SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

January 21, 2014 16:30 ET

Fulton Financial Reports 2013 Earnings

LANCASTER, PA--(Marketwired - Jan 21, 2014) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the fourth quarter of 2013 was 22 cents, a 4.8 percent increase from the third quarter of 2013 and a 10.0 percent increase from the fourth quarter of 2012. For the year ended December 31, 2013, diluted earnings per share was 83 cents, a 3.8 percent increase from 2012.
  • The provision for credit losses was $2.5 million for the fourth quarter of 2013, a $7.0 million, or 73.7 percent, decrease from the third quarter of 2013. For the year ended December 31, 2013, the provision for credit losses decreased $53.5 million, or 56.9 percent, compared to 2012. Non-performing loans decreased $14.0 million, or 8.3 percent, in comparison to September 30, 2013 and $56.8 million, or 26.9 percent, in comparison to December 31, 2012.
  • Net interest income for the fourth quarter of 2013 increased $419,000, or 0.3 percent, compared to the third quarter of 2013, while the net interest margin increased 3 basis points to 3.48 percent. For the year ended December 31, 2013, in comparison to 2012, net interest income decreased $17.1 million, or 3.1 percent, while the net interest margin decreased 26 basis points.
  • Average loans for the fourth quarter of 2013 increased $64.4 million, or 0.5 percent, compared to the third quarter of 2013. Average loans for the year ended December 31, 2013 increased $610.0 million, or 5.1 percent, in comparison to 2012.
  • Non-interest income, excluding investment securities gains, decreased $4.0 million, or 9.0 percent, in comparison to the third quarter of 2013, while non-interest expense increased 0.1 percent. For the year ended December 31, 2013, in comparison to 2012, non-interest income, excluding investment securities gains, decreased $33.7 million, or 15.8 percent, while non-interest expense increased $12.1 million, or 2.7 percent.
  • During 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 2013, the Corporation repurchased 8.0 million shares of its common stock. The Corporation is authorized to repurchase up to 4.0 million additional shares, or approximately 2.1 percent of its outstanding shares, through March 31, 2014.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $42.1 million, or 22 cents per diluted share, for the fourth quarter of 2013, compared to $39.9 million, or 21 cents per diluted share, for the third quarter of 2013. For the year ended December 31, 2013, net income was $161.8 million, or 83 cents per diluted share, a 3.8 percent increase in comparison to the 80 cents per diluted share earned for the same period in 2012.

"2013 was a year of good progress and positioning the company for the future. We increased our loan portfolio, one of our key strategic priorities. Overall asset quality improved significantly as seen in our lower provision for credit losses and lower non-performing loan levels year over year. We continued to prudently deploy capital through our share repurchases and cash dividends to our shareholders," said E. Philip Wenger, Chairman, CEO and President. "Fourth quarter financial performance was solid with further improvement in asset quality. We were particularly pleased to see modest expansion in our net interest margin, an area that has been a challenge over the last several quarters."

Asset Quality
Non-performing assets were $169.3 million, or 1.00 percent of total assets, at December 31, 2013, compared to $186.5 million, or 1.09 percent of total assets, at September 30, 2013 and $237.2 million, or 1.43 percent of total assets, at December 31, 2012. The $17.1 million, or 9.2 percent, decrease in non-performing assets in comparison to the third quarter of 2013 was primarily due to a decrease in non-performing commercial loans, construction loans and residential mortgages, as well as a decrease in other real estate owned (OREO).

Annualized net charge-offs for the quarter ended December 31, 2013 were 0.33 percent of average total loans, compared to 0.45 percent for the quarter ended September 30, 2013 and 0.91 percent for the quarter ended December 31, 2012. The allowance for credit losses as a percentage of non-performing loans was 132.8 percent at December 31, 2013, as compared to 126.5 percent at September 30, 2013 and 106.8 percent at December 31, 2012.

Net Interest Income and Margin
Net interest income for the fourth quarter of 2013 increased $419,000, or 0.3 percent, from the third quarter of 2013. The net interest margin increased three basis points, or 0.9 percent, to 3.48 percent in the fourth quarter of 2013 from 3.45 percent in the third quarter of 2013. Average yields on interest-earning assets increased two basis points, while the average cost of interest-bearing liabilities declined two basis points during the fourth quarter of 2013 in comparison to the third quarter of 2013.

For the year ended December 31, 2013, net interest income decreased $17.1 million, or 3.1 percent. The net interest margin was 3.50 percent for 2013, compared to 3.76 percent for 2012.

Average Balance Sheet
Total average assets for the fourth quarter of 2013 were $16.9 billion, a decrease of $71.4 million, or 0.4 percent, from the third quarter of 2013, due primarily to a $159.6 million decrease in average investment securities, partially offset by a $64.4 million increase in average loans.

                 
    Quarter Ended            
    Dec 31   Sep 30   Increase (decrease)  
    2013   2013   $     %  
    (dollars in thousands)  
Loans, by type:                          
  Real estate - commercial mortgage   $ 5,065,963   $ 4,961,871   $ 104,092     2.1 %
  Commercial - industrial, financial and agricultural     3,639,690     3,706,113     (66,423 )   (1.8 %)
  Real estate - home equity     1,774,919     1,767,095     7,824     0.4 %
  Real estate - residential mortgage     1,331,987     1,323,972     8,015     0.6 %
  Real estate - construction     581,306     576,222     5,084     0.9 %
  Consumer     287,245     299,057     (11,812 )   (3.9 %)
  Leasing and other     111,456     93,832     17,624     18.8 %
                           
  Total Loans, net of unearned income   $ 12,792,566   $ 12,728,162   $ 64,404     0.5 %
                           

Total average liabilities decreased $93.1 million, or 0.6 percent, from the third quarter of 2013, primarily due to a $238.0 million decrease in average short-term borrowings, partially offset by a $118.9 million increase in average deposits.

                 
    Quarter Ended            
    Dec 31   Sep 30   Increase (decrease)  
    2013   2013   $     %  
    (dollars in thousands)        
Deposits, by type:                          
  Noninterest-bearing demand   $ 3,318,073   $ 3,221,648   $ 96,425     3.0 %
  Interest-bearing demand     2,966,994     2,895,156     71,838     2.5 %
  Savings deposits     3,410,030     3,359,795     50,235     1.5 %
Total demand and savings     9,695,097     9,476,599     218,498     2.3 %
  Time deposits     2,965,604     3,065,210     (99,606 )   (3.2 %)
                           
  Total Deposits   $ 12,660,701   $ 12,541,809   $ 118,892     0.9 %
                           

Non-interest Income
Non-interest income, excluding investment securities gains, decreased $4.0 million, or 9.0 percent, in comparison to the third quarter of 2013. Mortgage banking income decreased $2.8 million, including a $1.5 million decrease in servicing income and a $1.3 million decrease in gains on sales of mortgage loans, as both volumes and spreads decreased. Servicing income in the third quarter of 2013 included a $1.7 million reduction of the valuation allowance for mortgage servicing rights. Service charges on deposit accounts decreased $1.2 million, or 8.4 percent, due to a decrease in overdraft fees.

For the year ended December 31, 2013, non-interest income, excluding investment securities gains, decreased $33.7 million, or 15.8 percent, in comparison to 2012. Mortgage banking income decreased $13.9 million, including a $21.7 million decrease in gains on sales of mortgage loans, which was partially offset by an increase in servicing income due to a reduction in the valuation allowance for mortgage servicing rights. Service charges on deposit accounts decreased $6.0 million, or 9.8 percent, due primarily to lower overdraft fees. Other service charges and fees decreased $7.4 million, or 16.7 percent, as foreign currency processing revenues declined after the December 2012 sale of the Corporation's Global Exchange Group Division. This sale also generated a $6.2 million gain in 2012.

Non-interest Expense
Non-interest expense increased $157,000, or 0.1 percent, in the fourth quarter of 2013 compared to the third quarter of 2013. Salaries and employee benefits increased $1.9 million, or 2.9 percent, due primarily to an increase in incentive compensation. Data processing and software expenses decreased $2.2 million primarily due to the timing of expenditures associated with the core processing system conversion, which was completed during the third quarter of 2013.

For the year ended December 31, 2013, non-interest expense increased $12.1 million, or 2.7 percent, in comparison to 2012. Salaries and employee benefits increased $9.3 million, or 3.8 percent, driven by an increase in staffing, normal merit increases and higher benefits costs. Data processing and software expenses increased $3.7 million, due to the 2013 core processing system conversion. Professional fees increased $1.6 million and other outside services increased $1.1 million, both primarily due to costs associated with regulatory compliance and risk management. OREO and repossession expense decreased $3.8 million, or 34.1 percent, due to decreases in holding costs and net losses on the sales of foreclosed properties as asset quality improved. During the fourth quarter of 2012, the Corporation incurred a $3.0 million penalty associated with the prepayment of approximately $20 million of Federal Home Loan Bank (FHLB) advances.

About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company that 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 September 30, 2013, 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  
    December 31   December 31   September 30   December 31   September 30  
    2013   2012   2013   2012   2013  
                             
ASSETS                            
                             
  Cash and due from banks   $ 218,540   $ 256,300   $ 262,938   (14.7 %) (16.9 %)
  Other interest-earning assets     248,161     244,959     308,924   1.3 % (19.7 %)
  Loans held for sale     21,351     67,899     39,273   (68.6 %) (45.6 %)
  Investment securities     2,568,434     2,721,082     2,597,436   (5.6 %) (1.1 %)
  Loans, net of unearned income     12,782,220     12,146,971     12,780,899   5.2 % -  
  Allowance for loan losses     (202,780 )   (223,903 )   (210,486 ) (9.4 %) (3.7 %)
    Net loans     12,579,440     11,923,068     12,570,413   5.5 % 0.1 %
  Premises and equipment     226,021     227,723     227,299   (0.7 %) (0.6 %)
  Accrued interest receivable     44,037     45,786     44,715   (3.8 %) (1.5 %)
  Goodwill and intangible assets     533,076     535,563     533,918   (0.5 %) (0.2 %)
  Other assets     495,574     510,717     465,855   (3.0 %) 6.4 %
                               
      Total Assets   $ 16,934,634   $ 16,533,097   $ 17,050,771   2.4 % (0.7 %)
                             
LIABILITIES AND SHAREHOLDERS' EQUITY                            
                             
  Deposits   $ 12,491,186   $ 12,484,163   $ 12,721,121   0.1 % (1.8 %)
  Short-term borrowings     1,258,629     868,399     1,198,577   44.9 % 5.0 %
  Other liabilities     238,048     204,626     212,987   16.3 % 11.8 %
  FHLB advances and long-term debt     883,584     894,253     889,122   (1.2 %) (0.6 %)
                               
    Total Liabilities     14,871,447     14,451,441     15,021,807   2.9 % (1.0 %)
                               
  Shareholders' equity     2,063,187     2,081,656     2,028,964   (0.9 %) 1.7 %
                             
      Total Liabilities and Shareholders' Equity   $ 16,934,634   $ 16,533,097   $ 17,050,771   2.4 % (0.7 %)
                             
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                            
                             
Loans, by type:                            
  Real estate - commercial mortgage   $ 5,101,922   $ 4,664,426   $ 5,063,373   9.4 % 0.8 %
  Commercial - industrial, financial and agricultural     3,628,420     3,612,065     3,645,270   0.5 % (0.5 %)
  Real estate - home equity     1,764,197     1,632,390     1,773,554   8.1 % (0.5 %)
  Real estate - residential mortgage     1,337,380     1,257,432     1,327,469   6.4 % 0.7 %
  Real estate - construction     573,672     584,118     577,342   (1.8 %) (0.6 %)
  Consumer     283,124     309,864     296,142   (8.6 %) (4.4 %)
  Leasing and other     93,505     86,676     97,749   7.9 % (4.3 %)
                               
  Total Loans, net of unearned income   $ 12,782,220   $ 12,146,971   $ 12,780,899   5.2 % -  
                             
Deposits, by type:                            
  Noninterest-bearing demand   $ 3,283,172   $ 3,009,966   $ 3,338,075   9.1 % (1.6 %)
  Interest-bearing demand     2,945,210     2,755,603     2,986,549   6.9 % (1.4 %)
  Savings deposits     3,344,882     3,335,256     3,371,923   0.3 % (0.8 %)
  Time deposits     2,917,922     3,383,338     3,024,574   (13.8 %) (3.5 %)
                               
  Total Deposits   $ 12,491,186   $ 12,484,163   $ 12,721,121   0.1 % (1.8 %)
                             
Short-term borrowings, by type:                            
  Customer repurchase agreements   $ 175,621   $ 156,238   $ 209,800   12.4 % (16.3 %)
  Customer short-term promissory notes     100,572     119,691     95,503   (16.0 %) 5.3 %
  Federal funds purchased     582,436     592,470     493,274   (1.7 %) 18.1 %
  Short-term FHLB advances     400,000     -     400,000   N/M   -  
                               
  Total Short-term Borrowings   $ 1,258,629   $ 868,399   $ 1,198,577   44.9 % 5.0 %
                             
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     Year Ended      
    Dec 31   Dec 31   Sep 30   Dec 31     Sep 30     Dec 31      
    2013   2012   2013   2012     2013     2013   2012   % Change  
                                                 
Interest Income:                                                
  Interest income   $ 152,457   $ 155,560   $ 152,832   (2.0 %)   (0.2 %)   $ 609,689   $ 647,496   (5.8 %)
  Interest expense     19,505     23,338     20,299   (16.4 %)   (3.9 %)     82,495     103,168   (20.0 %)
                                                   
    Net Interest Income     132,952     132,222     132,533   0.6 %   0.3 %     527,194     544,328   (3.1 %)
  Provision for credit losses     2,500     17,500     9,500   (85.7 %)   (73.7 %)     40,500     94,000   (56.9 %)
                                                   
    Net Interest Income after Provision     130,452     114,722     123,033   13.7 %   6.0 %     486,694     450,328   8.1 %
                                                 
Non-Interest Income:                                                
  Service charges on deposit accounts     12,770     15,642     13,938   (18.4 %)   (8.4 %)     55,470     61,502   (9.8 %)
  Investment management and trust services     10,589     9,611     10,420   10.2 %   1.6 %     41,706     38,239   9.1 %
  Other service charges and fees     9,421     11,164     9,518   (15.6 %)   (1.0 %)     36,957     44,345   (16.7 %)
  Mortgage banking income     4,363     12,813     7,123   (65.9 %)   (38.7 %)     30,656     44,600   (31.3 %)
  Investment securities gains     33     195     2,633   (83.1 %)   (98.7 %)     8,004     3,026   164.5 %
  Gain on sale of Global Exchange     -     6,215     -   (100.0 %)   -       -     6,215   (100.0 %)
  Other     3,556     3,883     3,725   (8.4 %)   (4.5 %)     14,871     18,485   (19.6 %)
                                                   
    Total Non-Interest Income     40,732     59,523     47,357   (31.6 %)   (14.0 %)     187,664     216,412   (13.3 %)
                                                 
Non-Interest Expense:                                                
  Salaries and employee benefits     65,194     61,303     63,344   6.3 %   2.9 %     253,240     243,915   3.8 %
  Net occupancy expense     12,134     11,362     11,519   6.8 %   5.3 %     46,944     44,663   5.1 %
  Other outside services     5,633     4,138     5,048   36.1 %   11.6 %     18,856     17,752   6.2 %
  Equipment expense     3,972     3,873     3,646   2.6 %   8.9 %     15,419     14,243   8.3 %
  Data processing     3,386     3,713     4,757   (8.8 %)   (28.8 %)     16,555     14,936   10.8 %
  Professional fees     3,379     3,228     3,329   4.7 %   1.5 %     13,150     11,522   14.1 %
  FDIC insurance expense     2,839     2,944     2,918   (3.6 %)   (2.7 %)     11,605     11,996   (3.3 %)
  Software     2,450     2,562     3,268   (4.4 %)   (25.0 %)     11,560     9,520   21.4 %
  Operating risk loss     2,367     2,627     3,297   (9.9 %)   (28.2 %)     9,290     9,454   (1.7 %)
  Marketing     1,660     2,537     2,251   (34.6 %)   (26.3 %)     7,705     8,240   (6.5 %)
  OREO and repossession expense     1,116     2,473     1,453   (54.9 %)   (23.2 %)     7,364     11,182   (34.1 %)
  Intangible amortization     834     713     534   17.0 %   56.2 %     2,437     3,031   (19.6 %)
  FHLB advance prepayment penalty     -     3,007     -   (100.0 %)   -       -     3,007   (100.0 %)
  Other     11,798     12,076     11,241   (2.3 %)   5.0 %     47,308     45,833   3.2 %
                                                   
    Total Non-Interest Expense     116,762     116,556     116,605   0.2 %   0.1 %     461,433     449,294   2.7 %
                                                     
    Income Before Income Taxes     54,422     57,689     53,785   (5.7 %)   1.2 %     212,925     217,446   (2.1 %)
  Income tax expense     12,339     17,449     13,837   (29.3 %)   (10.8 %)     51,085     57,601   (11.3 %)
                                                   
    Net Income   $ 42,083   $ 40,240   $ 39,948   4.6 %   5.3 %   $ 161,840   $ 159,845   1.2 %
                                                 
                                                 
PER SHARE:                                                
                                                 
  Net income:                                                
    Basic   $ 0.22   $ 0.20   $ 0.21   10.0 %   4.8 %   $ 0.84   $ 0.80   5.0 %
    Diluted     0.22     0.20     0.21   10.0 %   4.8 %     0.83     0.80   3.8 %
                                                   
  Cash dividends   $ 0.08   $ 0.08   $ 0.08   -     -     $ 0.32   $ 0.30   6.7 %
  Shareholders' equity     10.71     10.45     10.55   2.5 %   1.5 %     10.71     10.45   2.5 %
  Shareholders' equity (tangible)     7.94     7.76     7.77   2.3 %   2.2 %     7.94     7.76   2.3 %
                                                   
  Weighted average shares (basic)     191,577     198,161     192,251   (3.3 %)   (0.4 %)     193,334     199,067   (2.9 %)
  Weighted average shares (diluted)     192,658     199,198     193,259   (3.3 %)   (0.3 %)     194,354     200,039   (2.8 %)
  Shares outstanding, end of period     192,652     199,225     192,332   (3.3 %)   0.2 %     192,652     199,225   (3.3 %)
                                                 
SELECTED FINANCIAL RATIOS:                                                
                                                 
  Return on average assets     0.99 %   0.99 %   0.93 %               0.96 %   0.98 %    
  Return on average shareholders' equity     8.14 %   7.70 %   7.81 %               7.88 %   7.79 %    
  Return on average shareholders' equity (tangible)     11.15 %   10.53 %   10.69 %               10.76 %   10.73 %    
  Net interest margin     3.48 %   3.65 %   3.45 %               3.50 %   3.76 %    
  Efficiency ratio     65.14 %   59.16 %   63.92 %               63.39 %   57.61 %    
                                                 
                                                 
                                                 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
 
    Quarter Ended  
    December 31, 2013     December 31, 2012     September 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   $ 12,792,566   $ 138,336   4.29 %   $ 12,002,944   $ 141,014   4.68 %   $ 12,728,162   $ 139,141   4.34 %
  Taxable investment securities     2,289,672     13,431   2.35 %     2,279,551     13,406   2.35 %     2,446,583     12,977   2.12 %
  Tax-exempt investment securities     283,799     3,574   5.04 %     286,400     3,857   5.39 %     284,372     3,581   5.04 %
  Equity securities     33,887     413   4.83 %     43,706     509   4.63 %     35,999     436   4.82 %
                                                         
  Total Investment Securities     2,607,358     17,418   2.67 %     2,609,657     17,772   2.72 %     2,766,954     16,994   2.46 %
                                                         
  Loans held for sale     20,059     290   5.78 %     59,977     517   3.45 %     36,450     382   4.19 %
  Other interest-earning assets     263,478     737   1.12 %     217,948     520   0.96 %     236,185     658   1.12 %
                                                         
  Total Interest-earning Assets     15,683,461     156,781   3.98 %     14,890,526     159,823   4.28 %     15,767,751     157,175   3.96 %
                                                       
Noninterest-earning assets:                                                      
  Cash and due from banks     212,463                 220,924                 210,525            
  Premises and equipment     226,955                 224,852                 224,837            
  Other assets     1,008,304                 1,079,274                 1,009,162            
  Less: allowance for loan losses     (210,636 )               (235,563 )               (220,342 )          
                                                         
  Total Assets   $ 16,920,547               $ 16,180,013               $ 16,991,933            
                                                       
                                                       
LIABILITIES AND SHAREHOLDERS' EQUITY                                                      
                                                       
Interest-bearing liabilities:                                                      
  Demand deposits   $ 2,966,994   $ 969   0.13 %   $ 2,684,063   $ 1,055   0.16 %   $ 2,895,156   $ 938   0.13 %
  Savings deposits     3,410,030     1,042   0.12 %     3,399,423     1,251   0.15 %     3,359,795     1,015   0.12 %
  Time deposits     2,965,604     6,117   0.82 %     3,472,692     9,748   1.12 %     3,065,210     6,790   0.88 %
                                                         
  Total Interest-bearing Deposits     9,342,628     8,128   0.35 %     9,556,178     12,054   0.50 %     9,320,161     8,743   0.37 %
                                                       
  Short-term borrowings     1,099,709     520   0.19 %     488,310     156   0.13 %     1,337,742     691   0.20 %
  FHLB advances and long-term debt     888,378     10,857   4.87 %     914,013     11,128   4.86 %     889,141     10,865   4.87 %
                                                         
  Total Interest-bearing Liabilities     11,330,715     19,505   0.68 %     10,958,501     23,338   0.85 %     11,547,044     20,299   0.70 %
                                                       
Noninterest-bearing liabilities:                                                      
  Demand deposits     3,318,073                 2,955,208                 3,221,648            
  Other     221,010                 186,958                 194,163            
                                                         
  Total Liabilities     14,869,798                 14,100,667                 14,962,855            
                                                         
  Shareholders' equity     2,050,749                 2,079,346                 2,029,078            
                                                         
  Total Liabilities and Shareholders' Equity   $ 16,920,547               $ 16,180,013               $ 16,991,933            
                                                         
  Net interest income/net interest margin (fully taxable equivalent)           137,276   3.48 %           136,485   3.65 %           136,876   3.45 %
  Tax equivalent adjustment           (4,324 )               (4,263 )               (4,343 )    
                                                         
  Net interest income         $ 132,952               $ 132,222               $ 132,533      
 
(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  
  December 31   December 31   September 30   December 31   September 30  
  2013   2012   2013   2012   2013  
                           
Loans, by type:                          
  Real estate - commercial mortgage $ 5,065,963   $ 4,623,158   $ 4,961,871   9.6 % 2.1 %
  Commercial - industrial, financial and agricultural   3,639,690     3,559,171     3,706,113   2.3 % (1.8 %)
  Real estate - home equity   1,774,919     1,611,868     1,767,095   10.1 % 0.4 %
  Real estate - residential mortgage   1,331,987     1,223,962     1,323,972   8.8 % 0.6 %
  Real estate - construction   581,306     593,351     576,222   (2.0 %) 0.9 %
  Consumer   287,245     306,350     299,057   (6.2 %) (3.9 %)
  Leasing and other   111,456     85,084     93,832   31.0 % 18.8 %
                             
  Total Loans, net of unearned income $ 12,792,566   $ 12,002,944   $ 12,728,162   6.6 % 0.5 %
                           
Deposits, by type:                          
  Noninterest-bearing demand $ 3,318,073   $ 2,955,208   $ 3,221,648   12.3 % 3.0 %
  Interest-bearing demand   2,966,994     2,684,063     2,895,156   10.5 % 2.5 %
  Savings deposits   3,410,030     3,399,423     3,359,795   0.3 % 1.5 %
  Time deposits   2,965,604     3,472,692     3,065,210   (14.6 %) (3.2 %)
                             
  Total Deposits $ 12,660,701   $ 12,511,386   $ 12,541,809   1.2 % 0.9 %
                           
Short-term borrowings, by type:                          
  Customer repurchase agreements $ 196,997   $ 189,922   $ 196,503   3.7 % 0.3 %
  Customer short-term promissory notes   93,986     125,933     91,573   (25.4 %) 2.6 %
  Federal funds purchased   408,726     172,455     559,992   137.0 % (27.0 %)
  Short-term FHLB advances   400,000     -     489,674   N/M   (18.3 %)
                             
  Total Short-term Borrowings $ 1,099,709   $ 488,310   $ 1,337,742   125.2 % (17.8 %)
                           
N/M - Not meaningful                          
                           
                           
                           
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)  
dollars in thousands  
   
    Year ended December 31  
    2013         2012      
    Average
Balance
  Interest (1)   Yield/Rate     Average
Balance
  Interest (1)   Yield/Rate  
ASSETS                                    
                                     
Interest-earning assets:                                    
  Loans, net of unearned income   $ 12,578,524   $ 552,427   4.39 %   $ 11,968,567   $ 575,534   4.81 %
  Taxable investment securities     2,391,650     54,321   2.27 %     2,401,343     67,349   2.80 %
  Tax-exempt investment securities     285,174     14,577   5.11 %     287,763     15,942   5.54 %
  Equity securities     38,722     1,829   4.72 %     35,151     1,639   4.66 %
                                       
  Total Investment Securities     2,715,546     70,727   2.60 %     2,724,257     84,930   3.12 %
                                       
  Loans held for sale     36,561     1,551   4.24 %     54,351     2,064   3.80 %
  Other interest-earning assets     229,444     2,264   0.99 %     207,415     1,830   0.88 %
                                       
  Total Interest-earning Assets     15,560,075     626,969   4.03 %     14,954,590     664,358   4.45 %
                                     
Noninterest-earning assets:                                    
  Cash and due from banks     207,931                 234,494            
  Premises and equipment     226,041                 219,236            
  Other assets     1,037,338                 1,099,616            
  Less: allowance for loan losses     (220,048 )               (250,160 )          
                                       
  Total Assets   $ 16,811,337               $ 16,257,776            
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
                                     
Interest-bearing liabilities:                                    
  Demand deposits   $ 2,822,583   $ 3,656   0.13 %   $ 2,560,831   $ 4,187   0.16 %
  Savings deposits     3,363,943     4,096   0.12 %     3,356,070     6,002   0.18 %
  Time deposits     3,129,162     29,018   0.93 %     3,717,556     46,706   1.26 %
                                       
  Total Interest-bearing Deposits     9,315,688     36,770   0.39 %     9,634,457     56,895   0.59 %
                                       
  Short-term borrowings     1,196,323     2,420   0.20 %     690,883     1,068   0.15 %
  Federal Home Loan Bank advances and long-term debt     889,461     43,305   4.87 %     933,727     45,205   4.84 %
                                       
  Total Interest-bearing Liabilities     11,401,472     82,495   0.72 %     11,259,067     103,168   0.92 %
                                     
Noninterest-bearing liabilities:                                    
  Demand deposits     3,157,496                 2,758,123            
  Other     198,548                 189,592            
                                       
  Total Liabilities     14,757,516                 14,206,782            
                                       
  Shareholders' equity     2,053,821                 2,050,994            
                                       
  Total Liabilities and Shareholders' Equity   $ 16,811,337               $ 16,257,776            
                                       
  Net interest income/net interest margin (fully taxable equivalent)           544,474   3.50 %           561,190   3.76 %
  Tax equivalent adjustment           (17,280 )               (16,862 )    
                                       
  Net interest income         $ 527,194               $ 544,328      
                                     
(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:  
               
    Year Ended      
    December 31      
    2013   2012   % Change  
                   
Loans, by type:                  
  Real estate - commercial mortgage   $ 4,864,460   $ 4,619,587   5.3 %
  Commercial - industrial, financial and agricultural     3,680,772     3,551,056   3.7 %
  Real estate - home equity     1,734,622     1,605,088   8.1 %
  Real estate - residential mortgage     1,312,127     1,185,928   10.6 %
  Real estate - construction     591,540     620,166   (4.6 %)
  Consumer     299,127     307,746   (2.8 %)
  Leasing and other     95,876     78,996   21.4 %
                     
  Total Loans, net of unearned income   $ 12,578,524   $ 11,968,567   5.1 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 3,157,496   $ 2,758,123   14.5 %
  Interest-bearing demand     2,822,583     2,560,831   10.2 %
  Savings deposits     3,363,943     3,356,070   0.2 %
  Time deposits     3,129,162     3,717,556   (15.8 %)
                     
  Total Deposits   $ 12,473,184   $ 12,392,580   0.7 %
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 186,851   $ 206,842   (9.7 %)
  Customer short-term promissory notes     98,882     138,632   (28.7 %)
  Federal funds purchased     612,508     335,573   82.5 %
  Short-term FHLB advances     298,082     9,836   N/M  
                     
  Total Short-term Borrowings   $ 1,196,323   $ 690,883   73.2 %
                   
N/M - Not meaningful                  
                   
                   
                   
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
                       
    Quarter Ended   Year Ended  
    Dec 31   Dec 31   Sep 30   Dec 31  
    2013   2012   2013   2013   2012  
ALLOWANCE FOR CREDIT LOSSES:                                
                                 
  Balance at beginning of period   $ 212,838   $ 235,268   $ 217,626   $ 225,439   $ 258,177  
                                   
  Loans charged off:                                
    Commercial - industrial, financial and agricultural     (5,527 )   (12,711 )   (9,394 )   (30,383 )   (41,868 )
    Real estate - commercial mortgage     (7,779 )   (8,935 )   (3,724 )   (20,829 )   (51,988 )
    Real estate - home equity     (1,458 )   (3,464 )   (2,365 )   (8,193 )   (10,147 )
    Real estate - residential mortgage     (1,423 )   (1,500 )   (767 )   (9,705 )   (4,509 )
    Real estate - construction     (1,391 )   (873 )   (598 )   (6,572 )   (26,250 )
    Consumer     (421 )   (1,533 )   (473 )   (1,877 )   (3,323 )
    Leasing and other     (616 )   (585 )   (787 )   (2,653 )   (2,281 )
    Total loans charged off     (18,615 )   (29,601 )   (18,108 )   (80,212 )   (140,366 )
  Recoveries of loans previously charged off:                                
    Commercial - industrial, financial and agricultural     5,851     1,236     2,295     9,281     4,282  
    Real estate - commercial mortgage     740     85     185     3,494     3,371  
    Real estate - home equity     139     63     198     860     704  
    Real estate - residential mortgage     106     290     245     548     459  
    Real estate - construction     888     171     379     2,682     2,814  
    Consumer     312     274     294     1,518     1,107  
    Leasing and other     158     153     224     807     891  
    Recoveries of loans previously charged off     8,194     2,272     3,820     19,190     13,628  
  Net loans charged off     (10,421 )   (27,329 )   (14,288 )   (61,022 )   (126,738 )
  Provision for credit losses     2,500     17,500     9,500     40,500     94,000  
                                   
  Balance at end of period   $ 204,917   $ 225,439   $ 212,838   $ 204,917   $ 225,439  
                                   
  Net charge-offs to average loans (annualized)     0.33 %   0.91 %   0.45 %   0.49 %   1.06 %
                                 
NON-PERFORMING ASSETS:                                
                                 
  Non-accrual loans   $ 133,753   $ 184,832   $ 143,012              
  Loans 90 days past due and accruing     20,524     26,221     25,271              
    Total non-performing loans     154,277     211,053     168,283              
  Other real estate owned     15,052     26,146     18,173              
                                 
  Total non-performing assets   $ 169,329   $ 237,199   $ 186,456              
                                 
NON-PERFORMING LOANS, BY TYPE:                                
                                 
  Real estate - commercial mortgage   $ 44,068   $ 57,120   $ 42,623              
  Commercial - industrial, financial and agricultural     38,021     66,954     45,184              
  Real estate - residential mortgage     31,347     34,436     34,309              
  Real estate - construction     21,267     32,005     24,396              
  Real estate - home equity     16,983     17,204     18,691              
  Consumer     2,543     3,315     3,013              
  Leasing     48     19     67              
                                   
  Total non-performing loans   $ 154,277   $ 211,053   $ 168,283              
                                 
                                 
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                
                                 
  Real-estate - residential mortgage   $ 28,815   $ 32,993   $ 27,820              
  Real-estate - commercial mortgage     19,758     34,672     22,644              
  Real estate - construction     10,117     10,564     9,841              
  Commercial - industrial, financial and agricultural     8,045     5,745     8,184              
  Real estate - home equity     1,365     1,518     1,667              
  Consumer     11     16     11              
  Total accruing TDRs     68,111     85,508     70,167              
  Non-accrual TDRs (1)     30,209     31,245     30,501              
  Total TDRs   $ 98,320   $ 116,753   $ 100,668              
                                 
(1) Included within non-accrual loans above.
                                       
DELINQUENCY RATES, BY TYPE:                                      
    December 31, 2013   December 31, 2012   September 30, 2013  
    31-89 Days   Greater than or equal to 90 Days (2)   Total   31-89 Days   Greater than or equal to 90 Days (2)   Total   31-89 Days   Greater than or equal to 90 Days (2)   Total  
                                       
  Real estate - commercial mortgage   0.38 % 0.87 % 1.25 % 0.46 % 1.22 % 1.68 % 0.40 % 0.84 % 1.24 %
  Commercial - industrial, financial and agricultural   0.30 % 1.04 % 1.34 % 0.46 % 1.85 % 2.31 % 0.32 % 1.24 % 1.56 %
  Real estate - construction   0.11 % 3.71 % 3.82 % 0.23 % 5.48 % 5.71 % 0.40 % 4.22 % 4.62 %
  Real estate - residential mortgage   1.74 % 2.34 % 4.08 % 2.55 % 2.74 % 5.29 % 1.82 % 2.58 % 4.40 %
  Real estate - home equity   0.91 % 0.96 % 1.87 % 0.77 % 1.06 % 1.83 % 1.03 % 1.05 % 2.08 %
  Consumer, leasing and other   1.99 % 0.68 % 2.67 % 1.71 % 0.84 % 2.55 % 1.91 % 0.79 % 2.70 %
                                         
  Total   0.61 % 1.20 % 1.81 % 0.75 % 1.74 % 2.49 % 0.66 % 1.31 % 1.97 %
                                         
(2) Includes non-accrual loans
                   
ASSET QUALITY RATIOS:                  
    Dec 31   Dec 31   Sep 30      
    2013   2012   2013      
                         
  Non-accrual loans to total loans     1.05 %   1.52 %   1.12 %    
  Non-performing assets to total loans and OREO     1.32 %   1.95 %   1.46 %    
  Non-performing assets to total assets     1.00 %   1.43 %   1.09 %    
  Allowance for credit losses to loans outstanding     1.60 %   1.86 %   1.67 %    
  Allowance for credit losses to non-performing loans     132.82 %   106.82 %   126.48 %    
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses     9.76 %   13.39 %   10.92 %    
                         
                         
                         
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   Year Ended  
    December 31   December 31   September 30   December 31  
    2013   2012   2013   2013   2012  
Shareholders' equity (tangible), per share                                
Shareholders' equity   $ 2,063,187   $ 2,081,656   $ 2,028,964              
Less: Goodwill and intangible assets     (533,076 )   (535,563 )   (533,918 )            
Tangible shareholders' equity (numerator)   $ 1,530,111   $ 1,546,093   $ 1,495,046              
                                 
Shares outstanding, end of period (denominator)     192,652     199,225     192,332              
                                 
  Shareholders' equity (tangible), per share   $ 7.94   $ 7.76   $ 7.77              
                                 
Return on average common shareholders' equity (tangible)                                
Net income   $ 42,083   $ 40,240   $ 39,948   $ 161,840   $ 159,845  
Plus: Intangible amortization, net of tax     541     463     347     1,584     1,970  
Numerator   $ 42,624   $ 40,703   $ 40,295   $ 163,424   $ 161,815  
                                 
Average shareholders' equity   $ 2,050,749   $ 2,079,346     2,029,078   $ 2,053,821   $ 2,050,994  
Less: Average goodwill and intangible assets     (533,597 )   (541,416 )   (534,179 )   (534,431 )   (542,600 )
Average tangible shareholders' equity (denominator)   $ 1,517,152   $ 1,537,930   $ 1,494,899   $ 1,519,390   $ 1,508,394  
                                 
  Return on average common shareholders' equity (tangible), annualized     11.15 %   10.53 %   10.69 %   10.76 %   10.73 %
                                 
Efficiency ratio                                
Non-interest expense   $ 116,762   $ 116,556   $ 116,605   $ 461,433   $ 449,294  
Less: Intangible amortization     (834 )   (713 )   (534 )   (2,437 )   (3,031 )
Numerator   $ 115,928   $ 115,843   $ 116,071   $ 458,996   $ 446,263  
                                 
Net interest income (fully taxable equivalent)   $ 137,276   $ 136,485   $ 136,876   $ 544,474   $ 561,190  
Plus: Total Non-interest income     40,732     59,523     47,357     187,664     216,412  
Less: Investment securities gains     (33 )   (195 )   (2,633 )   (8,004 )   (3,026 )
Denominator   $ 177,975   $ 195,813   $ 181,600   $ 724,134   $ 774,576  
                                 
  Efficiency ratio     65.14 %   59.16 %   63.92 %   63.39 %   57.61 %
                                 
Non-performing assets to tangible common shareholders' equity and allowance for credit losses                                
Non-performing assets (numerator)   $ 169,329   $ 237,199   $ 186,456              
                                 
Tangible shareholders' equity   $ 1,530,111   $ 1,546,093   $ 1,495,046              
Plus: Allowance for credit losses     204,917     225,439     212,838              
Tangible shareholders' equity and allowance for credit losses (denominator)   $ 1,735,028   $ 1,771,532   $ 1,707,884              
                                 
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses     9.76 %   13.39 %   10.92 %            
                                   

Contact Information

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    (717) 291-2616


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    (717) 291-2456