SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

April 21, 2015 16:30 ET

Fulton Financial Reports First Quarter Earnings of $0.22 per Share and Announces Approval for $50 Million Share Repurchase Program

LANCASTER, PA--(Marketwired - Apr 21, 2015) -  Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the first quarter of 2015 was 22 cents, a 4.8 percent increase from the fourth quarter of 2014 and unchanged from the first quarter of 2014.
  • Net interest income for the first quarter of 2015 decreased $4.5 million, or 3.5 percent, compared to the fourth quarter of 2014; the net interest margin decreased 4 basis points, to 3.27 percent.
  • Average loans for the first quarter of 2015 increased $39.4 million, or 0.3 percent, compared to the fourth quarter of 2014 and increased $333.2 million, or 2.6 percent, compared to the first quarter of 2014.
  • Average deposits for the first quarter of 2015 increased $34.8 million, or 0.3 percent, compared to the fourth quarter of 2014 and increased $903.7 million, or 7.2 percent, compared to the first quarter of 2014. 
  • The provision for credit losses in the first quarter of 2015 was a negative $3.7 million. Annualized net charge-offs for the quarter ended March 31, 2015 were 0.08 percent of average total loans, compared to 0.25 percent for the quarter ended December 31, 2014 and 0.26 percent for the quarter ended March 31, 2014. Non-performing loans increased $10.8 million, or 7.8 percent, in comparison to December 31, 2014 and decreased $5.6 million, or 3.6 percent, in comparison to March 31, 2014. 
  • Non-interest income, excluding investment securities gains, decreased $661,000, or 1.6 percent, in comparison to the fourth quarter of 2014, and increased $2.1 million, or 5.4 percent, in comparison to the first quarter of 2014. During the first quarter of 2015, gains on sales of investment securities totaled $4.1 million.
  • Non-interest expenses increased $758,000, or 0.6 percent, compared to the fourth quarter of 2014 and increased $8.9 million, or 8.1 percent, compared to the first quarter of 2014.
  • In April 2015, the Corporation's Board of Directors approved the repurchase of up to $50.0 million of the Corporation's common stock, or approximately 2.3 percent of outstanding shares, through December 31, 2015. In addition, on April 17, 2015, the Corporation completed its $100 million Accelerated Share Repurchase (ASR) program announced in November 2014. During the fourth quarter of 2014 and April of 2015, the Corporation repurchased 8.3 million shares under the ASR program at an average price of $12.05 per share.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $40.0 million, or 22 cents per diluted share, for the first quarter of 2015, compared to $37.9 million, or 21 cents per diluted share, for the fourth quarter of 2014.

"We reported diluted earnings per share of 22 cents for the first quarter, supported by a negative loan loss provision after evaluation of relevant credit factors," said E. Philip Wenger, Chairman, President and CEO. "We also saw a significant increase in residential mortgage activity and related sales gains. Overall expenses remained stable. In keeping with our goal of enhancing shareholder value, we were pleased to increase our quarterly cash dividend. Earlier today, the Board of Directors authorized the buyback of up to an additional $50 million of our stock between now and the end of the year."

Net Interest Income and Margin
Net interest income for the first quarter of 2015 decreased $4.5 million, or 3.5 percent, from the fourth quarter of 2014. Net interest margin decreased 4 basis points, or 1.2 percent, to 3.27 percent in the first quarter of 2015 from 3.31 percent in the fourth quarter of 2014. Average yields on interest-earning assets decreased two basis points, while the average cost of interest-bearing liabilities increased four basis points during the first quarter of 2015 in comparison to the fourth quarter of 2014.

Average Balance Sheet
Total average assets for the first quarter of 2015 were $17.1 billion, a decrease of $25.3 million from the fourth quarter of 2014. Average loans, net of unearned income, increased $39.4 million, or 0.3 percent, in comparison to the fourth quarter of 2014.

             
    Three Months Ended     Increase (decrease)  
    March 31, 2015     December 31, 2014     in Balance  
    Balance   Yield (1)     Balance   Yield (1)     $     %  
    (dollars in thousands)  
Average Loans, net of unearned income, by type:                                      
  Real estate - commercial mortgage   $ 5,163,845   4.22 %   $ 5,131,375   4.36 %   $ 32,470     0.6 %
  Commercial - industrial, financial and agricultural     3,770,187   3.87 %     3,723,211   3.81 %     46,976     1.3 %
  Real estate - home equity     1,721,300   4.14 %     1,735,769   4.13 %     (14,469 )   (0.8 %)
  Real estate - residential mortgage     1,370,376   3.84 %     1,378,452   3.91 %     (8,076 )   (0.6 %)
  Real estate - construction     688,690   3.93 %     697,741   3.96 %     (9,051 )   (1.3 %)
  Consumer     259,138   5.26 %     275,349   5.65 %     (16,211 )   (5.9 %)
  Leasing and other     121,992   8.41 %     114,256   7.15 %     7,736     6.8 %
                                       
  Total Average Loans, net of unearned income   $ 13,095,528   4.11 %   $ 13,056,153   4.16 %   $ 39,375     0.3 %
                                         
    (1) Presented on a fully-taxable equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.  

Total average liabilities increased $11.0 million, or 0.1 percent, from the fourth quarter of 2014. Average deposits and interest rates, by type, for the first quarter of 2015 in comparison to the fourth quarter of 2014, are summarized in the following table:

             
             
    Three Months Ended     Increase (decrease)  
    March 31, 2015     December 31, 2014     in Balance  
    Balance   Rate     Balance   Rate     $     %  
    (dollars in thousands)        
Average Deposits, by type:                                      
  Noninterest-bearing demand   $ 3,662,040   - %   $ 3,630,780   - %   $ 31,260     0.9 %
  Interest-bearing demand     3,135,927   0.13 %     3,145,658   0.13 %     (9,731 )   (0.3 %)
  Savings deposits     3,517,057   0.13 %     3,548,504   0.13 %     (31,447 )   (0.9 %)
Total average demand and savings     10,315,024   0.08 %     10,324,942   0.08 %     (9,918 )   (0.1 %)
  Time deposits     3,061,593   1.02 %     3,016,834   0.96 %     44,759     1.5 %
                                       
  Total Average Deposits   $ 13,376,617   0.30 %   $ 13,341,776   0.28 %   $ 34,841     0.3 %
                                         

Asset Quality
Non-performing assets were $163.5 million, or 0.94 percent of total assets, at March 31, 2015, compared to $150.5 million, or 0.88 percent of total assets, at December 31, 2014 and $170.2 million, or 1.01 percent of total assets, at March 31, 2014. The $13.0 million, or 8.7 percent, increase in non-performing assets in comparison to the fourth quarter of 2014 was primarily due to an increase in non-performing commercial loans.

Annualized net charge-offs for the quarter ended March 31, 2015 were 0.08 percent of average total loans, compared to 0.25 percent for the quarter ended December 31, 2014 and 0.26 percent for the quarter ended March 31, 2014. The allowance for credit losses as a percentage of non-performing loans was 120.3 percent at March 31, 2015, as compared to 134.3 percent at December 31, 2014 and 128.5 percent at March 31, 2014.

During the first quarter of 2015, the Corporation recorded a $3.7 million negative provision for credit losses, compared to a $3.0 million provision for credit losses in the fourth quarter of 2014. The $6.7 million provision improvement was driven by an improvement in net charge-off levels and lower allocation needs on impaired loans.

Non-interest Income 
Non-interest income, excluding investment securities gains, decreased $661,000, or 1.6 percent, in comparison to the fourth quarter of 2014. Service charges on deposit accounts decreased $660,000, or 5.4 percent, primarily due to a decrease in overdraft fees. Other service charges and fees decreased $1.1 million, or 10.7 percent, primarily due to decreases in debit card, merchant fee and commercial loan swap fee income. Partially offsetting these decreases was a $965,000, or 25.9 percent, increase in mortgage banking income due to an increase in loan volumes.

Gains on sales of investment securities increased $3.3 million in comparison to the fourth quarter of 2014 due to the sale of two pooled trust preferred debt securities during the first quarter of 2015 and an increase in gains on sales of equity securities.

Non-interest Expense
During the first quarter of 2015, the Corporation implemented several cost savings initiatives, including the consolidation of nine branches, the modification of certain retirement benefits and the elimination of certain positions. Annualized expense reductions from these cost savings initiatives are expected to be approximately $6.5 million. Implementation expenses associated with these initiatives incurred during the first quarter of 2015 were $1.5 million. 

Non-interest expense increased $758,000, or 0.6 percent, in the first quarter of 2015, compared to the fourth quarter of 2014. Occupancy expense increased $2.2 million, or 19.3 percent, in comparison to the fourth quarter, due primarily to the aforementioned implementation costs associated with the nine branch consolidations and seasonal increases in snow removal and utilities costs. Other real estate owned (OREO) and repossession expense increased $1.1 million, primarily due to an increase in net losses on sales of OREO. Partially offsetting these increases were a $3.0 million, or 34.1 percent, decrease in other outside services, a $1.2 million, or 48.9 percent, decrease in marketing expenses, and a $408,000, or 0.6 percent, decrease in salaries and employee benefits. The decrease in salaries and employee benefits was due to cost savings associated with the aforementioned retirement plan changes and a reduction in healthcare costs, partially offset by a seasonal increase in payroll taxes, an increase in severance and higher defined benefit pension costs.

Share Repurchase Program
As previously noted, the Corporation's board of directors today approved the repurchase of up to $50.0 million of shares of the Corporation's common stock, or approximately 2.3 percent of the Corporation's outstanding shares, through December 31, 2015. As of March 31, 2015, the Corporation had approximately 179 million shares of common stock outstanding.

As permitted by securities laws and other legal requirements and subject to market conditions and other factors, purchases may be made from time to time in open market or privately negotiated transactions, including without limitation, through accelerated share repurchase transactions. The repurchase program may be discontinued at any time.

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, 2014, which has been filed with the Securities and Exchange Commission and is available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov). The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures
The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.

   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)  
dollars in thousands  
                      % Change from  
    March 31     March 31     December 31     March 31     December 31  
    2015     2014     2014     2014     2014  
                                     
ASSETS                                    
                                     
  Cash and due from banks   $ 91,870     $ 260,389     $ 105,702     (64.7 %)   (13.1 %)
  Other interest-earning assets     703,667       307,062       423,083     129.2 %   66.3 %
  Loans held for sale     34,124       24,417       17,522     39.8 %   94.7 %
  Investment securities     2,259,802       2,501,198       2,323,371     (9.7 %)   (2.7 %)
  Loans, net of unearned income     13,115,505       12,733,792       13,111,716     3.0 %   0.0 %
  Allowance for loan losses     (177,701 )     (197,089 )     (184,144 )   (9.8 %)   (3.5 %)
    Net loans     12,937,804       12,536,703       12,927,572     3.2 %   0.1 %
  Premises and equipment     226,241       225,647       226,027     0.3 %   0.1 %
  Accrued interest receivable     42,216       43,376       41,818     (2.7 %)   1.0 %
  Goodwill and intangible assets     531,672       532,747       531,803     (0.2 %)   (0.0 %)
  Other assets     535,945       480,350       527,869     11.6 %   1.5 %
                                     
      Total Assets   $ 17,363,341     $ 16,911,889     $ 17,124,767     2.7 %   1.4 %
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
                                     
  Deposits   $ 13,514,497     $ 12,669,917     $ 13,367,506     6.7 %   1.1 %
  Short-term borrowings     410,105       1,069,684       329,719     (61.7 %)   24.4 %
  Other liabilities     312,709       230,108       291,464     35.9 %   7.3 %
  FHLB advances and long-term debt     1,094,517       883,461       1,139,413     23.9 %   (3.9 %)
                                     
    Total Liabilities     15,331,828       14,853,170       15,128,102     3.2 %   1.3 %
                                     
  Shareholders' equity     2,031,513       2,058,719       1,996,665     (1.3 %)   1.7 %
                                     
      Total Liabilities and Shareholders' Equity   $ 17,363,341     $ 16,911,889     $ 17,124,767     2.7 %   1.4 %
                                     
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                              
                                     
Loans, by type:                                    
  Real estate - commercial mortgage   $ 5,227,101     $ 5,137,454     $ 5,197,155     1.7 %   0.6 %
  Commercial - industrial, financial and agricultural     3,762,631       3,574,130       3,725,567     5.3 %   1.0 %
  Real estate - home equity     1,701,623       1,740,496       1,736,688     (2.2 %)   (2.0 %)
  Real estate - residential mortgage     1,364,788       1,331,465       1,377,068     2.5 %   (0.9 %)
  Real estate - construction     677,806       584,217       690,601     16.0 %   (1.9 %)
  Consumer     257,301       270,021       265,431     (4.7 %)   (3.1 %)
  Leasing and other     124,255       96,009       119,206     29.4 %   4.2 %
                                     
  Total Loans, net of unearned income   $ 13,115,505     $ 12,733,792     $ 13,111,716     3.0 %   0.0 %
                                     
Deposits, by type:                                    
  Noninterest-bearing demand   $ 3,765,677     $ 3,359,900     $ 3,640,623     12.1 %   3.4 %
  Interest-bearing demand     3,133,748       2,960,577       3,150,612     5.8 %   (0.5 %)
  Savings deposits     3,567,652       3,346,880       3,504,820     6.6 %   1.8 %
  Time deposits     3,047,420       3,002,560       3,071,451     1.5 %   (0.8 %)
                                     
  Total Deposits   $ 13,514,497     $ 12,669,917     $ 13,367,506     6.7 %   1.1 %
                                     
Short-term borrowings, by type:                                    
  Customer repurchase agreements   $ 161,886     $ 220,426     $ 158,394     (26.6 %)   2.2 %
  Customer short-term promissory notes     93,176       88,160       95,106     5.7 %   (2.0 %)
  Short-term FHLB advances     155,000       400,000       70,000     (61.3 %)   121.4 %
  Federal funds purchased     43       361,098       6,219     (100.0 %)   (99.3 %)
                                     
  Total Short-term Borrowings   $ 410,105     $ 1,069,684     $ 329,719     (61.7 %)   24.4 %
                                     
                                     
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  
in thousands, except per-share data and percentages  
             
    Three Months Ended     % Change from  
    Mar 31     Mar 31     Dec 31     Mar 31     Dec 31  
    2015     2014     2014     2014     2014  
                                     
Interest Income:                                    
  Interest income   $ 145,772     $ 148,792     $ 149,594     (2.0 %)   (2.6 %)
  Interest expense     22,191       19,227       21,556     15.4 %   2.9 %
                                     
    Net Interest Income     123,581       129,565       128,038     (4.6 %)   (3.5 %)
  Provision for credit losses     (3,700 )     2,500       3,000     N/M     N/M  
                                     
    Net Interest Income after Provision     127,281       127,065       125,038     0.2 %   1.8 %
                                     
Non-Interest Income:                                    
  Service charges on deposit accounts     11,569       11,711       12,229     (1.2 %)   (5.4 %)
  Investment management and trust services     10,889       10,958       11,188     (0.6 %)   (2.7 %)
  Other service charges and fees     9,363       8,927       10,489     4.9 %   (10.7 %)
  Mortgage banking income     4,688       3,605       3,723     30.0 %   25.9 %
  Investment securities gains     4,145       -       848     N/M     388.8 %
  Other     4,083       3,305       3,624     23.5 %   12.7 %
                                     
    Total Non-Interest Income     44,737       38,506       42,101     16.2 %   6.3 %
                                     
Non-Interest Expense:                                    
  Salaries and employee benefits     64,990       59,566       65,398     9.1 %   (0.6 %)
  Net occupancy expense     13,692       13,603       11,481     0.7 %   19.3 %
  Other outside services     5,750       3,812       8,720     50.8 %   (34.1 %)
  Data processing     4,768       3,796       4,346     25.6 %   9.7 %
  Equipment expense     3,958       3,602       3,298     9.9 %   20.0 %
  Software     3,318       2,925       3,271     13.4 %   1.4 %
  Professional fees     2,871       2,904       2,382     (1.1 %)   20.5 %
  FDIC insurance expense     2,822       2,689       2,772     4.9 %   1.8 %
  OREO and repossession expense     1,362       983       236     38.6 %   477.1 %
  Marketing     1,233       1,584       2,414     (22.2 %)   (48.9 %)
  Operating risk loss     827       1,828       485     (54.8 %)   70.5 %
  Intangible amortization     130       315       315     (58.7 %)   (58.7 %)
  Other     12,757       11,947       12,602     6.8 %   1.2 %
                                     
    Total Non-Interest Expense     118,478       109,554       117,720     8.1 %   0.6 %
                                     
    Income Before Income Taxes     53,540       56,017       49,419     (4.4 %)   8.3 %
  Income tax expense     13,504       14,234       11,470     (5.1 %)   17.7 %
                                     
    Net Income   $ 40,036     $ 41,783     $ 37,949     (4.2 %)   5.5 %
                                     
                                     
PER SHARE:                                    
                                     
  Net income:                                    
    Basic   $ 0.22     $ 0.22     $ 0.21     -     4.8 %
    Diluted     0.22       0.22       0.21     -     4.8 %
                                     
  Cash dividends   $ 0.09     $ 0.08     $ 0.10     12.5 %   (10.0 %)
  Shareholders' equity     11.34       10.90       11.16     4.0 %   1.6 %
  Shareholders' equity (tangible)     8.37       8.08       8.19     3.6 %   2.2 %
                                     
  Weighted average shares (basic)     178,471       189,467       181,251     (5.8 %)   (1.5 %)
  Weighted average shares (diluted)     179,457       190,489       182,189     (5.8 %)   (1.5 %)
  Shares outstanding, end of period     179,098       188,850       178,924     (5.2 %)   0.1 %
                                     
SELECTED FINANCIAL RATIOS:                                    
                                     
  Return on average assets     0.95 %     1.01 %     0.88 %            
  Return on average shareholders' equity     8.05 %     8.21 %     7.34 %            
  Return on average shareholders' equity (tangible)     10.96 %     11.13 %     9.96 %            
  Net interest margin     3.27 %     3.47 %     3.31 %            
  Efficiency ratio     70.16 %     63.38 %     67.53 %            
                                     
N/M - Not meaningful                                    
                                     
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
 
       
    Three Months Ended  
    March 31, 2015     March 31, 2014       December 31, 2014  
    Average           Yield/     Average           Yield/       Average           Yield/  
    Balance     Interest (1)     Rate     Balance     Interest (1)     Rate       Balance     Interest (1)     Rate  
ASSETS                                                                    
                                                                     
Interest-earning assets:                                                                    
  Loans, net of unearned income   $ 13,095,528     $ 133,055     4.11 %   $ 12,762,357     $ 134,749     4.28 %     $ 13,056,153     $ 136,636     4.16 %
  Taxable investment securities     2,005,542       11,282     2.25 %     2,257,773       13,266     2.35 %       2,109,884       12,689     2.40 %
  Tax-exempt investment securities     229,082       3,212     5.61 %     279,278       3,613     5.17 %       241,711       3,249     5.38 %
  Equity securities     32,210       450     5.66 %     33,922       429     5.11 %       33,981       442     5.16 %
                                                                       
  Total Investment Securities     2,266,834       14,944     2.64 %     2,570,973       17,308     2.70 %       2,385,576       16,380     2.74 %
                                                                       
  Loans held for sale     17,002       173     4.07 %     13,426       134     4.00 %       15,340       201     5.24 %
  Other interest-earning assets     474,033       2,105     1.78 %     258,803       882     1.36 %       464,342       953     0.82 %
                                                                       
  Total Interest-earning Assets     15,853,397       150,277     3.83 %     15,605,559       153,073     3.97 %       15,921,411       154,170     3.85 %
                                                                     
Noninterest-earning assets:                                                                    
  Cash and due from banks     105,271                     199,641                       110,292                
  Premises and equipment     226,391                     226,295                       224,516                
  Other assets     1,114,078                     1,032,071                       1,073,302                
  Less: allowance for loan losses     (183,927 )                   (203,201 )                     (189,029 )              
                                                                       
  Total Assets   $ 17,115,210                   $ 16,860,365                     $ 17,140,492                
                                                                     
                                                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                    
                                                                     
Interest-bearing liabilities:                                                                    
  Demand deposits   $ 3,135,927     $ 983     0.13 %   $ 2,945,211     $ 909     0.13 %     $ 3,145,658     $ 1,027     0.13 %
  Savings deposits     3,517,057       1,119     0.13 %     3,351,871       1,035     0.13 %       3,548,504       1,171     0.13 %
  Time deposits     3,061,593       7,721     1.02 %     2,932,456       5,952     0.82 %       3,016,834       7,333     0.96 %
                                                                       
  Total Interest-bearing Deposits     9,714,577       9,823     0.41 %     9,229,538       7,896     0.35 %       9,710,996       9,531     0.39 %
                                                                       
  Short-term borrowings     309,215       77     0.10 %     1,208,953       633     0.21 %       417,838       138     0.13 %
  FHLB advances and long-term debt     1,124,074       12,291     4.40 %     883,532       10,698     4.88 %       1,086,321       11,887     4.36 %
                                                                       
  Total Interest-bearing Liabilities     11,147,866       22,191     0.80 %     11,322,023       19,227     0.69 %       11,215,155       21,556     0.76 %
                                                                     
Noninterest-bearing liabilities:                                                                    
  Demand deposits     3,662,040                     3,243,424                       3,630,780                
  Other     289,341                     232,004                       242,346                
                                                                       
  Total Liabilities     15,099,247                     14,797,451                       15,088,281                
                                                                       
  Shareholders' equity     2,015,963                     2,062,914                       2,052,211                
                                                                       
  Total Liabilities and Shareholders' Equity   $ 17,115,210                   $ 16,860,365                     $ 17,140,492                
                                                                       
  Net interest income/net interest margin (fully taxable equivalent)             128,086     3.27 %             133,846     3.47 %               132,614     3.31 %
  Tax equivalent adjustment             (4,505 )                   (4,281 )                     (4,576 )      
                                                                       
  Net interest income           $ 123,581                   $ 129,565                     $ 128,038        
 
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
 
 
 
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:            
 
    Three Months Ended   % Change from  
    March 31   March 31   December 31   March 31     December 31  
    2015   2014   2014   2014     2014  
                               
Loans, by type:                              
  Real estate - commercial mortgage   $ 5,163,845   $ 5,085,128   $ 5,131,375   1.5 %   0.6 %
  Commercial - industrial, financial and agricultural     3,770,187     3,637,075     3,723,211   3.7 %   1.3 %
  Real estate - home equity     1,721,300     1,755,346     1,735,769   (1.9 %)   (0.8 %)
  Real estate - residential mortgage     1,370,376     1,336,323     1,378,452   2.5 %   (0.6 %)
  Real estate - construction     688,690     576,346     697,741   19.5 %   (1.3 %)
  Consumer     259,138     274,910     275,349   (5.7 %)   (5.9 %)
  Leasing and other     121,992     97,229     114,256   25.5 %   6.8 %
                                 
  Total Loans, net of unearned income   $ 13,095,528   $ 12,762,357   $ 13,056,153   2.6 %   0.3 %
                               
Deposits, by type:                              
  Noninterest-bearing demand   $ 3,662,040   $ 3,243,424   $ 3,630,780   12.9 %   0.9 %
  Interest-bearing demand     3,135,927     2,945,211     3,145,658   6.5 %   (0.3 %)
  Savings deposits     3,517,057     3,351,871     3,548,504   4.9 %   (0.9 %)
  Time deposits     3,061,593     2,932,456     3,016,834   4.4 %   1.5 %
                                 
  Total Deposits   $ 13,376,617   $ 12,472,962   $ 13,341,776   7.2 %   0.3 %
                               
Short-term borrowings, by type:                              
  Customer repurchase agreements   $ 173,625   $ 187,362   $ 183,331   (7.3 %)   (5.3 %)
  Customer short-term promissory notes     86,258     102,000     87,338   (15.4 %)   (1.2 %)
  Federal funds purchased     25,054     416,230     59,669   (94.0 %)   (58.0 %)
  Short-term FHLB advances and other borrowings     24,278     503,361     87,500   (95.2 %)   (72.3 %)
                                 
  Total Short-term Borrowings   $ 309,215   $ 1,208,953   $ 417,838   (74.4 %)   (26.0 %)
                                 
                                 
   
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
   
    Three Months Ended  
    Mar 31     Mar 31     Dec 31  
    2015     2014     2014  
ALLOWANCE FOR CREDIT LOSSES:                        
                         
  Balance at beginning of period   $ 185,931     $ 204,917     $ 191,108  
                           
  Loans charged off:                        
    Commercial - industrial, financial and agricultural     (1,863 )     (5,125 )     (8,712 )
    Consumer and home equity     (1,548 )     (2,402 )     (1,696 )
    Real estate - residential mortgage     (1,281 )     (846 )     (752 )
    Real estate - commercial mortgage     (709 )     (1,386 )     (920 )
    Real estate - construction     0       (214 )     (464 )
    Leasing and other     (363 )     (295 )     (701 )
    Total loans charged off     (5,764 )     (10,268 )     (13,245 )
  Recoveries of loans previously charged off:                        
    Commercial - industrial, financial and agricultural     786       744       1,724  
    Consumer and home equity     492       565       419  
    Real estate - residential mortgage     159       116       132  
    Real estate - commercial mortgage     436       44       319  
    Real estate - construction     1,147       224       2,325  
    Leasing and other     171       164       149  
    Recoveries of loans previously charged off     3,191       1,857       5,068  
  Net loans charged off     (2,573 )     (8,411 )     (8,177 )
  Provision for credit losses     (3,700 )     2,500       3,000  
                           
  Balance at end of period   $ 179,658     $ 199,006     $ 185,931  
                           
  Net charge-offs to average loans (annualized)     0.08 %     0.26 %     0.25 %
                         
NON-PERFORMING ASSETS:                        
                         
  Non-accrual loans   $ 129,929     $ 133,705     $ 121,080  
  Loans 90 days past due and accruing     19,365       21,225       17,402  
    Total non-performing loans     149,294       154,930       138,482  
  Other real estate owned     14,251       15,300       12,022  
                           
  Total non-performing assets   $ 163,545     $ 170,230     $ 150,504  
                         
NON-PERFORMING LOANS, BY TYPE:                        
                         
  Real estate - commercial mortgage   $ 46,331     $ 45,876     $ 45,237  
  Commercial - industrial, financial and agricultural     43,265       38,830       30,388  
  Real estate - residential mortgage     28,595       29,305       28,995  
  Consumer and home equity     16,939       20,087       17,330  
  Real estate - construction     14,140       20,758       16,399  
  Leasing     24       74       133  
                           
  Total non-performing loans   $ 149,294     $ 154,930     $ 138,482  
                         
                         
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                          
                         
  Real-estate - residential mortgage   $ 31,574     $ 30,363     $ 31,308  
  Real-estate - commercial mortgage     23,468       19,514       18,822  
  Real estate - construction     7,791       8,430       9,241  
  Commercial - industrial, financial and agricultural     6,975       6,755       5,237  
  Consumer and home equity     3,118       2,622       3,013  
  Total accruing TDRs     72,926       67,684       67,621  
  Non-accrual TDRs (1)     29,392       27,487       24,616  
  Total TDRs   $ 102,318     $ 95,171     $ 92,237  
 
(1) Included within non-accrual loans above.
 
 
   
DELINQUENCY RATES, BY TYPE:  
  Mar 31, 2015     Mar 31, 2014     Dec 31, 2014  
  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 0.50 % 0.89 % 1.39 %   0.35 % 0.89 % 1.24 %   0.35 % 0.87 % 1.22 %
  Commercial - industrial, financial and agricultural 0.26 % 1.15 % 1.41 %   0.33 % 1.09 % 1.42 %   0.17 % 0.81 % 0.98 %
  Real estate - construction 0.31 % 2.09 % 2.40 %   0.43 % 3.55 % 3.98 %   0.02 % 2.38 % 2.40 %
  Real estate - residential mortgage 1.75 % 2.10 % 3.85 %   1.53 % 2.20 % 3.73 %   1.96 % 2.10 % 4.06 %
  Consumer, home equity, leasing and other 0.92 % 0.81 % 1.73 %   0.89 % 0.96 % 1.85 %   0.80 % 0.82 % 1.62 %
                                           
  Total 0.62 % 1.14 % 1.76 %   0.56 % 1.22 % 1.78 %   0.52 % 1.06 % 1.58 %
 
(2) Includes non-accrual loans
 
 
                   
ASSET QUALITY RATIOS:                  
    Mar 31     Mar 31     Dec 31  
    2015     2014     2014  
                   
  Non-accrual loans to total loans   0.99 %   1.05 %   0.92 %
  Non-performing assets to total loans and OREO   1.25 %   1.34 %   1.15 %
  Non-performing assets to total assets   0.94 %   1.01 %   0.88 %
  Allowance for credit losses to loans outstanding   1.37 %   1.56 %   1.42 %
  Allowance for credit losses to non-performing loans   120.34 %   128.45 %   134.26 %
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses   9.74 %   9.87 %   9.12 %
                   
                   
 
FULTON FINANCIAL CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED)
in thousands, except per share data and percentages
   
Explanatory note: This press release contains supplemental financial information, as detailed below, which has been derived by methods other than Generally Accepted Accounting Principles ("GAAP"). The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Management believes that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate the Corporation's results. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow:
   
                   
    Three Months Ended  
    March 31     March 31     December 31  
    2015     2014     2014  
Shareholders' equity (tangible), per share                  
Shareholders' equity   $ 2,031,513     $ 2,058,719     $ 1,996,665  
Less: Goodwill and intangible assets     (531,672 )     (532,747 )     (531,803 )
Tangible shareholders' equity (numerator)   $ 1,499,841     $ 1,525,972     $ 1,464,862  
                         
Shares outstanding, end of period (denominator)     179,098       188,850       178,924  
                         
  Shareholders' equity (tangible), per share   $ 8.37     $ 8.08     $ 8.19  
                         
Return on average common shareholders' equity (tangible)                        
Net income   $ 40,036     $ 41,783     $ 37,949  
Plus: Intangible amortization, net of tax     85       204       205  
Numerator   $ 40,121     $ 41,987     $ 38,154  
                         
Average shareholders' equity   $ 2,015,963     $ 2,062,914       2,052,211  
Less: Average goodwill and intangible assets     (531,732 )     (532,901 )     (531,955 )
Average tangible shareholders' equity (denominator)   $ 1,484,231     $ 1,530,013     $ 1,520,256  
                         
  Return on average common shareholders' equity (tangible), annualized     10.96 %     11.13 %     9.96 %
                         
Efficiency ratio                        
Non-interest expense   $ 118,478     $ 109,554     $ 117,720  
Less: Intangible amortization     (130 )     (315 )     (315 )
Numerator   $ 118,348     $ 109,239     $ 117,405  
                         
Net interest income (fully taxable equivalent)   $ 128,086     $ 133,846     $ 132,614  
Plus: Total Non-interest income     44,737       38,506       42,101  
Less: Investment securities gains     (4,145 )     -       (848 )
Denominator   $ 168,678     $ 172,352     $ 173,867  
                         
  Efficiency ratio     70.16 %     63.38 %     67.53 %
                         
Non-performing assets to tangible common shareholders' equity and allowance for credit losses                        
Non-performing assets (numerator)   $ 163,545     $ 170,230     $ 150,504  
                         
Tangible shareholders' equity   $ 1,499,841     $ 1,525,972     $ 1,464,862  
Plus: Allowance for credit losses     179,658       199,006       185,931  
Tangible shareholders' equity and allowance for credit losses (denominator)   $ 1,679,499     $ 1,724,978     $ 1,650,793  
                         
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses     9.74 %     9.87 %     9.12 %
                         
                         

Contact Information

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


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