Fulton Financial Corporation (NASDAQ:FULT) reported net income of $48.9 million, or 28 cents per diluted share, for the third quarter of 2017.
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"Overall, we are pleased with our third quarter financial performance as we’ve hit a couple of key milestones that help us continue to drive shareholder value,” said E. Philip Wenger, Chairman, President and CEO. “I’m extremely proud of our team’s continued focus on growth, efficiency and profitability. This resulted in total revenue that hit a record level in the third quarter and helped our company reach $20 billion in assets.”
Net Interest Income and Margin
Net interest income for the third quarter of 2017 increased $5.2 million, or 3.7 percent, from the second quarter of 2017. Net interest margin decreased two basis points, or 0.6 percent, to 3.27 percent in the third quarter of 2017, from 3.29 percent in the second quarter of 2017. The average yield on interest-earning assets increased two basis points, while the average cost of interest-bearing liabilities increased five basis points, during the third quarter of 2017 in comparison to the second quarter of 2017. The two basis point increase in the average yield on interest-earning assets reflects a seven basis point increase in loan yields, which was partially offset by higher levels of lower-yielding other interest-earning assets in the third quarter of 2017.
Average Balance Sheet
Total average assets for the third quarter of 2017 were $19.9 billion, an increase of $571.8 million from the second quarter of 2017. Average loans, net of unearned income, increased $264.9 million, or 1.8 percent, in comparison to the second quarter of 2017. Average loans and yields, by type, for the third quarter of 2017 in comparison to the second quarter of 2017, are summarized in the following table:
| Three Months Ended | Increase (decrease) | ||||||||||||||||||
| September 30, 2017 | June 30, 2017 | in Balance | |||||||||||||||||
| Balance | Yield (1) | Balance | Yield (1) | $ | % | ||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Average Loans, net of unearned income, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,208,630 | 4.07 | % | $ | 6,163,844 | 4.00 | % | $ | 44,786 | 0.7 | % | |||||||
| Commercial - industrial, financial and agricultural | 4,257,075 | 4.08 | % | 4,221,025 | 4.00 | % | 36,050 | 0.9 | % | ||||||||||
| Real estate - residential mortgage | 1,841,559 | 3.83 | % | 1,707,929 | 3.77 | % | 133,630 | 7.8 | % | ||||||||||
| Real estate - home equity | 1,569,898 | 4.48 | % | 1,587,680 | 4.33 | % | (17,782 | ) | (1.1 | %) | |||||||||
| Real estate - construction | 943,029 | 4.05 | % | 897,321 | 3.98 | % | 45,708 | 5.1 | % | ||||||||||
| Consumer | 318,546 | 4.94 | % | 300,966 | 5.03 | % | 17,580 | 5.8 | % | ||||||||||
| Leasing and other | 253,330 | 4.91 | % | 248,440 | 5.04 | % | 4,890 | 2.0 | % | ||||||||||
| Total Average Loans, net of unearned income | $ | 15,392,067 | 4.12 | % | $ | 15,127,205 | 4.05 | % | $ | 264,862 | 1.8 | % | |||||||
(1) Presented on a fully-taxable equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
Total average liabilities increased $537.6 million, or 3.1 percent, from the second quarter of 2017, while average deposits increased $786.4 million, or 5.2 percent. Average deposits and interest rates, by type, for the third quarter of 2017 in comparison to the second quarter of 2017, are summarized in the following table:
| Three Months Ended | Increase (decrease) | |||||||||||||||||
| September 30, 2017 | June 30, 2017 | in Balance | ||||||||||||||||
| Balance | Rate | Balance | Rate | $ | % | |||||||||||||
| (dollars in thousands) | ||||||||||||||||||
| Average Deposits, by type: | ||||||||||||||||||
| Noninterest-bearing demand | $ | 4,494,897 | - | % | $ | 4,387,517 | - | % | $ | 107,380 | 2.4 | % | ||||||
| Interest-bearing demand | 3,943,118 | 0.39 | % | 3,690,059 | 0.30 | % | 253,059 | 6.9 | % | |||||||||
| Savings and money market deposits | 4,603,155 | 0.34 | % | 4,315,495 | 0.25 | % | 287,660 | 6.7 | % | |||||||||
| Total average demand and savings | 13,041,170 | 0.24 | % | 12,393,071 | 0.18 | % | 648,099 | 5.2 | % | |||||||||
| Brokered deposits | 89,767 | 1.23 | % | - | - | % | 89,767 | - | % | |||||||||
| Time deposits | 2,744,532 | 1.15 | % | 2,696,033 | 1.10 | % | 48,499 | 1.8 | % | |||||||||
| Total Average Deposits | $ | 15,875,469 | 0.40 | % | $ | 15,089,104 | 0.34 | % | $ | 786,365 | 5.2 | % | ||||||
Average short-term borrowings decreased $230.8 million, or 36.4%, from the second quarter of 2017, as a portion of these borrowings were repaid with funds provided by the strong growth in deposits experienced during the third quarter of 2017.
Asset Quality
Non-performing assets were $147.0 million, or 0.73 percent of total assets, at September 30, 2017, compared to $147.2 million, or 0.75 percent of total assets, at June 30, 2017 and $150.1 million, or 0.80 percent of total assets, at September 30, 2016.
Annualized net charge-offs for the quarter ended September 30, 2017 were 0.14 percent of total average loans, compared to annualized net charge-offs of 0.11 percent for the quarters ended June 30, 2017 and September 30, 2016. The allowance for credit losses as a percentage of non-performing loans was 128.1 percent at September 30, 2017, as compared to 128.9 percent at June 30, 2017 and 119.6 percent at September 30, 2016.
During the third quarter of 2017, the Corporation recorded a $5.1 million provision for credit losses, compared to a $6.7 million provision for credit losses in the second quarter of 2017 and a $4.1 million provision in the third quarter of 2016.
Non-interest Income
Non-interest income, excluding investment securities gains, decreased $3.6 million, or 7.0 percent, in comparison to the second quarter of 2017. Other service charges and fees decreased $2.1 million, or 14.6 percent, due primarily to lower commercial loan interest rate swap fees. Mortgage banking income declined $1.3 million due to a reversal of the valuation allowance for mortgage servicing rights recorded in the second quarter of 2017. Also contributing to the decrease in non-interest income was lower gains from the sales of Small Business Administration loans.
Compared to the third quarter of 2016, non-interest income, excluding investment securities gains, decreased $770,000, or 1.6 percent, primarily due to lower commercial loan interest rate swap fees, partially offset by an increase in investment management and trust services income.
Gains on sales of investment securities increased $3.2 million in comparison to the second quarter of 2017, and increased $4.6 million from the third quarter of 2016. These increases resulted from sales in the Corporation’s portfolio of financial institution common stocks, which has increased in value over the past twelve months.
Non-interest Expense
Non-interest expense decreased $538,000, or 0.4 percent, in the third quarter of 2017, compared to the second quarter of 2017. Salaries and employee benefits decreased $1.6 million, or 2.2 percent, largely due to adjustments made to estimates of incentive compensation expense for 2017 and a seasonal decrease in payroll taxes. Other decreases occurred in outside services, other real estate expenses and professional fees. These reductions were offset by increases in data processing and software and FDIC insurance.
Compared to the third quarter of 2016, non-interest expense increased $12.3 million, or 10.3 percent, primarily due to increases in salaries and employee benefits, amortization of tax credit investments, state taxes, data processing and software and other outside services.
Income Tax Expense
The effective income tax rate for the third quarter of 2017 was 20.5 percent, as compared to 16.6 percent for the second quarter of 2017. The increase was partially due to an increase in income before income taxes. In addition, approximately $1.6 million of excess tax benefits associated with vesting of employee stock awards and stock option exercises were recorded as a reduction to income tax expense in the second quarter of 2017.
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 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, 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). 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 | ||||||||||||||||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | September 30 | ||||||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | 2017 | 2016 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
| Cash and due from banks | $ | 99,803 | $ | 94,938 | $ | 93,844 | $ | 118,763 | $ | 86,497 | 5.1 | % | 15.4 | % | ||||||||||||
| Other interest-earning assets | 645,796 | 392,842 | 350,387 | 291,252 | 428,966 | 64.4 | % | 50.5 | % | |||||||||||||||||
| Loans held for sale | 23,049 | 62,354 | 24,783 | 28,697 | 27,836 | -63.0 | % | -17.2 | % | |||||||||||||||||
| Investment securities | 2,561,516 | 2,488,699 | 2,506,017 | 2,559,227 | 2,508,068 | 2.9 | % | 2.1 | % | |||||||||||||||||
| Loans, net of unearned income | 15,486,899 | 15,346,617 | 14,963,177 | 14,699,272 | 14,391,238 | 0.9 | % | 7.6 | % | |||||||||||||||||
| Allowance for loan losses | (172,245 | ) | (172,342 | ) | (170,076 | ) | (168,679 | ) | (162,526 | ) | -0.1 | % | 6.0 | % | ||||||||||||
| Net loans | 15,314,654 | 15,174,275 | 14,793,101 | 14,530,593 | 14,228,712 | 0.9 | % | 7.6 | % | |||||||||||||||||
| Premises and equipment | 221,551 | 217,558 | 216,171 | 217,806 | 228,009 | 1.8 | % | -2.8 | % | |||||||||||||||||
| Accrued interest receivable | 50,082 | 47,603 | 46,355 | 46,294 | 43,600 | 5.2 | % | 14.9 | % | |||||||||||||||||
| Goodwill and intangible assets | 531,556 | 531,556 | 531,556 | 531,556 | 531,556 | 0.0 | % | 0.0 | % | |||||||||||||||||
| Other assets | 614,853 | 637,610 | 616,362 | 620,059 | 617,818 | -3.6 | % | -0.5 | % | |||||||||||||||||
| Total Assets | $ | 20,062,860 | $ | 19,647,435 | $ | 19,178,576 | $ | 18,944,247 | $ | 18,701,062 | 2.1 | % | 7.3 | % | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||
| Deposits | $ | 16,141,780 | $ | 15,357,361 | $ | 15,090,344 | $ | 15,012,864 | $ | 14,952,479 | 5.1 | % | 8.0 | % | ||||||||||||
| Short-term borrowings | 298,751 | 694,859 | 453,317 | 541,317 | 264,042 | -57.0 | % | 13.1 | % | |||||||||||||||||
| Other liabilities | 358,384 | 365,484 | 342,323 | 339,548 | 389,819 | -1.9 | % | -8.1 | % | |||||||||||||||||
| FHLB advances and long-term debt | 1,038,159 | 1,037,961 | 1,137,909 | 929,403 | 965,286 | 0.0 | % | 7.5 | % | |||||||||||||||||
| Total Liabilities | 17,837,074 | 17,455,665 | 17,023,893 | 16,823,132 | 16,571,626 | 2.2 | % | 7.6 | % | |||||||||||||||||
| Shareholders' equity | 2,225,786 | 2,191,770 | 2,154,683 | 2,121,115 | 2,129,436 | 1.6 | % | 4.5 | % | |||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 20,062,860 | $ | 19,647,435 | $ | 19,178,576 | $ | 18,944,247 | $ | 18,701,062 | 2.1 | % | 7.3 | % | ||||||||||||
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | ||||||||||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,275,140 | $ | 6,262,008 | $ | 6,118,533 | $ | 6,018,582 | $ | 5,818,915 | 0.2 | % | 7.8 | % | ||||||||||||
| Commercial - industrial, financial and agricultural | 4,223,075 | 4,245,849 | 4,167,809 | 4,087,486 | 4,024,119 | -0.5 | % | 4.9 | % | |||||||||||||||||
| Real estate - residential mortgage | 1,887,907 | 1,784,712 | 1,665,142 | 1,601,994 | 1,542,696 | 5.8 | % | 22.4 | % | |||||||||||||||||
| Real estate - home equity | 1,567,473 | 1,579,739 | 1,595,901 | 1,625,115 | 1,640,421 | -0.8 | % | -4.4 | % | |||||||||||||||||
| Real estate - construction | 973,108 | 938,900 | 882,983 | 843,649 | 861,634 | 3.6 | % | 12.9 | % | |||||||||||||||||
| Consumer | 302,448 | 283,156 | 288,826 | 291,470 | 283,673 | 6.8 | % | 6.6 | % | |||||||||||||||||
| Leasing and other | 257,748 | 252,253 | 243,983 | 230,976 | 219,780 | 2.2 | % | 17.3 | % | |||||||||||||||||
| Total Loans, net of unearned income | $ | 15,486,899 | $ | 15,346,617 | $ | 14,963,177 | $ | 14,699,272 | $ | 14,391,238 | 0.9 | % | 7.6 | % | ||||||||||||
| Deposits, by type: | ||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,363,915 | $ | 4,574,619 | $ | 4,417,733 | $ | 4,376,137 | $ | 4,210,099 | -4.6 | % | 3.7 | % | ||||||||||||
| Interest-bearing demand | 4,119,419 | 3,650,204 | 3,702,663 | 3,703,712 | 3,703,048 | 12.9 | % | 11.2 | % | |||||||||||||||||
| Savings and money market accounts | 4,790,985 | 4,386,128 | 4,251,574 | 4,179,773 | 4,235,015 | 9.2 | % | 13.1 | % | |||||||||||||||||
| Total demand and savings | 13,274,319 | 12,610,951 | 12,371,970 | 12,259,622 | 12,148,162 | 5.3 | % | 9.3 | % | |||||||||||||||||
| Brokered deposits | 109,936 | - | - | - | - | 0.0 | % | 0.0 | % | |||||||||||||||||
| Time deposits | 2,757,525 | 2,746,410 | 2,718,374 | 2,753,242 | 2,804,317 | 0.4 | % | -1.7 | % | |||||||||||||||||
| Total Deposits | $ | 16,141,780 | $ | 15,357,361 | $ | 15,090,344 | $ | 15,012,864 | $ | 14,952,479 | 5.1 | % | 8.0 | % | ||||||||||||
| Short-term borrowings, by type: | ||||||||||||||||||||||||||
| Customer repurchase agreements | $ | 185,945 | $ | 174,224 | $ | 181,170 | $ | 195,734 | $ | 189,727 | 6.7 | % | -2.0 | % | ||||||||||||
| Customer short-term promissory notes | 106,994 | 74,366 | 87,726 | 67,013 | 65,871 | 43.9 | % | 62.4 | % | |||||||||||||||||
| Short-term FHLB advances | - | 240,000 | 130,000 | - | - | -100.0 | % | 0.0 | % | |||||||||||||||||
| Federal funds purchased | 5,812 | 206,269 | 54,421 | 278,570 | 8,444 | -97.2 | % | -31.2 | % | |||||||||||||||||
| Total Short-term Borrowings | $ | 298,751 | $ | 694,859 | $ | 453,317 | $ | 541,317 | $ | 264,042 | -57.0 | % | 13.1 | % | ||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||
| in thousands, except per-share data and percentages | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | % Change from | Nine Months Ended | ||||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Jun 30 | Sep 30 | Sep 30 | |||||||||||||||||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | 2017 | 2016 | 2017 | 2016 | % Change | |||||||||||||||||||||||||||||
| Interest Income: | ||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 171,511 | $ | 163,881 | $ | 158,487 | $ | 153,012 | $ | 151,468 | 4.7 | % | 13.2 | % | $ | 493,879 | $ | 450,088 | 9.7 | % | ||||||||||||||||||
| Interest expense | 24,702 | 22,318 | 20,908 | 20,775 | 20,903 | 10.7 | % | 18.2 | % | 67,928 | 61,553 | 10.4 | % | |||||||||||||||||||||||||
| Net Interest Income | 146,809 | 141,563 | 137,579 | 132,237 | 130,565 | 3.7 | % | 12.4 | % | 425,951 | 388,535 | 9.6 | % | |||||||||||||||||||||||||
| Provision for credit losses | 5,075 | 6,700 | 4,800 | 5,000 | 4,141 | (24.3 | %) | 22.6 | % | 16,575 | 8,182 | 102.6 | % | |||||||||||||||||||||||||
| Net Interest Income after Provision | 141,734 | 134,863 | 132,779 | 127,237 | 126,424 | 5.1 | % | 12.1 | % | 409,376 | 380,353 | 7.6 | % | |||||||||||||||||||||||||
| Non-Interest Income: | ||||||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 13,022 | 12,914 | 12,400 | 12,814 | 13,078 | 0.8 | % | (0.4 | %) | 38,336 | 38,532 | (0.5 | %) | |||||||||||||||||||||||||
| Other service charges and fees | 12,251 | 14,342 | 12,437 | 13,333 | 14,407 | (14.6 | %) | (15.0 | %) | 39,030 | 38,140 | 2.3 | % | |||||||||||||||||||||||||
| Investment management and trust services | 12,157 | 12,132 | 11,808 | 11,610 | 11,425 | 0.2 | % | 6.4 | % | 36,097 | 33,660 | 7.2 | % | |||||||||||||||||||||||||
| Mortgage banking income | 4,805 | 6,141 | 4,596 | 6,959 | 4,529 | (21.8 | %) | 6.1 | % | 15,542 | 12,456 | 24.8 | % | |||||||||||||||||||||||||
| Other | 5,142 | 5,406 | 4,326 | 6,514 | 4,708 | (4.9 | %) | 9.2 | % | 14,874 | 13,610 | 9.3 | % | |||||||||||||||||||||||||
| Non-Interest Income before Investment Securities Gains | 47,377 | 50,935 | 45,567 | 51,230 | 48,147 | (7.0 | %) | (1.6 | %) | 143,879 | 136,398 | 5.5 | % | |||||||||||||||||||||||||
| Investment securities gains | 4,597 | 1,436 | 1,106 | 1,525 | 2 | N/M | N/M | 7,139 | 1,025 | N/M | ||||||||||||||||||||||||||||
| Total Non-Interest Income | 51,974 | 52,371 | 46,673 | 52,755 | 48,149 | (0.8 | %) | 7.9 | % | 151,018 | 137,423 | 9.9 | % | |||||||||||||||||||||||||
| Non-Interest Expense: | ||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 72,894 | 74,496 | 69,236 | 73,256 | 70,696 | (2.2 | %) | 3.1 | % | 216,626 | 210,097 | 3.1 | % | |||||||||||||||||||||||||
| Net occupancy expense | 12,180 | 12,316 | 12,663 | 11,798 | 11,782 | (1.1 | %) | 3.4 | % | 37,159 | 35,813 | 3.8 | % | |||||||||||||||||||||||||
| Data processing and software | 10,301 | 9,054 | 8,979 | 9,442 | 8,727 | 13.8 | % | 18.0 | % | 28,334 | 27,477 | 3.1 | % | |||||||||||||||||||||||||
| Other outside services | 6,582 | 7,708 | 5,546 | 6,536 | 5,783 | (14.6 | %) | 13.8 | % | 19,836 | 17,347 | 14.3 | % | |||||||||||||||||||||||||
| Amortization of tax credit investments | 3,503 | 3,151 | 998 | - | - | 11.2 | % | 100.0 | % | 7,652 | - | 100.0 | % | |||||||||||||||||||||||||
| Professional fees | 3,388 | 2,931 | 2,737 | 2,783 | 2,535 | 15.6 | % | 33.6 | % | 9,056 | 8,221 | 10.2 | % | |||||||||||||||||||||||||
| Equipment expense | 3,298 | 3,034 | 3,359 | 3,408 | 3,137 | 8.7 | % | 5.1 | % | 9,691 | 9,380 | 3.3 | % | |||||||||||||||||||||||||
| FDIC insurance expense | 3,007 | 2,366 | 2,058 | 2,067 | 1,791 | 27.1 | % | 67.9 | % | 7,431 | 7,700 | (3.5 | %) | |||||||||||||||||||||||||
| Marketing | 2,089 | 2,234 | 1,986 | 1,730 | 1,774 | (6.5 | %) | 17.8 | % | 6,309 | 5,314 | 18.7 | % | |||||||||||||||||||||||||
| Other | 14,915 | 15,405 | 14,713 | 16,601 | 13,623 | (3.2 | %) | 9.5 | % | 45,033 | 40,549 | 11.1 | % | |||||||||||||||||||||||||
| Total Non-Interest Expense | 132,157 | 132,695 | 122,275 | 127,621 | 119,848 | (0.4 | %) | 10.3 | % | 387,127 | 361,898 | 7.0 | % | |||||||||||||||||||||||||
| Income before Income Taxes | 61,551 | 54,539 | 57,177 | 52,371 | 54,725 | 12.9 | % | 12.5 | % | 173,267 | 155,878 | 11.2 | % | |||||||||||||||||||||||||
| Income tax expense | 12,646 | 9,072 | 13,797 | 10,221 | 13,257 | 39.4 | % | (4.6 | %) | 35,515 | 36,403 | (2.4 | %) | |||||||||||||||||||||||||
| Net Income | $ | 48,905 | $ | 45,467 | $ | 43,380 | $ | 42,150 | $ | 41,468 | 7.6 | % | 17.9 | % | $ | 137,752 | $ | 119,475 | 15.3 | % | ||||||||||||||||||
PER SHARE: | ||||||||||||||||||||||||||||||||||||||
| Net income: | ||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.28 | $ | 0.26 | $ | 0.25 | $ | 0.24 | $ | 0.24 | 7.7 | % | 16.7 | % | $ | 0.79 | $ | 0.69 | 14.5 | % | ||||||||||||||||||
| Diluted | 0.28 | 0.26 | 0.25 | 0.24 | 0.24 | 7.7 | % | 16.7 | % | 0.78 | 0.69 | 13.0 | % | |||||||||||||||||||||||||
| Cash dividends | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.12 | $ | 0.10 | - | 10.0 | % | $ | 0.33 | $ | 0.29 | 13.8 | % | |||||||||||||||||||
| Shareholders' equity | 12.71 | 12.54 | 12.36 | 12.19 | 12.30 | 1.4 | % | 3.3 | % | 12.71 | 12.30 | 3.3 | % | |||||||||||||||||||||||||
| Shareholders' equity (tangible) | 9.68 | 9.50 | 9.31 | 9.13 | 9.23 | 1.9 | % | 4.9 | % | 9.68 | 9.23 | 4.9 | % | |||||||||||||||||||||||||
| Weighted average shares (basic) | 174,991 | 174,597 | 174,150 | 173,554 | 173,020 | 0.2 | % | 1.1 | % | 174,582 | 173,248 | 0.8 | % | |||||||||||||||||||||||||
| Weighted average shares (diluted) | 176,216 | 175,532 | 175,577 | 174,874 | 174,064 | 0.4 | % | 1.2 | % | 175,776 | 174,265 | 0.9 | % | |||||||||||||||||||||||||
| Shares outstanding, end of period | 175,057 | 174,740 | 174,343 | 174,040 | 173,144 | 0.2 | % | 1.1 | % | 175,057 | 173,144 | 1.1 | % | |||||||||||||||||||||||||
SELECTED FINANCIAL RATIOS: | ||||||||||||||||||||||||||||||||||||||
| . | ||||||||||||||||||||||||||||||||||||||
| Return on average assets | 0.98 | % | 0.94 | % | 0.92 | % | 0.89 | % | 0.89 | % | 0.95 | % | 0.87 | % | ||||||||||||||||||||||||
| Return on average shareholders' equity | 8.76 | % | 8.36 | % | 8.22 | % | 7.86 | % | 7.78 | % | 8.45 | % | 7.64 | % | ||||||||||||||||||||||||
| Return on average shareholders' equity (tangible) | 11.52 | % | 11.06 | % | 10.93 | % | 10.47 | % | 10.38 | % | 11.18 | % | 10.24 | % | ||||||||||||||||||||||||
| Net interest margin | 3.27 | % | 3.29 | % | 3.26 | % | 3.15 | % | 3.14 | % | 3.27 | % | 3.19 | % | ||||||||||||||||||||||||
| Efficiency ratio | 64.30 | % | 65.33 | % | 64.23 | % | 67.60 | % | 65.16 | % | 64.63 | % | 67.01 | % | ||||||||||||||||||||||||
| N/M - Not meaningful | ||||||||||||||||||||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||||||||||||||||
| dollars in thousands | |||||||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||
| September 30, 2017 | June 30, 2017 | September 30, 2016 | |||||||||||||||||||||||||||||||
| 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 | $ | 15,392,067 | $ | 159,454 | 4.12 | % | $ | 15,127,205 | $ | 152,649 | 4.05 | % | $ | 14,212,250 | $ | 140,434 | 3.93 | % | |||||||||||||||
| Taxable investment securities | 2,115,931 | 11,423 | 2.01 | % | 2,090,120 | 11,473 | 2.12 | % | 2,110,084 | 10,872 | 2.06 | % | |||||||||||||||||||||
| Tax-exempt investment securities | 408,594 | 4,492 | 4.40 | % | 404,680 | 4,394 | 4.34 | % | 344,231 | 3,923 | 4.56 | % | |||||||||||||||||||||
| Equity securities | 8,709 | 143 | 6.52 | % | 10,759 | 148 | 5.52 | % | 14,209 | 196 | 5.50 | % | |||||||||||||||||||||
| Total Investment Securities | 2,533,234 | 16,058 | 2.53 | % | 2,505,559 | 16,015 | 2.56 | % | 2,468,524 | 14,991 | 2.43 | % | |||||||||||||||||||||
| Loans held for sale | 22,456 | 243 | 4.33 | % | 19,750 | 201 | 4.07 | % | 22,593 | 210 | 3.72 | % | |||||||||||||||||||||
| Other interest-earning assets | 590,676 | 1,667 | 1.12 | % | 324,719 | 802 | 0.99 | % | 501,666 | 1,051 | 0.84 | % | |||||||||||||||||||||
| Total Interest-earning Assets | 18,538,433 | 177,422 | 3.80 | % | 17,977,233 | 169,667 | 3.78 | % | 17,205,033 | 156,686 | 3.63 | % | |||||||||||||||||||||
| Noninterest-earning assets: | |||||||||||||||||||||||||||||||||
| Cash and due from banks | 101,643 | 103,078 | 101,927 | ||||||||||||||||||||||||||||||
| Premises and equipment | 220,129 | 218,075 | 227,906 | ||||||||||||||||||||||||||||||
| Other assets | 1,186,622 | 1,174,745 | 1,219,844 | ||||||||||||||||||||||||||||||
| Less: allowance for loan losses | (174,101 | ) | (172,156 | ) | (163,074 | ) | |||||||||||||||||||||||||||
| Total Assets | $ | 19,872,726 | $ | 19,300,975 | $ | 18,591,636 | |||||||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||||||||||||||||
| Demand deposits | $ | 3,943,118 | $ | 3,847 | 0.39 | % | $ | 3,690,059 | $ | 2,780 | 0.30 | % | $ | 3,602,448 | $ | 1,706 | 0.19 | % | |||||||||||||||
| Savings deposits | 4,603,155 | 3,962 | 0.34 | % | 4,315,495 | 2,710 | 0.25 | % | 4,078,942 | 2,042 | 0.20 | % | |||||||||||||||||||||
| Brokered deposits | 89,767 | 277 | 1.23 | % | 0 | - | 0.00 | % | - | - | 0.00 | % | |||||||||||||||||||||
| Time deposits | 2,744,532 | 7,937 | 1.15 | % | 2,696,033 | 7,394 | 1.10 | % | 2,814,258 | 7,562 | 1.07 | % | |||||||||||||||||||||
| Total Interest-bearing Deposits | 11,380,572 | 16,023 | 0.56 | % | 10,701,587 | 12,884 | 0.48 | % | 10,495,648 | 11,310 | 0.43 | % | |||||||||||||||||||||
| Short-term borrowings | 402,341 | 578 | 0.57 | % | 633,102 | 974 | 0.61 | % | 426,369 | 254 | 0.23 | % | |||||||||||||||||||||
| FHLB advances and long-term debt | 1,038,062 | 8,100 | 3.11 | % | 1,070,845 | 8,460 | 3.16 | % | 965,228 | 9,338 | 3.86 | % | |||||||||||||||||||||
| Total Interest-bearing Liabilities | 12,820,975 | 24,701 | 0.77 | % | 12,405,534 | 22,318 | 0.72 | % | 11,887,245 | 20,902 | 0.70 | % | |||||||||||||||||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||||||||||||||||
| Demand deposits | 4,494,897 | 4,387,517 | 4,227,639 | ||||||||||||||||||||||||||||||
| Other | 341,465 | 326,735 | 356,156 | ||||||||||||||||||||||||||||||
| Total Liabilities | 17,657,337 | 17,119,786 | 16,471,040 | ||||||||||||||||||||||||||||||
| Shareholders' equity | 2,215,389 | 2,181,189 | 2,120,596 | ||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 19,872,726 | $ | 19,300,975 | $ | 18,591,636 | |||||||||||||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 152,721 | 3.27 | % | 147,349 | 3.29 | % | 135,784 | 3.14 | % | ||||||||||||||||||||||||
| Tax equivalent adjustment | (5,912 | ) | (5,786 | ) | (5,219 | ) | |||||||||||||||||||||||||||
| Net interest income | $ | 146,809 | $ | 141,563 | $ | 130,565 | |||||||||||||||||||||||||||
| (1) 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 0.57%, 0.53% and 0.52% for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016, respectively. |
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | |||||||||||||||||||||
| Three Months Ended | % Change from | ||||||||||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | June 30 | September 30 | |||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | 2017 | 2016 | |||||||||||||||
| Loans, by type: | |||||||||||||||||||||
| Real estate - commercial mortgage | $ | 6,208,630 | $ | 6,163,844 | $ | 6,039,140 | $ | 5,828,313 | $ | 5,670,888 | 0.7 | % | 9.5 | % | |||||||
| Commercial - industrial, financial and agricultural | 4,257,075 | 4,221,025 | 4,205,070 | 4,081,498 | 4,066,275 | 0.9 | % | 4.7 | % | ||||||||||||
| Real estate - residential mortgage | 1,841,559 | 1,707,929 | 1,637,669 | 1,572,895 | 1,503,209 | 7.8 | % | 22.5 | % | ||||||||||||
| Real estate - home equity | 1,569,898 | 1,587,680 | 1,613,249 | 1,633,668 | 1,640,913 | (1.1 | %) | (4.3 | %) | ||||||||||||
| Real estate - construction | 943,029 | 897,321 | 840,968 | 845,528 | 837,920 | 5.1 | % | 12.5 | % | ||||||||||||
| Consumer | 318,546 | 300,967 | 284,352 | 289,864 | 281,517 | 5.8 | % | 13.2 | % | ||||||||||||
| Leasing and other | 253,330 | 248,440 | 237,114 | 224,050 | 211,528 | 2.0 | % | 19.8 | % | ||||||||||||
| Total Loans, net of unearned income | $ | 15,392,067 | $ | 15,127,205 | $ | 14,857,562 | $ | 14,475,816 | $ | 14,212,250 | 1.8 | % | 8.3 | % | |||||||
| Deposits, by type: | |||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,494,897 | $ | 4,387,517 | $ | 4,301,727 | $ | 4,331,894 | $ | 4,227,639 | 2.4 | % | 6.3 | % | |||||||
| Interest-bearing demand | 3,943,118 | 3,690,059 | 3,650,931 | 3,714,391 | 3,602,448 | 6.9 | % | 9.5 | % | ||||||||||||
| Savings and money market accounts | 4,603,155 | 4,315,495 | 4,194,216 | 4,216,090 | 4,078,942 | 6.7 | % | 12.9 | % | ||||||||||||
| Total demand and savings | 13,041,170 | 12,393,071 | 12,146,874 | 12,262,375 | 11,909,029 | 5.2 | % | 9.5 | % | ||||||||||||
| Brokered deposits | 89,767 | - | - | - | - | - | - | ||||||||||||||
| Time deposits | 2,744,532 | 2,696,033 | 2,739,453 | 2,777,203 | 2,814,258 | 1.8 | % | (2.5 | %) | ||||||||||||
| Total Deposits | $ | 15,875,469 | $ | 15,089,104 | $ | 14,886,327 | $ | 15,039,578 | $ | 14,723,287 | 5.2 | % | 7.8 | % | |||||||
| Short-term borrowings, by type: | |||||||||||||||||||||
| Customer repurchase agreements | $ | 176,415 | $ | 199,657 | $ | 199,403 | $ | 200,126 | $ | 187,587 | (11.6 | %) | (6.0 | %) | |||||||
| Customer short-term promissory notes | 80,147 | 77,554 | 79,985 | 67,355 | 70,072 | 3.3 | % | 14.4 | % | ||||||||||||
| Federal funds purchased | 90,453 | 242,375 | 308,220 | 40,613 | 148,546 | (62.7 | %) | (39.1 | %) | ||||||||||||
| Short-term FHLB advances and other borrowings | 55,326 | 113,516 | 124,889 | - | 20,163 | (51.3 | %) | N/M | |||||||||||||
| Total Short-term Borrowings | $ | 402,341 | $ | 633,102 | $ | 712,497 | $ | 308,094 | $ | 426,368 | (36.4 | %) | (5.6 | %) | |||||||
| N/M - Not meaningful | |||||||||||||||||||||
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | ||||||||||||||||||||||
| dollars in thousands | ||||||||||||||||||||||
| Nine Months Ended September 30 | ||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||
| Average | Average | |||||||||||||||||||||
| Balance | Interest (1) | Yield/Rate | Balance | Interest (1) | Yield/Rate | |||||||||||||||||
ASSETS | ||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||
| Loans, net of unearned income | $ | 15,127,569 | $ | 458,753 | 4.05 | % | $ | 14,011,301 | $ | 416,646 | 3.97 | % | ||||||||||
| Taxable investment securities | 2,117,127 | 34,811 | 2.11 | % | 2,139,378 | 34,034 | 2.12 | % | ||||||||||||||
| Tax-exempt investment securities | 405,728 | 13,268 | 4.36 | % | 306,298 | 10,631 | 4.63 | % | ||||||||||||||
| Equity securities | 10,391 | 467 | 6.01 | % | 14,272 | 599 | 5.60 | % | ||||||||||||||
| Total Investment Securities | 2,533,246 | 48,546 | 2.56 | % | 2,459,948 | 45,264 | 2.45 | % | ||||||||||||||
| Loans held for sale | 19,378 | 631 | 4.34 | % | 18,114 | 529 | 3.90 | % | ||||||||||||||
| Other interest-earning assets | 410,250 | 3,311 | 1.08 | % | 406,163 | 2,813 | 0.92 | % | ||||||||||||||
| Total Interest-earning Assets | 18,090,443 | 511,241 | 3.78 | % | 16,895,526 | 465,252 | 3.68 | % | ||||||||||||||
| Noninterest-earning assets: | ||||||||||||||||||||||
| Cash and due from banks | 107,029 | 100,417 | ||||||||||||||||||||
| Premises and equipment | 218,700 | 227,237 | ||||||||||||||||||||
| Other assets | 1,170,466 | 1,182,260 | ||||||||||||||||||||
| Less: allowance for loan losses | (172,145 | ) | (164,999 | ) | ||||||||||||||||||
| Total Assets | $ | 19,414,493 | $ | 18,240,441 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||
| Demand deposits | $ | 3,762,439 | $ | 8,865 | 0.32 | % | $ | 3,498,659 | $ | 4,727 | 0.18 | % | ||||||||||
| Savings deposits | 4,372,453 | 8,883 | 0.27 | % | 4,000,871 | 5,732 | 0.19 | % | ||||||||||||||
| Brokered deposits | 30,251 | 277 | 1.23 | % | - | - | 0.00 | % | ||||||||||||||
| Time deposits | 2,726,693 | 22,684 | 1.11 | % | 2,842,011 | 22,465 | 1.06 | % | ||||||||||||||
| Total Interest-bearing Deposits | 10,891,836 | 40,709 | 0.50 | % | 10,341,541 | 32,924 | 0.43 | % | ||||||||||||||
| Short-term borrowings | 581,511 | 2,407 | 0.55 | % | 425,151 | 739 | 0.23 | % | ||||||||||||||
| FHLB advances and long-term debt | 1,033,159 | 24,812 | 3.21 | % | 962,997 | 27,889 | 3.86 | % | ||||||||||||||
| Total Interest-bearing Liabilities | 12,506,506 | 67,928 | 0.73 | % | 11,729,689 | 61,552 | 0.70 | % | ||||||||||||||
| Noninterest-bearing liabilities: | ||||||||||||||||||||||
| Demand deposits | 4,395,421 | 4,091,555 | ||||||||||||||||||||
| Other | 333,250 | 329,315 | ||||||||||||||||||||
| Total Liabilities | 17,235,177 | 16,150,559 | ||||||||||||||||||||
| Shareholders' equity | 2,179,316 | 2,089,882 | ||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 19,414,493 | $ | 18,240,441 | ||||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 443,313 | 3.27 | % | 403,700 | 3.19 | % | ||||||||||||||||
| Tax equivalent adjustment | (17,362 | ) | (15,165 | ) | ||||||||||||||||||
| Net interest income | $ | 425,951 | $ | 388,535 | ||||||||||||||||||
| (1) 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 0.54% and 0.52% for the nine months ended September 30, 2017 and 2016, respectively. |
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | |||||||||
| Nine Months Ended | |||||||||
September 30 | |||||||||
| 2017 | 2016 | % Change | |||||||
| Loans, by type: | |||||||||
| Real estate - commercial mortgage | $ | 6,137,824 | $ | 5,572,356 | 10.1 | % | |||
| Commercial - industrial, financial and agricultural | 4,227,918 | 4,080,638 | 3.6 | % | |||||
| Real estate - residential mortgage | 1,729,799 | 1,428,430 | 21.1 | % | |||||
| Real estate - home equity | 1,590,117 | 1,656,969 | (4.0 | %) | |||||
| Real estate - construction | 894,146 | 817,014 | 9.4 | % | |||||
| Consumer | 301,414 | 272,402 | 10.7 | % | |||||
| Leasing and other | 246,351 | 183,492 | 34.3 | % | |||||
| Total Loans, net of unearned income | $ | 15,127,569 | $ | 14,011,301 | 8.0 | % | |||
| Deposits, by type: | |||||||||
| Noninterest-bearing demand | $ | 4,395,421 | $ | 4,091,555 | 7.4 | % | |||
| Interest-bearing demand | 3,762,439 | 3,498,659 | 7.5 | % | |||||
| Savings and money market accounts | 4,372,453 | 4,000,871 | 9.3 | % | |||||
| Total demand and savings | 12,530,313 | 11,591,085 | 8.1 | % | |||||
| Brokered deposits | 30,251 | - | - | ||||||
| Time deposits | 2,726,693 | 2,842,011 | (4.1 | %) | |||||
| Total Deposits | $ | 15,287,257 | $ | 14,433,096 | 5.9 | % | |||
| Short-term borrowings, by type: | |||||||||
| Customer repurchase agreements | $ | 192,015 | $ | 179,892 | 6.7 | % | |||
| Customer short-term promissory notes | 78,955 | 73,859 | 6.9 | % | |||||
| Federal funds purchased | 212,885 | 156,812 | 35.8 | % | |||||
| Short-term FHLB advances and other borrowings | 97,656 | 14,588 | N/M | ||||||
| Total Short-term Borrowings | $ | 581,511 | $ | 425,151 | 36.8 | % | |||
| 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 | ||||||||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | 2017 | 2016 | ||||||||||||||||||||||
ALLOWANCE FOR CREDIT LOSSES: | ||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 174,998 | $ | 172,647 | $ | 171,325 | $ | 165,169 | $ | 165,108 | $ | 171,325 | $ | 171,412 | ||||||||||||||
| Loans charged off: | ||||||||||||||||||||||||||||
| Commercial - industrial, financial and agricultural | (2,714 | ) | (5,353 | ) | (5,527 | ) | (1,319 | ) | (3,144 | ) | (13,594 | ) | (13,957 | ) | ||||||||||||||
| Consumer and home equity | (920 | ) | (1,022 | ) | (1,554 | ) | (2,156 | ) | (1,394 | ) | (3,496 | ) | (5,556 | ) | ||||||||||||||
| Real estate - construction | (2,744 | ) | (774 | ) | (247 | ) | 0 | (150 | ) | (3,765 | ) | (1,218 | ) | |||||||||||||||
| Real estate - commercial mortgage | (483 | ) | (242 | ) | (1,224 | ) | (174 | ) | (1,350 | ) | (1,949 | ) | (3,406 | ) | ||||||||||||||
| Real estate - residential mortgage | (195 | ) | (124 | ) | (216 | ) | (116 | ) | (802 | ) | (535 | ) | (2,210 | ) | ||||||||||||||
| Leasing and other | (739 | ) | (1,200 | ) | (639 | ) | (589 | ) | (832 | ) | (2,578 | ) | (3,226 | ) | ||||||||||||||
| Total loans charged off | (7,795 | ) | (8,715 | ) | (9,407 | ) | (4,354 | ) | (7,672 | ) | (25,917 | ) | (29,573 | ) | ||||||||||||||
| Recoveries of loans previously charged off: | ||||||||||||||||||||||||||||
| Commercial - industrial, financial and agricultural | 665 | 1,974 | 4,191 | 2,192 | 1,539 | 6,830 | 6,789 | |||||||||||||||||||||
| Consumer and home equity | 445 | 685 | 373 | 580 | 463 | 1,503 | 1,886 | |||||||||||||||||||||
| Real estate - construction | 629 | 373 | 548 | 1,080 | 898 | 1,550 | 2,844 | |||||||||||||||||||||
| Real estate - commercial mortgage | 106 | 934 | 450 | 885 | 296 | 1,490 | 2,488 | |||||||||||||||||||||
| Real estate - residential mortgage | 219 | 151 | 230 | 288 | 228 | 600 | 784 | |||||||||||||||||||||
| Leasing and other | 407 | 249 | 137 | 485 | 168 | 793 | 357 | |||||||||||||||||||||
| Recoveries of loans previously charged off | 2,471 | 4,366 | 5,929 | 5,510 | 3,592 | 12,766 | 15,148 | |||||||||||||||||||||
| Net loans (charged off) recovered | (5,324 | ) | (4,349 | ) | (3,478 | ) | 1,156 | (4,080 | ) | (13,151 | ) | (14,425 | ) | |||||||||||||||
| Provision for credit losses | 5,075 | 6,700 | 4,800 | 5,000 | 4,141 | 16,575 | 8,182 | |||||||||||||||||||||
| Balance at end of period | $ | 174,749 | $ | 174,998 | $ | 172,647 | $ | 171,325 | $ | 165,169 | $ | 174,749 | $ | 165,169 | ||||||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.14 | % | 0.11 | % | 0.09 | % | (0.03 | %) | 0.11 | % | 0.12 | % | 0.14 | % | ||||||||||||||
NON-PERFORMING ASSETS: | ||||||||||||||||||||||||||||
| Non-accrual loans | $ | 123,345 | $ | 122,600 | $ | 117,264 | $ | 120,133 | $ | 124,017 | ||||||||||||||||||
| Loans 90 days past due and accruing | 13,124 | 13,143 | 14,268 | 11,505 | 14,095 | |||||||||||||||||||||||
| Total non-performing loans | 136,469 | 135,743 | 131,532 | 131,638 | 138,112 | |||||||||||||||||||||||
| Other real estate owned | 10,542 | 11,432 | 11,906 | 12,815 | 11,981 | |||||||||||||||||||||||
| Total non-performing assets | $ | 147,011 | $ | 147,175 | $ | 143,438 | $ | 144,453 | $ | 150,093 | ||||||||||||||||||
NON-PERFORMING LOANS, BY TYPE: | ||||||||||||||||||||||||||||
| Commercial - industrial, financial and agricultural | $ | 54,209 | $ | 51,320 | $ | 43,826 | $ | 43,460 | $ | 47,330 | ||||||||||||||||||
| Real estate - commercial mortgage | 34,650 | 32,576 | 36,713 | 39,319 | 39,631 | |||||||||||||||||||||||
| Real estate - residential mortgage | 21,643 | 21,846 | 23,597 | 23,655 | 23,451 | |||||||||||||||||||||||
| Real estate - construction | 13,415 | 16,564 | 13,550 | 9,842 | 11,223 | |||||||||||||||||||||||
| Consumer and home equity | 12,472 | 13,156 | 13,408 | 15,045 | 16,426 | |||||||||||||||||||||||
| Leasing | 80 | 281 | 438 | 317 | 51 | |||||||||||||||||||||||
| Total non-performing loans | $ | 136,469 | $ | 135,743 | $ | 131,532 | $ | 131,638 | $ | 138,112 | ||||||||||||||||||
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE: | ||||||||||||||||||||||||||||
| Real-estate - residential mortgage | $ | 26,193 | $ | 26,368 | $ | 27,033 | $ | 27,617 | $ | 26,854 | ||||||||||||||||||
| Real-estate - commercial mortgage | 14,439 | 13,772 | 15,237 | 15,957 | 16,085 | |||||||||||||||||||||||
| Consumer and home equity | 14,822 | 12,064 | 9,638 | 8,633 | 7,707 | |||||||||||||||||||||||
| Commercial - industrial, financial and agricultural | 7,512 | 8,086 | 7,441 | 6,627 | 7,488 | |||||||||||||||||||||||
| Real estate - construction | 169 | 1,475 | 273 | 726 | 843 | |||||||||||||||||||||||
| Total accruing TDRs | 63,135 | 61,765 | 59,622 | 59,560 | 58,977 | |||||||||||||||||||||||
| Non-accrual TDRs (1) | 28,742 | 29,373 | 27,220 | 27,850 | 27,904 | |||||||||||||||||||||||
| Total TDRs | $ | 91,877 | $ | 91,138 | $ | 86,842 | $ | 87,410 | $ | 86,881 | ||||||||||||||||||
| (1) Included within non-accrual loans above. | ||||||||||||||||||||||||||||
| Total Delinquency % | ||||||||||||||||||||||||||||
DELINQUENCY RATES, BY TYPE: | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||||||||||
| Real estate - commercial mortgage | 0.75 | % | 0.66 | % | 0.78 | % | 0.78 | % | 0.87 | % | ||||||||||||||||||
| Commercial - industrial, financial and agricultural | 1.54 | % | 1.43 | % | 1.25 | % | 1.31 | % | 1.48 | % | ||||||||||||||||||
| Real estate - construction | 1.50 | % | 1.82 | % | 1.99 | % | 1.29 | % | 1.61 | % | ||||||||||||||||||
| Real estate - residential mortgage | 2.25 | % | 2.08 | % | 2.44 | % | 2.74 | % | 2.67 | % | ||||||||||||||||||
| Consumer, home equity, leasing and other | 1.38 | % | 1.34 | % | 1.22 | % | 1.45 | % | 1.53 | % | ||||||||||||||||||
| Total | 1.28 | % | 1.20 | % | 1.23 | % | 1.27 | % | 1.38 | % | ||||||||||||||||||
ASSET QUALITY RATIOS: | ||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | ||||||||||||||||||||||||
| Non-accrual loans to total loans | 0.80 | % | 0.80 | % | 0.78 | % | 0.82 | % | 0.86 | % | ||||||||||||||||||
| Non-performing loans to total loans | 0.88 | % | 0.88 | % | 0.88 | % | 0.90 | % | 0.96 | % | ||||||||||||||||||
| Non-performing assets to total loans and OREO | 0.95 | % | 0.96 | % | 0.96 | % | 0.98 | % | 1.04 | % | ||||||||||||||||||
| Non-performing assets to total assets | 0.73 | % | 0.75 | % | 0.75 | % | 0.76 | % | 0.80 | % | ||||||||||||||||||
| Allowance for credit losses to loans outstanding | 1.13 | % | 1.14 | % | 1.15 | % | 1.17 | % | 1.15 | % | ||||||||||||||||||
| Allowance for credit losses to non-performing loans | 128.05 | % | 128.92 | % | 131.26 | % | 130.15 | % | 119.59 | % | ||||||||||||||||||
Non-performing assets to tangible common shareholders' equity and allowance for credit losses | 7.87 | % | 8.02 | % | 7.99 | % | 8.20 | % | 8.51 | % | ||||||||||||||||||
| 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 | Nine Months Ended | |||||||||||||||||||||||||||
| September 30 | June 30 | March 31 | December 31 | September 30 | September 30 | September 30 | ||||||||||||||||||||||
| 2017 | 2017 | 2017 | 2016 | 2016 | 2017 | 2016 | ||||||||||||||||||||||
Shareholders' equity (tangible), per share | ||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,225,786 | $ | 2,191,770 | $ | 2,154,683 | $ | 2,121,115 | $ | 2,129,436 | ||||||||||||||||||
| Less: Goodwill and intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||||||||||
| Tangible shareholders' equity (numerator) | $ | 1,694,230 | $ | 1,660,214 | $ | 1,623,127 | $ | 1,589,559 | $ | 1,597,880 | ||||||||||||||||||
| Shares outstanding, end of period (denominator) | 175,057 | 174,740 | 174,343 | 174,040 | 173,144 | |||||||||||||||||||||||
| Shareholders' equity (tangible), per share | $ | 9.68 | $ | 9.50 | $ | 9.31 | $ | 9.13 | $ | 9.23 | ||||||||||||||||||
Return on average shareholders' equity (tangible) | ||||||||||||||||||||||||||||
| Net Income - Numerator | $ | 48,905 | $ | 45,467 | $ | 43,380 | $ | 42,150 | $ | 41,468 | $ | 137,752 | $ | 119,475 | ||||||||||||||
| Average shareholders' equity | $ | 2,215,389 | $ | 2,181,189 | $ | 2,140,547 | $ | 2,132,655 | $ | 2,120,596 | $ | 2,179,316 | $ | 2,089,882 | ||||||||||||||
| Less: Average goodwill and intangible assets | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | (531,556 | ) | ||||||||||||||
| Average tangible shareholders' equity (denominator) | $ | 1,683,833 | $ | 1,649,633 | $ | 1,608,991 | $ | 1,601,099 | $ | 1,589,040 | $ | 1,647,760 | $ | 1,558,326 | ||||||||||||||
| Return on average shareholders' equity (tangible), annualized | 11.52 | % | 11.06 | % | 10.93 | % | 10.47 | % | 10.38 | % | 11.18 | % | 10.24 | % | ||||||||||||||
Efficiency ratio | ||||||||||||||||||||||||||||
| Non-interest expense | $ | 132,157 | $ | 132,695 | $ | 122,275 | $ | 127,621 | $ | 119,848 | $ | 387,127 | $ | 361,898 | ||||||||||||||
| Less: Amortization of tax credit investments (1) | (3,503 | ) | (3,151 | ) | (998 | ) | - | - | (7,652 | ) | - | |||||||||||||||||
| Non-interest expense - Numerator | $ | 128,654 | $ | 129,544 | $ | 121,277 | $ | 127,621 | $ | 119,848 | $ | 379,475 | $ | 361,898 | ||||||||||||||
| Net interest income (fully taxable equivalent) | $ | 152,721 | $ | 147,349 | $ | 143,243 | $ | 137,571 | $ | 135,784 | $ | 443,313 | $ | 403,700 | ||||||||||||||
| Plus: Total Non-interest income | 51,974 | 52,371 | 46,673 | 52,755 | 48,149 | 151,018 | 137,423 | |||||||||||||||||||||
| Less: Investment securities gains | (4,597 | ) | (1,436 | ) | (1,106 | ) | (1,525 | ) | (2 | ) | (7,139 | ) | (1,025 | ) | ||||||||||||||
| Denominator | $ | 200,098 | $ | 198,284 | $ | 188,810 | $ | 188,801 | $ | 183,931 | $ | 587,192 | $ | 540,098 | ||||||||||||||
| Efficiency ratio | 64.30 | % | 65.33 | % | 64.23 | % | 67.60 | % | 65.16 | % | 64.63 | % | 67.01 | % | ||||||||||||||
Non-performing assets to tangible shareholders' equity and allowance for credit losses | ||||||||||||||||||||||||||||
| Non-performing assets (numerator) | $ | 147,011 | $ | 147,175 | $ | 143,438 | $ | 144,453 | $ | 150,093 | ||||||||||||||||||
| Tangible shareholders' equity | $ | 1,694,230 | $ | 1,660,214 | $ | 1,623,127 | $ | 1,589,559 | $ | 1,597,880 | ||||||||||||||||||
| Plus: Allowance for credit losses | 174,749 | 174,998 | 172,647 | 171,325 | 165,169 | |||||||||||||||||||||||
| Tangible shareholders' equity and allowance for credit losses (denominator) | $ | 1,868,979 | $ | 1,835,212 | $ | 1,795,774 | $ | 1,760,884 | $ | 1,763,049 | ||||||||||||||||||
| Non-performing assets to tangible shareholders' equity and allowance for credit losses | 7.87 | % | 8.02 | % | 7.99 | % | 8.20 | % | 8.51 | % | ||||||||||||||||||
Pre-provision net revenue | ||||||||||||||||||||||||||||
| Net interest income | $ | 146,809 | $ | 141,563 | $ | 137,579 | $ | 132,237 | $ | 130,565 | $ | 425,951 | $ | 388,535 | ||||||||||||||
| Non-interest income | 51,974 | 52,371 | 46,673 | 52,755 | 48,149 | 151,018 | 137,423 | |||||||||||||||||||||
| Less: Investment securities gains | (4,597 | ) | (1,436 | ) | (1,106 | ) | (1,525 | ) | (2 | ) | (7,139 | ) | (1,025 | ) | ||||||||||||||
| Total revenue | $ | 194,186 | $ | 192,498 | $ | 183,146 | $ | 183,467 | $ | 178,712 | $ | 569,830 | $ | 524,933 | ||||||||||||||
| Non-interest expense | $ | 132,157 | $ | 132,695 | $ | 122,275 | $ | 127,621 | $ | 119,848 | $ | 387,127 | $ | 361,898 | ||||||||||||||
| Less: Amortization of tax credit investments (1) | $ | (3,503 | ) | (3,151 | ) | (998 | ) | - | - | (7,652 | ) | - | ||||||||||||||||
| Total non-interest expense | $ | 128,654 | $ | 129,544 | $ | 121,277 | $ | 127,621 | $ | 119,848 | $ | 379,475 | $ | 361,898 | ||||||||||||||
| Pre-provision net revenue | $ | 65,532 | $ | 62,954 | $ | 61,869 | $ | 55,846 | $ | 58,864 | $ | 190,355 | $ | 163,035 | ||||||||||||||
| (1) Amortization expense for tax credit investments that are considered to be affordable housing projects under applicable accounting guidance is included in income taxes. Amortization expense for other tax credit investments that are not considered to be affordable housing projects is included in non-interest expense. |
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