LANCASTER, PA -- (Marketwired) -- 01/20/15 --
Fulton Financial Corporation (NASDAQ: FULT)
- Diluted earnings per share for the fourth quarter of 2014 was 21 cents, unchanged from the third quarter of 2014. For the year ended December 31, 2014, diluted earnings per share was 84 cents, a 1.2 percent increase from 2013. During the fourth quarter of 2014, total cash dividends increased to 10 cents per share, compared to 8 cents per share for the third quarter of 2014, due to the payment of a special 2 cent per share cash dividend in December 2014.
- Net interest income for the fourth quarter of 2014 decreased $1.3 million, or 1.0 percent, compared to the third quarter of 2014, while the net interest margin decreased 8 basis points, to 3.31 percent. For the year ended December 31, 2014, net interest income decreased $12.3 million, or 2.3 percent, compared to 2013, while the net interest margin decreased 11 basis points, to 3.39 percent.
- Average loans for the fourth quarter of 2014 increased $133.3 million, or 1.0 percent, compared to the third quarter of 2014. Average loans for the year ended December 31, 2014 increased $306.7 million, or 2.4 percent, in comparison to 2013.
- Average deposits for the fourth quarter of 2014 increased $302.4 million, or 2.3 percent, compared to the third quarter of 2014. Average deposits for the year ended December 31, 2014 increased $394.5 million, or 3.2 percent, compared to 2013.
- The provision for credit losses was $3.0 million for the fourth quarter of 2014, a decrease of $500,000 from the third quarter of 2014. For the year ended December 31, 2014, the provision for credit losses decreased $28.0 million, or 69.1 percent, compared to 2013. Non-performing loans decreased $5.4 million, or 3.7 percent, in comparison to September 30, 2014 and $15.8 million, or 10.2 percent, in comparison to December 31, 2013.
- Non-interest income, excluding investment securities gains, decreased $566,000, or 1.4 percent, in comparison to the third quarter of 2014, while non-interest expense increased $1.9 million, or 1.7 percent. For the year ended December 31, 2014, non-interest income, excluding investment securities gains, decreased $14.3 million, or 8.0 percent, compared to 2013, while non-interest expense decreased $2.2 million, or 0.5 percent.
- In November 2014, the Corporation issued $100.0 million subordinated debt, the net proceeds of which were used to repurchase outstanding shares of its common stock pursuant to an accelerated share repurchase agreement (ASR).
Fulton Financial Corporation (NASDAQ: FULT) reported net income of $37.9 million, or 21 cents per diluted share, for the fourth quarter of 2014, and net income of $157.9 million, or 84 cents per diluted share, for 2014.
"Throughout 2014, we deployed capital to enhance shareholder value through a series of stock repurchase programs and a special cash dividend. We also continued the build out of our regulatory, compliance and technology infrastructure, while at the same time reducing non-interest expenses," said E. Philip Wenger, Chairman, CEO and President. "In the fourth quarter, the persistently low interest rate environment exerted further pressure on our earning asset yields and net interest margin. However, we were pleased to see good growth in core deposits and steady improvement in overall asset quality."
Shareholders' Equity and Capital Actions
During the fourth quarter of 2014, the Corporation issued $100.0 million of subordinated debt, maturing in November 2024, at a coupon rate of 4.50 percent. In conjunction with this debt offering, the Corporation entered into an ASR with a third party to repurchase $100 million of shares of the Corporation's common stock. Under the terms of the ASR, the Corporation paid $100 million to the third party on November 18, 2014 and received an initial delivery of 6.5 million shares. The final number of shares to be repurchased under the ASR will depend upon the daily volume-weighted average prices of the Corporation's shares, less a discount, over the term of the ASR. Final settlement of the ASR is scheduled for no later than April 17, 2015. The subordinated debt offering and ASR had positive impacts on both diluted earnings per share and return on average shareholders' equity. Also during the fourth quarter of 2014, the Corporation paid a special 2 cent per share cash dividend to shareholders, resulting in total fourth quarter dividends to common shareholders of 10 cents per share.
In 2014, the Corporation repurchased 14.5 million, or 7.5 percent, of its shares outstanding as of December 31, 2013.
Net Interest Income and Margin
Net interest income for the fourth quarter of 2014 decreased $1.3 million, or 1.0 percent, from the third quarter of 2014. Net interest margin decreased 8 basis points, or 2.4 percent, to 3.31 percent in the fourth quarter of 2014 from 3.39 percent in the third quarter of 2014. Average yields on interest-earning assets decreased five basis points, while the average cost of interest-bearing liabilities increased three basis points during the fourth quarter of 2014 in comparison to the third quarter of 2014.
For the year ended December 31, 2014, net interest income decreased $12.3 million, or 2.3 percent. The net interest margin was 3.39 percent for 2014, compared to 3.50 percent for 2013. Average yields on interest-earning assets decreased 12 basis points, while the average cost of interest-bearing liabilities was unchanged from 2013.
Average Balance Sheet
Total average assets for the fourth quarter of 2014 were $17.1 billion, an increase of $138.5 million, or 0.8 percent, from the third quarter of 2014. Average loans, net of unearned income, increased $133.3 million, or 1.0 percent, in comparison to the third quarter of 2014.
Increase
Three Months Ended (decrease)
-------------------------------------- --------------
December 31, 2014 September 30, 2014 in Balance
------------------ ------------------ --------------
Yield Yield
Balance (1) Balance (1) $ %
----------- ------ ----------- ------ -------- ----
(dollars in thousands)
Average Loans, net
of unearned
income, by type:
Real estate -
commercial
mortgage $ 5,131,375 4.36% $ 5,114,221 4.35% $ 17,154 0.3%
Commercial -
industrial,
financial and
agricultural 3,723,211 3.81% 3,657,047 3.97% 66,164 1.8%
Real estate -
home equity 1,735,769 4.13% 1,727,253 4.18% 8,516 0.5%
Real estate -
residential
mortgage 1,378,452 3.91% 1,369,087 3.93% 9,365 0.7%
Real estate -
construction 697,741 3.96% 663,922 3.98% 33,819 5.1%
Consumer 275,349 5.65% 284,630 5.39% (9,281) (3.3%)
Leasing and other 114,256 7.15% 106,661 7.36% 7,595 7.1%
----------- ------ ----------- ------ -------- ----
Total Average
Loans, net of
unearned income $13,056,153 4.16% $12,922,821 4.20% $133,332 1.0%
=========== ====== =========== ====== ======== ====
(1) Presented on a fully-taxable equivalent basis using a 35% Federal tax
rate and statutory interest expense disallowances.
For the year ended December 31, 2014, average loans increased $306.7 million, or 2.4 percent, in comparison to 2013.
Total average liabilities increased $175.8 million, or 1.2 percent, from the third quarter of 2014, due to a $302.4 million, or 2.3 percent, increase in average deposits and a $90.8 million, or 9.1 percent, increase in Federal Home Loan Bank (FHLB) advances and long-term debt, partially offset by a $249.6 million, or 37.4 percent, decrease in average short-term borrowings. Average deposits and interest rates, by type, for the fourth quarter of 2014 in comparison to the third quarter of 2014, are summarized in the following table:
Three Months Ended
----------------------------------
Increase
December 31, September 30, (decrease) in
2014 2014 Balance
---------------- ---------------- --------------
Balance Rate Balance Rate $ %
----------- ---- ----------- ---- --------- ----
(dollars in thousands)
Average Deposits, by
type:
Noninterest-bearing
demand $ 3,630,780 -% $ 3,514,033 -% $ 116,747 3.3%
Interest-bearing
demand 3,145,658 0.13% 3,047,191 0.12% 98,467 3.2%
Savings deposits 3,548,504 0.13% 3,468,958 0.12% 79,546 2.3%
----------- ---- ----------- ---- --------- ----
Total average demand and
savings 10,324,942 0.08% 10,030,182 0.08% 294,760 2.9%
Time deposits 3,016,834 0.96% 3,009,225 0.92% 7,609 0.3%
----------- ---- ----------- ---- --------- ----
Total Average Deposits $13,341,776 0.28% $13,039,407 0.27% $ 302,369 2.3%
=========== ==== =========== ==== ========= ====
For the year ended December 31, 2014, average deposits increased $394.5 million, or 3.2 percent, in comparison to 2013.
Asset Quality
Non-performing assets were $150.5 million, or 0.88 percent of total assets, at December 31, 2014, compared to $157.3 million, or 0.91 percent of total assets, at September 30, 2014 and $169.3 million, or 1.00 percent of total assets, at December 31, 2013. The $6.8 million, or 4.3 percent, decrease in non-performing assets in comparison to the third quarter of 2014 was primarily due to a decrease in non-performing commercial loans and construction loans, as well as a decrease in other real estate owned (OREO).
Annualized net charge-offs for the quarter ended December 31, 2014 were 0.25 percent of average total loans, compared to 0.18 percent for the quarter ended September 30, 2014 and 0.33 percent for the quarter ended December 31, 2013. The allowance for credit losses as a percentage of non-performing loans was 134.3 percent at December 31, 2014, as compared to 132.9 percent at September 30, 2014 and 132.8 percent at December 31, 2013.
Non-interest Income
Non-interest income, excluding investment securities gains, decreased $566,000, or 1.4 percent, in comparison to the third quarter of 2014. Service charges on deposit accounts decreased $572,000, or 4.5 percent, primarily due to a decrease in overdraft fees. Mortgage banking income decreased $315,000 due to a decrease in spreads, while loan volumes were flat. Partially offsetting these decreases was a $535,000, or 5.4 percent, increase in other service charges and fees.
For the year ended December 31, 2014, non-interest income, excluding investment securities gains, decreased $14.3 million, or 8.0 percent, in comparison to 2013. Mortgage banking income decreased $13.5 million, or 44.2 percent, due to decreases in volumes and spreads. Service charges on deposit accounts decreased $6.2 million, or 11.1 percent, due primarily to lower overdraft fees. These decreases in non-interest income were partially offset by a $2.9 million increase in other service charges and fees and a $2.9 million increase in investment management and trust services income.
Non-interest Expense
Non-interest expense increased $1.9 million, or 1.7 percent, in the fourth quarter of 2014, compared to the third quarter of 2014. Salaries and employee benefits increased $3.0 million, or 4.7 percent, in comparison to the third quarter of 2014, due primarily to an increase in self-insured healthcare costs and employee salaries. Marketing expenses increased $616,000, or 34.3 percent. Other non-interest expense increased $1.6 million, or 14.5 percent, including increases in travel and entertainment expenses and provisions for reward points earned on debit card transactions. Partially offsetting these increases in non-interest expense were a $1.1 million decrease in OREO and repossession expense, an $870,000 decrease in professional fees and a $757,000 decrease in operating risk loss.
For the year ended December 31, 2014, non-interest expense decreased $2.2 million, or 0.5 percent, in comparison to 2013. In 2014, the Corporation implemented a series of cost saving initiatives which reduced expenses by approximately $7 million. These initiatives included the consolidation of 13 branches, streamlining of subsidiary bank management structures and other employee compensation and benefit reductions. Salaries and employee benefits decreased $2.2 million, or 0.9 percent, due to the cost saving initiatives, partially offset by an increase in self-insured healthcare costs. Also contributing to the decrease in non-interest expense was a $5.0 million decrease in operating risk loss and a $4.1 million decrease in OREO and repossession expense. Offsetting these decreases in non-interest expense was a $9.5 million, or 50.6 percent, increase in other outside services, largely attributable to continuing risk management and compliance efforts, including the enhancement of the Corporation's Bank Secrecy Act and anti-money laundering compliance program (the "BSA/AML Compliance Program"). The Corporation previously disclosed regulatory enforcement orders received by the Corporation and five of its banking subsidiaries during 2014 related to its BSA/AML Compliance Program.
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, 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, 2013, and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014, June 30, 2014, and September 30, 2014, 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 December September
December 31 December 31 30 31 30
2014 2013 2014 2013 2014
----------- ----------- ----------- -------- ---------
ASSETS
Cash and due from
banks $ 105,702$ 218,540$ 220,946 (51.6%) (52.2%)
Other interest-
earning assets 423,083 248,161 377,579 70.5% 12.1%
Loans held for
sale 17,522 21,351 25,212 (17.9%) (30.5%)
Investment
securities 2,323,371 2,568,434 2,470,609 (9.5%) (6.0%)
Loans, net of
unearned income 13,111,716 12,782,220 13,030,405 2.6% 0.6%
Allowance for
loan losses (184,144) (202,780) (189,477) (9.2%) (2.8%)
----------- ----------- -----------
Net loans 12,927,572 12,579,440 12,840,928 2.8% 0.7%
Premises and
equipment 226,027 226,021 224,441 - 0.7%
Accrued interest
receivable 41,818 44,037 43,544 (5.0%) (4.0%)
Goodwill and
intangible
assets 531,803 533,076 532,117 (0.2%) (0.1%)
Other assets 527,869 495,574 502,798 6.5% 5.0%
----------- ----------- -----------
Total Assets $17,124,767$16,934,634$17,238,174 1.1% (0.7%)
=========== =========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Deposits $13,367,506$12,491,186$13,333,627 7.0% 0.3%
Short-term
borrowings 329,719 1,258,629 564,952 (73.8%) (41.6%)
Other liabilities 291,464 238,048 243,300 22.4% 19.8%
FHLB advances and
long-term debt 1,139,413 883,584 1,018,289 29.0% 11.9%
----------- ----------- -----------
Total
Liabilities 15,128,102 14,871,447 15,160,168 1.7% (0.2%)
Shareholders'
equity 1,996,665 2,063,187 2,078,006 (3.2%) (3.9%)
----------- ----------- -----------
Total
Liabilities
and
Shareholders'
Equity $17,124,767$16,934,634$17,238,174 1.1% (0.7%)
=========== =========== ===========
LOANS, DEPOSITS AND SHORT-TERM
BORROWINGS DETAIL:
Loans, by type:
Real estate -
commercial
mortgage $ 5,197,155$ 5,101,922$ 5,156,979 1.9% 0.8%
Commercial -
industrial,
financial and
agricultural 3,725,567 3,628,420 3,691,262 2.7% 0.9%
Real estate -
home equity 1,736,688 1,764,197 1,733,036 (1.6%) 0.2%
Real estate -
residential
mortgage 1,377,068 1,337,380 1,372,033 3.0% 0.4%
Real estate -
construction 690,601 573,672 687,728 20.4% 0.4%
Consumer 265,431 283,124 278,219 (6.2%) (4.6%)
Leasing and other 119,206 93,505 111,148 27.5% 7.2%
----------- ----------- -----------
Total Loans, net
of unearned
income $13,111,716$12,782,220$13,030,405 2.6% 0.6%
=========== =========== ===========
Deposits, by type:
Noninterest-
bearing demand $ 3,640,623$ 3,283,172$ 3,556,810 10.9% 2.4%
Interest-bearing
demand 3,150,612 2,945,210 3,164,514 7.0% (0.4%)
Savings deposits 3,504,820 3,344,882 3,620,919 4.8% (3.2%)
Time deposits 3,071,451 2,917,922 2,991,384 5.3% 2.7%
----------- ----------- -----------
Total Deposits $13,367,506$12,491,186$13,333,627 7.0% 0.3%
=========== =========== ===========
Short-term
borrowings, by
type:
Customer
repurchase
agreements $ 158,394$ 175,621$ 195,121 (9.8%) (18.8%)
Customer short-
term promissory
notes 95,106 100,572 78,225 (5.4%) 21.6%
Federal funds
purchased 6,219 582,436 6,606 (98.9%) (5.9%)
Short-term FHLB
advances 70,000 400,000 285,000 (82.5%) (75.4%)
----------- ----------- -----------
Total Short-term
Borrowings $ 329,719$ 1,258,629$ 564,952 (73.8%) (41.6%)
=========== =========== ===========
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
in thousands, except per-share data and percentages
Three Months Ended % Change from
----------------------------- -------------------
Dec 31 Dec 31 Sep 30 Dec 31 Sep 30
2014 2013 2014 2013 2014
--------- --------- --------- -------- --------
Interest Income:
Interest income $ 149,594$ 152,457$ 149,790 (1.9%) (0.1%)
Interest expense 21,556 19,505 20,424 10.5% 5.5%
--------- --------- ---------
Net Interest Income 128,038 132,952 129,366 (3.7%) (1.0%)
Provision for credit
losses 3,000 2,500 3,500 20.0% (14.3%)
--------- --------- ---------
Net Interest Income
after Provision 125,038 130,452 125,866 (4.2%) (0.7%)
Non-Interest Income:
Service charges on
deposit accounts 12,229 12,770 12,801 (4.2%) (4.5%)
Investment management
and trust services 11,188 10,589 11,120 5.7% 0.6%
Other service charges
and fees 10,489 9,421 9,954 11.3% 5.4%
Mortgage banking
income 3,723 4,363 4,038 (14.7%) (7.8%)
Investment securities
gains 848 33 81 N/M N/M
Other 3,624 3,556 3,906 1.9% (7.2%)
--------- --------- ---------
Total Non-Interest
Income 42,101 40,732 41,900 3.4% 0.5%
Non-Interest Expense:
Salaries and employee
benefits 65,398 65,194 62,434 0.3% 4.7%
Net occupancy expense 11,481 12,134 11,582 (5.4%) (0.9%)
Other outside
services 8,720 5,633 8,632 54.8% 1.0%
Data processing 4,346 3,386 4,689 28.4% (7.3%)
Equipment expense 3,298 3,972 3,307 (17.0%) (0.3%)
Software 3,271 2,450 3,353 33.5% (2.4%)
FDIC insurance
expense 2,772 2,839 2,882 (2.4%) (3.8%)
Marketing 2,414 1,660 1,798 45.4% 34.3%
Professional fees 2,382 3,379 3,252 (29.5%) (26.8%)
Operating risk loss 485 2,367 1,242 (79.5%) (61.0%)
Intangible
amortization 315 835 314 (62.3%) 0.3%
OREO and repossession
expense 236 1,116 1,303 (78.9%) (81.9%)
Other 12,602 11,797 11,010 6.8% 14.5%
--------- --------- ---------
Total Non-Interest
Expense 117,720 116,762 115,798 0.8% 1.7%
--------- --------- ---------
Income Before
Income Taxes 49,419 54,422 51,968 (9.2%) (4.9%)
Income tax expense 11,470 12,339 13,402 (7.0%) (14.4%)
--------- --------- ---------
Net Income $ 37,949$ 42,083$ 38,566 (9.8%) (1.6%)
========= ========= =========
PER SHARE:
Net income:
Basic $ 0.21$ 0.22$ 0.21 (4.5%) -
Diluted 0.21 0.22 0.21 (4.5%) -
Cash dividends $ 0.10$ 0.08$ 0.08 25.0% 25.0%
Shareholders' equity 11.16 10.71 11.22 4.2% (0.5%)
Shareholders' equity
(tangible) 8.19 7.94 8.35 3.1% (1.9%)
Weighted average
shares (basic) 181,251 191,577 186,109 (5.4%) (2.6%)
Weighted average
shares (diluted) 182,189 192,658 186,955 (5.4%) (2.5%)
Shares outstanding,
end of period 178,924 192,652 185,158 (7.1%) (3.4%)
SELECTED FINANCIAL
RATIOS:
Return on average
assets 0.88% 0.99% 0.90%
Return on average
shareholders' equity 7.34% 8.14% 7.32%
Return on average
shareholders' equity
(tangible) 9.96% 11.15% 9.88%
Net interest margin 3.31% 3.48% 3.39%
Efficiency ratio 67.53% 65.14% 65.80%
N/M - Not meaningful
Year Ended Dec 31
-------------------
2014 2013 % Change
--------- --------- --------
Interest Income:
Interest income $ 596,078$ 609,689 (2.2%)
Interest expense 81,211 82,495 (1.6%)
--------- ---------
Net Interest Income 514,867 527,194 (2.3%)
Provision for credit
losses 12,500 40,500 (69.1%)
--------- ---------
Net Interest Income
after Provision 502,367 486,694 3.2%
Non-Interest Income:
Service charges on
deposit accounts 49,293 55,470 (11.1%)
Investment management
and trust services 44,605 41,706 7.0%
Other service charges
and fees 39,896 36,957 8.0%
Mortgage banking
income 17,107 30,656 (44.2%)
Investment securities
gains 2,041 8,004 (74.5%)
Other 14,437 14,871 (2.9%)
--------- ---------
Total Non-Interest
Income 167,379 187,664 (10.8%)
Non-Interest Expense:
Salaries and employee
benefits 251,021 253,240 (0.9%)
Net occupancy expense 48,130 46,944 2.5%
Other outside
services 28,404 18,856 50.6%
Data processing 17,162 16,555 3.7%
Equipment expense 13,567 15,419 (12.0%)
Software 12,758 11,560 10.4%
FDIC insurance
expense 10,958 11,605 (5.6%)
Marketing 8,133 7,705 5.6%
Professional fees 12,097 13,150 (8.0%)
Operating risk loss 4,271 9,290 (54.0%)
Intangible
amortization 1,259 2,438 (48.4%)
OREO and repossession
expense 3,270 7,364 (55.6%)
Other 48,216 47,307 1.9%
--------- ---------
Total Non-Interest
Expense 459,246 461,433 (0.5%)
--------- ---------
Income Before
Income Taxes 210,500 212,925 (1.1%)
Income tax expense 52,606 51,085 3.0%
--------- ---------
Net Income $ 157,894$ 161,840 (2.4%)
========= =========
PER SHARE:
Net income:
Basic $ 0.85$ 0.84 1.2%
Diluted 0.84 0.83 1.2%
Cash dividends $ 0.34$ 0.32 6.3%
Shareholders' equity 11.16 10.71 4.2%
Shareholders' equity
(tangible) 8.19 7.94 3.1%
Weighted average
shares (basic) 186,219 193,334 (3.7%)
Weighted average
shares (diluted) 187,181 194,354 (3.7%)
Shares outstanding,
end of period 178,924 192,652 (7.1%)
SELECTED FINANCIAL
RATIOS:
Return on average
assets 0.93% 0.96%
Return on average
shareholders' equity 7.62% 7.88%
Return on average
shareholders' equity
(tangible) 10.31% 10.76%
Net interest margin 3.39% 3.50%
Efficiency ratio 65.65% 63.39%
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Three Months Ended
December 31, 2014 December 31, 2013
---------------------------- ----------------------------
Average Interest Yield/ Average Interest Yield/
Balance (1) Rate Balance (1) Rate
----------- -------- ------ ----------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned
income $13,056,153$136,636 4.16% $12,792,566$138,336 4.29%
Taxable
investment
securities 2,109,884 12,689 2.40% 2,289,672 13,431 2.35%
Tax-exempt
investment
securities 241,711 3,249 5.38% 283,799 3,574 5.04%
Equity
securities 33,981 442 5.16% 33,887 413 4.83%
----------- -------- ------ ----------- -------- ------
Total
Investment
Securities 2,385,576 16,380 2.74% 2,607,358 17,418 2.67%
Loans held for
sale 15,340 201 5.24% 20,059 290 5.78%
Other
interest-
earning
assets 464,342 953 0.82% 263,478 737 1.12%
----------- -------- ------ ----------- -------- ------
Total
Interest-
earning
Assets 15,921,411 154,170 3.85% 15,683,461 156,781 3.98%
Noninterest-
earning assets:
Cash and due
from banks 110,292 212,463
Premises and
equipment 224,516 226,955
Other assets 1,073,302 1,008,304
Less:
allowance for
loan losses (189,029) (210,636)
----------- -----------
Total Assets $17,140,492$16,920,547
=========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand
deposits $ 3,145,658$ 1,027 0.13% $ 2,966,994$ 969 0.13%
Savings
deposits 3,548,504 1,171 0.13% 3,410,030 1,042 0.12%
Time deposits 3,016,834 7,333 0.96% 2,965,604 6,117 0.82%
----------- -------- ------ ----------- -------- ------
Total
Interest-
bearing
Deposits 9,710,996 9,531 0.39% 9,342,628 8,128 0.35%
Short-term
borrowings 417,838 138 0.13% 1,099,709 520 0.19%
FHLB advances
and long-term
debt 1,086,321 11,887 4.36% 888,378 10,857 4.87%
----------- -------- ------ ----------- -------- ------
Total
Interest-
bearing
Liabilities 11,215,155 21,556 0.76% 11,330,715 19,505 0.68%
Noninterest-
bearing
liabilities:
Demand
deposits 3,630,780 3,318,073
Other 242,346 221,010
----------- -----------
Total
Liabilities 15,088,281 14,869,798
Shareholders'
equity 2,052,211 2,050,749
----------- -----------
Total
Liabilities
and
Shareholders'
Equity $17,140,492$16,920,547
=========== ===========
Net interest income/net
interest margin (fully
taxable equivalent) 132,614 3.31% 137,276 3.48%
====== ======
Tax equivalent
adjustment (4,576) (4,324)
-------- --------
Net interest
income $128,038$132,952
======== ========
Three Months Ended
September 30, 2014
-----------------------------
Average Interest Yield/
Balance (1) Rate
----------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned
income $12,922,821$136,773 4.20%
Taxable
investment
securities 2,181,099 12,278 2.25%
Tax-exempt
investment
securities 256,303 3,414 5.33%
Equity
securities 34,002 438 5.12%
----------- -------- ------
Total
Investment
Securities 2,471,404 16,130 2.61%
Loans held for
sale 23,699 237 4.01%
Other
interest-
earning
assets 293,286 976 1.33%
----------- -------- ------
Total
Interest-
earning
Assets 15,711,210 154,116 3.90%
Noninterest-
earning assets:
Cash and due
from banks 203,134
Premises and
equipment 224,241
Other assets 1,055,521
Less:
allowance for
loan losses (192,163)
-----------
Total Assets $17,001,943
===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand
deposits $ 3,047,191$ 953 0.12%
Savings
deposits 3,468,958 1,061 0.12%
Time deposits 3,009,225 6,984 0.92%
----------- -------- ------
Total
Interest-
bearing
Deposits 9,525,374 8,998 0.37%
Short-term
borrowings 667,397 297 0.18%
FHLB advances
and long-term
debt 995,486 11,129 4.45%
----------- -------- ------
Total
Interest-
bearing
Liabilities 11,188,257 20,424 0.73%
Noninterest-
bearing
liabilities:
Demand
deposits 3,514,033
Other 210,194
-----------
Total
Liabilities 14,912,484
Shareholders'
equity 2,089,459
-----------
Total
Liabilities
and
Shareholders'
Equity $17,001,943
===========
Net interest
income/net
interest margin
(fully taxable
equivalent) 133,692 3.39%
======
Tax equivalent
adjustment (4,326)
--------
Net interest
income $129,366
========
(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 December September
December 31 December 31 30 31 30
2014 2013 2014 2013 2014
----------- ----------- ----------- --------- ---------
Loans, by type:
Real estate -
commercial
mortgage $ 5,131,375$ 5,065,963$ 5,114,221 1.3% 0.3%
Commercial -
industrial,
financial and
agricultural 3,723,211 3,639,690 3,657,047 2.3% 1.8%
Real estate -
home equity 1,735,769 1,774,919 1,727,253 (2.2%) 0.5%
Real estate -
residential
mortgage 1,378,452 1,331,987 1,369,087 3.5% 0.7%
Real estate -
construction 697,741 581,306 663,922 20.0% 5.1%
Consumer 275,349 287,245 284,630 (4.1%) (3.3%)
Leasing and
other 114,256 111,456 106,661 2.5% 7.1%
----------- ----------- -----------
Total Loans,
net of
unearned
income $13,056,153$12,792,566$12,922,821 2.1% 1.0%
=========== =========== ===========
Deposits, by
type:
Noninterest-
bearing demand $ 3,630,780$ 3,318,073$ 3,514,033 9.4% 3.3%
Interest-
bearing demand 3,145,658 2,966,994 3,047,191 6.0% 3.2%
Savings
deposits 3,548,504 3,410,030 3,468,958 4.1% 2.3%
Time deposits 3,016,834 2,965,604 3,009,225 1.7% 0.3%
----------- ----------- -----------
Total Deposits $13,341,776$12,660,701$13,039,407 5.4% 2.3%
=========== =========== ===========
Short-term
borrowings, by
type:
Customer
repurchase
agreements $ 183,331$ 196,997$ 202,809 (6.9%) (9.6%)
Customer short-
term
promissory
notes 87,338 93,986 83,734 (7.1%) 4.3%
Federal funds
purchased 59,669 408,726 224,930 (85.4%) (73.5%)
Short-term FHLB
advances and
other
borrowings 87,500 400,000 155,924 (78.1%) (43.9%)
----------- ----------- -----------
Total Short-
term
Borrowings $ 417,838$ 1,099,709$ 667,397 (62.0%) (37.4%)
=========== =========== ===========
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Year Ended December 31
--------------------------------------------------------
2014 2013
--------------------------- ---------------------------
Average Interest Yield/ Average Interest Yield/
Balance (1) Rate Balance (1) Rate
----------- -------- ------ ----------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned income $12,885,180$542,540 4.21% $12,578,524$552,427 4.39%
Taxable
investment
securities 2,189,510 50,651 2.31% 2,391,650 54,321 2.27%
Tax-exempt
investment
securities 261,825 13,810 5.27% 285,174 14,577 5.11%
Equity securities 33,957 1,728 5.09% 38,722 1,829 4.72%
----------- -------- ------ ----------- -------- ------
Total Investment
Securities 2,485,292 66,189 2.66% 2,715,546 70,727 2.60%
Loans held for
sale 17,524 786 4.49% 36,561 1,551 4.24%
Other interest-
earning assets 314,345 4,018 1.28% 229,444 2,264 0.99%
----------- -------- ------ ----------- -------- ------
Total Interest-
earning Assets 15,702,341 613,533 3.91% 15,560,075 626,969 4.03%
Noninterest-earning
assets:
Cash and due from
banks 177,664 207,931
Premises and
equipment 224,903 226,041
Other assets 1,049,765 1,037,338
Less: allowance
for loan losses (195,166) (220,048)
----------- -----------
Total Assets $16,959,507$16,811,337
=========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand deposits $ 3,013,879$ 3,793 0.13% $ 2,822,583$ 3,656 0.13%
Savings deposits 3,431,957 4,298 0.13% 3,363,943 4,096 0.12%
Time deposits 2,992,920 27,019 0.90% 3,129,162 29,018 0.93%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing Deposits 9,438,756 35,110 0.37% 9,315,688 36,770 0.39%
Short-term
borrowings 832,839 1,608 0.19% 1,196,323 2,420 0.20%
FHLB advances and
long-term debt 965,601 44,493 4.61% 889,461 43,305 4.87%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing
Liabilities 11,237,196 81,211 0.72% 11,401,472 82,495 0.72%
Noninterest-bearing
liabilities:
Demand deposits 3,428,907 3,157,496
Other 221,764 198,548
----------- -----------
Total Liabilities 14,887,867 14,757,516
Shareholders'
equity 2,071,640 2,053,821
----------- -----------
Total Liabilities
and
Shareholders'
Equity $16,959,507$16,811,337
=========== ===========
Net interest income/net
interest margin (fully
taxable equivalent) 532,322 3.39% 544,474 3.50%
====== ======
Tax equivalent
adjustment (17,455) (17,280)
-------- --------
Net interest
income $514,867$527,194
======== ========
(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:
Year Ended
December 31
-----------------------
%
2014 2013 Change
----------- ----------- ------
Loans, by type:
Real estate -
commercial
mortgage $ 5,117,433$ 4,864,460 5.2%
Commercial -
industrial,
financial and
agricultural 3,659,059 3,680,772 (0.6%)
Real estate -
home equity 1,738,449 1,734,622 0.2%
Real estate -
residential
mortgage 1,355,876 1,312,127 3.3%
Real estate -
construction 631,968 591,540 6.8%
Consumer 277,853 299,127 (7.1%)
Leasing and
other 104,542 95,876 9.0%
----------- -----------
Total Loans,
net of
unearned
income $12,885,180$12,578,524 2.4%
=========== ===========
Deposits, by
type:
Noninterest-
bearing demand $ 3,428,907$ 3,157,496 8.6%
Interest-
bearing demand 3,013,879 2,822,583 6.8%
Savings
deposits 3,431,957 3,363,943 2.0%
Time deposits 2,992,920 3,129,162 (4.4%)
----------- -----------
Total Deposits $12,867,663$12,473,184 3.2%
=========== ===========
Short-term
borrowings, by
type:
Customer
repurchase
agreements $ 197,432$ 186,851 5.7%
Customer short-
term
promissory
notes 88,670 98,882 (10.3%)
Federal funds
purchased 285,169 612,803 (53.5%)
Short-term FHLB
advances and
other
borrowings 261,568 297,787 (12.2%)
----------- -----------
Total Short-
term
Borrowings $ 832,839$ 1,196,323 (30.4%)
=========== ===========
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
Three Months Ended Year Ended Dec 31
---------------------------- ------------------
Dec 31 Dec 31 Sep 30
2014 2013 2014 2014 2013
-------- -------- -------- -------- --------
ALLOWANCE FOR CREDIT
LOSSES:
Balance at beginning of
period $191,108$212,838$193,442$204,917$225,439
Loans charged off:
Commercial -
industrial, financial
and agricultural (8,712) (5,527) (5,167) (24,516) (30,383)
Consumer and home
equity (1,696) (1,879) (2,030) (7,811) (10,070)
Real estate -
commercial mortgage (920) (7,779) (1,557) (6,004) (20,829)
Real estate -
residential mortgage (752) (1,423) (231) (2,918) (9,705)
Real estate -
construction (464) (1,391) (313) (1,209) (6,572)
Leasing and other (701) (616) (306) (2,135) (2,653)
-------- -------- -------- -------- --------
Total loans charged off (13,245) (18,615) (9,604) (44,593) (80,212)
Recoveries of loans
previously charged off:
Commercial -
industrial, financial
and agricultural 1,724 5,851 1,013 4,256 9,281
Consumer and home
equity 419 451 784 2,347 2,378
Real estate -
commercial mortgage 319 740 1,167 1,960 3,494
Real estate -
residential mortgage 132 106 95 451 548
Real estate -
construction 2,325 888 470 3,177 2,682
Leasing and other 149 158 241 916 807
-------- -------- -------- -------- --------
Recoveries of loans
previously charged off 5,068 8,194 3,770 13,107 19,190
-------- -------- -------- -------- --------
Net loans charged off (8,177) (10,421) (5,834) (31,486) (61,022)
Provision for credit
losses 3,000 2,500 3,500 12,500 40,500
-------- -------- -------- -------- --------
Balance at end of period $185,931$204,917$191,108$185,931$204,917
======== ======== ======== ======== ========
Net charge-offs to
average loans
(annualized) 0.25% 0.33% 0.18% 0.24% 0.49%
======== ======== ======== ======== ========
NON-PERFORMING ASSETS:
Non-accrual loans $121,080$133,753$126,420
Loans 90 days past due
and accruing 17,402 20,524 17,428
-------- -------- --------
Total non-performing
loans 138,482 154,277 143,848
Other real estate owned 12,022 15,052 13,489
-------- -------- --------
Total non-performing
assets $150,504$169,329$157,337
======== ======== ========
NON-PERFORMING LOANS, BY
TYPE:
Real estate - commercial
mortgage $ 45,237$ 44,068$ 44,602
Commercial - industrial,
financial and
agricultural 30,388 38,021 33,277
Real estate - residential
mortgage 28,995 31,347 28,135
Consumer and home equity 17,330 19,526 17,586
Real estate -
construction 16,399 21,267 19,860
Leasing 133 48 388
-------- -------- --------
Total non-performing
loans $138,482$154,277$143,848
======== ======== ========
TROUBLED DEBT RESTRUCTURINGS
(TDRs), BY TYPE:
Real-estate - residential
mortgage $ 31,308$ 28,815$ 30,850
Real-estate - commercial
mortgage 18,822 19,758 18,869
Real estate -
construction 9,241 10,117 9,251
Commercial - industrial,
financial and
agricultural 5,237 8,045 5,115
Consumer and home equity 3,013 1,376 2,927
-------- -------- --------
Total accruing TDRs 67,621 68,111 67,012
Non-accrual TDRs (1) 25,235 30,209 27,724
-------- -------- --------
Total TDRs $ 92,856$ 98,320$ 94,736
======== ======== ========
(1) Included within non-accrual loans above.
DELINQUENCY RATES, BY TYPE:
Dec 31, 2014 Dec 31, 2013 Sep 30, 2014
------------------- ------------------- -------------------
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 0.35% 0.87% 1.22% 0.38% 0.87% 1.25% 0.48% 0.86% 1.34%
Commercial -
industrial,
financial and
agricultural 0.17% 0.81% 0.98% 0.30% 1.04% 1.34% 0.28% 0.91% 1.19%
Real estate -
construction 0.02% 2.38% 2.40% 0.11% 3.71% 3.82% 0.03% 2.89% 2.92%
Real estate -
residential
mortgage 1.96% 2.10% 4.06% 1.74% 2.34% 4.08% 1.81% 2.06% 3.87%
Consumer, home
equity,
leasing and
other 0.80% 0.82% 1.62% 1.10% 0.91% 2.01% 0.74% 0.85% 1.59%
----- ------- ----- ----- ------- ----- ----- ------- -----
Total 0.52% 1.06% 1.58% 0.61% 1.20% 1.81% 0.58% 1.11% 1.69%
===== ======= ===== ===== ======= ===== ===== ======= =====
(2) Includes non-accrual loans
ASSET QUALITY RATIOS:
Dec 31 Dec 31 Sep 30
2014 2013 2014
--------- --------- ---------
Non-accrual loans to total loans 0.92% 1.05% 0.97%
Non-performing assets to total loans and
OREO 1.15% 1.32% 1.21%
Non-performing assets to total assets 0.88% 1.00% 0.91%
Allowance for credit losses to loans
outstanding 1.42% 1.60% 1.47%
Allowance for credit losses to non-
performing loans 134.26% 132.82% 132.85%
Non-performing assets to tangible common
shareholders' equity and allowance for
credit losses 9.12% 9.76% 9.06%
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 and annual 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:
Year Ended December
Three Months Ended 31
---------------------------------- ---------------------
December December September
31 2014 31 2013 30 2014 2014 2013
---------- ---------- ---------- ---------- ----------
Shareholders'
equity
(tangible), per
share
Shareholders'
equity $1,996,665$2,063,187$2,078,006
Less: Goodwill and
intangible assets (531,803) (533,076) (532,117)
---------- ---------- ----------
Tangible
shareholders'
equity
(numerator) $1,464,862$1,530,111$1,545,889
========== ========== ==========
Shares
outstanding, end
of period
(denominator) 178,924 192,652 185,158
========== ========== ==========
Shareholders'
equity
(tangible), per
share $ 8.19$ 7.94$ 8.35
========== ========== ==========
Return on average
common
shareholders'
equity (tangible)
Net income $ 37,949$ 42,083$ 38,566$ 157,894$ 161,840
Plus: Intangible
amortization, net
of tax 205 543 204 818 1,585
---------- ---------- ---------- ---------- ----------
Numerator $ 38,154$ 42,626$ 38,770$ 158,712$ 163,425
========== ========== ========== ========== ==========
Average
shareholders'
equity $2,052,211$2,050,749 2,089,459 2,071,640 2,053,821
Less: Average
goodwill and
intangible assets (531,955) (533,597) (532,271) (532,425) (534,431)
---------- ---------- ---------- ---------- ----------
Average tangible
shareholders'
equity
(denominator) $1,520,256$1,517,152$1,557,188$1,539,215$1,519,390
========== ========== ========== ========== ==========
Return on
average common
shareholders'
equity
(tangible),
annualized 9.96% 11.15% 9.88% 10.31% 10.76%
========== ========== ========== ========== ==========
Efficiency ratio
Non-interest
expense $ 117,720$ 116,762$ 115,798$ 459,246$ 461,433
Less: Intangible
amortization (315) (835) (314) (1,259) (2,438)
---------- ---------- ---------- ---------- ----------
Numerator $ 117,405$ 115,927$ 115,484$ 457,987$ 458,995
========== ========== ========== ========== ==========
Net interest
income (fully
taxable
equivalent) $ 132,614$ 137,276$ 133,692$ 532,322$ 544,474
Plus: Total Non-
interest income 42,101 40,732 41,900 167,379 187,664
Less: Investment
securities gains (848) (33) (81) (2,041) (8,004)
---------- ---------- ---------- ---------- ----------
Denominator $ 173,867$ 177,975$ 175,511$ 697,660$ 724,134
========== ========== ========== ========== ==========
Efficiency ratio 67.53% 65.14% 65.80% 65.65% 63.39%
========== ========== ========== ========== ==========
Non-performing
assets to
tangible common
shareholders'
equity and
allowance for
credit losses
Non-performing
assets
(numerator) $ 150,504$ 169,329$ 157,337
========== ========== ==========
Tangible
shareholders'
equity $1,464,862$1,530,111$1,545,889
Plus: Allowance
for credit losses 185,931 204,917 191,108
---------- ---------- ----------
Tangible
shareholders'
equity and
allowance for
credit losses
(denominator) $1,650,793$1,735,028$1,736,997
========== ========== ==========
Non-performing
assets to
tangible common
shareholders'
equity and
allowance for
credit losses 9.12% 9.76% 9.06%
========== ========== ==========
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Media Contact:
Laura J. Wakeley
(717) 291-2616
Investor Contact:
David C. Hostetter
(717) 291-2456
Source: Fulton Financial Corporation