14.56% Efficiency ratio(1) 57.8% 61.4% 60.3%
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields Average Deposits and Borrowings & Cost of Funds ($ IN MILLIONS) ($ IN BILLIONS) ($ IN BILLIONS) 4 $22 $22 $21 $22 $22 $1 $1 $1 $1 $1 0.22% 0.21% 0.21% 0.20% 0.31% 0.12% 0.11% 0.11% 0.11% 0.18% Cost of Deposits Cost of Funds Borrowings Deposits 3Q21 4Q21 1Q22 2Q22 3Q22 $0 $5 $10 $15 $20 $25 0.00% 0.20% 0.40% 0.60% $171 $166 $161 $179 $216 2.82% 2.77% 2.78% 3.04% 3.54% Net Interest Income Net Interest Margin (Fully-taxable equivalent basis, or FTE) 3Q21 4Q21 1Q22 2Q22 3Q22 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% $18 $18 $18 $19 $20 $6 $6 $6 $5 $5 3.03% 2.96% 2.98% 3.24% 3.83% Loans Securities & Other Interest-Earning Asset Yield (FTE) 3Q21 4Q21 1Q22 2Q22 3Q22 $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. $(1) $(5) $(7) $2 $19 3Q21 4Q21 1Q22 2Q22 3Q22 $(10) $(5) $— $5 $10 $15 $20 $150 $152 $161 $174 $193 0.82% 0.83% 0.87% 0.92% 0.98% NPL NPLs/Loans 3Q21 4Q21 1Q22 2Q22 3Q22 $100 $125 $150 $175 $200 0.00% 0.50% 1.00% $(2) $3 $(1) $(4) $0 -0.05% 0.07% -0.02% -0.08% 0.01% Net charge-offs/(recoveries) NCOs/Average Loans (annualized) 3Q21 4Q21 1Q22 2Q22 3Q22 $0 $10 $20 $30 $40 (1.00)% (0.50)% 0.00% 0.50% 1.00% 171% 164% 151% 143% 138% 1.45% 1.38% 1.33% 1.32% 1.36% 1.41% 1.36% 1.32% 1.31% 1.35% ACL/NPLs ACL/Loans excl PPP(2) ACL/Loans 3Q21 4Q21 1Q22 2Q22 3Q22 50% 75% 100% 125% 150% 175% 200% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% 2.25%
NON-INTEREST INCOME(1) (1) Excluding investment securities gains Three months ended September 30, 2022 (percent of total non-interest income) 6 Non-interest income increased 1% from 2Q22(1) Increases in: n Commercial banking merchant and card income and cash management fees. n Consumer banking overdraft and debit card fees. Decreases in: n Wealth management revenues due to a decline in the market value of assets under management. 30% 6% 23% 35% 6% Wealth Management Mortgage Banking Consumer Banking Commercial Banking Other 3Q22 2Q22 Change (dollars in thousands) n Commercial Banking $20,808 $20,359 $449 n Wealth Management 17,610 18,274 (664) n Consumer Banking 13,275 12,472 803 n Mortgage Banking 3,720 3,768 (48) n Other 3,802 3,510 292 Total $59,215 $58,383 $832
NON-INTEREST EXPENSE(1) Three months ended September 30, 2022 (percent of total non-interest expense) 7 57% 9% 10% 6% 18% Salaries and Benefits Occupancy Data Processing and Software Other Outside Services Other 3Q22 2Q22 Change (dollars in thousands) n Salaries and Benefits $94,283 $85,404 $8,879 n Data Processing and Software 15,807 14,685 1,122 n Occupancy 14,025 13,587 438 n Other Outside Services 9,361 8,764 597 n Other 29,076 26,263 2,813 Total $162,552 $148,703 $13,849 Non-interest expense, excluding merger-related expenses, increased 9% from 2Q22 Driven primarily by: n Salaries and benefits primarily as a result of additional performance-based accruals of $2.6 million and a full-quarter of Prudential Bancorp salaries and benefits costs of approximately $2.0 million. The total impact on non-interest expense from Prudential Bancorp for the third quarter of 2022 was $3.6 million. n Other expense primarily due to an $0.8 million increase in charitable contributions expense due to a $1.0 million contribution made to the Fulton Forward Foundation in the third quarter of 2022. n Data processing and software and other outside services primarily driven by investments made in technology and system solutions of $1.7 million. . (1) Excluding merger-related expenses
CAPITAL POSITION REMAINS STRONG(1) 8 1. Regulatory capital ratios and excess capital amounts as of September 30, 2022 are preliminary. 2. Excesses shown are to regulatory minimums, including the 250 basis point capital conservation buffer, except for Tier 1 Leverage which is the well-capitalized minimum. 9.3% 10.0% 10.9% 13.7% Regulatory Minimums Excess(2) Tier 1 Leverage CE Tier 1 Tier 1 Risk-Based Total Risk-Based —% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% $1,096 $527 $661 $697 (as of September 30, 2022) ($ in millions)
2022 OUTLOOK(4) 9 Net interest income: $770 - $780 million(1) Non-interest income: $225 - $230 million(2) Non-interest expense: $615 - $620 million(3) Effective tax rate: 18.0% +/- (1) Assumes Fed Funds Rate increases of: 75 bps in November 2022 and 50 bps in December 2022. Updated as of 3Q 2022; previously $745 - $760 million. (2) Excludes investment securities gains. Updated as of 3Q 2022; previously $220 - $230 million. (3) Updated as of 3Q 2022; previously $600 - $610 million. (4) Incorporates impact of the acquisition of Prudential Bancorp, Inc. on July 1, 2022. Non-interest expense excludes merger-related costs of $17.0 million to $18.0 million.
NON-GAAP RECONCILIATION 10 Note: The Corporation has presented the following non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Three months ended (dollars in thousands) Sep 30 Jun 30 Sep 30 2022 2022 2021 Operating net income available to common shareholders Net income available to common shareholders $68,309 $67,427 $73,021 Plus: Core deposit intangible amortization, net of tax 406 — — Plus: Merger-related expenses, net of tax 5,535 811 — Plus: CECL day 1 provision expense, net of tax 6,283 — — Operating net income available to common shareholders (numerator) $80,533 $68,238 $73,021 Weighted average shares (diluted) (denominator) 168,781 162,075 163,456 Operating net income available to common shareholders, per share (diluted) $0.48 $0.42 $0.45
NON-GAAP RECONCILIATION 11 (dollars in thousands) Three months ended Sep 30 Jun 30 Sep 30 2022 2022 2021 Operating return on average assets Net income $70,871 $69,989 $75,583 Plus: Core deposit intangible amortization, net of tax 406 — — Plus: Merger-related expenses, net of tax 5,535 811 — Plus: CECL day 1 provision expense, net of tax 6,283 — — Operating net income (numerator) $83,095 $70,800 $75,583 Total average assets (denominator) $26,357,095 $25,578,432 $26,440,876 Operating return on average assets, annualized 1.25 % 1.11 % 1.13 %
NON-GAAP RECONCILIATION 12 Three months ended (dollars in thousands) Sep 30 Jun 30 Sep 30 2022 2022 2021 Return on average common shareholders' equity (tangible) Net income available to common shareholders $68,309 $67,427 $73,021 Plus: Merger-related expenses, net of tax 5,535 811 — Plus: Intangible amortization, net of tax 545 140 118 Plus: CECL day 1 provision expense, net of tax 6,283 — — Operating net income available to common shareholders (numerator) $80,672 $68,378 $73,139 Average shareholders' equity $2,604,057 $2,531,346 $2,722,833 Less: Average preferred stock (192,878) (192,878) (192,878) Less: Average goodwill and intangible assets (562,285) (537,786) (536,772) Average tangible common shareholders' equity (denominator) $1,848,894 $1,800,682 $1,993,183 Return on average common shareholders' equity (tangible), annualized 17.31 % 15.23 % 14.56 %
NON-GAAP RECONCILIATION 13 (dollars in thousands) Three months ended Sep 30 Jun 30 Sep 30 Efficiency ratio 2022 2022 2021 Non-interest expense $169,558 $149,730 $144,596 Less: Amortization of tax credit investments (696) (696) (1,546) Less: Intangible amortization (690) (177) (150) Less: Merger-related expenses (7,006) (1,027) — Non-interest expense (numerator) $161,166 $147,830 $142,900 Net interest income $215,582 $178,831 $171,270 Tax equivalent adjustment 3,970 3,427 3,114 Plus: Total non-interest income 59,162 58,391 62,577 Less: Investment securities (gains) losses, net 53 (8) — Total revenue (denominator) $278,767 $240,641 $236,961 Efficiency ratio 57.8% 61.4% 60.3% Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Asset Quality, excluding PPP 2022 2022 2022 2021 2021 ACL - loans (numerator) $266,838 $248,564 $243,705 $249,001 $256,727 Net loans $19,695,199 $18,920,950 $18,476,119 $18,325,350 $18,269,407 Less: PPP loans (32,090) (72,423) (164,277) (301,253) (590,447) Total adjusted loans (denominator) $19,663,109 $18,848,527 $18,311,842 $18,024,097 $17,678,960 ACL - loans to total adjusted loans 1.36% 1.32% 1.33% 1.38% 1.45%