Fulton Financial Corporation (NASDAQ: FULT) (“Fulton” or the
“Corporation”) reported net income available to common shareholders
of $70 million, or $0.43 per diluted share, for the first quarter
of 2021.
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"Fulton achieved solid financial performance during the first
quarter, despite the continuing challenges brought about by
COVID-19,” said E. Philip Wenger, Chairman and CEO of Fulton
Financial Corporation. “We experienced record earnings per share,
our mortgage business remained strong, our wealth management
business grew to record highs, and asset quality remained stable.
The balance sheet restructuring we announced in March had minimal
net impact on our earnings in the first quarter, but it will
meaningfully enhance our net interest income beginning in the
second quarter and going forward.”
Net Interest Income and Balance
Sheet
Net interest income for the first quarter of 2021 was $164
million, $3 million higher than the fourth quarter of 2020. Net
interest margin for the first quarter of 2021 increased 4 basis
points, to 2.79%, from 2.75% in the fourth quarter of 2020. The
increases in net interest income and net interest margin in
comparison to the fourth quarter of 2020 were primarily due to the
forgiveness of Paycheck Protection Program ("PPP") loans and the
acceleration of the recognition of related fee income as well as
growth in average investment securities and other earning assets
during the quarter.
Total average assets for the first quarter of 2021 were $26.1
billion, an increase of $333 million from the fourth quarter of
2020, driven by growth in other interest-earning assets and
investment securities. Average loans, net of unearned income, were
$19.0 billion, relatively unchanged compared to the fourth quarter
of 2020. Average loans included loans originated under the PPP.
Average PPP loans were $1.7 billion for the first quarter of 2021
compared to $1.8 billion for the fourth quarter of 2020. First
quarter loan balances were impacted by the net effect of $579
million of PPP loans forgiven and $685 million of new loans
originated under the third phase of the PPP in the first quarter of
2021 .
Average loans and yields, by type, for the first quarter of 2021
in comparison to the fourth quarter of 2020 are summarized in the
following table:
Three months ended
March 31, 2021
December 31, 2020
Growth
Balance
Yield (1)
Balance
Yield (1)
$
%
(dollars in thousands)
Average Loans, net of unearned income, by
type:
Real estate - commercial mortgage
$
7,128,997
3.15
%
$
7,101,363
3.21
%
$
27,634
0.4
%
Commercial and industrial(2)
5,722,080
2.57
%
5,855,305
2.57
%
(133,225
)
(2.3
)
%
Real estate - residential mortgage
3,183,585
3.52
%
3,087,529
3.65
%
96,056
3.1
%
Real estate - home equity
1,175,218
3.75
%
1,212,113
3.91
%
(36,895
)
(3.0
)
%
Real estate - construction
1,054,718
3.09
%
1,009,284
3.11
%
45,434
4.5
%
Consumer
459,038
4.13
%
468,678
4.07
%
(9,640
)
(2.1
)
%
Equipment lease financing
266,405
4.11
%
279,059
3.98
%
(12,654
)
(4.5
)
%
Other(3)
(9,455
)
N/A
(18,817
)
N/A
9,362
(49.8
)
%
Total Average Loans, net of unearned
income
$
18,980,586
3.53
%
$
18,994,514
3.45
%
$
(13,928
)
(0.1
)
%
(1) Presented on a fully-taxable
equivalent basis using a 21% Federal tax rate and statutory
interest expense disallowances.
(2) Includes average PPP loans of $1.7
billion and $1.8 billion for the three months ended March 31, 2021
and December 31, 2020, respectively.
(3) Consists of overdrafts and net
origination fees and costs.
Total average liabilities in the first quarter of 2021 increased
$241 million, to $23.4 billion, from the fourth quarter of 2020
driven by increases in demand and savings deposits, partially
offset by decreases in time deposits and short-term borrowings.
Average deposits and interest rates, by type, for the first quarter
of 2021 in comparison to the fourth quarter of 2020 are summarized
in the following table:
Three months ended
March 31, 2021
December 31, 2020
Growth
Balance
Rate
Balance
Rate
$
%
(dollars in thousands)
Average Deposits, by type:
Noninterest-bearing demand
$
6,672,832
—
$
6,477,228
—
$
195,604
3.0
%
Interest-bearing demand
5,832,174
0.08
%
5,762,150
0.10
%
70,024
1.2
%
Savings
6,137,084
0.10
%
5,905,137
0.13
%
231,947
3.9
%
Total average demand and savings
18,642,090
0.06
%
18,144,515
0.07
%
497,575
2.7
%
Brokered
324,364
0.49
%
340,451
0.53
%
(16,087
)
(4.7
)
%
Time
2,150,570
1.23
%
2,306,556
1.39
%
(155,986
)
(6.8
)
%
Total Average Deposits
$
21,117,024
0.18
%
$
20,791,522
0.23
%
$
325,502
1.6
%
Asset Quality
In the first quarter of 2021 a reversal of provision of credit
losses of $6 million was recognized, as compared to provisions for
credit losses of $6 million, and $44 million for the fourth quarter
of 2020 and first quarter of 2020, respectively. Several factors as
of the end of the first quarter of 2021 in comparison to the end of
the fourth quarter of 2020, including improved economic forecasts
and a decrease in specific allocations within the allowance for
credit losses for loans evaluated individually, reduced the level
of the allowance for credit losses determined to be necessary at
the end of the first quarter of 2021, resulting in the negative
provision for credit losses.
The $44 million provision for credit losses in the first quarter
of 2020 was driven primarily by assessment of the initial estimated
impacts of the COVID-19 pandemic, as reflected in economic
forecasts as of the end of the first quarter of 2020, on the level
of expected credit losses.
Non-performing assets were $156 million, or 0.60% of total
assets, at March 31, 2021, compared to $151 million, or 0.58% of
total assets, and $147 million, or 0.64% of total assets at
December 31, 2020 and March 31, 2020, respectively.
Annualized net charge-offs for the quarter ended March 31, 2021
were 0.13% of total average loans, compared to annualized net
recoveries of 0.07% and annualized net charge-offs of 0.26% for the
quarters ended December 31, 2020 and March 31, 2020,
respectively.
Non-interest Income
Non-interest income in the first quarter of 2021, excluding
investment securities gains, was $62 million, an increase of $6
million, or 11%, from the fourth quarter of 2020, primarily driven
by increases of $5 million in mortgage banking income and $2
million in wealth management fees. The increase in mortgage banking
income was due to a $6 million reversal of the valuation allowance
for mortgage servicing assets.
Compared to the first quarter of 2020, non-interest income,
excluding investment securities gains, in the first quarter of 2021
increased $7 million, or 13%, from $55 million, primarily driven by
an $8 million increase in mortgage banking income, resulting from a
combination of higher mortgage sales gains and a $6 million
reversal of the mortgage servicing valuation allowance, both due to
lower mortgage interest rates.
In the first quarter of 2021, Fulton completed a balance sheet
restructuring involving gains on sales of Visa, Inc. Class B
restricted shares of $34 million, which were offset in non-interest
expense by corresponding debt extinguishment costs of $32 million,
other securities losses of $0.4 million and a write-off of $1
million recognized in net interest income in connection with the
purchase of certain of the Corporation's outstanding senior and
subordinated notes and the prepayment of certain term Federal Home
Loan Bank advances.
Non-interest Expense
Non-interest expense was $178 million in the first quarter of
2021, an increase of $24 million compared to the fourth quarter of
2020, which was driven by costs recognized during the first quarter
of 2021 associated with the aforementioned balance sheet
restructuring. In the fourth quarter of 2020, $15 million of
charges, reflected in salaries and employee benefits and other
expense, were recognized in connection with the cost saving
initiatives announced in October 2020.
Compared to the first quarter of 2020, non-interest expense
increased $36 million, or 25% in the first quarter of 2021, due
primarily to costs associated with the previously mentioned balance
sheet restructuring. Other increases were recognized in salaries
and employee benefits and data processing and software, partially
offset by lower professional fees.
Income Tax Expense
The effective income tax rate (ETR) for the first quarter of
2021 was 16%, as compared to 10% for both the fourth quarter of
2020 and first quarter of 2020. The increase was a result of higher
income before income taxes.
Additional information on Fulton 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," “projects,” the negative
of these terms and other comparable terminology. These
forward-looking statements may include projections of, or guidance
on, the Corporation’s future financial performance, expected levels
of future expenses, including future credit losses, anticipated
growth strategies, descriptions of new business initiatives and
anticipated trends in the Corporation’s business or financial
results.
Forward-looking statements are neither historical facts, nor
assurance of future performance. Instead, they are based on current
beliefs, expectations and assumptions regarding the future of the
Corporation’s business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of the Corporation’s control, and actual results
and financial condition may differ materially from those indicated
in the forward-looking statements. Therefore, you should not unduly
rely on any of these forward-looking statements. Any
forward-looking statement is based only on information currently
available and speaks only as of the date when made. 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.
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, 2020 and other current and periodic reports, which
have been or will be filed with the Securities and Exchange
Commission and are or will be 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).
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
SUMMARY CONSOLIDATED FINANCIAL
INFORMATION (UNAUDITED)
in thousands, except per-share data and
percentages
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2021
2020
2020
2020
2020
Ending
Balances
Investments
$
3,612,010
$
3,340,424
$
3,097,721
$
2,974,813
$
3,141,440
Loans, net of unearned income
18,990,986
18,900,820
19,028,621
18,704,722
17,077,403
Total assets
25,892,990
25,906,733
25,543,281
24,617,863
22,929,859
Deposits
21,633,838
20,839,207
20,730,051
19,884,208
17,365,026
Shareholders' equity
2,629,655
2,616,828
2,390,261
2,340,501
2,285,748
Average
Balances
Investments
$
3,448,166
$
3,221,289
$
2,977,672
$
3,096,632
$
3,071,828
Loans, net of unearned income
18,980,586
18,994,514
18,880,519
18,331,797
16,860,067
Total assets
26,082,816
25,749,405
25,169,508
24,139,116
22,252,099
Deposits
21,117,024
20,791,522
20,388,447
19,276,658
17,121,428
Shareholders' equity
2,637,098
2,544,866
2,374,091
2,309,133
2,337,016
Income
Statement
Net interest income
$
164,448
$
161,591
$
154,116
$
152,754
$
160,746
Provision for credit losses
(5,500
)
6,240
7,080
19,570
44,030
Non-interest income
95,397
55,574
63,248
55,922
54,644
Non-interest expense
178,384
154,737
139,147
143,005.8
142,552
Income before taxes
86,961
56,187
71,137
46,101
28,808
Net income available to common
shareholders
70,472
48,690
61,607
39,559
26,047
Pre-provision net revenue(1)
81,795
64,092
80,043
67,125
74,374
Per
Share
Net income available to common
shareholders (basic)
$
0.43
$
0.30
$
0.38
$
0.24
$
0.16
Net income available to common
shareholders (diluted)
$
0.43
$
0.30
$
0.38
$
0.24
$
0.16
Cash dividends
$
0.14
$
0.17
$
0.13
$
0.13
$
0.13
Common shareholders' equity
$
14.99
$
14.93
$
14.74
$
14.45
$
14.16
Common shareholders' equity
(tangible)(1)
$
11.69
$
11.62
$
11.44
$
11.15
$
10.84
Weighted average shares (basic)
162,441
162,242
162,061
161,715
163,475
Weighted average shares (diluted)
163,737
163,071
162,579
162,267
164,417
(1) Non-GAAP financial measure. Refer to
the calculation on the page titled “Reconciliation of Non-GAAP
Measures” at the end of this document.
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2021
2020
2020
2020
2020
Asset
Quality
Net charge-offs (recoveries) to average
loans (annualized)
0.13
%
(0.07
)
%
(0.05
)
%
0.09
%
0.26
%
Non-performing loans to total loans
0.80
%
0.78
%
0.75
%
0.75
%
0.82
%
Non-performing assets to total assets
0.60
%
0.58
%
0.57
%
0.59
%
0.64
%
ACL - loans(2) to total loans
1.40
%
1.47
%
1.40
%
1.37
%
1.40
%
ACL - loans(2) to non-performing loans
174
%
189
%
188
%
183
%
170
%
Asset Quality,
excluding PPP(1)(3)
Net charge-offs (recoveries) to average
loans (annualized)
0.14
%
(0.08
)
%
(0.06
)
%
0.10
%
—
%
Non-performing loans to total adjusted
loans
0.88
%
0.85
%
0.83
%
0.83
%
—
%
ACL - loans(2) to total adjusted loans
1.54
%
1.60
%
1.56
%
1.53
%
—
%
Profitability
Return on average assets
1.14
%
0.79
%
0.97
%
0.66
%
0.47
%
Return on average shareholders' equity
11.24
%
7.95
%
10.32
%
6.89
%
4.48
%
Return on average common shareholders'
equity (tangible)(1)
15.00
%
10.32
%
13.50
%
8.99
%
5.84
%
Net interest margin
2.79
%
2.75
%
2.70
%
2.81
%
3.21
%
Efficiency ratio(1)
63.0
%
62.5
%
62.3
%
66.4
%
64.5
%
Capital
Ratios
Tangible common equity ratio(1)
7.5
%
7.4
%
7.4
%
7.5
%
7.8
%
Tier 1 leverage ratio(4)
8.3
%
8.2
%
7.4
%
7.6
%
7.9
%
Common equity Tier 1 capital ratio(4)
9.8
%
9.5
%
9.5
%
9.5
%
9.4
%
Tier 1 capital ratio(4)
10.8
%
10.5
%
9.5
%
9.5
%
9.4
%
Total risk-based capital ratio(4)
14.2
%
14.4
%
13.9
%
13.8
%
13.8
%
(1) Non-GAAP financial measure. Refer to
the calculation on the page titled "Reconciliation of Non-GAAP
Measures" at the end of this document.
(2) "ACL - loans" relates to the allowance
for credit losses ("ACL") specifically on "Loans, net of unearned
income" and does not include the ACL related to off-balance-sheet
("OBS") credit exposures.
(3) Asset quality information excluding
Paycheck Protection Program ("PPP") loans. Refer to the calculation
on the page titled "Reconciliation of Non-GAAP Measures" at the end
of this document.
(4) Regulatory capital ratios as of March
31, 2021 are preliminary and prior periods are actual.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE
SHEETS (UNAUDITED)
dollars in thousands
% Change from
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
Dec 31
Mar 31
2021
2020
2020
2020
2020
2020
2020
ASSETS
Cash and due from banks
$
102,570
$
120,462
$
139,304
$
141,702
$
181,777
(14.9
)
%
(43.6
)
%
Other interest-earning assets
1,625,515
1,819,499
1,489,550
1,007,939
793,572
(10.7
)
%
104.8
%
Loans held for sale
34,092
83,886
93,621
77,415
40,645
(59.4
)
%
(16.1
)
%
Investment securities
3,612,010
3,340,424
3,097,721
2,974,813
3,141,440
8.1
%
15.0
%
Net Loans
18,990,986
18,900,820
19,028,621
18,704,722
17,077,403
0.5
%
11.2
%
Less: ACL - loans(1)
(265,986
)
(277,567
)
(266,825
)
(256,537
)
(238,508
)
(4.2
)
%
11.5
%
Loans, net
18,725,000
18,623,253
18,761,796
18,448,185
16,838,895
0.5
%
11.2
%
Net, premises and equipment
229,035
231,480
236,943
239,596
236,908
(1.1
)
%
(3.3
)
%
Accrued interest receivable
65,649
72,942
70,766
73,720
59,365
(10.0
)
%
10.6
%
Goodwill and intangible assets
536,544
536,659
534,907
535,039
535,171
—
%
0.3
%
Other assets
962,575
1,078,128
1,118,673
1,119,454
1,102,086
(10.7
)
%
(12.7
)
%
Total Assets
$
25,892,990
$
25,906,733
$
25,543,281
$
24,617,863
$
22,929,859
(0.1
)
%
12.9
%
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits
$
21,633,838
$
20,839,207
$
20,730,051
$
19,884,208
$
17,365,026
3.8
%
24.6
%
Short-term borrowings
520,989
630,066
611,727
572,551
1,386,808
(17.3
)
%
(62.4
)
%
Other liabilities
482,101
524,369
515,230
525,407
513,811
(8.1
)
%
(6.2
)
%
FHLB advances and long-term debt
626,407
1,296,263
1,296,012
1,295,196
1,378,466
(51.7
)
%
(54.6
)
%
Total Liabilities
23,263,335
23,289,905
23,153,020
22,277,362
20,644,111
(0.1
)
%
12.7
%
Shareholders' equity
2,629,655
2,616,828
2,390,261
2,340,501
2,285,748
0.5
%
15.0
%
Total Liabilities and Shareholders'
Equity
$
25,892,990
$
25,906,733
$
25,543,281
$
24,617,863
$
22,929,859
(0.1
)
%
12.9
%
LOANS, DEPOSITS AND SHORT-TERM
BORROWINGS DETAIL:
Loans, by type:
Real estate - commercial mortgage
$
7,142,137
$
7,105,092
$
7,046,330
$
6,934,936
$
6,895,069
0.5
%
3.6
%
Commercial and industrial
3,986,858
4,088,561
4,007,278
4,033,439
4,450,557
(2.5
)
%
(10.4
)
%
Real estate - residential mortgage
3,254,058
3,141,915
3,061,835
2,862,226
2,718,290
3.6
%
19.7
%
Real estate - home equity
1,149,958
1,202,913
1,222,709
1,251,455
1,292,677
(4.4
)
%
(11.0
)
%
Real estate - construction
1,083,494
1,047,218
1,007,534
972,909
947,768
3.5
%
14.3
%
Consumer
451,857
466,772
469,551
465,610
468,172
(3.2
)
%
(3.5
)
%
Equipment lease financing
260,907
279,118
280,286
281,897
289,726
(6.5
)
%
(9.9
)
%
Other(2)
(26,677
)
(12,481
)
(27,067
)
(34,784
)
15,144
113.7
%
N/M
Loans, net of unearned income before
PPP
17,302,592
17,319,108
17,068,456
16,767,688
17,077,403
(0.1
)
%
1.3
%
PPP
1,688,394
1,581,712
1,960,165
1,937,034
—
6.7
%
N/M
Total Loans, net of unearned
income
$
18,990,986
$
18,900,820
$
19,028,621
$
18,704,722
$
17,077,403
0.5
%
11.2
%
Deposits, by type:
Noninterest-bearing demand
$
7,046,116
$
6,531,002
$
6,378,077
$
6,239,055
$
4,531,872
7.9
%
55.5
%
Interest-bearing demand
5,959,909
5,818,564
5,813,935
5,099,405
4,724,520
2.4
%
26.1
%
Savings
6,244,513
5,929,792
5,805,431
5,667,893
5,092,865
5.3
%
22.6
%
Total demand and savings
19,250,538
18,279,358
17,997,443
17,006,353
14,349,257
5.3
%
34.2
%
Brokered
309,873
335,185
317,588
310,689
313,337
(7.6
)
%
(1.1
)
%
Time
2,073,427
2,224,664
2,415,020
2,567,166
2,702,432
(6.8
)
%
(23.3
)
%
Total Deposits
$
21,633,838
$
20,839,207
$
20,730,051
$
19,884,208
$
17,365,026
3.8
%
24.6
%
Short-term borrowings, by type:
Customer funding
$
520,989
$
630,066
$
611,727
$
572,551
$
461,808
(17.3
)
%
12.8
%
Federal funds purchased
—
—
—
—
200,000
N/M
(100.0
)
%
Short-term FHLB advances
—
—
—
—
725,000
N/M
(100.0
)
%
Total Short-term Borrowings
$
520,989
$
630,066
$
611,727
$
572,551
$
1,386,808
(17.3
)
%
(62.4
)
%
N/M - Not meaningful
(1) "ACL - loans" relates to the ACL
specifically on "Loans, net of unearned income" and does not
include the ACL related to OBS credit
exposures.
(2) Consists of overdrafts and net
origination fees and costs.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)
dollars in thousands
Three Months Ended
% Change from
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
Dec 31
Mar 31
2021
2020
2020
2020
2020
2020
2020
Interest Income:
Interest income
$
184,936
$
183,645
$
179,159
$
180,696
$
199,378
0.7
%
(7.2
)
%
Interest expense
20,488
22,054
25,043
27,942
38,632
(7.1
)
%
(47.0
)
%
Net Interest Income
164,448
161,591
154,116
152,754
160,746
1.8
%
2.3
%
Provision for credit losses
(5,500
)
6,240
7,080
19,570
44,030
N/M
(112.5
)
%
Net Interest Income after
Provision
169,948
155,351
147,036
133,184
116,716
9.4
%
45.6
%
Non-Interest Income:
Commercial banking:
Merchant and card
5,768
5,953
6,237
5,326
5,624
(3.1
)
%
2.6
%
Cash management
4,921
4,737
4,742
4,503
4,742
3.9
%
3.8
%
Capital markets
2,800
3,513
4,696
5,004
5,075
(20.3
)
%
(44.8
)
%
Other commercial banking
2,853
2,606
2,636
1,914
2,978
9.5
%
(4.2
)
%
Total commercial banking
16,342
16,809
18,311
16,748
18,419
(2.8
)
%
(11.3
)
%
Consumer banking:
Card
5,878
5,123
5,002
4,966
4,685
14.7
%
25.5
%
Overdraft
2,724
3,376
3,015
2,107
4,058
(19.3
)
%
(32.9
)
%
Other consumer banking
2,152
2,298
2,406
2,065
2,496
(6.4
)
%
(13.8
)
%
Total consumer banking
10,754
10,797
10,423
9,138
11,239
(0.4
)
%
(4.3
)
%
Wealth management
17,347
15,653
14,943
13,407
15,055
10.8
%
15.2
%
Mortgage banking
13,960
9,311
16,801
9,964
6,234
49.9
%
123.9
%
Other
3,519
3,004
2,769
3,660
3,651
17.1
%
(3.6
)
%
Non-interest income before investment
securities gains
61,922
55,574
63,246
52,917
54,598
11.4
%
13.4
%
Investment securities gains, net
33,475
—
2
3,005
46
N/M
N/M
Total Non-Interest Income
95,397
55,574
63,248
55,922
54,644
71.7
%
74.6
%
Non-Interest Expense:
Salaries and employee benefits
82,586
83,929
79,227
81,012
80,228
(1.6
)
%
2.9
%
Net occupancy
13,982
13,161
13,221
13,144
13,486
6.2
%
3.7
%
Data processing and software
13,561
11,951
12,285
12,193
11,645
13.5
%
16.5
%
Other outside services
8,490
8,334
7,617
7,600
7,881
1.9
%
7.7
%
Equipment
3,428
3,563
3,711
3,193
3,418
(3.8
)
%
0.3
%
Professional fees
2,779
2,424
2,879
3,331
4,202
14.6
%
(33.9
)
%
FDIC insurance
2,624
2,346
1,578
2,133
2,808
11.8
%
(6.6
)
%
Amortization of tax credit investments
1,531
1,532
1,694
1,450
1,450
(0.1
)
%
5.6
%
Marketing
1,002
1,098
1,147
1,303
1,579
(8.7
)
%
(36.5
)
%
Intangible amortization
115
132
132
132
132
(12.9
)
%
(12.9
)
%
Debt extinguishment
32,163
—
—
2,878
—
N/M
N/M
Other
16,123
26,268
15,654
14,637
15,723
(38.6
)
%
2.5
%
Total Non-Interest Expense
178,384
154,737
139,145
143,006
142,552
15.3
%
25.1
%
Income Before Income Taxes
86,961
56,187
71,139
46,100
28,808
54.8
%
N/M
Income tax expense
13,898
5,362
9,529
6,542
2,761
N/M
N/M
Net Income
73,063
50,825
61,610
39,558
26,047
43.8
%
N/M
Preferred stock dividends
(2,591
)
(2,135
)
—
—
—
21.4
%
N/M
Net Income Available to Common
Shareholders
$
70,472
$
48,690
$
61,610
$
39,558
$
26,047
44.7
%
N/M
PER SHARE:
Net income:
Basic
$
0.43
$
0.30
$
0.38
$
0.24
$
0.16
43.3
%
N/M
Diluted
0.43
0.30
0.38
0.24
0.16
43.3
%
N/M
Cash dividends
0.14
0.17
0.13
0.13
0.13
(17.6
)
%
7.7
%
Weighted average shares (basic)
162,441
162,242
162,061
161,715
163,475
0.1
%
(0.6
)
%
Weighted average shares (diluted)
163,737
163,071
162,579
162,267
164,417
0.4
%
(0.4
)
%
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE
SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Three months ended
March 31, 2021
December 31, 2020
March 31, 2020
Average
Interest
Yield/
Average
Interest
Yield/
Average
Interest
Yield/
Balance
(1)
Rate
Balance
(1)
Rate
Balance
(1)
Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income
$
18,980,586
$
165,462
3.53
%
$
18,994,514
$
164,329
3.45
%
$
16,860,067
$
177,496
4.23
%
Taxable investment securities
3,006,197
17,526
2.08
%
2,233,730
13,559
2.43
%
2,284,457
16,294
2.85
%
Tax-exempt investment securities
343,947
3,321
3.86
%
886,329
7,044
3.17
%
720,223
5,960
3.29
%
Total Investment Securities
3,350,144
20,847
2.49
%
3,120,059
20,603
2.64
%
3,004,680
22,254
2.96
%
Loans held for sale
53,465
471
3.53
%
76,871
521
2.71
%
27,178
320
4.71
%
Other interest-earning assets
1,900,199
1,136
0.21
%
1,668,454
1,179
0.28
%
602,270
2,532
1.69
%
Total Interest-earning Assets
24,284,394
187,916
3.13
%
23,859,898
186,632
3.12
%
20,494,195
202,602
3.97
%
Noninterest-earning assets:
Cash and due from banks
120,181
126,190
138,248
Premises and equipment
230,649
236,265
239,619
Other assets
1,728,473
1,799,381
1,590,666
Less: ACL - loans(2)
(280,881
)
(272,329
)
(210,629
)
Total Assets
$
26,082,816
$
25,749,405
$
22,252,099
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits
$
5,832,174
$
1,160
0.08
%
$
5,762,150
$
1,457
0.10
%
$
4,649,905
$
5,643
0.49
%
Savings deposits
6,137,084
1,526
0.10
%
5,905,137
1,866
0.13
%
5,127,662
7,110
0.56
%
Brokered deposits
324,364
395
0.49
%
340,451
451
0.53
%
275,359
1,073
1.57
%
Time deposits
2,150,570
6,521
1.23
%
2,306,556
8,082
1.39
%
2,761,474
12,614
1.84
%
Total Interest-bearing Deposits
14,444,192
9,602
0.27
%
14,314,294
11,856
0.33
%
12,814,400
26,440
0.83
%
Short-term borrowings
570,775
188
0.13
%
622,623
268
0.17
%
1,303,047
4,073
1.25
%
FHLB advances and long-term debt
1,271,170
10,698
3.38
%
1,296,139
9,930
3.06
%
1,063,214
8,119
3.06
%
Total Interest-bearing
Liabilities
16,286,137
20,488
0.51
%
16,233,056
22,054
0.54
%
15,180,661
38,632
1.02
%
Noninterest-bearing liabilities:
Demand deposits
6,672,832
6,477,228
4,307,027
Total Deposits/Cost of Deposits
21,117,024
0.18
%
20,791,522
0.23
%
17,121,427
0.62
%
Other
486,749
494,255
427,395
Total Liabilities
23,445,718
$
23,204,539
19,915,083
Total Interest-bearing liabilities and
non-interest bearing deposits ("Cost of Funds")
22,958,969
0.36
%
22,710,284
0.39
%
19,487,688
0.80
%
Shareholders' equity
2,637,098
2,544,866
2,337,016
Total Liabilities and Shareholders'
Equity
$
26,082,816
$
25,749,405
$
22,252,099
Net interest income/net interest margin
(fully taxable equivalent)
167,428
2.79
%
164,578
2.75
%
$
163,970
3.21
%
Tax equivalent adjustment
(2,979
)
(2,987
)
$
(3,224
)
Net interest income
$
164,449
$
161,591
$
160,746
(1) Presented on a fully
taxable-equivalent basis using a 21% federal tax rate and statutory
interest expense disallowances.
(2) "ACL - loans" relates to the ACL
specifically on "Loans, net of unearned income" and does not
include the ACL related to OBS credit exposures.
FULTON FINANCIAL CORPORATION
AVERAGE LOANS, DEPOSITS AND SHORT-TERM
BORROWINGS DETAIL (UNAUDITED):
dollars in thousands
Three months ended
% Change from
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
Dec 31
Mar 31
2021
2020
2020
2020
2020
2020
2020
Loans, by type:
Real estate - commercial mortgage
$
7,128,997
$
7,101,363
$
6,986,528
$
6,875,872
$
6,746,766
0.4
%
5.7
%
Commercial and industrial
4,033,367
4,024,879
4,030,750
4,451,228
4,446,750
0.2
%
(9.3
)
%
Real estate - residential mortgage
3,183,585
3,087,529
2,975,516
2,769,682
2,670,019
3.1
%
19.2
%
Real estate - home equity
1,175,218
1,212,113
1,237,602
1,271,190
1,300,132
(3.0
)
%
(9.6
)
%
Real estate - construction
1,054,718
1,009,284
981,589
941,079
929,529
4.5
%
13.5
%
Consumer
459,038
468,678
464,851
465,728
466,415
(2.1
)
%
(1.6
)
%
Equipment lease financing
266,405
279,059
279,217
284,658
284,566
(4.5
)
%
(6.4
)
%
Other(1)
(9,455
)
(18,817
)
(28,656
)
13,443
15,890
(49.8
)
%
N/M
Loans, net of unearned income before
PPP
17,291,873
17,164,088
16,927,397
17,072,880
16,860,067
0.7
%
2.6
%
PPP
1,688,713
1,830,426
1,953,122
1,258,917
—
(7.7
)
%
N/M
Total Loans, net of unearned
income
$
18,980,586
$
18,994,514
$
18,880,519
$
18,331,797
$
16,860,067
(0.1
)
%
12.6
%
Deposits, by type:
Noninterest-bearing demand
$
6,672,832
$
6,477,228
$
6,270,683
$
5,789,788
$
4,307,027
3.0
%
54.9
%
Interest-bearing demand
5,832,174
5,762,150
5,591,548
5,103,419
4,649,905
1.2
%
25.4
%
Savings
6,137,084
5,905,137
5,716,050
5,446,368
5,127,662
3.9
%
19.7
%
Total demand and savings
18,642,090
18,144,515
17,578,281
16,339,575
14,084,594
2.7
%
32.4
%
Brokered
324,364
340,451
314,721
312,121
275,359
(4.7
)
%
17.8
%
Time
2,150,570
2,306,556
2,495,445
2,624,962
2,761,474
(6.8
)
%
(22.1
)
%
Total Deposits
$
21,117,024
$
20,791,522
$
20,388,447
$
19,276,658
$
17,121,427
1.6
%
23.3
%
Short-term borrowings, by type:
Customer funding
$
570,775
$
622,623
$
613,127
$
546,716
$
428,240
(8.3
)
%
33.3
%
Federal funds purchased
—
—
—
74,231
186,868
N/M
(100.0
)
%
Short-term FHLB advances and other
borrowings
—
—
—
86,824
687,937
N/M
(100.0
)
%
Total Short-term borrowings
$
570,775
$
622,623
$
613,127
$
707,771
$
1,303,045
(8.3
)
%
(56.2
)
%
(1) Consists of overdrafts and net
origination fees and costs.
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION
(UNAUDITED)
dollars in thousands
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2021
2020
2020
2020
2020
Allowance for credit losses related to
Loans, net of unearned income:
Balance at beginning of period
$
277,567
$
266,825
$
256,537
$
238,508
$
163,620
Impact of adopting CECL
—
—
—
—
45,724
Loans charged off:
Commercial and industrial
(4,319
)
(1,567
)
(2,969
)
(3,480
)
(10,899
)
Real estate - commercial mortgage
(1,837
)
(300
)
(746
)
(2,324
)
(855
)
Consumer and home equity
(847
)
(668
)
(1,093
)
(1,303
)
(1,529
)
Real estate - residential mortgage
(192
)
—
(198
)
(235
)
(187
)
Real estate - construction
(39
)
—
—
(17
)
—
Equipment lease financing and other
(968
)
(483
)
(483
)
(688
)
(533
)
Total loans charged off
(8,202
)
(3,018
)
(5,489
)
(8,047
)
(14,003
)
Recoveries of loans previously charged
off:
Commercial and industrial
769
4,581
2,103
2,978
1,734
Real estate - commercial mortgage
174
588
100
95
244
Consumer and home equity
440
594
491
649
646
Real estate - residential mortgage
95
199
95
112
85
Real estate - construction
384
179
4,873
—
70
Equipment lease financing and other
159
219
185
92
108
Recoveries of loans previously charged
off
2,021
6,360
7,847
3,926
2,887
Net loans recovered (charged
off)
(6,181
)
3,342
2,358
(4,121
)
(11,116
)
Provision for credit losses
(5,400
)
7,400
7,930
22,150
40,280
Balance at end of period
$
265,986
$
277,567
$
266,825
$
256,537
$
238,508
Net charge-offs (recoveries) to average
loans (annualized)
0.13
%
(0.07
)
%
(0.05
)
%
0.09
%
0.26
%
Allowance credit losses related to OBS
Credit Exposures(1)
Balance at beginning of period
$
14,373
$
15,533
$
16,383
$
18,963
$
2,588
Impact of adopting CECL
—
—
—
—
12,625
Provision for credit losses
(100
)
(1,160
)
(850
)
(2,580
)
3,750
Balance at end of period
$
14,273
$
14,373
$
15,533
$
16,383
$
18,963
NON-PERFORMING ASSETS:
Non-accrual loans
$
143,889
$
137,198
$
128,321
$
125,037
$
120,345
Loans 90 days past due and accruing
8,559
9,929
13,761
14,767
19,593
Total non-performing loans
152,448
147,127
142,082
139,804
139,938
Other real estate owned
3,664
4,178
4,565
5,418
6,593
Total non-performing assets
$
156,112
$
151,305
$
146,647
$
145,222
$
146,531
NON-PERFORMING LOANS, BY TYPE:
Commercial and industrial
$
31,871
$
32,610
$
37,224
$
39,730
$
41,318
Real estate - commercial mortgage
54,164
52,647
43,426
42,374
36,538
Real estate - residential mortgage
36,152
30,793
28,287
22,887
25,832
Consumer and home equity
13,072
13,090
12,292
11,911
11,226
Real estate - construction
1,440
1,550
4,051
4,525
4,379
Equipment lease financing and other
15,749
16,437
16,802
18,377
20,645
Total non-performing loans
$
152,448
$
147,127
$
142,082
$
139,804
$
139,938
(1) The allowance for credit losses
related to OBS Credit Exposures is presented in "other liabilities"
on the consolidated balance sheets.
FULTON FINANCIAL CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
in thousands, except per share data and
percentages
Explanatory
note:
This press release contains supplemental
financial information, as detailed below, which has been derived by
methods other than Generally Accepted Accounting Principles
("GAAP"). The Corporation has presented these non-GAAP financial
measures because it believes that these measures provide useful and
comparative information to assess trends in the Corporation's
results of operations. Presentation of these non-GAAP financial
measures is consistent with how the Corporation evaluates its
performance internally and these non-GAAP financial measures are
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in the
Corporation's industry. Management believes that these non-GAAP
financial measures, in addition to GAAP measures, are also useful
to investors to evaluate the Corporation's results. Investors
should recognize that the Corporation's presentation of these
non-GAAP financial measures might not be comparable to
similarly-titled measures of other companies. These non-GAAP
financial measures should not be considered a substitute for GAAP
basis measures, and the Corporation strongly encourages a review of
its condensed consolidated financial statements in their entirety.
Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP measure follow:
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2021
2020
2020
2020
2020
Common shareholders' equity (tangible),
per share
Shareholders' equity
$
2,629,655
$
2,616,828
$
2,390,261
$
2,340,501
$
2,285,748
Less: Preferred stock
(192,878
)
(192,878
)
—
—
—
Less: Goodwill and intangible assets
(536,544
)
(536,659
)
(534,907
)
(535,039
)
(535,171
)
Tangible common shareholders' equity
(numerator)
$
1,900,233
$
1,887,291
$
1,855,354
$
1,805,462
$
1,750,577
Shares outstanding, end of period
(denominator)
162,518
162,350
162,134
161,958
161,435
Common shareholders' equity (tangible),
per share
$
11.69
$
11.62
$
11.44
$
11.15
$
10.84
Return on average common shareholders'
equity (tangible)
Net income available to common
shareholders
$
70,472
$
48,690
$
61,610
$
39,558
$
26,047
Plus: Intangible amortization, net of
tax
90
104
103
104
104
(Numerator)
$
70,562
$
48,794
$
61,713
$
39,662
$
26,151
Average shareholders' equity
$
2,637,098
$
2,544,866
$
2,374,091
$
2,309,133
$
2,337,016
Less: Average preferred stock
(192,878
)
(127,639
)
—
—
—
Less: Average goodwill and intangible
assets
(536,601
)
(535,474
)
(534,971
)
(535,103
)
(535,235
)
Average tangible common shareholders'
equity (denominator)
$
1,907,619
$
1,881,753
$
1,839,120
$
1,774,030
$
1,801,781
Return on average common shareholders'
equity (tangible), annualized
15.00
%
10.32
%
13.50
%
8.99
%
5.84
%
Tangible common equity to tangible
assets (TCE Ratio)
Shareholders' equity
$
2,629,655
$
2,616,828
$
2,390,261
$
2,340,501
$
2,285,748
Less: Preferred stock
(192,878
)
(192,878
)
—
—
—
Less: Goodwill and intangible assets
(536,544
)
(536,659
)
(534,907
)
(535,039
)
(535,171
)
Tangible common shareholders' equity
(numerator)
$
1,900,233
$
1,887,291
$
1,855,354
$
1,805,462
$
1,750,577
Total assets
$
25,892,990
$
25,906,733
$
25,543,281
$
24,617,863
$
22,929,859
Less: Goodwill and intangible assets
(536,544
)
(536,659
)
(534,907
)
(535,039
)
(535,171
)
Total tangible assets (denominator)
$
25,356,446
$
25,370,074
$
25,008,374
$
24,082,824
$
22,394,688
Tangible common equity to tangible
assets
7.49
%
7.44
%
7.42
%
7.50
%
7.82
%
Efficiency ratio
Non-interest expense
$
178,384
$
154,737
$
139,145
$
143,006
$
142,552
Less: Amortization of tax credit
investments
(1,531
)
(1,532
)
(1,694
)
(1,450
)
(1,450
)
Less: Intangible amortization
(115
)
(132
)
(132
)
(132
)
(132
)
Less: 2020 cost savings initiatives
—
(15,400
)
(800
)
—
—
Less: Debt extinguishment costs
(32,163
)
—
—
(2,878
)
—
Non-interest expense (numerator)
$
144,575
$
137,673
$
136,519
$
138,546
$
140,970
Net interest income (fully taxable
equivalent)
$
167,428
$
164,578
$
157,106
$
155,854
$
163,970
Plus: Total Non-interest income
95,397
55,574
63,248
55,922
54,644
Less: Investment securities gains, net
(33,475
)
—
(2
)
(3,005
)
(46
)
Total revenue (denominator)
$
229,350
$
220,152
$
220,352
$
208,771
$
218,568
Efficiency ratio
63.0
%
62.5
%
62.0
%
66.4
%
64.5
%
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2021
2020
2020
2020
2020
Asset Quality, excluding PPP
Net loans recovered (charged-off)
(numerator)
$
(6,181
)
$
3,342
$
2,358
$
(4,121
)
$
(11,116
)
Average loans, net of unearned income
$
18,980,586
$
18,994,514
$
18,880,519
$
18,331,797
$
16,860,067
Less: Average PPP loans
(1,688,713
)
(1,830,426
)
(1,953,122
)
(1,258,917
)
—
Total adjusted average loans
(denominator)
$
17,291,873
$
17,164,088
$
16,927,397
$
17,072,880
$
16,860,067
Net charge-offs (recoveries) to average
loans (annualized)
0.14
%
(0.08
)%
(0.06
)%
0.10
%
0.26
%
Non-performing loans (numerator)
$
152,448
$
147,127
$
142,082
$
139,804
$
139,938
Loans, net of unearned income
$
18,990,986
$
18,900,820
$
19,028,621
$
18,704,722
$
17,077,403
Less: PPP loans
(1,688,394
)
(1,581,712
)
(1,960,165
)
(1,937,034
)
—
Total adjusted loans (denominator)
$
17,302,592
$
17,319,108
$
17,068,456
$
16,767,688
$
17,077,403
Non-performing loans to adjusted total
loans
0.88
%
0.85
%
0.83
%
0.83
%
0.82
%
ACL - loans (numerator)
$
265,986
$
277,567
266,825
256,537
$
238,508
Loans, net of unearned income
$
18,990,986
$
18,900,820
$
19,028,621
$
18,704,722
$
17,077,403
Less: PPP loans
(1,688,394
)
(1,581,712
)
(1,960,165
)
(1,937,034
)
—
Total adjusted loans (denominator)
$
17,302,592
$
17,319,108
$
17,068,456
$
16,767,688
$
17,077,403
ACL - loans to adjusted total loans
1.54
%
1.60
%
1.56
%
1.53
%
1.40
%
Pre-provision net revenue
Net interest income
$
164,448
$
161,591
$
154,116
$
152,754
$
160,746
Non-interest income
95,397
55,574
63,248
55,922
54,644
Less: Investment securities gains, net
(33,475
)
—
(2
)
(3,005
)
(46
)
Total revenue
$
226,370
$
217,165
$
217,362
$
205,671
$
215,344
Non-interest expense
$
178,384
$
154,737
$
139,145
$
143,006
$
142,552
Less: Debt extinguishment
(32,163
)
—
—
(2,878
)
—
Less: Amortization on tax credit
investments
(1,531
)
(1,532
)
(1,694
)
(1,450
)
(1,450
)
Less: Intangible amortization
(115
)
(132
)
(132
)
(132
)
(132
)
Total non-interest expense
$
144,575
$
153,073
$
137,319
$
138,546
$
140,970
Pre-provision net revenue
$
81,795
$
64,092
$
80,043
$
67,125
$
74,374
Note: numbers may not sum due to
rounding.
Category: Earnings
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210420006149/en/
Media Contact: Laura Wakeley (717) 291-2616 Investor Contact:
Matt Jozwiak (717) 327-2657
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