Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the
“Corporation”) reported net income available to common shareholders
of $65.8 million, or $0.39 per diluted share, for the first quarter
of 2023, a decrease of $13.5 million, or 17.1%, in comparison to
the fourth quarter of 2022.
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“Our focus remains the same - the long-term financial wellbeing
of our company, our customers and our communities,” said Curtis J.
Myers, Chairman and CEO of Fulton. “During the quarter, we took
actions to fortify our balance sheet, increase our liquidity,
diversify our funding and enhance our reserves. By taking these
actions, monitoring capital and communicating with customers, we’ve
positioned ourselves to continue serving our stakeholders and
growing our company.”
Net Interest Income and Balance
Sheet
Net interest income for the first quarter of 2023 was $215.6
million, a decrease of $10.3 million in comparison to the fourth
quarter of 2022. The net interest margin for the first quarter of
2023 decreased 16 basis points, to 3.53%, in comparison to 3.69% in
the fourth quarter of 2022.
The linked-quarter decrease in net interest income was primarily
due to a shift in funding mix from lower-cost demand deposits to
higher-cost borrowings, time deposits and brokered deposits. An
increase in the average balance for net loans of $458.6 million and
higher loan yields in the first quarter of 2023 primarily
contributed to an increase in interest income of $22.0 million to
$289.8 million in comparison to $267.8 million in the fourth
quarter of 2022. Interest expense from interest-bearing liabilities
for the first quarter of 2023 increased by $32.3 million to $74.2
million in comparison to $41.9 million in the fourth quarter of
2022. The linked-quarter increase in interest expense in the first
quarter of 2023 was primarily due to a decline in the average
balance of noninterest-bearing deposits of $669.1 million and an
increase in the average balance for higher-cost borrowings and
other interest-bearing liabilities of $1.0 billion in comparison to
the fourth quarter of 2022.
For the first quarter of 2023, net interest income was $215.6
million, an increase of $54.3 million, or 33.6%, in comparison to
the first quarter of 2022. Interest income for the first quarter of
2023 increased by $116.8 million to $289.8 million in comparison to
$173.0 million in the first quarter of 2022 primarily driven by
rising interest rates resulting in increases in interest income
from net loans, investment securities and other interest-earning
assets of $110.9 million, $3.2 million and $2.7 million,
respectively. Increases in the average balances for net loans and
investment securities in the first quarter of 2023 of $2,080.0
million and $63.3 million, respectively, driven in part by the
Prudential Bancorp, Inc. ("Prudential Bancorp") acquisition, also
contributed to the increase in interest income. Interest expense
from interest-bearing liabilities for the first quarter of 2023
increased by $62.5 million to $74.2 million in comparison to $11.7
million in the first quarter of 2022 primarily driven by rising
interest rates resulting in increases in interest expense from
interest-bearing deposits and borrowings and other interest-bearing
liabilities of $36.0 million and $26.5 million, respectively. An
increase in the average balance for borrowings and other
interest-bearing liabilities of $2.0 billion in the first quarter
of 2023 in comparison to the first quarter of 2022 also contributed
to the increase in interest expense.
Total average interest-earning assets for the first quarter of
2023 was $25.2 billion, an increase of $450.6 million from the
fourth quarter of 2022 primarily driven by the aforementioned
increase in average net loans of $458.6 million and an increase in
average other interest-earning assets of $33.0 million, partially
offset by a decrease in average investment securities of $41.0
million.
Total average interest-earning assets for the first quarter of
2023 increased by $1.3 billion from the first quarter of 2022.
Average net loans for the first quarter of 2023 were $20.5 billion,
an increase of $2.1 billion from the same period in 2022. Compared
to the first quarter of 2022, average other interest-earning assets
decreased $793.6 million and average investment securities
increased $63.3 million in the first quarter of 2023.
Total average interest-bearing liabilities increased $1.2
billion, to $17.0 billion, in the first quarter of 2023 in
comparison to $15.7 billion in the fourth quarter of 2022 driven by
increases in the average balance for borrowings and other
interest-bearing liabilities and the average balance for total
interest-bearing deposits of $1.0 billion and $215.8 million,
respectively.
Total average interest-bearing liabilities for the first quarter
of 2023 increased $1.9 billion in comparison to $15.1 billion in
the first quarter of 2022, driven by an increase in the average
balance for borrowings and other interest-bearing liabilities of
$2.0 billion.
Asset Quality
In the first quarter of 2023, a provision for credit losses of
$24.5 million was recorded in comparison to a provision for credit
losses of $14.5 million in the fourth quarter of 2022, and a
negative provision for credit losses of $7.0 million in the first
quarter of 2022. The linked-quarter increase in the provision for
credit losses of $10.0 million was primarily due to loan growth and
changes to the macroeconomic outlook.
Non-performing assets were $167.9 million, or 0.62% of total
assets, at March 31, 2023, in comparison to $177.7 million, or
0.66% of total assets, at December 31, 2022, and $163.0 million, or
0.64% of total assets, at March 31, 2022.
Net charge-offs for the first quarter of 2023 were 0.27% of
total average loans in comparison to 0.23% and negative 0.02% in
the fourth quarter of 2022 and the first quarter of 2022,
respectively. Net charge-offs of $14.0 million for the first
quarter of 2023 were primarily due to a charge-off of $13.3 million
for a commercial office loan due to credit-related concerns; the
same loan that received a partial charge-off in the fourth quarter
of 2022.
Non-interest Income
Non-interest income before investment securities gains in the
first quarter of 2023 was $51.7 million, a decrease of $2.6
million, or 4.8%, from the fourth quarter of 2022. The decrease in
non-interest income was driven primarily by decreases in commercial
banking income, income from equity method investments, reflected in
other income, and consumer banking fees of $1.1 million, $1.0
million and $0.9 million, respectively, partially offset by an
increase in wealth management revenues of $0.5 million.
Compared to the first quarter of 2022, non-interest income
before investment securities gains in the first quarter of 2023
decreased $3.5 million, or 6.3%, from $55.2 million. The decrease
in non-interest income was primarily due to decreases of $2.6
million in mortgage banking income due to lower loan sale volumes
and lower spreads, $1.4 million in wealth management revenues
primarily due to market performance and $1.1 million from lower
income from equity method investments, reflected in other income,
partially offset by an increase of $1.5 million in commercial
banking income.
Non-interest Expense
Non-interest expense was $159.6 million in the first quarter of
2023, a decrease of $7.0 million, or 4.2%, compared to $166.6
million in the fourth quarter of 2022, which excludes
merger-related expenses of $1.9 million. The decline was primarily
due to decreases of $3.5 million in salaries and employee benefits
expense, $0.7 million in other outside services expense, $0.6
million in professional fees and $0.5 million in marketing expense,
partially offset by a $1.6 million increase in FDIC insurance
expense primarily due to the adoption of a final rule to increase
base deposit insurance assessment rates effective January 1, 2023.
Additional contributors of the decline in noninterest expense were
decreases of $1.2 million in charitable contributions, $1.1 million
in other real estate owned assets due to gains on sales recorded in
the first quarter of 2023 and $0.8 million in contingent
liabilities, in each case, reflected in other expense.
Compared to the first quarter of 2022, non-interest expense,
excluding merger-related expenses of $0.4 million in the first
quarter of 2022, increased $14.0 million, or 9.6%. The increase was
primarily due to increases of $4.8 million in salaries and employee
benefits expense, $2.0 million in other outside services expense,
$1.6 million in FDIC insurance expense, primarily due to the
adoption of a final rule to increase base deposit insurance
assessment rates effective January 1, 2023, $1.5 million in data
processing and software expense, $0.6 million in professional fees,
$0.6 million in marketing expense and $0.5 million in intangible
amortization expense due to the acquisition of Prudential Bancorp.
Additional drivers of the increase in noninterest expense were an
unfavorable change in owned asset expense due to a $1.5 million
gain on sale recorded on owned assets in the first quarter of 2022
and a $0.8 million contingent liability recorded in the first
quarter of 2023, in each case, reflected in other expense.
Income Tax Expense
For the first quarter of 2023, the effective tax rate was 17.9%,
in comparison to 17.3% for the full-year of 2022.
Additional information on Fulton is available on the Internet at
www.fultonbank.com.
Safe Harbor Statement
This press 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, 2022 and other current and periodic reports, which
have been, or will be, filed with the Securities and Exchange
Commission (the "SEC") 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 financial measures in this press
release that have been derived from methods other than generally
accepted accounting principles ("GAAP"). These non-GAAP financial
measures are reconciled to the most comparable GAAP measures in
tables at the end of this press release.
FULTON FINANCIAL CORPORATION
SUMMARY CONSOLIDATED FINANCIAL
INFORMATION (UNAUDITED)
dollars in thousands, except per share
data
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
Ending
Balances
Investment securities
$
3,950,101
$
3,968,023
$
3,936,694
$
4,117,801
$
4,288,674
Net loans
20,670,188
20,279,547
19,695,199
18,920,950
18,476,119
Total assets
27,112,176
26,931,702
26,146,042
25,252,686
25,598,310
Deposits
21,316,584
20,649,538
21,376,554
21,143,866
21,541,174
Shareholders' equity
2,618,998
2,579,757
2,471,159
2,471,093
2,569,535
Average
Balances
Investment securities
3,964,615
3,936,579
4,254,216
4,216,507
4,228,827
Net loans
20,463,096
20,004,513
19,563,825
18,637,175
18,383,118
Total assets
26,900,653
26,386,355
26,357,095
25,578,432
25,622,462
Deposits
20,574,323
21,027,656
21,788,052
21,523,713
21,480,183
Shareholders' equity
2,613,316
2,489,148
2,604,057
2,531,346
2,688,834
Income
Statement
Net interest income
215,587
225,911
215,582
178,831
161,310
Provision for credit losses
24,544
14,513
18,958
1,500
(6,950
)
Non-interest income
51,753
54,321
59,162
58,391
55,256
Non-interest expense
159,616
168,462
169,558
149,730
145,978
Income before taxes
83,180
97,257
86,228
85,992
77,538
Net income available to common
shareholders
65,752
79,271
68,309
67,427
61,726
Pre-provision net revenue(1)
108,375
115,049
113,631
89,384
71,842
Per Share
Net income available to common
shareholders (basic)
$
0.39
$
0.47
$
0.41
$
0.42
$
0.38
Net income available to common
shareholders (diluted)
$
0.39
$
0.47
$
0.40
$
0.42
$
0.38
Operating net income available to common
shareholders(1)
$
0.39
$
0.48
$
0.48
$
0.42
$
0.38
Cash dividends
$
0.15
$
0.21
$
0.15
$
0.15
$
0.15
Common shareholders' equity
$
14.67
$
14.24
$
13.61
$
14.15
$
14.79
Common shareholders' equity
(tangible)(1)
$
11.26
$
10.90
$
10.26
$
10.81
$
11.44
Weighted average shares (basic)
166,605
167,504
167,353
160,920
160,588
Weighted average shares (diluted)
168,401
169,136
168,781
162,075
161,911
(1) Non-GAAP financial measure. Refer to
the calculation on the page titled “Reconciliation of Non-GAAP
Measures” at the end of this press release.
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
Asset
Quality
Net charge-offs (recoveries) to average
loans
0.27
%
0.23
%
0.01
%
(0.08
) %
(0.02
) %
Non-performing loans to total loans
0.80
%
0.85
%
0.98
%
0.92
%
0.87
%
Non-performing assets to total assets
0.62
%
0.66
%
0.76
%
0.71
%
0.64
%
ACL - loans(1) to total loans
1.35
%
1.33
%
1.35
%
1.31
%
1.32
%
ACL - loans(1) to non-performing loans
169
%
157
%
138
%
143
%
151
%
Profitability
Return on average assets
1.03
%
1.23
%
1.07
%
1.10
%
1.02
%
Operating return on average assets(2)
1.04
%
1.26
%
1.25
%
1.11
%
1.02
%
Return on average common shareholders'
equity
11.02
%
13.70
%
11.24
%
11.57
%
10.03
%
Return on average common shareholders'
equity (tangible)(2)
14.46
%
18.59
%
17.31
%
15.23
%
12.88
%
Net interest margin
3.53
%
3.69
%
3.54
%
3.04
%
2.78
%
Efficiency ratio(2)
58.5
%
58.1
%
57.8
%
61.4
%
65.8
%
Non-interest expenses to total average
assets
2.41
%
2.53
%
2.55
%
2.35
%
2.31
%
Operating non-interest expenses to total
average assets(2)
2.40
%
2.48
%
2.43
%
2.32
%
2.29
%
Capital Ratios
Tangible common equity ratio
("TCE")(2)
7.0
%
6.9
%
6.7
%
7.0
%
7.3
%
TCE ratio, (excluding AOCI)(2)(4)
8.3
%
8.2
%
8.3
%
8.2
%
7.9
%
Tier 1 leverage ratio(3)
9.3
%
9.5
%
9.2
%
9.1
%
8.9
%
Common equity Tier 1 capital ratio(3)
9.8
%
10.0
%
10.0
%
9.9
%
10.0
%
Tier 1 risk-based capital ratio(3)
10.7
%
10.9
%
10.9
%
10.8
%
10.9
%
Total risk-based capital ratio(3)
13.5
%
13.6
%
13.6
%
13.7
%
13.8
%
(1) "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.
(2) Non-GAAP financial measure. Refer to
the calculation on the page titled "Reconciliation of Non-GAAP
Measures" at the end of this press release.
(3) Regulatory capital ratios as of March
31, 2023 are preliminary and prior periods are actual.
(4) Tangible common equity ("TCE") ratio,
excluding accumulated other comprehensive income ("AOCI").
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE
SHEETS (UNAUDITED)
dollars in thousands
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
ASSETS
Cash and due from banks
$
129,003
$
126,898
$
143,465
$
158,605
$
161,462
Other interest-earning assets
545,355
685,209
467,164
383,715
1,054,232
Loans held for sale
6,507
7,264
14,411
17,528
27,675
Investment securities
3,950,101
3,968,023
3,936,694
4,117,801
4,288,674
Net loans
20,670,188
20,279,547
19,695,199
18,920,950
18,476,119
Less: ACL - loans(1)
(278,695
)
(269,366
)
(266,838
)
(248,564
)
(243,705
)
Loans, net
20,391,493
20,010,181
19,428,361
18,672,386
18,232,414
Net premises and equipment
216,059
225,141
221,496
211,639
218,257
Accrued interest receivable
90,267
91,579
72,821
64,457
55,102
Goodwill and intangible assets
563,502
560,824
561,495
537,700
537,877
Other assets
1,219,889
1,256,583
1,300,135
1,088,855
1,022,617
Total Assets
$
27,112,176
$
26,931,702
$
26,146,042
$
25,252,686
$
25,598,310
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits
$
21,316,584
$
20,649,538
$
21,376,554
$
21,143,866
$
21,541,174
Borrowings
2,446,770
2,871,207
1,424,681
1,013,315
1,008,934
Other liabilities
729,824
831,200
873,648
624,412
478,667
Total Liabilities
24,493,178
24,351,945
23,674,883
22,781,593
23,028,775
Shareholders' equity
2,618,998
2,579,757
2,471,159
2,471,093
2,569,535
Total Liabilities and Shareholders'
Equity
$
27,112,176
$
26,931,702
$
26,146,042
$
25,252,686
$
25,598,310
LOANS, DEPOSITS AND BORROWINGS
DETAIL:
Loans, by type:
Real estate - commercial mortgage
$
7,746,920
$
7,693,835
$
7,554,509
$
7,417,036
$
7,289,376
Commercial and industrial
4,596,096
4,473,004
4,240,865
4,170,975
4,156,562
Real estate - residential mortgage
4,880,919
4,737,279
4,574,228
4,203,827
3,946,741
Real estate - home equity
1,074,712
1,102,838
1,110,103
1,108,808
1,098,171
Real estate - construction
1,326,754
1,269,925
1,273,097
1,177,446
1,210,340
Consumer
730,775
699,179
633,666
538,747
481,551
Leases and other loans(2)
314,012
303,487
308,731
304,111
293,378
Total Net Loans
$
20,670,188
$
20,279,547
$
19,695,199
$
18,920,950
$
18,476,119
Deposits, by type:
Noninterest-bearing demand
$
6,403,484
$
7,006,388
$
7,372,896
$
7,530,777
$
7,528,391
Interest-bearing demand
5,478,237
5,410,903
5,676,600
5,403,805
5,625,286
Savings
6,579,806
6,434,621
6,563,003
6,406,051
6,479,196
Total demand and savings
18,461,527
18,851,912
19,612,499
19,340,633
19,632,873
Brokered
960,919
208,416
226,883
243,172
248,833
Time
1,894,138
1,589,210
1,537,172
1,560,061
1,659,468
Total Deposits
$
21,316,584
$
20,649,538
$
21,376,554
$
21,143,866
$
21,541,174
Borrowings, by type:
Federal funds purchased
$
525,000
$
191,000
$
136,000
$
20,000
$
—
Federal Home Loan Bank advances
747,000
1,250,000
265,500
—
—
Senior debt and subordinated debt
539,814
539,634
539,461
555,748
555,594
Other borrowings
634,956
890,573
483,720
437,567
453,340
Total Borrowings
$
2,446,770
$
2,871,207
$
1,424,681
$
1,013,315
$
1,008,934
(1) "ACL - loans" relates to the ACL
specifically on "Net Loans" and does not include the ACL related to
OBS credit exposures.
(2) Includes equipment lease financing,
overdraft and net origination fees and costs.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)
dollars in thousands, except per
share
Three Months Ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
Interest Income:
Interest income
$
289,820
$
267,847
$
233,691
$
190,299
$
173,001
Interest expense
74,233
41,936
18,109
11,468
11,691
Net Interest Income
215,587
225,911
215,582
178,831
161,310
Provision for credit losses
24,544
14,513
18,958
1,500
(6,950
)
Net Interest Income after
Provision
191,043
211,398
196,624
177,331
168,260
Non-Interest Income:
Commercial banking:
Merchant and card
6,834
7,223
7,601
7,355
6,097
Cash management
5,515
5,756
6,483
6,062
5,428
Capital markets
2,344
2,627
4,060
3,893
1,676
Other commercial banking
2,820
2,998
2,664
3,049
2,807
Total commercial banking
17,513
18,604
20,808
20,359
16,008
Consumer banking:
Card
6,243
6,331
6,278
6,067
5,796
Overdraft
2,733
3,364
4,463
3,881
3,772
Other consumer banking
2,241
2,380
2,534
2,524
2,106
Total consumer banking
11,217
12,075
13,275
12,472
11,674
Wealth management
18,062
17,531
17,610
18,274
19,428
Mortgage banking
1,970
2,140
3,720
3,768
4,576
Other
2,968
3,972
3,802
3,510
3,551
Non-interest income before investment
securities gains (losses)
51,730
54,322
59,215
58,383
55,237
Investment securities gains (losses),
net
23
(1
)
(53
)
8
19
Total Non-Interest Income
51,753
54,321
59,162
58,391
55,256
Non-Interest Expense:
Salaries and employee benefits
89,283
92,733
94,283
85,404
84,464
Data processing and software
15,796
15,448
15,807
14,685
14,315
Net occupancy
14,438
14,061
14,025
13,587
14,522
Other outside services
10,126
10,860
9,361
8,764
8,167
FDIC insurance
4,795
3,219
3,158
2,961
3,209
Equipment
3,389
3,640
3,548
3,422
3,423
Professional fees
2,392
2,945
2,373
2,013
1,792
Marketing
1,886
2,380
1,859
1,326
1,320
Intangible amortization
674
688
690
177
176
Merger-related expenses
—
1,894
7,006
1,027
401
Other
16,837
20,594
17,448
16,364
14,189
Total Non-Interest Expense
159,616
168,462
169,558
149,730
145,978
Income Before Income Taxes
83,180
97,257
86,228
85,992
77,538
Income tax expense
14,866
15,424
15,357
16,003
13,250
Net Income
68,314
81,833
70,871
69,989
64,288
Preferred stock dividends
(2,562
)
(2,562
)
(2,562
)
(2,562
)
(2,562
)
Net Income Available to Common
Shareholders
$
65,752
$
79,271
$
68,309
$
67,427
$
61,726
Three Months Ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
PER
SHARE:
Net income available to common
shareholders:
Basic
$
0.39
$
0.47
$
0.41
$
0.42
$
0.38
Diluted
$
0.39
$
0.47
$
0.40
$
0.42
$
0.38
Cash dividends
$
0.15
$
0.21
$
0.15
$
0.15
$
0.15
Weighted average shares (basic)
166,605
167,504
167,353
160,920
160,588
Weighted average shares (diluted)
168,401
169,136
168,781
162,075
161,911
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE
SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Three months ended
March 31, 2023
December 31, 2022
March 31, 2022
Average
Yield/
Average
Yield/
Average
Yield/
Balance
Interest(1)
Rate
Balance
Interest(1)
Rate
Balance
Interest(1)
Rate
ASSETS
Interest-earning assets:
Net loans
$
20,463,096
$
263,065
5.21
%
$
20,004,513
$
241,453
4.80
%
$
18,383,118
$
151,127
3.32
%
Investment securities
4,289,643
27,522
2.60
%
4,330,635
27,781
2.56
%
4,226,352
24,251
2.29
%
Other interest-earning assets
493,130
3,648
3.00
%
460,082
2,923
2.53
%
1,286,723
912
0.29
%
Total Interest-Earning Assets
25,245,869
294,235
4.73
%
24,795,230
272,157
4.36
%
23,896,193
176,290
2.98
%
Noninterest-Earning assets:
Cash and due from banks
141,254
149,472
162,320
Premises and equipment
223,025
223,245
219,932
Other assets
1,563,806
1,488,684
1,595,039
Less: ACL - loans(2)
(273,301
)
(270,276
)
(251,022
)
Total Assets
$
26,900,653
$
26,386,355
$
25,622,462
LIABILITIES AND SHAREHOLDERS'
EQUITY
Interest-Bearing liabilities:
Demand deposits
$
5,326,566
$
8,455
0.64
%
$
5,479,443
$
4,589
0.33
%
$
5,664,987
$
728
0.05
%
Savings deposits
6,469,468
20,535
1.29
%
6,466,775
11,539
0.71
%
6,436,548
1,021
0.06
%
Brokered deposits
439,670
5,173
4.77
%
215,729
1,947
3.58
%
250,350
216
0.35
%
Time deposits
1,696,878
7,458
1.78
%
1,554,885
4,302
1.10
%
1,697,063
3,640
0.87
%
Total Interest-Bearing Deposits
13,932,582
41,621
1.21
%
13,716,832
22,377
0.65
%
14,048,948
5,605
0.16
%
Borrowings and other interest-bearing
liabilities
3,058,684
32,613
4.32
%
2,025,522
19,559
3.83
%
1,033,815
6,087
2.39
%
Total Interest-Bearing
Liabilities
16,991,266
74,234
1.78
%
15,742,354
41,936
1.06
%
15,082,763
11,692
0.31
%
Noninterest-Bearing liabilities:
Demand deposits
6,641,741
7,310,824
7,431,235
Other noninterest-bearing liabilities
654,330
844,029
419,630
Total Liabilities
24,287,337
23,897,207
22,933,628
Total Deposits/Cost of Deposits
20,574,323
0.82
%
21,027,656
0.42
%
21,480,183
0.11
%
Total interest-bearing liabilities and
non-interest bearing deposits ("Cost of Funds")
23,633,007
1.27
%
23,053,178
0.72
%
22,513,998
0.21
%
Shareholders' equity
2,613,316
2,489,148
2,688,834
Total Liabilities and Shareholders'
Equity
$
26,900,653
$
26,386,355
$
25,622,462
Net interest income/net interest margin
(fully taxable equivalent)
220,001
3.53
%
230,221
3.69
%
164,598
2.78
%
Tax equivalent adjustment
(4,414
)
(4,310
)
(3,288
)
Net Interest Income
$
215,587
$
225,911
$
161,310
(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 BORROWINGS
DETAIL (UNAUDITED):
dollars in thousands
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
Loans, by type:
Real estate - commercial mortgage
$
7,720,975
$
7,696,997
$
7,566,259
$
7,340,417
$
7,294,914
Commercial and industrial
4,565,923
4,372,935
4,250,573
4,155,436
4,213,014
Real estate - residential mortgage
4,790,868
4,643,784
4,485,649
4,052,666
3,887,428
Real estate - home equity
1,086,032
1,106,325
1,099,487
1,118,494
1,106,319
Real estate - construction
1,276,145
1,209,998
1,268,590
1,188,932
1,137,649
Consumer
721,248
679,108
604,634
485,095
471,129
Leases and other loans(1)
301,905
295,366
288,633
296,135
272,665
Total Net Loans
$
20,463,096
$
20,004,513
$
19,563,825
$
18,637,175
$
18,383,118
Deposits, by type:
Noninterest-bearing demand
$
6,641,741
$
7,310,824
$
7,535,791
$
7,647,618
$
7,431,235
Interest-bearing demand
5,326,566
5,479,443
5,708,059
5,597,975
5,664,987
Savings
6,469,468
6,466,775
6,681,713
6,425,634
6,436,548
Total demand and savings
18,437,775
19,257,042
19,925,563
19,671,227
19,532,770
Brokered
439,670
215,729
247,105
244,200
250,350
Time
1,696,878
1,554,885
1,615,384
1,608,286
1,697,063
Total Deposits
$
20,574,323
$
21,027,656
$
21,788,052
$
21,523,713
$
21,480,183
Borrowings, by type:
Federal funds purchased
$
505,142
$
261,737
$
96,965
$
2,857
$
—
Federal Home Loan Bank advances
1,261,589
564,692
206,152
—
—
Senior debt and subordinated debt
539,726
539,550
554,735
555,701
608,961
Other borrowings and other
interest-bearing liabilities
752,227
659,543
501,496
445,261
424,854
Total Borrowings
$
3,058,684
$
2,025,522
$
1,359,348
$
1,003,819
$
1,033,815
(1) Includes equipment lease financing,
overdraft 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
2023
2022
2022
2022
2022
Allowance for
credit losses related to net loans:
Balance at beginning of period
$
269,366
$
266,838
$
248,564
$
243,705
$
249,001
CECL Day 1 provision expense
—
—
7,954
—
—
Initial purchased credit deteriorated
loans
—
—
1,135
—
—
Loans charged off:
Real estate - commercial mortgage
(13,362
)
(12,235
)
(86
)
—
(152
)
Commercial and industrial
(612
)
(179
)
(1,783
)
(201
)
(227
)
Real estate - residential mortgage
—
—
—
(66
)
—
Consumer and home equity
(2,206
)
(1,311
)
(1,172
)
(877
)
(1,052
)
Real estate - construction
—
—
—
—
—
Leases and other loans(1)
(723
)
(505
)
(683
)
(474
)
(469
)
Total loans charged off
(16,903
)
(14,230
)
(3,724
)
(1,618
)
(1,900
)
Recoveries of loans previously charged
off:
Real estate - commercial mortgage
786
183
29
3,536
112
Commercial and industrial
1,086
961
2,213
739
1,980
Real estate - residential mortgage
48
10
101
92
222
Consumer and home equity
661
683
682
762
454
Real estate - construction
202
530
—
12
32
Leases and other loans(1)
116
132
247
226
154
Recoveries of loans previously charged
off
2,899
2,499
3,272
5,367
2,954
Net loans recovered (charged
off)
(14,004
)
(11,731
)
(452
)
3,749
1,054
Provision for credit losses
23,333
14,259
9,637
1,110
(6,350
)
Balance at end of period
$
278,695
$
269,366
$
266,838
$
248,564
$
243,705
Net (recoveries) charge-offs to average
loans
0.27
%
0.23
%
0.01
%
(0.08
) %
(0.02
) %
Provision for
credit losses related to OBS Credit Exposures
Provision for credit losses
$
1,211
$
254
$
1,367
$
390
($
600
)
NON-PERFORMING
ASSETS:
Non-accrual loans
$
134,303
$
144,443
$
178,204
$
162,530
$
136,799
Loans 90 days past due and accruing
30,336
27,463
14,559
11,016
24,182
Total non-performing loans
164,639
171,906
192,763
173,546
160,981
Other real estate owned
3,304
5,790
5,877
4,786
2,014
Total non-performing assets
$
167,943
$
177,696
$
198,640
$
178,332
$
162,995
NON-PERFORMING
LOANS, BY TYPE:
Real estate - commercial mortgage
$
61,322
$
72,634
$
96,281
$
59,940
$
64,190
Commercial and industrial
33,555
28,288
29,831
44,713
30,193
Real estate - residential mortgage
46,576
46,509
41,597
42,922
39,308
Consumer and home equity
8,983
9,800
10,016
10,552
11,465
Real estate - construction
1,509
1,368
1,456
1,357
672
Leases and other loans(1)
12,694
13,307
13,582
14,062
15,153
Total non-performing loans
$
164,639
$
171,906
$
192,763
$
173,546
$
160,981
(1) Includes equipment lease financing,
overdraft and net origination fees and costs.
FULTON FINANCIAL CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(dollars in thousands, except per share
data)
Explanatory note:
This press release contains supplemental
financial information, as detailed below, that 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
2023
2022
2022
2022
2022
Operating net
income available to common shareholders
Net income available to common
shareholders
$
65,752
$
79,271
$
68,309
$
67,427
$
61,726
Plus: Core deposit intangible
amortization
514
514
514
—
—
Plus: Merger-related expenses
—
1,894
7,006
1,027
401
Plus: CECL Day 1 Provision expense
—
—
7,954
—
—
Less: Tax impact of adjustments
(108
)
(506
)
(3,250
)
(216
)
(84
)
Operating net income available to common
shareholders (numerator)
$
66,158
$
81,173
$
80,533
$
68,238
$
62,043
Weighted average shares (diluted)
(denominator)
168,401
169,136
168,781
162,075
161,911
Operating net income available to common
shareholders, per share (diluted)
$
0.39
$
0.48
$
0.48
$
0.42
$
0.38
Common
shareholders' equity (tangible), per share
Shareholders' equity
$
2,618,998
$
2,579,757
$
2,471,159
$
2,471,093
$
2,569,535
Less: Preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Goodwill and intangible assets
(563,502
)
(560,824
)
(561,495
)
(537,700
)
(537,877
)
Tangible common shareholders' equity
(numerator)
$
1,862,618
$
1,826,055
$
1,716,786
$
1,740,515
$
1,838,780
Shares outstanding, end of period
(denominator)
165,396
167,599
167,399
161,057
160,669
Common shareholders' equity (tangible),
per share
$
11.26
$
10.90
$
10.26
$
10.81
$
11.44
Operating return
on average assets
Net income
$
68,314
$
81,833
$
70,871
$
69,989
$
64,288
Plus: Core deposit intangible
amortization
514
514
514
—
—
Plus: Merger-related expenses
—
1,894
7,006
1,027
401
Plus: CECL Day 1 Provision expense
—
—
7,954
—
—
Less: Tax impact of adjustments
(108
)
(506
)
(3,250
)
(216
)
(84
)
Operating net income (numerator)
$
68,720
$
83,735
$
83,095
$
70,800
$
64,605
Total average assets (denominator)
$
26,900,653
$
26,386,355
$
26,357,095
$
25,578,432
$
25,622,462
Operating return on average assets
1.04
%
1.26
%
1.25
%
1.11
%
1.02
%
Return on average
common shareholders' equity (tangible)
Net income available to common
shareholders
$
65,752
$
79,271
$
68,309
$
67,427
$
61,726
Plus: Intangible amortization
674
688
690
177
176
Plus: Merger-related expenses
—
1,894
7,006
1,027
401
Plus: CECL Day 1 Provision expense
—
—
7,954
—
—
Less: Tax impact of adjustments
(142
)
(542
)
(3,287
)
(253
)
(122
)
Operating net income available to common
shareholders (numerator)
$
66,284
$
81,311
$
80,672
$
68,378
$
62,181
Average shareholders' equity
$
2,613,316
$
2,489,148
$
2,604,057
$
2,531,346
$
2,688,834
Less: Average preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Average goodwill and intangible
assets
(561,744
)
(561,219
)
(562,285
)
(537,786
)
(537,976
)
Average tangible common shareholders'
equity (denominator)
$
1,858,694
$
1,735,051
$
1,848,894
$
1,800,682
$
1,957,980
Return on average common shareholders'
equity (tangible)
14.46
%
18.59
%
17.31
%
15.23
%
12.88
%
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
Tangible common equity to tangible
assets (TCE Ratio)
Shareholders' equity
$
2,618,998
$
2,579,757
$
2,471,159
$
2,471,093
$
2,569,535
Less: Preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Goodwill and intangible assets
(563,502
)
(560,824
)
(561,495
)
(537,700
)
(537,877
)
Tangible common shareholders' equity
(numerator)
$
1,862,618
$
1,826,055
$
1,716,786
$
1,740,515
$
1,838,780
Total assets
$
27,112,176
$
26,931,702
$
26,146,042
$
25,252,686
$
25,598,310
Less: Goodwill and intangible assets
(563,502
)
(560,824
)
(561,495
)
(537,700
)
(537,877
)
Total tangible assets (denominator)
$
26,548,674
$
26,370,878
$
25,584,547
$
24,714,986
$
25,060,433
Tangible common equity to tangible
assets
7.02
%
6.92
%
6.71
%
7.04
%
7.34
%
Tangible common
equity to tangible assets (TCE Ratio) excluding AOCI
Shareholders' equity
$
2,618,998
$
2,579,757
$
2,471,159
$
2,471,093
$
2,569,535
Less: Preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Accumulated other comprehensive
(income) loss
350,992
385,476
442,947
304,210
158,855
Less: Goodwill and intangible assets
(563,502
)
(560,824
)
(561,495
)
(537,700
)
(537,877
)
Tangible common shareholders' equity
(numerator)
$
2,213,610
$
2,211,531
$
2,159,733
$
2,044,725
$
1,997,635
Total assets
$
27,112,176
$
26,931,702
$
26,146,042
$
25,252,686
$
25,598,310
Less: Goodwill and intangible assets
(563,502
)
(560,824
)
(561,495
)
(537,700
)
(537,877
)
Plus: AOCI - unrealized losses/(gains) on
AFS investments securities
282,092
632,456
368,196
249,424
112,965
Total tangible assets (denominator)
$
26,830,766
$
27,003,334
$
25,952,743
$
24,964,410
$
25,173,398
Tangible common equity to tangible assets,
excluding AOCI
8.25
%
8.19
%
8.32
%
8.19
%
7.94
%
Efficiency ratio
Non-interest expense
$
159,616
$
168,462
$
169,558
$
149,730
$
145,978
Less: Amortization of tax credit
investments
—
(696
)
(696
)
(696
)
(696
)
Less: Merger-related expenses
—
(1,894
)
(7,006
)
(1,027
)
(401
)
Less: Intangible amortization
(674
)
(688
)
(690
)
(177
)
(176
)
Non-interest expense (numerator)
$
158,942
$
165,184
$
161,166
$
147,830
$
144,705
Net interest income
$
215,587
$
225,911
$
215,582
$
178,831
$
161,310
Tax equivalent adjustment
4,414
4,310
3,970
3,427
3,288
Plus: Total non-interest income
51,753
54,321
59,162
58,391
55,256
Less: Investment securities (gains)
losses, net
(23
)
1
53
(8
)
(19
)
Total revenue (denominator)
$
271,731
$
284,543
$
278,767
$
240,641
$
219,835
Efficiency ratio
58.5
%
58.1
%
57.8
%
61.4
%
65.8
%
Operating
non-interest expenses to total average assets
Non-interest expense
$
159,616
$
168,462
$
169,558
$
149,730
$
145,978
Less: Amortization of tax credit
investments
—
(696
)
(696
)
(696
)
(696
)
Less: Intangible amortization
(674
)
(688
)
(690
)
(177
)
(176
)
Less: Merger-related expenses
—
(1,894
)
(7,006
)
(1,027
)
(401
)
Non-interest expense (numerator)
$
158,942
$
165,184
$
161,166
$
147,830
$
144,705
Total average assets (denominator)
$
26,900,653
$
26,386,355
$
26,357,095
$
25,578,432
$
25,622,462
Operating non-interest expenses to total
average assets
2.40
%
2.48
%
2.43
%
2.32
%
2.29
%
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2023
2022
2022
2022
2022
Pre-provision net
revenue
Net interest income
$
215,587
$
225,911
$
215,582
$
178,831
$
161,310
Non-interest income
51,753
54,321
59,162
58,391
55,256
Less: Investment securities (gains)
losses, net
(23
)
1
53
(8
)
(19
)
Total revenue
$
267,317
$
280,233
$
274,797
$
237,214
$
216,547
Non-interest expense
$
159,616
$
168,462
$
169,558
$
149,730
$
145,978
Less: Amortization on tax credit
investments
—
(696
)
(696
)
(696
)
(696
)
Less: Merger-related expenses
—
(1,894
)
(7,006
)
(1,027
)
(401
)
Less: Intangible amortization
(674
)
(688
)
(690
)
(177
)
(176
)
Total non-interest expense
$
158,942
$
165,184
$
161,166
$
147,830
$
144,705
Pre-provision net revenue
$
108,375
$
115,049
$
113,631
$
89,384
$
71,842
Note: numbers may not sum due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230418006192/en/
Media Contact: Lacey Dean (717) 735-8688 Investor Contact: Matt
Jozwiak (717) 327-2657
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