Fulton Financial Reports Second Quarter Earnings of $0.21 per Share
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LANCASTER, PA -- (Marketwired) -- 07/21/15 -- 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.
Increase
Three Months Ended (decrease)
------------------------------------
June 30, 2015 March 31, 2015 in Balance
----------------- ----------------- -----------------
Yield Yield
Balance (1) Balance (1) $ %
----------- ----- ----------- ----- -------- -------
(dollars in thousands)
Average Loans, net
of unearned
income, by type:
Real estate -
commercial
mortgage $ 5,210,540 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:
Increase
Three Months Ended (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
---------------------------- ---------------
Jun 30 Jun 30 Mar 31 Jun 30 Mar 31
2015 2014 2015 2014 2015
-------- -------- -------- ------ ------
Interest Income:
Interest income $144,229 $147,902 $145,772 (2.5%) (1.1%)
Interest expense 21,309 20,004 22,191 6.5% (4.0%)
-------- -------- --------
Net Interest Income 122,920 127,898 123,581 (3.9%) (0.5%)
Provision for credit
losses 2,200 3,500 (3,700) (37.1%) N/M
-------- -------- --------
Net Interest Income after
Provision 120,720 124,398 127,281 (3.0%) (5.2%)
Non-Interest Income:
Service charges on deposit
accounts 12,637 12,552 11,569 0.7% 9.2%
Investment management and
trust services 11,011 11,339 10,889 (2.9%) 1.1%
Other service charges and
fees 10,988 10,526 9,363 4.4% 17.4%
Mortgage banking income 5,339 5,741 4,688 (7.0%) 13.9%
Investment securities
gains 2,415 1,112 4,145 117.2% (41.7%)
Other 4,099 3,602 4,083 13.8% 0.4%
-------- -------- --------
Total Non-Interest Income 46,489 44,872 44,737 3.6% 3.9%
Non-Interest Expense:
Salaries and employee
benefits 65,067 63,623 64,990 2.3% 0.1%
Net occupancy expense 11,809 11,464 13,692 3.0% (13.8%)
Other outside services 8,125 7,240 5,750 12.2% 41.3%
Data processing 4,894 4,331 4,768 13.0% 2.6%
Software 3,376 3,209 3,318 5.2% 1.7%
Equipment expense 3,335 3,360 3,958 (0.7%) (15.7%)
FDIC insurance expense 2,885 2,615 2,822 10.3% 2.2%
Professional fees 2,731 3,559 2,871 (23.3%) (4.9%)
Marketing 2,235 2,337 1,233 (4.4%) 81.3%
Operating risk loss 674 716 827 (5.9%) (18.5%)
Other real estate owned
and repossession expense 129 748 1,362 (82.8%) (90.5%)
Intangible amortization 106 315 130 (66.3%) (18.5%)
Other 12,988 12,657 12,757 2.6% 1.8%
-------- -------- --------
Total Non-Interest
Expense 118,354 116,174 118,478 1.9% (0.1%)
-------- -------- --------
Income Before Income
Taxes 48,855 53,096 53,540 (8.0%) (8.8%)
Income tax expense 12,175 13,500 13,504 (9.8%) (9.8%)
-------- -------- --------
Net Income $ 36,680 $ 39,596 $ 40,036 (7.4%) (8.4%)
======== ======== ========
PER SHARE:
Net income:
Basic $ 0.21 $ 0.21 $ 0.22 - (4.5%)
Diluted 0.21 0.21 0.22 - (4.5%)
Cash dividends $ 0.09 $ 0.08 $ 0.09 12.5% -
Shareholders' equity 11.50 11.11 11.34 3.5% 1.4%
Shareholders' equity
(tangible) 8.48 8.29 8.37 2.3% 1.3%
Weighted average shares
(basic) 176,433 188,139 178,471 (6.2%) (1.1%)
Weighted average shares
(diluted) 177,531 189,182 179,457 (6.2%) (1.1%)
Shares outstanding, end of
period 176,019 189,033 179,098 (6.9%) (1.7%)
SELECTED FINANCIAL RATIOS:
Return on average assets 0.86% 0.94% 0.95%
Return on average
shareholders' equity 7.24% 7.63% 8.05%
Return on average
shareholders' equity
(tangible) 9.83% 10.30% 10.96%
Net interest margin 3.20% 3.41% 3.27%
Efficiency ratio 68.94% 65.85% 70.16%
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
in thousands, except per-share data and percentages
Six Months Ended
Jun 30
------------------
%
2015 2014 Change
-------- -------- ------
Interest Income:
Interest income $290,001 $296,694 (2.3%)
Interest expense 43,500 39,231 10.9%
-------- --------
Net Interest Income 246,501 257,463 (4.3%)
Provision for credit
losses (1,500) 6,000 N/M
-------- --------
Net Interest Income after
Provision 248,001 251,463 (1.4%)
Non-Interest Income:
Service charges on deposit
accounts 24,206 24,263 (0.2%)
Investment management and
trust services 21,900 22,297 (1.8%)
Other service charges and
fees 20,351 19,453 4.6%
Mortgage banking income 10,027 9,346 7.3%
Investment securities
gains 6,560 1,112 489.9%
Other 8,182 6,907 18.5%
-------- --------
Total Non-Interest Income 91,226 83,378 9.4%
Non-Interest Expense:
Salaries and employee
benefits 130,057 123,189 5.6%
Net occupancy expense 25,501 25,067 1.7%
Other outside services 13,875 11,052 25.5%
Data processing 9,662 8,127 18.9%
Software 6,694 6,134 9.1%
Equipment expense 7,293 6,962 4.8%
FDIC insurance expense 5,707 5,304 7.6%
Professional fees 5,602 6,463 (13.3%)
Marketing 3,468 3,921 (11.6%)
Operating risk loss 1,501 2,544 (41.0%)
Other real estate owned
and repossession expense 1,491 1,731 (13.9%)
Intangible amortization 236 630 (62.5%)
Other 25,745 24,604 4.6%
-------- --------
Total Non-Interest
Expense 236,832 225,728 4.9%
-------- --------
Income Before Income
Taxes 102,395 109,113 (6.2%)
Income tax expense 25,679 27,734 (7.4%)
-------- --------
Net Income $ 76,716 $ 81,379 (5.7%)
======== ========
PER SHARE:
Net income:
Basic $ 0.43 $ 0.43 -
Diluted 0.43 0.43 -
Cash dividends $ 0.18 $ 0.16 12.5%
Shareholders' equity 11.50 11.11 3.5%
Shareholders' equity
(tangible) 8.48 8.29 2.3%
Weighted average shares
(basic) 177,446 188,799 (6.0%)
Weighted average shares
(diluted) 178,488 189,832 (6.0%)
Shares outstanding, end of
period 176,019 189,033 (6.9%)
SELECTED FINANCIAL RATIOS:
Return on average assets 0.90% 0.97%
Return on average
shareholders' equity 7.64% 7.92%
Return on average
shareholders' equity
(tangible) 10.39% 10.71%
Net interest margin 3.24% 3.44%
Efficiency ratio 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
---------------------------- ----------------------------
Yield Yield
Average Interest / Average Interest /
Balance (1) Rate Balance (1) Rate
----------- -------- ----- ----------- -------- -----
ASSETS
Interest-
earning
assets:
Loans, net of
unearned
income $13,192,600 $133,339 4.05% $12,795,747 $134,387 4.21%
Taxable
investment
securities 2,048,558 10,944 2.14% 2,211,004 12,418 2.25%
Tax-exempt
investment
securities 216,355 2,894 5.35% 270,482 3,534 5.23%
Equity
securities 27,618 379 5.50% 33,922 419 4.95%
----------- -------- ----- ----------- -------- -----
Total
Investment
Securities 2,292,531 14,217 2.48% 2,515,408 16,371 2.60%
Loans held for
sale 26,335 265 4.03% 17,540 214 4.87%
Other
interest-
earning
assets 439,425 933 0.85% 238,921 1,207 2.02%
----------- -------- ----- ----------- -------- -----
Total
Interest-
earning
Assets 15,950,891 148,754 3.74% 15,567,616 152,179 3.92%
Noninterest-
earning
assets:
Cash and due
from banks 104,723 198,291
Premises and
equipment 226,569 224,586
Other assets 1,094,071 1,037,654
Less:
allowance for
loan losses (176,085) (196,462)
----------- -----------
Total Assets $17,200,169 $16,831,685
=========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-
bearing
liabilities:
Demand
deposits $ 3,152,697 $ 987 0.13% $ 2,914,887 $ 904 0.12%
Savings
deposits 3,568,579 1,247 0.14% 3,355,929 1,031 0.12%
Time deposits 3,027,520 7,819 1.04% 3,012,061 6,750 0.90%
----------- -------- ----- ----------- -------- -----
Total
Interest-
bearing
Deposits 9,748,796 10,053 0.41% 9,282,877 8,685 0.38%
Short-term
borrowings 379,988 103 0.11% 1,047,684 540 0.21%
FHLB advances
and long-term
debt 1,026,987 11,153 4.35% 894,511 10,779 4.83%
----------- -------- ----- ----------- -------- -----
Total
Interest-
bearing
Liabilities 11,155,771 21,309 0.77% 11,225,072 20,004 0.71%
Noninterest-
bearing
liabilities:
Demand
deposits 3,734,880 3,322,195
Other 277,730 202,520
----------- -----------
Total
Liabilities 15,168,381 14,749,787
Shareholders'
equity 2,031,788 2,081,898
----------- -----------
Total
Liabilities
and
Shareholders'
Equity $17,200,169 $16,831,685
=========== ===========
Net interest
income/net
interest
margin (fully
taxable
equivalent) 127,445 3.20% 132,175 3.41%
===== =====
Tax equivalent
adjustment (4,525) (4,277)
-------- --------
Net interest
income $122,920 $127,898
======== ========
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE
SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Three Months Ended
----------------------------
March 31, 2015
----------------------------
Yield
Average Interest /
Balance (1) Rate
----------- -------- -----
ASSETS
Interest-
earning
assets:
Loans, net of
unearned
income $13,095,528 $133,055 4.11%
Taxable
investment
securities 2,005,542 11,282 2.25%
Tax-exempt
investment
securities 229,082 3,212 5.61%
Equity
securities 32,210 450 5.66%
----------- -------- -----
Total
Investment
Securities 2,266,834 14,944 2.64%
Loans held for
sale 17,002 173 4.07%
Other
interest-
earning
assets 474,033 2,105 1.78%
----------- -------- -----
Total
Interest-
earning
Assets 15,853,397 150,277 3.83%
Noninterest-
earning
assets:
Cash and due
from banks 105,271
Premises and
equipment 226,391
Other assets 1,114,078
Less:
allowance for
loan losses (183,927)
-----------
Total Assets $17,115,210
===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-
bearing
liabilities:
Demand
deposits $ 3,135,927 $ 983 0.13%
Savings
deposits 3,517,057 1,119 0.13%
Time deposits 3,061,593 7,721 1.02%
----------- -------- -----
Total
Interest-
bearing
Deposits 9,714,577 9,823 0.41%
Short-term
borrowings 309,215 77 0.10%
FHLB advances
and long-term
debt 1,124,074 12,291 4.40%
----------- -------- -----
Total
Interest-
bearing
Liabilities 11,147,866 22,191 0.80%
Noninterest-
bearing
liabilities:
Demand
deposits 3,662,040
Other 289,341
-----------
Total
Liabilities 15,099,247
Shareholders'
equity 2,015,963
-----------
Total
Liabilities
and
Shareholders'
Equity $17,115,210
===========
Net interest
income/net
interest
margin (fully
taxable
equivalent) 128,086 3.27%
=====
Tax equivalent
adjustment (4,505)
--------
Net interest
income $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 Interest Yield Average Interest Yield
Balance (1) /Rate Balance (1) /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
------------------- ------------------- -------------------
Greater Greater Greater
than or than or than or
equal equal equal
to 90 to 90 to 90
31-89 Days 31-89 Days 31-89 Days
Days (2) Total Days (2) Total 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 This press release contains supplemental financial
note: 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%
========== ========== ==========
Attachment Available: http://www2.marketwire.com/mw/frame_mw?attachid=2859462
Media Contact: Laura J. Wakeley (717) 291-2616 Investor Contact: David C. Hostetter (717) 291-2456
Source: Fulton Financial Corporation
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