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Section 1: 8-K (8-K)

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false0000700564 0000700564 2019-10-22 2019-10-22



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

October 22, 2019
Date of Report (date of earliest event reported)

Fulton Financial Corporation
(Exact name of registrant as specified in its charter)
PA
0-10587
23-2195389
 
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
One Penn Square,
Lancaster,
PA
17604
 
(Address of Principal Executive Offices)
 
(Zip Code)
 
(717) 291-2411
(Registrant's telephone number, including area code)

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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common stock, par value $2.50
FULT
NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o






Item 2.02 Results of Operations and Financial Condition.

On October 22, 2019, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the third quarter ended September 30, 2019. 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. The Corporation also posted on its Investor Relations website, www.fult.com, presentation materials the Corporation intends to use during a conference call and webcast to discuss those results on Wednesday, October 23, 2019 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 the Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," "projects," the negative of these terms and other comparable terminology. Statements relating to the "outlook" or "2019 Outlook" contained in Exhibit 99.3 to this Current Report are forward looking statements. These forward looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results.

Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, they are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019, 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).

Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits.

Exhibit No.
Description
Press Release dated October 22, 2019.
Supplementary financial information for the quarter ended September 30, 2019.
Presentation materials to be discussed during the conference call and webcast on October 23, 2019.






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: October 22, 2019
FULTON FINANCIAL CORPORATION

 
By:  /s/ Mark R. McCollom                     
 
       Mark R. McCollom
 
       Senior Executive Vice President and
 
       Chief Financial Officer



(Back To Top)

Section 2: EX-99.1 (PRESS RELEASE DATED OCTOBER 22, 2019)

Exhibit
Exhibit 99.1

FULTON FINANCIAL
CORPORATION


FOR IMMEDIATE RELEASE
Media Contact: Laura Wakeley (717) 291-2616
Investor Contact: Jason Weber (717) 327-2394


Fulton Financial reports third quarter net income of $62.1 million, or $0.37 per diluted share

(October 22, 2019) - Lancaster, PA - Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income of $62.1 million, or $0.37 per diluted share, for the third quarter of 2019, and net income of $178.6 million, or $1.06 per diluted share, for the nine months ended September 30, 2019.

“Overall, we were pleased with our third quarter results. Our consumer and commercial businesses had strong loan growth during the quarter despite the competitive headwinds in the market. Other positives for the quarter included stable credit conditions, solid fee income growth and essentially flat operating expenses, linked quarter, excluding charter consolidation expenses, prepayment penalties on FHLB advances and FDIC insurance credits” said E. Philip Wenger, Chairman and CEO. “On the corporate front, we consolidated our last remaining affiliate banks into Fulton Bank in September. Also, in early October the Department of Justice informed us that the Department had completed its fair lending investigation of Fulton without taking any action against the company. These are two important milestones that should help facilitate growth moving forward.”

Net income per diluted share increased 5.7% in comparison to the $0.35 reported for the second quarter of 2019 and remained unchanged from the $0.37 reported for the third quarter of 2018. The increase in net income over the second quarter of 2019 was the result of increases in non-interest income and a decrease in the provision for credit losses, partially offset by a decrease in net interest income and an increase in non-interest expense.

Net Interest Income and Balance Sheet
Net interest income for the third quarter of 2019 was $161.3 million, a $3.3 million decrease from the second quarter of 2019. The decrease resulted from the impact of a 13 basis point decrease in net interest margin, partially offset by balance sheet growth. The decline in net interest




margin resulted from a 12 basis point decrease in the yield on interest-earning assets and a one basis point increase in average cost of funds. The declines in asset yields were primarily the result of the 25 basis point decreases in the federal funds target rate in July and in September 2019, which had a more pronounced impact on loan yields than overall funding costs.

Total average assets for the third quarter of 2019 were $21.5 billion, an increase of $400.8 million from the second quarter of 2019, with average loans, net of unearned income, increasing $121.0 million, average other interest-earning assets increasing $100.0 million and the remaining increase occurring mainly in non interest-earning assets.

Average loans and yields, by type, for the third quarter of 2019 in comparison to the second quarter of 2019 are summarized in the following table:
 
Three Months Ended
 

 
September 30, 2019
 
June 30, 2019
 
Growth
 
Balance
 
Yield (1)
 
Balance
 
Yield (1)
 
$
 
%
 
(dollars in thousands)
Average Loans, net of unearned income, by type:
 
 
 
 
 
 
 
 
 
 
 
    Real estate - commercial mortgage
$
6,489,456

 
4.57
%
 
$
6,424,213

 
4.67
%
 
$
65,243

 
1.0
 %
    Commercial - industrial, financial, and agricultural
4,414,992

 
4.56
%
 
4,440,860

 
4.73
%
 
(25,868
)
 
(0.6
)%
    Real estate - residential mortgage
2,512,899

 
4.06
%
 
2,366,685

 
4.09
%
 
146,214

 
6.2
 %
    Real estate - home equity
1,364,161

 
5.27
%
 
1,404,141

 
5.35
%
 
(39,980
)
 
(2.8
)%
    Real estate - construction
905,060

 
4.68
%
 
943,080

 
5.29
%
 
(38,020
)
 
(4.0
)%
    Consumer
457,524

 
4.36
%
 
445,666

 
4.38
%
 
11,858

 
2.7
 %
    Leasing
277,555

 
4.41
%
 
279,619

 
4.45
%
 
(2,064
)
 
(0.7
)%
    Other
14,860

 
N/A

 
11,812

 
N/A

 
3,048

 
25.8
 %
Total Average Loans, net of unearned income
$
16,436,507

 
4.55
%
 
$
16,316,076

 
4.69
%
 
$
120,431

 
0.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
(1) Presented on a fully-taxable equivalent basis using a 21% Federal tax rate and statutory interest expense disallowances.
    
Total average liabilities increased $386.4 million, or 2.1%, from the second quarter of 2019, with a $575.2 million, or 3.5%, increase in average deposits being partially offset by a $209.2 million, or 19.9%, decrease in average Federal Home Loan Bank (FHLB) advances and long-term debt. Average deposits and interest rates, by type, for the third quarter of 2019 in comparison to the second quarter of 2019 are summarized in the following table:




 
Three Months Ended
 

 
September 30, 2019
 
June 30, 2019
 
Growth
 
Balance
 
Rate
 
Balance
 
Rate
 
$
 
%
 
(dollars in thousands)
Average Deposits, by type:
 
 
 
 
 
 
 
 
 
 
 
    Noninterest-bearing demand
$
4,247,820

 
%
 
$
4,200,810

 
%
 
$
47,010

 
1.1
%
    Interest-bearing demand
4,448,112

 
0.82
%
 
4,186,280

 
0.78
%
 
261,832

 
6.3
%
    Savings and money market deposits
5,026,316

 
0.87
%
 
4,925,788

 
0.86
%
 
100,528

 
2.0
%
Total average demand and savings
13,722,248

 
0.58
%
 
13,312,878

 
0.56
%
 
409,370

 
3.1
%
    Brokered deposits
253,426

 
2.40
%
 
246,154

 
2.58
%
 
7,272

 
3.0
%
    Time deposits
2,974,993

 
1.86
%
 
2,816,424

 
1.74
%
 
158,569

 
5.6
%
Total Average Deposits
$
16,950,667

 
0.84
%
 
$
16,375,456

 
0.80
%
 
$
575,211

 
3.5
%

Asset Quality
The provision for credit losses for the third quarter of 2019 was $2.2 million, down from $5.0 million for the second quarter of 2019.
Non-performing assets were $143.7 million, or 0.66% of total assets, at September 30, 2019, compared to $155.0 million, or 0.73% of total assets, at June 30, 2019 and $130.8 million, or 0.64% of total assets, at September 30, 2018.
Annualized net charge-offs for the quarter ended September 30, 2019 were 0.15% of total average loans, compared to net recoveries of 0.04% for the quarter ended June 30, 2019. The allowance for credit losses as a percentage of non-performing loans was 127% at September 30, 2019, compared to 120% at June 30, 2019.

Non-interest Income    
Non-interest income in the third quarter of 2019, excluding investment securities gains, was $55.3 million, an increase of $1.2 million, or 2.2%, in comparison to the second quarter of 2019 and an increase of $4.3 million, or 8.4%, compared to the third quarter of 2018.
Consumer banking income increased, driven by growth in card income. Commercial banking income decreased slightly as higher commercial loan interest rate swap fees were offset by declines in merchant and card income and Small Business Administration (SBA) loan sale gains. Other income increased $595,000 mainly due to earnings on additional investments in bank-owned life insurance.
During the third quarter of 2019, Fulton completed a balance sheet restructuring involving the sale of approximately $400 million of investment securities and a corresponding prepayment of FHLB advances. As a result of these transactions, $4.5 million of investment securities gains were realized during the quarter.





Non-interest Expense
Non-interest expense was $146.8 million in the third quarter of 2019, an increase of $2.6 million, or 1.8%, compared to the second quarter of 2019 and an increase of $11.4 million, or 8.4%, compared to the third quarter of 2018.
Expenses incurred in the third quarter of 2019 related to the consolidation of the remaining subsidiary banks were comparable to the prior quarter, totaling approximately $5.2 million, primarily in outside services and other expenses. Increases were realized in other expenses, including approximately $4.3 million of penalties related to the prepayment of certain FHLB advances in conjunction with the previously mentioned balance sheet restructuring. These increases were partially offset by decreases in occupancy costs and FDIC insurance due to the recognition of assessment credits of $2.6 million in the third quarter of 2019.

Income Tax Expense
The effective income tax rate for the third quarter of 2019 was 13.9%, as compared to 14.2% for the second quarter of 2019.

Additional information on Fulton is available on the Internet at www.fult.com.

Safe Harbor Statement
This news release may contain forward-looking statements with respect to the
Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results.
Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, they are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as




of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2018 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019, 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).


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.




(Back To Top)

Section 3: EX-99.2 (SUPPLEMENTAL FINANCIAL INFORMATION FOR THE QUARTER ENDED SEP 30, 2019)

Exhibit
FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
 
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
 
 
 
 
 
 
 
in thousands, except per-share data and percentages
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Sep 30
 
Jun 30
 
Mar 31
 
Dec 31
 
Sep 30
 
 
2019
 
2019
 
2019
 
2018
 
2018
 
Ending Balances
 
 
 
 
 
 
 
 
 
 
Investments
$
2,705,610

 
$
2,853,358

 
$
2,748,249

 
$
2,686,973

 
$
2,635,413

 
Loans, net of unearned income
16,686,866

 
16,368,458

 
16,262,633

 
16,165,800

 
15,925,093

 
Total assets
21,703,618

 
21,308,670

 
20,974,649

 
20,682,152

 
20,364,810

 
Deposits
17,342,717

 
16,388,895

 
16,377,978

 
16,376,159

 
16,249,014

 
Shareholders' equity
2,324,016

 
2,308,798

 
2,301,019

 
2,247,573

 
2,283,014

 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
 
 
 
 
 
 
 
 
 
 
Investments
$
2,829,672

 
$
2,790,392

 
$
2,699,130

 
$
2,646,266

 
$
2,596,414

 
Loans, net of unearned income
16,436,507

 
16,316,076

 
16,194,375

 
15,965,637

 
15,862,143

 
Total assets
21,457,800

 
21,057,030

 
20,690,365

 
20,512,130

 
20,273,232

 
Deposits
16,950,667

 
16,375,456

 
16,275,633

 
16,413,066

 
15,967,234

 
Shareholders' equity
2,315,585

 
2,301,258

 
2,265,097

 
2,281,669

 
2,269,093

 
 
 
 
 
 
 
 
 
 
 
 
Income Statement
 
 
 
 
 
 
 
 
 
 
Net interest income
$
161,260

 
$
164,544

 
$
163,315

 
$
162,944

 
$
160,127

 
Provision for credit losses
2,170

 
5,025

 
5,100

 
8,200

 
1,620

 
Non-interest income
59,813

 
54,315

 
46,751

 
49,523

 
51,033

 
Non-interest expense
146,770

 
144,168

 
137,824

 
140,685

 
135,413

 
Income before taxes
72,133

 
69,666

 
67,142

 
63,582

 
74,127

 
Net income
62,108

 
59,779

 
56,663

 
58,083

 
65,633

 
Pre-provision net revenue(1)
76,741

 
76,114

 
73,775

 
78,320

 
77,370

 
 
 
 
 
 
 
 
 
 
 
 
Per Share
 
 
 
 
 
 
 
 
 
 
Net income (basic)
$
0.38

 
$
0.36

 
$
0.33

 
$
0.33

 
$
0.37

 
Net income (diluted)
$
0.37

 
$
0.35

 
$
0.33

 
$
0.33

 
$
0.37

 
Cash dividends
$
0.13

 
$
0.13

 
$
0.13

 
$
0.16

 
$
0.12

 
Tangible common equity(1)
10.91

 
10.63

 
10.39

 
10.08

 
9.95

 
Weighted average shares (basic)
165,324

 
168,343

 
169,884

 
174,571

 
175,942

 
Weighted average shares (diluted)
166,126

 
169,168

 
170,909

 
175,473

 
177,128

 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
 
Net charge-offs (recoveries) to average loans (annualized)
0.15
%
 
(0.04
)%
 
0.10
%
 
0.17
%
 
0.08
%
 
Non-performing loans to total loans
0.81
%
 
0.90
 %
 
0.85
%
 
0.86
%
 
0.75
%
 
Non-performing assets to total assets
0.66
%
 
0.73
 %
 
0.70
%
 
0.73
%
 
0.64
%
 
Allowance for credit losses to loans outstanding
1.04
%
 
1.08
 %
 
1.05
%
 
1.05
%
 
1.05
%
 
Allowance for loan losses to loans outstanding
1.00
%
 
1.04
 %
 
1.00
%
 
0.99
%
 
0.99
%
 
Allowance for credit losses to non-performing loans
127
%
 
120
 %
 
123
%
 
121
%
 
140
%
 
Allowance for loan losses to non-performing loans
122
%
 
115
 %
 
117
%
 
115
%
 
131
%
 
Non-performing assets to tangible shareholders' equity
     and allowance for credit losses(1)
7.32
%
 
7.94
 %
 
7.63
%
 
7.97
%
 
6.81
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 
 
 
 
 
 
 
 
 
 
 
Profitability
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.15
%
 
1.14
 %
 
1.11
%
 
1.12
%
 
1.28
%
 
Return on average shareholders' equity
10.64

 
10.42

 
10.15%

 
10.10%

 
11.48%

 
Return on average shareholders' equity (tangible)(1)
14.03

 
13.60

 
13.28%

 
13.17%

 
14.99%

 
Net interest margin
3.31
%
 
3.44
 %
 
3.49
%
 
3.44
%
 
3.42
%
 
Efficiency ratio(1)
63.6
%
 
64.2
 %
 
63.9
%
 
62.2
%
 
62.5
%
 
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios
 
 
 
 
 
 
 
 
 
 
Tangible common equity ratio(1)
8.45
%
 
8.54
 %
 
8.64
%
 
8.52
%
 
8.83
%
 
Tier 1 leverage ratio(2)
8.47
%
 
8.68
 %
 
8.92

 
9.01%

 
9.34

 
Common equity Tier 1 capital ratio(2)
9.64
%
 
9.96
 %
 
10.16
%
 
10.22
%
 
10.80
%
 
Tier 1 capital ratio(2)
9.64
%
 
9.96
 %
 
10.16
%
 
10.22
%
 
10.80
%
 
Total risk-based capital ratio(2)
12.02
%
 
12.44
 %
 
12.63
%
 
12.75
%
 
13.34
%
 
 
 
 
 
 
 
 
 
 
 
 
(1) Please refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this document.
 
(2) Regulatory capital ratios as of September 30, 2019 are preliminary and remaining periods are actual.
 
 
 
 
 
 
 
 
 
 
 
 





Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
 
 
 
 
 
 
dollars in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 % Change from
 
 
Sep 30
 
Jun 30
 
Mar 31
 
Dec 31
 
Sep 30
 
Jun 30
 
Sep 30
 
 
2019
 
2019
 
2019
 
2018
 
2018
 
2019
 
2018
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
120,671

 
$
107,091

 
$
115,884

 
$
103,436

 
$
90,361

 
12.7
 %
 
33.5
 %
 
Other interest-earning assets
572,499

 
488,968

 
411,037

 
421,534

 
388,256

 
17.1
 %
 
47.5
 %
 
Loans held for sale
33,945

 
45,754

 
27,768

 
27,099

 
27,525

 
(25.8
)%
 
23.3
 %
 
Investment securities
2,705,610

 
2,853,358

 
2,748,249

 
2,686,973

 
2,635,413

 
(5.2
)%
 
2.7
 %
 
Loans, net of unearned income
16,686,866

 
16,368,458

 
16,262,633

 
16,165,800

 
15,925,093

 
1.9
 %
 
4.8
 %
 
Allowance for loan losses
(166,135
)
 
(170,233
)
 
(162,109
)
 
(160,537
)
 
(157,810
)
 
(2.4
)%
 
5.3
 %
 
     Net loans
16,520,731

 
16,198,225

 
16,100,524

 
16,005,263

 
15,767,283

 
2.0
 %
 
4.8
 %
 
Premises and equipment
237,344

 
243,300

 
239,004

 
234,529

 
231,236

 
(2.4
)%
 
2.6
 %
 
Accrued interest receivable
60,447

 
62,984

 
62,207

 
58,879

 
58,584

 
(4.0
)%
 
3.2
 %
 
Goodwill and intangible assets
534,178

 
535,249

 
535,356

 
531,556

 
531,556

 
(0.2
)%
 
0.5
 %
 
Other assets
918,193

 
773,741

 
734,620

 
612,883

 
634,596

 
18.7
 %
 
44.7
 %
 
    Total Assets
$
21,703,618

 
$
21,308,670

 
$
20,974,649

 
$
20,682,152

 
$
20,364,810

 
1.9
 %
 
6.6
 %
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
$
17,342,717

 
$
16,388,895

 
$
16,377,978

 
$
16,376,159

 
$
16,249,014

 
5.8
 %
 
6.7
 %
 
Short-term borrowings
832,860

 
1,188,390

 
829,016

 
754,777

 
485,565

 
(29.9
)%
 
71.5
 %
 
Other liabilities
477,311

 
435,171

 
401,324

 
311,364

 
355,102

 
9.7
 %
 
34.4
 %
 
FHLB advances and long-term debt
726,714

 
987,416

 
1,065,312

 
992,279

 
992,115

 
(26.4
)%
 
(26.8
)%
 
    Total Liabilities
19,379,602

 
18,999,872

 
18,673,630

 
18,434,579

 
18,081,796

 
2.0
 %
 
7.2
 %
 
Shareholders' equity
2,324,016

 
2,308,798

 
2,301,019

 
2,247,573

 
2,283,014

 
0.7
 %
 
1.8
 %
 
    Total Liabilities and Shareholders' Equity
$
21,703,618

 
$
21,308,670

 
$
20,974,649

 
$
20,682,152

 
$
20,364,810

 
1.9
 %
 
6.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
 
 
 
 
 
 
 
 
 
 
 
 
Loans, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
$
6,604,634

 
$
6,497,973

 
$
6,428,688

 
$
6,434,285

 
$
6,337,984

 
1.6
 %
 
4.2
 %
 
Commercial - industrial, financial and agricultural
4,494,496

 
4,365,248

 
4,429,538

 
4,404,548

 
4,288,823

 
3.0
 %
 
4.8
 %
 
Real estate - residential mortgage
2,570,793

 
2,451,966

 
2,313,908

 
2,251,044

 
2,173,548

 
4.8
 %
 
18.3
 %
 
Real estate - home equity
1,346,115

 
1,386,974

 
1,413,500

 
1,452,137

 
1,469,152

 
(2.9
)%
 
(8.4
)%
 
Real estate - construction
913,644

 
922,547

 
953,087

 
916,599

 
979,857

 
(1.0
)%
 
(6.8
)%
 
Consumer
464,213

 
452,874

 
433,545

 
419,186

 
390,708

 
2.5
 %
 
18.8
 %
 
Leasing and other
292,971

 
290,876

 
290,367

 
288,001

 
285,021

 
0.7
 %
 
2.8
 %
 
Total Loans, net of unearned income
$
16,686,866

 
$
16,368,458

 
$
16,262,633

 
$
16,165,800

 
$
15,925,093

 
1.9
 %
 
4.8
 %
Deposits, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
4,240,478

 
$
4,226,404

 
$
4,255,043

 
$
4,310,105

 
$
4,216,064

 
0.3
 %
 
0.6
 %
 
Interest-bearing demand
4,771,109

 
4,083,615

 
4,207,442

 
4,240,974

 
4,289,181

 
16.8
 %
 
11.2
 %
 
Savings and money market accounts
5,094,387

 
4,938,998

 
4,907,346

 
4,926,937

 
4,878,982

 
3.1
 %
 
4.4
 %
 
Total demand and savings
14,105,974

 
13,249,017

 
13,369,831

 
13,478,016

 
13,384,227

 
6.5
 %
 
5.4
 %
 
Brokered deposits
256,870

 
246,116

 
251,395

 
176,239

 
164,601

 
4.4
 %
 
56.1
 %
 
Time deposits
2,979,873

 
2,893,762

 
2,756,752

 
2,721,904

 
2,700,186

 
3.0
 %
 
10.4
 %
 
Total Deposits
$
17,342,717

 
$
16,388,895

 
$
16,377,978

 
$
16,376,159

 
$
16,249,014

 
5.8
 %
 
6.7
 %
Short-term borrowings, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer repurchase agreements
$
58,853

 
$
56,496

 
$
54,440

 
$
43,499

 
$
82,741

 
4.2
 %
 
(28.9
)%
 
Customer short-term promissory notes
279,007

 
281,894

 
299,576

 
326,278

 
267,824

 
(1.0
)%
 
4.2
 %
 
Short-term FHLB advances
475,000

 
650,000

 
475,000

 
385,000

 
85,000

 
(26.9
)%
 
N/M

 
Federal funds purchased
20,000

 
200,000

 

 

 
50,000

 
(90.0
)%
 
(60.0
)%
 
Total Short-term Borrowings
$
832,860

 
$
1,188,390

 
$
829,016

 
$
754,777

 
$
485,565

 
(29.9
)%
 
71.5
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N/M - Not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 





FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
 
 
 
 
 
 
 
dollars in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 % Change from
 
 
 
Nine Months Ended
 
 
 
 
 
 
 
Sep 30
 
Jun 30
 
Mar 31
 
Dec 31
 
Sep 30
 
Jun 30
 
Sep 30
 
 
 
Sep 30
 
 
 
 
 
 
 
2019
 
2019
 
2019
 
2018
 
2018
 
2019
 
2018
 
 
 
2019
 
2018
 
% Change
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
$
208,413

 
$
210,034

 
$
204,700

 
$
200,609

 
$
194,048

 
(0.8
)%
 
7.4
 %
 
 
 
$
623,147

 
$
557,905

 
11.7
 %
 
 
Interest expense
 
 
47,153

 
45,490

 
41,385

 
37,665

 
33,921

 
3.7
 %
 
39.0
 %
 
 
 
134,028

 
90,393

 
48.3
 %
 
 
    Net Interest Income
 
 
161,260

 
164,544

 
163,315

 
162,944

 
160,127

 
(2.0
)%
 
0.7
 %
 
 
 
489,119

 
467,512

 
4.6
 %
 
 
Provision for credit losses
 
 
2,170

 
5,025

 
5,100

 
8,200

 
1,620

 
(56.8
)%
 
34.0
 %
 
 
 
12,295

 
38,707

 
(68.2
)%
 
 
    Net Interest Income after Provision
 
 
159,090

 
159,519

 
158,215

 
154,744

 
158,507

 
(0.3
)%
 
0.4
 %
 
 
 
476,824

 
428,805

 
11.2
 %
 
Non-Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wealth management fees
 
 
13,867

 
14,153

 
13,239

 
13,408

 
13,066

 
(2.0
)%
 
6.1
 %
 
 
 
41,259

 
38,740

 
6.5
 %
 
 
Mortgage banking income
 
 
6,658

 
6,593

 
4,772

 
4,774

 
4,896

 
1.0
 %
 
36.0
 %
 
 
 
18,023

 
14,252

 
26.5
 %
 
 
Consumer banking income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Card income
 
 
5,791

 
5,047

 
4,686

 
4,966

 
5,382

 
14.7
 %
 
7.6
 %
 
 
 
15,524

 
14,531

 
6.8
 %
 
 
  Overdraft fees
 
 
4,682

 
4,413

 
4,104

 
4,653

 
4,443

 
6.1
 %
 
5.4
 %
 
 
 
13,199

 
12,952

 
1.9
 %
 
 
  Other consumer banking income
 
 
2,860

 
2,907

 
2,587

 
2,799

 
2,840

 
(1.6
)%
 
0.7
 %
 
 
 
8,354

 
8,522

 
(2.0
)%
 
 
     Total consumer banking income
 
 
13,333

 
12,367

 
11,377

 
12,418

 
12,665

 
7.8
 %
 
5.3
 %
 
 
 
37,077

 
36,005

 
3.0
 %
 
 
Commercial banking income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Merchant and card income
 
 
6,166

 
6,512

 
5,558

 
5,656

 
6,307

 
(5.3
)%
 
(2.2
)%
 
 
 
18,236

 
17,770

 
2.6
 %
 
 
   Cash management fees
 
 
4,696

 
4,638

 
4,361

 
4,340

 
4,472

 
1.3
 %
 
5.0
 %
 
 
 
13,695

 
13,242

 
3.4
 %
 
 
   Commercial loan interest rate swap fees
 
 
3,944

 
3,477

 
2,028

 
2,540

 
3,607

 
13.4
 %
 
9.3
 %
 
 
 
9,449

 
7,291

 
29.6
 %
 
 
   Other commercial banking income
 
 
3,478

 
3,815

 
2,816

 
3,466

 
3,154

 
(8.8
)%
 
10.3
 %
 
 
 
10,109

 
9,625

 
5.0
 %
 
 
     Total commercial banking income
 
 
18,284

 
18,442

 
14,763

 
16,002

 
17,540

 
(0.9
)%
 
4.2
 %
 
 
 
51,489

 
47,928

 
7.4
 %
 
 
Other income
 
 
3,179

 
2,584

 
2,535

 
2,921

 
2,852

 
23.0
 %
 
11.5
 %
 
 
 
8,298

 
9,040

 
(8.2
)%
 
 
     Non-interest income before investment securities gains
 
 
55,321

 
54,139

 
46,686

 
49,523

 
51,019

 
2.2
 %
 
8.4
 %
 
 
 
156,146

 
145,965

 
7.0
 %
 
 
Investment securities gains, net
 
 
4,492

 
176

 
65

 

 
14

 
N/M

 
N/M

 
 
 
4,733

 
37

 
N/M

 
 
    Total Non-Interest Income
 
 
59,813

 
54,315

 
46,751

 
49,523

 
51,033

 
10.1
 %
 
17.2
 %
 
 
 
160,879

 
146,002

 
10.2
 %
 
Non-Interest Expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
 
78,211

 
78,991

 
77,757

 
75,745

 
76,770

 
(1.0
)%
 
1.9
 %
 
 
 
234,959

 
227,457

 
3.3
 %
 
 
Net occupancy
 
 
12,368

 
14,469

 
12,909

 
12,708

 
12,578

 
(14.5
)%
 
(1.7
)%
 
 
 
39,746

 
38,970

 
2.0
 %
 
 
Other outside services
 
 
12,163

 
11,259

 
8,352

 
8,944

 
9,122

 
8.0
 %
 
33.3
 %
 
 
 
31,774

 
24,814

 
28.0
 %
 
 
Data processing and software
 
 
11,590

 
11,268

 
10,353

 
10,203

 
10,157

 
2.9
 %
 
14.1
 %
 
 
 
33,211

 
31,083

 
6.8
 %
 
 
Equipment
 
 
3,459

 
3,299

 
3,342

 
3,275

 
3,000

 
4.8
 %
 
15.3
 %
 
 
 
10,100

 
9,968

 
1.3
 %
 
 
Professional fees
 
 
3,331

 
2,970

 
3,960

 
3,546

 
3,427

 
12.2
 %
 
(2.8
)%
 
 
 
10,261

 
10,615

 
(3.3
)%
 
 
Marketing
 
 
3,322

 
2,863

 
2,160

 
1,577

 
2,692

 
16.0
 %
 
23.4
 %
 
 
 
8,345

 
7,277

 
14.7
 %
 
 
Amortization of tax credit investments
 
 
1,533

 
1,492

 
1,491

 
6,538

 
1,637

 
2.7
 %
 
(6.4
)%
 
 
 
4,516

 
4,911

 
(8.0
)%
 
 
FDIC insurance
 
 
239

 
2,755

 
2,609

 
2,563

 
2,814

 
(91.3
)%
 
(91.5
)%
 
 
 
5,603

 
8,430

 
(33.5
)%
 
 
Intangible amortization
 
 
1,071

 
107

 
107

 

 

 
N/M

 
100.0
 %
 
 
 
1,285

 

 
100.0
 %
 
 
Other
 
 
19,483

 
14,695

 
14,784

 
15,586

 
13,216

 
32.6
 %
 
47.4
 %
 
 
 
48,962

 
41,894

 
16.9
 %
 
 
    Total Non-Interest Expense
 
 
146,770

 
144,168

 
137,824

 
140,685

 
135,413

 
1.8
 %
 
8.4
 %
 
 
 
428,762

 
405,419

 
5.8
 %
 
 
    Income Before Income Taxes
 
 
72,133

 
69,666

 
67,142

 
63,582

 
74,127

 
3.5
 %
 
(2.7
)%
 
 
 
208,941

 
169,388

 
23.4
 %
 
 
Income tax expense
 
 
10,025

 
9,887

 
10,479

 
5,499

 
8,494

 
1.4
 %
 
18.0
 %
 
 
 
30,391

 
19,078

 
59.3
 %
 
 
    Net Income
 
 
$
62,108

 
$
59,779

 
$
56,663

 
$
58,083

 
$
65,633

 
3.9
 %
 
(5.4
)%
 
 
 
$
178,550

 
$
150,310

 
18.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PER SHARE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Basic
 
 
$
0.38

 
$
0.36

 
$
0.33

 
$
0.33

 
$
0.37

 
5.6
 %
 
2.7
 %
 
 
 
$
1.06

 
$
0.86

 
23.3
 %
 
 
    Diluted
 
 
0.37

 
0.35

 
0.33

 
0.33

 
0.37

 
5.7
 %
 
 %
 
 
 
1.06

 
0.85

 
24.7
 %
 
 
Cash dividends
 
 
0.13

 
0.13

 
0.13

 
0.16

 
0.12

 
 %
 
8.3
 %
 
 
 
$
0.39

 
$
0.36

 
8.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Weighted average shares (basic)
 
 
165,324

 
168,343

 
169,884

 
174,571

 
175,942

 
(1.8
)%
 
(6.0
)%
 
 
 
167,834

 
175,672

 
(4.5
)%
 
 
Weighted average shares (diluted)
 
 
166,126

 
169,168

 
170,909

 
175,473

 
177,128

 
(1.8
)%
 
(6.2
)%
 
 
 
168,722

 
176,848

 
(4.6
)%
 
N/M - not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







FULTON FINANCIAL CORPORATION
 
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
 
 
 
 Three Months Ended
 
 
September 30, 2019
 
June 30, 2019
 
September 30, 2018
 
 
 
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
$
16,436,507

 
$
188,280

 
4.55%
 
$
16,316,076

 
$
190,693

 
4.69%
 
$
15,862,143

 
$
177,329

 
4.44%
 
 
Taxable investment securities
2,282,292

 
15,565

 
2.73%
 
2,348,443

 
15,935

 
2.71%
 
2,239,837

 
13,956

 
2.49%
 
 
Tax-exempt investment securities
516,907

 
4,650

 
3.57%
 
444,227

 
4,140

 
3.70%
 
415,908

 
3,841

 
3.67%
 
 
Total Investment Securities
2,799,199

 
20,215