Fulton Financial Corporation (NASDAQ:FULT) reported net income of $43.4 million, or 25 cents per diluted share, for the first quarter of 2017.
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"We had a very good first quarter, building off the momentum we saw in our business in 2016,” said E. Philip Wenger, Chairman, President and CEO. “With increased customer confidence and business activity, we remain optimistic about our growth prospects for 2017."
Net Interest Income and Margin
Net interest income for the first quarter of 2017 increased $5.3 million, or 4.0 percent, from the fourth quarter of 2016. Net interest margin increased eleven basis points, or 3.5 percent, to 3.26 percent in the first quarter of 2017, from 3.15 percent in the fourth quarter of 2016. The average yield on interest-earning assets increased twelve basis points, while the average cost of interest-bearing liabilities remained unchanged, during the first quarter of 2017 in comparison to the fourth quarter of 2016.
Average Balance Sheet
Total average assets for the first quarter of 2017 were $19.1 billion, an increase of $300.3 million from the fourth quarter of 2016. Average loans, net of unearned income, increased $381.7 million, or 2.6 percent, in comparison to the fourth quarter of 2016. Average loans and yields, by type, for the first quarter of 2017 in comparison to the fourth quarter of 2016, are summarized in the following table:
| Three Months Ended | Increase (decrease) | ||||||||||||||||||
| March 31, 2017 | December 31, 2016 | in Balance | |||||||||||||||||
| Balance | Yield (1) | Balance | Yield (1) | $ | % | ||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Average Loans, net of unearned income, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,039,140 | 3.98 | % | $ | 5,828,313 | 3.90 | % | $ | 210,827 | 3.6 | % | |||||||
| Commercial - industrial, financial and agricultural | 4,205,070 | 3.89 | % | 4,081,498 | 3.74 | % | 123,572 | 3.0 | % | ||||||||||
| Real estate - residential mortgage | 1,637,669 | 3.76 | % | 1,572,895 | 3.75 | % | 64,774 | 4.1 | % | ||||||||||
Real estate - home equity | 1,613,249 | 4.18 | % | 1,633,668 | 4.05 | % | (20,419 | ) | (1.2 | %) | |||||||||
| Real estate - construction | 840,968 | 3.97 | % | 845,528 | 3.78 | % | (4,560 | ) | (0.5 | %) | |||||||||
| Consumer | 284,352 | 5.26 | % | 289,864 | 5.25 | % | (5,512 | ) | (1.9 | %) | |||||||||
| Leasing and other | 237,114 | 5.08 | % | 224,050 | 5.41 | % | 13,064 | 5.8 | % | ||||||||||
| Total Average Loans, net of unearned income | $ | 14,857,562 | 4.00 | % | $ | 14,475,816 | 3.90 | % | $ | 381,746 | 2.6 | % | |||||||
| (1) Presented on a fully-taxable equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances. | ||||||
Total average liabilities increased $292.4 million, or 1.8 percent, from the fourth quarter of 2016, while average deposits decreased $153.3 million, or 1.0 percent. Average deposits and interest rates, by type, for the first quarter of 2017 in comparison to the fourth quarter of 2016, are summarized in the following table:
| Three Months Ended | Increase (decrease) | ||||||||||||||||||
| March 31, 2017 | December 31, 2016 | in Balance | |||||||||||||||||
| Balance | Rate | Balance | Rate | $ | % | ||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Average Deposits, by type: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 4,301,727 | - | % | $ | 4,331,894 | - | % | $ | (30,167 | ) | (0.7 | %) | ||||||
| Interest-bearing demand | 3,650,931 | 0.25 | % | 3,714,391 | 0.21 | % | (63,460 | ) | (1.7 | %) | |||||||||
| Savings deposits | 4,194,216 | 0.21 | % | 4,216,090 | 0.21 | % | (21,874 | ) | (0.5 | %) | |||||||||
| Total average demand and savings | 12,146,874 | 0.15 | % | 12,262,375 | 0.14 | % | (115,501 | ) | (0.9 | %) | |||||||||
| Time deposits | 2,739,453 | 1.09 | % | 2,777,203 | 1.09 | % | (37,750 | ) | (1.4 | %) | |||||||||
| Total Average Deposits | $ | 14,886,327 | 0.32 | % | $ | 15,039,578 | 0.31 | % | $ | (153,251 | ) | (1.0 | %) | ||||||
Asset Quality
Non-performing assets were $143.4 million, or 0.75 percent of total assets, at March 31, 2017, compared to $144.5 million, or 0.76 percent of total assets, at December 31, 2016 and $148.1 million, or 0.82 percent of total assets, at March 31, 2016.
Annualized net charge-offs for the quarter ended March 31, 2017 were 0.09 percent of total average loans, compared to annualized net recoveries of 0.03 percent for the quarter ended December 31, 2016, and net charge-offs of 0.20 percent for the quarter ended March 31, 2016. The allowance for credit losses as a percentage of non-performing loans was 131.3 percent at March 31, 2017, as compared to 130.2 percent at December 31, 2016 and 121.1 percent at March 31, 2016.
During the first quarter of 2017, the Corporation recorded a $4.8 million provision for credit losses, compared to a $5.0 million provision for credit losses in the fourth quarter of 2016 and a $1.5 million provision in the first quarter of 2016.
Non-interest Income
Non-interest income, excluding investment securities gains, decreased $5.7 million, or 11.1 percent, in comparison to the fourth quarter of 2016. Other service charges and fees decreased $896,000, or 6.7 percent, due to decreases in debit card income and merchant fees. Service charges on deposits decreased $414,000, or 3.2 percent, due to a decrease in overdraft fee income. Mortgage banking income decreased $2.4 million, or 34.0 percent, due primarily to lower servicing income. The driver of this decrease was the $1.7 million adjustment recorded to reduce the valuation allowance for mortgage servicing rights (MSR) in the prior quarter. Other decreases in non-interest income were driven by decreases in gains from the sale of Small Business Administration loans.
Compared to the first quarter of 2016, non-interest income, excluding investment securities gains, increased $3.4 million, or 8.0 percent, due to increases in commercial loan interest rate swap fees, mortgage banking income, and investment management and trust services income.
Gains on sales of investment securities decreased $419,000 in comparison to the fourth quarter of 2016, and increased $159,000 from the first quarter of 2016.
Non-interest Expense
Non-interest expense decreased $5.3 million, or 4.2 percent, in the first quarter of 2017, compared to the fourth quarter of 2016. Salaries and employee benefits decreased $4.0 million, or 5.5 percent, due primarily to decreases in incentive compensation and two fewer payroll days in the quarter. Other decreases occurred in outside services and losses on the disposal of fixed assets.
Compared to the first quarter of 2016, non-interest expense increased $1.9 million, or 1.5 percent, primarily due to increases in state taxes and amortization of community development investments.
Additional information on Fulton Financial Corporation 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" and similar expressions which are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation's control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements.
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, 2016, which has been filed with the Securities and Exchange Commission and is available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov). The Corporation 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.
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 | ||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||||||
| % Change from | ||||||||||||||||||||||||||
| March 31 2017 | December 31 2016 | September 30 2016 | June 30 2016 | March 31 2016 | December 31 2016 | March 31 2016 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
| Cash and due from banks | $ | 93,844 | $ | 118,763 | $ | 86,497 | $ | 84,647 | $ | 83,479 | -21.0 | % | 12.4 | % | ||||||||||||
| Other interest-earning assets | 350,387 | 291,252 | 428,966 | 408,086 | 408,060 | 20.3 | % | -14.1 | % | |||||||||||||||||
| Loans held for sale | 24,783 | 28,697 | 27,836 | 34,330 | 19,719 | -13.6 | % | 25.7 | % | |||||||||||||||||
| Investment securities | 2,506,017 | 2,559,227 | 2,508,068 | 2,529,724 | 2,516,205 | -2.1 | % | -0.4 | % | |||||||||||||||||
| Loans, net of unearned income | 14,963,177 | 14,699,272 | 14,391,238 | 14,155,159 | 13,870,701 | 1.8 | % | 7.9 | % | |||||||||||||||||
| Allowance for loan losses | (170,076 | ) | (168,679 | ) | (162,526 | ) | (162,546 | ) | (163,841 | ) | 0.8 | % | 3.8 | % | ||||||||||||
| Net loans | 14,793,101 | 14,530,593 | 14,228,712 | 13,992,613 | 13,706,860 | 1.8 | % | 7.9 | % | |||||||||||||||||
| Premises and equipment | 216,171 | 217,806 | 228,009 | 228,861 | 228,057 | -0.8 | % | -5.2 | % | |||||||||||||||||
| Accrued interest receivable | 46,355 | 46,294 | 43,600 | 43,316 | 44,379 | 0.1 | % | 4.5 | % | |||||||||||||||||
| Goodwill and intangible assets | 531,556 | 531,556 | 531,556 | 531,556 | 531,556 | 0.0 | % | 0.0 | % | |||||||||||||||||
| Other assets | 616,362 | 620,059 | 617,818 | 626,902 | 583,939 | -0.6 | % | 5.6 | % | |||||||||||||||||
| Total Assets | $ | 19,178,576 | $ | 18,944,247 | $ | 18,701,062 | $ | 18,480,035 | $ | 18,122,254 | 1.2 | % | 5.8 | % | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||
| Deposits | $ | 15,090,344 | $ | 15,012,864 | $ | 14,952,479 | $ | 14,292,564 | $ | 14,404,280 | 0.5 | % | 4.8 | % | ||||||||||||
| Short-term borrowings | 453,317 | 541,317 | 264,042 | 722,214 | 352,883 | -16.3 | % | 28.5 | % | |||||||||||||||||
| Other liabilities | 342,323 | 339,548 | 389,819 | 392,708 | 326,128 | 0.8 | % | 5.0 | % | |||||||||||||||||
| FHLB advances and long-term debt | 1,137,909 | 929,403 | 965,286 | 965,552 | 965,654 | 22.4 | % | 17.8 | % | |||||||||||||||||
| Total Liabilities | 17,023,893 | 16,823,132 | 16,571,626 | 16,373,038 | 16,048,945 | 1.2 | % | 6.1 | % | |||||||||||||||||
| Shareholders' equity | 2,154,683 | 2,121,115 | 2,129,436 | 2,106,997 | 2,073,309 | 1.6 | % | 3.9 | % | |||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 19,178,576 | $ | 18,944,247 | $ | 18,701,062 | $ | 18,480,035 | $ | 18,122,254 | 1.2 | % | 5.8 | % | ||||||||||||
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | ||||||||||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,118,533 | $ | 6,018,582 | $ | 5,818,915 | $ | 5,635,347 | $ | 5,558,108 | 1.7 | % | 10.1 | % | ||||||||||||
| Commercial - industrial, financial and agricultural | 4,167,809 | 4,087,486 | 4,024,119 | 4,099,177 | 4,035,333 | 2.0 | % | 3.3 | % | |||||||||||||||||
| Real estate - residential mortgage | 1,665,142 | 1,601,994 | 1,542,696 | 1,447,292 | 1,377,459 | 3.9 | % | 20.9 | % | |||||||||||||||||
| Real estate - home equity | 1,595,901 | 1,625,115 | 1,640,421 | 1,647,319 | 1,659,481 | -1.8 | % | -3.8 | % | |||||||||||||||||
| Real estate - construction | 882,983 | 843,649 | 861,634 | 853,699 | 810,872 | 4.7 | % | 8.9 | % | |||||||||||||||||
| Consumer | 288,826 | 291,470 | 283,673 | 278,071 | 263,221 | -0.9 | % | 9.7 | % | |||||||||||||||||
| Leasing and other | 243,983 | 230,976 | 219,780 | 194,254 | 166,227 | 5.6 | % | 46.8 | % | |||||||||||||||||
| Total Loans, net of unearned income | $ | 14,963,177 | $ | 14,699,272 | $ | 14,391,238 | $ | 14,155,159 | $ | 13,870,701 | 1.8 | % | 7.9 | % | ||||||||||||
| Deposits, by type: | ||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,417,733 | $ | 4,376,137 | $ | 4,210,099 | $ | 4,125,375 | $ | 4,134,861 | 1.0 | % | 6.8 | % | ||||||||||||
| Interest-bearing demand | 3,702,663 | 3,703,712 | 3,703,048 | 3,358,536 | 3,430,206 | 0.0 | % | 7.9 | % | |||||||||||||||||
| Savings and money market accounts | 4,251,574 | 4,179,773 | 4,235,015 | 3,986,008 | 3,972,199 | 1.7 | % | 7.0 | % | |||||||||||||||||
| Time deposits | 2,718,374 | 2,753,242 | 2,804,317 | 2,822,645 | 2,867,014 | -1.3 | % | -5.2 | % | |||||||||||||||||
| Total Deposits | $ | 15,090,344 | $ | 15,012,864 | $ | 14,952,479 | $ | 14,292,564 | $ | 14,404,280 | 0.5 | % | 4.8 | % | ||||||||||||
| Short-term borrowings, by type: | ||||||||||||||||||||||||||
| Customer repurchase agreements | $ | 181,170 | $ | 195,734 | $ | 189,727 | $ | 168,521 | $ | 162,431 | -7.4 | % | 11.5 | % | ||||||||||||
| Customer short-term promissory notes | 87,726 | 67,013 | 65,871 | 69,509 | 76,807 | 30.9 | % | 14.2 | % | |||||||||||||||||
| Short-term FHLB advances | 130,000 | - | - | 35,000 | 81,000 | N/M | 60.5 | % | ||||||||||||||||||
| Federal funds purchased | 54,421 | 278,570 | 8,444 | 449,184 | 32,645 | -80.5 | % | 66.7 | % | |||||||||||||||||
| Total Short-term Borrowings | $ | 453,317 | $ | 541,317 | $ | 264,042 | $ | 722,214 | $ | 352,883 | -16.3 | % | 28.5 | % | ||||||||||||
| N/M - Not meaningful | ||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||||||||||
| in thousands, except per-share data and percentages | ||||||||||||||||||||||||||||
| Three Months Ended | % Change from | |||||||||||||||||||||||||||
| Mar 31 2017 | Dec 31 2016 | Sep 30 2016 | Jun 30 2016 | Mar 31 2016 | Dec 31 2016 | Mar 31 2016 | ||||||||||||||||||||||
| Interest Income: | ||||||||||||||||||||||||||||
| Interest income | $ | 158,487 | $ | 153,012 | $ | 151,468 | $ | 149,309 | $ | 149,311 | 3.6 | % | 6.1 | % | ||||||||||||||
| Interest expense | 20,908 | 20,775 | 20,903 | 20,393 | 20,257 | 0.6 | % | 3.2 | % | |||||||||||||||||||
| Net Interest Income | 137,579 | 132,237 | 130,565 | 128,916 | 129,054 | 4.0 | % | 6.6 | % | |||||||||||||||||||
| Provision for credit losses | 4,800 | 5,000 | 4,141 | 2,511 | 1,530 | (4.0 | %) | 213.7 | % | |||||||||||||||||||
| Net Interest Income after Provision | 132,779 | 127,237 | 126,424 | 126,405 | 127,524 | 4.4 | % | 4.1 | % | |||||||||||||||||||
| Non-Interest Income: | ||||||||||||||||||||||||||||
| Other service charges and fees | 12,437 | 13,333 | 14,407 | 12,983 | 10,750 | (6.7 | %) | 15.7 | % | |||||||||||||||||||
| Service charges on deposit accounts | 12,400 | 12,814 | 13,078 | 12,896 | 12,558 | (3.2 | %) | (1.3 | %) | |||||||||||||||||||
| Investment management and trust services | 11,808 | 11,610 | 11,425 | 11,247 | 10,988 | 1.7 | % | 7.5 | % | |||||||||||||||||||
| Mortgage banking income | 4,596 | 6,959 | 4,529 | 3,897 | 4,030 | (34.0 | %) | 14.0 | % | |||||||||||||||||||
| Other | 4,326 | 6,514 | 4,708 | 5,038 | 3,864 | (33.6 | %) | 12.0 | % | |||||||||||||||||||
| Non-Interest Income before Investment Securities Gains | 45,567 | 51,230 | 48,147 | 46,061 | 42,190 | (11.1 | %) | 8.0 | % | |||||||||||||||||||
| Investment securities gains | 1,106 | 1,525 | 2 | 76 | 947 | (27.5 | %) | 16.8 | % | |||||||||||||||||||
| Total Non-Interest Income | 46,673 | 52,755 | 48,149 | 46,137 | 43,137 | (11.5 | %) | 8.2 | % | |||||||||||||||||||
| Non-Interest Expense: | ||||||||||||||||||||||||||||
| Salaries and employee benefits | 69,236 | 73,256 | 70,696 | 70,029 | 69,372 | (5.5 | %) | (0.2 | %) | |||||||||||||||||||
| Net occupancy expense | 12,663 | 11,798 | 11,782 | 11,811 | 12,220 | 7.3 | % | 3.6 | % | |||||||||||||||||||
| Other outside services | 5,546 | 6,536 | 5,783 | 5,508 | 6,056 | (15.1 | %) | (8.4 | %) | |||||||||||||||||||
| Software | 4,693 | 4,912 | 4,117 | 3,953 | 3,921 | (4.5 | %) | 19.7 | % | |||||||||||||||||||
| Data processing | 4,286 | 4,530 | 4,610 | 5,476 | 5,400 | (5.4 | %) | (20.6 | %) | |||||||||||||||||||
| Equipment expense | 3,359 | 3,408 | 3,137 | 2,872 | 3,371 | (1.4 | %) | (0.4 | %) | |||||||||||||||||||
| Professional fees | 2,737 | 2,783 | 2,535 | 3,353 | 2,333 | (1.7 | %) | 17.3 | % | |||||||||||||||||||
| FDIC insurance expense | 2,058 | 2,067 | 1,791 | 2,960 | 2,949 | (0.4 | %) | (30.2 | %) | |||||||||||||||||||
| Marketing | 1,986 | 1,730 | 1,774 | 1,916 | 1,624 | 14.8 | % | 22.3 | % | |||||||||||||||||||
| Other | 15,711 | 16,601 | 13,623 | 13,759 | 13,167 | (5.4 | %) | 19.3 | % | |||||||||||||||||||
| Total Non-Interest Expense | 122,275 | 127,621 | 119,848 | 121,637 | 120,413 | (4.2 | %) | 1.5 | % | |||||||||||||||||||
| Income before Income Taxes | 57,177 | 52,371 | 54,725 | 50,905 | 50,248 | 9.2 | % | 13.8 | % | |||||||||||||||||||
| Income tax expense | 13,797 | 10,221 | 13,257 | 11,155 | 11,991 | 35.0 | % | 15.1 | % | |||||||||||||||||||
| Net Income | $ | 43,380 | $ | 42,150 | $ | 41,468 | $ | 39,750 | $ | 38,257 | 2.9 | % | 13.4 | % | ||||||||||||||
PER SHARE: | ||||||||||||||||||||||||||||
| Net income: | ||||||||||||||||||||||||||||
| Basic | $ | 0.25 | $ | 0.24 | $ | 0.24 | $ | 0.23 | $ | 0.22 | 4.2 | % | 13.6 | % | ||||||||||||||
| Diluted | 0.25 | 0.24 | 0.24 | 0.23 | 0.22 | 4.2 | % | 13.6 | % | |||||||||||||||||||
| Cash dividends | $ | 0.11 | $ | 0.12 | $ | 0.10 | $ | 0.10 | $ | 0.09 | (8.3 | %) | 22.2 | % | ||||||||||||||
| Shareholders' equity | 12.36 | 12.19 | 12.30 | 12.17 | 11.96 | 1.4 | % | 3.3 | % | |||||||||||||||||||
| Shareholders' equity (tangible) | 9.31 | 9.13 | 9.23 | 9.10 | 8.89 | 2.0 | % | 4.7 | % | |||||||||||||||||||
| Weighted average shares (basic) | 174,150 | 173,554 | 173,020 | 173,394 | 173,331 | 0.3 | % | 0.5 | % | |||||||||||||||||||
| Weighted average shares (diluted) | 175,577 | 174,874 | 174,064 | 174,318 | 174,416 | 0.4 | % | 0.7 | % | |||||||||||||||||||
| Shares outstanding, end of period | 174,343 | 174,040 | 173,144 | 173,139 | 173,393 | 0.2 | % | 0.5 | % | |||||||||||||||||||
SELECTED FINANCIAL RATIOS: | ||||||||||||||||||||||||||||
| Return on average assets | 0.92 | % | 0.89 | % | 0.89 | % | 0.88 | % | 0.86 | % | ||||||||||||||||||
| Return on average shareholders' equity | 8.22 | % | 7.86 | % | 7.78 | % | 7.65 | % | 7.47 | % | ||||||||||||||||||
| Return on average shareholders' equity (tangible) | 10.93 | % | 10.47 | % | 10.38 | % | 10.26 | % | 10.07 | % | ||||||||||||||||||
| Net interest margin | 3.26 | % | 3.15 | % | 3.14 | % | 3.20 | % | 3.23 | % | ||||||||||||||||||
| Efficiency ratio | 64.76 | % | 67.60 | % | 65.16 | % | 67.59 | % | 68.33 | % | ||||||||||||||||||
| N/M - Not meaningful | ||||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||||
| March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||||||||||||||||||||||
| Average Balance | Interest (1) | Yield/ Rate | Average Balance | Interest (1) | Yield/ Rate | Average Balance | Interest (1) | Yield/ Rate | ||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||
| Loans, net of unearned income | $ | 14,857,562 | $ | 146,650 | 4.00 | % | $ | 14,475,816 | $ | 141,826 | 3.90 | % | $ | 13,853,420 | $ | 137,895 | 4.00 | % | ||||||||||||||||
| Taxable investment securities | 2,145,656 | 11,914 | 2.19 | % | 2,096,086 | 10,941 | 2.07 | % | 2,180,593 | 12,003 | 2.20 | % | ||||||||||||||||||||||
| Tax-exempt investment securities | 403,856 | 4,383 | 4.34 | % | 389,047 | 4,234 | 4.35 | % | 259,396 | 3,138 | 4.84 | % | ||||||||||||||||||||||
| Equity securities | 11,740 | 176 | 6.08 | % | 13,068 | 181 | 5.52 | % | 14,386 | 218 | 6.10 | % | ||||||||||||||||||||||
| Total Investment Securities | 2,561,252 | 16,473 | 2.57 | % | 2,498,201 | 15,356 | 2.45 | % | 2,454,375 | 15,359 | 2.50 | % | ||||||||||||||||||||||
| Loans held for sale | 15,857 | 187 | 4.72 | % | 24,411 | 199 | 3.26 | % | 12,252 | 131 | 4.28 | % | ||||||||||||||||||||||
| Other interest-earning assets | 312,295 | 842 | 1.08 | % | 411,369 | 966 | 0.94 | % | 358,562 | 898 | 1.00 | % | ||||||||||||||||||||||
| Total Interest-earning Assets | 17,746,966 | 164,152 | 3.74 | % | 17,409,797 | 158,347 | 3.62 | % | 16,678,609 | 154,283 | 3.72 | % | ||||||||||||||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||||||||||||||||
| Cash and due from banks | 116,529 | 117,741 | 98,449 | |||||||||||||||||||||||||||||||
| Premises and equipment | 217,875 | 226,482 | 226,284 | |||||||||||||||||||||||||||||||
| Other assets | 1,149,621 | 1,171,031 | 1,137,292 | |||||||||||||||||||||||||||||||
| Less: allowance for loan losses | (170,134 | ) | (164,523 | ) | (167,372 | ) | ||||||||||||||||||||||||||||
| Total Assets | $ | 19,060,857 | $ | 18,760,528 | $ | 17,973,262 | ||||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 3,650,931 | $ | 2,239 | 0.25 | % | $ | 3,714,391 | $ | 1,927 | 0.21 | % | $ | 3,438,355 | $ | 1,494 | 0.17 | % | ||||||||||||||||
| Savings deposits | 4,194,216 | 2,211 | 0.21 | % | 4,216,090 | 2,249 | 0.21 | % | 3,932,824 | 1,804 | 0.18 | % | ||||||||||||||||||||||
| Time deposits | 2,739,453 | 7,352 | 1.09 | % | 2,777,203 | 7,593 | 1.09 | % | 2,867,651 | 7,429 | 1.04 | % | ||||||||||||||||||||||
| Total Interest-bearing Deposits | 10,584,600 | 11,802 | 0.45 | % | 10,707,684 | 11,769 | 0.44 | % | 10,238,830 | 10,727 | 0.42 | % | ||||||||||||||||||||||
| Short-term borrowings | 712,497 | 855 | 0.48 | % | 308,094 | 116 | 0.15 | % | 445,402 | 268 | 0.24 | % | ||||||||||||||||||||||
| FHLB advances and long-term debt | 990,044 | 8,252 | 3.35 | % | 947,661 | 8,891 | 3.74 | % | 958,213 | 9,262 | 3.88 | % | ||||||||||||||||||||||
| Total Interest-bearing Liabilities | 12,287,141 | 20,909 | 0.69 | % | 11,963,439 | 20,776 | 0.69 | % | 11,642,445 | 20,257 | 0.70 | % | ||||||||||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||
| Demand deposits | 4,301,727 | 4,331,894 | 3,967,887 | |||||||||||||||||||||||||||||||
| Other | 331,442 | 332,540 | 304,131 | |||||||||||||||||||||||||||||||
| Total Liabilities | 16,920,310 | 16,627,873 | 15,914,463 | |||||||||||||||||||||||||||||||
| Shareholders' equity | 2,140,547 | 2,132,655 | 2,058,799 | |||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 19,060,857 | $ | 18,760,528 | $ | 17,973,262 | ||||||||||||||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 143,243 | 3.26 | % | 137,571 | 3.15 | % | 134,026 | 3.23 | % | |||||||||||||||||||||||||
| Tax equivalent adjustment | (5,664 | ) | (5,334 | ) | (4,972 | ) | ||||||||||||||||||||||||||||
| Net interest income | $ | 137,579 | $ | 132,237 | $ | 129,054 | ||||||||||||||||||||||||||||
| (1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances. | ||||||||||||||||||||||||||||||||||
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | ||||||||||||||||||||||||||||||||||
| Three Months Ended | % Change from | |||||||||||||||||||||||||||||||||
| March 31 2017 | December 31 2016 | September 30 2016 | June 30 2016 | March 31 2016 | December 31 2016 | March 31 2016 | ||||||||||||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,039,140 | $ | 5,828,313 | $ | 5,670,888 | $ | 5,557,680 | $ | 5,487,421 | 3.6 | % | 10.1 | % | ||||||||||||||||||||
| Commercial - industrial, financial and agricultural | 4,205,070 | 4,081,498 | 4,066,275 | 4,080,524 | 4,095,268 | 3.0 | % | 2.7 | % | |||||||||||||||||||||||||
| Real estate - residential mortgage | 1,637,669 | 1,572,895 | 1,503,209 | 1,399,851 | 1,381,409 | 4.1 | % | 18.6 | % | |||||||||||||||||||||||||
| Real estate - home equity | 1,613,249 | 1,633,668 | 1,640,913 | 1,656,140 | 1,674,032 | (1.2 | %) | (3.6 | %) | |||||||||||||||||||||||||
| Real estate - construction | 840,968 | 845,528 | 837,920 | 820,881 | 792,014 | (0.5 | %) | 6.2 | % | |||||||||||||||||||||||||
| Consumer | 284,352 | 289,864 | 281,517 | 272,293 | 263,295 | (1.9 | %) | 8.0 | % | |||||||||||||||||||||||||
| Leasing and other | 237,114 | 224,050 | 211,528 | 178,655 | 159,981 | 5.8 | % | 48.2 | % | |||||||||||||||||||||||||
| Total Loans, net of unearned income | $ | 14,857,562 | $ | 14,475,816 | $ | 14,212,250 | $ | 13,966,024 | $ | 13,853,420 | 2.6 | % | 7.2 | % | ||||||||||||||||||||
| Deposits, by type: | ||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,301,727 | $ | 4,331,894 | $ | 4,227,639 | $ | 4,077,642 | $ | 3,967,887 | (0.7 | %) | 8.4 | % | ||||||||||||||||||||
| Interest-bearing demand | 3,650,931 | 3,714,391 | 3,602,448 | 3,454,031 | 3,438,355 | (1.7 | %) | 6.2 | % | |||||||||||||||||||||||||
| Savings and money market accounts | 4,194,216 | 4,216,090 | 4,078,942 | 3,989,988 | 3,932,824 | (0.5 | %) | 6.6 | % | |||||||||||||||||||||||||
| Time deposits | 2,739,453 | 2,777,203 | 2,814,258 | 2,844,434 | 2,867,651 | (1.4 | %) | (4.5 | %) | |||||||||||||||||||||||||
| Total Deposits | $ | 14,886,327 | $ | 15,039,578 | $ | 14,723,287 | $ | 14,366,095 | $ | 14,206,717 | (1.0 | %) | 4.8 | % | ||||||||||||||||||||
| Short-term borrowings, by type: | ||||||||||||||||||||||||||||||||||
| Customer repurchase agreements | $ | 199,403 | $ | 200,126 | $ | 187,588 | $ | 180,595 | $ | 171,408 | (0.4 | %) | 16.3 | % | ||||||||||||||||||||
| Customer short-term promissory notes | 79,985 | 67,355 | 70,072 | 77,535 | 74,013 | 18.8 | % | 8.1 | % | |||||||||||||||||||||||||
| Federal funds purchased | 308,220 | 40,613 | 148,546 | 138,012 | 183,970 | 658.9 | % | 67.5 | % | |||||||||||||||||||||||||
| Short-term FHLB advances and other borrowings | 124,889 | - | 20,163 | 7,527 | 16,011 | N/M | 680.0 | % | ||||||||||||||||||||||||||
| Total Short-term Borrowings | $ | 712,497 | $ | 308,094 | $ | 426,369 | $ | 403,669 | $ | 445,402 | 131.3 | % | 60.0 | % | ||||||||||||||||||||
| N/M - Not meaningful | ||||||||||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||
| ASSET QUALITY INFORMATION (UNAUDITED) | ||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| Mar 31 2017 | Dec 31 2016 | Sep 30 2016 | Jun 30 2016 | Mar 31 2016 | ||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES: | ||||||||||||||||||||
| Balance at beginning of period | $ | 171,325 | $ | 165,169 | $ | 165,108 | $ | 166,065 | $ | 171,412 | ||||||||||
| Loans charged off: | ||||||||||||||||||||
| Commercial - industrial, financial and agricultural | (5,527 | ) | (1,319 | ) | (3,144 | ) | (4,625 | ) | (6,188 | ) | ||||||||||
| Consumer and home equity | (1,554 | ) | (2,156 | ) | (1,394 | ) | (1,614 | ) | (2,548 | ) | ||||||||||
| Real estate - commercial mortgage | (1,224 | ) | (174 | ) | (1,350 | ) | (1,474 | ) | (582 | ) | ||||||||||
| Real estate - construction | (247 | ) | 0 | (150 | ) | (742 | ) | (326 | ) | |||||||||||
| Real estate - residential mortgage | (216 | ) | (116 | ) | (802 | ) | (340 | ) | (1,068 | ) | ||||||||||
| Leasing and other | (639 | ) | (589 | ) | (832 | ) | (1,951 | ) | (443 | ) | ||||||||||
| Total loans charged off | (9,407 | ) | (4,354 | ) | (7,672 | ) | (10,746 | ) | (11,155 | ) | ||||||||||
| Recoveries of loans previously charged off: | ||||||||||||||||||||
| Commercial - industrial, financial and agricultural | 4,191 | 2,192 | 1,539 | 2,931 | 2,319 | |||||||||||||||
| Consumer and home equity | 373 | 580 | 463 | 889 | 534 | |||||||||||||||
| Real estate - commercial mortgage | 450 | 885 | 296 | 1,367 | 825 | |||||||||||||||
| Real estate - construction | 548 | 1,080 | 898 | 1,563 | 383 | |||||||||||||||
| Real estate - residential mortgage | 230 | 288 | 228 | 420 | 136 | |||||||||||||||
| Leasing and other | 137 | 485 | 168 | 108 | 81 | |||||||||||||||
| Recoveries of loans previously charged off | 5,929 | 5,510 | 3,592 | 7,278 | 4,278 | |||||||||||||||
| Net loans recovered (charged off) | (3,478 | ) | 1,156 | (4,080 | ) | (3,468 | ) | (6,877 | ) | |||||||||||
| Provision for credit losses | 4,800 | 5,000 | 4,141 | 2,511 | 1,530 | |||||||||||||||
| Balance at end of period | $ | 172,647 | $ | 171,325 | $ | 165,169 | $ | 165,108 | $ | 166,065 | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.09 | % | (0.03 | %) | 0.11 | % | 0.10 | % | 0.20 | % | ||||||||||
NON-PERFORMING ASSETS: | ||||||||||||||||||||
| Non-accrual loans | $ | 117,264 | $ | 120,133 | $ | 124,017 | $ | 111,742 | $ | 122,170 | ||||||||||
| Loans 90 days past due and accruing | 14,268 | 11,505 | 14,095 | 15,992 | 15,013 | |||||||||||||||
| Total non-performing loans | 131,532 | 131,638 | 138,112 | 127,734 | 137,183 | |||||||||||||||
| Other real estate owned | 11,906 | 12,815 | 11,981 | 11,918 | 10,946 | |||||||||||||||
| Total non-performing assets | $ | 143,438 | $ | 144,453 | $ | 150,093 | $ | 139,652 | $ | 148,129 | ||||||||||
NON-PERFORMING LOANS, BY TYPE: | ||||||||||||||||||||
| Commercial - industrial, financial and agricultural | $ | 43,826 | $ | 43,460 | $ | 47,330 | $ | 38,902 | $ | 39,140 | ||||||||||
| Real estate - commercial mortgage | 36,713 | 39,319 | 39,631 | 35,704 | 43,132 | |||||||||||||||
| Real estate - residential mortgage | 23,597 | 23,655 | 23,451 | 25,030 | 25,182 | |||||||||||||||
| Real estate - construction | 13,550 | 9,842 | 11,223 | 11,879 | 12,005 | |||||||||||||||
| Consumer and home equity | 13,408 | 15,045 | 16,426 | 16,061 | 16,210 | |||||||||||||||
| Leasing | 438 | 317 | 51 | 158 | 1,514 | |||||||||||||||
| Total non-performing loans | $ | 131,532 | $ | 131,638 | $ | 138,112 | $ | 127,734 | $ | 137,183 | ||||||||||
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE: | ||||||||||||||||||||
| Real-estate - residential mortgage | $ | 27,033 | $ | 27,617 | $ | 26,854 | $ | 27,324 | $ | 27,565 | ||||||||||
| Real-estate - commercial mortgage | 15,237 | 15,957 | 16,085 | 17,808 | 17,427 | |||||||||||||||
| Consumer and home equity | 9,638 | 8,633 | 7,707 | 7,191 | 6,562 | |||||||||||||||
| Commercial - industrial, financial and agricultural | 7,441 | 6,627 | 7,488 | 5,756 | 5,650 | |||||||||||||||
| Real estate - construction | 273 | 726 | 843 | 3,086 | 3,092 | |||||||||||||||
| Total accruing TDRs | 59,622 | 59,560 | 58,977 | 61,165 | 60,296 | |||||||||||||||
| Non-accrual TDRs (1) | 27,220 | 27,850 | 27,904 | 24,887 | 27,277 | |||||||||||||||
| Total TDRs | $ | 86,842 | $ | 87,410 | $ | 86,881 | $ | 86,052 | $ | 87,573 | ||||||||||
| (1) Included within non-accrual loans above. | ||||||||||||||||||||
| Total Delinquency % | ||||||||||||||||||||
DELINQUENCY RATES, BY TYPE: | Mar 31 2017 | Dec 31 2016 | Sep 30 2016 | Jun 30 2016 | Mar 31 2016 | |||||||||||||||
| Real estate - commercial mortgage | 0.78 | % | 0.78 | % | 0.87 | % | 0.81 | % | 0.93 | % | ||||||||||
| Commercial - industrial, financial and agricultural | 1.25 | % | 1.31 | % | 1.48 | % | 1.25 | % | 1.46 | % | ||||||||||
| Real estate - construction | 1.99 | % | 1.29 | % | 1.61 | % | 1.93 | % | 2.00 | % | ||||||||||
| Real estate - residential mortgage | 2.44 | % | 2.74 | % | 2.67 | % | 2.70 | % | 3.10 | % | ||||||||||
| Consumer, home equity, leasing and other | 1.22 | % | 1.45 | % | 1.53 | % | 1.47 | % | 1.48 | % | ||||||||||
| Total | 1.23 | % | 1.27 | % | 1.38 | % | 1.30 | % | 1.44 | % | ||||||||||
ASSET QUALITY RATIOS: | ||||||||||||||||||||
| Mar 31 2017 | Dec 31 2016 | Sep 30 2016 | Jun 30 2016 | Mar 31 2016 | ||||||||||||||||
| Non-accrual loans to total loans | 0.78 | % | 0.82 | % | 0.86 | % | 0.79 | % | 0.88 | % | ||||||||||
| Non-performing loans to total loans | 0.88 | % | 0.90 | % | 0.96 | % | 0.90 | % | 0.99 | % | ||||||||||
| Non-performing assets to total loans and OREO | 0.96 | % | 0.98 | % | 1.04 | % | 0.99 | % | 1.07 | % | ||||||||||
| Non-performing assets to total assets | 0.75 | % | 0.76 | % | 0.80 | % | 0.76 | % | 0.82 | % | ||||||||||
| Allowance for credit losses to loans outstanding | 1.15 | % | 1.17 | % | 1.15 | % | 1.17 | % | 1.20 | % | ||||||||||
| Allowance for credit losses to non-performing loans | 131.26 | % | 130.15 | % | 119.59 | % | 129.26 | % | 121.05 | % | ||||||||||
Non-performing assets to tangible common shareholders' equity and allowance for credit losses | 7.99 | % | 8.20 | % | 8.51 | % | 8.02 | % | 8.67 | % | ||||||||||
| FULTON FINANCIAL CORPORATION | ||
| RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED) | ||
| in thousands, except per share data and percentages | ||
Explanatory note: | This press release contains 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 | ||||||||||||||||||||
| March 31 2017 | December 31 2016 | September 30 2016 | June 30 2016 | March 31 2016 | ||||||||||||||||
Shareholders' equity (tangible), per share | ||||||||||||||||||||
| Shareholders' equity | $ | 2,154,683 | $ | 2,121,115 | $ | 2,129,436 | $ | 2,106,997 | $ | 2,073,309 | ||||||||||
| Less: Goodwill and intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||
| Tangible shareholders' equity (numerator) | $ | 1,623,127 | $ | 1,589,559 | $ | 1,597,880 | $ | 1,575,441 | $ | 1,541,753 | ||||||||||
| Shares outstanding, end of period (denominator) | 174,343 | 174,040 | 173,144 | 173,139 | 173,393 | |||||||||||||||
| Shareholders' equity (tangible), per share | $ | 9.31 | $ | 9.13 | $ | 9.23 | $ | 9.10 | $ | 8.89 | ||||||||||
Return on average shareholders' equity (tangible) | ||||||||||||||||||||
| Net Income - Numerator | $ | 43,380 | $ | 42,150 | $ | 41,468 | $ | 39,750 | $ | 38,257 | ||||||||||
| Average shareholders' equity | $ | 2,140,547 | $ | 2,132,655 | $ | 2,120,596 | $ | 2,089,915 | $ | 2,058,799 | ||||||||||
| Less: Average goodwill and intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||
| Average tangible shareholders' equity (denominator) | $ | 1,608,991 | $ | 1,601,099 | $ | 1,589,040 | $ | 1,558,359 | $ | 1,527,243 | ||||||||||
| Return on average shareholders' equity (tangible), annualized | 10.93 | % | 10.47 | % | 10.38 | % | 10.26 | % | 10.07 | % | ||||||||||
Efficiency ratio | ||||||||||||||||||||
| Non-interest expense - Numerator | $ | 122,275 | $ | 127,621 | $ | 119,848 | $ | 121,637 | $ | 120,413 | ||||||||||
| Net interest income (fully taxable equivalent) | $ | 143,243 | $ | 137,571 | $ | 135,784 | $ | 133,890 | $ | 134,026 | ||||||||||
| Plus: Total Non-interest income | 46,673 | 52,755 | 48,149 | 46,137 | 43,137 | |||||||||||||||
| Less: Investment securities gains | (1,106 | ) | (1,525 | ) | (2 | ) | (76 | ) | (947 | ) | ||||||||||
| Denominator | $ | 188,810 | $ | 188,801 | $ | 183,931 | $ | 179,951 | $ | 176,216 | ||||||||||
| Efficiency ratio | 64.76 | % | 67.60 | % | 65.16 | % | 67.59 | % | 68.33 | % | ||||||||||
Non-performing assets to tangible shareholders' equity and allowance for credit losses | ||||||||||||||||||||
| Non-performing assets (numerator) | $ | 143,438 | $ | 144,453 | $ | 150,093 | $ | 139,652 | $ | 148,129 | ||||||||||
| Tangible shareholders' equity | $ | 1,623,127 | $ | 1,589,559 | $ | 1,597,880 | $ | 1,575,441 | $ | 1,541,753 | ||||||||||
| Plus: Allowance for credit losses | 172,647 | 171,325 | 165,169 | 165,108 | 166,065 | |||||||||||||||
| Tangible shareholders' equity and allowance for credit losses (denominator) | $ | 1,795,774 | $ | 1,760,884 | $ | 1,763,049 | $ | 1,740,549 | $ | 1,707,818 | ||||||||||
| Non-performing assets to tangible shareholders' equity and allowance for credit losses | 7.99 | % | 8.20 | % | 8.51 | % | 8.02 | % | 8.67 | % | ||||||||||
Pre-provision net revenue | ||||||||||||||||||||
| Net interest income | $ | 137,579 | $ | 132,237 | $ | 130,565 | $ | 128,916 | $ | 129,054 | ||||||||||
| Non-interest income | 46,673 | 52,755 | 48,149 | 46,137 | 43,137 | |||||||||||||||
| Less: Investment securities gains | (1,106 | ) | (1,525 | ) | (2 | ) | (76 | ) | (947 | ) | ||||||||||
| Total revenue | $ | 183,146 | $ | 183,467 | $ | 178,712 | $ | 174,977 | $ | 171,244 | ||||||||||
| Total Non-interest expense | $ | 122,275 | $ | 127,621 | $ | 119,848 | $ | 121,637 | $ | 120,413 | ||||||||||
| Pre-provision net revenue | $ | 60,871 | $ | 55,846 | $ | 58,864 | $ | 53,340 | $ | 50,831 | ||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170418006354/en/
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