SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

July 21, 2015 16:30 ET

Fulton Financial Reports Second Quarter Earnings of $0.21 per Share

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

  • Diluted earnings per share was 21 cents, a 4.5 percent decrease from the first quarter of 2015 and unchanged from the second quarter of 2014.
  • Net interest income decreased $661,000, or 0.5 percent, compared to the first quarter of 2015 and decreased $5.0 million, or 3.9%, compared to the second quarter of 2014. The net interest margin decreased 7 basis points compared to the first quarter of 2015, to 3.20 percent. The net interest margin for the second quarter of 2014 was 3.41 percent.
  • Average loans increased $97.1 million, or 0.7 percent, compared to the first quarter of 2015 and $396.9 million, or 3.1 percent, compared to the second quarter of 2014. Average deposits increased $107.1 million, or 0.8 percent, compared to the first quarter of 2015 and $878.6 million, or 7.0 percent, compared to the second quarter of 2014.
  • The provision for credit losses was $2.2 million, compared to a $3.7 million negative provision in the first quarter of 2015 and a $3.5 million provision in the second quarter of 2014.
  • Non-interest income, excluding investment securities gains, increased $3.5 million, or 8.6 percent, in comparison to the first quarter of 2015, and increased $314,000, or 0.7 percent, in comparison to the second quarter of 2014.
  • Non-interest expense was largely unchanged compared to the first quarter of 2015 and increased $2.2 million, or 1.9 percent, compared to the second quarter of 2014.
  • In April 2015, the Corporation announced that its Board of Directors approved the repurchase of up to $50 million of the Corporation's common stock through December 31, 2015. During the second quarter of 2015, 1.5 million shares were repurchased under this program at a total cost of $19.0 million.
  • In June 2015, the Corporation issued $150.0 million of subordinated debt, the net proceeds of which were used to redeem $150 million of trust preferred securities in July 2015.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $36.7 million, or 21 cents per diluted share, for the second quarter of 2015, compared to $40.0 million, or 22 cents per diluted share, for the first quarter of 2015.

"We reported diluted earnings per share of 21 cents for the second quarter. During the quarter, we saw earning asset and core deposit growth, an increase in non-interest income across a number of key business lines and good control of other expenses," said E. Philip Wenger, Chairman, President and CEO. "Lower yields on earning assets exerted pressure on our net interest margin during the quarter. In keeping with our goal of creating shareholder value, and in light of the current low interest rate environment, we took steps to reduce interest expense over the long term through the issuance of $150 million in subordinated debt which was used to redeem higher cost trust preferred securities in July."

Net Interest Income and Margin
Net interest income for the second quarter of 2015 decreased $661,000, or 0.5 percent, from the first quarter of 2015. Net interest margin decreased seven basis points, or 2.1 percent, to 3.20 percent in the second quarter of 2015 from 3.27 percent in the first quarter of 2015. Average yields on interest-earning assets decreased nine basis points, while the average cost of interest-bearing liabilities decreased three basis points during the second quarter of 2015 in comparison to the first quarter of 2015.

Average Balance Sheet

Total average assets for the second quarter of 2015 were $17.2 billion, an increase of $85.0 million from the first quarter of 2015. Average loans, net of unearned income, increased $97.1 million, or 0.7 percent, in comparison to the first quarter of 2015.

             
    Three Months Ended     Increase (decrease)  
    June 30, 2015     March 31, 2015     in Balance  
    Balance   Yield (1)     Balance   Yield (1)     $     %  
    (dollars in thousands)  
Average Loans, net of unearned income, by type:                                      
  Real estate - commercial mortgage   $ 5,210,540   4.15 %   $ 5,163,845   4.22 %   $ 46,695     0.9 %
  Commercial - industrial, financial and agricultural     3,836,397   3.79 %     3,770,187   3.87 %     66,210     1.8 %
  Real estate - home equity     1,695,171   4.11 %     1,721,300   4.14 %     (26,129 )   (1.5 %)
  Real estate - residential mortgage     1,356,464   3.82 %     1,370,376   3.84 %     (13,912 )   (1.0 %)
  Real estate - construction     698,685   3.97 %     688,690   3.93 %     9,995     1.5 %
  Consumer     265,354   5.48 %     259,138   5.26 %     6,216     2.4 %
  Leasing and other     129,989   6.94 %     121,992   8.41 %     7,997     6.6 %
                                         
  Total Average Loans, net of unearned income   $ 13,192,600   4.05 %   $ 13,095,528   4.11 %   $ 97,072     0.7 %
                                       
    (1) Presented on a fully-taxable equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
     

Total average liabilities increased $69.1 million, or 0.5 percent, from the first quarter of 2015, including a $107.1 million, or 0.8%, increase in average deposits. Average deposits and interest rates, by type, for the second quarter of 2015 in comparison to the first quarter of 2015, are summarized in the following table:

             
    Three Months Ended     Increase (decrease)  
    June 30, 2015     March 31, 2015     in Balance  
    Balance   Rate     Balance   Rate     $     %  
    (dollars in thousands)  
Average Deposits, by type:                                      
  Noninterest-bearing demand   $ 3,734,880   - %   $ 3,662,040   - %   $ 72,840     2.0 %
  Interest-bearing demand     3,152,697   0.13 %     3,135,927   0.13 %     16,770     0.5 %
  Savings deposits     3,568,579   0.14 %     3,517,057   0.13 %     51,522     1.5 %
Total average demand and savings     10,456,156   0.09 %     10,315,024   0.08 %     141,132     1.4 %
  Time deposits     3,027,520   1.04 %     3,061,593   1.02 %     (34,073 )   (1.1 %)
                                       
  Total Average Deposits   $ 13,483,676   0.30 %   $ 13,376,617   0.30 %   $ 107,059     0.8 %
                                         

Asset Quality
Non-performing assets were $162.3 million, or 0.93 percent of total assets, at June 30, 2015, compared to $163.5 million, or 0.94 percent of total assets, at March 31, 2015 and $162.8 million, or 0.96 percent of total assets, at June 30, 2014.

Annualized net charge-offs for the quarter ended June 30, 2015 were 0.38 percent of total average loans, compared to 0.08 percent for the quarter ended March 31, 2015 and 0.28 percent for the quarter ended June 30, 2014. The increase in net charge-offs was mainly in commercial loans and was primarily due to two customer relationships that were placed on non-accrual status in the first quarter of 2015. The allowance for credit losses as a percentage of non-performing loans was 113.3 percent at June 30, 2015, as compared to 120.3 percent at March 31, 2015 and 129.6 percent at June 30, 2014.

During the second quarter of 2015, the Corporation recorded a $2.2 million provision for credits losses, compared to a $3.7 million negative provision for credit losses in the first quarter of 2015. The $5.9 million increase in the provision resulted from the consistent application of the Corporation's allowance methodology.

Non-interest Income
Non-interest income, excluding investment securities gains, increased $3.5 million, or 8.6 percent, in comparison to the first quarter of 2015. Service charges on deposit accounts increased $1.1 million, or 9.2 percent, primarily due to an increase in overdraft fees. Other service charges and fees increased $1.6 million, or 17.4 percent, primarily due to increases in debit card, merchant and commercial loan swap fee income. Mortgage banking income increased $650,000, or 13.9 percent, mainly due to an increase in spreads on new loan commitments.

Gains on sales of investment securities decreased $1.7 million in comparison to the first quarter of 2015. Gains in the second quarter of 2015 were primarily realized gains on sales of equity securities.

Non-interest Expense
Non-interest expense decreased $124,000, or 0.1 percent, in the second quarter of 2015, compared to the first quarter of 2015. Occupancy expense decreased $1.9 million, or 13.8 percent, due primarily to seasonal fluctuations in snow removal and utilities costs. Other real estate owned (OREO) and repossession expense decreased $1.2 million, primarily due to an increase in net gains on sales of OREO. Partially offsetting these decreases was a $2.4 million, or 41.3 percent, increase in other outside services expenses.

During the first six months 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 were $520,000 and $1.5 million during the second and first quarters of 2015, respectively.

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, Bethlehem, 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 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which have 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  
    June 30     June 30     March 31     June 30     March 31  
    2015     2014     2015     2014     2015  
                                     
ASSETS                                    
                                     
  Cash and due from banks   $ 100,455     $ 258,837     $ 91,870     (61.2 %)   9.3 %
  Other interest-earning assets     387,324       305,518       703,667     26.8 %   (45.0 %)
  Loans held for sale     33,980       36,079       34,124     (5.8 %)   (0.4 %)
  Investment securities     2,440,492       2,497,776       2,259,802     (2.3 %)   8.0 %
  Loans, net of unearned income     13,244,230       12,839,511       13,115,505     3.2 %   1.0 %
  Allowance for loan losses     (167,485 )     (191,685 )     (177,701 )   (12.6 %)   (5.7 %)
    Net loans     13,076,745       12,647,826       12,937,804     3.4 %   1.1 %
  Premises and equipment     226,794       225,168       226,241     0.7 %   0.2 %
  Accrued interest receivable     41,193       42,116       42,216     (2.2 %)   (2.4 %)
  Goodwill and intangible assets     531,567       532,432       531,672     (0.2 %)   (0.0 %)
  Other assets     526,923       487,887       535,945     8.0 %   (1.7 %)
                                     
      Total Assets   $ 17,365,473     $ 17,033,639     $ 17,363,341     1.9 %   0.0 %
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
                                     
  Deposits   $ 13,505,709     $ 12,693,659     $ 13,514,497     6.4 %   (0.1 %)
  Short-term borrowings     409,035       1,008,307       410,105     (59.4 %)   (0.3 %)
  Other liabilities     293,271       263,478       312,709     11.3 %   (6.2 %)
  FHLB advances and long-term debt     1,132,641       968,395       1,094,517     17.0 %   3.5 %
                                     
    Total Liabilities     15,340,656       14,933,839       15,331,828     2.7 %   0.1 %
                                     
  Shareholders' equity     2,024,817       2,099,800       2,031,513     (3.6 %)   (0.3 %)
                                     
Total Liabilities and Shareholders' Equity   $ 17,365,473     $ 17,033,639     $ 17,363,341     1.9 %   0.0 %
                                     
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                                    
                                     
Loans, by type:                                    
  Real estate - commercial mortgage   $ 5,237,800     $ 5,128,734     $ 5,227,101     2.1 %   0.2 %
  Commercial - industrial, financial and agricultural     3,806,699       3,601,721       3,762,631     5.7 %   1.2 %
  Real estate - home equity     1,689,688       1,730,497       1,701,623     (2.4 %)   (0.7 %)
  Real estate - residential mortgage     1,369,103       1,361,976       1,364,788     0.5 %   0.3 %
  Real estate - construction     731,925       634,018       677,806     15.4 %   8.0 %
  Consumer     272,494       280,557       257,301     (2.9 %)   5.9 %
  Leasing and other     136,521       102,008       124,255     33.8 %   9.9 %
                                     
  Total Loans, net of unearned income   $ 13,244,230     $ 12,839,511     $ 13,115,505     3.2 %   1.0 %
                                     
Deposits, by type:                                    
  Noninterest-bearing demand   $ 3,805,165     $ 3,484,125     $ 3,765,677     9.2 %   1.0 %
  Interest-bearing demand     3,129,903       2,855,511       3,133,748     9.6 %   (0.1 %)
  Savings deposits     3,566,888       3,338,018       3,567,652     6.9 %   (0.0 %)
  Time deposits     3,003,753       3,016,005       3,047,420     (0.4 %)   (1.4 %)
                                       
  Total Deposits   $ 13,505,709     $ 12,693,659     $ 13,514,497     6.4 %   (0.1 %)
                                     
Short-term borrowings, by type:                                    
  Customer repurchase agreements   $ 169,918     $ 212,930     $ 161,886     (20.2 %)   5.0 %
  Customer short-term promissory notes     74,059       86,366       93,176     (14.2 %)   (20.5 %)
  Short-term FHLB advances     160,000       325,000       155,000     (50.8 %)   3.2 %
  Federal funds purchased     5,058       384,011       43     (98.7 %)   N/M  
                                       
  Total Short-term Borrowings   $ 409,035     $ 1,008,307     $ 410,105     (59.4 %)   (0.3 %)
                                     
N/M - Not Meaningful                                    
                                     
   
   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  
in thousands, except per-share data and percentages  
                                       
    Three Months Ended     % Change from     Six Months Ended        
    Jun 30     Jun 30     Mar 31     Jun 30     Mar 31     Jun 30        
    2015     2014     2015     2014     2015     2015     2014     % Change  
                                                           
Interest Income:                                                          
  Interest income   $ 144,229     $ 147,902     $ 145,772     (2.5 %)   (1.1 %)   $ 290,001     $ 296,694     (2.3 %)
  Interest expense     21,309       20,004       22,191     6.5 %   (4.0 %)     43,500       39,231     10.9 %
                                                             
    Net Interest Income     122,920       127,898       123,581     (3.9 %)   (0.5 %)     246,501       257,463     (4.3 %)
  Provision for credit losses     2,200       3,500       (3,700 )   (37.1 %)   N/M       (1,500 )     6,000     N/M  
                                                             
    Net Interest Income after Provision     120,720       124,398       127,281     (3.0 %)   (5.2 %)     248,001       251,463     (1.4 %)
                                                           
Non-Interest Income:                                                          
  Service charges on deposit accounts     12,637       12,552       11,569     0.7 %   9.2 %     24,206       24,263     (0.2 %)
  Investment management and trust services     11,011       11,339       10,889     (2.9 %)   1.1 %     21,900       22,297     (1.8 %)
  Other service charges and fees     10,988       10,526       9,363     4.4 %   17.4 %     20,351       19,453     4.6 %
  Mortgage banking income     5,339       5,741       4,688     (7.0 %)   13.9 %     10,027       9,346     7.3 %
  Investment securities gains     2,415       1,112       4,145     117.2 %   (41.7 %)     6,560       1,112     489.9 %
  Other     4,099       3,602       4,083     13.8 %   0.4 %     8,182       6,907     18.5 %
                                                             
    Total Non-Interest Income     46,489       44,872       44,737     3.6 %   3.9 %     91,226       83,378     9.4 %
                                                           
Non-Interest Expense:                                                          
  Salaries and employee benefits     65,067       63,623       64,990     2.3 %   0.1 %     130,057       123,189     5.6 %
  Net occupancy expense     11,809       11,464       13,692     3.0 %   (13.8 %)     25,501       25,067     1.7 %
  Other outside services     8,125       7,240       5,750     12.2 %   41.3 %     13,875       11,052     25.5 %
  Data processing     4,894       4,331       4,768     13.0 %   2.6 %     9,662       8,127     18.9 %
  Software     3,376       3,209       3,318     5.2 %   1.7 %     6,694       6,134     9.1 %
  Equipment expense     3,335       3,360       3,958     (0.7 %)   (15.7 %)     7,293       6,962     4.8 %
  FDIC insurance expense     2,885       2,615       2,822     10.3 %   2.2 %     5,707       5,304     7.6 %
  Professional fees     2,731       3,559       2,871     (23.3 %)   (4.9 %)     5,602       6,463     (13.3 %)
  Marketing     2,235       2,337       1,233     (4.4 %)   81.3 %     3,468       3,921     (11.6 %)
  Operating risk loss     674       716       827     (5.9 %)   (18.5 %)     1,501       2,544     (41.0 %)
  Other real estate owned and repossession expense     129       748       1,362     (82.8 %)   (90.5 %)     1,491       1,731     (13.9 %)
  Intangible amortization     106       315       130     (66.3 %)   (18.5 %)     236       630     (62.5 %)
  Other     12,988       12,657       12,757     2.6 %   1.8 %     25,745       24,604     4.6 %
                                                             
    Total Non-Interest Expense     118,354       116,174       118,478     1.9 %   (0.1 %)     236,832       225,728     4.9 %
                                                               
    Income Before Income Taxes     48,855       53,096       53,540     (8.0 %)   (8.8 %)     102,395       109,113     (6.2 %)
  Income tax expense     12,175       13,500       13,504     (9.8 %)   (9.8 %)     25,679       27,734     (7.4 %)
                                                             
    Net Income   $ 36,680     $ 39,596     $ 40,036     (7.4 %)   (8.4 %)   $ 76,716     $ 81,379     (5.7 %)
                                                           
                                                           
PER SHARE:                                                          
                                                           
  Net income:                                                          
    Basic   $ 0.21     $ 0.21     $ 0.22     -     (4.5 %)   $ 0.43     $ 0.43     -  
    Diluted     0.21       0.21       0.22     -     (4.5 %)     0.43       0.43     -  
                                                             
  Cash dividends   $ 0.09     $ 0.08     $ 0.09     12.5 %   -     $ 0.18     $ 0.16     12.5 %
  Shareholders' equity     11.50       11.11       11.34     3.5 %   1.4 %     11.50       11.11     3.5 %
  Shareholders' equity (tangible)     8.48       8.29       8.37     2.3 %   1.3 %     8.48       8.29     2.3 %
                                                             
  Weighted average shares (basic)     176,433       188,139       178,471     (6.2 %)   (1.1 %)     177,446       188,799     (6.0 %)
  Weighted average shares (diluted)     177,531       189,182       179,457     (6.2 %)   (1.1 %)     178,488       189,832     (6.0 %)
  Shares outstanding, end of period     176,019       189,033       179,098     (6.9 %)   (1.7 %)     176,019       189,033     (6.9 %)
                                                           
SELECTED FINANCIAL RATIOS:                                                          
                                                           
  Return on average assets     0.86 %     0.94 %     0.95 %                 0.90 %     0.97 %      
  Return on average shareholders' equity     7.24 %     7.63 %     8.05 %                 7.64 %     7.92 %      
  Return on average shareholders' equity (tangible)     9.83 %     10.30 %     10.96 %                 10.39 %     10.71 %      
  Net interest margin     3.20 %     3.41 %     3.27 %                 3.24 %     3.44 %      
  Efficiency ratio     68.94 %     65.85 %     70.16 %                 69.55 %     64.63 %      
                                                           
    N/M - Not meaningful                                                          
                                                           
   
   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)  
dollars in thousands  
   
    Three Months Ended  
    June 30, 2015     June 30, 2014     March 31, 2015  
    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   $ 13,192,600     $ 133,339     4.05 %   $ 12,795,747     $ 134,387     4.21 %   $ 13,095,528     $ 133,055     4.11 %
  Taxable investment securities     2,048,558       10,944     2.14 %     2,211,004       12,418     2.25 %     2,005,542       11,282     2.25 %
  Tax-exempt investment securities     216,355       2,894     5.35 %     270,482       3,534     5.23 %     229,082       3,212     5.61 %
  Equity securities     27,618       379     5.50 %     33,922       419     4.95 %     32,210       450     5.66 %
                                                                     
  Total Investment Securities     2,292,531       14,217     2.48 %     2,515,408       16,371     2.60 %     2,266,834       14,944     2.64 %
                                                                     
  Loans held for sale     26,335       265     4.03 %     17,540       214     4.87 %     17,002       173     4.07 %
  Other interest-earning assets     439,425       933     0.85 %     238,921       1,207     2.02 %     474,033       2,105     1.78 %
                                                                     
  Total Interest-earning Assets     15,950,891       148,754     3.74 %     15,567,616       152,179     3.92 %     15,853,397       150,277     3.83 %
                                                                   
Noninterest-earning assets:                                                                  
  Cash and due from banks     104,723                     198,291                     105,271                
  Premises and equipment     226,569                     224,586                     226,391                
  Other assets     1,094,071                     1,037,654                     1,114,078                
  Less: allowance for loan losses     (176,085 )                   (196,462 )                   (183,927 )              
                                                                     
  Total Assets   $ 17,200,169                   $ 16,831,685                   $ 17,115,210                
                                                                   
                                                                   
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                  
                                                                   
Interest-bearing liabilities:                                                                  
  Demand deposits   $ 3,152,697     $ 987     0.13 %   $ 2,914,887     $ 904     0.12 %   $ 3,135,927     $ 983     0.13 %
  Savings deposits     3,568,579       1,247     0.14 %     3,355,929       1,031     0.12 %     3,517,057       1,119     0.13 %
  Time deposits     3,027,520       7,819     1.04 %     3,012,061       6,750     0.90 %     3,061,593       7,721     1.02 %
                                                                     
  Total Interest-bearing Deposits     9,748,796       10,053     0.41 %     9,282,877       8,685     0.38 %     9,714,577       9,823     0.41 %
                                                                     
  Short-term borrowings     379,988       103     0.11 %     1,047,684       540     0.21 %     309,215       77     0.10 %
  FHLB advances and long-term debt     1,026,987       11,153     4.35 %     894,511       10,779     4.83 %     1,124,074       12,291     4.40 %
                                                                     
  Total Interest-bearing Liabilities     11,155,771       21,309     0.77 %     11,225,072       20,004     0.71 %     11,147,866       22,191     0.80 %
                                                                   
Noninterest-bearing liabilities:                                                                  
  Demand deposits     3,734,880                     3,322,195                     3,662,040                
  Other     277,730                     202,520                     289,341                
                                                                     
  Total Liabilities     15,168,381                     14,749,787                     15,099,247                
                                                                     
  Shareholders' equity     2,031,788                     2,081,898                     2,015,963                
                                                                     
  Total Liabilities and Shareholders' Equity   $ 17,200,169                   $ 16,831,685                   $ 17,115,210                
                                                                     
  Net interest income/net interest margin (fully taxable equivalent)             127,445     3.20 %             132,175     3.41 %             128,086     3.27 %
  Tax equivalent adjustment             (4,525 )                   (4,277 )                   (4,505 )      
                                                                     
  Net interest income           $ 122,920                   $ 127,898                   $ 123,581        
                                                                     
  (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  
    June 30   June 30   March 31   June 30     March 31  
    2015   2014   2015   2014     2015  
                 
Loans, by type:                        
  Real estate - commercial mortgage   $ 5,210,540   $ 5,138,537   $ 5,163,845   1.4 %   0.9 %
  Commercial - industrial, financial and agricultural     3,836,397     3,617,977     3,770,187   6.0 %   1.8 %
  Real estate - home equity     1,695,171     1,735,767     1,721,300   (2.3 %)   (1.5 %)
  Real estate - residential mortgage     1,356,464     1,339,034     1,370,376   1.3 %   (1.0 %)
  Real estate - construction     698,685     588,176     688,690   18.8 %   1.5 %
  Consumer     265,354     276,444     259,138   (4.0 %)   2.4 %
  Leasing and other     129,989     99,812     121,992   30.2 %   6.6 %
                                 
  Total Loans, net of unearned income   $ 13,192,600   $ 12,795,747   $ 13,095,528   3.1 %   0.7 %
                               
Deposits, by type:                              
  Noninterest-bearing demand   $ 3,734,880   $ 3,322,195   $ 3,662,040   12.4 %   2.0 %
  Interest-bearing demand     3,152,697     2,914,887     3,135,927   8.2 %   0.5 %
  Savings deposits     3,568,579     3,355,929     3,517,057   6.3 %   1.5 %
  Time deposits     3,027,520     3,012,061     3,061,593   0.5 %   (1.1 %)
                                 
  Total Deposits   $ 13,483,676   $ 12,605,072   $ 13,376,617   7.0 %   0.8 %
                               
Short-term borrowings, by type:                              
  Customer repurchase agreements   $ 179,804   $ 216,212   $ 173,625   (16.8 %)   3.6 %
  Customer short-term promissory notes     80,073     81,823     86,258   (2.1 %)   (7.2 %)
  Federal funds purchased     108,078     444,429     25,054   (75.7 %)   331.4 %
  Short-term FHLB advances and other borrowings     12,033     305,220     24,278   (96.1 %)   (50.4 %)
                                 
  Total Short-term Borrowings   $ 379,988   $ 1,047,684   $ 309,215   (63.7 %)   22.9 %
                                 
 
 
FULTON FINANCIAL CORPORATION       
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)     
dollars in thousands       
 
    Six Months Ended June 30  
    2015     2014  
    Average
Balance
   
Interest (1)
   
Yield/Rate
    Average
Balance
   
Interest (1)
   
Yield/Rate
 
ASSETS                                            
                                             
Interest-earning assets:                                            
  Loans, net of unearned income   $ 13,144,332     $ 266,394     4.08 %   $ 12,779,145     $ 269,131     4.24 %
  Taxable investment securities     2,027,170       22,226     2.19 %     2,234,259       25,684     2.30 %
  Tax-exempt investment securities     222,684       6,106     5.48 %     274,856       7,147     5.20 %
  Equity securities     29,901       829     5.58 %     33,922       848     5.03 %
                                               
  Total Investment Securities     2,279,755       29,161     2.56 %     2,543,037       33,679     2.65 %
                                               
  Loans held for sale     21,694       438     4.04 %     15,494       348     4.49 %
  Other interest-earning assets     456,633       3,038     1.33 %     248,807       2,089     1.68 %
                                               
  Total Interest-earning Assets     15,902,414       299,031     3.79 %     15,586,483       305,247     3.95 %
                                             
Noninterest-earning assets:                                            
  Cash and due from banks     104,996                     198,962                
  Premises and equipment     226,480                     225,436                
  Other assets     1,104,019                     1,034,877                
  Less: allowance for loan losses     (179,985 )                   (199,813 )              
                                               
  Total Assets   $ 17,157,924                   $ 16,845,945                
                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                            
                                             
Interest-bearing liabilities:                                            
  Demand deposits   $ 3,144,358     $ 1,970     0.13 %   $ 2,929,965     $ 1,813     0.12 %
  Savings deposits     3,542,960       2,366     0.13 %     3,353,910       2,066     0.12 %
  Time deposits     3,044,463       15,540     1.03 %     2,972,480       12,702     0.86 %
                                               
  Total Interest-bearing Deposits     9,731,781       19,876     0.41 %     9,256,355       16,581     0.36 %
                                               
  Short-term borrowings     344,797       180     0.10 %     1,127,872       1,173     0.21 %
  FHLB advances and long-term debt     1,075,262       23,444     4.38 %     889,051       21,477     4.85 %
                                               
  Total Interest-bearing Liabilities     11,151,840       43,500     0.78 %     11,273,278       39,231     0.70 %
                                             
Noninterest-bearing liabilities:                                            
  Demand deposits     3,698,661                     3,283,027                
  Other     283,504                     217,181                
                                               
  Total Liabilities     15,134,005                     14,773,486                
                                               
  Shareholders' equity     2,023,919                     2,072,459                
                                               
  Total Liabilities and Shareholders' Equity   $ 17,157,924                   $ 16,845,945                
                                               
  Net interest income/net interest margin (fully taxable equivalent)             255,531     3.24 %             266,016     3.44 %
  Tax equivalent adjustment             (9,030 )                   (8,553 )      
                                               
  Net interest income           $ 246,501                   $ 257,463        
                                             
(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:  
   
    Six Months Ended      
    June 30      
    2015   2014   % Change  
                   
Loans, by type:                  
  Real estate - commercial mortgage   $ 5,187,322   $ 5,111,979   1.5 %
  Commercial - industrial, financial and agricultural     3,803,475     3,627,471   4.9 %
  Real estate - home equity     1,708,163     1,745,503   (2.1 %)
  Real estate - residential mortgage     1,363,382     1,337,686   1.9 %
  Real estate - construction     693,715     582,294   19.1 %
  Consumer     262,265     275,682   (4.9 %)
  Leasing and other     126,010     98,530   27.9 %
                   
Total Loans, net of unearned income   $ 13,144,332   $ 12,779,145   2.9 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 3,698,661   $ 3,283,027   12.7 %
  Interest-bearing demand     3,144,358     2,929,965   7.3 %
  Savings deposits     3,542,960     3,353,910   5.6 %
  Time deposits     3,044,463     2,972,480   2.4 %
                     
  Total Deposits   $ 13,430,442   $ 12,539,382   7.1 %
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 176,732   $ 201,866   (12.5 %)
  Customer short-term promissory notes     83,148     91,856   (9.5 %)
  Federal funds purchased     66,795     430,407   (84.5 %)
  Short-term FHLB advances and other borrowings     18,122     403,743   (95.5 %)
                     
  Total Short-term Borrowings   $ 344,797   $ 1,127,872   (69.4 %)
                   
   
   
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
   
    Three Months Ended     Six Months Ended  
    Jun 30     Jun 30     Mar 31     Jun 30     Jun 30  
    2015     2014     2015     2015     2014  
ALLOWANCE FOR CREDIT LOSSES:                                        
                                         
  Balance at beginning of period   $ 179,658     $ 199,006     $ 185,931     $ 185,931     $ 204,917  
                                           
  Loans charged off:                                        
    Commercial - industrial, financial and agricultural     (11,166 )     (5,512 )     (1,863 )     (13,029 )     (10,637 )
    Real estate - commercial mortgage     (1,642 )     (2,141 )     (709 )     (2,351 )     (3,527 )
    Consumer and home equity     (1,227 )     (1,683 )     (1,548 )     (2,775 )     (4,085 )
    Real estate - residential mortgage     (783 )     (1,089 )     (1,281 )     (2,064 )     (1,935 )
    Real estate - construction     (87 )     (218 )     0       (87 )     (432 )
    Leasing and other     (467 )     (833 )     (363 )     (830 )     (1,128 )
    Total loans charged off     (15,372 )     (11,476 )     (5,764 )     (21,136 )     (21,744 )
  Recoveries of loans previously charged off:                                        
    Commercial - industrial, financial and agricultural     1,471       775       786       2,257       1,519  
    Real estate - commercial mortgage     451       430       436       887       474  
    Consumer and home equity     557       579       492       1,049       1,144  
    Real estate - residential mortgage     187       108       159       346       224  
    Real estate - construction     231       158       1,147       1,378       382  
    Leasing and other     70       362       171       241       526  
    Recoveries of loans previously charged off     2,967       2,412       3,191       6,158       4,269  
  Net loans charged off     (12,405 )     (9,064 )     (2,573 )     (14,978 )     (17,475 )
  Provision for credit losses     2,200       3,500       (3,700 )     (1,500 )     6,000  
                                           
  Balance at end of period   $ 169,453     $ 193,442     $ 179,658     $ 169,453     $ 193,442  
                                           
  Net charge-offs to average loans (annualized)     0.38 %     0.28 %     0.08 %     0.23 %     0.27 %
                                         
NON-PERFORMING ASSETS:                                        
                                         
  Non-accrual loans   $ 129,152     $ 129,934     $ 129,929                  
  Loans 90 days past due and accruing     20,353       19,378       19,365                  
    Total non-performing loans     149,505       149,312       149,294                  
  Other real estate owned     12,763       13,482       14,251                  
                                           
  Total non-performing assets   $ 162,268     $ 162,794     $ 163,545                  
                                         
NON-PERFORMING LOANS, BY TYPE:                                        
                                         
  Real estate - commercial mortgage   $ 49,932     $ 44,015     $ 46,331                  
  Commercial - industrial, financial and agricultural     35,839       38,163       43,265                  
  Real estate - residential mortgage     31,562       27,887       28,595                  
  Consumer and home equity     17,215       18,919       16,939                  
  Real estate - construction     14,884       20,268       14,140                  
  Leasing     73       60       24                  
                                           
  Total non-performing loans   $ 149,505     $ 149,312     $ 149,294                  
                                         
                                         
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                        
                                         
  Real-estate - residential mortgage   $ 31,584     $ 31,184     $ 31,574                  
  Real-estate - commercial mortgage     17,482       19,398       23,468                  
  Real estate - construction     4,482       8,561       7,791                  
  Commercial - industrial, financial and agricultural     6,591       6,953       6,975                  
  Consumer and home equity     3,330       2,838       3,118                  
  Total accruing TDRs     63,469       68,934       72,926                  
  Non-accrual TDRs (1)     27,230       25,526       29,392                  
  Total TDRs   $ 90,699     $ 94,460     $ 102,318                  
                                         
(1) Included within non-accrual loans above.
 
                                       
DELINQUENCY RATES, BY TYPE:  
   
    Jun 30, 2015   Jun 30, 2014   Mar 31, 2015  
    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   0.34 % 0.96 % 1.30 % 0.30 % 0.86 % 1.16 % 0.50 % 0.89 % 1.39 %
Commercial - industrial, financial and agricultural   0.22 % 0.93 % 1.15 % 0.47 % 1.05 % 1.52 % 0.26 % 1.15 % 1.41 %
Real estate - construction   0.02 % 2.04 % 2.06 % 0.10 % 3.20 % 3.30 % 0.31 % 2.09 % 2.40 %
Real estate - residential mortgage   1.53 % 2.30 % 3.83 % 1.78 % 2.05 % 3.83 % 1.75 % 2.10 % 3.85 %
Consumer, home equity, leasing and other   0.69 % 0.83 % 1.52 % 0.84 % 0.90 % 1.74 % 0.92 % 0.81 % 1.73 %
                                       
Total   0.47 % 1.13 % 1.60 % 0.58 % 1.17 % 1.75 % 0.62 % 1.14 % 1.76 %
                                       
(2) Includes non-accrual loans
 
   
ASSET QUALITY RATIOS:  
   
    Jun 30     Jun 30     Mar 31  
    2015     2014     2015  
                   
Non-accrual loans to total loans   0.98 %   1.01 %   0.99 %
Non-performing assets to total loans and OREO   1.22 %   1.27 %   1.25 %
Non-performing assets to total assets   0.93 %   0.96 %   0.94 %
Allowance for credit losses to loans outstanding   1.28 %   1.51 %   1.37 %
Allowance for credit losses to non-performing loans   113.34 %   129.56 %   120.34 %
Non-performing assets to tangible common shareholders' equity and allowance for credit losses   9.76 %   9.25 %   9.74 %
                   
 
 
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     Six Months Ended  
    June 30     June 30     March 31     June 30     June 30  
    2015     2014     2015     2015     2014  
Shareholders' equity (tangible), per share                                        
Shareholders' equity   $ 2,024,817     $ 2,099,800     $ 2,031,513                  
Less: Goodwill and intangible assets     (531,567 )     (532,432 )     (531,672 )                
Tangible shareholders' equity (numerator)   $ 1,493,250     $ 1,567,368     $ 1,499,841                  
                                         
Shares outstanding, end of period (denominator)     176,019       189,033       179,098                  
                                         
  Shareholders' equity (tangible), per share   $ 8.48     $ 8.29     $ 8.37                  
                                         
Return on average common shareholders' equity (tangible)                                        
Net income   $ 36,680     $ 39,596     $ 40,036     $ 76,716     $ 81,379  
Plus: Intangible amortization, net of tax     69       204       85       153       410  
Numerator   $ 36,749     $ 39,800     $ 40,121     $ 76,869     $ 81,789  
                                         
Average shareholders' equity   $ 2,031,788     $ 2,081,898       2,015,963       2,023,919       2,072,459  
Less: Average goodwill and intangible assets     (531,618 )     (532,585 )     (531,732 )     (531,675 )     (532,742 )
Average tangible shareholders' equity (denominator)   $ 1,500,170     $ 1,549,313     $ 1,484,231     $ 1,492,244     $ 1,539,717  
                                         
  Return on average common shareholders' equity (tangible), annualized     9.83 %     10.30 %     10.96 %     10.39 %     10.71 %
                                         
Efficiency ratio                                        
Non-interest expense   $ 118,354     $ 116,174     $ 118,478     $ 236,832     $ 225,728  
Less: Intangible amortization     (106 )     (315 )     (130 )     (236 )     (630 )
Numerator   $ 118,248     $ 115,859     $ 118,348     $ 236,596     $ 225,098  
                                         
Net interest income (fully taxable equivalent)   $ 127,445     $ 132,175     $ 128,086     $ 255,531     $ 266,016  
Plus: Total Non-interest income     46,489       44,872       44,737       91,226       83,378  
Less: Investment securities gains     (2,415 )     (1,112 )     (4,145 )     (6,560 )     (1,112 )
Denominator   $ 171,519     $ 175,935     $ 168,678     $ 340,197     $ 348,282  
                                         
  Efficiency ratio     68.94 %     65.85 %     70.16 %     69.55 %     64.64 %
                                         
Non-performing assets to tangible common shareholders' equity and allowance for credit losses                                        
Non-performing assets (numerator)   $ 162,268     $ 162,794     $ 163,545                  
                                         
Tangible shareholders' equity   $ 1,493,250     $ 1,567,368     $ 1,499,841                  
Plus: Allowance for credit losses     169,453       193,442       179,658                  
Tangible shareholders' equity and allowance for credit losses (denominator)   $ 1,662,703     $ 1,760,810     $ 1,679,499                  
                                         
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses     9.76 %     9.25 %     9.74 %                
                                         

Contact Information

  • Media Contact:
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    (717) 291-2616

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