SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

October 22, 2013 16:30 ET

Fulton Financial Reports Third Quarter Earnings of $0.21 per Share

LANCASTER, PA--(Marketwired - Oct 22, 2013) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the third quarter of 2013 was 21 cents, unchanged from both the second quarter of 2013 and the third quarter of 2012.
  • The provision for credit losses was $9.5 million for the third quarter of 2013, a $4.0 million, or 29.6 percent, decrease from the second quarter of 2013 and a $13.5 million, or 58.7 percent, decrease from the third quarter of 2012. Non-performing loans decreased $20.7 million, or 11.0 percent, in comparison to June 30, 2013 and $44.5 million, or 20.9 percent, in comparison to September 30, 2012.
  • Average loans for the third quarter of 2013 increased $199.6 million, or 1.6 percent, compared to the second quarter of 2013. Average loans for the nine months ended September 30, 2013 increased $549.4 million, or 4.6 percent, in comparison to the same period in 2012.
  • Net interest income for the third quarter of 2013 increased $468,000, or 0.4 percent, compared to the second quarter of 2013, while the net interest margin decreased seven basis points to 3.45 percent.
  • Non-interest income, excluding investment securities gains, decreased $4.7 million, or 9.6 percent, in comparison to the second quarter of 2013, while non-interest expense decreased $525,000, or 0.4 percent.
  • During the third quarter of 2013, the Corporation successfully completed the conversion to its new core processing system, which supports customer relationship management for substantially all deposit and loan customers.
  • During the third quarter of 2013, the Corporation repurchased approximately 1.6 million shares, completing the eight million share repurchase program that expired on September 30, 2013. The Corporation announced that its board of directors approved the repurchase of up to four million shares, or approximately 2.1 percent of the Corporation's outstanding shares, through March 31, 2014.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $39.9 million, or 21 cents per diluted share, for the third quarter ended September 30, 2013, compared to $40.6 million, or 21 cents per diluted share, for the second quarter of 2013. For the nine months ended September 30, 2013, net income was $119.8 million, or 61 cents per diluted share, a 1.7 percent increase in comparison to the 60 cents per diluted share earned for the same period in 2012.

"We continued to increase our earning assets in the third quarter with solid loan growth, particularly in the commercial mortgage category. As a result of further improvement in our overall asset quality, we again reduced the provision for credit losses," said E. Philip Wenger, Chairman, CEO and President. "However, net interest margin compression and lower non-interest income, due to reduced mortgage sale gains, presented challenges. During the quarter, we completed both our core processing conversion and our previously announced eight million share repurchase program."

Asset Quality
Non-performing assets were $186.5 million, or 1.09 percent of total assets, at September 30, 2013, compared to $210.2 million, or 1.23 percent of total assets, at June 30, 2013 and $242.0 million, or 1.49 percent of total assets, at September 30, 2012. The $23.7 million, or 11.3 percent, decrease in non-performing assets in comparison to the second quarter of 2013 was primarily due to a decrease in non-performing commercial loans, commercial mortgages and construction loans, as well as a decrease in other real estate owned (OREO).

Annualized net charge-offs for the third quarter ended September 30, 2013 were 0.45 percent of average total loans, compared to 0.56 percent for the quarter ended June 30, 2013 and 0.84 percent for the quarter ended September 30, 2012. The allowance for credit losses as a percentage of non-performing loans was 126.5 percent at September 30, 2013, as compared to 115.0 percent at June 30, 2013 and 110.5 percent at September 30, 2012.

Net Interest Income and Margin
Net interest income for the third quarter of 2013 increased $468,000, or 0.4 percent, from the second quarter of 2013. Interest income for the second quarter of 2013 included $1.9 million of interest recoveries and calls on debt securities, compared to $119,000 of interest recoveries for the third quarter of 2013. The net interest margin decreased seven basis points, or 2.0 percent, to 3.45 percent in the third quarter of 2013 from 3.52 percent in the second quarter of 2013. Average yields on interest-earning assets decreased 11 basis points, while the decline in the average costs of interest-bearing liabilities was 4 basis points during the third quarter of 2013 in comparison to the second quarter of 2013.

Average Balance Sheet

Total average assets for the third quarter of 2013 were $17.0 billion, an increase of $191.4 million, or 1.1 percent, from the second quarter of 2013, due primarily to an increase in average loans.

                 
    Quarter Ended            
    Sep 30   Jun 30   Increase (decrease)  
    2013   2013   $     %  
    (dollars in thousands)  
Loans, by type:                          
  Real estate - commercial mortgage   $ 4,961,871   $ 4,758,060   $ 203,811     4.3 %
  Commercial - industrial, financial and agricultural     3,706,113     3,714,683     (8,570 )   (0.2 %)
  Real estate - home equity     1,767,095     1,732,704     34,391     2.0 %
  Real estate - residential mortgage     1,323,972     1,308,713     15,259     1.2 %
  Real estate - construction     576,222     617,577     (41,355 )   (6.7 %)
  Consumer     299,057     304,918     (5,861 )   (1.9 %)
  Leasing and other     93,832     91,907     1,925     2.1 %
                             
  Total Loans, net of unearned income   $ 12,728,162   $ 12,528,562   $ 199,600     1.6 %
                             

Total average liabilities increased $224.8 million, or 1.5 percent, from the second quarter of 2013, including a $186.2 million, or 1.5 percent, increase in average deposits.

                 
    Quarter Ended            
    Sep 30   Jun 30   Increase (decrease)  
    2013   2013   $     %  
    (dollars in thousands)        
Deposits, by type:                          
  Noninterest-bearing demand   $ 3,221,648   $ 3,116,940   $ 104,708     3.4 %
  Interest-bearing demand     2,895,156     2,718,679     176,477     6.5 %
  Savings deposits     3,359,795     3,350,856     8,939     0.3 %
Total demand and savings     9,476,599     9,186,475     290,124     3.2 %
  Time deposits     3,065,210     3,169,141     (103,931 )   (3.3 %)
                           
  Total Deposits   $ 12,541,809   $ 12,355,616   $ 186,193     1.5 %
                           

Non-interest Income 
Non-interest income, excluding investment securities gains, decreased $4.7 million, or 9.6 percent, in comparison to the second quarter of 2013. Mortgage banking income decreased $3.9 million due to a $4.2 million decrease in gains on sales of loans, as both volumes and spreads decreased. Mortgage banking income benefited from a $1.7 million reduction to the valuation allowance for mortgage servicing rights during the third quarter of 2013. This compares to a $2.0 million decrease in the allowance recognized in the second quarter of 2013. Service charges on deposit accounts decreased $713,000, or 4.9 percent, including a $432,000 decrease in overdraft fees and a $312,000 decrease in other service charges on deposits. Investment management and trust services revenue decreased $181,000, or 1.7 percent. 

Non-interest Expense
Non-interest expense decreased $525,000, or 0.4 percent, in the third quarter of 2013 compared to the second quarter of 2013. OREO and repossession expenses decreased $488,000, due to both a decrease in holding costs and a net decrease in losses on foreclosed properties. Other outside services decreased $267,000 due to a decrease in consulting costs associated with regulatory compliance and risk management. Operating risk loss increased $1.4 million due to an increase in provisions for losses associated with previously sold residential mortgages. 

During the second quarter of 2013, three of the Corporation's six affiliate banks converted to a new core processing system. During the third quarter of 2013, the Corporation's three remaining affiliate banks converted to the new core processing system. Total implementation costs specifically associated with these conversions were approximately $1.6 million in the third quarter of 2013, compared to $1.2 million in the second quarter of 2013. Total implementation costs associated with these conversions were $3.1 million for the nine months ended September 30, 2013.

About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates, headquartered as indicated: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Fulton Bank of New Jersey, Mt. Laurel, NJ; and The Columbia Bank, Columbia, MD.

The Corporation's investment management and trust services are offered at all banks through Fulton Financial Advisors, a division of Fulton Bank, N.A. Residential mortgage lending is offered by all banks under the Fulton Mortgage Company brand.

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, 2012, and the Quarterly Reports on Form 10-Q for the quarters ended June 30, 2013 and March 31, 2013, 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. 

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   September 30   June 30   September 30     June 30  
    2013   2012   2013   2012     2013  
                         
ASSETS                        
                         
  Cash and due from banks   $ 262,938   $ 217,207   $ 219,944   21.1 %   19.5 %
  Other interest-earning assets     221,064     202,305     130,065   9.3 %   70.0 %
  Loans held for sale     39,273     85,477     60,909   (54.1 %)   (35.5 %)
  Investment securities     2,686,649     2,790,138     2,915,879   (3.7 %)   (7.9 %)
  Loans, net of unearned income     12,798,865     11,935,260     12,645,418   7.2 %   1.2 %
  Allowance for loan losses     (210,486 )   (233,864 )   (216,431 ) (10.0 %)   (2.7 %)
    Net loans     12,588,379     11,701,396     12,428,987   7.6 %   1.3 %
  Premises and equipment     227,299     225,771     224,418   0.7 %   1.3 %
  Accrued interest receivable     44,715     49,784     45,713   (10.2 %)   (2.2 %)
  Goodwill and intangible assets     533,918     541,845     534,452   (1.5 %)   (0.1 %)
  Other assets     464,502     463,420     462,043   0.2 %   0.5 %
                                 
    Total Assets   $ 17,068,737   $ 16,277,343   $ 17,022,410   4.9 %   0.3 %
                               
LIABILITIES AND SHAREHOLDERS' EQUITY  
                               
  Deposits   $ 12,721,121   $ 12,610,359   $ 12,257,809   0.9 %   3.8 %
  Short-term borrowings     1,198,577     486,971     1,620,318   146.1 %   (26.0 %)
  Other liabilities     230,953     210,707     226,384   9.6 %   2.0 %
  FHLB advances and long-term debt     889,122     908,623     889,167   (2.1 %)   -  
                                 
    Total Liabilities     15,039,773     14,216,660     14,993,678   5.8 %   0.3 %
                                 
  Shareholders' equity     2,028,964     2,060,683     2,028,732   (1.5 %)   -  
                                 
      Total Liabilities and Shareholders' Equity   $ 17,068,737   $ 16,277,343   $ 17,022,410   4.9 %   0.3 %
                               
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:  
                               
Loans, by type:                              
  Real estate - commercial mortgage   $ 5,063,373   $ 4,632,509   $ 4,856,916   9.3 %   4.3 %
  Commercial - industrial, financial and agricultural     3,645,270     3,507,846     3,712,974   3.9 %   (1.8 %)
  Real estate - home equity     1,773,554     1,603,456     1,760,268   10.6 %   0.8 %
  Real estate - residential mortgage     1,327,469     1,214,322     1,313,345   9.3 %   1.1 %
  Real estate - construction     577,342     597,358     610,280   (3.4 %)   (5.4 %)
  Consumer     296,142     301,717     300,233   (1.8 %)   (1.4 %)
  Leasing and other     115,715     78,052     91,402   48.3 %   26.6 %
                                 
  Total Loans, net of unearned income   $ 12,798,865   $ 11,935,260   $ 12,645,418   7.2 %   1.2 %
                               
Deposits, by type:                              
  Noninterest-bearing demand   $ 3,338,075   $ 2,904,844   $ 3,168,781   14.9 %   5.3 %
  Interest-bearing demand     2,986,549     2,702,710     2,714,545   10.5 %   10.0 %
  Savings deposits     3,371,923     3,423,807     3,272,557   (1.5 %)   3.0 %
  Time deposits     3,024,574     3,578,998     3,101,926   (15.5 %)   (2.5 %)
                                 
  Total Deposits   $ 12,721,121   $ 12,610,359   $ 12,257,809   0.9 %   3.8 %
                               
Short-term borrowings, by type:                              
  Customer repurchase agreements   $ 209,800   $ 192,082   $ 196,188   9.2 %   6.9 %
  Customer short-term promissory notes     95,503     124,628     93,671   (23.4 %)   2.0 %
  Federal funds purchased     493,274     170,261     780,459   189.7 %   (36.8 %)
  Short-term FHLB advances     400,000     -     550,000   N/M     (27.3 %)
                                 
  Total Short-term Borrowings   $ 1,198,577   $ 486,971   $ 1,620,318   146.1 %   (26.0 %)
                               
N/M - Not meaningful                           
 
 
 
FULTON FINANCIAL CORPORATION                  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                  
in thousands, except per-share data and percentages                  
 
    Quarter Ended     % Change from   Nine Months Ended
Sep 30
    % Change  
 
 
 
 
 
 
Sep 30
2013
 
 
 
 
Sep 30
2012
 
 
 
 
Jun 30
2013
 
 
 
 
Sep 30
2012
 
 
 
 
Jun 30
2013
 
 
     
2013     2012      
                                           
Interest Income:                                                        
  Interest income   $ 152,832     $ 161,060     $ 153,078     (5.1 %)   (0.2 %) $ 457,232     $ 491,936     (7.1 %)
  Interest expense     20,299       25,179       21,013     (19.4 %)   (3.4 %)   62,990       79,830     (21.1 %)
                                                           
    Net Interest Income     132,533       135,881       132,065     (2.5 %)   0.4 %   394,242       412,106     (4.3 %)
  Provision for credit losses     9,500       23,000       13,500     (58.7 %)   (29.6 %)   38,000       76,500     (50.3 %)
                                                           
    Net Interest Income after Provision     123,033       112,881       118,565     9.0 %   3.8 %   356,242       335,606     6.1 %
                                                         
Non-Interest Income:                                                        
  Service charges on deposit accounts     13,938       15,651       14,651     (10.9 %)   (4.9 %)   42,700       45,860     (6.9 %)
  Investment management and trust services     10,420       9,429       10,601     10.5 %   (1.7 %)   31,117       28,628     8.7 %
  Other service charges and fees     9,518       11,119       9,508     (14.4 %)   0.1 %   27,536       33,181     (17.0 %)
  Mortgage banking income     7,123       10,594       10,997     (32.8 %)   (35.2 %)   26,293       31,787     (17.3 %)
  Investment securities gains     2,633       42       2,865     N/M     (8.1 %)   7,971       2,831     181.6 %
  Other     3,725       5,108       3,694     (27.1 %)   0.8 %   11,315       14,602     (22.5 %)
                                                           
    Total Non-Interest Income     47,357       51,943       52,316     (8.8 %)   (9.5 %)   146,932       156,889     (6.3 %)
                                                         
Non-Interest Expense:                                                        
  Salaries and employee benefits     63,344       62,161       63,490     1.9 %   (0.2 %)   188,046       182,612     3.0 %
  Net occupancy expense     11,519       11,161       11,447     3.2 %   0.6 %   34,810       33,301     4.5 %
  Other outside services     5,048       5,600       5,315     (9.9 %)   (5.0 %)   13,223       13,614     (2.9 %)
  Data processing     4,757       3,776       4,509     26.0 %   5.5 %   13,169       11,223     17.3 %
  Equipment expense     3,646       3,816       3,893     (4.5 %)   (6.3 %)   11,447       10,370     10.4 %
  Professional fees     3,329       2,728       3,395     22.0 %   (1.9 %)   9,771       8,294     17.8 %
  Operating risk loss     3,297       1,404       1,860     134.8 %   77.3 %   6,923       6,827     1.4 %
  Software     3,268       2,511       3,094     30.1 %   5.6 %   9,110       6,958     30.9 %
  FDIC insurance expense     2,918       3,029       3,001     (3.7 %)   (2.8 %)   8,766       9,052     (3.2 %)
  Marketing     2,251       648       1,922     247.4 %   17.1 %   6,045       5,703     6.0 %
  OREO and repossession expense     1,453       2,249       1,941     (35.4 %)   (25.1 %)   6,248       8,709     (28.3 %)
  Intangible amortization     534       756       535     (29.4 %)   (0.2 %)   1,603       2,318     (30.8 %)
  Other     11,241       10,143       12,728     10.8 %   (11.7 %)   35,510       33,757     5.2 %
                                                           
    Total Non-Interest Expense     116,605       109,982       117,130     6.0 %   (0.4 %)   344,671       332,738     3.6 %
                                                           
    Income Before Income Taxes     53,785       54,842       53,751     (1.9 %)   0.1 %   158,503       159,757     (0.8 %)
  Income tax expense     13,837       13,260       13,169     4.4 %   5.1 %   38,746       40,152     (3.5 %)
                                                           
    Net Income   $ 39,948     $ 41,582     $ 40,582     (3.9 %)   (1.6 %) $ 119,757     $ 119,605     0.1 %
                                                         
                                                         
PER SHARE:                                                        
                                                         
  Net income:                                                        
    Basic   $ 0.21     $ 0.21     $ 0.21     -     -   $ 0.62     $ 0.60     3.3 %
    Diluted     0.21       0.21       0.21     -     -     0.61       0.60     1.7 %
                                                         
  Cash dividends   $ 0.08     $ 0.08     $ 0.08     -     -   $ 0.24     $ 0.22     9.1 %
  Shareholders' equity     10.55       10.36       10.48     1.8 %   0.7 %   10.54       10.36     1.7 %
  Shareholders' equity (tangible)     7.77       7.63       7.72     1.8 %   0.6 %   7.77       7.63     1.8 %
                                                           
  Weighted average shares (basic)     192,251       198,956       193,273     (3.4 %)   (0.5 %)   193,926       199,371     (2.7 %)
  Weighted average shares (diluted)     193,259       199,808       194,346     (3.3 %)   (0.6 %)   194,926       200,321     (2.7 %)
  Shares outstanding, end of period     192,332       198,975       193,658     (3.3 %)   (0.7 %)   192,332       198,975     (3.3 %)
                                                         
SELECTED FINANCIAL RATIOS:                                                        
                                                         
  Return on average assets     0.93 %     1.02 %     0.97 %               0.95 %     0.98 %      
  Return on average shareholders' equity     7.81 %     8.03 %     7.89 %               7.79 %     7.83 %      
  Return on average shareholders' equity (tangible)     10.69 %     11.02 %     10.75 %               10.62 %     10.80 %      
  Net interest margin     3.45 %     3.74 %     3.52 %               3.51 %     3.79 %      
  Efficiency ratio     63.92 %     56.90 %     62.73 %               62.81 %     57.09 %      
                                                         
N/M - Not meaningful                                                        
                                                         
                                                         
                                     
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
   
    Quarter Ended  
    September 30, 2013     September 30, 2012   June 30, 2013  
    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   $ 12,728,162   $ 139,141     4.34 %   $ 11,922,417   $ 143,211     4.78 % $ 12,528,562     $ 138,002     4.42 %
  Taxable investment securities     2,446,583     12,977     2.12 %     2,392,043     16,658     2.78 %   2,410,004       14,516     2.41 %
  Tax-exempt investment securities     284,372     3,581     5.04 %     286,225     3,936     5.50 %   280,508       3,608     5.15 %
  Equity securities     133,200     1,056     3.16 %     109,884     820     2.98 %   123,848       875     2.83 %
                                                               
  Total Investment Securities     2,864,155     17,614     2.46 %     2,788,152     21,414     3.07 %   2,814,360       18,999     2.70 %
                                                               
  Loans held for sale     36,450     382     4.19 %     61,001     578     3.79 %   42,158       384     3.64 %
  Other interest-earning assets     140,338     38     0.11 %     147,818     35     0.09 %   144,945       35     0.10 %
                                                               
  Total Interest-earning Assets     15,769,105     157,175     3.96 %     14,919,388     165,238     4.41 %   15,530,025       157,420     4.07 %
                                                             
Noninterest-earning assets:                                                            
  Cash and due from banks     210,525                   221,561                 206,090                
  Premises and equipment     224,837                   222,544                 225,915                
  Other assets     1,007,808                   1,098,748                 1,060,095                
  Less: allowance for loan losses     (220,342)                   (239,931)                 (221,541 )              
                                                               
  Total Assets   $ 16,991,933                 $ 16,222,310               $ 16,800,584                
                                                             
                                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                                            
                                                             
Interest-bearing liabilities:                                                            
  Demand deposits   $ 2,895,156   $ 938     0.13 %   $ 2,608,202   $ 1,071     0.16 % $ 2,718,679     $ 872     0.13 %
  Savings deposits     3,359,795     1,015     0.12 %     3,372,278     1,431     0.17 %   3,350,856       1,016     0.12 %
  Time deposits     3,065,210     6,790     0.88 %     3,657,616     11,346     1.23 %   3,169,141       7,610     0.96 %
                                                               
  Total Interest-bearing Deposits     9,320,161     8,743     0.37 %     9,638,096     13,848     0.57 %   9,238,676       9,498     0.41 %
                                                               
  Short-term borrowings     1,337,742     691     0.20 %     588,568     220     0.15 %   1,313,424       700     0.21 %
  FHLB advances and long-term debt     889,141     10,865     4.87 %     908,767     11,111     4.88 %   889,186       10,815     4.87 %
                                                               
  Total Interest-bearing Liabilities     11,547,044     20,299     0.70 %     11,135,431     25,179     0.90 %   11,441,286       21,013     0.74 %
                                                             
Noninterest-bearing liabilities:                                                            
  Demand deposits     3,221,648                   2,837,539                 3,116,940                
  Other     194,163                   188,065                 179,875                
                                                               
  Total Liabilities     14,962,855                   14,161,035                 14,738,101                
                                                               
  Shareholders' equity     2,029,078                   2,061,275                 2,062,483                
                                                               
  Total Liabilities and Shareholders' Equity   $ 16,991,933                 $ 16,222,310               $ 16,800,584                
                                                               
  Net interest income/net interest margin (fully taxable equivalent)     136,876     3.45 %           140,059     3.74 %           136,407     3.52 %
  Tax equivalent adjustment           (4,343 )                 (4,178 )                 (4,342 )      
                                                               
  Net interest income         $ 132,533                 $ 135,881                 $ 132,065        
 
(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:  
                         
    Quarter Ended   % Change from  
    September 30   September 30   June 30   September 30     June 30  
    2013   2012   2013   2012     2013  
                         
Loans, by type:                              
  Real estate - commercial mortgage   $ 4,961,871   $ 4,603,388   $ 4,758,060   7.8 %   4.3 %
  Commercial - industrial, financial and agricultural     3,706,113     3,529,733     3,714,683   5.0 %   (0.2 %)
  Real estate - home equity     1,767,095     1,597,230     1,732,704   10.6 %   2.0 %
  Real estate - residential mortgage     1,323,972     1,201,179     1,308,713   10.2 %   1.2 %
  Real estate - construction     576,222     605,910     617,577   (4.9 %)   (6.7 %)
  Consumer     299,057     304,800     304,918   (1.9 %)   (1.9 %)
  Leasing and other     93,832     80,177     91,907   17.0 %   2.1 %
                                 
  Total Loans, net of unearned income   $ 12,728,162   $ 11,922,417   $ 12,528,562   6.8 %   1.6 %
                               
Deposits, by type:                              
  Noninterest-bearing demand   $ 3,221,648   $ 2,837,539   $ 3,116,940   13.5 %   3.4 %
  Interest-bearing demand     2,895,156     2,608,202     2,718,679   11.0 %   6.5 %
  Savings deposits     3,359,795     3,372,278     3,350,856   (0.4 %)   0.3 %
  Time deposits     3,065,210     3,657,616     3,169,141   (16.2 %)   (3.3 %)
                                 
  Total Deposits   $ 12,541,809   $ 12,475,635   $ 12,355,616   0.5 %   1.5 %
                               
Short-term borrowings, by type:                              
  Customer repurchase agreements   $ 196,503   $ 210,830   $ 188,339   (6.8 %)   4.3 %
  Customer short-term promissory notes     91,573     127,479     98,207   (28.2 %)   (6.8 %)
  Federal funds purchased     559,992     244,214     776,603   129.3 %   (27.9 %)
  Short-term FHLB advances     489,674     6,045     250,275   N/M     95.7 %
                                 
  Total Short-term Borrowings   $ 1,337,742   $ 588,568   $ 1,313,424   127.3 %   1.9 %
                               
N/M - Not meaningful                              
                               
                               
   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)  
dollars in thousands  
    Nine Months ended September 30  
    2013        2012     
    Average
Balance
   
Interest (1)
   
Yield/Rate
    Average
Balance
   
Interest (1)
   
Yield/Rate
 
ASSETS                                            
                                             
Interest-earning assets:                                            
  Loans, net of unearned income   $ 12,506,393     $ 414,091     4.43 %   $ 11,957,025     $ 434,520     4.85 %
  Taxable investment securities     2,426,015       40,890     2.25 %     2,442,237       53,943     2.95 %
  Tax-exempt investment securities     285,638       11,003     5.14 %     288,221       12,085     5.59 %
  Equity securities     125,193       2,848     3.04 %     110,807       2,307     2.78 %
                                               
  Total Investment Securities     2,836,846       54,741     2.57 %     2,841,265       68,335     3.21 %
                                               
  Loans held for sale     42,122       1,261     3.99 %     52,462       1,547     3.93 %
  Other interest-earning assets     134,460       95     0.09 %     126,556       133     0.14 %
                                               
  Total Interest-earning Assets     15,519,821       470,188     4.05 %     14,977,308       504,535     4.50 %
                                             
Noninterest-earning assets:                                            
  Cash and due from banks     206,403                     239,050                
  Premises and equipment     225,733                     217,351                
  Other assets     1,045,796                     1,105,238                
  Less: allowance for loan losses     (223,220 )                   (255,061 )              
                                             
  Total Assets   $ 16,774,533                   $ 16,283,886                
                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                  
                                             
Interest-bearing liabilities:                                            
  Demand deposits   $ 2,773,917     $ 2,687     0.13 %   $ 2,519,454     $ 3,132     0.17 %
  Savings deposits     3,348,413       3,054     0.12 %     3,341,512       4,751     0.19 %
  Time deposits     3,184,281       22,901     0.96 %     3,799,774       36,958     1.30 %
                                               
  Total Interest-bearing Deposits     9,306,611       28,642     0.41 %     9,660,740       44,841     0.62 %
                                               
  Short-term borrowings     1,228,882       1,900     0.20 %     758,899       912     0.16 %
  Federal Home Loan Bank advances and long-term debt     889,826       32,448     4.87 %     940,348       34,077     4.84 %
                                               
  Total Interest-bearing Liabilities     11,425,319       62,990     0.74 %     11,359,987       79,830     0.94 %
                                             
Noninterest-bearing liabilities:                                            
  Demand deposits     3,103,381                     2,691,949                
  Other     190,976                     190,476                
                                             
  Total Liabilities     14,719,676                     14,242,412                
                                             
  Shareholders' equity     2,054,857                     2,041,474                
                                             
  Total Liabilities and Shareholders' Equity   $ 16,774,533                   $ 16,283,886                
                                             
  Net interest income/net interest margin (fully taxable equivalent)             407,198     3.51 %             424,705     3.79 %
  Tax equivalent adjustment             (12,956 )                   (12,599 )      
                                             
  Net interest income           $ 394,242                   $ 412,106        
                                             
  (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:  
               
    Nine Months Ended      
    September 30      
    2013   2012   % Change  
             
Loans, by type:                  
  Real estate - commercial mortgage   $ 4,796,557   $ 4,618,389   3.9 %
  Commercial - industrial, financial and agricultural     3,694,612     3,548,332   4.1 %
  Real estate - home equity     1,721,041     1,602,812   7.4 %
  Real estate - residential mortgage     1,305,434     1,173,158   11.3 %
  Real estate - construction     594,991     629,170   (5.4 %)
  Consumer     303,127     308,215   (1.7 %)
  Leasing and other     90,631     76,949   17.8 %
                   
  Total Loans, net of unearned income   $ 12,506,393   $ 11,957,025   4.6 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 3,103,381   $ 2,691,949   15.3 %
  Interest-bearing demand     2,773,917     2,519,454   10.1 %
  Savings deposits     3,348,413     3,341,512   0.2 %
  Time deposits     3,184,281     3,799,774   (16.2 %)
                     
  Total Deposits   $ 12,409,992   $ 12,352,689   0.5 %
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 183,432   $ 212,523   (13.7 %)
  Customer short-term promissory notes     100,532     142,896   (29.6 %)
  Federal funds purchased     681,576     390,319   74.6 %
  Short-term FHLB advances     263,342     13,161   N/M  
                   
  Total Short-term Borrowings   $ 1,228,882   $ 758,899   61.9 %
                   
N/M - Not meaningful                  
                   
                   
   
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
                               
    Quarter Ended     Nine Months Ended  
    Sep 30     Sep 30     Jun 30     Sep 30  
    2013     2012     2013     2013     2012  
ALLOWANCE FOR CREDIT LOSSES:                                        
                                         
  Balance at beginning of period   $ 217,626     $ 237,316     $ 221,527     $ 225,439     $ 258,177  
                                         
  Loans charged off:                                        
    Commercial - industrial, financial and agricultural     (9,394 )     (10,471 )     (5,960 )     (24,856 )     (29,157 )
    Real estate - commercial mortgage     (3,724 )     (7,463 )     (5,193 )     (13,050 )     (43,053 )
    Real estate - home equity     (2,365 )     (1,688 )     (1,966 )     (6,735 )     (6,683 )
    Real estate - residential mortgage     (767 )     (670 )     (4,465 )     (8,282 )     (3,009 )
    Real estate - construction     (598 )     (8,364 )     (2,597 )     (5,181 )     (25,377 )
    Consumer     (473 )     (685 )     (433 )     (1,456 )     (1,790 )
    Leasing and other     (787 )     (625 )     (769 )     (2,037 )     (1,696 )
    Total loans charged off     (18,108 )     (29,966 )     (21,383 )     (61,597 )     (110,765 )
  Recoveries of loans previously charged off:                                        
    Commercial - industrial, financial and agricultural     2,295       1,693       756       3,430       3,046  
    Real estate - commercial mortgage     185       1,317       1,505       2,754       3,286  
    Real estate - home equity     198       343       192       721       641  
    Real estate - residential mortgage     245       25       116       442       169  
    Real estate - construction     379       1,040       744       1,794       2,643  
    Consumer     294       202       406       1,206       833  
    Leasing and other     224       298       263       649       738  
    Recoveries of loans previously charged off     3,820       4,918       3,982       10,996       11,356  
  Net loans charged off     (14,288 )     (25,048 )     (17,401 )     (50,601 )     (99,409 )
  Provision for credit losses     9,500       23,000       13,500       38,000       76,500  
                                         
  Balance at end of period   $ 212,838     $ 235,268     $ 217,626     $ 212,838     $ 235,268  
                                         
  Net charge-offs to average loans (annualized)     0.45 %     0.84 %     0.56 %     0.54 %     1.11 %
                                         
NON-PERFORMING ASSETS:                                        
                                         
  Non-accrual loans   $ 143,012     $ 185,791     $ 164,039                  
  Loans 90 days past due and accruing     25,271       27,035       25,159                  
    Total non-performing loans     168,283       212,826       189,198                  
  Other real estate owned     18,173       29,217       20,984                  
                                         
  Total non-performing assets   $ 186,456     $ 242,043     $ 210,182                  
                                         
NON-PERFORMING LOANS, BY TYPE:                                        
                                         
  Commercial - industrial, financial and agricultural   $ 45,184     $ 73,879     $ 57,219                  
  Real estate - commercial mortgage     42,623       64,609       49,429                  
  Real estate - residential mortgage     34,309       24,910       30,660                  
  Real estate - construction     24,396       32,742       29,964                  
  Real estate - home equity     18,691       12,644       19,046                  
  Consumer     3,013       3,942       2,780                  
  Leasing     67       100       100                  
                                         
Total non-performing loans   $ 168,283     $ 212,826     $ 189,198                  
                                         
                                         
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                        
                                         
  Real-estate - residential mortgage   $ 27,820     $ 36,946     $ 28,948                  
  Real-estate - commercial mortgage     22,644       32,198       24,828                  
  Real estate - construction     9,841       10,525       10,599                  
  Commercial - industrial, financial and agricultural     8,184       4,795       8,394                  
  Real estate - home equity     1,667       755       1,549                  
  Consumer     11       -       13                  
  Total accruing TDRs     70,167       85,219       74,331                  
  Non-accrual TDRs (1)     30,501       21,167       30,377                  
  Total TDRs   $ 100,668     $ 106,386     $ 104,708                  
                                         
(1) Included within non-accrual loans above.                             
                                         
                                                       
DELINQUENCY RATES, BY TYPE:                                                      
    September 30, 2013     September 30, 2012     June 30, 2013  
    31-89 Days     ≥90 Days (2)     Total     31-89 Days     ≥90 Days (2)     Total     31-89 Days     ≥90 Days (2)     Total  
                                                       
  Real estate - commercial mortgage   0.40 %   0.84 %   1.24 %   0.46 %   1.39 %   1.85 %   0.47 %   1.01 %   1.48 %
  Commercial - industrial, financial and agricultural   0.32 %   1.24 %   1.56 %   0.45 %   2.11 %   2.56 %   0.41 %   1.54 %   1.95 %
  Real estate - construction   0.40 %   4.22 %   4.62 %   0.95 %   5.48 %   6.43 %   0.42 %   4.91 %   5.33 %
  Real estate - residential mortgage   1.82 %   2.58 %   4.40 %   2.66 %   2.05 %   4.71 %   2.12 %   2.33 %   4.45 %
  Real estate - home equity   1.03 %   1.05 %   2.08 %   0.85 %   0.78 %   1.63 %   0.68 %   1.08 %   1.76 %
  Consumer, leasing and other   1.83 %   0.75 %   2.58 %   1.84 %   1.06 %   2.90 %   1.47 %   0.74 %   2.21 %
                                                         
  Total   0.66 %   1.31 %   1.97 %   0.80 %   1.78 %   2.58 %   0.68 %   1.50 %   2.18 %
                                                       
(2) Includes non-accrual loans                                                      
                                                       
ASSET QUALITY RATIOS:                                                      
    Sep 30     Sep 30     Jun 30                                      
    2013     2012     2013                                      
                                                       
  Non-accrual loans to total loans   1.12 %   1.56 %   1.30 %                                    
  Non-performing assets to total loans and OREO   1.45 %   2.02 %   1.66 %                                    
  Non-performing assets to total assets   1.09 %   1.49 %   1.23 %                                    
  Allowance for credit losses to loans outstanding   1.66 %   1.97 %   1.72 %                                    
  Allowance for credit losses to non-performing loans   126.48 %   110.54 %   115.03 %                                    
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses   10.92 %   13.80 %   12.28 %                                    
                                                       
                                                       
 
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 certain 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 quarterly 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:
     
                               
    Quarter Ended     Nine Months Ended  
    September 30     September 30     June 30     September 30  
    2013     2012     2013     2013     2012  
  Shareholders' equity (tangible), per share                                        
  Shareholders' equity   $ 2,028,964     $ 2,060,683     $ 2,028,732                  
  Less: Goodwill and intangible assets     (533,918 )     (541,845 )     (534,452 )                
  Tangible shareholders' equity (numerator)   $ 1,495,046     $ 1,518,838     $ 1,494,280                  
                                         
  Shares outstanding, end of period (denominator)     192,332       198,975       193,658                  
                                         
    Shareholders' equity (tangible), per share   $ 7.77     $ 7.63     $ 7.72                  
                                         
  Return on average common shareholders' equity (tangible)                                        
  Net income   $ 39,948     $ 41,582     $ 40,582     $ 119,757     $ 119,605  
  Plus: Intangible amortization, net of tax     347       491       348       1,042       1,507  
  Net income, less intangible amortization, net of tax (numerator)   $ 40,295     $ 42,073     $ 40,930     $ 120,799     $ 121,112  
                                         
  Average shareholders' equity   $ 2,029,078     $ 2,061,275       2,062,483     $ 2,054,857     $ 2,041,474  
  Less: Average goodwill and intangible assets     (534,179 )     (542,225 )     (534,713 )     (534,712 )     (542,997 )
  Average tangible shareholders' equity (denominator)   $ 1,494,899     $ 1,519,050     $ 1,527,770     $ 1,520,145     $ 1,498,477  
                                         
    Return on average common shareholders' equity (tangible), annualized     10.69 %     11.02 %     10.75 %     10.62 %     10.80 %
                                         
  Efficiency ratio                                        
  Non-interest expense   $ 116,605     $ 109,982     $ 117,130     $ 344,671     $ 332,738  
  Less: Intangible amortization     (534 )     (756 )     (535 )     (1,603 )     (2,318 )
  Numerator   $ 116,071     $ 109,226     $ 116,595     $ 343,068     $ 330,420  
                                         
  Net interest income (fully taxable equivalent)   $ 136,876     $ 140,059     $ 136,407     $ 407,198     $ 424,705  
  Plus: Total Non-interest income     47,357       51,943       52,316       146,932       156,889  
  Less: Investment securities gains     (2,633 )     (42 )     (2,865 )     (7,971 )     (2,831 )
  Denominator   $ 181,600     $ 191,960     $ 185,858     $ 546,159     $ 578,763  
                                         
    Efficiency ratio     63.92 %     56.90 %     62.73 %     62.81 %     57.09 %
                                         
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses                                        
  Non-performing assets (numerator)   $ 186,456     $ 242,043     $ 210,182                  
                                         
  Tangible shareholders' equity   $ 1,495,046     $ 1,518,838     $ 1,494,280                  
  Plus: Allowance for credit losses     212,838       235,268       217,626                  
  Tangible shareholders' equity and allowance for credit losses (denominator)   $ 1,707,884     $ 1,754,106     $ 1,711,906                  
                                         
    Non-performing assets to tangible common shareholders' equity and allowance for credit losses     10.92 %     13.80 %     12.28 %                
                                             
                                             

Contact Information

  • Media Contact:
    Laura J. Wakeley
    (717) 291-2616

    Investor Contact:
    David C. Hostetter
    (717) 291-2456