SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

October 20, 2015 16:30 ET

Fulton Financial Reports Third Quarter Earnings of $0.20 per Share and Announces Approval for $50 Million Share Repurchase Program

LANCASTER, PA--(Marketwired - Oct 20, 2015) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the third quarter of 2015 was 20 cents, compared to 21 cents in both the second quarter of 2015 and the third quarter of 2014.
  • In July 2015, the Corporation redeemed $150.0 million of trust preferred securities. In connection with this redemption, a loss of $5.6 million was recognized as a component of non-interest expense. This loss reduced diluted earnings per share for the third quarter of 2015 by approximately 2 cents.
  • Net interest income for the third quarter of 2015 increased $2.8 million, or 2.3 percent, compared to the second quarter of 2015 and decreased $3.7 million, or 2.8 percent, compared to the third quarter of 2014. The net interest margin of 3.18 percent decreased two basis points compared to the second quarter of 2015, and was down 21 basis points compared to the third quarter of 2014.
  • Ending loans increased $292.1 million, or 2.2 percent, compared to the second quarter of 2015 and $506.0 million, or 3.9 percent, compared to the third quarter of 2014, while average loans increased 1.3 percent and 3.5 percent, compared to the second quarter of 2015 and the third quarter of 2014, respectively.
  • Ending deposits increased $578.7 million, or 4.3 percent, compared to the second quarter of 2015 and $750.8 million, or 5.6 percent, compared to the third quarter of 2014, while average deposits increased 3.1 percent and 6.6 percent, compared to the second quarter of 2015 and the third quarter of 2014, respectively.
  • The provision for credit losses in the third quarter of 2015 was $1.0 million, compared to a $2.2 million provision in the second quarter of 2015 and a $3.5 million provision in the third quarter of 2014.
  • Non-interest income, excluding investment securities gains, decreased $1.0 million, or 2.3 percent, in comparison to the second quarter of 2015, and increased $1.2 million, or 2.9 percent, in comparison to the third quarter of 2014.
  • Non-interest expense, excluding the loss on redemption of trust preferred securities, increased $909,000, or 0.8 percent, compared to the second quarter of 2015 and increased $3.5 million, or 3.0 percent, compared to the third quarter of 2014.
  • In October 2015, the Corporation's Board of Directors approved the repurchase of up to $50 million of the Corporation's common stock, or approximately 2.3 percent of outstanding shares. In addition, during the third quarter of 2015, the Corporation completed the $50 million share repurchase program announced in April 2015. A total of approximately 4.0 million shares were repurchased under that program at an average cost of $12.57 per share.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $34.3 million, or 20 cents per diluted share, for the third quarter of 2015, compared to $36.7 million, or 21 cents per diluted share, for the second quarter of 2015.

"We had a good third quarter with strong loan and related net interest income growth. At the same time, we saw further improvement across all of our asset quality metrics," said E. Philip Wenger, Chairman, President and CEO. "During the quarter, we completed the $50 million share repurchase program announced in April of 2015. Today, our Board of Directors approved an additional $50 million share repurchase program."

Net Interest Income and Margin
Net interest income for the third quarter of 2015 increased $2.8 million, or 2.3 percent, from the second quarter of 2015. Net interest margin decreased two basis points, or 0.6 percent, to 3.18 percent in the third quarter of 2015 from 3.20 percent in the second quarter of 2015. Average yields on interest-earning assets decreased six basis points, while the average cost of interest-bearing liabilities decreased five basis points during the third quarter of 2015 in comparison to the second quarter of 2015.

Average Balance Sheet
Total average assets for the third quarter of 2015 were $17.5 billion, an increase of $324.3 million from the second quarter of 2015. Average loans, net of unearned income, increased $177.3 million, or 1.3 percent, in comparison to the second quarter of 2015. Average loans and yields, by type, for the third quarter of 2015 in comparison to the second quarter of 2015, are summarized in the following table:

             
             
    Three Months Ended     Increase (decrease)  
    September 30, 2015     June 30, 2015     in Balance  
    Balance   Yield (1)     Balance   Yield (1)     $     %  
    (dollars in thousands)  
Average Loans, net of unearned income, by type:                                      
  Real estate - commercial mortgage   $ 5,242,021   4.09 %   $ 5,210,540   4.15 %   $ 31,481     0.6 %
  Commercial - industrial, financial and agricultural     3,887,161   3.78 %     3,836,397   3.79 %     50,764     1.3 %
  Real estate - home equity     1,692,860   4.08 %     1,695,171   4.11 %     (2,311 )   (0.1 %)
  Real estate - residential mortgage     1,381,141   3.78 %     1,356,464   3.82 %     24,677     1.8 %
  Real estate - construction     753,584   3.88 %     698,685   3.97 %     54,899     7.9 %
  Consumer     270,391   5.81 %     265,354   5.48 %     5,037     1.9 %
  Leasing and other     142,716   6.79 %     129,989   6.94 %     12,727     9.8 %
                                       
  Total Average Loans, net of unearned income   $ 13,369,874   4.02 %   $ 13,192,600   4.05 %   $ 177,274     1.3 %
                                       
(1) Presented on a fully-taxable equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.        
 
 

Total average liabilities increased $333.3 million, or 2.2 percent, from the second quarter of 2015, including a $415.1 million, or 3.1 percent, increase in average deposits. Average deposits and interest rates, by type, for the third quarter of 2015 in comparison to the second quarter of 2015, are summarized in the following table:

             
             
    Three Months Ended     Increase (decrease)  
    September 30, 2015     June 30, 2015     in Balance  
    Balance   Rate     Balance   Rate     $     %  
    (dollars in thousands)        
Average Deposits, by type:                                      
  Noninterest-bearing demand   $ 3,904,176   - %   $ 3,734,880   - %   $ 169,296     4.5 %
  Interest-bearing demand     3,316,532   0.13 %     3,152,697   0.13 %     163,835     5.2 %
  Savings deposits     3,714,282   0.15 %     3,568,579   0.14 %     145,703     4.1 %
Total average demand and savings     10,934,990   0.09 %     10,456,156   0.09 %     478,834     4.6 %
  Time deposits     2,963,774   1.03 %     3,027,520   1.04 %     (63,746 )   (2.1 %)
                                       
  Total Average Deposits   $ 13,898,764   0.29 %   $ 13,483,676   0.30 %   $ 415,088     3.1 %
                                         
                                         

Asset Quality
Non-performing assets were $155.6 million, or 0.87 percent of total assets, at September 30, 2015, compared to $162.3 million, or 0.93 percent of total assets, at June 30, 2015 and $157.3 million, or 0.91 percent of total assets, at September 30, 2014.

Annualized net charge-offs for the quarter ended September 30, 2015 were 0.03 percent of total average loans, compared to 0.38 percent for the quarter ended June 30, 2015 and 0.18 percent for the quarter ended September 30, 2014. The allowance for credit losses as a percentage of non-performing loans was 116.8 percent at September 30, 2015, as compared to 113.3 percent at June 30, 2015 and 132.9 percent at September 30, 2014.

During the third quarter of 2015, the Corporation recorded a $1.0 million provision for credits losses, compared to a $2.2 million provision for credit losses in the second quarter of 2015.

Non-interest Income 
Non-interest income, excluding investment securities gains, decreased $1.0 million, or 2.3 percent, in comparison to the second quarter of 2015. Mortgage banking income decreased $1.5 million, or 27.6 percent, due to decreases in both origination volumes and spreads on new loan commitments.

Gains on sales of investment securities decreased $685,000 in comparison to the second quarter of 2015. Gains in the third quarter of 2015 were primarily realized gains on sales of equity securities.

Non-interest Expense
Non-interest expense increased $6.5 million, or 5.5 percent, in the third quarter of 2015, compared to the second quarter of 2015. In the third quarter of 2015, the Corporation incurred a $5.6 million loss on the redemption of trust preferred securities. Excluding this loss, non-interest expense increased $909,000, or 0.8 percent in the third quarter, compared to the second quarter 2015. A number of other expense categories increased during the third quarter of 2015, most notably, other real estate owned and repossession expense, software and operating risk loss. Partially offsetting these increases were decreases in occupancy and other outside services expenses.

During the first nine months of 2015, the Corporation implemented several cost savings initiatives, including the consolidation of eleven 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 approximately $2.1 million for the nine months ended September 30, 2015, recognized primarily in the first and second quarters of 2015.

Share Repurchase Program
As previously noted, the Corporation's board of directors today approved the repurchase of up to $50 million of shares of the Corporation's common stock, or approximately 2.3 percent of the Corporation's outstanding shares, based on the closing price of the Corporation's common stock on October 19, 2015. This approval expires on December 31, 2016. As of September 30, 2015, the Corporation had approximately 174 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, 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 Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov). The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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

   
   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)  
dollars in thousands  
              % Change from  
  September 30   September 30   June 30   September 30   June 30  
  2015   2014   2015   2014   2015  
                           
ASSETS                          
                           
  Cash and due from banks $ 93,803   $ 220,946   $ 100,455   (57.5 %) (6.6 %)
  Other interest-earning assets   579,920     377,579     387,324   53.6 % 49.7 %
  Loans held for sale   26,937     25,212     33,980   6.8 % (20.7 %)
  Investment securities   2,436,337     2,470,609     2,440,492   (1.4 %) (0.2 %)
  Loans, net of unearned income   13,536,361     13,030,405     13,244,230   3.9 % 2.2 %
  Allowance for loan losses   (167,136 )   (189,477 )   (167,485 ) (11.8 %) (0.2 %)
    Net loans   13,369,225     12,840,928     13,076,745   4.1 % 2.2 %
  Premises and equipment   225,705     224,441     226,794   0.6 % (0.5 %)
  Accrued interest receivable   42,846     43,544     41,193   (1.6 %) 4.0 %
  Goodwill and intangible assets   531,562     532,117     531,567   (0.1 %) (0.0 %)
  Other assets   531,724     502,798     526,923   5.8 % 0.9 %
      Total Assets $ 17,838,059   $ 17,238,174   $ 17,365,473   3.5 % 2.7 %
                           
LIABILITIES AND SHAREHOLDERS' EQUITY  
                           
  Deposits $ 14,084,394   $ 13,333,627   $ 13,505,709   5.6 % 4.3 %
  Short-term borrowings   431,631     564,952     409,035   (23.6 %) 5.5 %
  Other liabilities   316,697     243,300     293,271   30.2 % 8.0 %
  FHLB advances and long-term debt   979,433     1,018,289     1,132,641   (3.8 %) (13.5 %)
                           
    Total Liabilities   15,812,155     15,160,168     15,340,656   4.3 % 3.1 %
                           
  Shareholders' equity   2,025,904     2,078,006     2,024,817   (2.5 %) 0.1 %
    Total Liabilities and Shareholders' Equity $ 17,838,059   $ 17,238,174   $ 17,365,473   3.5 % 2.7 %
                           
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:  
                           
Loans, by type:                          
  Real estate - commercial mortgage $ 5,339,928   $ 5,156,979   $ 5,237,800   3.5 % 1.9 %
  Commercial - industrial, financial and agricultural   3,929,908     3,691,262     3,806,699   6.5 % 3.2 %
  Real estate - home equity   1,693,649     1,733,036     1,689,688   (2.3 %) 0.2 %
  Real estate - residential mortgage   1,382,085     1,372,033     1,369,103   0.7 % 0.9 %
  Real estate - construction   769,565     687,728     731,925   11.9 % 5.1 %
  Consumer   271,696     278,219     272,494   (2.3 %) (0.3 %)
  Leasing and other   149,530     111,148     136,521   34.5 % 9.5 %
  Total Loans, net of unearned income $ 13,536,361   $ 13,030,405   $ 13,244,230   3.9 % 2.2 %
                           
Deposits, by type:                          
  Noninterest-bearing demand $ 3,906,228   $ 3,556,810   $ 3,805,165   9.8 % 2.7 %
  Interest-bearing demand   3,362,336     3,164,514     3,129,903   6.3 % 7.4 %
  Savings deposits   3,880,103     3,620,919     3,566,888   7.2 % 8.8 %
  Time deposits   2,935,727     2,991,384     3,003,753   (1.9 %) (2.3 %)
  Total Deposits $ 14,084,394   $ 13,333,627   $ 13,505,709   5.6 % 4.3 %
                           
Short-term borrowings, by type:                          
  Customer repurchase agreements $ 145,225   $ 195,121   $ 169,918   (25.6 %) (14.5 %)
  Customer short-term promissory notes   80,879     78,225     74,059   3.4 % 9.2 %
  Short-term FHLB advances   200,000     285,000     160,000   (29.8 %) 25.0 %
  Federal funds purchased   5,527     6,606     5,058   (16.3 %) 9.3 %
  Total Short-term Borrowings $ 431,631   $ 564,952   $ 409,035   (23.6 %) 5.5 %
                           
                           
 
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
in thousands, except per-share data and percentages
   
    Three Months Ended     % Change from     Nine Months Ended        
    Sep 30     Sep 30     Jun 30     Sep 30     Jun 30     Sep 30        
    2015     2014     2015     2014     2015     2015     2014     % Change  
                                                           
Interest Income:                                                          
  Interest income   $ 146,228     $ 149,790     $ 144,229     (2.4 %)   1.4 %   $ 436,229     $ 446,484     (2.3 %)
  Interest expense     20,534       20,424       21,309     0.5 %   (3.6 %)     64,034       59,655     7.3 %
    Net Interest Income     125,694       129,366       122,920     (2.8 %)   2.3 %     372,195       386,829     (3.8 %)
  Provision for credit losses     1,000       3,500       2,200     (71.4 %)   (54.5 %)     (500 )     9,500     N/M  
    Net Interest Income after Provision     124,694       125,866       120,720     (0.9 %)   3.3 %     372,695       377,329     (1.2 %)
Non-Interest Income:                                                          
  Service charges on deposit accounts     12,982       12,801       12,637     1.4 %   2.7 %     37,188       37,064     0.3 %
  Investment management and trust services     11,237       11,120       11,011     1.1 %   2.1 %     33,137       33,417     (0.8 %)
  Other service charges and fees     10,965       9,954       10,988     10.2 %   (0.2 %)     31,316       29,407     6.5 %
  Mortgage banking income     3,864       4,038       5,339     (4.3 %)   (27.6 %)     13,891       13,384     3.8 %
  Investment securities gains     1,730       81       2,415     N/M     (28.4 %)     8,290       1,193     594.9 %
  Other     3,996       3,906       4,099     2.3 %   (2.5 %)     12,178       10,813     12.6 %
    Total Non-Interest Income     44,774       41,900       46,489     6.9 %   (3.7 %)     136,000       125,278     8.6 %
Non-Interest Expense:                                                          
  Salaries and employee benefits     65,308       62,434       65,067     4.6 %   0.4 %     195,365       185,623     5.2 %
  Net occupancy expense     10,710       11,582       11,809     (7.5 %)   (9.3 %)     36,211       36,649     (1.2 %)
  Other outside services     7,373       8,632       8,125     (14.6 %)   (9.3 %)     21,248       19,684     7.9 %
  Loss on redemption of trust preferred securities     5,626       -       -     N/M     N/M       5,626       -     N/M  
  Data processing     5,105       4,689       4,894     8.9 %   4.3 %     14,767       12,816     15.2 %
  Software     3,984       3,353       3,376     18.8 %   18.0 %     10,678       9,487     12.6 %
  Equipment expense     3,595       3,307       3,335     8.7 %   7.8 %     10,888       10,269     6.0 %
  FDIC insurance expense     2,867       2,882       2,885     (0.5 %)   (0.6 %)     8,574       8,186     4.7 %
  Professional fees     2,828       3,252       2,731     (13.0 %)   3.6 %     8,430       9,715     (13.2 %)
  Marketing     2,102       1,798       2,235     16.9 %   (6.0 %)     5,570       5,719     (2.6 %)
  Operating risk loss     1,136       1,242       674     (8.5 %)   68.5 %     2,637       3,786     (30.3 %)
  Other real estate owned and repossession expense     1,016       1,303       129     (22.0 %)   687.6 %     2,507       3,034     (17.4 %)
  Intangible amortization     5       314       106     (98.4 %)   (95.3 %)     241       944     (74.5 %)
  Other     13,234       11,010       12,988     20.2 %   1.9 %     38,979       35,614     9.4 %
    Total Non-Interest Expense     124,889       115,798       118,354     7.9 %   5.5 %     361,721       341,526     5.9 %
    Income Before Income Taxes     44,579       51,968       48,855     (14.2 %)   (8.8 %)     146,974       161,081     (8.8 %)
  Income tax expense     10,328       13,402       12,175     (22.9 %)   (15.2 %)     36,007       41,136     (12.5 %)
    Net Income   $ 34,251     $ 38,566     $ 36,680     (11.2 %)   (6.6 %)   $ 110,967     $ 119,945     (7.5 %)
                                                           
PER SHARE:                                                          
  Net income:                                                          
    Basic   $ 0.20     $ 0.21     $ 0.21     (4.8 %)   (4.8 %)   $ 0.63     $ 0.64     (1.6 %)
    Diluted     0.20       0.21       0.21     (4.8 %)   (4.8 %)     0.63       0.64     (1.6 %)
                                                           
  Cash dividends   $ 0.09     $ 0.08     $ 0.09     12.5 %   -     $ 0.27     $ 0.24     12.5 %
  Shareholders' equity     11.66       11.22       11.50     3.9 %   1.4 %     11.66       11.22     3.9 %
  Shareholders' equity (tangible)     8.60       8.35       8.48     3.0 %   1.4 %     8.60       8.35     3.0 %
                                                           
  Weighted average shares (basic)     174,338       186,109       176,433     (6.3 %)   (1.2 %)     176,399       187,893     (6.1 %)
  Weighted average shares (diluted)     175,342       186,955       177,531     (6.2 %)   (1.2 %)     177,428       188,863     (6.1 %)
  Shares outstanding, end of period     173,771       185,158       176,019     (6.1 %)   (1.3 %)     173,771       185,158     (6.1 %)
                                                           
SELECTED FINANCIAL RATIOS:                                                          
  Return on average assets     0.78 %     0.90 %     0.86 %                 0.86 %     0.95 %      
  Return on average shareholders' equity     6.72 %     7.32 %     7.24 %                 7.33 %     7.72 %      
  Return on average shareholders' equity (tangible)     9.11 %     9.88 %     9.83 %                 9.96 %     10.43 %      
  Net interest margin     3.18 %     3.39 %     3.20 %                 3.22 %     3.42 %      
  Efficiency ratio     68.82 %     65.80 %     68.94 %                 69.30 %     65.02 %      
 
    N/M - Not meaningful
 
 
 
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
 
    Three Months Ended  
    September 30, 2015     September 30, 2014     June 30, 2015  
    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   $ 13,369,874   $ 135,268     4.02 %   $ 12,922,821     $ 136,773     4.20 %   $ 13,192,600     $ 133,339     4.05 %
  Taxable investment securities     2,148,403     11,252     2.09 %     2,181,099       12,278     2.25 %     2,048,558       10,944     2.14 %
  Tax-exempt investment securities     230,178     2,929     5.09 %     256,303       3,414     5.33 %     216,355       2,894     5.35 %
  Equity securities     18,280     257     5.58 %     34,002       438     5.12 %     27,618       379     5.50 %
  Total Investment Securities     2,396,861     14,438     2.41 %     2,471,404       16,130     2.61 %     2,292,531       14,217     2.48 %
  Loans held for sale     20,704     194     3.74 %     23,699       237     4.01 %     26,335       265     4.03 %
  Other interest-earning assets     477,145     884     0.74 %     293,286       976     1.33 %     439,425       933     0.85 %
  Total Interest-earning Assets     16,264,584     150,784     3.68 %     15,711,210       154,116     3.90 %     15,950,891       148,754     3.74 %
                                                                 
Noninterest-earning assets:                                                                
  Cash and due from banks     104,622                   203,134                     104,723                
  Premises and equipment     226,446                   224,241                     226,569                
  Other assets     1,097,600                   1,055,521                     1,094,071                
  Less: allowance for loan losses     (168,770 )                 (192,163 )                   (176,085 )              
  Total Assets   $ 17,524,482                 $ 17,001,943                   $ 17,200,169                
                                                                 
                                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                
                                                                 
Interest-bearing liabilities:                                                                
  Demand deposits   $ 3,316,532   $ 1,122     0.13 %   $ 3,047,191     $ 953     0.12 %   $ 3,152,697     $ 987     0.13 %
  Savings deposits     3,714,282     1,436     0.15 %     3,468,958       1,061     0.12 %     3,568,579       1,247     0.14 %
  Time deposits     2,963,774     7,659     1.03 %     3,009,225       6,984     0.92 %     3,027,520       7,819     1.04 %
  Total Interest-bearing Deposits     9,994,588     10,217     0.41 %     9,525,374       8,998     0.37 %     9,748,796       10,053     0.41 %
                                                                 
  Short-term borrowings     324,685     92     0.11 %     667,397       297     0.18 %     379,988       103     0.11 %
  FHLB advances and long-term debt     996,247     10,225     4.09 %     995,486       11,129     4.45 %     1,026,987       11,153     4.35 %
  Total Interest-bearing Liabilities     11,315,520     20,534     0.72 %     11,188,257       20,424     0.73 %     11,155,771       21,309     0.77 %
                                                                 
Noninterest-bearing liabilities:                                                                
  Demand deposits     3,904,176                   3,514,033                     3,734,880                
  Other     281,957                   210,194                     277,730                
  Total Liabilities     15,501,653                   14,912,484                     15,168,381                
  Shareholders' equity     2,022,829                   2,089,459                     2,031,788                
  Total Liabilities and Shareholders' Equity   $ 17,524,482                 $ 17,001,943                   $ 17,200,169                
  Net interest income/net interest margin (fully taxable equivalent)           130,250     3.18 %             133,692     3.39 %             127,445     3.20 %
  Tax equivalent adjustment           (4,556 )                   (4,326 )                   (4,525 )      
  Net interest income         $ 125,694                   $ 129,366                   $ 122,920        
 
(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  
    September 30   September 30   June 30   September 30     June 30  
    2015   2014   2015   2014     2015  
                 
Loans, by type:                              
  Real estate - commercial mortgage   $ 5,242,021   $ 5,114,221   $ 5,210,540   2.5 %   0.6 %
  Commercial - industrial, financial and agricultural     3,887,161     3,657,047     3,836,397   6.3 %   1.3 %
  Real estate - home equity     1,692,860     1,727,253     1,695,171   (2.0 %)   (0.1 %)
  Real estate - residential mortgage     1,381,141     1,369,087     1,356,464   0.9 %   1.8 %
  Real estate - construction     753,584     663,922     698,685   13.5 %   7.9 %
  Consumer     270,391     284,630     265,354   (5.0 %)   1.9 %
  Leasing and other     142,716     106,661     129,989   33.8 %   9.8 %
                               
    Total Loans, net of unearned income   $ 13,369,874   $ 12,922,821   $ 13,192,600   3.5 %   1.3 %
                               
Deposits, by type:                              
  Noninterest-bearing demand   $ 3,904,176   $ 3,514,033   $ 3,734,880   11.1 %   4.5 %
  Interest-bearing demand     3,316,532     3,047,191     3,152,697   8.8 %   5.2 %
  Savings deposits     3,714,282     3,468,958     3,568,579   7.1 %   4.1 %
  Time deposits     2,963,774     3,009,225     3,027,520   (1.5 %)   (2.1 %)
                               
    Total Deposits   $ 13,898,764   $ 13,039,407   $ 13,483,676   6.6 %   3.1 %
                               
Short-term borrowings, by type:                              
  Customer repurchase agreements   $ 149,415   $ 202,809   $ 179,804   (26.3 %)   (16.9 %)
  Customer short-term promissory notes     79,308     83,734     80,073   (5.3 %)   (1.0 %)
  Federal funds purchased     85,092     224,930     108,078   (62.2 %)   (21.3 %)
  Short-term FHLB advances and other borrowings     10,870     155,924     12,033   (93.0 %)   (9.7 %)
                               
    Total Short-term Borrowings   $ 324,685   $ 667,397   $ 379,988   (51.4 %)   (14.6 %)
                                   
                                   
                                     
FULTON FINANCIAL CORPORATION                    
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)              
dollars in thousands                    
    Nine Months Ended September 30  
    2015     2014  
    Average                 Average              
    Balance     Interest (1)     Yield/Rate     Balance     Interest (1)     Yield/Rate  
ASSETS                                            
                                             
Interest-earning assets:                                            
  Loans, net of unearned income   $ 13,220,339     $ 401,662     4.06 %   $ 12,827,563     $ 405,904     4.23 %
  Taxable investment securities     2,068,025       33,478     2.16 %     2,216,344       37,962     2.28 %
  Tax-exempt investment securities     225,209       9,035     5.35 %     268,604       10,561     5.24 %
  Equity securities     25,985       1,086     5.59 %     33,949       1,286     5.06 %
                                             
  Total Investment Securities     2,319,219       43,599     2.51 %     2,518,897       49,809     2.64 %
                                             
  Loans held for sale     21,360       632     3.94 %     18,259       585     4.27 %
  Other interest-earning assets     463,545       3,922     1.13 %     263,797       3,065     1.55 %
                                             
  Total Interest-earning Assets     16,024,463       449,815     3.75 %     15,628,516       459,363     3.93 %
                                             
Noninterest-earning assets:                                            
  Cash and due from banks     104,870                     200,368                
  Premises and equipment     226,469                     225,033                
  Other assets     1,101,856                     1,041,834                
  Less: allowance for loan losses     (176,205 )                   (197,235 )              
                                             
  Total Assets   $ 17,281,453                   $ 16,898,516                
                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                            
                                             
Interest-bearing liabilities:                                            
  Demand deposits   $ 3,202,380     $ 3,092     0.13 %   $ 2,969,470     $ 2,766     0.12 %
  Savings deposits     3,600,695       3,802     0.14 %     3,392,681       3,127     0.12 %
  Time deposits     3,017,271       23,199     1.03 %     2,984,861       19,686     0.88 %
                                               
  Total Interest-bearing Deposits     9,820,346       30,093     0.41 %     9,347,012       25,579     0.37 %
                                             
  Short-term borrowings     338,019       272     0.11 %     972,694       1,470     0.20 %
  FHLB advances and long-term debt     1,048,634       33,669     4.29 %     924,920       32,606     4.71 %
                                             
  Total Interest-bearing Liabilities     11,206,999       64,034     0.76 %     11,244,626       59,655     0.71 %
                                             
Noninterest-bearing liabilities:                                            
  Demand deposits     3,767,919                     3,360,876                
  Other     282,983                     214,826                
                                             
  Total Liabilities     15,257,901                     14,820,328                
                                             
  Shareholders' equity     2,023,552                     2,078,188                
                                             
  Total Liabilities and Shareholders' Equity   $ 17,281,453                   $ 16,898,516                
                                             
  Net interest income/net interest margin (fully taxable equivalent)       385,781     3.22 %             399,708     3.42 %
  Tax equivalent adjustment             (13,586 )                   (12,879 )      
                                             
  Net interest income           $ 372,195                   $ 386,829        
                                             
  (1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
                   
                   
                   
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
                   
    Nine Months Ended      
    September 30      
    2015   2014   % Change  
             
Loans, by type:                  
  Real estate - commercial mortgage   $ 5,205,755   $ 5,112,735   1.8 %
  Commercial - industrial, financial and agricultural     3,831,678     3,637,440   5.3 %
  Real estate - home equity     1,703,006     1,739,352   (2.1 %)
  Real estate - residential mortgage     1,369,367     1,348,269   1.6 %
  Real estate - construction     713,893     609,803   17.1 %
  Consumer     265,002     278,697   (4.9 %)
  Leasing and other     131,638     101,267   30.0 %
                   
  Total Loans, net of unearned income   $ 13,220,339   $ 12,827,563   3.1 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 3,767,919   $ 3,360,876   12.1 %
  Interest-bearing demand     3,202,380     2,969,470   7.8 %
  Savings deposits     3,600,695     3,392,681   6.1 %
  Time deposits     3,017,271     2,984,861   1.1 %
                   
  Total Deposits   $ 13,588,265   $ 12,707,888   6.9 %
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 167,526   $ 202,184   (17.1 %)
  Customer short-term promissory notes     81,854     89,119   (8.2 %)
  Federal funds purchased     72,961     361,162   (79.8 %)
  Short-term FHLB advances and other borrowings     15,678     320,229   (95.1 %)
                   
  Total Short-term Borrowings   $ 338,019   $ 972,694   (65.2 %)
                     
                     
   
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
                               
    Three Months Ended     Nine Months Ended  
    Sep 30     Sep 30     Jun 30     Sep 30     Sep 30  
    2015     2014     2015     2015     2014  
ALLOWANCE FOR CREDIT LOSSES:                                        
Balance at beginning of period   $ 169,453     $ 193,442     $ 179,658     $ 185,931     $ 204,917  
Loans charged off:                                        
  Commercial - industrial, financial and agricultural     (1,640 )     (5,167 )     (11,166 )     (14,669 )     (15,804 )
  Real estate - commercial mortgage     (660 )     (1,557 )     (1,642 )     (3,011 )     (5,084 )
  Consumer and home equity     (1,590 )     (2,030 )     (1,227 )     (4,365 )     (6,115 )
  Real estate - residential mortgage     (1,035 )     (231 )     (783 )     (3,099 )     (2,166 )
  Real estate - construction     (114 )     (313 )     (87 )     (201 )     (745 )
  Leasing and other     (522 )     (306 )     (467 )     (1,352 )     (1,434 )
  Total loans charged off     (5,561 )     (9,604 )     (15,372 )     (26,697 )     (31,348 )
Recoveries of loans previously charged off:                                        
  Commercial - industrial, financial and agricultural     1,598       1,013       1,471       3,855       2,532  
  Real estate - commercial mortgage     842       1,167       451       1,729       1,641  
  Consumer and home equity     618       784       557       1,667       1,928  
  Real estate - residential mortgage     201       95       187       547       319  
  Real estate - construction     898       470       231       2,276       852  
  Leasing and other     346       241       70       587       767  
  Recoveries of loans previously charged off     4,503       3,770       2,967       10,661       8,039  
Net loans charged off     (1,058 )     (5,834 )     (12,405 )     (16,036 )     (23,309 )
Provision for credit losses     1,000       3,500       2,200       (500 )     9,500  
                                         
Balance at end of period   $ 169,395     $ 191,108     $ 169,453     $ 169,395     $ 191,108  
                                         
Net charge-offs to average loans (annualized)     0.03 %     0.18 %     0.38 %     0.16 %     0.24 %
                                         
NON-PERFORMING ASSETS:                                        
  Non-accrual loans   $ 132,154     $ 126,420     $ 129,152                  
  Loans 90 days past due and accruing     12,867       17,428       20,353                  
    Total non-performing loans     145,021       143,848       149,505                  
  Other real estate owned     10,561       13,489       12,763                  
  Total non-performing assets   $ 155,582     $ 157,337     $ 162,268                  
                                         
NON-PERFORMING LOANS, BY TYPE:                                        
  Real estate - commercial mortgage   $ 49,021     $ 44,602     $ 49,932                  
  Commercial - industrial, financial and agricultural     38,032       33,277       35,839                  
  Real estate - residential mortgage     27,707       28,135       31,562                  
  Consumer and home equity     15,186       17,586       17,215                  
  Real estate - construction     14,989       19,860       14,884                  
  Leasing     86       388       73                  
  Total non-performing loans   $ 145,021     $ 143,848     $ 149,505                  
                                         
                                         
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                  
  Real-estate - residential mortgage   $ 29,330     $ 30,850     $ 31,584                  
  Real-estate - commercial mortgage     17,282       18,869       17,482                  
  Commercial - industrial, financial and agricultural     7,399       5,115       6,591                  
  Real estate - construction     4,363       9,251       4,482                  
  Consumer and home equity     3,983       2,927       3,330                  
  Total accruing TDRs     62,357       67,012       63,469                  
  Non-accrual TDRs (1)     27,618       27,724       27,230                  
  Total TDRs   $ 89,975     $ 94,736     $ 90,699                  
                                         
(1) Included within non-accrual loans above.  
   
   

 

 
DELINQUENCY RATES, BY TYPE:
 
                   
    Sep 30, 2015     Sep 30, 2014     Jun 30, 2015  
    31-89 Days     ≥90 Days (2)     Total     31-89 Days     ≥90 Days (2)     Total     31-89 Days     ≥90 Days (2)     Total  
Real estate - commercial mortgage   0.16 %   0.92 %   1.08 %   0.48 %   0.86 %   1.34 %   0.34 %   0.96 %   1.30 %
Commercial - industrial, financial and agricultural   0.35 %   0.97 %   1.32 %   0.28 %   0.91 %   1.19 %   0.22 %   0.94 %   1.16 %
Real estate - construction   0.30 %   1.95 %   2.25 %   0.03 %   2.89 %   2.92 %   0.02 %   2.03 %   2.05 %
Real estate - residential mortgage   1.27 %   2.00 %   3.27 %   1.81 %   2.06 %   3.87 %   1.53 %   2.30 %   3.83 %
Consumer, home equity, leasing and other   0.69 %   0.72 %   1.41 %   0.74 %   0.85 %   1.59 %   0.69 %   0.83 %   1.52 %
Total   0.42 %   1.07 %   1.49 %   0.58 %   1.11 %   1.69 %   0.47 %   1.13 %   1.60 %
 
(2) Includes non-accrual loans
 
 
                   
ASSET QUALITY RATIOS:                  
    Sep 30     Sep 30     Jun 30  
    2015     2014     2015  
                   
Non-accrual loans to total loans   0.98 %   0.97 %   0.98 %
Non-performing assets to total loans and OREO   1.15 %   1.21 %   1.22 %
Non-performing assets to total assets   0.87 %   0.91 %   0.93 %
Allowance for credit losses to loans outstanding   1.25 %   1.47 %   1.28 %
Allowance for credit losses to non-performing loans   116.81 %   132.85 %   113.34 %
Non-performing assets to tangible common shareholders' equity and allowance for credit losses  
9.35
%  
9.06
%  
9.76
%
                   
                   
 
 
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     Nine Months Ended  
    September 30     September 30     June 30     September 30     September 30  
    2015     2014     2015     2015     2014  
Shareholders' equity (tangible), per share                                        
Shareholders' equity   $ 2,025,904     $ 2,078,006     $ 2,024,817                  
Less: Goodwill and intangible assets     (531,562 )     (532,117 )     (531,567 )                
Tangible shareholders' equity (numerator)   $ 1,494,342     $ 1,545,889     $ 1,493,250                  
                                         
Shares outstanding, end of period (denominator)     173,771       185,158       176,019                  
                                         
  Shareholders' equity (tangible), per share   $ 8.60     $ 8.35     $ 8.48                  
                                         
Return on average common shareholders' equity (tangible)                                        
Net income   $ 34,251     $ 38,566     $ 36,680     $ 110,967     $ 119,945  
Plus: Intangible amortization, net of tax     3       203       69       157       614  
Numerator   $ 34,254     $ 38,769     $ 36,749     $ 111,124     $ 120,559  
                                         
Average shareholders' equity   $ 2,022,829     $ 2,089,459       2,031,788       2,023,552       2,078,188  
Less: Average goodwill and intangible assets     (531,564 )     (532,271 )     (531,618 )     (531,638 )     (532,584 )
Average tangible shareholders' equity (denominator)   $ 1,491,265     $ 1,557,188     $ 1,500,170     $ 1,491,914     $ 1,545,604  
                                         
  Return on average common shareholders' equity (tangible), annualized     9.11 %     9.88 %     9.83 %     9.96 %     10.43 %
                                         
Efficiency ratio                                        
Non-interest expense   $ 124,889     $ 115,798     $ 118,354     $ 361,721     $ 341,526  
Less: Intangible amortization     (5 )     (314 )     (106 )     (241 )     (944 )
Less: Loss on redemption of trust preferred securities     (5,626 )     -       -       (5,626 )     -  
Numerator   $ 119,258     $ 115,484     $ 118,248     $ 355,854     $ 340,582  
                                         
Net interest income (fully taxable equivalent)   $ 130,250     $ 133,692     $ 127,445     $ 385,781     $ 399,708  
Plus: Total Non-interest income     44,774       41,900       46,489       136,000       125,278  
Less: Investment securities gains     (1,730 )     (81 )     (2,415 )     (8,290 )     (1,193 )
Denominator   $ 173,294     $ 175,511     $ 171,519     $ 513,491     $ 523,793  
                                         
  Efficiency ratio     68.82 %     65.80 %     68.94 %     69.30 %     65.02 %
                                         
Non-performing assets to tangible common shareholders' equity and allowance for credit losses                                        
Non-performing assets (numerator)   $ 155,582     $ 157,337     $ 162,268                  
                                         
Tangible shareholders' equity   $ 1,494,342     $ 1,545,889     $ 1,493,250                  
Plus: Allowance for credit losses     169,395       191,108       169,453                  
Tangible shareholders' equity and allowance for credit losses (denominator)   $ 1,663,737     $ 1,736,997     $ 1,662,703                  
                                         
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses     9.35 %     9.06 %     9.76 %                
                                           
                                           

Contact Information

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


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