Fulton Financial Reports Third Quarter Earnings of $0.20 per Share and Announces Approval for $50 Million Share Repurchase Program
/EINPresswire.com/ -- LANCASTER, PA -- (Marketwired) -- 10/20/15 -- 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 2015 Third Quarter Results
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:
Increase
Three Months Ended (decrease)
September 30,
2015 June 30, 2015 in Balance
----------------- ----------------- ---------------
Yield Yield
Balance (1) Balance (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:
Increase
Three Months Ended (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 September September June
30 30 June 30 30 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
---------------------------- -----------------
Sep 30 Sep 30 Jun 30 Sep 30 Jun 30
2015 2014 2015 2014 2015
-------- -------- -------- ------- -------
Interest Income:
Interest income $146,228 $149,790 $144,229 (2.4%) 1.4%
Interest expense 20,534 20,424 21,309 0.5% (3.6%)
-------- -------- --------
Net Interest Income 125,694 129,366 122,920 (2.8%) 2.3%
Provision for credit
losses 1,000 3,500 2,200 (71.4%) (54.5%)
-------- -------- --------
Net Interest Income
after Provision 124,694 125,866 120,720 (0.9%) 3.3%
Non-Interest Income:
Service charges on
deposit accounts 12,982 12,801 12,637 1.4% 2.7%
Investment management
and trust services 11,237 11,120 11,011 1.1% 2.1%
Other service charges
and fees 10,965 9,954 10,988 10.2% (0.2%)
Mortgage banking income 3,864 4,038 5,339 (4.3%) (27.6%)
Investment securities
gains 1,730 81 2,415 N/M (28.4%)
Other 3,996 3,906 4,099 2.3% (2.5%)
-------- -------- --------
Total Non-Interest
Income 44,774 41,900 46,489 6.9% (3.7%)
Non-Interest Expense:
Salaries and employee
benefits 65,308 62,434 65,067 4.6% 0.4%
Net occupancy expense 10,710 11,582 11,809 (7.5%) (9.3%)
Other outside services 7,373 8,632 8,125 (14.6%) (9.3%)
Loss on redemption of
trust preferred
securities 5,626 - - N/M N/M
Data processing 5,105 4,689 4,894 8.9% 4.3%
Software 3,984 3,353 3,376 18.8% 18.0%
Equipment expense 3,595 3,307 3,335 8.7% 7.8%
FDIC insurance expense 2,867 2,882 2,885 (0.5%) (0.6%)
Professional fees 2,828 3,252 2,731 (13.0%) 3.6%
Marketing 2,102 1,798 2,235 16.9% (6.0%)
Operating risk loss 1,136 1,242 674 (8.5%) 68.5%
Other real estate owned
and repossession
expense 1,016 1,303 129 (22.0%) 687.6%
Intangible amortization 5 314 106 (98.4%) (95.3%)
Other 13,234 11,010 12,988 20.2% 1.9%
-------- -------- --------
Total Non-Interest
Expense 124,889 115,798 118,354 7.9% 5.5%
-------- -------- --------
Income Before Income
Taxes 44,579 51,968 48,855 (14.2%) (8.8%)
Income tax expense 10,328 13,402 12,175 (22.9%) (15.2%)
-------- -------- --------
Net Income $ 34,251 $ 38,566 $ 36,680 (11.2%) (6.6%)
======== ======== ========
PER SHARE:
Net income:
Basic $ 0.20 $ 0.21 $ 0.21 (4.8%) (4.8%)
Diluted 0.20 0.21 0.21 (4.8%) (4.8%)
Cash dividends $ 0.09 $ 0.08 $ 0.09 12.5% -
Shareholders' equity 11.66 11.22 11.50 3.9% 1.4%
Shareholders' equity
(tangible) 8.60 8.35 8.48 3.0% 1.4%
Weighted average shares
(basic) 174,338 186,109 176,433 (6.3%) (1.2%)
Weighted average shares
(diluted) 175,342 186,955 177,531 (6.2%) (1.2%)
Shares outstanding, end
of period 173,771 185,158 176,019 (6.1%) (1.3%)
SELECTED FINANCIAL RATIOS:
Return on average assets 0.78% 0.90% 0.86%
Return on average
shareholders' equity 6.72% 7.32% 7.24%
Return on average
shareholders' equity
(tangible) 9.11% 9.88% 9.83%
Net interest margin 3.18% 3.39% 3.20%
Efficiency ratio 68.82% 65.80% 68.94%
Nine Months Ended
Sep 30
------------------
%
2015 2014 Change
-------- -------- -------
Interest Income:
Interest income $436,229 $446,484 (2.3%)
Interest expense 64,034 59,655 7.3%
-------- --------
Net Interest Income 372,195 386,829 (3.8%)
Provision for credit
losses (500) 9,500 N/M
-------- --------
Net Interest Income
after Provision 372,695 377,329 (1.2%)
Non-Interest Income:
Service charges on
deposit accounts 37,188 37,064 0.3%
Investment management
and trust services 33,137 33,417 (0.8%)
Other service charges
and fees 31,316 29,407 6.5%
Mortgage banking income 13,891 13,384 3.8%
Investment securities
gains 8,290 1,193 594.9%
Other 12,178 10,813 12.6%
-------- --------
Total Non-Interest
Income 136,000 125,278 8.6%
Non-Interest Expense:
Salaries and employee
benefits 195,365 185,623 5.2%
Net occupancy expense 36,211 36,649 (1.2%)
Other outside services 21,248 19,684 7.9%
Loss on redemption of
trust preferred
securities 5,626 - N/M
Data processing 14,767 12,816 15.2%
Software 10,678 9,487 12.6%
Equipment expense 10,888 10,269 6.0%
FDIC insurance expense 8,574 8,186 4.7%
Professional fees 8,430 9,715 (13.2%)
Marketing 5,570 5,719 (2.6%)
Operating risk loss 2,637 3,786 (30.3%)
Other real estate owned
and repossession
expense 2,507 3,034 (17.4%)
Intangible amortization 241 944 (74.5%)
Other 38,979 35,614 9.4%
-------- --------
Total Non-Interest
Expense 361,721 341,526 5.9%
-------- --------
Income Before Income
Taxes 146,974 161,081 (8.8%)
Income tax expense 36,007 41,136 (12.5%)
-------- --------
Net Income $110,967 $119,945 (7.5%)
======== ========
PER SHARE:
Net income:
Basic $ 0.63 $ 0.64 (1.6%)
Diluted 0.63 0.64 (1.6%)
Cash dividends $ 0.27 $ 0.24 12.5%
Shareholders' equity 11.66 11.22 3.9%
Shareholders' equity
(tangible) 8.60 8.35 3.0%
Weighted average shares
(basic) 176,399 187,893 (6.1%)
Weighted average shares
(diluted) 177,428 188,863 (6.1%)
Shares outstanding, end
of period 173,771 185,158 (6.1%)
SELECTED FINANCIAL RATIOS:
Return on average assets 0.86% 0.95%
Return on average
shareholders' equity 7.33% 7.72%
Return on average
shareholders' equity
(tangible) 9.96% 10.43%
Net interest margin 3.22% 3.42%
Efficiency ratio 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
---------------------------- -----------------------------
Average Yield/ Average Yield/
Interest Interest
Balance (1) Rate Balance (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%
Taxable
investment
securities 2,148,403 11,252 2.09% 2,181,099 12,278 2.25%
Tax-exempt
investment
securities 230,178 2,929 5.09% 256,303 3,414 5.33%
Equity
securities 18,280 257 5.58% 34,002 438 5.12%
----------- -------- ------ ----------- -------- ------
Total
Investment
Securities 2,396,861 14,438 2.41% 2,471,404 16,130 2.61%
Loans held for
sale 20,704 194 3.74% 23,699 237 4.01%
Other
interest-
earning
assets 477,145 884 0.74% 293,286 976 1.33%
----------- -------- ------ ----------- -------- ------
Total
Interest-
earning
Assets 16,264,584 150,784 3.68% 15,711,210 154,116 3.90%
Noninterest-
earning
assets:
Cash and due
from banks 104,622 203,134
Premises and
equipment 226,446 224,241
Other assets 1,097,600 1,055,521
Less:
allowance for
loan losses (168,770) (192,163)
----------- -----------
Total Assets $17,524,482 $17,001,943
=========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-
bearing
liabilities:
Demand
deposits $ 3,316,532 $ 1,122 0.13% $ 3,047,191 $ 953 0.12%
Savings
deposits 3,714,282 1,436 0.15% 3,468,958 1,061 0.12%
Time deposits 2,963,774 7,659 1.03% 3,009,225 6,984 0.92%
----------- -------- ------ ----------- -------- ------
Total
Interest-
bearing
Deposits 9,994,588 10,217 0.41% 9,525,374 8,998 0.37%
Short-term
borrowings 324,685 92 0.11% 667,397 297 0.18%
FHLB advances
and long-term
debt 996,247 10,225 4.09% 995,486 11,129 4.45%
----------- -------- ------ ----------- -------- ------
Total
Interest-
bearing
Liabilities 11,315,520 20,534 0.72% 11,188,257 20,424 0.73%
Noninterest-
bearing
liabilities:
Demand
deposits 3,904,176 3,514,033
Other 281,957 210,194
----------- -----------
Total
Liabilities 15,501,653 14,912,484
Shareholders'
equity 2,022,829 2,089,459
----------- -----------
Total
Liabilities
and
Shareholders'
Equity $17,524,482 $17,001,943
=========== ===========
Net interest
income/net
interest
margin (fully
taxable
equivalent) 130,250 3.18% 133,692 3.39%
====== ======
Tax equivalent
adjustment (4,556) (4,326)
-------- --------
Net interest
income $125,694 $129,366
======== ========
Three Months Ended
June 30, 2015
--------------------------------
Average Yield/
Interest
Balance (1) Rate
----------- ----------- ------
ASSETS
Interest-
earning
assets:
Loans, net of
unearned
income $13,192,600 $ 133,339 4.05%
Taxable
investment
securities 2,048,558 10,944 2.14%
Tax-exempt
investment
securities 216,355 2,894 5.35%
Equity
securities 27,618 379 5.50%
----------- ----------- ------
Total
Investment
Securities 2,292,531 14,217 2.48%
Loans held for
sale 26,335 265 4.03%
Other
interest-
earning
assets 439,425 933 0.85%
----------- ----------- ------
Total
Interest-
earning
Assets 15,950,891 148,754 3.74%
Noninterest-
earning
assets:
Cash and due
from banks 104,723
Premises and
equipment 226,569
Other assets 1,094,071
Less:
allowance for
loan losses (176,085)
-----------
Total Assets $17,200,169
===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-
bearing
liabilities:
Demand
deposits $ 3,152,697 $ 987 0.13%
Savings
deposits 3,568,579 1,247 0.14%
Time deposits 3,027,520 7,819 1.04%
----------- ----------- ------
Total
Interest-
bearing
Deposits 9,748,796 10,053 0.41%
Short-term
borrowings 379,988 103 0.11%
FHLB advances
and long-term
debt 1,026,987 11,153 4.35%
----------- ----------- ------
Total
Interest-
bearing
Liabilities 11,155,771 21,309 0.77%
Noninterest-
bearing
liabilities:
Demand
deposits 3,734,880
Other 277,730
-----------
Total
Liabilities 15,168,381
Shareholders'
equity 2,031,788
-----------
Total
Liabilities
and
Shareholders'
Equity $17,200,169
===========
Net interest
income/net
interest
margin (fully
taxable
equivalent) 127,445 3.20%
======
Tax equivalent
adjustment (4,525)
-----------
Net interest
income $ 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 September September June
30 30 June 30 30 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
Interest Yield Interest Yield
Balance (1) /Rate Balance (1) /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
---------------------------- ----------------------------
> than or = > than or =
31-89 to 90 Days Total 31-89 90 Days Total
Days (2) Days (2)
-------- -------- -------- -------- -------- --------
Real estate -
commercial
mortgage 0.16% 0.92% 1.08% 0.48% 0.86% 1.34%
Commercial -
industrial,
financial and
agricultural 0.35% 0.97% 1.32% 0.28% 0.91% 1.19%
Real estate -
construction 0.30% 1.95% 2.25% 0.03% 2.89% 2.92%
Real estate -
residential
mortgage 1.27% 2.00% 3.27% 1.81% 2.06% 3.87%
Consumer, home
equity, leasing
and other 0.69% 0.72% 1.41% 0.74% 0.85% 1.59%
-------- -------- -------- -------- -------- --------
Total 0.42% 1.07% 1.49% 0.58% 1.11% 1.69%
======== ======== ======== ======== ======== ========
Jun 30, 2015
----------------------------
> than or =
31-89 to 90 Days Total
Days (2)
-------- -------- --------
Real estate -
commercial
mortgage 0.34% 0.96% 1.30%
Commercial -
industrial,
financial and
agricultural 0.22% 0.94% 1.16%
Real estate -
construction 0.02% 2.03% 2.05%
Real estate -
residential
mortgage 1.53% 2.30% 3.83%
Consumer, home
equity, leasing
and other 0.69% 0.83% 1.52%
-------- -------- --------
Total 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 September September September
30 30 June 30 30 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%
========== ========== ==========
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(717) 291-2616
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(717) 291-2456
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