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Section 1: 8-K (8-K)

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false0000700564 0000700564 2020-01-21 2020-01-21



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

January 21, 2020
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
The Nasdaq Stock Market, LLC

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.
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Item 2.02 Results of Operations and Financial Condition.

On January 21, 2020, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the fourth quarter and year ended December 31, 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, January 22, 2020 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 "2020 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, June 30, 2019 and September 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 January 21, 2020.
Supplementary financial information for the quarter and year ended December 31, 2019.
Presentation materials to be discussed during the conference call and webcast on January 22, 2020.






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: January 21, 2020
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 JANUARY 21, 2020)

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 fourth quarter and 2019 results

2019 Key Accomplishments
Termination of the remaining BSA/AML regulatory orders
Successful consolidation of affiliate banks into Fulton Bank, N.A.
Record year of revenues and net income
Average loan growth of 4% and average deposit growth of 6%
Net income grew 12% and pre-provision net revenue(1) increased 4%

(January 21, 2020) - Lancaster, PA - Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income of $54 million, or $0.33 per diluted share, for the fourth quarter of 2019, and net income of $233 million, or $1.39 per diluted share, for 2019.

"Overall, 2019 was another good year for Fulton as we continued to execute on our growth strategies and completed the consolidation of our remaining affiliate banks into Fulton Bank,” said E. Philip Wenger, Chairman and CEO. “I’m extremely proud of our team’s hard work this year, and continued focus on driving shareholder value. We look forward to 2020 and believe we are well-positioned to continue to advance our strategic priorities.”

Net income per diluted share for the fourth quarter of 2019 decreased 11% to $0.33 in comparison to the $0.37 reported for the third quarter of 2019 and unchanged from the fourth quarter of 2018. The decline in net income from the third quarter of 2019 was primarily the result of a decrease in net interest income and an increase in the provision for credit losses, partially offset by a decrease in non-interest expense.




(1) 
Non-GAAP financial measure. Please refer to the calculation and management’s reasons for using this measure on the page titled “Non-GAAP Reconciliation” in the accompanying tables.



For the year ended December 31, 2019, net income per diluted share increased 18% to $1.39 in comparison to the $1.18 reported for 2018. The increase in net income was driven by a lower provision for credit losses and higher net interest income, non-interest income and securities gains, partially offset by higher non-interest expense.

Net Interest Income and Balance Sheet
Net interest income for the fourth quarter of 2019 was $159 million, a $2 million decrease from the third quarter of 2019. The decrease resulted from the impact of a 9 basis point decrease in net interest margin due mainly to the 25 basis point decrease in the federal funds rate in each of September and October 2019, partially offset by balance sheet growth. The decline in net interest margin resulted from the net impact of an 18 basis point decrease in the yield on interest-earning assets, partially offset by an 11 basis point decrease in average cost of funds. The decline in asset yields was primarily the result of a 24 basis point decrease in loan yields, partially offset by an 8 basis point increase in investment securities yields.
For the year ended December 31, 2019, net interest income increased $18 million, or 3%, driven mainly by a 4% increase in average interest-earning assets. The increase in average interest-earning assets was partially offset by the impact of a 4 basis point decrease in the net interest margin to 3.36%. The average yield on interest-earning assets increased 18 basis points and the average cost of interest-bearing liabilities increased 28 basis points from 2018.
Total average assets for the fourth quarter of 2019 were $22 billion, an increase of $356 million from the third quarter of 2019, with average loans, net of unearned income, increasing $332 million.



Average loans and yields, by type, for the fourth quarter of 2019 in comparison to the third quarter of 2019 are summarized in the following table:
 
Three Months Ended
 
 
 
December 31, 2019
 
September 30, 2019
 
Growth
 
Balance
 
Yield (1)
 
Balance
 
Yield (1)
 
$
 
%
 
(dollars in thousands)
Average Loans, net of unearned income, by type:
 
 
 
 
 
 
 
 
 
 
 
    Real estate - commercial mortgage
$
6,561,029

 
4.34
%
 
$
6,489,456

 
4.57
%
 
$
71,573

 
1.1
 %
    Commercial - industrial, financial, and agricultural
4,575,350

 
4.24
%
 
4,414,992

 
4.56
%
 
160,358

 
3.6
 %
    Real estate - residential mortgage
2,606,136

 
4.00
%
 
2,512,899

 
4.06
%
 
93,237

 
3.7
 %
    Real estate - home equity
1,331,088

 
4.97
%
 
1,364,161

 
5.27
%
 
(33,073
)
 
(2.4
)%
    Real estate - construction
934,556

 
4.37
%
 
905,060

 
4.68
%
 
29,496

 
3.3
 %
    Consumer
464,606

 
4.44
%
 
457,524

 
4.36
%
 
7,082

 
1.5
 %
     Leasing
281,451

 
4.35
%
 
277,555

 
4.41
%
 
3,896

 
1.4
 %
     Other
14,058

 
N/A

 
14,860

 
N/A

 
(802
)
 
(5.4
)%
Total Average Loans, net of unearned income
$
16,768,274

 
4.31
%
 
$
16,436,507

 
4.55
%
 
$
331,767

 
2.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
(1) Presented on a tax-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances.
N/A - Not applicable
 
 
 
 
 
 
 
 
 
 
 
    
For the year ended December 31, 2019, average loans increased $615 million, or 4%, compared to 2018. Ending loans at December 31, 2019 increased $171 million, or 1%, compared to September 30, 2019 and increased $692 million, or 4%, compared to December 31, 2018.
Total average liabilities for the fourth quarter of 2019 increased $329 million, or 2%, from the third quarter of 2019, with a $499 million, or 3%, increase in average deposits being partially offset by a $202 million, or 22%, decrease in average short-term borrowings.
Average deposits and interest rates, by type, for the fourth quarter of 2019 in comparison to the third quarter of 2019 are summarized in the following table:
 
Three Months Ended
 

 
December 31, 2019
 
September 30, 2019
 
Growth
 
Balance
 
Rate
 
Balance
 
Rate
 
$
 
%
 
(dollars in thousands)
Average Deposits, by type:
 
 
 
 
 
 
 
 
 
 
 
    Noninterest-bearing demand
$
4,324,568

 
%
 
$
4,247,820

 
%
 
$
76,748

 
1.8
 %
    Interest-bearing demand
4,699,040

 
0.71
%
 
4,448,112

 
0.82
%
 
250,928

 
5.6
 %
    Savings and money market deposits
5,205,260

 
0.78
%
 
5,026,316

 
0.87
%
 
178,944

 
3.6
 %
Total average demand and savings
14,228,868

 
0.52
%
 
13,722,248

 
0.58
%
 
506,620

 
3.7
 %
    Brokered deposits
261,689

 
1.94
%
 
253,426

 
2.40
%
 
$
8,263

 
3.3
 %
    Time deposits
2,959,008

 
1.86
%
 
2,974,993

 
1.86
%
 
(15,985
)
 
(0.5
)%
Total Average Deposits
$
17,449,565

 
0.77
%
 
$
16,950,667

 
0.84
%
 
$
498,898

 
2.9
 %




For the year ended December 31, 2019, average deposits increased $934 million, or 6%, compared to 2018. Ending deposits at December 31, 2019 increased $1 billion, or 6%, compared to December 31, 2018.

Asset Quality
The provision for credit losses for the fourth quarter of 2019 was $13 million, up from $2 million for the third quarter of 2019, driven primarily by a higher allocation need for a certain commercial loan.
Non-performing assets were $168 million, or 0.77% of total assets, at December 31, 2019, compared to $144 million, or 0.66% of total assets, at September 30, 2019 and $150 million, or 0.73% of total assets, at December 31, 2018.
Annualized net charge-offs for the quarter ended December 31, 2019 were 0.17% of total average loans, compared to 0.15% for the quarter ended September 30, 2019. The allowance for credit losses as a percentage of non-performing loans was 111% at December 31, 2019, compared to 127% at September 30, 2019.

Non-interest Income    
Non-interest income in the fourth quarter of 2019, excluding investment securities gains, was $55 million, essentially unchanged from the third quarter of 2019 and $6 million, or 12%, higher than the fourth quarter of 2018.
Wealth management income increased due to growth in trust and brokerage income, both organically and, with respect to brokerage income, through the acquisitions completed in the first and fourth quarters of 2019. Mortgage banking income decreased due to seasonally lower loan volumes. Consumer banking income decreased, driven by decreases in card income. Commercial banking income increased, as higher commercial loan interest rate swap fees were partially offset by declines in merchant and card income.
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, $5 million of investment securities gains were realized during the quarter.
For the year ended December 31, 2019, non-interest income, excluding investment securities gains, increased $16 million, or 8%, with increases across all major categories.

Non-interest Expense
Non-interest expense was $140 million in the fourth quarter of 2019, a decrease of $7 million, or 5%, compared to the third quarter of 2019 and a decrease of $1 million, or 1%, compared to the fourth quarter of 2018.



The fourth quarter of 2019 included decreases in other outside services, marketing and intangible amortization, partially offset by increases in FDIC insurance expense, due to lower assessment credits, net occupancy expense and other expenses.
The third quarter of 2019 included $5 million of expenses related to the consolidation of the remaining subsidiary banks, primarily in other outside services. The third quarter also included $4 million of penalties related to the prepayment of certain FHLB advances in conjunction with the previously mentioned balance sheet restructuring.
For the year ended December 31, 2019, non-interest expense increased $23 million, or 4%, compared to 2018. This increase was primarily due to increases in salaries and employee benefits, other outside services and other expense, partially offset by decreases in amortization of tax credit investments and FDIC insurance expense.
Expenses incurred for the years ended December 31, 2019 and 2018 related to the consolidation of the subsidiary banks were $11 million and $4 million, respectively, which were recognized in various categories in non-interest expense.

Income Tax Expense
The effective income tax rate for the fourth quarter of 2019 was 13%, as compared to 14% for the third quarter of 2019, with the decrease resulting mainly from lower income before income taxes.
The effective income tax rate for the year ended December 31, 2019 was 14%, as compared to 11% in 2018. The increase resulted mainly from higher income before income taxes.

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, June 30, 2019 and September 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.


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Section 3: EX-99.2 (SUPPLEMENTAL FINANCIAL INFORMATION FOR THE QUARTER AND YEAR ENDED DEC 31, 2019)

Exhibit
FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
 
SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)
 
 
 
 
 
 
 
in thousands, except per-share data and percentages
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Dec 31
 
Sep 30
 
Jun 30
 
Mar 31
 
Dec 31
 
 
2019
 
2019
 
2019
 
2019
 
2018
 
Ending Balances
 
 
 
 
 
 
 
 
 
 
Investments
$
2,867,378

 
$
2,705,610

 
$
2,853,358

 
$
2,748,249

 
$
2,686,973

 
Loans, net of unearned income
16,857,526

 
16,686,866

 
16,368,458

 
16,262,633

 
16,165,800

 
Total assets
21,897,062

 
21,703,618

 
21,308,670

 
20,974,649

 
20,682,152

 
Deposits
17,393,913

 
17,342,717

 
16,388,895

 
16,377,978

 
16,376,159

 
Shareholders' equity
2,348,474

 
2,324,016

 
2,308,798

 
2,301,019

 
2,247,573

 
 
 
 
 
 
 
 
 
 
 
 
Average Balances
 
 
 
 
 
 
 
 
 
 
Investments
$
2,830,999

 
$
2,829,672

 
$
2,790,392

 
$
2,699,130

 
$
2,646,266

 
Loans, net of unearned income
16,768,274

 
16,436,507

 
16,316,076

 
16,194,375

 
15,965,637

 
Total assets
21,813,760

 
21,457,800

 
21,057,030

 
20,690,365

 
20,512,130

 
Deposits
17,449,565

 
16,950,667

 
16,375,456

 
16,275,633

 
16,413,066

 
Shareholders' equity
2,342,571

 
2,315,585

 
2,301,258

 
2,265,097

 
2,281,669

 
 
 
 
 
 
 
 
 
 
 
 
Income Statement
 
 
 
 
 
 
 
 
 
 
Net interest income
$
159,270

 
$
161,260

 
$
164,544

 
$
163,315

 
$
162,944

 
Provision for credit losses
12,530

 
2,170

 
5,025

 
5,100

 
8,200

 
Non-interest income
55,281

 
59,813

 
54,315

 
46,751

 
49,523

 
Non-interest expense
139,874

 
146,770

 
144,168

 
137,824

 
140,685

 
Income before taxes
62,147

 
72,133

 
69,666

 
67,142

 
63,582

 
Net income
54,087

 
62,108

 
59,779

 
56,663

 
58,083

 
Pre-provision net revenue(1)
76,324

 
76,741

 
76,114

 
73,775

 
78,320

 
 
 
 
 
 
 
 
 
 
 
 
Per Share
 
 
 
 
 
 
 
 
 
 
Net income (basic)
$
0.33

 
$
0.38

 
$
0.36

 
$
0.33

 
$
0.33

 
Net income (diluted)
$
0.33

 
$
0.37

 
$
0.35

 
$
0.33

 
$
0.33

 
Cash dividends
$
0.17

 
$
0.13

 
$
0.13

 
$
0.13

 
$
0.16

 
Tangible common equity(1)
$
11.04

 
$
10.91

 
$
10.63

 
$
10.39

 
$
10.08

 
Weighted average shares (basic)
164,135

 
165,324

 
168,343

 
169,884

 
174,571

 
Weighted average shares (diluted)
165,039

 
166,126

 
169,168

 
170,909

 
175,473

 
 
 
 
 
 
 
 
 
 
 
 
Asset Quality
 
 
 
 
 
 
 
 
 
 
Net charge-offs to average loans (annualized)
0.17
%
 
0.15%

 
-0.04%

 
0.10%

 
0.17
%
 
Non-performing loans to total loans
0.96
%
 
0.81%

 
0.90%

 
0.85%

 
0.86
%
 
Non-performing assets to total assets
0.77
%
 
0.66%

 
0.73%

 
0.70%

 
0.73
%
 
Allowance for credit losses to loans outstanding
1.06
%
 
1.04%

 
1.08%

 
1.05%

 
1.05
%
 
Allowance for loan losses to loans outstanding
1.04
%
 
1.00
%
 
1.04
%
 
1.00
%
 
0.99
%
 
Allowance for credit losses to non-performing loans
111
%
 
127%

 
120%

 
123%

 
121.00
%
 
Allowance for loan losses to non-performing loans
109
%
 
122%

 
115%

 
117%

 
115.00
%
 
Non-performing assets to tangible shareholders' equity
     and allowance for credit losses(1)
8.44
%
 
7.32%

 
7.94%

 
7.63%

 
7.97
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Profitability
 
 
 
 
 
 
 
 
 
 
Return on average assets
0.98
%
 
1.15
%
 
1.14
%
 
1.11
%
 
1.12
%
 
Return on average shareholders' equity
9.16
%
 
10.64%

 
10.42%

 
10.15%

 
10.10
%
 
Return on average shareholders' equity (tangible)(1)
11.89
%
 
14.03%

 
13.60%

 
13.28%

 
13.17
%
 
Net interest margin
3.22
%
 
3.31
%
 
3.44
%
 
3.49
%
 
3.44
%
 
Efficiency ratio(1)
63.5
%
 
63.6
%
 
64.2
%
 
63.9
%
 
62.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Capital Ratios
 
 
 
 
 
 
 
 
 
 
Tangible common equity ratio(1)
8.49
%
 
8.45
%
 
8.54
%
 
8.64
%
 
8.52
%
 
Tier 1 leverage ratio(2)
8.47%

 
8.52%

 
8.68%

 
8.92%

 
9.01
%
 
Common equity Tier 1 capital ratio(2)
9.67
%
 
9.64
%
 
9.96
%
 
10.16
%
 
10.22
%
 
Tier 1 capital ratio(2)
9.67
%
 
9.64
%
 
9.96
%
 
10.16%

 
10.22
%
 
Total risk-based capital ratio(2)
11.79
%
 
12.01
%
 
12.44
%
 
12.63%

 
12.75
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 December 31, 2019 are preliminary and prior periods are actual.
 
 
 
 
 
 
 
 
 
 
 
 





Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
 
 
 
 
 
 
dollars in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 % Change from
 
 
Dec 31
 
Sep 30
 
Jun 30
 
Mar 31
 
Dec 31
 
Sep 30
 
Dec 31
 
 
2019
 
2019
 
2019
 
2019
 
2018
 
2019
 
2018
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
132,283

 
$
120,671

 
$
107,091

 
$
115,884

 
$
103,436

 
9.6
 %
 
27.9
 %
 
Other interest-earning assets
482,930

 
572,499

 
488,968

 
411,037

 
421,534

 
(15.6
)%
 
14.6
 %
 
Loans held for sale
37,828

 
33,945

 
45,754

 
27,768

 
27,099

 
11.4
 %
 
39.6
 %
 
Investment securities
2,867,378

 
2,705,610

 
2,853,358

 
2,748,249

 
2,686,973

 
6.0
 %
 
6.7
 %
 
Loans, net of unearned income
16,857,526

 
16,686,866

 
16,368,458

 
16,262,633

 
16,165,800

 
1.0
 %
 
4.3
 %
 
Allowance for loan losses
(175,622
)
 
(166,135
)
 
(170,233
)
 
(162,109
)
 
(160,537
)
 
5.7
 %
 
9.4
 %
 
     Net loans
16,681,904

 
16,520,731

 
16,198,225

 
16,100,524

 
16,005,263

 
1.0
 %
 
4.2
 %
 
Premises and equipment
240,046

 
237,344

 
243,300

 
239,004

 
234,529

 
1.1
 %
 
2.4
 %
 
Accrued interest receivable
60,898

 
60,447

 
62,984

 
62,207

 
58,879

 
0.7
 %
 
3.4
 %
 
Goodwill and intangible assets
535,303

 
534,178

 
535,249

 
535,356

 
531,556

 
0.2
 %
 
0.7
 %
 
Other assets
858,492

 
918,193

 
773,741

 
734,620

 
612,883

 
(6.5
)%
 
40.1
 %
 
    Total Assets
$
21,897,062

 
$
21,703,618

 
$
21,308,670

 
$
20,974,649

 
$
20,682,152

 
0.9
 %
 
5.9
 %
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
$
17,393,913

 
$
17,342,717

 
$
16,388,895

 
$
16,377,978

 
$
16,376,159

 
0.3
 %
 
6.2
 %
 
Short-term borrowings
883,241

 
832,860

 
1,188,390

 
829,016

 
754,777

 
6.0
 %
 
17.0
 %
 
Other liabilities
389,665

 
477,311

 
435,171

 
401,324

 
311,364

 
(18.4
)%
 
25.1
 %
 
FHLB advances and long-term debt
881,769

 
726,714

 
987,416

 
1,065,312

 
992,279

 
21.3
 %
 
(11.1
)%
 
    Total Liabilities
19,548,588

 
19,379,602

 
18,999,872

 
18,673,630

 
18,434,579

 
0.9
 %
 
6.0
 %
 
Shareholders' equity
2,348,474

 
2,324,016

 
2,308,798

 
2,301,019

 
2,247,573

 
1.1
 %
 
4.5
 %
 
    Total Liabilities and Shareholders' Equity
$
21,897,062

 
$
21,703,618

 
$
21,308,670

 
$
20,974,649

 
$
20,682,152

 
0.9
 %
 
5.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
 
 
 
 
 
 
 
 
 
 
Loans, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
$
6,700,776

 
$
6,604,634

 
$
6,497,973

 
$
6,428,688

 
$
6,434,285

 
1.5
 %
 
4.1
 %
 
Commercial - industrial, financial and agricultural
4,466,701

 
4,494,496

 
4,365,248

 
4,429,538

 
4,404,548

 
(0.6
)%
 
1.4
 %
 
Real estate - residential mortgage
2,641,465

 
2,570,793

 
2,451,966

 
2,313,908

 
2,251,044

 
2.7
 %
 
17.3
 %
 
Real estate - home equity
1,314,944

 
1,346,115

 
1,386,974

 
1,413,500

 
1,452,137

 
(2.3
)%
 
(9.4
)%
 
Real estate - construction
971,079

 
913,644

 
922,547

 
953,087

 
916,599

 
6.3
 %
 
5.9
 %
 
Consumer
463,164

 
464,213

 
452,874

 
433,545

 
419,186

 
(0.2
)%
 
10.5
 %
 
Leasing and other
299,397

 
292,971

 
290,876

 
290,367

 
288,001

 
2.2
 %
 
4.0
 %
 
Total Loans, net of unearned income
$
16,857,526

 
$
16,686,866

 
$
16,368,458

 
$
16,262,633

 
$
16,165,800

 
1.0
 %
 
4.3
 %
Deposits, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
4,453,324

 
$
4,240,478

 
$
4,226,404

 
$
4,255,043

 
$
4,310,105

 
5.0
 %
 
3.3
 %
 
Interest-bearing demand
4,720,188

 
4,771,109

 
4,083,615

 
4,207,442

 
4,240,974

 
(1.1
)%
 
11.3
 %
 
Savings and money market accounts
5,153,941

 
5,094,387

 
4,938,998

 
4,907,346

 
4,926,937

 
1.2
 %
 
4.6
 %
 
    Total demand and savings
14,327,453

 
14,105,974

 
13,249,017

 
13,369,831

 
13,478,016

 
1.6
 %
 
6.3
 %
 
Brokered deposits
264,531

 
256,870

 
246,116

 
251,395

 
176,239

 
3.0
 %
 
50.1
 %
 
Time deposits
2,801,929

 
2,979,873

 
2,893,762

 
2,756,752

 
2,721,904

 
(6.0
)%
 
2.9
 %
 
Total Deposits
$
17,393,913

 
$
17,342,717

 
$
16,388,895

 
$
16,377,978

 
$
16,376,159

 
0.3
 %
 
6.2
 %
Short-term borrowings, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer repurchase agreements
$
56,707

 
$
58,853

 
$
56,496

 
$
54,440

 
$
43,499

 
(3.6
)%
 
30.4
 %
 
Customer short-term promissory notes
326,534

 
279,007

 
281,894

 
299,576

 
326,278

 
17.0
 %
 
0.1
 %
 
Short-term FHLB advances
500,000

 
475,000

 
650,000

 
475,000

 
385,000

 
5.3
 %
 
29.9
 %
 
Federal funds purchased

 
20,000

 
200,000

 

 

 
(100.0
)%
 
N/M

 
Total Short-term Borrowings
$
883,241

 
$
832,860

 
$
1,188,390

 
$
829,016

 
$
754,777

 
6.0
 %
 
17.0
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N/M - Not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 





FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
 
 
 
 
 
 
in thousands
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 % Change from
 
 
Year ended
 
 
 
 
 
 
 
Dec 31
 
Sep 30
 
Jun 30
 
Mar 31
 
Dec 31
 
Sep 30
 
Dec 31
 
 
December 31
 
 
 
 
 
 
 
2019
 
2019
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
2019
 
2018
 
% Change
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
$
202,159

 
$
208,413

 
$
210,034

 
$
204,700

 
$
200,609

 
(3.0
)%
 
0.8
 %
 
 
$
825,306

 
$
758,514

 
8.8
 %
 
 
Interest expense
 
 
42,889

 
47,153

 
45,490

 
41,385

 
37,665

 
(9.0
)%
 
13.9
 %
 
 
176,917

 
128,058

 
38.2
 %
 
 
    Net Interest Income
 
 
159,270

 
161,260

 
164,544

 
163,315

 
162,944

 
(1.2
)%
 
(2.3
)%
 
 
648,389

 
630,456

 
2.8
 %
 
 
Provision for credit losses
 
 
12,530

 
2,170

 
5,025

 
5,100

 
8,200

 
N/M

 
52.8
 %
 
 
24,825

 
46,907

 
(47.1
)%
 
 
    Net Interest Income after Provision
 
 
146,740

 
159,090

 
159,519

 
158,215

 
154,744

 
(7.8
)%
 
(5.2
)%
 
 
623,564

 
583,549

 
6.9
 %
 
Non-Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wealth management
 
 
14,419

 
13,867

 
14,153

 
13,239

 
13,408

 
4.0
 %
 
7.5
 %
 
 
55,678

 
52,148

 
6.8
 %
 
 
Mortgage banking
 
 
5,076

 
6,658

 
6,593

 
4,772

 
4,774

 
(23.8
)%
 
6.3
 %
 
 
23,099

 
19,026

 
21.4
 %
 
 
Consumer banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Card
 
 
4,991

 
5,791

 
5,047

 
4,686

 
4,966

 
(13.8
)%
 
0.5
 %
 
 
20,515

 
19,497

 
5.2
 %
 
 
Overdraft
 
 
4,750

 
4,682

 
4,413

 
4,104

 
4,653

 
1.5
 %
 
2.1
 %
 
 
17,949

 
17,606

 
1.9
 %
 
 
Other consumer banking
 
 
2,685

 
2,860

 
2,907

 
2,587

 
2,799

 
(6.1
)%
 
(4.1
)%
 
 
11,039

 
11,319

 
(2.5
)%
 
 
Total consumer banking
 
 
12,426

 
13,333

 
12,367

 
11,377

 
12,418

 
(6.8
)%
 
0.1
 %
 
 
49,503

 
48,422

 
2.2
 %
 
 
Commercial banking:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Merchant and card
 
 
5,841

 
6,166

 
6,512

 
5,558

 
5,656

 
(5.3
)%
 
3.3
 %
 
 
24,077

 
23,427

 
2.8
 %
 
 
Cash management
 
 
4,697

 
4,696

 
4,638

 
4,361

 
4,340

 
 %
 
8.2
 %
 
 
18,392

 
17,581

 
4.6
 %
 
 
Commercial loan interest rate swap
 
 
5,426

 
3,944

 
3,477

 
2,028

 
2,540

 
37.6
 %
 
113.6
 %
 
 
14,875

 
9,831

 
51.3
 %
 
 
Other commercial banking
 
 
3,664

 
3,478

 
3,815

 
2,816

 
3,466

 
5.3
 %
 
5.7
 %
 
 
13,773

 
13,090

 
5.2
 %
 
 
Total commercial banking
 
 
19,628

 
18,284

 
18,442

 
14,763

 
16,002

 
7.4
 %
 
22.7
 %
 
 
71,117

 
63,929

 
11.2
 %
 
 
Other
 
 
3,732

 
3,179

 
2,584

 
2,535

 
2,921

 
17.4
 %
 
27.8
 %
 
 
12,030

 
11,963

 
0.6
 %
 
 
    Non-Interest Income before Investment Securities Gains
 
 
55,281

 
55,321

 
54,139

 
46,686

 
49,523

 
(0.1
)%
 
11.6
 %
 
 
211,427

 
195,488

 
8.2
 %
 
 
Investment securities gains, net
 
 

 
4,492

 
176

 
65

 

 
(100.0
)%
 
 %
 
 
4,733

 
37

 
N/M

 
 
    Total Non-Interest Income
 
 
55,281

 
59,813

 
54,315

 
46,751

 
49,523

 
(7.6
)%
 
11.6
 %
 
 
216,160

 
195,525

 
10.6
 %
 
Non-Interest Expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
 
77,875

 
78,211

 
78,991

 
77,757

 
75,745

 
(0.4
)%
 
2.8
 %
 
 
312,834

 
303,202

 
3.2
 %
 
 
Net occupancy
 
 
13,080

 
12,368

 
14,469

 
12,909

 
12,708

 
5.8
 %
 
2.9
 %
 
 
52,826

 
51,678

 
2.2
 %
 
 
Data processing and software
 
 
11,468

 
11,590

 
11,268

 
10,353

 
10,203

 
(1.1
)%
 
12.4
 %
 
 
44,679

 
41,286

 
8.2
 %
 
 
Other outside services
 
 
8,215

 
12,163

 
11,259

 
8,352

 
8,944

 
(32.5
)%
 
(8.2
)%
 
 
39,989

 
33,758

 
18.5
 %
 
 
Equipment
 
 
3,475

 
3,459

 
3,299

 
3,342

 
3,275

 
0.5
 %
 
6.1
 %
 
 
13,575

 
13,243

 
2.5
 %
 
 
Professional fees
 
 
2,873

 
3,331

 
2,970

 
3,960

 
3,546

 
(13.7
)%
 
(19.0
)%
 
 
13,134

 
14,161

 
(7.3
)%
 
 
FDIC insurance
 
 
2,177

 
239

 
2,755

 
2,609

 
2,563

 
N/M

 
(15.1
)%
 
 
7,780

 
10,993

 
(29.2
)%
 
 
Amortization of tax credit investments
 
 
1,505

 
1,533

 
1,492

 
1,491

 
6,538

 
(1.8
)%
 
(77.0
)%
 
 
6,021

 
11,449

 
(47.4
)%
 
 
Marketing
 
 
1,503

 
3,322

 
2,863

 
2,160

 
1,577

 
(54.8
)%
 
(4.7
)%
 
 
9,848

 
8,854

 
11.2
 %
 
 
Intangible amortization
 
 
142

 
1,071

 
107

 
107

 

 
N/M

 
100.0
 %
 
 
1,427

 

 
100.0
 %
 
 
Prepayment penalty on FHLB advances
 
 

 
4,326

 

 
 
 

 
(100.0
)%
 
 %
 
 
4,326

 

 
100.0
 %
 
 
Other
 
 
17,561

 
15,157

 
14,695

 
14,784

 
15,586

 
15.9
 %
 
12.7
 %
 
 
62,197

 
57,480

 
8.2
 %
 
 
    Total Non-Interest Expense
 
 
139,874

 
146,770

 
144,168

 
137,824

 
140,685

 
(4.7
)%
 
(0.6
)%
 
 
568,636

 
546,104

 
4.1
 %
 
 
    Income Before Income Taxes
 
 
62,147

 
72,133

 
69,666

 
67,142

 
63,582

 
(13.8
)%
 
(2.3
)%
 
 
271,088

 
232,970

 
16.4
 %
 
 
Income tax expense
 
 
8,060

 
10,025

 
9,887

 
10,479

 
5,499

 
(19.6
)%
 
46.6
 %
 
 
38,451

 
24,577

 
56.5
 %
 
 
    Net Income
 
 
$
54,087

 
$
62,108

 
$
59,779

 
$
56,663

 
$
58,083

 
(12.9
)%
 
(6.9
)%
 
 
$
232,637

 
$
208,393

 
11.6
 %
 
PER SHARE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Basic
 
 
$
0.33

 
$
0.38

 
$
0.36

 
$
0.33

 
$
0.33

 
(13.2
)%
 
 %
 
 
$
1.39

 
$
1.19

 
16.8
 %
 
 
    Diluted
 
 
0.33

 
0.37

 
0.35

 
0.33

 
0.33

 
(10.8
)%
 
 %
 
 
1.39

 
1.18

 
17.8
 %
 
 
Cash dividends
 
 
0.17

 
0.13

 
0.13

 
0.13

 
0.16

 
30.8
 %
 
6.3
 %
 
 
0.56

 
0.52

 
7.7
 %
 
 
Weighted average shares (basic)
 
 
164,135

 
165,324

 
168,343

 
169,884

 
174,571

 
(0.7
)%
 
(6.0
)%
 
 
166,902

 
175,395

 
(4.8
)%
 
 
Weighted average shares (diluted)
 
 
165,039

 
166,126

 
169,168

 
170,909

 
175,473

 
(0.7
)%
 
(5.9
)%
 
 
167,792

 
176,543

 
(5.0
)%
 
N/M - not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
 
 
 Three Months Ended
 
 
December 31, 2019
 
September 30, 2019
 
December 31, 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
$
16,768,274

 
$
182,024

 
4.31%
 
$
16,436,507

 
$
188,280

 
4.55%
 
$
15,965,637

 
$
182,358

 
4.54%
 
Taxable investment securities
2,198,252

 
15,621

 
2.84%
 
2,282,292

 
15,565

 
2.73%
 
2,283,897

 
15,005

 
2.74%
 
Tax-exempt investment securities
594,487

 
5,058

 
3.38%
 
516,907

 
4,650

 
3.57%
 
426,872

 
3.978

 
3.71%
 
Total Investment Securities
2,792,739

 
20,679

 
2.96%
 
2,799,199

 
20,215

 
2.88%
 
2,710,769

 
18.983

 
2.80%
 
Loans held for sale
30,062

 
295

 
3.93%
 
31,898

 
466