LANCASTER, PA -- (Marketwired) -- 10/22/13 --
Fulton Financial Corporation (NASDAQ: FULT)
- Diluted earnings per share for the third quarter of 2013 was 21 cents, unchanged from both the second quarter of 2013 and the third quarter of 2012.
- The provision for credit losses was $9.5 million for the third quarter of 2013, a $4.0 million, or 29.6 percent, decrease from the second quarter of 2013 and a $13.5 million, or 58.7 percent, decrease from the third quarter of 2012. Non-performing loans decreased $20.7 million, or 11.0 percent, in comparison to June 30, 2013 and $44.5 million, or 20.9 percent, in comparison to September 30, 2012.
- Average loans for the third quarter of 2013 increased $199.6 million, or 1.6 percent, compared to the second quarter of 2013. Average loans for the nine months ended September 30, 2013 increased $549.4 million, or 4.6 percent, in comparison to the same period in 2012.
- Net interest income for the third quarter of 2013 increased $468,000, or 0.4 percent, compared to the second quarter of 2013, while the net interest margin decreased seven basis points to 3.45 percent.
- Non-interest income, excluding investment securities gains, decreased $4.7 million, or 9.6 percent, in comparison to the second quarter of 2013, while non-interest expense decreased $525,000, or 0.4 percent.
- During the third quarter of 2013, the Corporation successfully completed the conversion to its new core processing system, which supports customer relationship management for substantially all deposit and loan customers.
- During the third quarter of 2013, the Corporation repurchased approximately 1.6 million shares, completing the eight million share repurchase program that expired on September 30, 2013. The Corporation announced that its board of directors approved the repurchase of up to four million shares, or approximately 2.1 percent of the Corporation's outstanding shares, through March 31, 2014.
Fulton Financial Corporation (NASDAQ: FULT) reported net income of $39.9 million, or 21 cents per diluted share, for the third quarter ended September 30, 2013, compared to $40.6 million, or 21 cents per diluted share, for the second quarter of 2013. For the nine months ended September 30, 2013, net income was $119.8 million, or 61 cents per diluted share, a 1.7 percent increase in comparison to the 60 cents per diluted share earned for the same period in 2012.
"We continued to increase our earning assets in the third quarter with solid loan growth, particularly in the commercial mortgage category. As a result of further improvement in our overall asset quality, we again reduced the provision for credit losses," said E. Philip Wenger, Chairman, CEO and President. "However, net interest margin compression and lower non-interest income, due to reduced mortgage sale gains, presented challenges. During the quarter, we completed both our core processing conversion and our previously announced eight million share repurchase program."
Asset Quality
Non-performing assets were $186.5 million, or 1.09 percent of total assets, at September 30, 2013, compared to $210.2 million, or 1.23 percent of total assets, at June 30, 2013 and $242.0 million, or 1.49 percent of total assets, at September 30, 2012. The $23.7 million, or 11.3 percent, decrease in non-performing assets in comparison to the second quarter of 2013 was primarily due to a decrease in non-performing commercial loans, commercial mortgages and construction loans, as well as a decrease in other real estate owned (OREO).
Annualized net charge-offs for the third quarter ended September 30, 2013 were 0.45 percent of average total loans, compared to 0.56 percent for the quarter ended June 30, 2013 and 0.84 percent for the quarter ended September 30, 2012. The allowance for credit losses as a percentage of non-performing loans was 126.5 percent at September 30, 2013, as compared to 115.0 percent at June 30, 2013 and 110.5 percent at September 30, 2012.
Net Interest Income and Margin
Net interest income for the third quarter of 2013 increased $468,000, or 0.4 percent, from the second quarter of 2013. Interest income for the second quarter of 2013 included $1.9 million of interest recoveries and calls on debt securities, compared to $119,000 of interest recoveries for the third quarter of 2013. The net interest margin decreased seven basis points, or 2.0 percent, to 3.45 percent in the third quarter of 2013 from 3.52 percent in the second quarter of 2013. Average yields on interest-earning assets decreased 11 basis points, while the decline in the average costs of interest-bearing liabilities was 4 basis points during the third quarter of 2013 in comparison to the second quarter of 2013.
Average Balance Sheet
Total average assets for the third quarter of 2013 were $17.0 billion, an increase of $191.4 million, or 1.1 percent, from the second quarter of 2013, due primarily to an increase in average loans.
Quarter Ended
-------------------------- Increase (decrease)
Sep 30 Jun 30 -------------------
2013 2013 $ %
------------ ------------ ---------- ------
(dollars in thousands)
Loans, by type:
Real estate -
commercial mortgage $ 4,961,871$ 4,758,060$ 203,811 4.3%
Commercial -
industrial, financial
and agricultural 3,706,113 3,714,683 (8,570) (0.2%)
Real estate - home
equity 1,767,095 1,732,704 34,391 2.0%
Real estate -
residential mortgage 1,323,972 1,308,713 15,259 1.2%
Real estate -
construction 576,222 617,577 (41,355) (6.7%)
Consumer 299,057 304,918 (5,861) (1.9%)
Leasing and other 93,832 91,907 1,925 2.1%
------------ ------------ ---------- ------
Total Loans, net of
unearned income $ 12,728,162$ 12,528,562$ 199,600 1.6%
============ ============ ========== ======
Total average liabilities increased $224.8 million, or 1.5 percent, from the second quarter of 2013, including a $186.2 million, or 1.5 percent, increase in average deposits.
Quarter Ended
-------------------------- Increase (decrease)
Sep 30 Jun 30 -------------------
2013 2013 $ %
------------ ------------ ---------- ------
(dollars in thousands)
Deposits, by type:
Noninterest-bearing
demand $ 3,221,648$ 3,116,940$ 104,708 3.4%
Interest-bearing demand 2,895,156 2,718,679 176,477 6.5%
Savings deposits 3,359,795 3,350,856 8,939 0.3%
------------ ------------ ---------- ------
Total demand and savings 9,476,599 9,186,475 290,124 3.2%
Time deposits 3,065,210 3,169,141 (103,931) (3.3%)
------------ ------------ ---------- ------
Total Deposits $ 12,541,809$ 12,355,616$ 186,193 1.5%
============ ============ ========== ======
Non-interest Income
Non-interest income, excluding investment securities gains, decreased $4.7 million, or 9.6 percent, in comparison to the second quarter of 2013. Mortgage banking income decreased $3.9 million due to a $4.2 million decrease in gains on sales of loans, as both volumes and spreads decreased. Mortgage banking income benefited from a $1.7 million reduction to the valuation allowance for mortgage servicing rights during the third quarter of 2013. This compares to a $2.0 million decrease in the allowance recognized in the second quarter of 2013. Service charges on deposit accounts decreased $713,000, or 4.9 percent, including a $432,000 decrease in overdraft fees and a $312,000 decrease in other service charges on deposits. Investment management and trust services revenue decreased $181,000, or 1.7 percent.
Non-interest Expense
Non-interest expense decreased $525,000, or 0.4 percent, in the third quarter of 2013 compared to the second quarter of 2013. OREO and repossession expenses decreased $488,000, due to both a decrease in holding costs and a net decrease in losses on foreclosed properties. Other outside services decreased $267,000 due to a decrease in consulting costs associated with regulatory compliance and risk management. Operating risk loss increased $1.4 million due to an increase in provisions for losses associated with previously sold residential mortgages.
During the second quarter of 2013, three of the Corporation's six affiliate banks converted to a new core processing system. During the third quarter of 2013, the Corporation's three remaining affiliate banks converted to the new core processing system. Total implementation costs specifically associated with these conversions were approximately $1.6 million in the third quarter of 2013, compared to $1.2 million in the second quarter of 2013. Total implementation costs associated with these conversions were $3.1 million for the nine months ended September 30, 2013.
About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates, headquartered as indicated: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Fulton Bank of New Jersey, Mt. Laurel, NJ; and The Columbia Bank, Columbia, MD.
The Corporation's investment management and trust services are offered at all banks through Fulton Financial Advisors, a division of Fulton Bank, N.A. Residential mortgage lending is offered by all banks under the Fulton Mortgage Company brand.
Additional information on Fulton Financial Corporation is available on the Internet at www.fult.com.
Safe Harbor Statement
This news release may contain forward-looking statements with respect to the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends" and similar expressions which are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation's control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2012, and the Quarterly Reports on Form 10-Q for the quarters ended June 30, 2013 and March 31, 2013, 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.
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
30 30 June 30 30 June 30
2013 2012 2013 2012 2013
----------- ----------- ----------- --------- -------
ASSETS
Cash and due from
banks $ 262,938$ 217,207$ 219,944 21.1% 19.5%
Other interest-
earning assets 221,064 202,305 130,065 9.3% 70.0%
Loans held for
sale 39,273 85,477 60,909 (54.1%) (35.5%)
Investment
securities 2,686,649 2,790,138 2,915,879 (3.7%) (7.9%)
Loans, net of
unearned income 12,798,865 11,935,260 12,645,418 7.2% 1.2%
Allowance for
loan losses (210,486) (233,864) (216,431) (10.0%) (2.7%)
----------- ----------- -----------
Net loans 12,588,379 11,701,396 12,428,987 7.6% 1.3%
Premises and
equipment 227,299 225,771 224,418 0.7% 1.3%
Accrued interest
receivable 44,715 49,784 45,713 (10.2%) (2.2%)
Goodwill and
intangible
assets 533,918 541,845 534,452 (1.5%) (0.1%)
Other assets 464,502 463,420 462,043 0.2% 0.5%
----------- ----------- -----------
Total Assets $17,068,737$16,277,343$17,022,410 4.9% 0.3%
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $12,721,121$12,610,359$12,257,809 0.9% 3.8%
Short-term
borrowings 1,198,577 486,971 1,620,318 146.1% (26.0%)
Other
liabilities 230,953 210,707 226,384 9.6% 2.0%
FHLB advances
and long-term
debt 889,122 908,623 889,167 (2.1%) -
----------- ----------- -----------
Total
Liabilities 15,039,773 14,216,660 14,993,678 5.8% 0.3%
Shareholders'
equity 2,028,964 2,060,683 2,028,732 (1.5%) -
----------- ----------- -----------
Total
Liabilities
and
Shareholders'
Equity $17,068,737$16,277,343$17,022,410 4.9% 0.3%
=========== =========== ===========
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Loans, by type:
Real estate -
commercial
mortgage $ 5,063,373$ 4,632,509$ 4,856,916 9.3% 4.3%
Commercial -
industrial,
financial and
agricultural 3,645,270 3,507,846 3,712,974 3.9% (1.8%)
Real estate -
home equity 1,773,554 1,603,456 1,760,268 10.6% 0.8%
Real estate -
residential
mortgage 1,327,469 1,214,322 1,313,345 9.3% 1.1%
Real estate -
construction 577,342 597,358 610,280 (3.4%) (5.4%)
Consumer 296,142 301,717 300,233 (1.8%) (1.4%)
Leasing and other 115,715 78,052 91,402 48.3% 26.6%
----------- ----------- -----------
Total Loans, net
of unearned
income $12,798,865$11,935,260$12,645,418 7.2% 1.2%
=========== =========== ===========
Deposits, by type:
Noninterest-
bearing demand $ 3,338,075$ 2,904,844$ 3,168,781 14.9% 5.3%
Interest-bearing
demand 2,986,549 2,702,710 2,714,545 10.5% 10.0%
Savings deposits 3,371,923 3,423,807 3,272,557 (1.5%) 3.0%
Time deposits 3,024,574 3,578,998 3,101,926 (15.5%) (2.5%)
----------- ----------- -----------
Total Deposits $12,721,121$12,610,359$12,257,809 0.9% 3.8%
=========== =========== ===========
Short-term
borrowings, by
type:
Customer
repurchase
agreements $ 209,800$ 192,082$ 196,188 9.2% 6.9%
Customer short-
term promissory
notes 95,503 124,628 93,671 (23.4%) 2.0%
Federal funds
purchased 493,274 170,261 780,459 189.7% (36.8%)
Short-term FHLB
advances 400,000 - 550,000 N/M (27.3%)
----------- ----------- -----------
Total Short-term
Borrowings $ 1,198,577$ 486,971$ 1,620,318 146.1% (26.0%)
=========== =========== ===========
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
in thousands, except per-share data and percentages
Quarter Ended % Change from
---------------------------- ---------------
Sep 30 Sep 30 Jun 30 Sep 30 Jun 30
2013 2012 2013 2012 2013
-------- -------- -------- ------ ------
Interest Income:
Interest income $152,832$161,060$153,078 (5.1%) (0.2%)
Interest expense 20,299 25,179 21,013 (19.4%) (3.4%)
-------- -------- --------
Net Interest Income 132,533 135,881 132,065 (2.5%) 0.4%
Provision for credit
losses 9,500 23,000 13,500 (58.7%) (29.6%)
-------- -------- --------
Net Interest Income
after Provision 123,033 112,881 118,565 9.0% 3.8%
Non-Interest Income:
Service charges on deposit
accounts 13,938 15,651 14,651 (10.9%) (4.9%)
Investment management and
trust services 10,420 9,429 10,601 10.5% (1.7%)
Other service charges and
fees 9,518 11,119 9,508 (14.4%) 0.1%
Mortgage banking income 7,123 10,594 10,997 (32.8%) (35.2%)
Investment securities
gains 2,633 42 2,865 N/M (8.1%)
Other 3,725 5,108 3,694 (27.1%) 0.8%
-------- -------- --------
Total Non-Interest
Income 47,357 51,943 52,316 (8.8%) (9.5%)
Non-Interest Expense:
Salaries and employee
benefits 63,344 62,161 63,490 1.9% (0.2%)
Net occupancy expense 11,519 11,161 11,447 3.2% 0.6%
Other outside services 5,048 5,600 5,315 (9.9%) (5.0%)
Data processing 4,757 3,776 4,509 26.0% 5.5%
Equipment expense 3,646 3,816 3,893 (4.5%) (6.3%)
Professional fees 3,329 2,728 3,395 22.0% (1.9%)
Operating risk loss 3,297 1,404 1,860 134.8% 77.3%
Software 3,268 2,511 3,094 30.1% 5.6%
FDIC insurance expense 2,918 3,029 3,001 (3.7%) (2.8%)
Marketing 2,251 648 1,922 247.4% 17.1%
OREO and repossession
expense 1,453 2,249 1,941 (35.4%) (25.1%)
Intangible amortization 534 756 535 (29.4%) (0.2%)
Other 11,241 10,143 12,728 10.8% (11.7%)
-------- -------- --------
Total Non-Interest
Expense 116,605 109,982 117,130 6.0% (0.4%)
-------- -------- --------
Income Before Income
Taxes 53,785 54,842 53,751 (1.9%) 0.1%
Income tax expense 13,837 13,260 13,169 4.4% 5.1%
-------- -------- --------
Net Income $ 39,948$ 41,582$ 40,582 (3.9%) (1.6%)
======== ======== ========
PER SHARE:
Net income:
Basic $ 0.21$ 0.21$ 0.21 - -
Diluted 0.21 0.21 0.21 - -
Cash dividends $ 0.08$ 0.08$ 0.08 - -
Shareholders' equity 10.55 10.36 10.48 1.8% 0.7%
Shareholders' equity
(tangible) 7.77 7.63 7.72 1.8% 0.6%
Weighted average shares
(basic) 192,251 198,956 193,273 (3.4%) (0.5%)
Weighted average shares
(diluted) 193,259 199,808 194,346 (3.3%) (0.6%)
Shares outstanding, end of
period 192,332 198,975 193,658 (3.3%) (0.7%)
SELECTED FINANCIAL RATIOS:
Return on average assets 0.93% 1.02% 0.97%
Return on average
shareholders' equity 7.81% 8.03% 7.89%
Return on average
shareholders' equity
(tangible) 10.69% 11.02% 10.75%
Net interest margin 3.45% 3.74% 3.52%
Efficiency ratio 63.92% 56.90% 62.73%
Nine Months Ended
Sep 30
------------------ %
2013 2012 Change
-------- -------- ------
Interest Income:
Interest income $457,232$491,936 (7.1%)
Interest expense 62,990 79,830 (21.1%)
-------- --------
Net Interest Income 394,242 412,106 (4.3%)
Provision for credit
losses 38,000 76,500 (50.3%)
-------- --------
Net Interest Income
after Provision 356,242 335,606 6.1%
Non-Interest Income:
Service charges on deposit
accounts 42,700 45,860 (6.9%)
Investment management and
trust services 31,117 28,628 8.7%
Other service charges and
fees 27,536 33,181 (17.0%)
Mortgage banking income 26,293 31,787 (17.3%)
Investment securities
gains 7,971 2,831 181.6%
Other 11,315 14,602 (22.5%)
-------- --------
Total Non-Interest
Income 146,932 156,889 (6.3%)
Non-Interest Expense:
Salaries and employee
benefits 188,046 182,612 3.0%
Net occupancy expense 34,810 33,301 4.5%
Other outside services 13,223 13,614 (2.9%)
Data processing 13,169 11,223 17.3%
Equipment expense 11,447 10,370 10.4%
Professional fees 9,771 8,294 17.8%
Operating risk loss 6,923 6,827 1.4%
Software 9,110 6,958 30.9%
FDIC insurance expense 8,766 9,052 (3.2%)
Marketing 6,045 5,703 6.0%
OREO and repossession
expense 6,248 8,709 (28.3%)
Intangible amortization 1,603 2,318 (30.8%)
Other 35,510 33,757 5.2%
-------- --------
Total Non-Interest
Expense 344,671 332,738 3.6%
-------- --------
Income Before Income
Taxes 158,503 159,757 (0.8%)
Income tax expense 38,746 40,152 (3.5%)
-------- --------
Net Income $119,757$119,605 0.1%
======== ========
PER SHARE:
Net income:
Basic $ 0.62$ 0.60 3.3%
Diluted 0.61 0.60 1.7%
Cash dividends $ 0.24$ 0.22 9.1%
Shareholders' equity 10.54 10.36 1.7%
Shareholders' equity
(tangible) 7.77 7.63 1.8%
Weighted average shares
(basic) 193,926 199,371 (2.7%)
Weighted average shares
(diluted) 194,926 200,321 (2.7%)
Shares outstanding, end of
period 192,332 198,975 (3.3%)
SELECTED FINANCIAL RATIOS:
Return on average assets 0.95% 0.98%
Return on average
shareholders' equity 7.79% 7.83%
Return on average
shareholders' equity
(tangible) 10.62% 10.80%
Net interest margin 3.51% 3.79%
Efficiency ratio 62.81% 57.09%
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Quarter Ended
-----------------------------------------------------------
September 30, 2013 September 30, 2012
---------------------------- ----------------------------
Average Interest Yield/ Average Interest Yield/
Balance (1) Rate Balance (1) Rate
----------- -------- ------ ----------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned
income $12,728,162$139,141 4.34% $11,922,417$143,211 4.78%
Taxable
investment
securities 2,446,583 12,977 2.12% 2,392,043 16,658 2.78%
Tax-exempt
investment
securities 284,372 3,581 5.04% 286,225 3,936 5.50%
Equity
securities 133,200 1,056 3.16% 109,884 820 2.98%
----------- -------- ------ ----------- -------- ------
Total
Investment
Securities 2,864,155 17,614 2.46% 2,788,152 21,414 3.07%
Loans held for
sale 36,450 382 4.19% 61,001 578 3.79%
Other interest-
earning assets 140,338 38 0.11% 147,818 35 0.09%
----------- -------- ------ ----------- -------- ------
Total Interest-
earning Assets 15,769,105 157,175 3.96% 14,919,388 165,238 4.41%
Noninterest-
earning assets:
Cash and due
from banks 210,525 221,561
Premises and
equipment 224,837 222,544
Other assets 1,007,808 1,098,748
Less: allowance
for loan
losses (220,342) (239,931)
----------- -----------
Total Assets $16,991,933$16,222,310
=========== ===========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand deposits $ 2,895,156$ 938 0.13% $ 2,608,202$ 1,071 0.16%
Savings
deposits 3,359,795 1,015 0.12% 3,372,278 1,431 0.17%
Time deposits 3,065,210 6,790 0.88% 3,657,616 11,346 1.23%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing
Deposits 9,320,161 8,743 0.37% 9,638,096 13,848 0.57%
Short-term
borrowings 1,337,742 691 0.20% 588,568 220 0.15%
FHLB advances
and long-term
debt 889,141 10,865 4.87% 908,767 11,111 4.88%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing
Liabilities 11,547,044 20,299 0.70% 11,135,431 25,179 0.90%
Noninterest-
bearing
liabilities:
Demand deposits 3,221,648 2,837,539
Other 194,163 188,065
----------- -----------
Total
Liabilities 14,962,855 14,161,035
Shareholders'
equity 2,029,078 2,061,275
----------- -----------
Total
Liabilities
and
Shareholders'
Equity $16,991,933$16,222,310
=========== ===========
Net interest income/net
interest margin (fully
taxable equivalent) 136,876 3.45% 140,059 3.74%
====== ======
Tax equivalent
adjustment (4,343) (4,178)
-------- --------
Net interest
income $132,533$135,881
======== ========
Quarter Ended
-------------------------------
June 30, 2013
-------------------------------
Average Interest Yield/
Balance (1) Rate
------------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned
income $12,528,562$138,002 4.42%
Taxable
investment
securities 2,410,004 14,516 2.41%
Tax-exempt
investment
securities 280,508 3,608 5.15%
Equity
securities 123,848 875 2.83%
------------- -------- ------
Total
Investment
Securities 2,814,360 18,999 2.70%
Loans held for
sale 42,158 384 3.64%
Other interest-
earning assets 144,945 35 0.10%
------------- -------- ------
Total Interest-
earning Assets 15,530,025 157,420 4.07%
Noninterest-
earning assets:
Cash and due
from banks 206,090
Premises and
equipment 225,915
Other assets 1,060,095
Less: allowance
for loan
losses (221,541)
-------------
Total Assets $16,800,584
=============
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand deposits $ 2,718,679$ 872 0.13%
Savings
deposits 3,350,856 1,016 0.12%
Time deposits 3,169,141 7,610 0.96%
------------- -------- ------
Total Interest-
bearing
Deposits 9,238,676 9,498 0.41%
Short-term
borrowings 1,313,424 700 0.21%
FHLB advances
and long-term
debt 889,186 10,815 4.87%
------------- -------- ------
Total Interest-
bearing
Liabilities 11,441,286 21,013 0.74%
Noninterest-
bearing
liabilities:
Demand deposits 3,116,940
Other 179,875
-------------
Total
Liabilities 14,738,101
Shareholders'
equity 2,062,483
-------------
Total
Liabilities
and
Shareholders'
Equity $16,800,584
=============
Net interest
income/net
interest
margin (fully
taxable
equivalent) 136,407 3.52%
======
Tax equivalent
adjustment (4,342)
--------
Net interest
income $132,065
========
(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:
Quarter Ended % Change from
----------------------------------- -----------------
September September September June
30 30 June 30 30 30
2013 2012 2013 2012 2013
----------- ----------- ----------- --------- -----
Loans, by type:
Real estate -
commercial
mortgage $ 4,961,871$ 4,603,388$ 4,758,060 7.8% 4.3%
Commercial -
industrial,
financial and
agricultural 3,706,113 3,529,733 3,714,683 5.0% (0.2%)
Real estate - home
equity 1,767,095 1,597,230 1,732,704 10.6% 2.0%
Real estate -
residential
mortgage 1,323,972 1,201,179 1,308,713 10.2% 1.2%
Real estate -
construction 576,222 605,910 617,577 (4.9%) (6.7%)
Consumer 299,057 304,800 304,918 (1.9%) (1.9%)
Leasing and other 93,832 80,177 91,907 17.0% 2.1%
----------- ----------- -----------
Total Loans, net
of unearned
income $12,728,162$11,922,417$12,528,562 6.8% 1.6%
=========== =========== ===========
Deposits, by type:
Noninterest-
bearing demand $ 3,221,648$ 2,837,539$ 3,116,940 13.5% 3.4%
Interest-bearing
demand 2,895,156 2,608,202 2,718,679 11.0% 6.5%
Savings deposits 3,359,795 3,372,278 3,350,856 (0.4%) 0.3%
Time deposits 3,065,210 3,657,616 3,169,141 (16.2%) (3.3%)
----------- ----------- -----------
Total Deposits $12,541,809$12,475,635$12,355,616 0.5% 1.5%
=========== =========== ===========
Short-term
borrowings, by
type:
Customer
repurchase
agreements $ 196,503$ 210,830$ 188,339 (6.8%) 4.3%
Customer short-
term promissory
notes 91,573 127,479 98,207 (28.2%) (6.8%)
Federal funds
purchased 559,992 244,214 776,603 129.3% (27.9%)
Short-term FHLB
advances 489,674 6,045 250,275 N/M 95.7%
----------- ----------- -----------
Total Short-term
Borrowings $ 1,337,742$ 588,568$ 1,313,424 127.3% 1.9%
=========== =========== ===========
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Nine Months ended September 30
----------------------------------------------------------
2013 2012
---------------------------- ----------------------------
Average Interest Yield Average Interest Yield
Balance (1) /Rate Balance (1) /Rate
----------- -------- ----- ----------- -------- -----
ASSETS
Interest-earning
assets:
Loans, net of
unearned
income $12,506,393$414,091 4.43% $11,957,025$434,520 4.85%
Taxable
investment
securities 2,426,015 40,890 2.25% 2,442,237 53,943 2.95%
Tax-exempt
investment
securities 285,638 11,003 5.14% 288,221 12,085 5.59%
Equity
securities 125,193 2,848 3.04% 110,807 2,307 2.78%
----------- -------- ----- ----------- -------- -----
Total
Investment
Securities 2,836,846 54,741 2.57% 2,841,265 68,335 3.21%
Loans held for
sale 42,122 1,261 3.99% 52,462 1,547 3.93%
Other
interest-
earning
assets 134,460 95 0.09% 126,556 133 0.14%
----------- -------- ----- ----------- -------- -----
Total
Interest-
earning
Assets 15,519,821 470,188 4.05% 14,977,308 504,535 4.50%
Noninterest-
earning assets:
Cash and due
from banks 206,403 239,050
Premises and
equipment 225,733 217,351
Other assets 1,045,796 1,105,238
Less:
allowance for
loan losses (223,220) (255,061)
----------- -----------
Total Assets $16,774,533$16,283,886
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing
liabilities:
Demand
deposits $ 2,773,917$ 2,687 0.13% $ 2,519,454$ 3,132 0.17%
Savings
deposits 3,348,413 3,054 0.12% 3,341,512 4,751 0.19%
Time deposits 3,184,281 22,901 0.96% 3,799,774 36,958 1.30%
----------- -------- ----- ----------- -------- -----
Total
Interest-
bearing
Deposits 9,306,611 28,642 0.41% 9,660,740 44,841 0.62%
Short-term
borrowings 1,228,882 1,900 0.20% 758,899 912 0.16%
Federal Home
Loan Bank
advances and
long-term
debt 889,826 32,448 4.87% 940,348 34,077 4.84%
----------- -------- ----- ----------- -------- -----
Total
Interest-
bearing
Liabilities 11,425,319 62,990 0.74% 11,359,987 79,830 0.94%
Noninterest-
bearing
liabilities:
Demand
deposits 3,103,381 2,691,949
Other 190,976 190,476
----------- -----------
Total
Liabilities 14,719,676 14,242,412
Shareholders'
equity 2,054,857 2,041,474
----------- -----------
Total
Liabilities
and
Shareholders'
Equity $16,774,533$16,283,886
=========== ===========
Net interest
income/net
interest
margin (fully
taxable
equivalent) 407,198 3.51% 424,705 3.79%
===== =====
Tax equivalent
adjustment (12,956) (12,599)
-------- --------
Net interest
income $394,242$412,106
======== ========
(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
-----------------------
2013 2012 % Change
----------- ----------- ----------
Loans, by type:
Real estate - commercial mortgage $ 4,796,557$ 4,618,389 3.9%
Commercial - industrial, financial
and agricultural 3,694,612 3,548,332 4.1%
Real estate - home equity 1,721,041 1,602,812 7.4%
Real estate - residential mortgage 1,305,434 1,173,158 11.3%
Real estate - construction 594,991 629,170 (5.4%)
Consumer 303,127 308,215 (1.7%)
Leasing and other 90,631 76,949 17.8%
----------- -----------
Total Loans, net of unearned income $12,506,393$11,957,025 4.6%
=========== ===========
Deposits, by type:
Noninterest-bearing demand $ 3,103,381$ 2,691,949 15.3%
Interest-bearing demand 2,773,917 2,519,454 10.1%
Savings deposits 3,348,413 3,341,512 0.2%
Time deposits 3,184,281 3,799,774 (16.2%)
----------- -----------
Total Deposits $12,409,992$12,352,689 0.5%
=========== ===========
Short-term borrowings, by type:
Customer repurchase agreements $ 183,432$ 212,523 (13.7%)
Customer short-term promissory notes 100,532 142,896 (29.6%)
Federal funds purchased 681,576 390,319 74.6%
Short-term FHLB advances 263,342 13,161 N/M
----------- -----------
Total Short-term Borrowings $ 1,228,882$ 758,899 61.9%
=========== ===========
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
Quarter Ended
------------------------------- Nine Months Ended
Sep 30 Sep 30 Jun 30 Sep 30
--------------------
2013 2012 2013 2013 2012
--------- --------- --------- --------- ---------
ALLOWANCE FOR CREDIT
LOSSES:
Balance at
beginning of
period $ 217,626$ 237,316$ 221,527$ 225,439$ 258,177
Loans charged off:
Commercial -
industrial,
financial and
agricultural (9,394) (10,471) (5,960) (24,856) (29,157)
Real estate -
commercial
mortgage (3,724) (7,463) (5,193) (13,050) (43,053)
Real estate -
home equity (2,365) (1,688) (1,966) (6,735) (6,683)
Real estate -
residential
mortgage (767) (670) (4,465) (8,282) (3,009)
Real estate -
construction (598) (8,364) (2,597) (5,181) (25,377)
Consumer (473) (685) (433) (1,456) (1,790)
Leasing and other (787) (625) (769) (2,037) (1,696)
--------- --------- --------- --------- ---------
Total loans
charged off (18,108) (29,966) (21,383) (61,597) (110,765)
Recoveries of loans
previously charged
off:
Commercial -
industrial,
financial and
agricultural 2,295 1,693 756 3,430 3,046
Real estate -
commercial
mortgage 185 1,317 1,505 2,754 3,286
Real estate -
home equity 198 343 192 721 641
Real estate -
residential
mortgage 245 25 116 442 169
Real estate -
construction 379 1,040 744 1,794 2,643
Consumer 294 202 406 1,206 833
Leasing and other 224 298 263 649 738
--------- --------- --------- --------- ---------
Recoveries of
loans previously
charged off 3,820 4,918 3,982 10,996 11,356
--------- --------- --------- --------- ---------
Net loans charged
off (14,288) (25,048) (17,401) (50,601) (99,409)
Provision for
credit losses 9,500 23,000 13,500 38,000 76,500
--------- --------- --------- --------- ---------
Balance at end of
period $ 212,838$ 235,268$ 217,626$ 212,838$ 235,268
========= ========= ========= ========= =========
Net charge-offs to
average loans
(annualized) 0.45% 0.84% 0.56% 0.54% 1.11%
========= ========= ========= ========= =========
NON-PERFORMING
ASSETS:
Non-accrual loans $ 143,012$ 185,791$ 164,039
Loans 90 days past
due and accruing 25,271 27,035 25,159
--------- --------- ---------
Total non-
performing loans 168,283 212,826 189,198
Other real estate
owned 18,173 29,217 20,984
--------- --------- ---------
Total non-
performing assets $ 186,456$ 242,043$ 210,182
========= ========= =========
NON-PERFORMING LOANS,
BY TYPE:
Commercial -
industrial,
financial and
agricultural $ 45,184$ 73,879$ 57,219
Real estate -
commercial
mortgage 42,623 64,609 49,429
Real estate -
residential
mortgage 34,309 24,910 30,660
Real estate -
construction 24,396 32,742 29,964
Real estate - home
equity 18,691 12,644 19,046
Consumer 3,013 3,942 2,780
Leasing 67 100 100
--------- --------- ---------
Total non-performing
loans $ 168,283$ 212,826$ 189,198
========= ========= =========
TROUBLED DEBT
RESTRUCTURINGS
(TDRs), BY TYPE:
Real-estate -
residential
mortgage $ 27,820$ 36,946$ 28,948
Real-estate -
commercial
mortgage 22,644 32,198 24,828
Real estate -
construction 9,841 10,525 10,599
Commercial -
industrial,
financial and
agricultural 8,184 4,795 8,394
Real estate - home
equity 1,667 755 1,549
Consumer 11 - 13
--------- --------- ---------
Total accruing TDRs 70,167 85,219 74,331
Non-accrual TDRs
(1) 30,501 21,167 30,377
--------- --------- ---------
Total TDRs $ 100,668$ 106,386$ 104,708
========= ========= =========
(1) Included within non-accrual loans above.
DELINQUENCY RATES, BY TYPE:
September 30, 2013 September 30, 2012 June 30, 2013
------------------ ------------------ ------------------
≥90 ≥90 ≥90
31-89 Days 31-89 Days 31-89 Days
Days (2) Total Days (2) Total Days (2) Total
----- ---- ----- ----- ---- ----- ----- ---- -----
Real estate -
commercial
mortgage 0.40% 0.84% 1.24% 0.46% 1.39% 1.85% 0.47% 1.01% 1.48%
Commercial -
industrial,
financial and
agricultural 0.32% 1.24% 1.56% 0.45% 2.11% 2.56% 0.41% 1.54% 1.95%
Real estate -
construction 0.40% 4.22% 4.62% 0.95% 5.48% 6.43% 0.42% 4.91% 5.33%
Real estate -
residential
mortgage 1.82% 2.58% 4.40% 2.66% 2.05% 4.71% 2.12% 2.33% 4.45%
Real estate -
home equity 1.03% 1.05% 2.08% 0.85% 0.78% 1.63% 0.68% 1.08% 1.76%
Consumer,
leasing and
other 1.83% 0.75% 2.58% 1.84% 1.06% 2.90% 1.47% 0.74% 2.21%
----- ---- ----- ----- ---- ----- ----- ---- -----
Total 0.66% 1.31% 1.97% 0.80% 1.78% 2.58% 0.68% 1.50% 2.18%
===== ==== ===== ===== ==== ===== ===== ==== =====
(2) Includes non-accrual loans
ASSET QUALITY RATIOS:
Sep 30 Sep 30 Jun 30
2013 2012 2013
------ ------ ------
Non-accrual
loans to
total loans 1.12% 1.56% 1.30%
Non-performing
assets to
total loans
and OREO 1.45% 2.02% 1.66%
Non-performing
assets to
total assets 1.09% 1.49% 1.23%
Allowance for
credit losses
to loans
outstanding 1.66% 1.97% 1.72%
Allowance for
credit losses
to non-
performing
loans 126.48% 110.54% 115.03%
Non-performing
assets to
tangible
common
shareholders'
equity and
allowance for
credit losses 10.92% 13.80% 12.28%
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 certain 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 quarterly 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:
Quarter Ended
----------------------------------
September September Nine Months Ended
30 30 June 30 September 30
----------------------
2013 2012 2013 2013 2012
---------- ---------- ---------- ---------- ----------
Shareholders'
equity
(tangible),
per share
Shareholders'
equity $2,028,964$2,060,683$2,028,732
Less: Goodwill
and intangible
assets (533,918) (541,845) (534,452)
---------- ---------- ----------
Tangible
shareholders'
equity
(numerator) $1,495,046$1,518,838$1,494,280
========== ========== ==========
Shares
outstanding,
end of period
(denominator) 192,332 198,975 193,658
========== ========== ==========
Shareholders'
equity
(tangible),
per share $ 7.77$ 7.63$ 7.72
========== ========== ==========
Return on
average common
shareholders'
equity
(tangible)
Net income $ 39,948$ 41,582$ 40,582$ 119,757$ 119,605
Plus:
Intangible
amortization,
net of tax 347 491 348 1,042 1,507
---------- ---------- ---------- ---------- ----------
Net income,
less
intangible
amortization,
net of tax
(numerator) $ 40,295$ 42,073$ 40,930$ 120,799$ 121,112
========== ========== ========== ========== ==========
Average
shareholders'
equity $2,029,078$2,061,275 2,062,483 $2,054,857$2,041,474
Less: Average
goodwill and
intangible
assets (534,179) (542,225) (534,713) (534,712) (542,997)
---------- ---------- ---------- ---------- ----------
Average
tangible
shareholders'
equity
(denominator) $1,494,899$1,519,050$1,527,770$1,520,145$1,498,477
========== ========== ========== ========== ==========
Return on
average
common
shareholders'
equity
(tangible),
annualized 10.69% 11.02% 10.75% 10.62% 10.80%
========== ========== ========== ========== ==========
Efficiency
ratio
Non-interest
expense $ 116,605$ 109,982$ 117,130$ 344,671$ 332,738
Less:
Intangible
amortization (534) (756) (535) (1,603) (2,318)
---------- ---------- ---------- ---------- ----------
Numerator $ 116,071$ 109,226$ 116,595$ 343,068$ 330,420
========== ========== ========== ========== ==========
Net interest
income (fully
taxable
equivalent) $ 136,876$ 140,059$ 136,407$ 407,198$ 424,705
Plus: Total
Non-interest
income 47,357 51,943 52,316 146,932 156,889
Less:
Investment
securities
gains (2,633) (42) (2,865) (7,971) (2,831)
---------- ---------- ---------- ---------- ----------
Denominator $ 181,600$ 191,960$ 185,858$ 546,159$ 578,763
========== ========== ========== ========== ==========
Efficiency
ratio 63.92% 56.90% 62.73% 62.81% 57.09%
========== ========== ========== ========== ==========
Non-performing
assets to
tangible
common
shareholders'
equity and
allowance for
credit losses
Non-performing
assets
(numerator) $ 186,456$ 242,043$ 210,182
========== ========== ==========
Tangible
shareholders'
equity $1,495,046$1,518,838$1,494,280
Plus: Allowance
for credit
losses 212,838 235,268 217,626
---------- ---------- ----------
Tangible
shareholders'
equity and
allowance for
credit losses
(denominator) $1,707,884$1,754,106$1,711,906
========== ========== ==========
Non-performing
assets to
tangible
common
shareholders'
equity and
allowance for
credit losses 10.92% 13.80% 12.28%
========== ========== ==========
Media Contact:
Laura J. Wakeley
(717) 291-2616
Investor Contact:
David C. Hostetter
(717) 291-2456
Source: Fulton Financial Corporation