FULTON FINANCIAL CORPORATION 
By LANCASTER, PA -- (Marketwired) -- 01/21/14 -- Fulton Financial Corporation (NASDAQ: FULT)
- Diluted earnings per share for the fourth quarter of 2013 was 22 cents, a 4.8 percent increase from the third quarter of 2013 and a 10.0 percent increase from the fourth quarter of 2012. For the year ended December 31, 2013, diluted earnings per share was 83 cents, a 3.8 percent increase from 2012.
- The provision for credit losses was $2.5 million for the fourth quarter of 2013, a $7.0 million, or 73.7 percent, decrease from the third quarter of 2013. For the year ended December 31, 2013, the provision for credit losses decreased $53.5 million, or 56.9 percent, compared to 2012. Non-performing loans decreased $14.0 million, or 8.3 percent, in comparison to September 30, 2013 and $56.8 million, or 26.9 percent, in comparison to December 31, 2012.
- Net interest income for the fourth quarter of 2013 increased $419,000, or 0.3 percent, compared to the third quarter of 2013, while the net interest margin increased 3 basis points to 3.48 percent. For the year ended December 31, 2013, in comparison to 2012, net interest income decreased $17.1 million, or 3.1 percent, while the net interest margin decreased 26 basis points.
- Average loans for the fourth quarter of 2013 increased $64.4 million, or 0.5 percent, compared to the third quarter of 2013. Average loans for the year ended December 31, 2013 increased $610.0 million, or 5.1 percent, in comparison to 2012.
- Non-interest income, excluding investment securities gains, decreased $4.0 million, or 9.0 percent, in comparison to the third quarter of 2013, while non-interest expense increased 0.1 percent. For the year ended December 31, 2013, in comparison to 2012, non-interest income, excluding investment securities gains, decreased $33.7 million, or 15.8 percent, while non-interest expense increased $12.1 million, or 2.7 percent.
- During 2013, the Corporation successfully completed the conversion to its new core processing system, which supports customer relationship management for substantially all deposit and loan customers.
-
During 2013, the Corporation repurchased 8.0 million shares of its common stock. The Corporation is authorized to repurchase up to 4.0 million additional shares, or approximately 2.1 percent of its outstanding shares, through March 31, 2014.
Fulton Financial Corporation (NASDAQ: FULT) reported net income of $42.1 million, or 22 cents per diluted share, for the fourth quarter of 2013, compared to $39.9 million, or 21 cents per diluted share, for the third quarter of 2013. For the year ended December 31, 2013, net income was $161.8 million, or 83 cents per diluted share, a 3.8 percent increase in comparison to the 80 cents per diluted share earned for the same period in 2012.
"2013 was a year of good progress and positioning the company for the future. We increased our loan portfolio, one of our key strategic priorities. Overall asset quality improved significantly as seen in our lower provision for credit losses and lower non-performing loan levels year over year. We continued to prudently deploy capital through our share repurchases and cash dividends to our shareholders," said E. Philip Wenger, Chairman, CEO and President. "Fourth quarter financial performance was solid with further improvement in asset quality. We were particularly pleased to see modest expansion in our net interest margin, an area that has been a challenge over the last several quarters."
Asset Quality
Non-performing assets were $169.3 million, or 1.00 percent of total assets, at December 31, 2013, compared to $186.5 million, or 1.09 percent of total assets, at September 30, 2013 and $237.2 million, or 1.43 percent of total assets, at December 31, 2012. The $17.1 million, or 9.2 percent, decrease in non-performing assets in comparison to the third quarter of 2013 was primarily due to a decrease in non-performing commercial loans, construction loans and residential mortgages, as well as a decrease in other real estate owned (OREO).
Annualized net charge-offs for the quarter ended December 31, 2013 were 0.33 percent of average total loans, compared to 0.45 percent for the quarter ended September 30, 2013 and 0.91 percent for the quarter ended December 31, 2012. The allowance for credit losses as a percentage of non-performing loans was 132.8 percent at December 31, 2013, as compared to 126.5 percent at September 30, 2013 and 106.8 percent at December 31, 2012.
Net Interest Income and Margin
Net interest income for the fourth quarter of 2013 increased $419,000, or 0.3 percent, from the third quarter of 2013. The net interest margin increased three basis points, or 0.9 percent, to 3.48 percent in the fourth quarter of 2013 from 3.45 percent in the third quarter of 2013. Average yields on interest-earning assets increased two basis points, while the average cost of interest-bearing liabilities declined two basis points during the fourth quarter of 2013 in comparison to the third quarter of 2013.
For the year ended December 31, 2013, net interest income decreased $17.1 million, or 3.1 percent. The net interest margin was 3.50 percent for 2013, compared to 3.76 percent for 2012.
Average Balance Sheet
Total average assets for the fourth quarter of 2013 were $16.9 billion, a decrease of $71.4 million, or 0.4 percent, from the third quarter of 2013, due primarily to a $159.6 million decrease in average investment securities, partially offset by a $64.4 million increase in average loans.
Total average liabilities decreased $93.1 million, or 0.6 percent, from the third quarter of 2013, primarily due to a $238.0 million decrease in average short-term borrowings, partially offset by a $118.9 million increase in average deposits.
Non-interest Income
Non-interest income, excluding investment securities gains, decreased $4.0 million, or 9.0 percent, in comparison to the third quarter of 2013. Mortgage banking income decreased $2.8 million, including a $1.5 million decrease in servicing income and a $1.3 million decrease in gains on sales of mortgage loans, as both volumes and spreads decreased. Servicing income in the third quarter of 2013 included a $1.7 million reduction of the valuation allowance for mortgage servicing rights. Service charges on deposit accounts decreased $1.2 million, or 8.4 percent, due to a decrease in overdraft fees.
For the year ended December 31, 2013, non-interest income, excluding investment securities gains, decreased $33.7 million, or 15.8 percent, in comparison to 2012. Mortgage banking income decreased $13.9 million, including a $21.7 million decrease in gains on sales of mortgage loans, which was partially offset by an increase in servicing income due to a reduction in the valuation allowance for mortgage servicing rights. Service charges on deposit accounts decreased $6.0 million, or 9.8 percent, due primarily to lower overdraft fees. Other service charges and fees decreased $7.4 million, or 16.7 percent, as foreign currency processing revenues declined after the December 2012 sale of the Corporation's Global Exchange Group Division. This sale also generated a $6.2 million gain in 2012.
Non-interest Expense
Non-interest expense increased $157,000, or 0.1 percent, in the fourth quarter of 2013 compared to the third quarter of 2013. Salaries and employee benefits increased $1.9 million, or 2.9 percent, due primarily to an increase in incentive compensation. Data processing and software expenses decreased $2.2 million primarily due to the timing of expenditures associated with the core processing system conversion, which was completed during the third quarter of 2013.
For the year ended December 31, 2013, non-interest expense increased $12.1 million, or 2.7 percent, in comparison to 2012. Salaries and employee benefits increased $9.3 million, or 3.8 percent, driven by an increase in staffing, normal merit increases and higher benefits costs. Data processing and software expenses increased $3.7 million, due to the 2013 core processing system conversion. Professional fees increased $1.6 million and other outside services increased $1.1 million, both primarily due to costs associated with regulatory compliance and risk management. OREO and repossession expense decreased $3.8 million, or 34.1 percent, due to decreases in holding costs and net losses on the sales of foreclosed properties as asset quality improved. During the fourth quarter of 2012, the Corporation incurred a $3.0 million penalty associated with the prepayment of approximately $20 million of Federal Home Loan Bank (FHLB) advances.
About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company that has banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates, headquartered as indicated: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Fulton Bank of New Jersey, Mt. Laurel, NJ; and The Columbia Bank, Columbia, MD.
The Corporation's investment management and trust services are offered at all banks through Fulton Financial Advisors, a division of Fulton Bank, N.A. Residential mortgage lending is offered by all banks under the Fulton Mortgage Company brand.
Additional information on Fulton Financial Corporation is available on the Internet at www.fult.com.
Safe Harbor Statement
This news release may contain forward-looking statements with respect to the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends" and similar expressions which are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation's control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2012, and the Quarterly Reports on Form 10-Q for the quarters ended September 30, 2013, June 30, 2013 and March 31, 2013, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov). The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
dollars in thousands
% Change from
-------------------
September December September
December 31 December 31 30 31 30
2013 2012 2013 2012 2013
----------- ----------- ----------- -------- ---------
ASSETS
Cash and due
from banks $ 218,540 $ 256,300 $ 262,938 (14.7%) (16.9%)
Other interest-
earning assets 248,161 244,959 308,924 1.3% (19.7%)
Loans held for
sale 21,351 67,899 39,273 (68.6%) (45.6%)
Investment
securities 2,568,434 2,721,082 2,597,436 (5.6%) (1.1%)
Loans, net of
unearned income 12,782,220 12,146,971 12,780,899 5.2% -
Allowance for
loan losses (202,780) (223,903) (210,486) (9.4%) (3.7%)
----------- ----------- -----------
Net loans 12,579,440 11,923,068 12,570,413 5.5% 0.1%
Premises and
equipment 226,021 227,723 227,299 (0.7%) (0.6%)
Accrued interest
receivable 44,037 45,786 44,715 (3.8%) (1.5%)
Goodwill and
intangible
assets 533,076 535,563 533,918 (0.5%) (0.2%)
Other assets 495,574 510,717 465,855 (3.0%) 6.4%
----------- ----------- -----------
Total Assets $16,934,634 $16,533,097 $17,050,771 2.4% (0.7%)
=========== =========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Deposits $12,491,186 $12,484,163 $12,721,121 0.1% (1.8%)
Short-term
borrowings 1,258,629 868,399 1,198,577 44.9% 5.0%
Other
liabilities 238,048 204,626 212,987 16.3% 11.8%
FHLB advances
and long-term
debt 883,584 894,253 889,122 (1.2%) (0.6%)
----------- ----------- -----------
Total
Liabilities 14,871,447 14,451,441 15,021,807 2.9% (1.0%)
Shareholders'
equity 2,063,187 2,081,656 2,028,964 (0.9%) 1.7%
----------- ----------- -----------
Total
Liabilities
and
Shareholder's
Equity $16,934,634 $16,533,097 $17,050,771 2.4% (0.7%)
=========== =========== ===========
LOANS, DEPOSITS
AND SHORT-TERM
BORROWINGS
DETAIL:
Loans, by type:
Real estate -
commercial
mortgage $ 5,101,922 $ 4,664,426 $ 5,063,373 9.4% 0.8%
Commercial -
industrial,
financial and
agricultural 3,628,420 3,612,065 3,645,270 0.5% (0.5%)
Real estate -
home equity 1,764,197 1,632,390 1,773,554 8.1% (0.5%)
Real estate -
residential
mortgage 1,337,380 1,257,432 1,327,469 6.4% 0.7%
Real estate -
construction 573,672 584,118 577,342 (1.8%) (0.6%)
Consumer 283,124 309,864 296,142 (8.6%) (4.4%)
Leasing and
other 93,505 86,676 97,749 7.9% (4.3%)
----------- ----------- -----------
Total Loans, net
of unearned
income $12,782,220 $12,146,971 $12,780,899 5.2% -
=========== =========== ===========
Deposits, by type:
Noninterest-
bearing demand $ 3,283,172 $ 3,009,966 $ 3,338,075 9.1% (1.6%)
Interest-bearing
demand 2,945,210 2,755,603 2,986,549 6.9% (1.4%)
Savings deposits 3,344,882 3,335,256 3,371,923 0.3% (0.8%)
Time deposits 2,917,922 3,383,338 3,024,574 (13.8%) (3.5%)
----------- ----------- -----------
Total Deposits $12,491,186 $12,484,163 $12,721,121 0.1% (1.8%)
=========== =========== ===========
Short-term
borrowings, by
type:
Customer
repurchase
agreements $ 175,621 $ 156,238 $ 209,800 12.4% (16.3%)
Customer short-
term promissory
notes 100,572 119,691 95,503 (16.0%) 5.3%
Federal funds
purchased 582,436 592,470 493,274 (1.7%) 18.1%
Short-term FHLB
advances 400,000 - 400,000 N/M -
----------- ----------- -----------
Total Short-term
Borrowings $ 1,258,629 $ 868,399 $ 1,198,577 44.9% 5.0%
=========== =========== ===========
N/M - Not
meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
in thousands, except per-share data and percentages
Quarter Ended % Change from
-------------------------- ---------------
Dec 31 Dec 31 Sep 30 Dec 31 Sep 30
2013 2012 2013 2012 2013
-------- -------- -------- ------ ------
Interest Income:
Interest income $152,457 $155,560 $152,832 (2.0%) (0.2%)
Interest expense 19,505 23,338 20,299 (16.4%) (3.9%)
-------- -------- --------
Net Interest Income 132,952 132,222 132,533 0.6% 0.3%
Provision for credit losses 2,500 17,500 9,500 (85.7%) (73.7%)
-------- -------- --------
Net Interest Income after
Provision 130,452 114,722 123,033 13.7% 6.0%
Non-Interest Income:
Service charges on deposit
accounts 12,770 15,642 13,938 (18.4%) (8.4%)
Investment management and
trust services 10,589 9,611 10,420 10.2% 1.6%
Other service charges and
fees 9,421 11,164 9,518 (15.6%) (1.0%)
Mortgage banking income 4,363 12,813 7,123 (65.9%) (38.7%)
Investment securities gains 33 195 2,633 (83.1%) (98.7%)
Gain on sale of Global
Exchange - 6,215 - (100.0%) -
Other 3,556 3,883 3,725 (8.4%) (4.5%)
-------- -------- --------
Total Non-Interest Income 40,732 59,523 47,357 (31.6%) (14.0%)
Non-Interest Expense:
Salaries and employee
benefits 65,194 61,303 63,344 6.3% 2.9%
Net occupancy expense 12,134 11,362 11,519 6.8% 5.3%
Other outside services 5,633 4,138 5,048 36.1% 11.6%
Equipment expense 3,972 3,873 3,646 2.6% 8.9%
Data processing 3,386 3,713 4,757 (8.8%) (28.8%)
Professional fees 3,379 3,228 3,329 4.7% 1.5%
FDIC insurance expense 2,839 2,944 2,918 (3.6%) (2.7%)
Software 2,450 2,562 3,268 (4.4%) (25.0%)
Operating risk loss 2,367 2,627 3,297 (9.9%) (28.2%)
Marketing 1,660 2,537 2,251 (34.6%) (26.3%)
OREO and repossession
expense 1,116 2,473 1,453 (54.9%) (23.2%)
Intangible amortization 834 713 534 17.0% 56.2%
FHLB advance prepayment
penalty - 3,007 - (100.0%) -
Other 11,798 12,076 11,241 (2.3%) 5.0%
-------- -------- --------
Total Non-Interest Expense 116,762 116,556 116,605 0.2% 0.1%
-------- -------- --------
Income Before Income Taxes 54,422 57,689 53,785 (5.7%) 1.2%
Income tax expense 12,339 17,449 13,837 (29.3%) (10.8%)
-------- -------- --------
Net Income $ 42,083 $ 40,240 $ 39,948 4.6% 5.3%
======== ======== ========
PER SHARE:
Net income:
Basic $ 0.22 $ 0.20 $ 0.21 10.0% 4.8%
Diluted 0.22 0.20 0.21 10.0% 4.8%
Cash dividends $ 0.08 $ 0.08 $ 0.08 - -
Shareholders' equity 10.71 10.45 10.55 2.5% 1.5%
Shareholders' equity
(tangible) 7.94 7.76 7.77 2.3% 2.2%
Weighted average shares
(basic) 191,577 198,161 192,251 (3.3%) (0.4%)
Weighted average shares
(diluted) 192,658 199,198 193,259 (3.3%) (0.3%)
Shares outstanding, end of
period 192,652 199,225 192,332 (3.3%) 0.2%
SELECTED FINANCIAL RATIOS:
Return on average assets 0.99% 0.99% 0.93%
Return on average
shareholders' equity 8.14% 7.70% 7.81%
Return on average
shareholders' equity
(tangible) 11.15% 10.53% 10.69%
Net interest margin 3.48% 3.65% 3.45%
Efficiency ratio 65.14% 59.16% 63.92%
-------- -------- -------- ------ ------
Year Ended
Dec 31
-----------------
%
2013 2012 Change
-------- -------- -------
Interest Income:
Interest income $609,689 $647,496 (5.8%)
Interest expense 82,495 103,168 (20.0%)
-------- --------
Net Interest Income 527,194 544,328 (3.1%)
Provision for credit losses 40,500 94,000 (56.9%)
-------- --------
Net Interest Income after
Provision 486,694 450,328 8.1%
Non-Interest Income:
Service charges on deposit
accounts 55,470 61,502 (9.8%)
Investment management and
trust services 41,706 38,239 9.1%
Other service charges and
fees 36,957 44,345 (16.7%)
Mortgage banking income 30,656 44,600 (31.3%)
Investment securities gains 8,004 3,026 164.5%
Gain on sale of Global
Exchange - 6,215 (100.0%)
Other 14,871 18,485 (19.6%)
-------- --------
Total Non-Interest Income 187,664 216,412 (13.3%)
Non-Interest Expense:
Salaries and employee
benefits 253,240 243,915 3.8%
Net occupancy expense 46,944 44,663 5.1%
Other outside services 18,856 17,752 6.2%
Equipment expense 15,419 14,243 8.3%
Data processing 16,555 14,936 10.8%
Professional fees 13,150 11,522 14.1%
FDIC insurance expense 11,605 11,996 (3.3%)
Software 11,560 9,520 21.4%
Operating risk loss 9,290 9,454 (1.7%)
Marketing 7,705 8,240 (6.5%)
OREO and repossession
expense 7,364 11,182 (34.1%)
Intangible amortization 2,437 3,031 (19.6%)
FHLB advance prepayment
penalty - 3,007 (100.0%)
Other 47,308 45,833 3.2%
-------- --------
Total Non-Interest Expense 461,433 449,294 2.7%
-------- --------
Income Before Income Taxes 212,925 217,446 (2.1%)
Income tax expense 51,085 57,601 (11.3%)
-------- --------
Net Income $161,840 $159,845 1.2%
======== ========
PER SHARE:
Net income:
Basic $ 0.84 $ 0.80 5.0%
Diluted 0.83 0.80 3.8%
Cash dividends $ 0.32 $ 0.30 6.7%
Shareholders' equity 10.71 10.45 2.5%
Shareholders' equity
(tangible) 7.94 7.76 2.3%
Weighted average shares
(basic) 193,334 199,067 (2.9%)
Weighted average shares
(diluted) 194,354 200,039 (2.8%)
Shares outstanding, end of
period 192,652 199,225 (3.3%)
SELECTED FINANCIAL RATIOS:
Return on average assets 0.96% 0.98%
Return on average
shareholders' equity 7.88% 7.79%
Return on average
shareholders' equity
(tangible) 10.76% 10.73%
Net interest margin 3.50% 3.76%
Efficiency ratio 63.39% 57.61%
-------- -------- -------
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Quarter Ended
December 31, 2013 December 31, 2012
--------------------------- ---------------------------
Average Interest Yield/ Average Interest Yield/
Balance (1) Rate Balance (1) Rate
----------- -------- ------ ----------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned income $12,792,566 $138,336 4.29% $12,002,944 $141,014 4.68%
Taxable
investment
securities 2,289,672 13,431 2.35% 2,279,551 13,406 2.35%
Tax-exempt
investment
securities 283,799 3,574 5.04% 286,400 3,857 5.39%
Equity
securities 33,887 413 4.83% 43,706 509 4.63%
----------- -------- ------ ----------- -------- ------
Total Investment
Securities 2,607,358 17,418 2.67% 2,609,657 17,772 2.72%
Loans held for
sale 20,059 290 5.78% 59,977 517 3.45%
Other interest-
earning assets 263,478 737 1.12% 217,948 520 0.96%
----------- -------- ------ ----------- -------- ------
Total Interest-
earning Assets 15,683,461 156,781 3.98% 14,890,526 159,823 4.28%
Noninterest-
earning assets:
Cash and due
from banks 212,463 220,924
Premises and
equipment 226,955 224,852
Other assets 1,008,304 1,079,274
Less: allowance
for loan losses (210,636) (235,563)
----------- -----------
Total Assets $16,920,547 $16,180,013
=========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand deposits $ 2,966,994 $ 969 0.13% $ 2,684,063 $ 1,055 0.16%
Savings deposits 3,410,030 1,042 0.12% 3,399,423 1,251 0.15%
Time deposits 2,965,604 6,117 0.82% 3,472,692 9,748 1.12%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing
Deposits 9,342,628 8,128 0.35% 9,556,178 12,054 0.50%
Short-term
borrowings 1,099,709 520 0.19% 488,310 156 0.13%
FHLB advances
and long-term
debt 888,378 10,857 4.87% 914,013 11,128 4.86%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing
Liabilities 11,330,715 19,505 0.68% 10,958,501 23,338 0.85%
Noninterest-
bearing
liabilities:
Demand deposits 3,318,073 2,955,208
Other 221,010 186,958
----------- -----------
Total
Liabilities 14,869,798 14,100,667
Shareholders'
equity 2,050,749 2,079,346
----------- -----------
Total
Liabilities and
Shareholders'
Equity $16,920,547 $16,180,013
=========== ===========
Net interest
income/net
interest margin
(fully taxable
equivalent) 137,276 3.48% 136,485 3.65%
====== ======
Tax equivalent
adjustment (4,324) (4,263)
-------- --------
Net interest
income $132,952 $132,222
======== ========
Quarter Ended
September 30, 2013
---------------------------
Average Interest Yield/
Balance (1) Rate
----------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned income $12,728,162 $139,141 4.34%
Taxable
investment
securities 2,446,583 12,977 2.12%
Tax-exempt
investment
securities 284,372 3,581 5.04%
Equity
securities 35,999 436 4.82%
----------- -------- ------
Total Investment
Securities 2,766,954 16,994 2.46%
Loans held for
sale 36,450 382 4.19%
Other interest-
earning assets 236,185 658 1.12%
----------- -------- ------
Total Interest-
earning Assets 15,767,751 157,175 3.96%
Noninterest-
earning assets:
Cash and due
from banks 210,525
Premises and
equipment 224,837
Other assets 1,009,162
Less: allowance
for loan losses (220,342)
-----------
Total Assets $16,991,933
===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand deposits $ 2,895,156 $ 938 0.13%
Savings deposits 3,359,795 1,015 0.12%
Time deposits 3,065,210 6,790 0.88%
----------- -------- ------
Total Interest-
bearing
Deposits 9,320,161 8,743 0.37%
Short-term
borrowings 1,337,742 691 0.20%
FHLB advances
and long-term
debt 889,141 10,865 4.87%
----------- -------- ------
Total Interest-
bearing
Liabilities 11,547,044 20,299 0.70%
Noninterest-
bearing
liabilities:
Demand deposits 3,221,648
Other 194,163
-----------
Total
Liabilities 14,962,855
Shareholders'
equity 2,029,078
-----------
Total
Liabilities and
Shareholders'
Equity $16,991,933
===========
Net interest
income/net
interest margin
(fully taxable
equivalent) 136,876 3.45%
======
Tax equivalent
adjustment (4,343)
--------
Net interest
income $132,533
========
(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:
Quarter Ended % Change from
----------------------------------- --------------------
September December September
December 31 December 31 30 31 30
2013 2012 2013 2012 2013
----------- ----------- ----------- --------- ---------
Loans, by type:
Real estate -
commercial
mortgage $ 5,065,963 $ 4,623,158 $ 4,961,871 9.6% 2.1%
Commercial -
industrial,
financial and
agricultural 3,639,690 3,559,171 3,706,113 2.3% (1.8%)
Real estate -
home equity 1,774,919 1,611,868 1,767,095 10.1% 0.4%
Real estate -
residential
mortgage 1,331,987 1,223,962 1,323,972 8.8% 0.6%
Real estate -
construction 581,306 593,351 576,222 (2.0%) 0.9%
Consumer 287,245 306,350 299,057 (6.2%) (3.9%)
Leasing and
other 111,456 85,084 93,832 31.0% 18.8%
----------- ----------- -----------
Total Loans, net
of unearned
income $12,792,566 $12,002,944 $12,728,162 6.6% 0.5%
=========== =========== ===========
Deposits, by type:
Noninterest-
bearing demand $ 3,318,073 $ 2,955,208 $ 3,221,648 12.3% 3.0%
Interest-bearing
demand 2,966,994 2,684,063 2,895,156 10.5% 2.5%
Savings deposits 3,410,030 3,399,423 3,359,795 0.3% 1.5%
Time deposits 2,965,604 3,472,692 3,065,210 (14.6%) (3.2%)
----------- ----------- -----------
Total Deposits $12,660,701 $12,511,386 $12,541,809 1.2% 0.9%
=========== =========== ===========
Short-term
borrowings, by
type:
Customer
repurchase
agreements $ 196,997 $ 189,922 $ 196,503 3.7% 0.3%
Customer short-
term promissory
notes 93,986 125,933 91,573 (25.4%) 2.6%
Federal funds
purchased 408,726 172,455 559,992 137.0% (27.0%)
Short-term FHLB
advances 400,000 - 489,674 N/M (18.3%)
----------- ----------- -----------
Total Short-term
Borrowings $ 1,099,709 $ 488,310 $ 1,337,742 125.2% (17.8%)
=========== =========== ===========
N/M - Not
meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Year ended December 31
--------------------------------------------------------
2013 2012
--------------------------- ----------- -------- ------
Average Interest Yield/ Average Interest Yield/
Balance (1) Rate Balance (1) Rate
----------- -------- ------ ----------- -------- ------
ASSETS
Interest-earning
assets:
Loans, net of
unearned income $12,578,524 $552,427 4.39% $11,968,567 $575,534 4.81%
Taxable
investment
securities 2,391,650 54,321 2.27% 2,401,343 67,349 2.80%
Tax-exempt
investment
securities 285,174 14,577 5.11% 287,763 15,942 5.54%
Equity
securities 38,722 1,829 4.72% 35,151 1,639 4.66%
----------- -------- ------ ----------- -------- ------
Total Investment
Securities 2,715,546 70,727 2.60% 2,724,257 84,930 3.12%
Loans held for
sale 36,561 1,551 4.24% 54,351 2,064 3.80%
Other interest-
earning assets 229,444 2,264 0.99% 207,415 1,830 0.88%
----------- -------- ------ ----------- -------- ------
Total Interest-
earning Assets 15,560,075 626,969 4.03% 14,954,590 664,358 4.45%
Noninterest-
earning assets:
Cash and due
from banks 207,931 234,494
Premises and
equipment 226,041 219,236
Other assets 1,037,338 1,099,616
Less: allowance
for loan losses (220,048) (250,160)
----------- -----------
Total Assets $16,811,337 $16,257,776
=========== ===========
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Interest-bearing
liabilities:
Demand deposits $ 2,822,583 $ 3,656 0.13% $ 2,560,831 $ 4,187 0.16%
Savings deposits 3,363,943 4,096 0.12% 3,356,070 6,002 0.18%
Time deposits 3,129,162 29,018 0.93% 3,717,556 46,706 1.26%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing
Deposits 9,315,688 36,770 0.39% 9,634,457 56,895 0.59%
Short-term
borrowings 1,196,323 2,420 0.20% 690,883 1,068 0.15%
Federal Home
Loan Bank
advances and
long-term debt 889,461 43,305 4.87% 933,727 45,205 4.84%
----------- -------- ------ ----------- -------- ------
Total Interest-
bearing
Liabilities 11,401,472 82,495 0.72% 11,259,067 103,168 0.92%
Noninterest-
bearing
liabilities:
Demand deposits 3,157,496 2,758,123
Other 198,548 189,592
----------- -----------
Total
Liabilities 14,757,516 14,206,782
Shareholders'
equity 2,053,821 2,050,994
----------- -----------
Total
Liabilities and
Shareholders'
Equity $16,811,337 $16,257,776
=========== ===========
Net interest
income/net
interest margin
(fully taxable
equivalent) 544,474 3.50% 561,190 3.76%
====== ======
Tax equivalent
adjustment (17,280) (16,862)
-------- --------
Net interest
income $527,194 $544,328
======== ========
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and
statutory interest expense disallowances.
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Year Ended
December 31
-----------------------
%
2013 2012 Change
----------- ----------- -------
Loans, by type:
Real estate - commercial mortgage $ 4,864,460 $ 4,619,587 5.3%
Commercial - industrial, financial and
agricultural 3,680,772 3,551,056 3.7%
Real estate - home equity 1,734,622 1,605,088 8.1%
Real estate - residential mortgage 1,312,127 1,185,928 10.6%
Real estate - construction 591,540 620,166 (4.6%)
Consumer 299,127 307,746 (2.8%)
Leasing and other 95,876 78,996 21.4%
----------- -----------
Total Loans, net of unearned income $12,578,524 $11,968,567 5.1%
=========== ===========
Deposits, by type:
Noninterest-bearing demand $ 3,157,496 $ 2,758,123 14.5%
Interest-bearing demand 2,822,583 2,560,831 10.2%
Savings deposits 3,363,943 3,356,070 0.2%
Time deposits 3,129,162 3,717,556 (15.8%)
----------- -----------
Total Deposits $12,473,184 $12,392,580 0.7%
=========== ===========
Short-term borrowings, by type:
Customer repurchase agreements $ 186,851 $ 206,842 (9.7%)
Customer short-term promissory notes 98,882 138,632 (28.7%)
Federal funds purchased 612,508 335,573 82.5%
Short-term FHLB advances 298,082 9,836 N/M
----------- -----------
Total Short-term Borrowings $ 1,196,323 $ 690,883 73.2%
=========== ===========
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
Quarter Ended Year Ended
--------------------------
Dec 31 Dec 31 Sep 30 Dec 31
-------------------
2013 2012 2013 2013 2012
-------- -------- -------- -------- ----------
ALLOWANCE FOR CREDIT LOSSES:
Balance at beginning of
period $212,838 $235,268 $217,626 $225,439 $ 258,177
Loans charged off:
Commercial - industrial,
financial and
agricultural (5,527) (12,711) (9,394) (30,383) (41,868)
Real estate - commercial
mortgage (7,779) (8,935) (3,724) (20,829) (51,988)
Real estate - home equity (1,458) (3,464) (2,365) (8,193) (10,147)
Real estate - residential
mortgage (1,423) (1,500) (767) (9,705) (4,509)
Real estate - construction (1,391) (873) (598) (6,572) (26,250)
Consumer (421) (1,533) (473) (1,877) (3,323)
Leasing and other (616) (585) (787) (2,653) (2,281)
-------- -------- -------- -------- ----------
Total loans charged off (18,615) (29,601) (18,108) (80,212) (140,366)
Recoveries of loans
previously charged off:
Commercial - industrial,
financial and
agricultural 5,851 1,236 2,295 9,281 4,282
Real estate - commercial
mortgage 740 85 185 3,494 3,371
Real estate - home equity 139 63 198 860 704
Real estate - residential
mortgage 106 290 245 548 459
Real estate - construction 888 171 379 2,682 2,814
Consumer 312 274 294 1,518 1,107
Leasing and other 158 153 224 807 891
-------- -------- -------- -------- ----------
Recoveries of loans
previously charged off 8,194 2,272 3,820 19,190 13,628
-------- -------- -------- -------- ----------
Net loans charged off (10,421) (27,329) (14,288) (61,022) (126,738)
Provision for credit losses 2,500 17,500 9,500 40,500 94,000
-------- -------- -------- -------- ----------
Balance at end of period $204,917 $225,439 $212,838 $204,917 $ 225,439
======== ======== ======== ======== ==========
Net charge-offs to average
loans (annualized) 0.33% 0.91% 0.45% 0.49% 1.06%
======== ======== ======== ======== ==========
NON-PERFORMING ASSETS:
Non-accrual loans $133,753 $184,832 $143,012
Loans 90 days past due and
accruing 20,524 26,221 25,271
-------- -------- --------
Total non-performing loans 154,277 211,053 168,283
Other real estate owned 15,052 26,146 18,173
-------- -------- --------
Total non-performing assets $169,329 $237,199 $186,456
======== ======== ========
NON-PERFORMING LOANS, BY
TYPE:
Real estate - commercial
mortgage $ 44,068 $ 57,120 $ 42,623
Commercial - industrial,
financial and agricultural 38,021 66,954 45,184
Real estate - residential
mortgage 31,347 34,436 34,309
Real estate - construction 21,267 32,005 24,396
Real estate - home equity 16,983 17,204 18,691
Consumer 2,543 3,315 3,013
Leasing 48 19 67
-------- -------- --------
Total non-performing loans $154,277 $211,053 $168,283
======== ======== ========
TROUBLED DEBT RESTRUCTURINGS
(TDRs), BY TYPE:
Real-estate - residential
mortgage $ 28,815 $ 32,993 $ 27,820
Real-estate - commercial
mortgage 19,758 34,672 22,644
Real estate - construction 10,117 10,564 9,841
Commercial - industrial,
financial and agricultural 8,045 5,745 8,184
Real estate - home equity 1,365 1,518 1,667
Consumer 11 16 11
-------- -------- --------
Total accruing TDRs 68,111 85,508 70,167
Non-accrual TDRs (1) 30,209 31,245 30,501
-------- -------- --------
Total TDRs $ 98,320 $116,753 $100,668
======== ======== ========
(1) Included within non-accrual loans above.
DELINQUENCY
RATES, BY
TYPE:
---------------
December 31, 2013 December 31, 2012 September 30, 2013
------------------- ------------------- -------------------
Greater Greater Greater
than or than or than or
equal equal equal
to 90 to 90 to 90
31-89 Days 31-89 Days 31-89 Days
Days (2) Total Days (2) Total Days (2) Total
----- ------- ----- ----- ------- ----- ----- ------- -----
Real estate -
commercial
mortgage 0.38% 0.87% 1.25% 0.46% 1.22% 1.68% 0.40% 0.84% 1.24%
Commercial -
industrial,
financial
and
agricultural 0.30% 1.04% 1.34% 0.46% 1.85% 2.31% 0.32% 1.24% 1.56%
Real estate -
construction 0.11% 3.71% 3.82% 0.23% 5.48% 5.71% 0.40% 4.22% 4.62%
Real estate -
residential
mortgage 1.74% 2.34% 4.08% 2.55% 2.74% 5.29% 1.82% 2.58% 4.40%
Real estate -
home equity 0.91% 0.96% 1.87% 0.77% 1.06% 1.83% 1.03% 1.05% 2.08%
Consumer,
leasing and
other 1.99% 0.68% 2.67% 1.71% 0.84% 2.55% 1.91% 0.79% 2.70%
----- ------- ----- ----- ------- ----- ----- ------- -----
Total 0.61% 1.20% 1.81% 0.75% 1.74% 2.49% 0.66% 1.31% 1.97%
===== ======= ===== ===== ======= ===== ===== ======= =====
(2) Includes non-accrual loans
ASSET QUALITY RATIOS:
------------------------------
Dec 31 Dec 31 Sep 30
2013 2012 2013
-------- -------- --------
Non-accrual loans to total
loans 1.05% 1.52% 1.12%
Non-performing assets to
total loans and OREO 1.32% 1.95% 1.46%
Non-performing assets to
total assets 1.00% 1.43% 1.09%
Allowance for credit losses
to loans outstanding 1.60% 1.86% 1.67%
Allowance for credit losses
to non-performing loans 132.82% 106.82% 126.48%
Non-performing assets to
tangible common
shareholders' equity and
allowance for credit losses 9.76% 13.39% 10.92%
FULTON FINANCIAL CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED)
in thousands, except per share data and percentages
Explanatory note: This press release contains certain financial information, as detailed below, which has been derived by methods other than Generally Accepted Accounting Principles ("GAAP"). The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's quarterly 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:
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