Fulton Financial Corporation (NASDAQ: FULT) (“Fulton” or the
“Corporation”) reported net income available to common shareholders
of $59.4 million, or $0.36 per diluted share, for the first quarter
of 2024, a decrease of $2.3 million, or 3.8%, in comparison to the
fourth quarter of 2023. Operating net income available to common
shareholders for the three months ended March 31, 2024 was $65.4
million, or $0.40 per diluted share(1), a decrease of $3.5 million,
or 5.0% in comparison to the fourth quarter of 2023.
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“We are pleased with our first quarter results, which are a good
start to the year; operating earnings were solid, deposit growth
outpaced loan growth during the quarter, net interest margin was in
line with our expectations, and asset quality remained stable,”
said Curtis J. Myers, Chairman and CEO of Fulton Financial
Corporation. “We are focused and making progress on our strategic
initiatives.”
Net Interest Income and Balance
Sheet
Net interest income for the first quarter of 2024 was $206.9
million, a decrease of $5.1 million in comparison to the fourth
quarter of 2023, due to slight decreases in both average
interest-earning assets and the net interest margin.
Total average interest-earning assets for the first quarter of
2024 were $25.6 billion, a decrease of $41.0 million from the
fourth quarter of 2023 primarily driven by a decrease in average
investment securities and average other interest-earning assets of
$137.0 million and $18.3 million, respectively, partially offset by
an increase in average net loans of $114.3 million.
Total average interest-bearing liabilities increased $347.9
million to $18.9 billion in the first quarter of 2024 in comparison
to $18.6 billion in the fourth quarter of 2023. The increase in
average interest-bearing liabilities was driven by an increase in
the average balance of total interest-bearing deposits and the
average balance of borrowings and other interest-bearing
liabilities of $281.2 million and $66.6 million, respectively.
(1)
Financial measure derived by methods other
than generally accepted accounting principles ("GAAP"). Refer to
the calculation on the page titled "Reconciliation of Non-GAAP
Measures" at the end of the press release.
The net interest margin for the first quarter of 2024 decreased
four basis points to 3.32% in comparison to 3.36% in the fourth
quarter of 2023. The decrease was primarily due to an increase in
the rate on average interest-bearing deposits and a shift in the
funding mix from noninterest-bearing demand deposits to
interest-bearing deposits, partially offset by higher loan yields
and a lower rate on average borrowings and other interest-bearing
liabilities.
A seven basis point increase in the yield on average net loans
and an increase in the average balance of net loans of $114.3
million in the first quarter of 2024 drove an increase in interest
income of $1.5 million to $339.7 million in comparison to $338.1
million in the fourth quarter of 2023.
Interest expense on interest-bearing liabilities for the first
quarter of 2024 increased by $6.6 million to $132.7 million in
comparison to $126.1 million in the fourth quarter of 2023. The
linked-quarter increase in interest expense in the first quarter of
2024 was primarily due to an increase in the rate on average
interest-bearing deposits of 16 basis points, a decline of $379.0
million in the average balance of noninterest-bearing deposits and
an increase in the average balance of interest-bearing deposits of
$281.2 million in comparison to the fourth quarter of 2023,
partially offset by a decrease in the rate on borrowings and other
interest-bearing liabilities of 12 basis points.
For the first quarter of 2024, net interest income was $206.9
million, a decrease of $8.7 million, or 4.0%, in comparison to the
first quarter of 2023. Interest income for the first quarter of
2024 increased by $49.8 million to $339.7 million in comparison to
$289.8 million in the first quarter of 2023, primarily driven by
rising interest rates resulting in an increase in interest income
from net loans of $50.6 million.
Total average interest-earning assets for the first quarter of
2024 increased by $357.0 million from the first quarter of 2023.
Average net loans for the first quarter of 2024 were $21.4 billion,
an increase of $0.9 billion from the same period in 2023. Compared
to the first quarter of 2023, average investment securities
decreased $305.9 million and average other interest-earning assets
decreased $244.1 million in the first quarter of 2024.
Total average interest-bearing liabilities for the first quarter
of 2024 increased $1.9 billion to $18.9 billion in comparison to
$17.0 billion in the first quarter of 2023, driven by an increase
in the average balance of total interest-bearing deposits of $2.4
billion, partially offset by a decrease in the average balance of
borrowings and other interest-bearing liabilities of $0.5
billion.
Increases in the average balance of net loans of $0.9 billion
and yields on net loans of 69 basis points in the first quarter of
2024 compared to the first quarter of 2023 each contributed to the
increase in interest income.
Interest expense on interest-bearing liabilities for the first
quarter of 2024 increased by $58.5 million to $132.7 million in
comparison to $74.2 million in the first quarter of 2023, primarily
driven by rising interest rates resulting in an increase to
interest expense from interest-bearing deposits of $62.0 million. A
decrease in the average balance of noninterest-bearing deposits of
$1.6 billion and an increase in the average balance of
interest-bearing deposits of $2.4 billion, in the first quarter of
2024 in comparison to the first quarter of 2023 also contributed to
the increase in interest expense.
Asset Quality
The provision for credit losses was $10.9 million in the first
quarter of 2024 compared to $9.8 million in the fourth quarter of
2023 and $24.5 million in the first quarter of 2023. The provision
for credit losses of $10.9 million recorded in the first quarter of
2024 was primarily due to net charge-offs of $8.6 million and loan
growth.
Non-performing assets were $156.4 million, or 0.57% of total
assets, at March 31, 2024, in comparison to $154.2 million, or
0.56% of total assets, at December 31, 2023, and $167.9 million, or
0.62% of total assets, at March 31, 2023.
Net charge-offs for the first quarter of 2024 were 0.16% of
total average loans in comparison to 0.15% and 0.27% in the fourth
quarter of 2023 and the first quarter of 2023, respectively.
Non-interest Income
Non-interest income before investment securities gains (losses)
in the first quarter of 2024 was $57.1 million, a decrease of $3.0
million, or 5.0%, from the fourth quarter of 2023. The decrease in
non-interest income was due to a $2.0 million decrease in
commercial customer interest rate swap fee income, reflected in
capital markets, a $2.2 million decrease in other non-interest
income (including a $0.9 million decrease in income from equity
method investments and a $1.0 million net change from market
movements in our commercial customer interest rate swap program
resulting from the reference rate transition from the London
Inter-Bank Offered Rate ("LIBOR") to the Secured Overnight
Financing Rate ("SOFR")). These decreases were partially offset by
increases in wealth management revenues due to an increase in
assets under management and mortgage banking income due to higher
loan sales volumes and higher spreads.
Compared to the first quarter of 2023, non-interest income
before investment securities gains (losses) increased $5.4 million,
or 10.5%, from $51.7 million. The increase in non-interest income
was primarily due to increases of $2.1 million in wealth management
revenues due to an increase in assets under management, $1.3
million in commercial banking income, $1.1 million in mortgage
banking income and $0.5 million in consumer banking income. The
increase in commercial banking income was primarily due to
increases of $0.8 million in cash management fee income and $0.3
million in gains on sale from Small Business Administration loans,
reflected in other commercial banking income. The increase in
mortgage banking income was driven by higher loan sale volumes and
higher spreads.
Non-interest Expense
Non-interest expense was $177.6 million in the first quarter of
2024, a decrease of $3.0 million, or 1.6%, compared to $180.6
million in the fourth quarter of 2023. The decrease was primarily
due to a $5.0 million decrease in FDIC insurance expense, which
included special assessment charges of $1.0 million in the first
quarter of 2024 and $6.5 million in the fourth quarter of 2023,
assessed to recover the loss to the Deposit Insurance Fund in
connection with the closures of certain banks in 2023. The decrease
was partially offset by an increase in FultonFirst implementation
costs and loss on asset disposals of $3.1 million. The FultonFirst
implementation costs and loss on asset disposals of $6.3 million in
the first quarter of 2024 included a $3.6 million loss on disposal
of assets, reflected in other non-interest expense, $2.5 million of
consulting service expense, included in other outside services, and
$0.2 million of severance expense, reflected in salaries and
employee benefits expense. The FultonFirst implementation costs and
loss on asset disposals of $3.2 million in the fourth quarter of
2023 included $2.6 million of consulting services, reflected in
other outside services, and $0.6 million of severance expense,
included in salaries and employee benefits expense.
Excluding FultonFirst implementation costs and loss on asset
disposals, and FDIC expense noted above in the first quarter of
2024 and the fourth quarter of 2023, non-interest expense decreased
$0.5 million, or 0.3%, compared to the fourth quarter of 2023,
largely due to decreases in marketing expense of $1.6 million and
salaries and employee benefits expense of $1.4 million, partially
offset by increases in snow removal costs of $1.1 million, included
in net occupancy expense, $0.7 million in data processing and
software expense and a debt extinguishment gain of $0.7 million
recorded in the fourth quarter of 2023. The $1.6 million decrease
in marketing expense was the result of higher costs incurred in the
fourth quarter of 2023 related to a targeted customer deposit
acquisition program and brand marketing campaigns in growth
markets. The $1.4 million decrease in salaries and benefits expense
was primarily due to a decrease in healthcare costs and variable
incentive expenses, partially offset by an increase in payroll
taxes due to the reset of payroll tax caps.
Compared to the first quarter of 2023, excluding the FultonFirst
implementation costs and loss on asset disposals of $6.3 million
discussed above, non-interest expense increased $11.7 million, or
7.3%. The increase was primarily due to increases of $6.0 million
in salaries and employee benefits expense, $1.9 million in data
processing and software expense primarily due to technology
investments made in 2023, $1.7 million in net occupancy expense
driven by snow removal costs, $1.3 million in FDIC insurance, which
includes the $1.0 million special assessment charge noted above,
and $0.7 million in other outside services expense. The $6.0
million increase in salaries and benefits expense was primarily due
to merit increases and healthcare costs.
Income Tax Expense
For the first quarter of 2024 the effective tax rate was 18.0%
in comparison to 18.5% for the full-year of 2023.
Additional information on Fulton is available on the Internet at
www.fultonbank.com.
Safe Harbor Statement
This press release may contain forward-looking statements with
respect to the Corporation’s financial condition, results of
operations and business. Do not unduly rely on forward-looking
statements. Forward-looking statements can be identified by the use
of words such as "may," "should," "will," "could," "estimates,"
"predicts," "potential," "continue," "anticipates," "believes,"
"plans," "expects," "future," "intends," “projects,” the negative
of these terms and other comparable terminology. These
forward-looking statements may include projections of, or guidance
on, the Corporation’s future financial performance, expected levels
of future expenses, including future credit losses, anticipated
growth strategies, descriptions of new business initiatives and
anticipated trends in the Corporation’s business or financial
results.
Forward-looking statements are neither historical facts, nor
assurance of future performance. Instead, the statements are based
on current beliefs, expectations and assumptions regarding the
future of the Corporation’s business, future plans and strategies,
projections, anticipated events and trends, the economy and other
future conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of the Corporation’s control, and actual results
and financial condition may differ materially from those indicated
in the forward-looking statements. Therefore, you should not unduly
rely on any of these forward-looking statements. Any
forward-looking statement is based only on information currently
available and speaks only as of the date when made. The Corporation
undertakes no obligation, other than as required by law, to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the
Corporation, and some of the factors that could cause the
Corporation's actual results to differ materially from those
described in the forward-looking statements, can be found in the
sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the
Corporation’s Annual Report on Form 10-K for the year ended
December 31, 2023 and other current and periodic reports, which
have been, or will be, filed with the Securities and Exchange
Commission (the "SEC") and are, or will be, available in the
Investor Relations section of the Corporation's website
(www.fultonbank.com) and on the SEC's website (www.sec.gov).
Non-GAAP Financial
Measures
The Corporation uses certain financial measures in this press
release that have been derived from methods other than GAAP. These
non-GAAP financial measures are reconciled to the most comparable
GAAP measures in tables at the end of this press release.
FULTON FINANCIAL CORPORATION
SUMMARY CONSOLIDATED FINANCIAL
INFORMATION (UNAUDITED)
(dollars in thousands, except per share
and shares data)
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Ending
Balances
Investment securities
$
3,783,392
$
3,666,274
$
3,698,601
$
3,867,334
$
3,950,101
Net loans
21,444,483
21,351,094
21,177,508
21,044,685
20,670,188
Total assets
27,642,957
27,571,915
27,375,177
27,403,163
27,112,176
Deposits
21,741,950
21,537,623
21,421,589
21,206,540
21,316,584
Shareholders' equity
2,757,679
2,760,139
2,566,693
2,642,152
2,618,998
Average
Balances
Investment securities
3,672,844
3,665,261
3,834,824
3,916,130
3,964,615
Net loans
21,370,033
21,255,779
21,121,277
20,866,235
20,463,096
Total assets
27,427,626
27,397,671
27,377,836
27,235,567
26,900,653
Deposits
21,378,754
21,476,548
21,357,295
21,207,143
20,574,323
Shareholders' equity
2,766,945
2,618,024
2,645,977
2,647,464
2,613,316
Income
Statement
Net interest income
206,937
212,006
213,842
212,852
215,587
Provision for credit losses
10,925
9,808
9,937
9,747
24,544
Non-interest income
57,140
59,378
55,961
60,585
51,753
Non-interest expense
177,600
180,552
171,020
168,018
159,616
Income before taxes
75,552
81,024
88,846
95,672
83,180
Net income available to common
shareholders
59,379
61,701
69,535
77,045
65,752
Pre-provision net revenue(1)
94,184
100,050
102,342
106,495
108,375
Per
Share
Net income available to common
shareholders (basic)
$
0.36
$
0.38
$
0.42
$
0.46
$
0.39
Net income available to common
shareholders (diluted)
$
0.36
$
0.37
$
0.42
$
0.46
$
0.39
Operating net income available to common
shareholders(1)
$
0.40
$
0.42
$
0.43
$
0.47
$
0.39
Cash dividends
$
0.17
$
0.17
$
0.16
$
0.16
$
0.15
Common shareholders' equity
$
15.82
$
15.67
$
14.47
$
14.75
$
14.67
Common shareholders' equity
(tangible)(1)
$
12.37
$
12.25
$
11.05
$
11.36
$
11.26
Weighted average shares (basic)
162,706
163,975
164,566
165,854
166,605
Weighted average shares (diluted)
164,520
165,650
166,023
167,191
168,401
(1) Non-GAAP financial measure. Refer to
the calculation on the page titled “Reconciliation of Non-GAAP
Measures” at the end of this press release.
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Asset
Quality
Net charge-offs to average loans
0.16
%
0.15
%
0.10
%
0.04
%
0.27
%
Non-performing loans to total net
loans
0.73
%
0.72
%
0.67
%
0.70
%
0.80
%
Non-performing assets to total assets
0.57
%
0.56
%
0.52
%
0.55
%
0.62
%
ACL - loans(1) to total loans
1.39
%
1.37
%
1.38
%
1.37
%
1.35
%
ACL - loans(1) to non-performing loans
191
%
191
%
208
%
195
%
169
%
Profitability
Return on average assets
0.91
%
0.93
%
1.04
%
1.17
%
1.03
%
Operating return on average assets(2)
1.00
%
1.03
%
1.08
%
1.18
%
1.04
%
Return on average common shareholders'
equity
9.28
%
10.09
%
11.25
%
12.59
%
11.02
%
Operating return on average common
shareholders' equity (tangible)(2)
13.08
%
14.68
%
15.17
%
16.52
%
14.46
%
Net interest margin
3.32
%
3.36
%
3.40
%
3.40
%
3.53
%
Efficiency ratio(2)
63.2
%
62.0
%
61.5
%
60.1
%
58.5
%
Non-interest expense to total average
assets
2.60
%
2.61
%
2.48
%
2.47
%
2.41
%
Operating non-interest expense to total
average assets(2)
2.49
%
2.47
%
2.47
%
2.46
%
2.40
%
Capital
Ratios(3)
Tangible common equity ratio
("TCE")(2)
7.4
%
7.4
%
6.8
%
7.0
%
7.0
%
Tier 1 leverage ratio
9.4
%
9.5
%
9.4
%
9.3
%
9.2
%
Common equity Tier 1 capital ratio
10.2
%
10.3
%
10.3
%
10.1
%
9.8
%
Tier 1 risk-based capital ratio
11.0
%
11.2
%
11.1
%
11.0
%
10.6
%
Total risk-based capital ratio
13.9
%
14.0
%
14.0
%
13.8
%
13.4
%
(1) "ACL - loans" relates to the allowance
for credit losses ("ACL") specifically on "Net Loans" and does not
include the ACL related to off-balance-sheet
("OBS") credit exposures.
(2) Non-GAAP financial measure. Refer to
the calculation on the page titled "Reconciliation of Non-GAAP
Measures" at the end of this press release.
(3) Regulatory capital ratios as of March
31, 2024 are preliminary estimates and prior periods are
actual.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE
SHEETS (UNAUDITED)
(dollars in thousands)
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
ASSETS
Cash and due from banks
$
247,581
$
300,343
$
304,042
$
123,779
$
129,003
Other interest-earning assets
231,389
373,772
222,781
505,141
545,355
Loans held for sale
10,624
15,158
20,368
14,673
6,507
Investment securities
3,783,392
3,666,274
3,698,601
3,867,334
3,950,101
Net loans
21,444,483
21,351,094
21,177,508
21,044,685
20,670,188
Less: ACL - loans(1)
(297,888
)
(293,404
)
(292,739
)
(287,442
)
(278,695
)
Loans, net
21,146,595
21,057,690
20,884,769
20,757,243
20,391,493
Net premises and equipment
213,541
222,881
215,626
216,322
216,059
Accrued interest receivable
107,089
107,972
101,624
96,991
90,267
Goodwill and intangible assets
560,114
560,687
561,284
561,885
563,502
Other assets
1,342,632
1,267,138
1,366,082
1,259,795
1,219,889
Total Assets
$
27,642,957
$
27,571,915
$
27,375,177
$
27,403,163
$
27,112,176
LIABILITIES AND
SHAREHOLDERS' EQUITY
Deposits
$
21,741,950
$
21,537,623
$
21,421,589
$
21,206,540
$
21,316,584
Borrowings
2,296,040
2,487,526
2,370,112
2,719,114
2,446,770
Other liabilities
847,288
786,627
1,016,783
835,357
729,824
Total Liabilities
24,885,278
24,811,776
24,808,484
24,761,011
24,493,178
Shareholders' equity
2,757,679
2,760,139
2,566,693
2,642,152
2,618,998
Total Liabilities and Shareholders'
Equity
$
27,642,957
$
27,571,915
$
27,375,177
$
27,403,163
$
27,112,176
LOANS, DEPOSITS
AND BORROWINGS DETAIL:
Loans, by type:
Real estate - commercial mortgage
$
8,252,117
$
8,127,728
$
8,106,300
$
7,846,861
$
7,746,920
Commercial and industrial
4,467,589
4,545,552
4,577,334
4,599,759
4,596,096
Real estate - residential mortgage
5,395,720
5,325,923
5,279,681
5,147,262
4,880,919
Real estate - home equity
1,040,335
1,047,184
1,045,438
1,061,891
1,074,712
Real estate - construction
1,249,199
1,239,075
1,078,263
1,308,564
1,326,754
Consumer
698,421
729,318
743,976
763,530
730,775
Leases and other loans(2)
341,102
336,314
346,516
316,818
314,012
Total Net Loans
$
21,444,483
$
21,351,094
$
21,177,508
$
21,044,685
$
20,670,188
Deposits, by type:
Noninterest-bearing demand
$
5,086,514
$
5,314,094
$
5,575,374
$
5,865,855
$
6,403,484
Interest-bearing demand
5,521,017
5,722,695
5,757,487
5,543,320
5,478,237
Savings
6,846,038
6,616,901
6,707,729
6,646,448
6,579,806
Total demand and savings
17,453,569
17,653,690
18,040,590
18,055,623
18,461,527
Brokered
1,152,427
1,144,692
941,059
949,259
960,919
Time
3,135,954
2,739,241
2,439,940
2,201,658
1,894,138
Total Deposits
$
21,741,950
$
21,537,623
$
21,421,589
$
21,206,540
$
21,316,584
Borrowings, by type:
Federal funds purchased
$
—
$
240,000
$
544,000
$
555,000
$
525,000
Federal Home Loan Bank advances
900,000
1,100,000
730,000
1,165,000
747,000
Senior debt and subordinated debt
535,566
535,384
540,174
539,994
539,814
Other borrowings
860,474
612,142
555,938
459,120
634,956
Total Borrowings
$
2,296,040
$
2,487,526
$
2,370,112
$
2,719,114
$
2,446,770
(1) "ACL - loans" relates to the ACL
specifically on "Net Loans" and does not include the ACL related to
OBS credit exposures.
(2) Includes equipment lease financing,
overdraft and net origination fees and costs.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (UNAUDITED)
(dollars in thousands, except per share
and share data)
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Net Interest Income:
Interest income
$
339,666
$
338,134
$
330,371
$
314,912
$
289,820
Interest expense
132,729
126,128
116,529
102,060
74,233
Net Interest Income
206,937
212,006
213,842
212,852
215,587
Provision for credit losses
10,925
9,808
9,937
9,747
24,544
Net Interest Income after
Provision
196,012
202,198
203,905
203,105
191,043
Non-Interest Income:
Wealth management
20,155
19,388
19,413
18,678
18,062
Commercial banking:
Merchant and card
6,808
7,045
7,626
7,700
6,834
Cash management
6,305
6,030
5,960
5,835
5,515
Capital markets
2,341
4,258
2,960
6,092
2,344
Other commercial banking
3,375
3,447
3,176
3,518
2,820
Total commercial banking
18,829
20,780
19,722
23,145
17,513
Consumer banking:
Card
6,628
6,739
6,770
6,592
6,243
Overdraft
2,786
2,991
2,996
2,696
2,733
Other consumer banking
2,254
2,357
2,407
2,432
2,241
Total consumer banking
11,668
12,087
12,173
11,720
11,217
Mortgage banking
3,090
2,288
3,190
2,940
1,970
Other
3,398
5,587
1,463
4,106
2,968
Non-interest income before investment
securities gains (losses)
57,140
60,130
55,961
60,589
51,730
Investment securities gains (losses),
net
—
(752
)
—
(4
)
23
Total Non-Interest Income
57,140
59,378
55,961
60,585
51,753
Non-Interest Expense:
Salaries and employee benefits
95,481
97,275
96,757
94,102
89,283
Data processing and software
17,661
16,985
16,914
16,776
15,796
Net occupancy
16,149
14,647
14,561
14,374
14,438
Other outside services
13,283
14,670
12,094
10,834
10,126
FDIC insurance
6,104
11,138
4,738
4,895
4,795
Equipment
4,040
3,995
3,475
3,530
3,389
Professional fees
2,088
2,302
1,869
1,829
2,392
Marketing
1,912
3,550
1,913
1,655
1,886
Intangible amortization
573
597
601
1,072
674
Other
20,309
15,393
18,098
18,951
16,837
Total Non-Interest Expense
177,600
180,552
171,020
168,018
159,616
Income Before Income Taxes
75,552
81,024
88,846
95,672
83,180
Income tax expense
13,611
16,761
16,749
16,065
14,866
Net Income
61,941
64,263
72,097
79,607
68,314
Preferred stock dividends
(2,562
)
(2,562
)
(2,562
)
(2,562
)
(2,562
)
Net Income Available to Common
Shareholders
$
59,379
$
61,701
$
69,535
$
77,045
$
65,752
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
PER
SHARE:
Net income available to common
shareholders (basic)
$
0.36
$
0.38
$
0.42
$
0.46
$
0.39
Net income available to common
shareholders (diluted)
$
0.36
$
0.37
$
0.42
$
0.46
$
0.39
Cash dividends
$
0.17
$
0.17
$
0.16
$
0.16
$
0.15
Weighted average shares (basic)
162,706
163,975
164,566
165,854
166,605
Weighted average shares (diluted)
164,520
165,650
166,023
167,191
168,401
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE
SHEET ANALYSIS (UNAUDITED)
(dollars in thousands)
Three months ended
March 31, 2024
December 31, 2023
March 31, 2023
Average
Yield/
Average
Yield/
Average
Yield/
Balance
Interest(1)
Rate
Balance
Interest(1)
Rate
Balance
Interest(1)
Rate
ASSETS
Interest-earning assets:
Net loans(2)
$
21,370,033
$
313,882
5.90
%
$
21,255,779
$
311,992
5.83
%
$
20,463,096
$
263,065
5.21
%
Investment securities(3)
3,983,753
27,048
2.71
%
4,120,750
27,227
2.64
%
4,289,643
27,522
2.60
%
Other interest-earning assets
249,079
3,328
5.36
%
267,329
3,464
5.17
%
493,130
3,648
3.00
%
Total Interest-Earning Assets
25,602,865
344,258
5.40
%
25,643,858
342,683
5.31
%
25,245,869
294,235
4.73
%
Noninterest-earning assets:
Cash and due from banks
282,895
282,614
141,254
Premises and equipment
223,375
219,994
223,025
Other assets
1,614,746
1,545,535
1,563,806
Less: ACL - loans(4)
(296,255
)
(294,330
)
(273,301
)
Total Assets
$
27,427,626
$
27,397,671
$
26,900,653
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits
$
5,596,725
$
20,500
1.47
%
$
5,723,169
$
20,737
1.44
%
$
5,326,566
$
8,455
0.64
%
Savings deposits
6,669,228
38,797
2.34
%
6,682,512
38,239
2.27
%
6,469,468
20,535
1.29
%
Brokered deposits
1,083,382
14,655
5.44
%
1,051,369
14,078
5.31
%
439,670
5,173
4.77
%
Time deposits
2,968,344
29,622
4.01
%
2,579,400
23,575
3.63
%
1,696,878
7,458
1.78
%
Total Interest-Bearing Deposits
16,317,679
103,574
2.55
%
16,036,450
96,629
2.39
%
13,932,582
41,621
1.21
%
Borrowings and other interest-bearing
liabilities
2,608,376
29,155
4.46
%
2,541,727
29,499
4.58
%
3,058,684
32,613
4.32
%
Total Interest-Bearing
Liabilities
18,926,055
132,729
2.82
%
18,578,177
126,128
2.69
%
16,991,266
74,234
1.78
%
Noninterest-bearing liabilities:
Demand deposits
5,061,075
5,440,098
6,641,741
Other noninterest-bearing liabilities
673,551
761,372
654,330
Total Liabilities
24,660,681
24,779,647
24,287,337
Total Deposits
21,378,754
1.95
%
21,476,548
1.79
%
20,574,323
0.82
%
Total interest-bearing liabilities and
non-interest bearing deposits
23,987,130
2.22
%
24,018,275
2.08
%
23,633,007
1.27
%
Shareholders' equity
2,766,945
2,618,024
2,613,316
Total Liabilities and Shareholders'
Equity
$
27,427,626
$
27,397,671
$
26,900,653
Net interest income/net interest margin
(fully taxable equivalent)
211,529
3.32
%
216,555
3.36
%
220,001
3.53
%
Tax equivalent adjustment
(4,592
)
(4,549
)
(4,414
)
Net Interest Income
$
206,937
$
212,006
$
215,587
(1) Presented on a fully
taxable-equivalent basis using a 21% federal tax rate and statutory
interest expense disallowances.
(2) Average balances include
non-performing loans.
(3) Average balances include amortized
historical cost for available for sale ("AFS") securities; the
related unrealized holding gains (losses) are included in other
assets.
(4) ACL - loans relates to the ACL for net
loans and does not include the ACL related to OBS credit exposures,
which is included in other liabilities.
FULTON FINANCIAL CORPORATION
AVERAGE LOANS, DEPOSITS AND BORROWINGS
DETAIL (UNAUDITED):
(dollars in thousands)
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Loans, by type:
Real estate - commercial mortgage
$
8,166,018
$
8,090,627
$
7,912,801
$
7,775,436
$
7,720,975
Commercial and industrial
4,517,179
4,579,441
4,611,376
4,629,919
4,565,923
Real estate - residential mortgage
5,353,905
5,303,632
5,209,105
5,008,295
4,790,868
Real estate - home equity
1,039,321
1,043,753
1,045,806
1,066,615
1,086,032
Real estate - construction
1,240,640
1,153,601
1,254,577
1,306,286
1,276,145
Consumer
721,523
746,011
761,273
763,407
721,248
Leases and other loans(1)
331,447
338,714
326,339
316,277
301,905
Total Net Loans
$
21,370,033
$
21,255,779
$
21,121,277
$
20,866,235
$
20,463,096
Deposits, by type:
Noninterest-bearing demand
$
5,061,075
$
5,440,098
$
5,672,411
$
6,021,091
$
6,641,741
Interest-bearing demand
5,596,725
5,723,169
5,740,229
5,535,669
5,326,566
Savings
6,669,228
6,682,512
6,676,792
6,632,572
6,469,468
Total demand and savings
17,327,028
17,845,779
18,089,432
18,189,332
18,437,775
Brokered
1,083,382
1,051,369
937,657
954,773
439,670
Time
2,968,344
2,579,400
2,330,206
2,063,038
1,696,878
Total Deposits
$
21,378,754
$
21,476,548
$
21,357,295
$
21,207,143
$
20,574,323
Borrowings, by type:
Federal funds purchased
$
173,659
$
446,707
$
634,163
$
679,401
$
505,142
Federal Home Loan Bank advances
902,890
760,087
793,098
880,811
1,261,589
Senior debt and subordinated debt
535,479
539,186
540,086
539,906
539,726
Other borrowings and other
interest-bearing liabilities
996,348
795,747
723,740
690,742
752,227
Total Borrowings
$
2,608,376
$
2,541,727
$
2,691,087
$
2,790,860
$
3,058,684
(1) Includes equipment lease financing,
overdraft and net origination fees and costs.
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION
(UNAUDITED)
(dollars in thousands)
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Allowance for
credit losses related to net loans:
Balance at beginning of period
$
293,404
$
292,739
$
287,442
$
278,695
$
269,366
Loans charged off:
Real estate - commercial mortgage
(26
)
(3,547
)
(860
)
(230
)
(13,362
)
Commercial and industrial
(7,632
)
(3,397
)
(3,220
)
(2,017
)
(612
)
Real estate - residential mortgage
(251
)
—
—
(62
)
—
Consumer and home equity
(2,238
)
(2,192
)
(1,803
)
(1,313
)
(2,206
)
Real estate - construction
—
—
—
—
—
Leases and other loans(1)
(805
)
(1,096
)
(1,396
)
(1,165
)
(723
)
Total loans charged off
(10,952
)
(10,232
)
(7,279
)
(4,787
)
(16,903
)
Recoveries of loans previously charged
off:
Real estate - commercial mortgage
152
160
101
29
786
Commercial and industrial
1,248
779
620
988
1,086
Real estate - residential mortgage
116
278
37
58
48
Consumer and home equity
676
555
1,023
959
661
Real estate - construction
—
87
—
569
202
Leases and other loans(1)
162
374
400
213
116
Recoveries of loans previously charged
off
2,354
2,233
2,181
2,816
2,899
Net loans charged off
(8,598
)
(7,999
)
(5,098
)
(1,971
)
(14,004
)
Provision for credit losses
13,082
8,664
10,395
10,718
23,333
Balance at end of period
$
297,888
$
293,404
$
292,739
$
287,442
$
278,695
Net charge-offs to average
loans
0.16
%
0.15
%
0.10
%
0.04
%
0.27
%
Provision for
credit losses related to OBS Credit Exposures
Provision for credit losses
$
(2,157
)
$
1,144
$
(458
)
$
(971
)
$
1,211
NON-PERFORMING
ASSETS:
Non-accrual loans
$
129,628
$
121,620
$
113,022
$
123,280
$
134,303
Loans 90 days past due and accruing
26,521
31,721
27,962
24,415
30,336
Total non-performing loans
156,149
153,341
140,984
147,695
164,639
Other real estate owned
277
896
2,549
3,881
3,304
Total non-performing assets
$
156,426
$
154,237
$
143,533
$
151,576
$
167,943
NON-PERFORMING
LOANS, BY TYPE:
Real estate - commercial
mortgage
$
47,891
$
46,527
$
44,058
$
55,048
$
61,322
Commercial and industrial
44,118
41,020
33,365
30,588
33,555
Real estate - residential
mortgage
40,685
42,029
40,560
39,157
46,576
Consumer and home equity
10,172
10,878
11,580
10,469
8,983
Real estate - construction
3,148
2,876
677
1,099
1,509
Leases and other loans(1)
10,135
10,011
10,744
11,334
12,694
Total non-performing
loans
$
156,149
$
153,341
$
140,984
$
147,695
$
164,639
(1) Includes equipment lease financing,
overdraft and net origination fees and costs.
FULTON FINANCIAL CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(dollars in thousands, except per share
and share data)
Explanatory note:
This press release contains supplemental
financial information, as detailed below, that has been derived by
methods other than GAAP. The Corporation has presented these
non-GAAP financial measures because it believes that these measures
provide useful and comparative information to assess trends in the
Corporation's results of operations and financial condition.
Presentation of these non-GAAP financial measures is consistent
with how the Corporation evaluates its performance internally and
these non-GAAP financial measures are frequently used by securities
analysts, investors and other interested parties in the evaluation
of companies in the Corporation's industry. Management believes
that these non-GAAP financial measures, in addition to GAAP
measures, are also useful to investors to evaluate the
Corporation's results. Investors should recognize that the
Corporation's presentation of these non-GAAP financial measures
might not be comparable to similarly titled measures of other
companies. These non-GAAP financial measures should not be
considered a substitute for GAAP basis measures, and the
Corporation strongly encourages a review of its condensed
consolidated financial statements in their entirety.
Reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP measure follow:
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Operating net
income available to common shareholders
Net income available to common
shareholders
$
59,379
$
61,701
$
69,535
$
77,045
$
65,752
Plus: Core deposit intangible
amortization
441
441
441
912
514
Plus: Interest rate derivative transition
valuation(1)
(151
)
(1,102
)
2,958
—
—
Plus: FDIC special assessment
956
6,494
—
—
—
Plus: FultonFirst implementation and asset
disposals
6,329
3,197
—
—
—
Less: Tax impact of adjustments
(1,591
)
(1,896
)
(714
)
(192
)
(108
)
Operating net income available to common
shareholders (numerator)
$
65,363
$
68,835
$
72,220
$
77,765
$
66,158
Weighted average shares (diluted)
(denominator)
164,520
165,650
166,023
167,191
168,401
Operating net income available to common
shareholders, per share (diluted)
$
0.40
$
0.42
$
0.43
$
0.47
$
0.39
Common
shareholders' equity (tangible), per share
Shareholders' equity
$
2,757,679
$
2,760,139
$
2,566,693
$
2,642,152
$
2,618,998
Less: Preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Goodwill and intangible assets
(560,114
)
(560,687
)
(561,284
)
(561,885
)
(563,502
)
Tangible common shareholders' equity
(numerator)
$
2,004,687
$
2,006,574
$
1,812,531
$
1,887,389
$
1,862,618
Shares outstanding, end of period
(denominator)
162,087
163,801
164,084
166,097
165,396
Common shareholders' equity (tangible),
per share
$
12.37
$
12.25
$
11.05
$
11.36
$
11.26
Operating return
on average assets
Net income
$
61,941
$
64,263
$
72,097
$
79,607
$
68,314
Plus: Core deposit intangible
amortization
441
441
441
912
514
Plus: Interest rate derivative transition
valuation(1)
(151
)
(1,102
)
2,958
—
—
Plus: FDIC special assessment
956
6,494
—
—
—
Plus: FultonFirst implementation and asset
disposals
6,329
3,197
—
—
—
Less: Tax impact of adjustments
(1,591
)
(1,896
)
(714
)
(192
)
(108
)
Operating net income (numerator)
$
67,925
$
71,397
$
74,782
$
80,327
$
68,720
Total average assets
$
27,427,626
$
27,397,671
$
27,377,836
$
27,235,567
$
26,900,653
Less: Average net core deposit
intangible
(4,666
)
(5,106
)
(5,548
)
(6,417
)
(6,937
)
Total operating average assets
(denominator)
$
27,422,960
$
27,392,565
$
27,372,288
$
27,229,150
$
26,893,716
Operating return on average assets
1.00
%
1.03
%
1.08
%
1.18
%
1.04
%
(1) Resulting from the reference rate
transition from LIBOR to SOFR in the Corporation's commercial
customer interest rate swap program.
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Operating return
on average common shareholders' equity (tangible)
Net income available to common
shareholders
$
59,379
$
61,701
$
69,535
$
77,045
$
65,752
Plus: Intangible amortization
573
597
601
1,072
674
Plus: Interest rate derivative transition
valuation(1)
(151
)
(1,102
)
2,958
—
—
Plus: FDIC special assessment
956
6,494
—
—
—
Plus: FultonFirst implementation and asset
disposals
6,329
3,197
—
—
—
Less: Tax impact of adjustments
(1,618
)
(1,929
)
(747
)
(225
)
(142
)
Adjusted net income available to common
shareholders (numerator)
$
65,468
$
68,958
$
72,347
$
77,892
$
66,284
Average shareholders' equity
$
2,766,945
$
2,618,024
$
2,645,977
$
2,647,464
$
2,613,316
Less: Average preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Average goodwill and intangible
assets
(560,393
)
(560,977
)
(561,578
)
(563,146
)
(561,744
)
Average tangible common shareholders'
equity (denominator)
$
2,013,674
$
1,864,169
$
1,891,521
$
1,891,440
$
1,858,694
Operating return on average common
shareholders' equity (tangible)
13.08
%
14.68
%
15.17
%
16.52
%
14.46
%
Tangible common equity to tangible
assets (TCE Ratio)
Shareholders' equity
$
2,757,679
$
2,760,139
$
2,566,693
$
2,642,152
$
2,618,998
Less: Preferred stock
(192,878
)
(192,878
)
(192,878
)
(192,878
)
(192,878
)
Less: Goodwill and intangible assets
(560,114
)
(560,687
)
(561,284
)
(561,885
)
(563,502
)
Tangible common shareholders' equity
(numerator)
$
2,004,687
$
2,006,574
$
1,812,531
$
1,887,389
$
1,862,618
Total assets
$
27,642,957
$
27,571,915
$
27,375,177
$
27,403,163
$
27,112,176
Less: Goodwill and intangible assets
(560,114
)
(560,687
)
(561,284
)
(561,885
)
(563,502
)
Total tangible assets (denominator)
$
27,082,843
$
27,011,228
$
26,813,893
$
26,841,278
$
26,548,674
Tangible common equity to tangible
assets
7.40
%
7.43
%
6.76
%
7.03
%
7.02
%
Efficiency
ratio
Non-interest expense
$
177,600
$
180,552
$
171,020
$
168,018
$
159,616
Less: FDIC special assessment
(956
)
(6,494
)
—
—
—
Less: FultonFirst implementation and asset
disposals
(6,329
)
(3,197
)
—
—
—
Less: Intangible amortization
(573
)
(597
)
(601
)
(1,072
)
(674
)
Less: Debt extinguishment
—
720
—
—
—
Non-interest expense (numerator)
$
169,742
$
170,984
$
170,419
$
166,946
$
158,942
Net interest income
$
206,937
$
212,006
$
213,842
$
212,852
$
215,587
Tax equivalent adjustment
4,592
4,549
4,442
4,405
4,414
Plus: Total non-interest income
57,140
59,378
55,961
60,585
51,753
Plus: Interest rate derivative transition
valuation(1)
(151
)
(1,102
)
2,958
—
—
Less: Investment securities (gains)
losses, net
—
752
—
4
(23
)
Total revenue (denominator)
$
268,518
$
275,583
$
277,203
$
277,846
$
271,731
Efficiency ratio
63.2
%
62.0
%
61.5
%
60.1
%
58.5
%
(1) Resulting from the reference rate
transition from LIBOR to SOFR in the Corporation's commercial
customer interest rate swap program.
Three months ended
Mar 31
Dec 31
Sep 30
Jun 30
Mar 31
2024
2023
2023
2023
2023
Operating
non-interest expense to total average assets
Non-interest expense
$
177,600
$
180,552
$
171,020
$
168,018
$
159,616
Less: Intangible amortization
(573
)
(597
)
(601
)
(1,072
)
(674
)
Less: FDIC special assessment
(956
)
(6,494
)
—
—
—
Less: FultonFirst implementation and asset
disposals
(6,329
)
(3,197
)
—
—
—
Non-interest expense (numerator)
$
169,742
$
170,264
$
170,419
$
166,946
$
158,942
Total average assets (denominator)
$
27,427,626
$
27,397,671
$
27,377,836
$
27,235,567
$
26,900,653
Operating non-interest expenses to total
average assets
2.49
%
2.47
%
2.47
%
2.46
%
2.40
%
Pre-provision net
revenue
Net interest income
$
206,937
$
212,006
$
213,842
$
212,852
$
215,587
Non-interest income
57,140
59,378
55,961
60,585
51,753
Plus: Interest rate derivative transition
valuation(1)
(151
)
(1,102
)
2,958
—
—
Less: Investment securities (gains)
losses, net
—
752
—
4
(23
)
Total revenue
$
263,926
$
271,034
$
272,761
$
273,441
$
267,317
Non-interest expense
$
177,600
$
180,552
$
171,020
$
168,018
$
159,616
Less: Intangible amortization
(573
)
(597
)
(601
)
(1,072
)
(674
)
Less: FDIC special assessment
(956
)
(6,494
)
—
—
—
Less: FultonFirst implementation and asset
disposals
(6,329
)
(3,197
)
—
—
—
Less: Debt extinguishment
—
720
—
—
—
Total non-interest expense
$
169,742
$
170,984
$
170,419
$
166,946
$
158,942
Pre-provision net revenue
$
94,184
$
100,050
$
102,342
$
106,495
$
108,375
(1) Resulting from the reference rate
transition from LIBOR to SOFR in the Corporation's commercial
customer interest rate swap program.
Note: numbers in this report may not sum
due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240416112442/en/
Media Contact: Lacey Dean (717) 735-8688 Investor Contact: Matt
Jozwiak (717) 327-2657
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