Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the
“Corporation”) reported net income available to common shareholders
of $61.7 million, or $0.38 per diluted share, for the first quarter
of 2022, an increase of $2.4 million, or 4.0%, in comparison to the
fourth quarter of 2021.
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"Overall, we are pleased with our first quarter results. Our
consumer and commercial businesses had solid loan growth during the
quarter despite the volatile rate environment. We again saw record
income in our wealth management business. Our asset quality
remained stable, and we saw a decline in operating expenses linked
quarter," said E. Phillip Wenger, Chairman and CEO. "On the
corporate front, we were pleased to be able to raise our quarterly
dividend. And our announcement of our intent to acquire Prudential
Bancorp, Inc. later this year will help grow Fulton's presence in
Philadelphia, which is a strategically important market for
us."
Net Interest Income and Balance
Sheet
Net interest income for the first quarter of 2022 was $161.3
million, $4.3 million lower than the fourth quarter of 2021. The
net interest margin for the first quarter of 2022 increased 1 basis
point, to 2.78%, from 2.77% in the fourth quarter of 2021.
The linked-quarter decrease in net interest income was primarily
due to a decrease in loan fees related to Paycheck Protection
Program ("PPP") loans, which were $4.4 million in the first quarter
of 2022 compared to $10.0 million in the fourth quarter of 2021,
partially offset by lower interest expense. The linked-quarter
increase in net interest margin was primarily due to an increase in
average net loans to $18.4 billion from $18.2 billion coupled with
a decrease in lower yielding other interest-earning assets to $1.3
billion from $2.1 billion. The PPP loan balance was $164.3 million
and $301.3 million as of March 31, 2022 and December 31, 2021,
respectively.
For the first quarter of 2022, net interest income was $161.3
million, a decrease of $3.1 million, or 1.9%, in comparison to the
first quarter of 2021. The net interest margin for the first
quarter of 2022 decreased 1 basis point, to 2.78% from 2.79% in the
first quarter of 2021. The yield on average interest-earning assets
declined 15 basis points and the rate on average interest-bearing
liabilities declined 20 basis points in the first quarter of 2022
in comparison to the first quarter of 2021.
The year-over-year decrease in net interest income was primarily
due to a decline in interest income on loans of $14.4 million, from
$165.5 million in the first quarter of 2021 compared to $151.1
million for the first quarter of 2022. The decline in interest
income on loans was primarily due to a decline of $15.0 million in
PPP loan fees. Interest expense on interest-bearing deposits and
long-term borrowings declined by $4.0 million and $4.7 million,
respectively, in the first quarter of 2022 in comparison to the
first quarter of 2021. The decline in interest expense on
interest-bearing deposits in the first quarter of 2022 was
primarily due to a decrease in rate of 11 basis points. The decline
in interest expense on long-term borrowings in the first quarter of
2022 was driven by a $661.3 million decrease in average balance due
to the balance sheet restructuring in the first quarter of 2021,
which included the prepayment of $536.0 million of long-term
Federal Home Loan Bank ("FHLB") advances and the cash tender offer
for $75 million and $60.0 million of the Corporation's outstanding
subordinated and senior notes, respectively.
Total average interest-earning assets for the first quarter of
2022 was $23.9 billion, a decrease of $382.2 million from the
fourth quarter of 2021, primarily due to a decrease of $842.2
million in average other interest-earning assets, partially offset
by increases in average taxable investment securities and average
net loans of $271.7 million and $162.6 million, respectively.
Total average interest-earning assets for the first quarter of
2022 decreased $388.2 million from the first quarter of 2021.
Average net loans for the first quarter of 2022 were $18.4 billion,
a decrease of $597.5 million from the same period in 2021. Included
in average net loans for the first quarter of 2022 were PPP loans
with an average balance of $226.1 million, a decrease of $1.5
billion from the first quarter of 2021. The decrease in average PPP
loans for the first quarter of 2022 was partially offset by
increases in average residential mortgage loans, average commercial
mortgage loans and average real estate construction loans of $703.8
million, $165.9 million and $82.9 million, respectively. Average
taxable investment securities increased $635.1 million for the
first quarter of 2022 compared to the first quarter of 2021.
Total average interest-bearing liabilities decreased $374.6
million, to $15.1 billion, in the first quarter of 2022 compared to
the fourth quarter of 2021, driven by decreases of $268.8 million
in demand deposits and $59.6 million in time deposits.
Total average interest-bearing liabilities for the first quarter
of 2022 decreased $1.2 billion from the first quarter of 2021,
driven by a decrease in total interest-bearing deposits of $395.2
million and a decrease in long-term borrowings of $661.3 million.
Average noninterest-bearing deposits increased $758.4 million for
the first quarter of 2022 compared to the first quarter of
2021.
On March 21, 2022, the Corporation announced that its Board of
Directors approved the repurchase of up to $75 million of shares of
Fulton's common stock commencing on April 1, 2022 and expiring on
December 31, 2022.
Asset Quality
In the first quarter of 2022, a negative provision for credit
losses of $7.0 million was recognized, as compared to a negative
provision for credit losses of $5.0 million in the fourth quarter
of 2021, and a negative provision for credit losses of $5.5 million
in the first quarter of 2021. The negative provision for credit
losses for the first quarter of 2022 was recorded to adjust the
allowance for credit losses as a result of improved economic
conditions.
Non-performing assets were $163.0 million, or 0.64% of total
assets, at March 31, 2022, compared to $153.9 million, or 0.60% of
total assets, and $156.1 million, or 0.60% of total assets, at
December 31, 2021 and March 31, 2021, respectively.
Annualized net charge-offs (recoveries) for the quarter ended
March 31, 2022, were (0.02)% of total average loans, compared to
0.07% and 0.13% for the quarters ended December 31, 2021 and March
31, 2021, respectively.
Non-interest Income
Non-interest income before investment securities gains in the
first quarter of 2022 was $55.2 million, a decrease of $8.6
million, or 13.5%, from the fourth quarter of 2021. The decrease in
non-interest income was primarily due to declines in income from
equity method investments of $4.0 million reflected in other
income, mortgage banking income of $2.7 million due to lower gains
on sales, and capital markets income of $1.3 million primarily due
to lower fee income from commercial customer interest rate swaps,
partially offset by an increase of $1.1 million in wealth
management income.
Compared to the first quarter of 2021, non-interest income
before investment securities gains in the first quarter of 2022
decreased $6.7 million, or 10.8%, from $61.9 million. The decrease
in non-interest income was primarily due to a $9.4 million decrease
in mortgage banking income due to lower gains on sale, partially
offset by a $2.1 million increase in wealth management income.
In the first quarter of 2021, Fulton completed balance sheet
restructurings involving sales of investment securities and
corresponding prepayments of FHLB advances, subordinated debt and
senior notes. The balance sheet restructuring involved gains on
sales of Visa, Inc. Class B restricted shares of $34.0 million that
were offset in non-interest expense by debt extinguishment of costs
of $33.2 million.
Non-interest Expense
Non-interest expense was $146.0 million in the first quarter of
2022, a decrease of $8.0 million, or 5.2%, compared to the fourth
quarter of 2021. The decrease was primarily due to decreases in
charitable contributions and donations of $2.2 million,
state-related taxes of $1.7 million and a net gain for owned fixed
assets of $1.5 million, all reflected in other expense.
Additionally, the decrease in non-interest expense was also driven
by decreases in other outside services of $1.5 million and salaries
and benefits of $1.0 million. Included in non-interest expense was
$0.4 million for merger-related expenses associated with the
pending acquisition of Prudential Bancorp, Inc.
Compared to the first quarter of 2021, non-interest expense
decreased $32.4 million, or 18.2%, in the first quarter of 2022,
primarily due to debt extinguishment costs of $33.2 million related
to the prepayment of FHLB advances, subordinated debt and senior
notes during the first quarter of 2021.
Income Tax Expense
For the first quarter of 2022, the effective tax rate was
moderately lower at 17.1%, compared to 17.6% for the full-year of
2021.
Additional information on Fulton is available on the Internet at
www.fultonbank.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, the statements 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, 2021 and other current and periodic reports, which
have been or will be filed with the Securities and Exchange
Commission (the "SEC"), including the risks, uncertainties and
assumptions regarding the Corporation's pending acquisition of
Prudential Bancorp, Inc. set forth under the heading "Safe Harbor
Statement" in the Corporation's Current Report on Form 8-K filed on
March 2, 2022, and are or will be available in the Investor
Relations section of the Corporation's website (www.fultonbank.com)
and on the SEC'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 (GAAP: Generally Accepted Accounting Principles).
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
2022
2021
2021
2021
2021
Ending
Balances
Investments
$
4,288,674
$
4,167,774
$
4,000,760
$
3,921,658
$
3,612,010
Net loans
18,476,119
18,325,350
18,269,407
18,586,756
18,990,986
Total assets
25,598,310
25,796,398
26,390,832
26,079,774
25,892,990
Deposits
21,541,174
21,573,499
22,074,041
21,724,312
21,633,838
Shareholders' equity
2,569,535
2,712,680
2,699,818
2,692,958
2,629,655
Average
Balances
Investments
$
4,228,827
$
3,980,045
$
3,914,627
$
3,670,333
$
3,448,166
Net loans
18,383,118
18,220,550
18,414,153
18,906,556
18,980,586
Total assets
25,622,462
26,136,536
26,440,876
26,017,542
26,082,816
Deposits
21,480,183
21,876,938
22,123,480
21,765,601
21,117,024
Shareholders' equity
2,688,834
2,713,198
2,722,833
2,669,413
2,637,098
Income
Statement
Net interest income
$
161,310
$
165,613
$
171,270
$
162,399
$
164,448
Provision for credit losses
(6,950
)
(5,000
)
(600
)
(3,500
)
(5,500
)
Non-interest income
55,256
63,881
62,577
51,890
95,397
Non-interest expense
145,978
154,019
144,596
140,831
178,384
Income before taxes
77,538
80,475
89,851
76,958
86,961
Net income available to common
shareholders
61,726
59,325
73,021
62,402
70,472
Pre-provision net revenue(1)
71,842
77,837
90,947
75,575
81,795
Per
Share
Net income available to common
shareholders (basic)
$
0.38
$
0.37
$
0.45
$
0.38
$
0.43
Net income available to common
shareholders (diluted)
$
0.38
$
0.37
$
0.45
$
0.38
$
0.43
Cash dividends
$
0.15
$
0.22
$
0.14
$
0.14
$
0.14
Common shareholders' equity
$
14.79
$
15.70
$
15.53
$
15.34
$
14.99
Common shareholders' equity
(tangible)(1)
$
11.44
$
12.35
$
12.21
$
12.05
$
11.69
Weighted average shares (basic)
160,588
161,210
162,506
162,785
162,441
Weighted average shares (diluted)
161,911
162,355
163,456
163,858
163,737
(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
2022
2021
2021
2021
2021
Asset
Quality
Net (recoveries) charge offs to average
loans (annualized)
(0.02
)%
0.07
%
(0.05
)%
0.15
%
0.13
%
Non-performing loans to total loans
0.87
%
0.83
%
0.82
%
0.83
%
0.80
%
Non-performing assets to total assets
0.64
%
0.60
%
0.58
%
0.60
%
0.60
%
ACL - loans(2) to total loans
1.32
%
1.36
%
1.41
%
1.37
%
1.40
%
ACL - loans(2) to non-performing loans
151
%
164
%
171
%
166
%
174
%
Asset Quality,
excluding PPP(1)(3)
Net (recoveries) charge offs to adjusted
average loans (annualized)
(0.02
)%
0.07
%
(0.05
)%
0.16
%
0.14
%
Non-performing loans to total adjusted
loans
0.88
%
0.84
%
0.85
%
0.88
%
0.88
%
ACL - loans(2) to total adjusted loans
1.33
%
1.38
%
1.45
%
1.46
%
1.54
%
Profitability
Return on average assets
1.02
%
0.94
%
1.13
%
1.00
%
1.14
%
Return on average common shareholders'
equity
10.03
%
9.34
%
11.45
%
10.01
%
11.73
%
Return on average common shareholders'
equity (tangible)(1)
12.88
%
11.89
%
14.56
%
12.93
%
15.00
%
Net interest margin
2.78
%
2.77
%
2.82
%
2.73
%
2.79
%
Efficiency ratio(1)
65.8
%
65.2
%
60.3
%
63.8
%
63.0
%
Non-interest expenses to total average
assets(1)
2.29
%
2.30
%
2.14
%
2.14
%
2.25
%
Capital
Ratios
Tangible common equity ratio(1)
7.3
%
7.8
%
7.6
%
7.7
%
7.5
%
Tier 1 leverage ratio(4)
8.9
%
8.6
%
8.4
%
8.5
%
8.2
%
Common equity Tier 1 capital ratio(4)
10.0
%
9.9
%
10.1
%
10.0
%
9.7
%
Tier 1 risk-based capital ratio(4)
10.9
%
10.9
%
11.1
%
11.0
%
10.7
%
Total risk-based capital ratio(4)
13.8
%
14.1
%
14.4
%
14.5
%
14.3
%
(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 "Net Loans" 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, 2022 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
2022
2021
2021
2021
2021
2021
2021
ASSETS
Cash and due from banks
$
161,462
$
172,276
$
260,564
$
143,002
$
102,570
(6.3
)%
57.4
%
Other interest-earning assets
1,054,232
1,523,973
2,271,738
1,823,688
1,625,515
(30.8
)%
(35.1
)%
Loans held for sale
27,675
35,768
43,123
41,924
34,092
(22.6
)%
(18.8
)%
Investment securities
4,288,674
4,167,774
4,000,760
3,921,658
3,612,010
2.9
%
18.7
%
Net loans
18,476,119
18,325,350
18,269,407
18,586,756
18,990,986
0.8
%
(2.7
)%
Less: ACL - loans(1)
(243,705
)
(249,001
)
(256,727
)
(255,032
)
(265,986
)
(2.1
)%
(8.4
)%
Loans, net
18,232,414
18,076,349
18,012,680
18,331,724
18,725,000
0.9
%
(2.6
)%
Net, premises and equipment
218,257
220,357
228,179
228,353
229,035
(1.0
)%
(4.7
)%
Accrued interest receivable
55,102
57,451
57,902
63,232
65,649
(4.1
)%
(16.1
)%
Goodwill and intangible assets
537,877
538,053
536,697
536,847
536,544
—
%
0.2
%
Other assets
1,022,617
1,004,397
979,189
989,346
962,575
1.8
%
6.2
%
Total Assets
$
25,598,310
$
25,796,398
$
26,390,832
$
26,079,774
$
25,892,990
(0.8
)%
(1.1
)%
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits
$
21,541,174
$
21,573,499
$
22,074,041
$
21,724,312
$
21,633,838
(0.1
)%
(0.4
)%
Short-term borrowings
452,440
416,764
468,967
533,749
520,989
8.6
%
(13.2
)%
Other liabilities
478,667
472,110
520,620
501,542
482,101
1.4
%
(0.7
)%
Long-term borrowings
556,494
621,345
627,386
627,213
626,407
(10.4
)%
(11.2
)%
Total Liabilities
23,028,775
23,083,718
23,691,014
23,386,816
23,263,335
(0.2
)%
(1.0
)%
Shareholders' equity
2,569,535
2,712,680
2,699,818
2,692,958
2,629,655
(5.3
)%
(2.3
)%
Total Liabilities and Shareholders'
Equity
$
25,598,310
$
25,796,398
$
26,390,832
$
26,079,774
$
25,892,990
(0.8
)%
(1.1
)%
LOANS, DEPOSITS AND SHORT-TERM
BORROWINGS DETAIL:
Loans, by type:
Real estate - commercial mortgage
$
7,289,376
$
7,279,080
$
7,145,115
$
7,152,932
$
7,142,137
0.1
%
2.1
%
Commercial and industrial
3,992,285
3,906,791
3,863,154
3,870,462
3,986,858
2.2
%
0.1
%
Real estate - residential mortgage
3,946,741
3,846,750
3,719,684
3,555,897
3,254,058
2.6
%
21.3
%
Real estate - home equity
1,098,171
1,118,248
1,126,628
1,136,128
1,149,958
(1.8
)%
(4.5
)%
Real estate - construction
1,210,340
1,139,779
1,111,487
1,070,755
1,083,494
6.2
%
11.7
%
Consumer
481,551
464,657
458,595
448,433
451,857
3.6
%
6.6
%
Equipment lease financing
253,521
236,344
242,967
252,158
260,907
7.3
%
(2.8
)%
Other(2)
39,857
32,448
11,330
(14,410
)
(26,677
)
22.8
%
N/M
Net loans before PPP
18,311,842
18,024,097
17,678,960
17,472,355
17,302,592
1.6
%
5.8
%
PPP
164,277
301,253
590,447
1,114,401
1,688,394
(45.5
)%
(90.3
)%
Total Net Loans
$
18,476,119
$
18,325,350
$
18,269,407
$
18,586,756
$
18,990,986
0.8
%
(2.7
)%
Deposits, by type:
Noninterest-bearing demand
$
7,528,391
$
7,370,963
$
7,434,155
$
7,442,132
$
7,046,116
2.1
%
6.8
%
Interest-bearing demand
5,625,286
5,819,539
6,187,096
5,795,404
5,959,909
(3.3
)%
(5.6
)%
Savings
6,479,196
6,403,995
6,401,619
6,276,554
6,244,513
1.2
%
3.8
%
Total demand and savings
19,632,873
19,594,497
20,022,870
19,514,090
19,250,538
0.2
%
2.0
%
Brokered
248,833
251,526
262,617
277,444
309,873
(1.1
)%
(19.7
)%
Time
1,659,468
1,727,476
1,788,554
1,932,778
2,073,427
(3.9
)%
(20.0
)%
Total Deposits
$
21,541,174
$
21,573,499
$
22,074,041
$
21,724,312
$
21,633,838
(0.1
)%
(0.4
)%
Short-term borrowings, by type:
Customer funding
$
452,440
$
416,764
$
468,967
$
533,749
$
520,989
8.6
%
(13.2
)%
Total Short-Term Borrowings
$
452,440
$
416,764
$
468,967
$
533,749
$
520,989
8.6
%
(13.2
)%
(1) "ACL - loans" relates to the ACL
specifically on "Net Loans" and does not include the ACL related to
OBS credit exposures.
(2) Consists of overdrafts and net
origination fees and costs.
N/M - Not meaningful
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
2022
2021
2021
2021
2021
2021
2021
Interest Income:
Interest income
$
173,001
$
177,724
$
184,079
$
176,673
$
184,937
(2.7
)%
(6.5
)%
Interest expense
11,691
12,111
12,809
14,274
20,488
(3.5
)%
(42.9
)%
Net Interest Income
161,310
165,613
171,270
162,399
164,449
(2.6
)%
(1.9
)%
Provision for credit losses
(6,950
)
(5,000
)
(600
)
(3,500
)
(5,500
)
39.0
%
26.4
%
Net Interest Income after
Provision
168,260
170,613
171,870
165,899
169,949
(1.4
)%
(1.0
)%
Non-Interest Income:
Commercial banking:
Merchant and card
6,097
6,588
6,979
6,786
5,768
(7.5
)%
5.7
%
Cash management
5,428
5,318
5,285
5,341
4,921
2.1
%
10.3
%
Capital markets
1,676
2,982
2,063
1,536
2,800
(43.8
)%
(40.1
)%
Other commercial banking
2,807
3,592
2,411
3,466
2,853
(21.9
)%
(1.6
)%
Total commercial banking
16,008
18,480
16,738
17,129
16,342
(13.4
)%
(2.0
)%
Consumer banking:
Card
5,796
5,953
5,941
5,733
5,878
(2.6
)%
(1.4
)%
Overdraft
3,772
3,896
3,474
2,750
2,724
(3.2
)%
38.5
%
Other consumer banking
2,106
2,280
2,386
2,377
2,152
(7.6
)%
(2.1
)%
Total consumer banking
11,674
12,129
11,801
10,860
10,754
(3.8
)%
8.6
%
Wealth management
19,428
18,285
18,532
17,634
17,347
6.3
%
12.0
%
Mortgage banking
4,576
7,243
9,535
2,838
13,960
(36.8
)%
(67.2
)%
Other
3,551
7,739
5,971
3,393
3,518
(54.1
)%
0.9
%
Non-interest income before
investment securities gains
55,237
63,876
62,577
51,854
61,921
(13.5
)%
(10.8
)%
Investment securities gains, net
19
5
—
36
33,475
N/M
(99.9
)%
Total Non-Interest Income
55,256
63,881
62,577
51,890
95,396
(13.5
)%
(42.1
)%
Non-Interest Expense:
Salaries and employee benefits
84,464
85,506
82,679
78,367
82,586
(1.2
)%
2.3
%
Net occupancy
14,522
14,366
12,957
12,494
13,982
1.1
%
3.9
%
Data processing and software
14,315
14,612
14,335
13,932
13,561
(2.0
)%
5.6
%
Other outside services
8,167
9,637
7,889
8,178
8,490
(15.3
)%
(3.8
)%
Equipment
3,423
3,539
3,416
3,424
3,428
(3.3
)%
(0.1
)%
FDIC insurance
3,209
3,032
2,727
2,282
2,624
5.8
%
22.3
%
Professional fees
1,792
1,946
2,271
2,651
2,779
(7.9
)%
(35.5
)%
Marketing
1,320
1,477
1,448
1,348
1,002
(10.6
)%
31.7
%
Intangible amortization
176
146
150
178
115
20.5
%
53.0
%
Debt extinguishment
—
674
—
412
32,163
(100.0
)%
(100.0
)%
Merger-related expenses
401
—
—
—
—
N/M
N/M
Other
14,189
19,084
16,724
17,565
17,654
(25.6
)%
(19.6
)%
Total Non-Interest Expense
145,978
154,019
144,596
140,831
178,384
(5.2
)%
(18.2
)%
Income Before Income Taxes
77,538
80,475
89,851
76,958
86,961
(3.6
)%
(10.8
)%
Income tax expense
13,250
18,588
14,268
11,994
13,898
(28.7
)%
(4.7
)%
Net Income
64,288
61,887
75,583
64,964
73,063
3.9
%
(12.0
)%
Preferred stock dividends
(2,562
)
(2,562
)
(2,562
)
(2,562
)
(2,591
)
—
%
1.1
%
Net Income Available to Common
Shareholders
$
61,726
$
59,325
$
73,021
$
62,402
$
70,472
4.0
%
(12.4
)%
PER SHARE:
Net income available to common
shareholders:
Basic
$
0.38
$
0.37
$
0.45
$
0.38
$
0.43
2.7
%
(11.6
)%
Diluted
$
0.38
$
0.37
$
0.45
$
0.38
$
0.43
2.7
%
(11.6
)%
Cash dividends
$
0.15
$
0.22
$
0.14
$
0.14
$
0.14
(31.8
)%
7.1
%
Weighted average shares (basic)
160,588
161,210
162,506
162,785
162,441
(0.4
)%
(1.1
)%
Weighted average shares (diluted)
161,911
162,355
163,456
163,858
163,737
(0.3
)%
(1.1
)%
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE
SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Three months ended
March 31, 2022
December 31, 2021
March 31, 2021
Average
Interest
Yield/
Average
Interest
Yield/
Average
Interest
Yield/
Balance
(1)
Rate
Balance
(1)
Rate
Balance
(1)
Rate
ASSETS
Interest-earning assets:
Net loans
$
18,383,118
$
151,127
3.32
%
$
18,220,550
$
159,057
3.47
%
$
18,980,586
$
165,462
3.53
%
Taxable investment securities
3,073,643
15,213
1.71
%
2,801,934
14,006
1.75
%
2,438,496
13,691
2.08
%
Tax-exempt investment securities
1,152,709
9,038
3.13
%
1,120,263
8,418
3.00
%
911,648
7,156
3.13
%
Total Investment Securities
4,226,352
24,251
2.29
%
3,922,197
22,424
2.29
%
3,350,144
20,847
2.49
%
Loans held for sale
28,549
241
3.37
%
35,235
333
3.77
%
53,465
471
3.53
%
Other interest-earning assets
1,258,174
671
0.22
%
2,100,392
(905
)
(0.19
)%
1,900,199
1,136
0.24
%
Total Interest-Earning Assets
23,896,193
176,290
2.98
%
24,278,374
180,909
2.96
%
24,284,394
187,916
3.13
%
Noninterest-Earning assets:
Cash and due from banks
162,320
211,958
120,181
Premises and equipment
219,932
226,319
230,649
Other assets
1,595,039
1,677,028
1,728,473
Less: ACL - loans(2)
(251,022
)
(257,143
)
(280,881
)
Total Assets
$
25,622,462
$
26,136,536
$
26,082,816
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-Bearing liabilities:
Demand deposits
$
5,664,987
$
728
0.05
%
$
5,933,780
$
756
0.05
%
$
5,832,174
$
1,160
0.08
%
Savings deposits
6,436,548
1,021
0.06
%
6,413,638
992
0.06
%
6,137,084
1,526
0.10
%
Brokered deposits
250,350
216
0.35
%
256,192
220
0.34
%
324,364
395
0.49
%
Time deposits
1,697,063
3,640
0.87
%
1,756,672
3,928
0.89
%
2,150,570
6,521
1.23
%
Total Interest-Bearing Deposits
14,048,948
5,605
0.16
%
14,360,282
5,896
0.16
%
14,444,192
9,602
0.27
%
Short-term borrowings
423,949
121
0.12
%
474,022
128
0.11
%
570,775
188
0.13
%
Long-term borrowings
609,866
5,966
3.91
%
623,073
6,088
3.91
%
1,271,170
10,698
3.38
%
Total Interest-Bearing
Liabilities
15,082,763
11,692
0.31
%
15,457,377
12,112
0.31
%
16,286,137
20,488
0.51
%
Noninterest-Bearing liabilities:
Demand deposits
7,431,235
7,516,656
6,672,832
Other
419,630
449,305
486,749
Total Liabilities
22,933,628
23,423,338
23,445,718
Total Deposits/Cost of Deposits
21,480,183
0.11
%
21,876,938
0.11
%
21,117,024
0.18
%
Total interest-bearing liabilities and
non-interest bearing deposits ("Cost of Funds")
22,513,998
0.21
%
22,974,033
0.21
%
22,958,969
0.36
%
Shareholders' equity
2,688,834
2,713,198
2,637,098
Total Liabilities and Shareholders'
Equity
$
25,622,462
$
26,136,536
$
26,082,816
Net interest income/net interest margin
(fully taxable equivalent)
164,598
2.78
%
168,797
2.77
%
167,428
2.79
%
Tax equivalent adjustment
(3,288
)
(3,184
)
(2,979
)
Net Interest Income
$
161,310
$
165,613
$
164,449
(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 "Net Loans" 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
2022
2021
2021
2021
2021
2021
2021
Loans, by type:
Real estate - commercial mortgage
$
7,294,914
$
7,157,906
$
7,134,177
$
7,177,622
$
7,128,997
1.9
%
2.3
%
Commercial and industrial
3,986,900
3,898,559
3,878,767
3,920,771
4,033,367
2.3
%
(1.2
)%
Real estate - residential mortgage
3,887,428
3,773,156
3,642,822
3,396,690
3,183,585
3.0
%
22.1
%
Real estate - home equity
1,106,319
1,122,042
1,128,076
1,139,558
1,175,218
(1.4
)%
(5.9
)%
Real estate - construction
1,137,649
1,117,592
1,085,846
1,054,469
1,054,718
1.8
%
7.9
%
Consumer
471,129
462,346
452,844
451,486
459,038
1.9
%
2.6
%
Equipment lease financing
236,388
238,349
247,776
256,248
266,405
(0.8
)%
(11.3
)%
Other(1)
36,277
15,558
(6,773
)
(14,677
)
(9,455
)
133.2
%
N/M
Net loans before PPP
18,157,004
17,785,508
17,563,535
17,382,167
17,291,873
2.1
%
5.0
%
PPP
226,114
435,042
850,618
1,524,389
1,688,713
(48.0
)%
(86.6
)%
Total Net Loans
$
18,383,118
$
18,220,550
$
18,414,153
$
18,906,556
$
18,980,586
0.9
%
(3.1
)%
Deposits, by type:
Noninterest-bearing demand
$
7,431,235
$
7,516,656
$
7,439,644
$
7,203,696
$
6,672,832
(1.1
)%
11.4
%
Interest-bearing demand
5,664,987
5,933,780
6,168,908
5,979,855
5,832,174
(4.5
)%
(2.9
)%
Savings
6,436,548
6,413,638
6,392,537
6,280,629
6,137,084
0.4
%
4.9
%
Total demand and savings
19,532,770
19,864,074
20,001,089
19,464,180
18,642,090
(1.7
)%
4.8
%
Brokered
250,350
256,192
270,168
297,815
324,364
(2.3
)%
(22.8
)%
Time
1,697,063
1,756,672
1,852,223
2,003,606
2,150,570
(3.4
)%
(21.1
)%
Total Deposits
$
21,480,183
$
21,876,938
$
22,123,480
$
21,765,601
$
21,117,024
(1.8
)%
1.7
%
Short-term borrowings, by type:
Customer funding
$
423,949
$
474,022
$
494,811
$
514,025
$
570,775
(10.6
)%
(25.7
)%
Total Short-Term borrowings
$
423,949
$
474,022
$
494,811
$
514,025
$
570,775
(10.6
)%
(25.7
)%
(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
2022
2021
2021
2021
2021
Allowance for credit losses related to
net loans:
Balance at beginning of period
$
249,001
$
256,727
$
255,032
$
265,986
$
277,567
Loans charged off:
Commercial and industrial
(227
)
(9,417
)
(647
)
(954
)
(4,319
)
Real estate - commercial mortgage
(152
)
(369
)
(14
)
(6,506
)
(1,837
)
Consumer and home equity
(1,052
)
(828
)
(504
)
(1,130
)
(847
)
Real estate - residential mortgage
—
—
(602
)
(496
)
(192
)
Real estate - construction
—
—
—
—
(39
)
Equipment lease financing and other
(469
)
(380
)
(467
)
(436
)
(968
)
Total loans charged off
(1,900
)
(10,994
)
(2,234
)
(9,522
)
(8,202
)
Recoveries of loans previously charged
off:
Commercial and industrial
1,980
5,795
2,330
693
769
Real estate - commercial mortgage
112
1,007
564
729
174
Consumer and home equity
454
767
504
634
440
Real estate - residential mortgage
222
89
86
105
95
Real estate - construction
32
77
697
254
384
Equipment lease financing and other
154
283
358
153
159
Recoveries of loans previously charged
off
2,954
8,018
4,539
2,568
2,021
Net loans recovered (charged
off)
1,054
(2,976
)
2,305
(6,954
)
(6,181
)
Provision for credit losses
(6,350
)
(4,750
)
(610
)
(4,000
)
(5,400
)
Balance at end of period
$
243,705
$
249,001
$
256,727
$
255,032
$
265,986
Net (recoveries) charge offs to average
loans (annualized)
(0.02
) %
0.07
%
(0.05
) %
0.15
%
0.13
%
Allowance credit losses related to OBS
Credit Exposures(1)
Balance at beginning of period
$
14,533
$
14,783
$
14,773
$
14,273
$
14,373
Provision for credit losses
(600
)
(250
)
10
500
(100
)
Balance at end of period
$
13,933
$
14,533
$
14,783
$
14,773
$
14,273
NON-PERFORMING ASSETS:
Non-accrual loans
$
136,799
$
143,666
$
138,833
$
147,864
$
143,889
Loans 90 days past due and accruing
24,182
8,453
11,389
5,865
8,559
Total non-performing loans
160,981
152,119
150,222
153,729
152,448
Other real estate owned
2,014
1,817
1,896
2,779
3,664
Total non-performing assets
$
162,995
$
153,936
$
152,118
$
156,508
$
156,112
NON-PERFORMING LOANS, BY TYPE:
Commercial and industrial
$
30,193
$
30,629
$
32,697
$
33,522
$
31,871
Real estate - commercial mortgage
64,190
54,044
52,100
53,693
54,164
Real estate - residential mortgage
39,308
39,399
37,077
38,185
36,152
Consumer and home equity
11,465
11,505
11,509
11,408
13,072
Real estate - construction
672
901
965
1,016
1,440
Equipment lease financing and other
15,153
15,641
15,874
15,905
15,749
Total non-performing loans
$
160,981
$
152,119
$
150,222
$
153,729
$
152,448
(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
2022
2021
2021
2021
2021
Common shareholders' equity (tangible),
per share
Shareholders' equity
$
2,569,535
$
2,712,680
$
2,699,818
$
2,692,958
$
2,629,655
Less: Preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Goodwill and intangible assets
(537,877
)
(538,053
)
(536,697
)
(536,847
)
(536,544
)
Tangible common shareholders' equity
(numerator)
$
1,838,780
$
1,981,749
$
1,970,243
$
1,963,233
$
1,900,233
Shares outstanding, end of period
(denominator)
160,669
160,490
161,429
162,988
162,518
Common shareholders' equity (tangible),
per share
$
11.44
$
12.35
$
12.21
$
12.05
$
11.69
Return on average common shareholders'
equity (tangible)
Net income available to common
shareholders
$
61,726
$
59,325
$
73,021
$
62,402
$
70,472
Plus: Merger-related expenses, net of
tax
317
—
—
—
—
Plus: Intangible amortization, net of
tax
138
114
118
140
90
Net income available to common
shareholder's (numerator)
$
62,181
$
59,439
$
73,139
$
62,542
$
70,562
Average shareholders' equity
$
2,688,834
$
2,713,198
$
2,722,833
$
2,669,413
$
2,637,098
Less: Average preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Average goodwill and intangible
assets
(537,976
)
(536,638
)
(536,772
)
(536,470
)
(536,601
)
Average tangible common shareholders'
equity (denominator)
$
1,957,980
$
1,983,682
$
1,993,183
$
1,940,065
$
1,907,619
Return on average common shareholders'
equity (tangible), annualized
12.88
%
11.89
%
14.56
%
12.93
%
15.00
%
Tangible common equity to tangible
assets (TCE Ratio)
Shareholders' equity
$
2,569,535
$
2,712,680
$
2,699,818
$
2,692,958
$
2,629,655
Less: Preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Goodwill and intangible assets
(537,877
)
(538,053
)
(536,697
)
(536,847
)
(536,544
)
Tangible common shareholders' equity
(numerator)
$
1,838,780
$
1,981,749
$
1,970,243
$
1,963,233
$
1,900,233
Total assets
$
25,598,310
$
25,796,398
$
26,390,832
$
26,079,774
$
25,892,990
Less: Goodwill and intangible assets
(537,877
)
(538,053
)
(536,697
)
(536,847
)
(536,544
)
Total tangible assets (denominator)
$
25,060,433
$
25,258,345
$
25,854,135
$
25,542,927
$
25,356,446
Tangible common equity to tangible
assets
7.34
%
7.85
%
7.62
%
7.69
%
7.49
%
Efficiency ratio
Non-interest expense
$
145,978
$
154,019
$
144,596
$
140,831
$
178,384
Less: Amortization of tax credit
investments
(696
)
(1,547
)
(1,546
)
(1,563
)
(1,531
)
Less: Merger-related expenses
(401
)
—
—
—
—
Less: Intangible amortization
(176
)
(146
)
(150
)
(178
)
(115
)
Less: Debt extinguishment costs
—
(674
)
—
(412
)
(32,163
)
Non-interest expense (numerator)
$
144,705
$
151,652
$
142,900
$
138,678
$
144,575
Net interest income
$
161,310
$
165,613
$
171,270
$
162,399
$
164,449
Tax equivalent adjustment
3,288
3,184
3,114
3,018
2,979
Plus: Total non-interest income
55,256
63,881
62,577
51,890
95,396
Less: Investment securities gains, net
(19
)
(5
)
—
(36
)
(33,475
)
Total revenue (denominator)
$
219,835
$
232,673
$
236,961
$
217,271
$
229,349
Efficiency ratio
65.8
%
65.2
%
60.3
%
63.8
%
63.0
%
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2022
2021
2021
2021
2021
Non-interest expenses to total average
assets (annualized)
Non-interest expense
$
145,978
$
154,019
$
144,596
$
140,831
$
178,384
Less: Amortization of tax credit
investments
(696
)
(1,547
)
(1,546
)
(1,563
)
(1,531
)
Less: Intangible amortization
(176
)
(146
)
(150
)
(178
)
(115
)
Less: Merger-related expenses
(401
)
—
—
—
—
Less: Debt extinguishment costs
—
(674
)
—
(412
)
(32,163
)
Non-interest expense (numerator)
$
144,705
$
151,652
$
142,900
$
138,678
$
144,575
Total average assets (denominator)
$
25,622,462
$
26,136,536
$
26,440,876
$
26,017,542
$
26,082,816
Non-interest expenses to total average
assets, (annualized)
2.29
%
2.30
%
2.14
%
2.14
%
2.25
%
Asset Quality, excluding PPP
Net loans recovered (charged-off)
(numerator)
$
1,054
$
(2,976
)
$
2,305
$
(6,954
)
$
(6,181
)
Average net loans
$
18,383,118
$
18,220,550
$
18,414,153
$
18,906,556
$
18,980,586
Less: Average PPP loans
(226,114
)
(435,042
)
(850,618
)
(1,524,389
)
(1,688,713
)
Total adjusted average loans
(denominator)
$
18,157,004
$
17,785,508
$
17,563,535
$
17,382,167
$
17,291,873
Net charge-offs (recoveries) to adjusted
average loans (annualized)
(0.02
) %
0.07
%
(0.05
) %
0.16
%
0.14
%
Non-performing loans (numerator)
$
160,981
$
152,119
$
150,222
$
153,729
$
152,448
Net loans
$
18,476,119
$
18,325,350
$
18,269,407
$
18,586,756
$
18,990,986
Less: PPP loans
(164,277
)
(301,253
)
(590,447
)
(1,114,401
)
(1,688,394
)
Total adjusted loans (denominator)
$
18,311,842
$
18,024,097
$
17,678,960
$
17,472,355
$
17,302,592
Non-performing loans to total adjusted
loans
0.88
%
0.84
%
0.85
%
0.88
%
0.88
%
ACL - loans (numerator)
$
243,705
$
249,001
$
256,727
$
255,032
$
265,986
Net loans
$
18,476,119
$
18,325,350
$
18,269,407
$
18,586,756
$
18,990,986
Less: PPP loans
(164,277
)
(301,253
)
(590,447
)
(1,114,401
)
(1,688,394
)
Total adjusted loans (denominator)
$
18,311,842
$
18,024,097
$
17,678,960
$
17,472,355
$
17,302,592
ACL - loans to total adjusted loans
1.33
%
1.38
%
1.45
%
1.46
%
1.54
%
Pre-provision net revenue
Net interest income
$
161,310
$
165,613
$
171,270
$
162,399
$
164,449
Non-interest income
55,256
63,881
62,577
51,890
95,396
Less: Investment securities gains, net
(19
)
(5
)
—
(36
)
(33,475
)
Total revenue
$
216,547
$
229,489
$
233,847
$
214,253
$
226,370
Non-interest expense
$
145,978
$
154,019
$
144,596
$
140,831
$
178,384
Less: Amortization on tax credit
investments
(696
)
(1,547
)
(1,546
)
(1,563
)
(1,531
)
Less: Merger-related expenses
(401
)
—
—
—
—
Less: Intangible amortization
(176
)
(146
)
(150
)
(178
)
(115
)
Less: Debt extinguishment
—
(674
)
—
(412
)
(32,163
)
Total non-interest expense
$
144,705
$
151,652
$
142,900
$
138,678
$
144,575
Pre-provision net revenue
$
71,842
$
77,837
$
90,947
$
75,575
$
81,795
Note: numbers may not sum due to
rounding.
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Media Contact: Laura Wakeley (717) 291-2616 Investor Contact:
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