LANCASTER, Pa.--(BUSINESS WIRE)--Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income of $65.6 million, or $0.37 per diluted share, for the third quarter of 2018, and net income of $150.3 million, or $0.85 per diluted share, for the nine months ended September 30, 2018.
"Overall, we were pleased with our third quarter financial performance as earnings reached an all-time high,” said E. Philip Wenger, Chairman and CEO. “I’m proud of our team’s continued focus on our corporate objectives, which allowed us to drive shareholder value.”
Net income per diluted share increased 85.0% in comparison to the $0.20 reported for the second quarter of 2018 and 32.1% from the third quarter of 2017. Net income for the second quarter of 2018 included a credit loss arising from a single, large commercial lending relationship (“Commercial Relationship”). The provision for credit losses recorded in the second quarter of 2018 for this Commercial Relationship was $36.8 million, or $29.1 million, net of tax. This loss equated to approximately $0.16 per diluted share.
Balance Sheet
Total average assets for the third quarter of 2018 were $20.3 billion, an increase of $209.9 million from the second quarter of 2018. Average loans, net of unearned income, increased $93.8 million in comparison to the second quarter of 2018. Average loans and yields, by type, for the third quarter of 2018 in comparison to the second quarter of 2018 are summarized in the following table:
Three Months Ended | ||||||||||||||||||||
September 30, 2018 | June 30, 2018 | Increase (Decrease) | ||||||||||||||||||
Balance | Yield (1) | Balance | Yield (1) | $ | % | |||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
Average Loans, net of unearned income, by type: | ||||||||||||||||||||
Real estate - commercial mortgage | $ | 6,309,663 | 4.46 | % | $ | 6,298,534 | 4.34 | % | $ | 11,129 | 0.2 | % | ||||||||
Commercial - industrial, financial and agricultural | 4,304,320 | 4.36 | % | 4,335,097 | 4.27 | % | (30,777 | ) | (0.7 | %) | ||||||||||
Real estate - residential mortgage | 2,142,977 | 3.96 | % | 2,026,161 | 3.89 | % | 116,816 | 5.8 | % | |||||||||||
Real estate - home equity | 1,474,011 | 4.99 | % | 1,502,936 | 4.83 | % | (28,925 | ) | (1.9 | %) | ||||||||||
Real estate - construction | 969,575 | 4.58 | % | 978,327 | 4.40 | % | (8,752 | ) | (0.9 | %) | ||||||||||
Consumer | 375,656 | 4.50 | % | 345,572 | 4.43 | % | 30,084 | 8.7 | % | |||||||||||
Leasing | 276,456 | 4.66 | % | 272,298 | 4.59 | % | 4,158 | 1.5 | % | |||||||||||
Other | 9,485 | N/A | 9,452 | N/A | 33 | 0.3 | % | |||||||||||||
Total Average Loans, net of unearned income | $ | 15,862,143 | 4.44 | % | $ | 15,768,377 | 4.32 | % | $ | 93,766 | 0.6 | % |
(1) Presented on a fully-taxable equivalent basis using a 21% Federal tax rate and statutory interest expense disallowances for the three months ended September 30, 2018 and June 30, 2018.
Average deposits increased $449.8 million in comparison to the second quarter of 2018. Average deposits and interest rates, by type, for the third quarter of 2018 in comparison to the second quarter of 2018 are summarized in the following table:
Three Months Ended | |||||||||||||||||||
September 30, 2018 | June 30, 2018 | Increase | |||||||||||||||||
Balance | Rate | Balance | Rate | $ | % | ||||||||||||||
(dollars in thousands) | |||||||||||||||||||
Average Deposits, by type: | |||||||||||||||||||
Noninterest-bearing demand | $ | 4,298,020 | - | % | $ | 4,281,574 | - | % | $ | 16,446 | 0.4 | % | |||||||
Interest-bearing demand | 4,116,051 | 0.61 | % | 3,952,115 | 0.50 | % | 163,936 | 4.1 | % | ||||||||||
Savings and money market deposits | 4,718,148 | 0.64 | % | 4,538,083 | 0.49 | % | 180,065 | 4.0 | % | ||||||||||
Total average demand and savings | 13,132,219 | 0.42 | % | 12,771,772 | 0.34 | % | 360,447 | 2.8 | % | ||||||||||
Brokered deposits | 162,467 | 2.05 | % | 85,242 | 1.87 | % | 77,225 | 90.6 | % | ||||||||||
Time deposits | 2,672,548 | 1.34 | % | 2,660,410 | 1.26 | % | 12,138 | 0.5 | % | ||||||||||
Total Average Deposits | $ | 15,967,234 | 0.59 | % | $ | 15,517,424 | 0.50 | % | $ | 449,810 | 2.9 | % | |||||||
Asset Quality
Non-performing assets were $130.8 million, or 0.64% of total assets, at September 30, 2018, compared to $134.9 million, or 0.67% of total assets, at June 30, 2018.
Annualized net charge-offs for the quarter ended September 30, 2018 were 0.08% of total average loans compared to 1.01% for the quarter ended June 30, 2018. The second quarter of 2018 net charge-offs included a $33.9 million charge-off, or 0.86% of total average loans on an annualized basis, related to the Commercial Relationship. The allowance for credit losses as a percentage of non-performing loans was 140% at September 30, 2018 compared to 137% for the quarter ended June 30, 2018.
During the third quarter of 2018, Fulton recorded a $1.6 million provision for credit losses, compared to $33.1 million in the second quarter of 2018.
Net Interest Income and Margin
Net interest income for the third quarter of 2018 was $160.1 million, an increase of $4.1 million, or 2.6%, from the second quarter of 2018. This increase was driven by the aforementioned growth in loans and deposits and a three basis point increase in the net interest margin, to 3.42%. The improvement in the net interest margin resulted from a nine basis point increase in the average yield on interest-earning assets outpacing a seven basis point increase in the average cost of funds.
Non-interest Income
Non-interest income in the third quarter of 2018, excluding investment securities gains, was $51.0 million, an increase of $1.9 million, or 3.9%, in comparison to the second quarter of 2018. For the third quarter of 2018, other service charges and fees increased $1.8 million, or 12.9%, due primarily to higher commercial loan interest rate swap fees and debit card income.
Non-interest Expense
Non-interest expense was $135.4 million in the third quarter of 2018, an increase of $2.1 million, or 1.6%, compared to the second quarter of 2018. This increase was primarily due to a $1.9 million increase in salaries and employee benefits resulting from higher incentive compensation and health insurance costs, a $1.6 million increase in other outside services related to charter consolidation activities and a $1.1 million increase in professional fees. These increases were partially offset by a $0.4 million decrease in equipment expense and a $2.0 million decrease in other expenses, as a result of lower other real estate owned and operating risk loss expense.
Income Tax Expense
The effective income tax rate for the third quarter of 2018 was 11.5%, as compared to 9.0% for the second quarter of 2018. The increase in the effective income tax rate resulted from higher income before income taxes.
Additional information on Fulton is available on the Internet at www.fult.com.
Safe Harbor Statement
This news release may contain forward-looking statements with respect to the Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results.
Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, they are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements related 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, 2017 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2018 and June 30, 2018, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov).
Non-GAAP Financial Measures
The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.
FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) | ||||||||||||||||||||||
in thousands, except per-share data and percentages | ||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | ||||||||||||||||||
Ending Balances |
||||||||||||||||||||||
Investments | $ | 2,635,413 | $ | 2,593,283 | $ | 2,592,823 | $ | 2,547,956 | $ | 2,561,516 | ||||||||||||
Loans, net of unearned income | 15,925,093 | 15,792,969 | 15,696,284 | 15,768,247 | 15,486,899 | |||||||||||||||||
Total assets | 20,364,810 | 20,172,539 | 19,948,941 | 20,036,905 | 20,062,860 | |||||||||||||||||
Deposits | 16,249,014 | 15,599,799 | 15,477,103 | 15,797,532 | 16,141,780 | |||||||||||||||||
Shareholders' equity | 2,283,014 | 2,245,785 | 2,235,493 | 2,229,857 | 2,225,786 | |||||||||||||||||
Average Balances |
||||||||||||||||||||||
Investments | $ | 2,596,414 | $ | 2,601,705 | $ | 2,556,986 | $ | 2,566,337 | $ | 2,523,758 | ||||||||||||
Loans, net of unearned income | 15,862,143 | 15,768,377 | 15,661,032 | 15,560,185 | 15,392,067 | |||||||||||||||||
Total assets | 20,273,232 | 20,063,375 | 19,876,093 | 20,072,579 | 19,872,726 | |||||||||||||||||
Deposits | 15,967,234 | 15,517,424 | 15,420,312 | 16,056,789 | 15,875,469 | |||||||||||||||||
Shareholders' equity | 2,269,093 | 2,246,904 | 2,224,615 | 2,237,031 | 2,215,389 | |||||||||||||||||
Income Statement |
||||||||||||||||||||||
Net interest income | $ | 160,127 | $ | 156,067 | $ | 151,318 | $ | 149,413 | $ | 146,809 | ||||||||||||
Provision for credit losses | 1,620 | 33,117 | 3,970 | 6,730 | 5,075 | |||||||||||||||||
Non-interest income | 51,033 | 49,094 | 45,875 | 56,956 | 51,974 | |||||||||||||||||
Non-interest expense | 135,413 | 133,345 | 136,661 | 138,452 | 132,157 | |||||||||||||||||
Income before taxes | 74,127 | 38,699 | 56,562 | 61,187 | 61,551 | |||||||||||||||||
Net income | 65,633 | 35,197 | 49,480 | 34,001 | 48,905 | |||||||||||||||||
Pre-provision net revenue(1) | 77,370 | 73,449 | 62,150 | 69,361 | 65,532 | |||||||||||||||||
Per Share |
||||||||||||||||||||||
Net income (basic) | $ | 0.37 | $ | 0.20 | $ | 0.28 | $ | 0.19 | $ | 0.28 | ||||||||||||
Net income (diluted) | 0.37 | 0.20 | 0.28 | 0.19 | 0.28 | |||||||||||||||||
Cash dividends | 0.12 | 0.12 | 0.12 | 0.14 | 0.11 | |||||||||||||||||
Tangible common equity(1) | 9.95 | 9.75 | 9.71 | 9.70 | 9.68 | |||||||||||||||||
Weighted average shares (basic) | 175,942 | 175,764 | 175,303 | 175,132 | 174,991 | |||||||||||||||||
Weighted average shares (diluted) | 177,128 | 176,844 | 176,568 | 176,374 | 176,216 | |||||||||||||||||
Asset Quality |
||||||||||||||||||||||
Net charge-offs to average loans (annualized) | 0.08 | % | 1.01 | % | 0.10 | % | 0.14 | % | 0.14 | % | ||||||||||||
Non-performing loans to total loans | 0.75 | % | 0.78 | % | 0.86 | % | 0.85 | % | 0.88 | % | ||||||||||||
Non-performing assets to total assets | 0.64 | % | 0.67 | % | 0.73 | % | 0.72 | % | 0.73 | % | ||||||||||||
Allowance for credit losses to loans outstanding | 1.05 | % | 1.07 | % | 1.12 | % | 1.12 | % | 1.13 | % | ||||||||||||
Allowance for loan losses to loans outstanding | 0.99 | % | 0.99 | % | 1.04 | % | 1.08 | % | 1.11 | % | ||||||||||||
Allowance for credit losses to non-performing loans | 139.74 | % | 136.77 | % | 130.73 | % | 130.67 | % | 128.05 | % | ||||||||||||
Allowance for loan losses to non-performing loans | 131.40 | % | 126.11 | % | 121.22 | % | 126.08 | % | 126.22 | % | ||||||||||||
Non-performing assets to tangible shareholders' equity
and allowance for credit losses(1) |
6.81 | % | 7.16 | % | 7.73 | % | 7.71 | % | 7.87 | % | ||||||||||||
Total delinquency rate | 1.15 | % | 1.18 | % | 1.19 | % | 1.24 | % | 1.28 | % | ||||||||||||
Profitability |
||||||||||||||||||||||
Return on average assets | 1.28 | % | 0.70 | % | 1.01 | % | 0.67 | % | 0.98 | % | ||||||||||||
Return on average shareholders' equity | 11.48 | % | 6.28 | % | 9.02 | % | 6.03 | % | 8.76 | % | ||||||||||||
Return on average shareholders' equity (tangible)(1) | 14.99 | % | 8.23 | % | 11.85 | % | 7.91 | % | 11.52 | % | ||||||||||||
Net interest margin | 3.42 | % | 3.39 | % | 3.35 | % | 3.29 | % | 3.27 | % | ||||||||||||
Efficiency ratio(1) | 62.5 | % | 63.3 | % | 67.5 | % | 64.2 | % | 64.3 | % | ||||||||||||
Capital Ratios |
||||||||||||||||||||||
Tangible common equity ratio(1) | 8.83 | % | 8.73 | % | 8.78 | % | 8.71 | % | 8.67 | % | ||||||||||||
Tier 1 leverage ratio(2) | 9.30 | % | 9.20 | % | 9.20 | % | 8.93 | % | 8.97 | % | ||||||||||||
Common equity Tier 1 capital ratio(2) | 10.70 | % | 10.60 | % | 10.70 | % | 10.38 | % | 10.42 | % | ||||||||||||
Tier 1 capital ratio(2) | 10.70 | % | 10.60 | % | 10.70 | % | 10.38 | % | 10.42 | % | ||||||||||||
Total risk-based capital ratio(2) | 13.25 | % | 13.20 | % | 13.30 | % | 13.02 | % | 13.09 | % | ||||||||||||
Financial information, as adjusted (3): |
||||||||||||||||||||||
Net income | $ | 49,635 | ||||||||||||||||||||
Net income per share, diluted | $ | 0.28 | ||||||||||||||||||||
Return on average assets | 0.98 | % | ||||||||||||||||||||
Return on average shareholders' equity | 8.80 | % | ||||||||||||||||||||
Return on average shareholders' equity (tangible) | 11.55 | % |
(1) Please refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this document. |
(2) Regulatory capital ratios as of September 30, 2018 are preliminary and remaining periods are actual. |
(3)Excluding the re-measurement of net deferred tax assets of $15.6 million, which is considered a Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the page titled “Reconciliation of Non-GAAP Measures" at the end of this document. |
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 | ||||||||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||
Cash and due from banks | $ | 90,361 | $ | 99,742 | $ | 100,151 | $ | 108,291 | $ | 99,803 | -9.4 | % | -9.5 | % | ||||||||||||||
Other interest-earning assets | 388,256 | 364,802 | 267,806 | 354,566 | 645,796 | 6.4 | % | -39.9 | % | |||||||||||||||||||
Loans held for sale | 27,525 | 35,898 | 23,450 | 31,530 | 23,049 | -23.3 | % | 19.4 | % | |||||||||||||||||||
Investment securities | 2,635,413 | 2,593,283 | 2,592,823 | 2,547,956 | 2,561,516 | 1.6 | % | 2.9 | % | |||||||||||||||||||
Loans, net of unearned income | 15,925,093 | 15,792,969 | 15,696,284 | 15,768,247 | 15,486,899 | 0.8 | % | 2.8 | % | |||||||||||||||||||
Allowance for loan losses | (157,810 | ) | (156,050 | ) | (163,217 | ) | (169,910 | ) | (172,245 | ) | 1.1 | % | -8.4 | % | ||||||||||||||
Net loans | 15,767,283 | 15,636,919 | 15,533,067 | 15,598,337 | 15,314,654 | 0.8 | % | 3.0 | % | |||||||||||||||||||
Premises and equipment | 231,236 | 230,195 | 230,313 | 222,802 | 221,551 | 0.5 | % | 4.4 | % | |||||||||||||||||||
Accrued interest receivable | 58,584 | 55,208 | 53,060 | 52,910 | 50,082 | 6.1 | % | 17.0 | % | |||||||||||||||||||
Goodwill and intangible assets | 531,556 | 531,556 | 531,556 | 531,556 | 531,556 | 0.0 | % | 0.0 | % | |||||||||||||||||||
Other assets | 634,596 | 624,936 | 616,715 | 588,957 | 614,853 | 1.5 | % | 3.2 | % | |||||||||||||||||||
Total Assets | $ | 20,364,810 | $ | 20,172,539 | $ | 19,948,941 | $ | 20,036,905 | $ | 20,062,860 | 1.0 | % | 1.5 | % | ||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||||||||||||||||||
Deposits | $ | 16,249,014 | $ | 15,599,799 | $ | 15,477,103 | $ | 15,797,532 | $ | 16,141,780 | 4.2 | % | 0.7 | % | ||||||||||||||
Short-term borrowings | 485,565 | 983,833 | 937,852 | 617,524 | 298,751 | -50.6 | % | 62.5 | % | |||||||||||||||||||
Other liabilities | 355,102 | 351,174 | 359,994 | 353,646 | 358,384 | 1.1 | % | -0.9 | % | |||||||||||||||||||
FHLB advances and long-term debt | 992,115 | 991,948 | 938,499 | 1,038,346 | 1,038,159 | 0.0 | % | -4.4 | % | |||||||||||||||||||
Total Liabilities | 18,081,796 | 17,926,754 | 17,713,448 | 17,807,048 | 17,837,074 | 0.9 | % | 1.4 | % | |||||||||||||||||||
Shareholders' equity | 2,283,014 | 2,245,785 | 2,235,493 | 2,229,857 | 2,225,786 | 1.7 | % | 2.6 | % | |||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 20,364,810 | $ | 20,172,539 | $ | 19,948,941 | $ | 20,036,905 | $ | 20,062,860 | 1.0 | % | 1.5 | % | ||||||||||||||
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: |
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Loans, by type: | ||||||||||||||||||||||||||||
Real estate - commercial mortgage | $ | 6,337,984 | $ | 6,304,475 | $ | 6,332,508 | $ | 6,364,804 | $ | 6,275,140 | 0.5 | % | 1.0 | % | ||||||||||||||
Commercial - industrial, financial and agricultural | 4,288,823 | 4,264,602 | 4,299,072 | 4,300,297 | 4,223,075 | 0.6 | % | 1.6 | % | |||||||||||||||||||
Real estate - residential mortgage | 2,173,548 | 2,094,530 | 1,976,524 | 1,954,711 | 1,887,907 | 3.8 | % | 15.1 | % | |||||||||||||||||||
Real estate - home equity | 1,469,152 | 1,491,395 | 1,514,241 | 1,559,719 | 1,567,473 | -1.5 | % | -6.3 | % | |||||||||||||||||||
Real estate - construction | 979,857 | 990,705 | 976,131 | 1,006,935 | 973,108 | -1.1 | % | 0.7 | % | |||||||||||||||||||
Consumer | 390,708 | 360,315 | 326,766 | 313,783 | 302,448 | 8.4 | % | 29.2 | % | |||||||||||||||||||
Leasing and other | 285,021 | 286,947 | 271,042 | 267,998 | 257,748 | -0.7 | % | 10.6 | % | |||||||||||||||||||
Total Loans, net of unearned income | $ | 15,925,093 | $ | 15,792,969 | $ | 15,696,284 | $ | 15,768,247 | $ | 15,486,899 | 0.8 | % | 2.8 | % | ||||||||||||||
Deposits, by type: | ||||||||||||||||||||||||||||
Noninterest-bearing demand | $ | 4,216,064 | $ | 4,324,659 | $ | 4,291,821 | $ | 4,437,294 | $ | 4,363,915 | -2.5 | % | -3.4 | % | ||||||||||||||
Interest-bearing demand | 4,289,181 | 3,854,680 | 3,984,423 | 4,018,107 | 4,119,419 | 11.3 | % | 4.1 | % | |||||||||||||||||||
Savings and money market accounts | 4,878,982 | 4,597,510 | 4,487,277 | 4,586,746 | 4,790,985 | 6.1 | % | 1.8 | % | |||||||||||||||||||
Total demand and savings | 13,384,227 | 12,776,849 | 12,763,521 | 13,042,147 | 13,274,319 | 4.8 | % | 0.8 | % | |||||||||||||||||||
Brokered deposits | 164,601 | 161,447 | 64,195 | 90,473 | 109,936 | 2.0 | % | 49.7 | % | |||||||||||||||||||
Time deposits | 2,700,186 | 2,661,503 | 2,649,387 | 2,664,912 | 2,757,525 | 1.5 | % | -2.1 | % | |||||||||||||||||||
Total Deposits | $ | 16,249,014 | $ | 15,599,799 | $ | 15,477,103 | $ | 15,797,532 | $ | 16,141,780 | 4.2 | % | 0.7 | % | ||||||||||||||
Short-term borrowings, by type: | ||||||||||||||||||||||||||||
Customer repurchase agreements | $ | 82,741 | $ | 152,594 | $ | 165,186 | $ | 172,017 | $ | 185,945 | -45.8 | % | -55.5 | % | ||||||||||||||
Customer short-term promissory notes | 267,824 | 303,239 | 342,666 | 225,507 | 106,994 | -11.7 | % | 150.3 | % | |||||||||||||||||||
Short-term FHLB advances | 85,000 | 185,000 | 35,000 | - | - | -54.1 | % | N/M | ||||||||||||||||||||
Federal funds purchased | 50,000 | 343,000 | 395,000 | 220,000 | 5,812 | -85.4 | % | N/M | ||||||||||||||||||||
Total Short-term Borrowings | $ | 485,565 | $ | 983,833 | $ | 937,852 | $ | 617,524 | $ | 298,751 | -50.6 | % | 62.5 | % | ||||||||||||||
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 | ||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | 2018 | 2017 | 2018 | 2017 | % Change | ||||||||||||||||||||||||
Interest Income: | |||||||||||||||||||||||||||||||||
Interest income | $ | 194,048 | $ | 186,170 | $ | 177,687 | $ | 174,987 | $ | 171,511 | 4.2 | % | 13.1 | % | $ | 557,905 | $ | 493,879 | 13.0 | % | |||||||||||||
Interest expense | 33,921 | 30,103 | 26,369 | 25,574 | 24,702 | 12.7 | % | 37.3 | % | 90,393 | 67,928 | 33.1 | % | ||||||||||||||||||||
Net Interest Income | 160,127 | 156,067 | 151,318 | 149,413 | 146,809 | 2.6 | % | 9.1 | % | 467,512 | 425,951 | 9.8 | % | ||||||||||||||||||||
Provision for credit losses | 1,620 | 33,117 | 3,970 | 6,730 | 5,075 | (95.1 | %) | (68.1 | %) | 38,707 | 16,575 | 133.5 | % | ||||||||||||||||||||
Net Interest Income after Provision | 158,507 | 122,950 | 147,348 | 142,683 | 141,734 | 28.9 | % | 11.8 | % | 428,805 | 409,376 | 4.7 | % | ||||||||||||||||||||
Non-Interest Income: | |||||||||||||||||||||||||||||||||
Other service charges and fees: | |||||||||||||||||||||||||||||||||
Merchant fees | 5,006 | 4,920 | 4,115 | 4,308 | 4,398 | 1.7 | % | 13.8 | % | 14,041 | 12,536 | 12.0 | % | ||||||||||||||||||||
Commercial loan interest rate swap fees | 3,607 | 2,393 | 1,291 | 2,914 | 1,954 | 50.7 | % | 84.6 | % | 7,291 | 8,780 | (17.0 | %) | ||||||||||||||||||||
Debit card income | 3,604 | 3,077 | 2,817 | 3,526 | 2,830 | 17.1 | % | 27.4 | % | 9,498 | 8,379 | 13.4 | % | ||||||||||||||||||||
Letter of credit fees | 983 | 956 | 992 | 1,037 | 1,056 | 2.8 | % | (7.0 | %) | 2,931 | 3,366 | (12.9 | %) | ||||||||||||||||||||
Foreign exchange income | 542 | 591 | 533 | 510 | 470 | (8.2 | %) | 15.5 | % | 1,666 | 1,249 | 33.4 | % | ||||||||||||||||||||
Other | 1,691 | 1,728 | 1,671 | 1,534 | 1,543 | (2.1 | %) | 9.5 | % | 5,090 | 4,720 | 7.8 | % | ||||||||||||||||||||
Total | 15,433 | 13,665 | 11,419 | 13,829 | 12,251 | 12.9 | % | 26.0 | % | 40,517 | 39,030 | 3.8 | % | ||||||||||||||||||||
Service charges on deposit accounts: | |||||||||||||||||||||||||||||||||
Overdraft fees | 5,167 | 5,092 | 5,145 | 5,609 | 5,844 | 1.5 | % | (11.6 | %) | 15,404 | 16,960 | (9.2 | %) | ||||||||||||||||||||
Cash management fees | 4,472 | 4,452 | 4,317 | 3,669 | 3,624 | 0.4 | % | 23.4 | % | 13,241 | 10,775 | 22.9 | % | ||||||||||||||||||||
Other | 2,620 | 2,726 | 2,500 | 3,392 | 3,554 | (3.9 | %) | (26.3 | %) | 7,846 | 10,601 | (26.0 | %) | ||||||||||||||||||||
Total | 12,259 | 12,270 | 11,962 | 12,670 | 13,022 | (0.1 | %) | (5.9 | %) | 36,491 | 38,336 | (4.8 | %) | ||||||||||||||||||||
Investment management and trust services | 13,066 | 12,803 | 12,871 | 13,152 | 12,157 | 2.1 | % | 7.5 | % | 38,740 | 36,097 | 7.3 | % | ||||||||||||||||||||
Mortgage banking income | 4,896 | 5,163 | 4,193 | 4,386 | 4,805 | (5.2 | %) | 1.9 | % | 14,252 | 15,542 | (8.3 | %) | ||||||||||||||||||||
Other: | |||||||||||||||||||||||||||||||||
Credit card income | 3,080 | 2,866 | 2,816 | 2,778 | 2,829 | 7.5 | % | 8.9 | % | 8,762 | 8,143 | 7.6 | % | ||||||||||||||||||||
Small Business Administration lending income | 530 | 846 | 357 | 1,355 | 565 | (37.3 | %) | (6.1 | %) | 1,733 | 2,156 | (19.6 | %) | ||||||||||||||||||||
Other income | 1,755 | 1,477 | 2,238 | 6,854 | 1,748 | 18.8 | % | 0.4 | % | 5,470 | 4,575 | 19.6 | % | ||||||||||||||||||||
Total | 5,365 | 5,189 | 5,411 | 10,987 | 5,142 | 3.4 | % | 4.3 | % | 15,965 | 14,874 | 7.3 | % | ||||||||||||||||||||
Non-Interest Income before Investment Securities Gains | 51,019 | 49,090 | 45,856 | 55,024 | 47,377 | 3.9 | % | 7.7 | % | 145,965 | 143,879 | 1.4 | % | ||||||||||||||||||||
Investment securities gains | 14 | 4 | 19 | 1,932 | 4,597 | N/M | (99.7 | %) | 37 | 7,139 | (99.5 | %) | |||||||||||||||||||||
Total Non-Interest Income | 51,033 | 49,094 | 45,875 | 56,956 | 51,974 | 3.9 | % | (1.8 | %) | 146,002 | 151,018 | (3.3 | %) | ||||||||||||||||||||
Non-Interest Expense: | |||||||||||||||||||||||||||||||||
Salaries and employee benefits | 76,770 | 74,919 | 75,768 | 73,504 | 72,894 | 2.5 | % | 5.3 | % | 227,457 | 216,626 | 5.0 | % | ||||||||||||||||||||
Net occupancy expense | 12,578 | 12,760 | 13,632 | 12,549 | 12,180 | (1.4 | %) | 3.3 | % | 38,970 | 37,159 | 4.9 | % | ||||||||||||||||||||
Data processing and software | 10,157 | 10,453 | 10,473 | 10,401 | 10,301 | (2.8 | %) | (1.4 | %) | 31,083 | 28,334 | 9.7 | % | ||||||||||||||||||||
Other outside services | 9,122 | 7,568 | 8,124 | 7,665 | 6,582 | 20.5 | % | 38.6 | % | 24,814 | 19,836 | 25.1 | % | ||||||||||||||||||||
Professional fees | 3,427 | 2,372 | 4,816 | 3,632 | 3,388 | 44.5 | % | 1.2 | % | 10,615 | 9,056 | 17.2 | % | ||||||||||||||||||||
Equipment expense | 3,000 | 3,434 | 3,534 | 3,244 | 3,298 | (12.6 | %) | (9.0 | %) | 9,968 | 9,691 | 2.9 | % | ||||||||||||||||||||
FDIC insurance expense | 2,814 | 2,663 | 2,953 | 3,618 | 3,007 | 5.7 | % | (6.4 | %) | 8,430 | 7,431 | 13.4 | % | ||||||||||||||||||||
Marketing | 2,692 | 2,335 | 2,250 | 1,725 | 2,089 | 15.3 | % | 28.9 | % | 7,277 | 6,309 | 15.3 | % | ||||||||||||||||||||
Amortization of tax credit investments | 1,637 | 1,637 | 1,637 | 3,376 | 3,503 | (0.0 | %) | (53.3 | %) | 4,911 | 7,652 | (35.8 | %) | ||||||||||||||||||||
Other | 13,216 | 15,204 | 13,474 | 18,738 | 14,915 | (13.1 | %) | (11.4 | %) | 41,894 | 45,033 | (7.0 | %) | ||||||||||||||||||||
Total Non-Interest Expense | 135,413 | 133,345 | 136,661 | 138,452 | 132,157 | 1.6 | % | 2.5 | % | 405,419 | 387,127 | 4.7 | % | ||||||||||||||||||||
Income before Income Taxes | 74,127 | 38,699 | 56,562 | 61,187 | 61,551 | 91.5 | % | 20.4 | % | 169,388 | 173,267 | (2.2 | %) | ||||||||||||||||||||
Income tax expense | 8,494 | 3,502 | 7,082 | 27,186 | 12,646 | 142.5 | % | (32.8 | %) | 19,078 | 35,515 | (46.3 | %) | ||||||||||||||||||||
Net Income | $ | 65,633 | $ | 35,197 | $ | 49,480 | $ | 34,001 | $ | 48,905 | 86.5 | % | 34.2 | % | $ | 150,310 | $ | 137,752 | 9.1 | % | |||||||||||||
PER SHARE: |
|||||||||||||||||||||||||||||||||
Net income: | |||||||||||||||||||||||||||||||||
Basic | $ | 0.37 | $ | 0.20 | $ | 0.28 | $ | 0.19 | $ | 0.28 | 85.0 | % | 32.1 | % | $ | 0.86 | $ | 0.79 | 8.9 | % | |||||||||||||
Diluted | 0.37 | 0.20 | 0.28 | 0.19 | 0.28 | 85.0 | % | 32.1 | % | 0.85 | 0.78 | 9.0 | % | ||||||||||||||||||||
Weighted average shares (basic) | 175,942 | 175,764 | 175,303 | 175,132 | 174,991 | 0.1 | % | 0.5 | % | 175,672 | 174,582 | 0.6 | % | ||||||||||||||||||||
Weighted average shares (diluted) | 177,128 | 176,844 | 176,568 | 176,374 | 176,216 | 0.2 | % | 0.5 | % | 176,848 | 175,776 | 0.6 | % | ||||||||||||||||||||
N/M - not meaningful |
FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||||||||||||||||||
dollars in thousands | |||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||||||||||||||||||||||||||||
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 | $ | 15,862,143 | $ | 177,329 | 4.44 | % | $ | 15,768,377 | $ | 170,006 | 4.32 | % | $ | 15,392,067 | $ | 159,454 | 4.12 | % | |||||||||||||||||
Taxable investment securities | 2,239,837 | 13,956 | 2.49 | % | 2,262,789 | 13,885 | 2.45 | % | 2,115,931 | 11,423 | 2.16 | % | |||||||||||||||||||||||
Tax-exempt investment securities | 415,908 | 3,841 | 3.67 | % | 408,715 | 3,713 | 3.61 | % | 408,594 | 4,492 | 4.37 | % | |||||||||||||||||||||||
Equity securities | - | - | - | - | - | - | 8,709 | 143 | 6.52 | % | |||||||||||||||||||||||||
Total Investment Securities | 2,655,745 | 17,797 | 2.68 | % | 2,671,504 | 17,598 | 2.63 | % | 2,533,234 | 16,058 | 2.53 | % | |||||||||||||||||||||||
Loans held for sale | 27,195 | 388 | 5.71 | % | 22,237 | 284 | 5.11 | % | 22,456 | 243 | 4.33 | % | |||||||||||||||||||||||
Other interest-earning assets | 416,129 | 1,601 | 1.53 | % | 316,381 | 1,243 | 1.57 | % | 590,676 | 1,667 | 1.12 | % | |||||||||||||||||||||||
Total Interest-earning Assets | 18,961,212 | 197,115 | 4.13 | % | 18,778,499 | 189,131 | 4.04 | % | 18,538,433 | 177,422 | 3.80 | % | |||||||||||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||||||||||||||
Cash and due from banks | 100,568 | 100,811 | 101,643 | ||||||||||||||||||||||||||||||||
Premises and equipment | 231,280 | 232,048 | 220,129 | ||||||||||||||||||||||||||||||||
Other assets | 1,137,293 | 1,112,913 | 1,186,622 | ||||||||||||||||||||||||||||||||
Less: allowance for loan losses | (157,121 | ) | (160,896 | ) | (174,101 | ) | |||||||||||||||||||||||||||||
Total Assets | $ | 20,273,232 | $ | 20,063,375 | $ | 19,872,726 | |||||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Demand deposits | $ | 4,116,051 | $ | 6,378 | 0.61 | % | $ | 3,952,115 | $ | 4,959 | 0.50 | % | $ | 3,943,118 | $ | 3,847 | 0.39 | % | |||||||||||||||||
Savings deposits | 4,718,148 | 7,569 | 0.64 | % | 4,538,083 | 5,545 | 0.49 | % | 4,603,155 | 3,962 | 0.34 | % | |||||||||||||||||||||||
Brokered deposits | 162,467 | 840 | 2.05 | % | 85,242 | 396 | 1.87 | % | 89,767 | 277 | 1.23 | % | |||||||||||||||||||||||
Time deposits | 2,672,548 | 9,032 | 1.34 | % | 2,660,410 | 8,385 | 1.26 | % | 2,744,532 | 7,937 | 1.15 | % | |||||||||||||||||||||||
Total Interest-bearing Deposits | 11,669,214 | 23,819 | 0.81 | % | 11,235,850 | 19,285 | 0.69 | % | 11,380,572 | 16,023 | 0.56 | % | |||||||||||||||||||||||
Short-term borrowings | 724,132 | 2,002 | 1.09 | % | 1,023,160 | 3,036 | 1.18 | % | 402,341 | 578 | 0.57 | % | |||||||||||||||||||||||
FHLB advances and long-term debt | 988,748 | 8,100 | 3.26 | % | 945,177 | 7,783 | 3.30 | % | 1,038,062 | 8,100 | 3.11 | % | |||||||||||||||||||||||
Total Interest-bearing Liabilities | 13,382,094 | 33,921 | 1.01 | % | 13,204,187 | 30,104 | 0.91 | % | 12,820,975 | 24,701 | 0.77 | % | |||||||||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||||
Demand deposits | 4,298,020 | 4,281,574 | 4,494,897 | ||||||||||||||||||||||||||||||||
Other | 324,025 | 330,710 | 341,465 | ||||||||||||||||||||||||||||||||
Total Liabilities | 18,004,139 | 17,816,471 | 17,657,337 | ||||||||||||||||||||||||||||||||
Shareholders' equity | 2,269,093 | 2,246,904 | 2,215,389 | ||||||||||||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 20,273,232 | $ | 20,063,375 | $ | 19,872,726 | |||||||||||||||||||||||||||||
Net interest income/net interest margin (fully taxable equivalent) |
|
163,194 |
3.42 | % | 159,027 | 3.39 | % | 152,721 | 3.27 | % | |||||||||||||||||||||||||
Tax equivalent adjustment | (3,067 | ) | (2,960 | ) | (5,912 | ) | |||||||||||||||||||||||||||||
Net interest income | $ | 160,127 | $ | 156,067 | $ | 146,809 |
(1) Three months ended September 30, 2018 and June 30, 2018 are presented on a fully taxable-equivalent basis using a 21% Federal tax rate and statutory interest expense disallowances. Prior periods are presented on a fully taxable-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances. |
Note: The weighted average interest rate on total average interest-bearing liabilities and average non-interest bearing demand deposits (“cost of funds”) was 0.76%, 0.69% and 0.57% for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017, respectively. |
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: |
|||||||||||||||||||||||
Three Months Ended | % Change from | ||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | |||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | 2018 | 2017 | |||||||||||||||||
Loans, by type: | |||||||||||||||||||||||
Real estate - commercial mortgage | $ | 6,309,663 | $ | 6,298,534 | $ | 6,305,821 | $ | 6,232,674 | $ | 6,208,630 | 0.2 | % | 1.6 | % | |||||||||
Commercial - industrial, financial and agricultural | 4,304,320 | 4,335,097 | 4,288,634 | 4,263,199 | 4,257,075 | (0.7 | %) | 1.1 | % | ||||||||||||||
Real estate - residential mortgage | 2,142,977 | 2,026,161 | 1,958,505 | 1,926,067 | 1,841,559 | 5.8 | % | 16.4 | % | ||||||||||||||
Real estate - home equity | 1,474,011 | 1,502,936 | 1,538,974 | 1,560,713 | 1,569,898 | (1.9 | %) | (6.1 | %) | ||||||||||||||
Real estate - construction | 969,575 | 978,327 | 984,242 | 1,004,166 | 943,029 | (0.9 | %) | 2.8 | % | ||||||||||||||
Consumer | 375,656 | 345,572 | 315,927 | 312,320 | 318,546 | 8.7 | % | 17.9 | % | ||||||||||||||
Leasing and other | 285,941 | 281,750 | 268,930 | 261,046 | 253,330 | 1.5 | % | 12.9 | % | ||||||||||||||
Total Loans, net of unearned income | $ |
15,862,143 |
$ | 15,768,377 | $ | 15,661,032 | $ | 15,560,185 | $ | 15,392,067 | 0.6 | % | 3.1 | % | |||||||||
Deposits, by type: | |||||||||||||||||||||||
Noninterest-bearing demand | $ | 4,298,020 | $ | 4,281,574 | $ | 4,246,168 | $ | 4,454,456 | $ | 4,494,897 | 0.4 | % | (4.4 | %) | |||||||||
Interest-bearing demand | 4,116,051 | 3,952,115 | 3,958,894 | 4,037,879 | 3,943,118 | 4.1 | % | 4.4 | % | ||||||||||||||
Savings and money market accounts | 4,718,148 | 4,538,083 | 4,494,445 | 4,752,337 | 4,603,155 | 4.0 | % | 2.5 | % | ||||||||||||||
Total demand and savings | 13,132,219 | 12,771,772 | 12,699,507 | 13,244,672 | 13,041,170 | 2.8 | % | 0.7 | % | ||||||||||||||
Brokered deposits | 162,467 | 85,242 | 74,026 | 105,135 | 89,767 | 90.6 | % | 81.0 | % | ||||||||||||||
Time deposits | 2,672,548 | 2,660,410 | 2,646,779 | 2,706,982 | 2,744,532 | 0.5 | % | (2.6 | %) | ||||||||||||||
Total Deposits | $ | 15,967,234 | $ | 15,517,424 | $ | 15,420,312 | $ | 16,056,789 | $ | 15,875,469 | 2.9 | % | 0.6 | % | |||||||||
Short-term borrowings, by type: | |||||||||||||||||||||||
Customer repurchase agreements | $ | 148,660 | $ | 162,276 | $ | 175,292 | $ | 179,948 | $ | 176,415 | (8.4 | %) | (15.7 | %) | |||||||||
Customer short-term promissory notes | 298,896 | 316,049 | 308,725 | 195,951 | 80,147 | (5.4 | %) |
N/M |
|
||||||||||||||
Federal funds purchased | 145,793 | 398,297 | 379,822 | 15,374 | 90,453 | (63.4 | %) | 61.2 | % | ||||||||||||||
Short-term FHLB advances and other borrowings | 130,783 | 146,538 | 33,000 | 11 | 55,326 | (10.8 | %) | 136.4 | % | ||||||||||||||
Total Short-term Borrowings | $ | 724,132 | $ | 1,023,160 | $ | 896,839 | $ | 391,284 | $ | 402,341 | (29.2 | %) | 80.0 | % |
FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||||||||
dollars in thousands | |||||||||||||||||||||||||
Nine Months Ended September 30 | |||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||
Average | Average | ||||||||||||||||||||||||
Balance | Interest (1) | Yield/Rate | Balance | Interest (1) | Yield/Rate | ||||||||||||||||||||
ASSETS |
|||||||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||
Loans, net of unearned income | $ | 15,764,587 | $ | 509,596 | 4.32 | % | $ | 15,127,569 | $ | 458,753 | 4.05 | % | |||||||||||||
Taxable investment securities | 2,233,972 | 41,034 | 2.45 | % | 2,117,127 | 34,811 | 2.19 | % | |||||||||||||||||
Tax-exempt investment securities | 412,496 | 11,307 | 3.64 | % | 405,728 | 13,268 | 4.34 | % | |||||||||||||||||
Equity securities | 167 | 5 | 13.01 | % | 10,391 | 467 | 6.01 | % | |||||||||||||||||
Total Investment Securities | 2,646,635 | 52,346 | 2.63 | % | 2,533,246 | 48,546 | 2.55 | % | |||||||||||||||||
Loans held for sale | 23,175 | 888 | 5.11 | % | 19,378 | 631 | 4.34 | % | |||||||||||||||||
Other interest-earning assets | 345,512 | 4,016 | 1.55 | % | 410,250 | 3,311 | 1.08 | % | |||||||||||||||||
Total Interest-earning Assets | 18,779,909 | 566,846 | 4.03 | % | 18,090,443 | 511,241 | 3.78 | % | |||||||||||||||||
Noninterest-earning assets: | |||||||||||||||||||||||||
Cash and due from banks | 102,352 | 107,029 | |||||||||||||||||||||||
Premises and equipment | 231,195 | 218,700 | |||||||||||||||||||||||
Other assets | 1,121,267 | 1,170,466 | |||||||||||||||||||||||
Less: allowance for loan losses | (162,368 | ) | (172,145 | ) | |||||||||||||||||||||
Total Assets | $ | 20,072,355 | $ | 19,414,493 | |||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||
Demand deposits | $ | 4,009,596 | $ | 15,341 | 0.51 | % | $ | 3,762,439 | $ | 8,865 | 0.32 | % | |||||||||||||
Savings deposits | 4,584,377 | 17,481 | 0.51 | % | 4,372,453 | 8,883 | 0.27 | % | |||||||||||||||||
Brokered deposits | 107,569 | 1,511 | 1.88 | % | 30,251 | 277 | 1.23 | % | |||||||||||||||||
Time deposits | 2,660,009 | 25,220 | 1.27 | % | 2,726,693 | 22,684 | 1.11 | % | |||||||||||||||||
Total Interest-bearing Deposits | 11,361,550 | 59,553 | 0.70 | % | 10,891,836 | 40,709 | 0.50 | % | |||||||||||||||||
Short-term borrowings | 880,745 | 7,079 | 1.07 | % | 581,511 | 2,407 | 0.55 | % | |||||||||||||||||
FHLB advances and long-term debt | 973,751 | 23,761 | 3.26 | % | 1,033,159 | 24,812 | 3.21 | % | |||||||||||||||||
Total Interest-bearing Liabilities | 13,216,046 | 90,393 | 0.91 | % | 12,506,506 | 67,928 | 0.73 | % | |||||||||||||||||
Noninterest-bearing liabilities: | |||||||||||||||||||||||||
Demand deposits | 4,275,443 | 4,395,421 | |||||||||||||||||||||||
Other | 333,832 | 333,250 | |||||||||||||||||||||||
Total Liabilities | 17,825,321 | 17,235,177 | |||||||||||||||||||||||
Shareholders' equity | 2,247,034 | 2,179,316 | |||||||||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 20,072,355 | $ | 19,414,493 | |||||||||||||||||||||
Net interest income/net interest margin (fully taxable equivalent) | 476,453 | 3.39 | % | 443,313 | 3.27 | % | |||||||||||||||||||
Tax equivalent adjustment | (8,941 | ) | (17,362 | ) | |||||||||||||||||||||
Net interest income | $ | 467,512 | $ | 425,951 |
(1) Nine months ended September 30, 2018 is presented on a fully taxable-equivalent basis using a 21% Federal tax rate and statutory interest expense disallowances. Prior periods are presented on a fully taxable-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances. |
Note: The weighted average interest rate on total average interest-bearing liabilities and average non-interest bearing demand deposits (“cost of funds”) was 0.69% and 0.54% for the nine months ended September 30, 2018 and 2017, respectively. |
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: |
|||||||||||
Nine Months Ended | |||||||||||
September 30 |
|||||||||||
2018 | 2017 | % Change | |||||||||
Loans, by type: | |||||||||||
Real estate - commercial mortgage | $ | 6,304,687 | $ | 6,137,824 | 2.7 | % | |||||
Commercial - industrial, financial and agricultural | 4,309,408 | 4,227,918 | 1.9 | % | |||||||
Real estate - residential mortgage | 2,043,223 | 1,729,799 | 18.1 | % | |||||||
Real estate - home equity | 1,505,069 | 1,590,117 | (5.3 | %) | |||||||
Real estate - construction | 977,327 | 894,146 | 9.3 | % | |||||||
Consumer | 345,937 | 301,414 | 14.8 | % | |||||||
Leasing and other | 278,936 | 246,351 | 13.2 | % | |||||||
Total Loans, net of unearned income | $ | 15,764,587 | $ | 15,127,569 | 4.2 | % | |||||
Deposits, by type: | |||||||||||
Noninterest-bearing demand | $ | 4,275,443 | $ | 4,395,421 | (2.7 | %) | |||||
Interest-bearing demand | 4,009,596 | 3,762,439 | 6.6 | % | |||||||
Savings and money market accounts | 4,584,377 | 4,372,453 | 4.8 | % | |||||||
Total demand and savings | 12,869,416 | 12,530,313 | 2.7 | % | |||||||
Brokered deposits | 107,569 | 30,251 | N/M | ||||||||
Time deposits | 2,660,009 | 2,726,693 | (2.4 | %) | |||||||
Total Deposits | $ | 15,636,993 | $ |
15,287,257 |
2.3 | % | |||||
Short-term borrowings, by type: | |||||||||||
Customer repurchase agreements | $ | 162,345 | $ | 192,015 | (15.5 | %) | |||||
Customer short-term promissory notes | 307,854 | 78,955 | N/M | ||||||||
Federal funds purchased | 307,114 | 212,885 | 44.3 | % | |||||||
Short-term FHLB advances and other borrowings | 103,432 | 97,656 | 5.9 | % | |||||||
Total Short-term Borrowings | $ | 880,745 | $ | 581,511 | 51.5 | % | |||||
N/M - Not meaningful |
FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||
ASSET QUALITY INFORMATION (UNAUDITED) | ||||||||||||||||||||||||||||||||
dollars in thousands | ||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Sep 30 | Sep 30 | ||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES: |
||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | 169,247 | $ | 176,019 | $ | 176,084 | $ | 174,749 | $ | 174,998 | $ | 176,084 | $ | 171,325 | ||||||||||||||||||
Loans charged off: | ||||||||||||||||||||||||||||||||
Commercial - industrial, financial and agricultural | (3,541 | ) | (38,632 | ) | (4,005 | ) | (5,473 | ) | (2,714 | ) | (46,178 | ) | (13,594 | ) | ||||||||||||||||||
Consumer and home equity | (1,415 | ) | (1,528 | ) | (1,300 | ) | (1,071 | ) | (920 | ) | (4,243 | ) | (3,496 | ) | ||||||||||||||||||
Real estate - construction | (212 | ) | (606 | ) | (158 | ) | 0 | (2,744 | ) | (976 | ) | (3,765 | ) | |||||||||||||||||||
Real estate - residential mortgage | (483 | ) | (483 | ) | (162 | ) | (152 | ) | (195 | ) | (1,128 | ) | (535 | ) | ||||||||||||||||||
Real estate - commercial mortgage | (650 | ) | (366 | ) | (267 | ) | (220 | ) | (483 | ) | (1,283 | ) | (1,949 | ) | ||||||||||||||||||
Leasing and other | (582 | ) | (545 | ) | (505 | ) | (457 | ) | (739 | ) | (1,632 | ) | (2,578 | ) | ||||||||||||||||||
Total loans charged off | (6,883 | ) | (42,160 | ) | (6,397 | ) | (7,373 | ) | (7,795 | ) | (55,440 | ) | (25,917 | ) | ||||||||||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||||||||||||||
Commercial - industrial, financial and agricultural | 731 | 541 | 1,075 | 941 | 665 | 2,347 | 6,830 | |||||||||||||||||||||||||
Consumer and home equity | 607 | 717 | 385 | 466 | 445 | 1,709 | 1,503 | |||||||||||||||||||||||||
Real estate - construction | 664 | 444 | 306 | 32 | 629 | 1,414 | 1,550 | |||||||||||||||||||||||||
Real estate - residential mortgage | 317 | 96 | 107 | 186 | 219 | 520 | 600 | |||||||||||||||||||||||||
Real estate - commercial mortgage | 928 | 321 | 279 | 178 | 106 | 1,528 | 1,490 | |||||||||||||||||||||||||
Leasing and other | 595 | 152 | 210 | 175 | 407 | 957 | 793 | |||||||||||||||||||||||||
Recoveries of loans previously charged off | 3,842 | 2,271 | 2,362 | 1,978 | 2,471 | 8,475 | 12,766 | |||||||||||||||||||||||||
Net loans charged off | (3,041 | ) | (39,889 | ) | (4,035 | ) | (5,395 | ) | (5,324 | ) | (46,965 | ) | (13,151 | ) | ||||||||||||||||||
Provision for credit losses | 1,620 | 33,117 | 3,970 | 6,730 | 5,075 | 38,707 | 16,575 | |||||||||||||||||||||||||
Balance at end of period | $ | 167,826 | $ | 169,247 | $ | 176,019 | $ | 176,084 | $ | 174,749 | $ | 167,826 | $ | 174,749 | ||||||||||||||||||
Net charge-offs to average loans (annualized) | 0.08 | % | 1.01 | % | 0.10 | % | 0.14 | % | 0.14 | % | 0.40 | % | 0.12 | % | ||||||||||||||||||
NON-PERFORMING ASSETS: |
||||||||||||||||||||||||||||||||
Non-accrual loans | $ | 106,433 | $ | 111,116 | $ | 122,966 | $ | 124,749 | $ | 123,345 | ||||||||||||||||||||||
Loans 90 days past due and accruing | 13,663 | 12,628 | 11,676 | 10,010 | 13,124 | |||||||||||||||||||||||||||
Total non-performing loans | 120,096 | 123,744 | 134,642 | 134,759 | 136,469 | |||||||||||||||||||||||||||
Other real estate owned | 10,684 | 11,181 | 10,744 | 9,823 | 10,542 | |||||||||||||||||||||||||||
Total non-performing assets | $ | 130,780 | $ | 134,925 | $ | 145,386 | $ | 144,582 | $ | 147,011 | ||||||||||||||||||||||
NON-PERFORMING LOANS, BY TYPE: |
||||||||||||||||||||||||||||||||
Commercial - industrial, financial and agricultural | $ | 43,391 | $ | 44,045 | $ | 54,915 | $ | 54,309 | $ | 54,209 | ||||||||||||||||||||||
Real estate - commercial mortgage | 37,393 | 39,278 | 36,183 | 35,446 | 34,650 | |||||||||||||||||||||||||||
Real estate - residential mortgage | 19,076 | 18,888 | 20,169 | 20,972 | 21,643 | |||||||||||||||||||||||||||
Consumer and home equity | 10,362 | 12,038 | 12,272 | 11,803 | 12,472 | |||||||||||||||||||||||||||
Real estate - construction | 9,784 | 9,319 | 10,931 | 12,197 | 13,415 | |||||||||||||||||||||||||||
Leasing | 90 | 176 | 172 | 32 | 80 | |||||||||||||||||||||||||||
Total non-performing loans | $ | 120,096 | $ | 123,744 | $ | 134,642 | $ | 134,759 | $ | 136,469 | ||||||||||||||||||||||
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE: |
||||||||||||||||||||||||||||||||
Real-estate - residential mortgage | $ | 24,810 | $ | 25,055 | $ | 25,602 | $ | 26,016 | $ | 26,193 | ||||||||||||||||||||||
Real-estate - commercial mortgage | 15,690 | 16,420 | 18,181 | 13,959 | 14,439 | |||||||||||||||||||||||||||
Consumer and home equity | 16,216 | 16,212 | 16,091 | 15,584 | 14,822 | |||||||||||||||||||||||||||
Commercial - industrial, financial and agricultural | 10,342 | 11,199 | 11,740 | 10,820 | 7,512 | |||||||||||||||||||||||||||
Real estate - construction | - | - | - | - | 169 | |||||||||||||||||||||||||||
Total accruing TDRs | 67,058 | 68,886 | 71,614 | 66,379 | 63,135 | |||||||||||||||||||||||||||
Non-accrual TDRs(1) | 23,238 | 24,743 | 24,897 | 29,051 | 28,742 | |||||||||||||||||||||||||||
Total TDRs | $ | 90,296 | $ | 93,629 | $ | 96,511 | $ | 95,430 | $ | 91,877 | ||||||||||||||||||||||
(1) Included within non-accrual loans above. | ||||||||||||||||||||||||||||||||
Total Delinquency % | ||||||||||||||||||||||||||||||||
DELINQUENCY RATES, BY TYPE: |
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | ||||||||||||||||||||||||||||
Real estate - commercial mortgage | 0.81 | % | 0.77 | % | 0.77 | % | 0.77 | % | 0.75 | % | ||||||||||||||||||||||
Commercial - industrial, financial and agricultural | 1.21 | % | 1.44 | % | 1.48 | % | 1.50 | % | 1.54 | % | ||||||||||||||||||||||
Real estate - construction | 1.04 | % | 1.02 | % | 1.12 | % | 1.32 | % | 1.50 | % | ||||||||||||||||||||||
Real estate - residential mortgage | 1.95 | % | 1.90 | % | 1.91 | % | 2.04 | % | 2.25 | % | ||||||||||||||||||||||
Consumer, home equity, leasing and other | 1.31 | % | 1.22 | % | 1.20 | % | 1.37 | % | 1.38 | % | ||||||||||||||||||||||
Total | 1.15 | % | 1.18 | % | 1.19 | % | 1.24 | % | 1.28 | % |
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 | ||||||||||||||||||||||
Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||
2018 | 2018 | 2018 | 2017 | 2017 | ||||||||||||||||||
Shareholders' equity (tangible), per share |
||||||||||||||||||||||
Shareholders' equity | $ | 2,283,014 | $ | 2,245,785 | $ | 2,235,493 | $ | 2,229,857 | $ | 2,225,786 | ||||||||||||
Less: Goodwill and intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||||
Tangible shareholders' equity (numerator) | $ | 1,751,458 | $ | 1,714,229 | $ | 1,703,937 | $ | 1,698,301 | $ | 1,694,230 | ||||||||||||
Shares outstanding, end of period (denominator) | 176,019 | 175,847 | 175,404 | 175,170 | 175,057 | |||||||||||||||||
Shareholders' equity (tangible), per share | $ | 9.95 | $ | 9.75 | $ | 9.71 | $ | 9.70 | $ | 9.68 | ||||||||||||
Return on average shareholders' equity (tangible) |
||||||||||||||||||||||
Net Income (numerator | $ | 65,633 | $ | 35,197 | $ | 49,480 | $ | 34,001 | $ | 48,905 | ||||||||||||
Average shareholders' equity | $ | 2,269,093 | $ | 2,246,904 | $ | 2,224,615 | $ | 2,237,031 | $ | 2,215,389 | ||||||||||||
Less: Average goodwill and intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||||
Average tangible shareholders' equity (denominator) | $ | 1,737,537 | $ | 1,715,348 | $ | 1,693,059 | $ | 1,705,475 | $ | 1,683,833 | ||||||||||||
Return on average shareholders' equity (tangible), annualized | 14.99 | % | 8.23 | % | 11.85 | % | 7.91 | % | 11.52 | % | ||||||||||||
Tangible Common Equity to Tangible Assets (TCE Ratio) |
||||||||||||||||||||||
Shareholders' equity | $ | 2,283,014 | $ | 2,245,785 | $ | 2,235,493 | $ | 2,229,857 | $ | 2,225,786 | ||||||||||||
Less: Intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||||
Tangible shareholders' equity (numerator) | $ | 1,751,458 | $ | 1,714,229 | $ | 1,703,937 | $ | 1,698,301 | $ | 1,694,230 | ||||||||||||
Total assets | $ | 20,364,810 | $ | 20,172,539 | $ | 19,948,941 | $ | 20,036,905 | $ | 20,062,860 | ||||||||||||
Less: Intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||||
Total tangible assets (denominator) | $ | 19,833,254 | $ | 19,640,983 | $ | 19,417,385 | $ | 19,505,349 | $ | 19,531,304 | ||||||||||||
Tangible Common Equity to Tangible Assets | 8.83 | % | 8.73 | % | 8.78 | % | 8.71 | % | 8.67 | % | ||||||||||||
Efficiency ratio |
||||||||||||||||||||||
Non-interest expense | $ | 135,413 | $ | 133,345 | $ | 136,661 | $ | 138,452 | $ | 132,157 | ||||||||||||
Less: Amortization of tax credit investments | (1,637 | ) | (1,637 | ) | (1,637 | ) | (3,376 | ) | (3,503 | ) | ||||||||||||
Non-interest expense (numerator) | $ | 133,776 | $ | 131,708 | $ | 135,024 | $ | 135,076 | $ | 128,654 | ||||||||||||
Net interest income (fully taxable equivalent) | $ | 163,194 | $ | 159,027 | $ | 154,232 | $ | 155,253 | $ | 152,721 | ||||||||||||
Plus: Total Non-interest income | 51,033 | 49,094 | 45,875 | 56,956 | 51,974 | |||||||||||||||||
Less: Investment securities gains | (14 | ) | (4 | ) | (19 | ) | (1,932 | ) | (4,597 | ) | ||||||||||||
Net interest income (denominator) | $ | 214,213 | $ | 208,117 | $ | 200,088 | $ | 210,277 | $ | 200,098 | ||||||||||||
Efficiency ratio | 62.5 | % | 63.3 | % | 67.5 | % | 64.2 | % | 64.3 | % | ||||||||||||
Non-performing assets to tangible shareholders' equity and allowance for credit losses |
||||||||||||||||||||||
Non-performing assets (numerator) | $ | 130,780 | $ | 134,925 | $ | 145,386 | $ | 144,582 | $ | 147,011 | ||||||||||||
Tangible shareholders' equity | $ | 1,751,458 | $ | 1,714,229 | $ | 1,703,937 | $ | 1,698,301 | $ | 1,694,230 | ||||||||||||
Plus: Allowance for credit losses | 167,826 | 169,247 | 176,019 | 176,084 | 174,749 | |||||||||||||||||
Tangible shareholders' equity and allowance for credit losses (denominator) | $ | 1,919,284 | $ | 1,883,476 | $ | 1,879,956 | $ | 1,874,385 | $ | 1,868,979 | ||||||||||||
Non-performing assets to tangible shareholders' equity and allowance for credit losses | 6.81 | % | 7.16 | % | 7.73 | % | 7.71 | % | 7.87 | % | ||||||||||||
Pre-provision net revenue |
||||||||||||||||||||||
Net interest income | $ | 160,127 | $ | 156,067 | $ | 151,318 | $ | 149,413 | $ | 146,809 | ||||||||||||
Non-interest income | 51,033 | 49,094 | 45,875 | 56,956 | 51,974 | |||||||||||||||||
Less: Investment securities gains | (14 | ) | (4 | ) | (19 | ) | (1,932 | ) | (4,597 | ) | ||||||||||||
Total revenue | $ | 211,146 | $ | 205,157 | $ | 197,174 | $ | 204,437 | $ | 194,186 | ||||||||||||
Non-interest expense | $ | 135,413 | $ | 133,345 | $ | 136,661 | $ | 138,452 | $ | 132,157 | ||||||||||||
Less: Amortization of tax credit investments | (1,637 | ) | (1,637 | ) | (1,637 | ) | (3,376 | ) | (3,503 | ) | ||||||||||||
Total non-interest expense | $ | 133,776 | $ | 131,708 | $ | 135,024 | $ | 135,076 | $ | 128,654 | ||||||||||||
Pre-provision net revenue | $ | 77,370 | $ | 73,449 | $ | 62,150 | $ | 69,361 | $ | 65,532 |
FULTON FINANCIAL CORPORATION | ||||||||||||
RECONCILIATION OF NON-GAAP MEASURES CONTINUED (UNAUDITED) | ||||||||||||
in thousands, except per share data and percentages | ||||||||||||
Reconciliation of Net Income; Net Income
per share, diluted; and Selected Financial Ratios, adjusted to
exclude the charge to income taxes recognized in the fourth
quarter of 2017 related to the |
||||||||||||
Three Months Ended |
||||||||||||
Dec 31 | ||||||||||||
2017 | ||||||||||||
Net income and Net income per share, diluted |
||||||||||||
Net income | $ | 34,001 | ||||||||||
Plus: Re-measurement of net deferred tax assets | 15,634 | |||||||||||
Net Income, adjusted (numerator) | $ | 49,635 | ||||||||||
Weighted average shares (diluted) (denominator) | 176,374 | |||||||||||
Net income per share, diluted | $ | 0.28 | ||||||||||
Return on average assets |
||||||||||||
Net income | $ | 34,001 | ||||||||||
Plus: Re-measurement of net deferred tax assets | 15,634 | |||||||||||
Net Income, adjusted (numerator) | $ | 49,635 | ||||||||||
Average assets (denominator) | $ | 20,072,579 | ||||||||||
Return on average assets, annualized |
0.98 | % | ||||||||||
Return on average shareholders' equity |
||||||||||||
Net income | $ | 34,001 | ||||||||||
Plus: Re-measurement of net deferred tax assets | 15,634 | |||||||||||
Net Income, adjusted (numerator) | $ | 49,635 | ||||||||||
Average shareholders' equity (denominator) | $ | 2,237,031 | ||||||||||
Return on average shareholders' equity, annualized |
8.80 | % | ||||||||||
Return on average shareholders' equity (tangible) |
||||||||||||
Net Income, as reported | $ | 34,001 | ||||||||||
Plus: Re-measurement of net deferred tax assets | 15,634 | |||||||||||
Net Income, adjusted (numerator) | $ | 49,635 | ||||||||||
Average shareholders' equity | $ | 2,237,031 | ||||||||||
Less: Average goodwill and intangible assets | (531,556 | ) | ||||||||||
Average tangible shareholders' equity (denominator) | $ | 1,705,475 | ||||||||||
Return on average shareholders' equity (tangible), annualized | 11.55 | % |