UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
|
| |
Date of Report (date of earliest event reported): | July 21, 2015 |
Fulton Financial Corporation
(Exact name of Registrant as specified in its Charter)
|
| | |
Pennsylvania | 0-10587 | 23-2195389 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
One Penn Square Lancaster, Pennsylvania | | 17604 |
(Address of principal executive offices) | | (Zip Code) |
Registrant's telephone number, including area code: 717-291-2411
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
£ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
£ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
£ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
£ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 - Results of Operations and Financial Condition
On July 21, 2015, Fulton Financial Corporation (“Fulton”) issued a press release (the “Press Release”) announcing its results of operations for the second quarter ended June 30, 2015. A copy of the Press Release and supplementary financial information which accompanied the Press Release, are attached as Exhibits 99.1 and 99.2, respectively, to this Current Report and are incorporated herein by reference. Fulton also posted on its Investor Relations website, www.fult.com, presentation materials Fulton intends to use during a conference call and webcast to discuss those results on Wednesday, July 22, 2015 at 10:00 a.m. Eastern Time. A copy of the presentation materials is attached as Exhibit 99.3 to this Current Report and is incorporated herein by reference.
Forward-Looking Statements
This Current Report on Form 8-K, including the Exhibits hereto, may contain forward-looking statements with respect to Fulton’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as “may,” “should,” “will,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future,” “intends” and similar expressions which are intended to identify forward-looking statements. Statements relating to the “outlook” or “outlook for 2015” contained in Exhibit 99.3 to this Current Report are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond Fulton’s control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements.
A discussion of certain risks and uncertainties affecting Fulton, and some of the factors that could cause Fulton’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 Fulton’s Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which have been filed with the Securities and Exchange Commission and are available in the Investors Relations section of Fulton’s website (www.fult.com) and on the Securities and Exchange Commission’s website (www.sec.gov). Fulton 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.
Item 9.01 Financial Statements And Exhibits
(d) Exhibits.
|
| |
Exhibit No. | Description |
99.1 | Press Release dated July 21, 2015. |
99.2 | Supplementary financial information for the quarter ended June 30, 2015. |
99.3 | Presentation materials to be discussed during the conference call and webcast on July 22, 2015. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
| |
Date: July 21, 2015 | FULTON FINANCIAL CORPORATION
|
| By: /s/ Patrick S. Barrett |
| Patrick S. Barrett
|
| Senior Executive Vice President and
|
| Chief Financial Officer |
Exhibit 99.1
FULTON FINANCIAL
CORPORATION
FOR IMMEDIATE RELEASE
Media Contact: Laura J. Wakeley (717) 291-2616
Investor Contact: David C. Hostetter (717) 291-2456
Fulton Financial reports second quarter earnings of $0.21 per share
| |
• | Diluted earnings per share was 21 cents, a 4.5 percent decrease from the first quarter of 2015 and unchanged from the second quarter of 2014. |
| |
• | Net interest income decreased $661,000, or 0.5 percent, compared to the first quarter of 2015 and decreased $5.0 million, or 3.9%, compared to the second quarter of 2014. The net interest margin decreased 7 basis points compared to the first quarter of 2015, to 3.20 percent. The net interest margin for the second quarter of 2014 was 3.41 percent. |
| |
• | Average loans increased $97.1 million, or 0.7 percent, compared to the first quarter of 2015 and $396.9 million, or 3.1 percent, compared to the second quarter of 2014. Average deposits increased $107.1 million, or 0.8 percent, compared to the first quarter of 2015 and $878.6 million, or 7.0 percent, compared to the second quarter of 2014. |
| |
• | The provision for credit losses was $2.2 million, compared to a $3.7 million negative provision in the first quarter of 2015 and a $3.5 million provision in the second quarter of 2014. |
| |
• | Non-interest income, excluding investment securities gains, increased $3.5 million, or 8.6 percent, in comparison to the first quarter of 2015, and increased $314,000, or 0.7 percent, in comparison to the second quarter of 2014. |
| |
• | Non-interest expense was largely unchanged compared to the first quarter of 2015 and increased $2.2 million, or 1.9 percent, compared to the second quarter of 2014. |
| |
• | In April 2015, the Corporation announced that its Board of Directors approved the repurchase of up to $50 million of the Corporation’s common stock through December 31, 2015. During the second quarter of 2015, 1.5 million shares were repurchased under this program at a total cost of $19.0 million. |
| |
• | In June 2015, the Corporation issued $150.0 million of subordinated debt, the net proceeds of which were used to redeem $150 million of trust preferred securities in July 2015. |
(July 21, 2015) - Lancaster, PA - Fulton Financial Corporation (NASDAQ: FULT) reported net income of $36.7 million, or 21 cents per diluted share, for the second quarter of 2015, compared to $40.0 million, or 22 cents per diluted share, for the first quarter of 2015.
“We reported diluted earnings per share of 21 cents for the second quarter. During the quarter, we saw earning asset and core deposit growth, an increase in non-interest income across a number of key business lines and good control of other expenses”, said E. Philip Wenger, Chairman, President and CEO. “Lower yields on earning assets exerted pressure on our net interest margin during the quarter. In keeping with our goal of creating shareholder value, and in light of the current low interest rate environment, we took steps to reduce interest expense over the long term through the issuance of $150 million in subordinated debt which was used to redeem higher cost trust preferred securities in July”.
Net Interest Income and Margin
Net interest income for the second quarter of 2015 decreased $661,000, or 0.5 percent, from the first quarter of 2015. Net interest margin decreased seven basis points, or 2.1 percent, to 3.20 percent in the second quarter of 2015 from 3.27 percent in the first quarter of 2015. Average yields on interest-earning assets decreased nine basis points, while the average cost of interest-bearing liabilities decreased three basis points during the second quarter of 2015 in comparison to the first quarter of 2015.
Average Balance Sheet
Total average assets for the second quarter of 2015 were $17.2 billion, an increase of $85.0 million from the first quarter of 2015. Average loans, net of unearned income, increased $97.1 million, or 0.7 percent, in comparison to the first quarter of 2015.
|
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Increase (decrease) |
| June 30, 2015 | | March 31, 2015 | | in Balance |
| Balance | | Yield (1) | | Balance | | Yield (1) | | $ | | % |
| (dollars in thousands) |
Average Loans, net of unearned income, by type: | | | | | | | | | | | |
Real estate - commercial mortgage | $ | 5,210,540 |
| | 4.15 | % | | $ | 5,163,845 |
| | 4.22 | % | | $ | 46,695 |
| | 0.9 | % |
Commercial - industrial, financial, and agricultural | 3,836,397 |
| | 3.79 | % | | 3,770,187 |
| | 3.87 | % | | 66,210 |
| | 1.8 | % |
Real estate - home equity | 1,695,171 |
| | 4.11 | % | | 1,721,300 |
| | 4.14 | % | | (26,129 | ) | | (1.5 | )% |
Real estate - residential mortgage | 1,356,464 |
| | 3.82 | % | | 1,370,376 |
| | 3.84 | % | | (13,912 | ) | | (1.0 | )% |
Real estate - construction | 698,685 |
| | 3.97 | % | | 688,690 |
| | 3.93 | % | | 9,995 |
| | 1.5 | % |
Consumer | 265,354 |
| | 5.48 | % | | 259,138 |
| | 5.26 | % | | 6,216 |
| | 2.4 | % |
Leasing and other | 129,989 |
| | 6.94 | % | | 121,992 |
| | 8.41 | % | | 7,997 |
| | 6.6 | % |
Total Average Loans, net of unearned income | $ | 13,192,600 |
| | 4.05 | % | | $ | 13,095,528 |
| | 4.11 | % | | $ | 97,072 |
| | 0.7 | % |
| | | | | | | | | | | |
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances. |
Total average liabilities increased $69.1 million, or 0.5 percent, from the first quarter of 2015, including a $107.1 million, or 0.8%, increase in average deposits. Average deposits and interest rates, by type, for the second quarter of 2015 in comparison to the first quarter of 2015, are summarized in the following table:
|
| | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Increase (decrease) |
| June 30, 2015 | | March 31, 2015 | | in Balance |
| Balance | Rate | | Balance | Rate | | $ | | % |
| (dollars in thousands) |
Average Deposits, by type: | | | | | | | | | |
Noninterest-bearing demand | $ | 3,734,880 |
| — | % | | $ | 3,662,040 |
| — | % | | $ | 72,840 |
| | 2.0 | % |
Interest-bearing demand | 3,152,697 |
| 0.13 | % | | 3,135,927 |
| 0.13 | % | | 16,770 |
| | 0.5 | % |
Savings deposits | 3,568,579 |
| 0.14 | % | | 3,517,057 |
| 0.13 | % | | 51,522 |
| | 1.5 | % |
Total average demand and savings | 10,456,156 |
| 0.09 | % | | 10,315,024 |
| 0.08 | % | | 141,132 |
| | 1.4 | % |
Time deposits | 3,027,520 |
| 1.04 | % | | 3,061,593 |
| 1.02 | % | | (34,073 | ) | | (1.1 | )% |
Total Average Deposits | $ | 13,483,676 |
| 0.30 | % | | $ | 13,376,617 |
| 0.30 | % | | $ | 107,059 |
| | 0.8 | % |
Asset Quality
Non-performing assets were $162.3 million, or 0.93 percent of total assets, at June 30, 2015, compared to $163.5 million, or 0.94 percent of total assets, at March 31, 2015 and $162.8 million, or 0.96 percent of total assets, at June 30, 2014.
Annualized net charge-offs for the quarter ended June 30, 2015 were 0.38 percent of total average loans, compared to 0.08 percent for the quarter ended March 31, 2015 and 0.28 percent for the quarter ended June 30, 2014. The increase in net charge-offs was mainly in commercial loans and was primarily due to two customer relationships that were placed on non-accrual status in the first quarter of 2015. The allowance for credit losses as a percentage of non-performing loans was 113.3 percent at June 30, 2015, as compared to 120.3 percent at March 31, 2015 and 129.6 percent at June 30, 2014.
During the second quarter of 2015, the Corporation recorded a $2.2 million provision for credits losses, compared to a $3.7 million negative provision for credit losses in the first quarter of 2015. The $5.9 million increase in the provision resulted from the consistent application of the Corporation’s allowance methodology.
Non-interest Income
Non-interest income, excluding investment securities gains, increased $3.5 million, or 8.6 percent, in comparison to the first quarter of 2015. Service charges on deposit accounts increased $1.1 million, or 9.2 percent, primarily due to an increase in overdraft fees. Other service charges and fees increased $1.6 million, or 17.4 percent, primarily due to increases in debit card, merchant
and commercial loan swap fee income. Mortgage banking income increased $650,000, or 13.9 percent, mainly due to an increase in spreads on new loan commitments.
Gains on sales of investment securities decreased $1.7 million in comparison to the first quarter of 2015. Gains in the second quarter of 2015 were primarily realized gains on sales of equity securities.
Non-interest Expense
Non-interest expense decreased $124,000, or 0.1 percent, in the second quarter of 2015, compared to the first quarter of 2015. Occupancy expense decreased $1.9 million, or 13.8 percent, due primarily to seasonal fluctuations in snow removal and utilities costs. Other real estate owned (OREO) and repossession expense decreased $1.2 million, primarily due to an increase in net gains on sales of OREO. Partially offsetting these decreases was a $2.4 million, or 41.3 percent, increase in other outside services expenses.
During the first six months of 2015, the Corporation implemented several cost savings initiatives, including the consolidation of nine branches, the modification of certain retirement benefits and the elimination of certain positions. Annualized expense reductions from these cost savings initiatives are expected to be approximately $6.5 million. Implementation expenses associated with these initiatives were $520,000 and $1.5 million during the second and first quarters of 2015, respectively.
About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company that has banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates, headquartered as indicated: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Bethlehem, PA; FNB Bank, N.A., Danville, PA; Fulton Bank of New Jersey, Mt. Laurel, NJ; and The Columbia Bank, Columbia, MD.
The Corporation’s investment management and trust services are offered at all banks through Fulton Financial Advisors, a division of Fulton Bank, N.A. Residential mortgage lending is offered by all banks under the Fulton Mortgage Company brand.
Additional information on Fulton Financial Corporation is available on the Internet at www.fult.com.
Safe Harbor Statement
This news release may contain forward-looking statements with respect to the Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates,"
"believes," "plans," "expects," "future," "intends" and similar expressions which are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation's control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which have been filed with the Securities and Exchange Commission and is available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov). The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Non-GAAP Financial Measures
The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.
|
| | | | | | | | | | | | | | | | | | |
Exhibit 99.2 | | |
| | | | | | | | | | |
FULTON FINANCIAL CORPORATION | | |
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | | |
dollars in thousands | | |
| | | | | | | | % Change from |
| | June 30 | | June 30 | | March | | June 30 | | March |
| | 2015 | | 2014 | | 2015 | | 2014 | | 2015 |
ASSETS | | | | | | | | |
| Cash and due from banks | $ | 100,455 |
| | $ | 258,837 |
| | $ | 91,870 |
| | (61.2 | )% | | 9.3 | % |
| Other interest-earning assets | 387,324 |
| | 305,518 |
| | 703,667 |
| | 26.8 | % | | (45.0 | )% |
| Loans held for sale | 33,980 |
| | 36,079 |
| | 34,124 |
| | (5.8 | )% | | (0.4 | )% |
| Investment securities | 2,440,492 |
| | 2,497,776 |
| | 2,259,802 |
| | (2.3 | )% | | 8.0 | % |
| Loans, net of unearned income | 13,244,230 |
| | 12,839,511 |
| | 13,115,505 |
| | 3.2 | % | | 1.0 | % |
| Allowance for loan losses | (167,485 | ) | | (191,685 | ) | | (177,701 | ) | | (12.6 | )% | | (5.7 | )% |
| Net loans | 13,076,745 |
| | 12,647,826 |
| | 12,937,804 |
| | 3.4 | % | | 1.1 | % |
| Premises and equipment | 226,794 |
| | 225,168 |
| | 226,241 |
| | 0.7 | % | | 0.2 | % |
| Accrued interest receivable | 41,193 |
| | 42,116 |
| | 42,216 |
| | (2.2 | )% | | (2.4 | )% |
| Goodwill and intangible assets | 531,567 |
| | 532,432 |
| | 531,672 |
| | (0.2 | )% | | — | % |
| Other assets | 526,923 |
| | 487,887 |
| | 535,945 |
| | 8.0 | % | | (1.7 | )% |
| Total Assets | $ | 17,365,473 |
| | $ | 17,033,639 |
| | $ | 17,363,341 |
| | 1.9 | % | | — | % |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| Deposits | $ | 13,505,709 |
| | $ | 12,693,659 |
| | $ | 13,514,497 |
| | 6.4 | % | | (0.1 | )% |
| Short-term borrowings | 409,035 |
| | 1,008,307 |
| | 410,105 |
| | (59.4 | )% | | (0.3 | )% |
| Other liabilities | 293,271 |
| | 263,478 |
| | 312,709 |
| | 11.3 | % | | (6.2 | )% |
| FHLB advances and long-term debt | 1,132,641 |
| | 968,395 |
| | 1,094,517 |
| | 17.0 | % | | 3.5 | % |
| Total Liabilities | 15,340,656 |
| | 14,933,839 |
| | 15,331,828 |
| | 2.7 | % | | 0.1 | % |
| Shareholders' equity | 2,024,817 |
| | 2,099,800 |
| | 2,031,513 |
| | (3.6 | )% | | (0.3 | )% |
| Total Liabilities and Shareholders' Equity | $ | 17,365,473 |
| | $ | 17,033,639 |
| | $ | 17,363,341 |
| | 1.9 | % | | — | % |
| | | | | | | | | | |
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | | | | | | | | |
Loans, by type: | | | | | | | | |
| Real estate - commercial mortgage | $ | 5,237,800 |
| | $ | 5,128,734 |
| | $ | 5,227,101 |
| | 2.1 | % | | 0.2 | % |
| Commercial - industrial, financial and agricultural | 3,806,699 |
| | 3,601,721 |
| | 3,762,631 |
| | 5.7 | % | | 1.2 | % |
| Real estate - home equity | 1,689,688 |
| | 1,730,497 |
| | 1,701,623 |
| | (2.4 | )% | | (0.7 | )% |
| Real estate - residential mortgage | 1,369,103 |
| | 1,361,976 |
| | 1,364,788 |
| | 0.5 | % | | 0.3 | % |
| Real estate - construction | 731,925 |
| | 634,018 |
| | 677,806 |
| | 15.4 | % | | 8.0 | % |
| Consumer | 272,494 |
| | 280,557 |
| | 257,301 |
| | (2.9 | )% | | 5.9 | % |
| Leasing and other | 136,521 |
| | 102,008 |
| | 124,255 |
| | 33.8 | % | | 9.9 | % |
| Total Loans, net of unearned income | $ | 13,244,230 |
| | $ | 12,839,511 |
| | $ | 13,115,505 |
| | 3.2 | % | | 1.0 | % |
Deposits, by type: | | | | | | | | |
| Noninterest-bearing demand | $ | 3,805,165 |
| | $ | 3,484,125 |
| | $ | 3,765,677 |
| | 9.2 | % | | 1.0 | % |
| Interest-bearing demand | 3,129,903 |
| | 2,855,511 |
| | 3,133,748 |
| | 9.6 | % | | (0.1 | )% |
| Savings deposits | 3,566,888 |
| | 3,338,018 |
| | 3,567,652 |
| | 6.9 | % | | — | % |
| Time deposits | 3,003,753 |
| | 3,016,005 |
| | 3,047,420 |
| | (0.4 | )% | | (1.4 | )% |
| Total Deposits | $ | 13,505,709 |
| | $ | 12,693,659 |
| | $ | 13,514,497 |
| | 6.4 | % | | (0.1 | )% |
Short-term borrowings, by type: | | | | | | | | |
| Customer repurchase agreements | $ | 169,918 |
| | $ | 212,930 |
| | $ | 161,886 |
| | (20.2 | )% | | 5.0 | % |
| Customer short-term promissory notes | 74,059 |
| | 86,366 |
| | 93,176 |
| | (14.2 | )% | | (20.5 | )% |
| Short-term FHLB advances | 160,000 |
| | 325,000 |
| | 155,000 |
| | (50.8 | )% | | 3.2 | % |
| Federal funds purchased | 5,058 |
| | 384,011 |
| | 43 |
| | (98.7 | )% | | N/M |
|
| Total Short-term Borrowings | $ | 409,035 |
| | $ | 1,008,307 |
| | $ | 410,105 |
| | (59.4 | )% | | (0.3 | )% |
| | | | | | | | | | |
| | | | | | | | | | |
N/M - Not meaningful | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
FULTON FINANCIAL CORPORATION | | | | | | | |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | | | | | | | |
in thousands, except per-share data and percentages | | | | | | | |
| | | | Three Months Ended | | % Change from | | Six Months Ended | | | |
| | | | June 30 | | June 30 | | March 31 | | June 30 | | March 31 | | June 30 | | | |
| | | | 2015 | | 2014 | | 2015 | | 2014 | | 2015 | | 2015 | | 2014 | | % Change | |
Interest Income: | | | | | | | | | | | | | | | | | | |
| Interest income | | | $ | 144,229 |
| | $ | 147,902 |
| | $ | 145,772 |
| | (2.5 | )% | | (1.1 | )% | | $ | 290,001 |
| | $ | 296,694 |
| | (2.3 | )% | |
| Interest expense | | | 21,309 |
| | 20,004 |
| | 22,191 |
| | 6.5 | % | | (4.0 | )% | | 43,500 |
| | 39,231 |
| | 10.9 | % | |
| Net Interest Income | | | 122,920 |
| | 127,898 |
| | 123,581 |
| | (3.9 | )% | | (0.5 | )% | | 246,501 |
| | 257,463 |
| | (4.3 | )% | |
| Provision for credit losses | | | 2,200 |
| | 3,500 |
| | (3,700 | ) | | (37.1 | )% | | N/M |
| | (1,500 | ) | | 6,000 |
| | N/M |
| |
| Net Interest Income after Provision | | | 120,720 |
| | 124,398 |
| | 127,281 |
| | (3.0 | )% | | (5.2 | )% | | 248,001 |
| | 251,463 |
| | (1.4 | )% | |
Non-Interest Income: | | | | | | | | | | | | | | | | | | |
| Service charges on deposit accounts | | | 12,637 |
| | 12,552 |
| | 11,569 |
| | 0.7 | % | | 9.2 | % | | 24,206 |
| | 24,263 |
| | (0.2 | )% | |
| Investment management and trust services | | | 11,011 |
| | 11,339 |
| | 10,889 |
| | (2.9 | )% | | 1.1 | % | | 21,900 |
| | 22,297 |
| | (1.8 | )% | |
| Other service charges and fees | | | 10,988 |
| | 10,526 |
| | 9,363 |
| | 4.4 | % | | 17.4 | % | | 20,351 |
| | 19,453 |
| | 4.6 | % | |
| Mortgage banking income | | | 5,339 |
| | 5,741 |
| | 4,688 |
| | (7.0 | )% | | 13.9 | % | | 10,027 |
| | 9,346 |
| | 7.3 | % | |
| Investment securities gains | | | 2,415 |
| | 1,112 |
| | 4,145 |
| | 117.2 | % | | (41.7 | )% | | 6,560 |
| | 1,112 |
| | 489.9 | % | |
| Other | | | 4,099 |
| | 3,602 |
| | 4,083 |
| | 13.8 | % | | 0.4 | % | | 8,182 |
| | 6,907 |
| | 18.5 | % | |
| Total Non-Interest Income | | | 46,489 |
| | 44,872 |
| | 44,737 |
| | 3.6 | % | | 3.9 | % | | 91,226 |
| | 83,378 |
| | 9.4 | % | |
Non-Interest Expense: | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 65,067 |
| | 63,623 |
| | 64,990 |
| | 2.3 | % | | 0.1 | % | | 130,057 |
| | 123,189 |
| | 5.6 | % | |
| Net occupancy expense | | | 11,809 |
| | 11,464 |
| | 13,692 |
| | 3.0 | % | | (13.8 | )% | | 25,501 |
| | 25,067 |
| | 1.7 | % | |
| Other outside services | | | 8,125 |
| | 7,240 |
| | 5,750 |
| | 12.2 | % | | 41.3 | % | | 13,875 |
| | 11,052 |
| | 25.5 | % | |
| Data processing | | | 4,894 |
| | 4,331 |
| | 4,768 |
| | 13.0 | % | | 2.6 | % | | 9,662 |
| | 8,127 |
| | 18.9 | % | |
| Software | | | 3,376 |
| | 3,209 |
| | 3,318 |
| | 5.2 | % | | 1.7 | % | | 6,694 |
| | 6,134 |
| | 9.1 | % | |
| Equipment expense | | | 3,335 |
| | 3,360 |
| | 3,958 |
| | (0.7 | )% | | (15.7 | )% | | 7,293 |
| | 6,962 |
| | 4.8 | % | |
| FDIC insurance expense | | | 2,885 |
| | 2,615 |
| | 2,822 |
| | 10.3 | % | | 2.2 | % | | 5,707 |
| | 5,304 |
| | 7.6 | % | |
| Professional fees | | | 2,731 |
| | 3,559 |
| | 2,871 |
| | (23.3 | )% | | (4.9 | )% | | 5,602 |
| | 6,463 |
| | (13.3 | )% | |
| Marketing | | | 2,235 |
| | 2,337 |
| | 1,233 |
| | (4.4 | )% | | 81.3 | % | | 3,468 |
| | 3,921 |
| | (11.6 | )% | |
| Operating risk loss | | | 674 |
| | 716 |
| | 827 |
| | (5.9 | )% | | (18.5 | )% | | 1,501 |
| | 2,544 |
| | (41.0 | )% | |
| Other real estate owned and repossession expense | | | 129 |
| | 748 |
| | 1,362 |
| | (82.8 | )% | | (90.5 | )% | | 1,491 |
| | 1,731 |
| | (13.9 | )% | |
| Intangible amortization | | | 106 |
| | 315 |
| | 130 |
| | (66.3 | )% | | (18.5 | )% | | 236 |
| | 630 |
| | (62.5 | )% | |
| Other | | | 12,988 |
| | 12,657 |
| | 12,757 |
| | 2.6 | % | | 1.8 | % | | 25,745 |
| | 24,604 |
| | 4.6 | % | |
| Total Non-Interest Expense | | | 118,354 |
| | 116,174 |
| | 118,478 |
| | 1.9 | % | | (0.1 | )% | | 236,832 |
| | 225,728 |
| | 4.9 | % | |
| Income Before Income Taxes | | | 48,855 |
| | 53,096 |
| | 53,540 |
| | (8.0 | )% | | (8.8 | )% | | 102,395 |
| | 109,113 |
| | (6.2 | )% | |
| Income tax expense | | | 12,175 |
| | 13,500 |
| | 13,504 |
| | (9.8 | )% | | (9.8 | )% | | 25,679 |
| | 27,734 |
| | (7.4 | )% | |
| Net Income | | | $ | 36,680 |
| | $ | 39,596 |
| | $ | 40,036 |
| | (7.4 | )% | | (8.4 | )% | | $ | 76,716 |
| | $ | 81,379 |
| | (5.7 | )% | |
| | | | | | | | | | | | | | | | | | | |
PER SHARE: | | | | | | | | | | | | | | | | | | |
| Net income: | | | | | | | | | | | | | | | | | | |
| Basic | | | $ | 0.21 |
| | $ | 0.21 |
| | $ | 0.22 |
| | — | % | | (4.5 | )% | | $ | 0.43 |
| | $ | 0.43 |
| | — | % | |
| Diluted | | | 0.21 |
| | 0.21 |
| | 0.22 |
| | — | % | | (4.5 | )% | | 0.43 |
| | 0.43 |
| | — | % | |
| | | | | | | | | | | | | | | | | | | |
| Cash dividends | | | $ | 0.09 |
| | $ | 0.08 |
| | $ | 0.09 |
| | 12.5 | % | | — | % | | $ | 0.18 |
| | $ | 0.16 |
| | 12.5 | % | |
| Shareholders' equity | | | 11.50 |
| | 11.11 |
| | 11.34 |
| | 3.5 | % | | 1.4 | % | | 11.50 |
| | 11.11 |
| | 3.5 | % | |
| Shareholders' equity (tangible) | | | 8.48 |
| | 8.29 |
| | 8.37 |
| | 2.3 | % | | 1.3 | % | | 8.48 |
| | 8.29 |
| | 2.3 | % | |
| | | | | | | | | | | | | | | | | | | |
| Weighted average shares (basic) | | | 176,433 |
| | 188,139 |
| | 178,471 |
| | (6.2 | )% | | (1.1 | )% | | 177,446 |
| | 188,799 |
| | (6.0 | )% | |
| Weighted average shares (diluted) | | | 177,531 |
| | 189,182 |
| | 179,457 |
| | (6.2 | )% | | (1.1 | )% | | 178,488 |
| | 189,832 |
| | (6.0 | )% | |
| Shares outstanding, end of period | | | 176,019 |
| | 189,033 |
| | 179,098 |
| | (6.9 | )% | | (1.7 | )% | | 176,019 |
| | 189,033 |
| | (6.9 | )% | |
| | | | | | | | | | | | | | | | | | | |
SELECTED FINANCIAL RATIOS: | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 0.86 | % | | 0.94 | % | | 0.95 | % | | | | | | 0.90 | % | | 0.97 | % | | | |
| Return on average shareholders' equity | | | 7.24 | % | | 7.63 | % | | 8.05 | % | | | | | | 7.64 | % | | 7.92 | % | | | |
| Return on average shareholders' equity (tangible) | | | 9.83 | % | | 10.30 | % | | 10.96 | % | | | | | | 10.39 | % | | 10.71 | % | | | |
| Net interest margin | | | 3.20 | % | | 3.41 | % | | 3.27 | % | | | | | | 3.24 | % | | 3.44 | % | | | |
| Efficiency ratio | | | 68.94 | % | | 65.85 | % | | 70.16 | % | | | | | | 69.55 | % | | 64.63 | % | | | |
N/M - Not meaningful | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
FULTON FINANCIAL CORPORATION | | | | | | |
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | | | | | |
dollars in thousands | | | | | | |
| | Three Months Ended |
| | June 30, 2015 | | June 30, 2014 | | March 31, 2015 |
| | Average | | | | Yield/ | | Average | | | | Yield/ | | Average | | | | Yield/ |
| | Balance | | Interest (1) | | Rate | | Balance | | Interest (1) | | Rate | | Balance | | Interest (1) | | Rate |
ASSETS | | | | | | | | | | | | | | | | | |
Interest-earning assets: | | | | | | | | | | | | | | | | |
| Loans, net of unearned income | $ | 13,192,600 |
| | $ | 133,339 |
| | 4.05% | | $ | 12,795,747 |
| | $ | 134,387 |
| | 4.21% | | $ | 13,095,528 |
| | $ | 133,055 |
| | 4.11% |
| Taxable investment securities | 2,048,558 |
| | 10,944 |
| | 2.14% | | 2,211,004 |
| | 12,418 |
| | 2.25% | | 2,005,542 |
| | 11,282 |
| | 2.25% |
| Tax-exempt investment securities | 216,355 |
| | 2,894 |
| | 5.35% | | 270,482 |
| | 3,534 |
| | 5.23% | | 229,082 |
| | 3,212 |
| | 5.61% |
| Equity securities | 27,618 |
| | 379 |
| | 5.50% | | 33,922 |
| | 419 |
| | 4.95% | | 32,210 |
| | 450 |
| | 5.66% |
| Total Investment Securities | 2,292,531 |
| | 14,217 |
| | 2.48% | | 2,515,408 |
| | 16,371 |
| | 2.60% | | 2,266,834 |
| | 14,944 |
| | 2.64% |
| Loans held for sale | 26,335 |
| | 265 |
| | 4.03% | | 17,540 |
| | 214 |
| | 4.87% | | 17,002 |
| | 173 |
| | 4.07% |
| Other interest-earning assets | 439,425 |
| | 933 |
| | 0.85% | | 238,921 |
| | 1,207 |
| | 2.02% | | 474,033 |
| | 2,105 |
| | 1.78% |
| Total Interest-earning Assets | 15,950,891 |
| | 148,754 |
| | 3.74% | | 15,567,616 |
| | 152,179 |
| | 3.92% | | 15,853,397 |
| | 150,277 |
| | 3.83% |
Noninterest-earning assets: | | | | | | | | | | | | | | | | |
| Cash and due from banks | 104,723 |
| | | | | | 198,291 |
| | | | | | 105,271 |
| | | | |
| Premises and equipment | 226,569 |
| | | | | | 224,586 |
| | | | | | 226,391 |
| | | | |
| Other assets | 1,094,071 |
| | | | | | 1,037,654 |
| | | | | | 1,114,078 |
| | | | |
| Less: allowance for loan losses | (176,085 | ) | | | | | | (196,462 | ) | | | | | | (183,927 | ) | | | | |
| Total Assets | $ | 17,200,169 |
| | | | | | $ | 16,831,685 |
| | | | | | $ | 17,115,210 |
| | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | | |
Interest-bearing liabilities: | | | | | | | | | | | | | | | | |
| Demand deposits | $ | 3,152,697 |
| | $ | 987 |
| | 0.13% | | $ | 2,914,887 |
| | $ | 904 |
| | 0.12% | | $ | 3,135,927 |
| | $ | 983 |
| | 0.13% |
| Savings deposits | 3,568,579 |
| | 1,247 |
| | 0.14% | | 3,355,929 |
| | 1,031 |
| | 0.12% | | 3,517,057 |
| | 1,119 |
| | 0.13% |
| Time deposits | 3,027,520 |
| | 7,819 |
| | 1.04% | | 3,012,061 |
| | 6,750 |
| | 0.90% | | 3,061,593 |
| | 7,721 |
| | 1.02% |
| Total Interest-bearing Deposits | 9,748,796 |
| | 10,053 |
| | 0.41% | | 9,282,877 |
| | 8,685 |
| | 0.38% | | 9,714,577 |
| | 9,823 |
| | 0.41% |
| Short-term borrowings | 379,988 |
| | 103 |
| | 0.11% | | 1,047,684 |
| | 540 |
| | 0.21% | | 309,215 |
| | 77 |
| | 0.10% |
| FHLB advances and long-term debt | 1,026,987 |
| | 11,153 |
| | 4.35% | | 894,511 |
| | 10,779 |
| | 4.83% | | 1,124,074 |
| | 12,291 |
| | 4.40% |
| Total Interest-bearing Liabilities | 11,155,771 |
| | 21,309 |
| | 0.77% | | 11,225,072 |
| | 20,004 |
| | 0.71% | | 11,147,866 |
| | 22,191 |
| | 0.80% |
Noninterest-bearing liabilities: | | | | | | | | | | | | | | | | |
| Demand deposits | 3,734,880 |
| | | | | | 3,322,195 |
| | | | | | 3,662,040 |
| | | | |
| Other | 277,730 |
| | | | | | 202,520 |
| | | | | | 289,341 |
| | | | |
| Total Liabilities | 15,168,381 |
| | | | | | 14,749,787 |
| | | | | | 15,099,247 |
| | | | |
| Shareholders' equity | 2,031,788 |
| | | | | | 2,081,898 |
| | | | | | 2,015,963 |
| | | | |
| Total Liabilities and Shareholders' Equity | $ | 17,200,169 |
| | | | | | $ | 16,831,685 |
| | | | | | $ | 17,115,210 |
| | | | |
| Net interest income/net interest margin (fully taxable equivalent) | | | 127,445 |
| | 3.20% | | | | 132,175 |
| | 3.41% | | | | 128,086 |
| | 3.27% |
| Tax equivalent adjustment | | | (4,525 | ) | | | | | | (4,277 | ) | | | | | | (4,505 | ) | | |
| Net interest income | | | $ | 122,920 |
| | | | | | $ | 127,898 |
| | | | | | $ | 123,581 |
| | |
| | | | | | | | | | | | | | | | | | |
| (1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances. | | | | | | |
| | | | | | | | | | | | | | | | | | |
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | | | | | | | | | | | | |
| | Three Months Ended | | % Change from | | | | | | | | |
| | June 30 | | June 30 | | March 31 | | June 30 | | March 31 | | | | | | | | |
| | 2015 | | 2014 | | 2015 | | 2014 | | 2015 | | | | | | | | |
Loans, by type: | | | | | | | | | | | | | | | | |
| Real estate - commercial mortgage | $ | 5,210,540 |
| | $ | 5,138,537 |
| | $ | 5,163,845 |
| | 1.4 | % | | 0.9 | % | | | | | | | | |
| Commercial - industrial, financial and agricultural | 3,836,397 |
| | 3,617,977 |
| | 3,770,187 |
| | 6.0 | % | | 1.8 | % | | | | | | | | |
| Real estate - home equity | 1,695,171 |
| | 1,735,767 |
| | 1,721,300 |
| | (2.3 | )% | | (1.5 | )% | | | | | | | | |
| Real estate - residential mortgage | 1,356,464 |
| | 1,339,034 |
| | 1,370,376 |
| | 1.3 | % | | (1.0 | )% | | | | | | | | |
| Real estate - construction | 698,685 |
| | 588,176 |
| | 688,690 |
| | 18.8 | % | | 1.5 | % | | | | | | | | |
| Consumer | 265,354 |
| | 276,444 |
| | 259,138 |
| | (4.0 | )% | | 2.4 | % | | | | | | | | |
| Leasing and other | 129,989 |
| | 99,812 |
| | 121,992 |
| | 30.2 | % | | 6.6 | % | | | | | | | | |
| Total Loans, net of unearned income | $ | 13,192,600 |
| | $ | 12,795,747 |
| | $ | 13,095,528 |
| | 3.1 | % | | 0.7 | % | | | | | | | | |
Deposits, by type: | | | | | | | | | | | | | | | | |
| Noninterest-bearing demand | $ | 3,734,880 |
| | $ | 3,322,195 |
| | $ | 3,662,040 |
| | 12.4 | % | | 2.0 | % | | | | | | | | |
| Interest-bearing demand | 3,152,697 |
| | 2,914,887 |
| | 3,135,927 |
| | 8.2 | % | | 0.5 | % | | | | | | | | |
| Savings deposits | 3,568,579 |
| | 3,355,929 |
| | 3,517,057 |
| | 6.3 | % | | 1.5 | % | | | | | | | | |
| Time deposits | 3,027,520 |
| | 3,012,061 |
| | 3,061,593 |
| | 0.5 | % | | (1.1 | )% | | | | | | | | |
| Total Deposits | $ | 13,483,676 |
| | $ | 12,605,072 |
| | $ | 13,376,617 |
| | 7.0 | % | | 0.8 | % | | | | | | | | |
Short-term borrowings, by type: | | | | | | | | | | | | | | | | |
| Customer repurchase agreements | $ | 179,804 |
| | $ | 216,212 |
| | $ | 173,625 |
| | (16.8 | )% | | 3.6 | % | | | | | | | | |
| Customer short-term promissory notes | 80,073 |
| | 81,823 |
| | 86,258 |
| | (2.1 | )% | | (7.2 | )% | | | | | | | | |
| Federal funds purchased | 108,078 |
| | 444,429 |
| | 25,054 |
| | (75.7 | )% | | 331.4 | % | | | | | | | | |
| Short-term FHLB advances and other borrowings | 12,033 |
| | 305,220 |
| | 24,278 |
| | (96.1 | )% | | (50.4 | )% | | | | | | | | |
| Total Short-term Borrowings | $ | 379,988 |
| | $ | 1,047,684 |
| | $ | 309,215 |
| | (63.7 | )% | | 22.9 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
FULTON FINANCIAL CORPORATION | | | | | | |
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | | | | | | |
dollars in thousands | | | | | | |
| | | Six Months Ended June 30 |
| | | 2015 | | 2014 |
| | | Average | | | | | | Average | | | | |
| | | Balance | | Interest (1) | | Yield/Rate | | Balance | | Interest (1) | | Yield/Rate |
ASSETS | | | | | | |
Interest-earning assets: | | | | | | |
| Loans, net of unearned income | | $ | 13,144,332 |
| | $ | 266,394 |
| | 4.08 | % | | $ | 12,779,145 |
| | $ | 269,131 |
| | 4.24 | % |
| Taxable investment securities | | 2,027,170 |
| | 22,226 |
| | 2.19 | % | | 2,234,259 |
| | 25,684 |
| | 2.30 | % |
| Tax-exempt investment securities | | 222,684 |
| | 6,106 |
| | 5.48 | % | | 274,856 |
| | 7,147 |
| | 5.20 | % |
| Equity securities | | 29,901 |
| | 829 |
| | 5.58 | % | | 33,922 |
| | 848 |
| | 5.03 | % |
| Total Investment Securities | | 2,279,755 |
| | 29,161 |
| | 2.56 | % | | 2,543,037 |
| | 33,679 |
| | 2.65 | % |
| Loans held for sale | | 21,694 |
| | 438 |
| | 4.04 | % | | 15,494 |
| | 348 |
| | 4.49 | % |
| Other interest-earning assets | | 456,633 |
| | 3,038 |
| | 1.33 | % | | 248,807 |
| | 2,089 |
| | 1.68 | % |
| Total Interest-earning Assets | | 15,902,414 |
| | 299,031 |
| | 3.79 | % | | 15,586,483 |
| | 305,247 |
| | 3.95 | % |
Noninterest-earning assets: | | | | | | |
| Cash and due from banks | | 104,996 |
| | | | | | 198,962 |
| | | | |
| Premises and equipment | | 226,480 |
| | | | | | 225,436 |
| | | | |
| Other assets | | 1,104,019 |
| | | | | | 1,034,877 |
| | | | |
| Less: allowance for loan losses | | (179,985 | ) | | | | | | (199,813 | ) | | | | |
| Total Assets | | $ | 17,157,924 |
| | | | | | $ | 16,845,945 |
| | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
Interest-bearing liabilities: | | | | | | |
| Demand deposits | | $ | 3,144,358 |
| | $ | 1,970 |
| | 0.13 | % | | $ | 2,929,965 |
| | $ | 1,813 |
| | 0.12 | % |
| Savings deposits | | 3,542,960 |
| | 2,366 |
| | 0.13 | % | | 3,353,910 |
| | 2,066 |
| | 0.12 | % |
| Time deposits | | 3,044,463 |
| | 15,540 |
| | 1.03 | % | | 2,972,480 |
| | 12,702 |
| | 0.86 | % |
| Total Interest-bearing Deposits | | 9,731,781 |
| | 19,876 |
| | 0.41 | % | | 9,256,355 |
| | 16,581 |
| | 0.36 | % |
| Short-term borrowings | | 344,797 |
| | 180 |
| | 0.10 | % | | 1,127,872 |
| | 1,173 |
| | 0.21 | % |
| FHLB advances and long-term debt | | 1,075,262 |
| | 23,444 |
| | 4.38 | % | | 889,051 |
| | 21,477 |
| | 4.85 | % |
| Total Interest-bearing Liabilities | | 11,151,840 |
| | 43,500 |
| | 0.78 | % | | 11,273,278 |
| | 39,231 |
| | 0.70 | % |
Noninterest-bearing liabilities: | | | | | | |
| Demand deposits | | 3,698,661 |
| | | | | | 3,283,027 |
| | | | |
| Other | | 283,504 |
| | | | | | 217,181 |
| | | | |
| Total Liabilities | | 15,134,005 |
| | | | | | 14,773,486 |
| | | | |
| Shareholders' equity | | 2,023,919 |
| | | | | | 2,072,459 |
| | | | |
| Total Liabilities and Shareholders' Equity | | $ | 17,157,924 |
| | | | | | $ | 16,845,945 |
| | | | |
| Net interest income/net interest margin (fully taxable equivalent) | | | | 255,531 |
| | 3.24 | % | | | | 266,016 |
| | 3.44 | % |
| Tax equivalent adjustment | | | | (9,030 | ) | | | | | | (8,553 | ) | | |
| Net interest income | | | | $ | 246,501 |
| | | | | | $ | 257,463 |
| | |
| | | | | | | | | | | | | |
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances. | | | | | | |
| | | | | | | | | | | | | |
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL: | | | | | | |
| | | Six Months Ended | | | | | | | | |
| | | June 30 | | | | | | | | |
| | | 2015 | | 2014 | | % Change | | | | | | |
Loans, by type: | | | | | | |
| Real estate - commercial mortgage | | $ | 5,187,322 |
| | $ | 5,111,979 |
| | 1.5 | % | | | | | | |
| Commercial - industrial, financial and agricultural | | 3,803,475 |
| | 3,627,471 |
| | 4.9 | % | | | | | | |
| Real estate - home equity | | 1,708,163 |
| | 1,745,503 |
| | (2.1 | )% | | | | | | |
| Real estate - residential mortgage | | 1,363,382 |
| | 1,337,686 |
| | 1.9 | % | | | | | | |
| Real estate - construction | | 693,715 |
| | 582,294 |
| | 19.1 | % | | | | | | |
| Consumer | | 262,265 |
| | 275,682 |
| | (4.9 | )% | | | | | | |
| Leasing and other | | 126,010 |
| | 98,530 |
| | 27.9 | % | | | | | | |
| Total Loans, net of unearned income | | $ | 13,144,332 |
| | $ | 12,779,145 |
| | 2.9 | % | | | | | | |
Deposits, by type: | | | | | | |
| Noninterest-bearing demand | | $ | 3,698,661 |
| | $ | 3,283,027 |
| | 12.7 | % | | | | | | |
| Interest-bearing demand | | 3,144,358 |
| | 2,929,965 |
| | 7.3 | % | | | | | | |
| Savings deposits | | 3,542,960 |
| | 3,353,910 |
| | 5.6 | % | | | | | | |
| Time deposits | | 3,044,463 |
| | 2,972,480 |
| | 2.4 | % | | | | | | |
| Total Deposits | | $ | 13,430,442 |
| | $ | 12,539,382 |
| | 7.1 | % | | | | | | |
Short-term borrowings, by type: | | | | | | |
| Customer repurchase agreements | | $ | 176,732 |
| | $ | 201,866 |
| | (12.5 | )% | | | | | | |
| Customer short-term promissory notes | | 83,148 |
| | 91,856 |
| | (9.5 | )% | | | | | | |
| Federal funds purchased | | 66,795 |
| | 430,407 |
| | (84.5 | )% | | | | | | |
| Short-term FHLB advances and other borrowings | | 18,122 |
| | 403,743 |
| | (95.5 | )% | | | | | | |
| Total Short-term Borrowings | | $ | 344,797 |
| | $ | 1,127,872 |
| | (69.4 | )% | | | | | | |
| | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
FULTON FINANCIAL CORPORATION | | | | | | | | | | | |
ASSET QUALITY INFORMATION (UNAUDITED) | | | | | | | | | | | |
dollars in thousands | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | | | | | | | |
| | Jun 30 | | Jun 30 | | Mar 31 | | Jun 30 | | Jun 30 | | | | | | | | |
| | 2015 | | 2014 | | 2015 | | 2015 | | 2014 | | | | | | | | |
ALLOWANCE FOR CREDIT LOSSES: | | | | | | | | | | | | | | | | |
Balance at beginning of period | $ | 179,658 |
| | $ | 199,006 |
| | $ | 185,931 |
| | $ | 185.931 |
| | $ | 204.917 |
| | | | | | | | |
| Loans charged off: | | | | | | | | | | | | | | | | | |
| Commercial - industrial, financial and agricultural | (11,166 | ) | | (5,512 | ) | | (1,863 | ) | | (13,029 | ) | | (10,637 | ) | | | | | | | | |
| Real estate - commercial mortgage | (1,642 | ) | | (2,141 | ) | | (709 | ) | | (2,351 | ) | | (3,527 | ) | | | | | | | | |
| Consumer and home equity | (1,227 | ) | | (1,683 | ) | | (1,548 | ) | | (2,775 | ) | | (4,085 | ) | | | | | | | | |
| Real estate - residential mortgage | (783 | ) | | (1,089 | ) | | (1,281 | ) | | (2,064 | ) | | (1,935 | ) | | | | | | | | |
| Real estate - construction | (87 | ) | | (218 | ) | | — |
| | (87 | ) | | (432 | ) | | | | | | | | |
| Leasing and other | (467 | ) | | (833 | ) | | (363 | ) | | (830 | ) | | (1,128 | ) | | | | | | | | |
| Total loans charged off | (15,372 | ) | | (11,476 | ) | | (5,764 | ) | | (21,136 | ) | | (21,744 | ) | | | | | | | | |
Recoveries of loans previously charged off: | | | | | | | | | | | | | | | | | |
| Commercial - industrial, financial and agricultural | 1,471 |
| | 775 |
| | 786 |
| | 2,257 |
| | 1,519 |
| | | | | | | | |
| Real estate - commercial mortgage | 451 |
| | 430 |
| | 436 |
| | 887 |
| | 474 |
| | | | | | | | |
| Consumer and home equity | 557 |
| | 579 |
| | 492 |
| | 1,049 |
| | 1,144 |
| | | | | | | | |
| Real estate - residential mortgage | 187 |
| | 108 |
| | 159 |
| | 346 |
| | 224 |
| | | | | | | | |
| Real estate - construction | 231 |
| | 158 |
| | 1,147 |
| | 1,378 |
| | 382 |
| | | | | | | | |
| Leasing and other | 70 |
| | 362 |
| | 171 |
| | 241 |
| | 526 |
| | | | | | | | |
| Recoveries of loans previously charged off | 2,967 |
| | 2,412 |
| | 3,191 |
| | 6,158 |
| | 4,269 |
| | | | | | | | |
Net loans charged off | (12,405 | ) | | (9,064 | ) | | (2,573 | ) | | (14,978 | ) | | (17,475 | ) | | | | | | | | |
Provision for credit losses | 2,200 |
| | 3,500 |
| | (3,700 | ) | | (1,500 | ) | | 6,000 |
| | | | | | | | |
Balance at end of period | $ | 169,453 |
| | $ | 193,442 |
| | $ | 179,658 |
| | $169,453 | | $ | 193,442 |
| | | | | | | | |
Net charge-offs to average loans (annualized) | 0.38 | % | | 0.28 | % | | 0.08 | % | | 0.23 | % | | 0.27 | % | | | | | | | | |
NON-PERFORMING ASSETS: | | | | | | | | | | | | | | | | |
| Non-accrual loans | $ | 129,152 |
| | $ | 129,934 |
| | $ | 129,929 |
| | | | | | | | | | | | |
| Loans 90 days past due and accruing | 20,353 |
| | 19,378 |
| | 19,365 |
| | | | | | | | | | | | |
| Total non-performing loans | 149,505 |
| | 149,312 |
| | 149,294 |
| | | | | | | | | | | | |
| Other real estate owned | 12,763 |
| | 13,482 |
| | 14,251 |
| | | | | | | | | | | | |
| Total non-performing assets | $ | 162,268 |
| | $ | 162,794 |
| | $ | 163,545 |
| | | | | | | | | | | | |
NON-PERFORMING LOANS, BY TYPE: | | | | | | | | | | | | | | | | |
| Real estate - commercial mortgage | $ | 49,932 |
| | $ | 44,015 |
| | $ | 46,331 |
| | | | | | | | | | | | |
| Commercial - industrial, financial and agricultural | 35,839 |
| | 38,163 |
| | 43,265 |
| | | | | | | | | | | | |
| Real estate - residential mortgage | 31,562 |
| | 27,887 |
| | 28,595 |
| | | | | | | | | | | | |
| Consumer and home equity | 17,215 |
| | 18,919 |
| | 16,939 |
| | | | | | | | | | | | |
| Real estate - construction | 14,884 |
| | 20,268 |
| | 14,140 |
| | | | | | | | | | | | |
| Leasing | 73 |
| | 60 |
| | 24 |
| | | | | | | | | | | | |
| Total non-performing loans | $ | 149,505 |
| | $ | 149,312 |
| | $ | 149,294 |
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE: | | | | | | | | | | | | | | | | |
| Real-estate - residential mortgage | $ | 31,584 |
| | $ | 31,184 |
| | $ | 31,574 |
| | | | | | | | | | | | |
| Real-estate - commercial mortgage | 17,482 |
| | 19,398 |
| | 23,468 |
| | | | | | | | | | | | |
| Real estate - construction | 4,482 |
| | 8,561 |
| | 7,791 |
| | | | | | | | | | | | |
| Commercial - industrial, financial and agricultural | 6,591 |
| | 6,953 |
| | 6,975 |
| | | | | | | | | | | | |
| Consumer and home equity | 3,330 |
| | 2,838 |
| | 3,118 |
| | | | | | | | | | | | |
| Total accruing TDRs | $ | 63,469 |
| | $ | 68,934 |
| | $ | 72,926 |
| | | | | | | | | | | | |
| Non-accrual TDRs (1) | 27,230 |
| | 25,526 |
| | 29,392 |
| | | | | | | | | | | | |
| Total TDRs | $ | 90,699 |
| | $ | 94,460 |
| | $ | 102,318 |
| | | | | | | | | | | | |
(1) Included within non-accrual loans above. | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
DELINQUENCY RATES, BY TYPE: | | | | | | | | | | | | | | | | |
| | June 30, 2015 | | June 30, 2014 | | March 31, 2015 |
| | 31-89 Days | | ≥90 Days (2) | | Total | | 31-89 Days | | ≥90 Days (2) | | Total | | 31-89 Days | | ≥90 Days (2) | | Total |
| | | | | | | | | | | | | | | | | | |
| Real estate - commercial mortgage | 0.34 | % | | 0.96 | % | | 1.30 | % | | 0.30 | % | | 0.86 | % | | 1.16 | % | | 0.50 | % | | 0.89 | % | | 1.39 | % |
| Commercial - industrial, financial and agricultural | 0.22 | % | | 0.93 | % | | 1.15 | % | | 0.47 | % | | 1.05 | % | | 1.52 | % | | 0.26 | % | | 1.15 | % | | 1.41 | % |
| Real estate - construction | 0.02 | % | | 2.04 | % | | 2.06 | % | | 0.10 | % | | 3.20 | % | | 3.30 | % | | 0.31 | % | | 2.09 | % | | 2.40 | % |
| Real estate - residential mortgage | 1.53 | % | | 2.30 | % | | 3.83 | % | | 1.78 | % | | 2.05 | % | | 3.83 | % | | 1.75 | % | | 2.10 | % | | 3.85 | % |
| Consumer, home equity, leasing and other | 0.69 | % | | 0.83 | % | | 1.52 | % | | 0.84 | % | | 0.90 | % | | 1.74 | % | | 0.92 | % | | 0.81 | % | | 1.73 | % |
| Total | 0.47 | % | | 1.13 | % | | 1.60 | % | | 0.58 | % | | 1.17 | % | | 1.75 | % | | 0.62 | % | | 1.14 | % | | 1.76 | % |
| | | | | | | | | | | | | | | | | | |
(2) Includes non-accrual loans | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
ASSET QUALITY RATIOS: | | | | | | | | | | | | | | | | |
| | Jun 30 | | Jun 30 | | Mar 31 | | | | | | | | | | | | |
| | 2015 | | 2014 | | 2015 | | | | | | | | | | | | |
| Non-accrual loans to total loans | 0.98 | % | | 1.01 | % | | 0.99 | % | | | | | | | | | | | | |
| Non-performing assets to total loans and OREO | 1.22 | % | | 1.27 | % | | 1.25 | % | | | | | | | | | | | | |
| Non-performing assets to total assets | 0.93 | % | | 0.96 | % | | 0.94 | % | | | | | | | | | | | | |
| Allowance for credit losses to loans outstanding | 1.28 | % | | 1.51 | % | | 1.37 | % | | | | | | | | | | | | |
| Allowance for credit losses to non-performing loans | 113.34 | % | | 129.56 | % | | 120.34 | % | | | | | | | | | | | | |
| Non-performing assets to tangible common shareholders' equity and allowance for credit losses | 9.76 | % | | 9.25 | % | | 9.74 | % | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
FULTON FINANCIAL CORPORATION | | | | | | |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED) | | | | | | |
in thousands, except per share data and percentages | | | | | | |
| | | | | | | | | | | | | | | |
Explanatory note: | This press release contains 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 | | Six Months Ended |
| | | | | | | June 30 | | June 30 | | March 31 | | Jun 30 | | Jun 30 |
| | | | | | | 2015 | | 2014 | | 2015 | | 2015 | | 2014 |
Shareholders' equity (tangible), per share | | | | | | | | | | | |
Shareholders' equity | | | $ | 2,024,817 |
| | $ | 2,099,800 |
| | $ | 2,031,513 |
| | | | |
Less: Goodwill and intangible assets | | | (531,567 | ) | | (532,432 | ) | | (531,672 | ) | | | | |
Tangible shareholders' equity (numerator) | | | $ | 1,493,250 |
| | $ | 1,567,368 |
| | $ | 1,499,841 |
| | | | |
| | | | | | | | | | | |
Shares outstanding, end of period (denominator) | | | 176,019 |
| | 189,033 |
| | 179,098 |
| | | | |
| | | | | | | | | | | |
Shareholders' equity (tangible), per share | | | $ | 8.48 |
| | $ | 8.29 |
| | $ | 8.37 |
| | | | |
| | | | | | | | | | | | | | | |
Return on average common shareholders' equity (tangible) | | | | | | | | | | |
Net income | | | $ | 36,680 |
| | $ | 39,596 |
| | $ | 40,036 |
| | $ | 76,716 |
| | $ | 81,379 |
|
Plus: Intangible amortization, net of tax | | | 69 |
| | 204 |
| | 85 |
| | 153 |
| | 410 |
|
Numerator | | $ | 36,749 |
| | $ | 39,800 |
| | $ | 40,121 |
| | $ | 76,869 |
| | $ | 81,789 |
|
| | | | | | | | | | | |
Average shareholders' equity | | | $ | 2,031,788 |
| | $ | 2,081,898 |
| | $ | 2,015,963 |
| | $ | 2,023,919 |
| | $ | 2,072,459 |
|
Less: Average goodwill and intangible assets | | | (531,618 | ) | | (532,585 | ) | | (531,732 | ) | | (531,675 | ) | | (532,742 | ) |
Average tangible shareholders' equity (denominator) | | $ | 1,500,170 |
| | $ | 1,549,313 |
| | $ | 1,484,231 |
| | $ | 1,492,244 |
| | $ | 1,539,717 |
|
| | | | | | | | | | |
Return on average common shareholders' equity (tangible), annualized | | 9.83 | % | | 10.30 | % | | 10.96 | % | | 10.39 | % | | 10.71 | % |
| | | | | | | | | | | | | | | |
Efficiency ratio | | | | | | | | | | | | | |
Non-interest expense | | | $ | 118,354 |
| | $ | 116,174 |
| | $ | 118,478 |
| | $ | 236,832 |
| | $ | 225,728 |
|
Less: Intangible amortization | | | (106 | ) | | (315 | ) | | (130 | ) | | (236 | ) | | (630 | ) |
Numerator | | | $ | 118,248 |
| | $ | 115,859 |
| | $ | 118,348 |
| | $ | 236,596 |
| | $ | 225,098 |
|
| | | | | | | | | | | |
Net interest income (fully taxable equivalent) | | | $ | 127,445 |
| | $ | 132,175 |
| | $ | 128,086 |
| | $ | 255,531 |
| | $ | 266,016 |
|
Plus: Total Non-interest income | | | 46,489 |
| | 44,872 |
| | 44,737 |
| | 91,226 |
| | 83,378 |
|
Less: Investment securities gains | | | (2,415 | ) | | (1,112 | ) | | (4,145 | ) | | (6,560 | ) | | (1,112 | ) |
Denominator | | | $ | 171,519 |
| | $ | 175,935 |
| | $ | 168,678 |
| | $ | 340,197 |
| | $ | 348,282 |
|
| | | | | | | | | | | |
Efficiency ratio | | | 68.94 | % | | 65.85 | % | | 70.16 | % | | 69.55 | % | | 64.64 | % |
| | | | | | | | | | | | | | | |
Non-performing assets to tangible common shareholders' equity and allowance for credit losses | | | | | | |
Non-performing assets (numerator) | | | $ | 162,268 |
| | $ | 162,794 |
| | $ | 163,545 |
| | | | |
| | | | | | | | | | | |
Tangible shareholders' equity | | | $ | 1,493,250 |
| | $ | 1,567,368 |
| | $ | 1,499,841 |
| | | | |
Plus: Allowance for credit losses | | | 169,453 |
| | 193,442 |
| | 179,658 |
| | | | |
Tangible shareholders' equity and allowance for credit losses (denominator) | $ | 1,662,703 |
| | $ | 1,760,810 |
| | $ | 1,679,499 |
| | | | |
| | | | | | | | | |
Non-performing assets to tangible common shareholders' equity and allowance for credit losses | 9.76 | % | | 9.25 | % | | 9.74 | % | | | | |
| | | | | | | | | | | | | | | |
D A T A A S O F J U N E 3 0 , 2 0 1 5 U N L E S S O T H E R W I S E N O T E D 2015 SECOND QUARTER RESULTS NASDAQ: FULT
FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements with respect to Fulton Financial Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as “may,” “should,” “will,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future,” “intends” and similar expressions which are intended to identify forward-looking statements. Management’s “2015 Outlook” contained herein is comprised of forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation’s control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements. 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, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation’s website (www.fult.com) and on the Securities and Exchange Commission’s website (www.sec.gov). The Corporation uses certain non-GAAP financial measures in this presentation. These non-GAAP financial measures are reconciled to the most comparable GAAP measures at the end of this presentation. 2
SECOND QUARTER HIGHLIGHTS • Diluted Earnings Per Share Growth • 4.5% decrease compared to 1Q15 • Loans & Deposits • 0.7% increase in average loans compared to 1Q15, driven by Commercial and Commercial Real Estate; 3.1% increase compared to 2Q14 • 0.8% increase in average deposits compared to 1Q15, driven by an increase in savings and demand deposits; 7.0% increase compared to 2Q14 • Net Interest Income & Margin • 0.5% decrease in net interest income and a 7 basis point decrease in net interest margin compared to 1Q15 • Asset Quality • $2.2 million loan loss provision; increase in net charge-offs, stable non-performing loans • Non-Interest Income • Increased 8.6% compared to 1Q15 and increased 0.7% compared to 2Q14; increase in other service charges and fees in comparison to both periods • Non-Interest Expenses • Very slight (0.1%) decrease compared to 1Q15; 1.9% increase compared to 2Q14 • Strong Capital Levels • Capital levels remain above regulatory minimums under Basel III standards • Quarterly cash dividend to shareholders remained at nine cents; 1.5 million shares repurchased during 2Q15 • Issued $150 million of subordinated debt; proceeds used to redeem $150 million of trust preferred securities 3
INCOME STATEMENT SUMMARY – QUARTERLY COMPARISON Net Income of $36.7 million; an 8.4% decrease from 1Q15 and a 7.4% decrease from 2Q14 Net Interest Income From 1Q15: Decrease of 0.5% due to a 7 bps decline in net interest margin (NIM) From 2Q14: Decrease of 3.9% due to 21 bps decline in NIM, partially offset by 2.5% increase in average earning assets Loan Loss Provision $3.7 million negative provision in Q1 2015 Non-Interest Income From 1Q15: Increase of 8.6% driven by increases in overdraft fees, merchant and mortgage sale gains From 2Q14: Increase of 0.7% due to increased merchant and debit card income and other service charges and fees Non-Interest Expenses From 1Q15: Decrease of 0.1% reflecting lower occupancy and OREO costs, offset by higher outside services and marketing From 2Q14: Increase of 1.9% due to higher staffing costs and outside services 4 Note: ROA is return an average assets determined by dividing net income for the period indicated by average assets (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 2Q15 1Q15 2Q14 Net Interest Income 122,920$ (661)$ (4,978)$ Loan Loss Provision 2,200 5,900 (1,300) Non-interest Income 44,074 3,482 314 Securities Gains 2,415 (1,730) 1,303 Non-interest Expense 118,354 (124) 2,180 Income Taxes 12,175 (1,329) (1,325) Net Income 36,680$ (3,356)$ (2,916)$ Per Share (Diluted) 0.21$ (0.01)$ -$ ROA 0.86% (0.09%) (0.08%) ROE (tangible) (1) 9.83% (1.13%) (0.47%) Efficiency ratio (1) 68.94% (1.22%) 3.09% (dollars in thousands, except per-share data) Change from
NET INTEREST INCOME AND MARGIN 5 Net Interest Income & Net Interest Margin ~ $730 million ~ $610 million $127.9 $129.4 $128.0 $123.6 $122.9 3.41% 3.39% 3.31% 3.27% 3.20% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Net Interest Income Net Interest Margin (Fully-taxable equivalent basis, or FTE) Average Interest-Earning Assets & Yields Average Liabilities & Rates $2.8 $2.8 $2.9 $2.8 $2.8 $12.8 $12.9 $13.1 $13.1 $13.2 3.92% 3.90% 3.85% 3.83% 3.74% 0.0% 2.0% 4.0% $- $4.0 $8.0 $12.0 $16.0 $20.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Securities & Other Loans Earning Asset Yield (FTE) $12.6 $13.0 $13.3 $13.4 $13.5 $1.9 $1.7 $1.5 $1.4 $1.4 0.71% 0.73% 0.76% 0.80% 0.77% 0.5% 0.7% 0.9% $- $4.0 $8.0 $12.0 $16 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Deposits Borrowings Cost of Interest-bearing Liabilities ($ IN MILLIONS) ($ IN BILLIONS) ($ IN BILLIONS)
ASSET QUALITY ($ IN MILLIONS) 6 Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans 129.56% 132.85% 134.26% 120.34% 113.34% 1.51% 1.47% 1.42% 1.37% 1.28% 0.00% 1.00% 2.00% 3.00% 0.00% 25.00% 50.00% 75.00% 100.00% 125.00% 150.00% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Allowance/NPLs Allowance/Loans Net Charge-offs (NCOs) and NCOs to Average Loans Allowance for Credit Losses (Allowance) to NPLs & Loans $9.1 $5.8 $8.2 $2.6 $12.4 0.28% 0.18% 0.25% 0.08% 0.38% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 Q2 2014 Q3 2014 Q4 2014 1 5 2 2015 NCOs NCOs/Average Loans $3.5 $3.5 $3.0 $(3.7) $2.2 $(6.0) $(4.0) $(2.0) $- $2.0 $4.0 $6.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $149.3 $143.8 $138.5 $149.3 $149.5 1.16% 1.10% 1.06% 1.14% 1.13% 0.00% 0.50% 1.00% 1.50% 2.00% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 NPL NPLs/Loans
NON-INTEREST INCOME, EXCLUDING SECURITIES GAINS ($ IN MILLIONS) 7 Non-interest Income, Excluding Securities Gains ~ $730 million ~ $610 million $43.8 $41.8 $41.3 $40.6 $44.1 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Mortgage Banking Income & Spreads Other Non-interest Income 1.15% 1.32% 1.03% 1.11% 1.62% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Gains on Sales Servicing Income Spread on Sales (1) $5.7 $4.0 $3.7 $4.7 $5.3 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40 $45.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Invt Mgmt & Trust Srvs Deposit Srv Chgs Oth Srv Chgs Other $38.0 $37.8 $37.5 $34.9 $38.7 8.6% (1) Represents Gains on Sales divided by total commitments to originate residential mortgage loans for customers.
NON-INTEREST EXPENSES ($ IN MILLIONS) 8 Non-interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $116.2 $115.8 $117.7 $118.5 $118.4 65.9% 65.8% 67.5% 70.2% 68.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Salaries and Employee Benefits & Staffing Other Non-interest Expenses 3,530 3,468 - 2,000 4,000 6,000 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Total Salaries Employee Benefits Average Full-time Equivalent Employees $63.6 $62.4 $65.4 $65.0 $65.1 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Occp & Equip Data Processing & Software Outside Srvs Other $52.6 $53.4 $52.3 $53.5 $53.3 - 0.1% (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non- GAAP Reconciliation” at the end of this presentation.
COMPLIANCE & RISK MANAGEMENT $1.8 $2.1 $3.2 $4.1 $4.6 $1.4 $8.2 $4.2 13 45 47 0 5 10 15 20 25 30 35 40 45 50 $- $3.0 $6.0 $9.0 $12.0 2011 2012 2013 2014 2015 (Projected) Salaries & Benefits Expense Outside Consulting Services# Staffing $0.8 YTD Jun15: $2.0 YTD Jun15: $3.0 $0.1 9 # Represents third-party consulting and legal services directly related to BSA/AML compliance program. 2015 and 2014 exclude $0.7 million and $0.6 million, respectively, of capitalized software costs. To tal A n n u al E xp e n ses , in m ill io n s • Strengthening Risk Management and Compliance infrastructures • Address deficiencies within BSA/AML compliance • Recent BSA/AML enforcement actions at the Corporation and banking subsidiaries • Significant investments in personnel, outside services and systems; largely in-line with amounts previously disclosed BSA/AML Compliance Program Expenses and Staffing To tal N u m b e r o f Em p lo ye e s at Pe rio d En d
PROFITABILITY & CAPITAL 10 ROA ROE (tangible) (1) Tangible Common Equity Ratio (1) Diluted Earnings Per Common Share 10.30% 9.88% 9.96% 10.96% 9.83% 0.00% 4.00% 8.00% 12.00% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 0.94% 0.90% 0.88% 0.95% 0.86% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Note: ROA is return an average assets determined by dividing net income for the period indicated by average assets (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 9.5% 9.3% 8.8% 8.9% 8.9% 0.0% 4. 8. 12.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $0.21 $0.21 $0.21 $0.22 $0.21 $- $0.05 $0.10 $0.15 $0.20 $0.25 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
2015 OUTLOOK 11 Area Original Updated Loans & Deposits Annual average growth of 3%-7% Loans - Growth at lower end of range; Deposits - no change Net Interest Margin Compression of 0-4 bps per quarter, on average, based on the current interest rate environment Compression of 5-8 basis points over the second half of 2015 Asset Quality Continued modest provision; volatility may occur due to individual credits No change Non-Interest Income Mid- to high- single digit growth rate Growth at lower end of range Non-Interest Expense Low- single digit growth rate No change, except for $5.6 million of debt extinguishment costs in Q3 2015 Compliance, Risk Management and Technology Continued focus on program build- out No change Capital Continued commitment to return of capital to shareholders No change
NON-GAAP RECONCILIATION Note: The Corporation has presented the following non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non- GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. 12 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Efficiency ratio Non-interest expense 116,174$ 115,798$ 117,720$ 118,478$ 118,354$ Less: Intangible amortization (315) (314) (315) (130) (106) Numerator 115,859$ 115,484$ 117,405$ 118,348$ 118,248$ Net interest income (fully taxable equivalent) 132,175$ 133,692$ 132,614$ 128,085$ 127,444$ Plus: Total Non-interest income 44,872 41,900 42,101 44,737 46,489 Less: Investment securities (gains) losses (1,112) (81) (848) (4,145) (2,415) Denominator 175,935$ 175,511$ 173,867$ 168,677$ 171,518$ Efficiency ratio 65.85% 65.80% 67.53% 70.16% 68.94% Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Return on Average Shareholders' Equity (ROE) (Tangible) Net income 39,596$ 38,566$ 37,949$ 40,036$ 36,680$ Plus: Intangible amortization, net of tax 204 204 205 85 69 umer to 39,800$ 38,770$ 38,154$ 40,121$ 36,749$ Ave age sh r holders' equity 2,081,898$ 2,089,459$ 2,052,211$ 2,015,963$ 2,031,788$ Less: Average goodwill and intangible assets (532,585) (532,271) (531,955) (531,732) (531,618) Average tangible shareholders' equity (denominator) 1,549,313$ 1,557,188$ 1,520,256$ 1,484,231$ 1,500,170$ Return on average common shareholders' equity (tangible), annualized 10.30% 9.88% 9.96% 10.96% 9.83% Three Months Ended Three Months Ended (dollars in thousands) (dollars in thousands)
NON-GAAP RECONCILIATION (CON’T) 13 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Tangible Common Equity to Tangible Assets (TCE Ratio) Shareholders' equity 2,099,800$ 2,078,006$ 1,996,665$ 2,031,513$ 2,024,817$ Less: Intangible assets (532,432) (532,117) (531,803) (531,672) (531,567) Tangible shareholders' equity (numerator) 1,567,368$ 1,545,889$ 1,464,862$ 1,499,841$ 1,493,250$ Total assets 17,033,639$ 17,238,174$ 17,124,767$ 17,363,341$ 17,365,462$ Less: Intangible assets (532,432) (532,117) (531,803) (531,672) (531,567) Total tangible assets (denominator) 16,501,207$ 16,706,057$ 16,592,964$ 16,831,669$ 16,833,895$ Tangible Common Equity to Tangible Assets 9.5% 9.3% 8.8% 8.9% 8.9%
V E R S I O N 4 . 2 1 . 2 0 1 5 www.fult.com
Fulton Financial (NASDAQ:FULT)
Historical Stock Chart
From May 2024 to Jun 2024
Fulton Financial (NASDAQ:FULT)
Historical Stock Chart
From Jun 2023 to Jun 2024