Fulton Financial Corporation (NASDAQ: FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $60.6 million, or $0.33 per diluted share, for the third quarter of 2024, a decrease of $31.8million, or $0.19 per share, in comparison to the second quarter of 2024. Operating net income available to common shareholders for the three months ended September30, 2024 was $91.3 million, or $0.50 per diluted share(1), an increase of $8.8 million, or $0.03 per share, in comparison to the second quarter of 2024.
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“We are excited about the progress we made on key strategic initiatives and pleased to see that this work has generated record operating earnings this quarter,” said Curtis J. Myers, Chairman and CEO of Fulton. “We continue to see strong operating revenue growth, improvement in operating efficiency and profitability, combined with solid organic capital generation.”
Financial Highlights
Third quarter of 2024 operating results of $0.50 per diluted share represented an all-time high for Fulton and was impacted by the following items:
— Solid net interest margin of 3.49%, an increase of six basis points compared to the prior quarter.
— Excluding brokered deposits, customer deposits increased $745.0 million compared to the prior quarter.
— Common equity tier 1 capital increased to 10.5%, compared to 10.3% in the prior quarter.
— Tangible shareholders’ equity per common share increased $0.59, or 4.7%, to $13.02 compared to the prior quarter.
— Acquisition-related(2) expenses of $14.2 million.
— FultonFirst implementation and asset disposal costs of $9.4 million.
The following items highlight notable changes in the components of net income in the third quarter of 2024 compared to the second quarter of 2024:
— Net interest income totaled $258.0 million, an increase of $16.3 million, which was largely due to the full-quarter impact of the Acquisition and an increase in on-balance sheet liquidity.
— Non-interest income before investment securities gains (losses) was $59.7 million compared to $113.3 million in the second quarter of 2024. The decrease was primarily due to a $55.1 million change in the gain on acquisition (net of tax) with a $7.7 million reduction recorded in the third quarter of 2024.
— Non-interest expense was $226.1 million compared to $219.8 million in the second quarter of 2024, excluding the $20.3 million gain on the sale-leaseback transaction, reflected in other expense in the second quarter of 2024. The increase was largely due to an $8.2 million increase in salaries and benefits expense driven by a $4.9 million increase in employee severance costs related to the FultonFirst initiative, a full-quarter impact of salaries and benefits from the Acquisition resulting in an increase of $2.7 million and a $1.7 million increase in incentive compensation expense. The increase in salaries and benefits expense was partially offset by a $1.4 million decrease in consulting costs related to the FultonFirst initiative.
Balance Sheet Summary
— Net loans totaled $24.2 billion, an increase of $69.8 million compared to $24.1 billion as of June 30, 2024. The increase was largely due to increases of $203.7 million and $53.8 million in commercial mortgage loans and residential mortgage loans, respectively, partially offset by decreases of $130.8 million, $53.1 million and $40.4 million in construction loans, commercial and industrial loans and consumer loans, respectively. Excluding the impact from the day 1 Purchased Credit Deteriorated (“PCD”) adjustment of $55.9 million and purchase accounting accretion of $24.9 million, net loans acquired in the Acquisition declined approximately $82.3 million since the Acquisition Date. Excluding purchase accounting accretion of $14.5 million, net loans acquired in the Acquisition declined approximately $49.2 million to $2.5 billion, compared to the second quarter of 2024.
— Deposits totaled $26.2 billion, an increase of $592.5 million compared to $25.6 billion as of June 30, 2024. The increase was primarily due to increases of $374.2 million, $301.4 million and $177.1 million in time deposits, interest-bearing demand deposits and savings deposits, respectively, partially offset by decreases of $152.5 million in brokered deposits and $107.7 million in noninterest-bearing demand deposits. Deposits assumed in the Acquisition declined approximately $248.6 million since the Acquisition Date and increased approximately $108.7 million to $3.9 billion compared to the second quarter of 2024.
Provision for Credit Losses and Asset Quality
— The provision for credit losses was $11.9 million in the third quarter of 2024 compared to $32.1 million in the second quarter of 2024. The decrease was primarily related to the Acquisition, which included a provision for credit losses of $23.4 million for non-PCD loans in the second quarter of 2024.
— Non-performing assets were $205.0 million, or 0.64% of total assets, at September 30, 2024, in comparison to $174.0 million, or 0.55% of total assets, at June 30, 2024.
— Net charge-offs for the third quarter of 2024 were 0.18% of total average loans in comparison to 0.19% in the second quarter of 2024.
— The allowance for credit losses attributable to net loans remained relatively unchanged and totaled $376.0 million, or 1.56% of total loans at September 30, 2024, compared to $375.9 million, or 1.56% of total loans at June 30, 2024.
Additional information on Fulton is available on the Internet at www.fultonbank.com.
(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.
(2) On April 26, 2024, the Corporation announced that its wholly owned banking subsidiary, Fulton Bank, National Association ("Fulton Bank"), acquired substantially all of the assets and assumed substantially all of the deposits and certain liabilities of Republic First Bank, doingbusiness as Republic Bank ("Republic Bank"), from the Federal Deposit Insurance Corporation (the "FDIC"), as receiver for Republic Bank (the "Acquisition"), pursuant to the terms of the Purchase and Assumption Agreement - Whole Bank, All Deposits, effective as of April 26, 2024 (the"Acquisition Date"), among the FDIC, as receiver of Republic Bank, the FDIC and Fulton Bank.
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, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024 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
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2024 2024 2024 2023 2023
Ending Balances
Investment securities $ 4,545,278 $ 4,184,027 $ 3,783,392 $ 3,666,274 $ 3,698,601
Net loans 24,176,075 24,106,297 21,444,483 21,351,094 21,177,508
Total assets 32,185,726 31,769,813 27,642,957 27,571,915 27,375,177
Deposits 26,152,144 25,559,654 21,741,950 21,537,623 21,421,589
Shareholders' equity 3,203,943 3,101,609 2,757,679 2,760,139 2,566,693
Average Balances
Investment securities 4,237,805 4,043,136 3,672,844 3,665,261 3,834,824
Net loans 24,147,801 23,345,914 21,370,033 21,255,779 21,121,277
Total assets 31,895,235 30,774,891 27,427,626 27,397,671 27,377,836
Deposits 25,778,259 24,642,954 21,378,754 21,476,548 21,357,295
Shareholders' equity 3,160,322 2,952,671 2,766,945 2,618,024 2,645,977
Income Statement
Net interest income 258,009 241,720 206,937 212,006 213,842
Provision for credit losses 11,929 32,056 10,925 9,808 9,937
Non-interest income 59,673 92,994 57,140 59,378 55,961
Non-interest expense 226,089 199,488 177,600 180,552 171,020
Income before taxes 79,664 103,170 75,552 81,024 88,846
Net income available to common shareholders 60,644 92,413 59,379 61,701 69,535
Per Share
Net income available to common shareholders (basic) $0.33 $0.53 $0.36 $0.38 $0.42
Net income available to common shareholders (diluted) $0.33 $0.52 $0.36 $0.37 $0.42
Operating net income available to common shareholders(1) $0.50 $0.47 $0.40 $0.42 $0.43
Cash dividends $0.17 $0.17 $0.17 $0.17 $0.16
Common shareholders' equity $16.55 $16.00 $15.82 $15.67 $14.47
Common shareholders' equity (tangible)(1) $13.02 $12.43 $12.37 $12.25 $11.05
Weighted average shares (basic) 181,905 175,305 162,706 163,975 164,566
Weighted average shares (diluted) 183,609 176,934 164,520 165,650 166,023
(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
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2024 2024 2024 2023 2023
Asset Quality
Net charge-offs to average loans 0.18% 0.19% 0.16% 0.15% 0.10%
Non-performing loans to total net loans 0.84% 0.72% 0.73% 0.72% 0.67%
Non-performing assets to total assets 0.64% 0.55% 0.57% 0.56% 0.52%
ACL - loans(1) to total loans 1.56% 1.56% 1.39% 1.37% 1.38%
ACL - loans(1) to non-performing loans 186% 218% 191% 191% 208%
Profitability
Return on average assets 0.79% 1.24% 0.91% 0.93% 1.04%
Operating return on average assets(2) 1.17% 1.11% 1.00% 1.03% 1.08%
Return on average common shareholders' equity 8.13% 13.47% 9.28% 10.09% 11.25%
Operating return on average common shareholders' equity (tangible)(2) 15.65% 15.56% 13.08% 14.68% 15.17%
Net interest margin 3.49% 3.43% 3.32% 3.36% 3.40%
Efficiency ratio(2) 59.6% 62.6% 63.2% 62.0% 61.5%
Non-interest expense to total average assets 2.82% 2.61% 2.60% 2.61% 2.48%
Operating non-interest expense to total average assets(2) 2.45% 2.55% 2.49% 2.47% 2.47%
Capital Ratios(3)
Tangible common equity ratio ("TCE")(2) 7.5% 7.3% 7.4% 7.4% 6.8%
Tier 1 leverage ratio 8.9% 9.2% 9.3% 9.5% 9.4%
Common equity Tier 1 capital ratio 10.5% 10.3% 10.3% 10.3% 10.3%
Tier 1 risk-based capital ratio 11.3% 11.1% 11.1% 11.2% 11.1%
Total risk-based capital ratio 14.0% 13.8% 14.0% 14.0% 14.0%
(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 September30, 2024 are preliminary estimates and prior periods are actual.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2024 2024 2024 2023 2023
ASSETS
Cash and due from banks $ 296,500 $ 333,238 $ 247,581 $ 300,343 $ 304,042
Other interest-earning assets 1,287,392 1,188,341 231,389 373,772 222,781
Loans held for sale 17,678 26,822 10,624 15,158 20,368
Investment securities 4,545,278 4,184,027 3,783,392 3,666,274 3,698,601
Net loans 24,176,075 24,106,297 21,444,483 21,351,094 21,177,508
Less: ACL - loans(1) (375,961) (375,941) (297,888) (293,404) (292,739)
Loans, net 23,800,114 23,730,356 21,146,595 21,057,690 20,884,769
Net premises and equipment 171,731 180,642 213,541 222,881 215,626
Accrued interest receivable 115,903 120,752 107,089 107,972 101,624
Goodwill and intangible assets 641,739 648,026 560,114 560,687 561,284
Other assets 1,309,391 1,357,609 1,342,632 1,267,138 1,366,082
Total Assets $ 32,185,726 $ 31,769,813 $ 27,642,957 $ 27,571,915 $ 27,375,177
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 26,152,144 $ 25,559,654 $ 21,741,950 $ 21,537,623 $ 21,421,589
Borrowings 2,052,227 2,178,597 2,296,040 2,487,526 2,370,112
Other liabilities 777,412 929,953 847,288 786,627 1,016,783
Total Liabilities 28,981,783 28,668,204 24,885,278 24,811,776 24,808,484
Shareholders' equity 3,203,943 3,101,609 2,757,679 2,760,139 2,566,693
Total Liabilities and Shareholders' Equity $ 32,185,726 $ 31,769,813 $ 27,642,957 $ 27,571,915 $ 27,375,177
LOANS, DEPOSITS AND BORROWINGS DETAIL:
Loans, by type:
Real estate - commercial mortgage $ 9,493,479 $ 9,289,770 $ 8,252,117 $ 8,127,728 $ 8,106,300
Commercial and industrial 4,914,734 4,967,796 4,467,589 4,545,552 4,577,334
Real estate - residential mortgage 6,302,624 6,248,856 5,395,720 5,325,923 5,279,681
Real estate - home equity 1,144,402 1,120,878 1,040,335 1,047,184 1,045,438
Real estate - construction 1,332,954 1,463,799 1,249,199 1,239,075 1,078,263
Consumer 651,717 692,086 698,421 729,318 743,976
Leases and other loans(2) 336,165 323,112 341,102 336,314 346,516
Total Net Loans $ 24,176,075 $ 24,106,297 $ 21,444,483 $ 21,351,094 $ 21,177,508
Deposits, by type:
Noninterest-bearing demand $ 5,501,699 $ 5,609,383 $ 5,086,514 $ 5,314,094 $ 5,575,374
Interest-bearing demand 7,779,472 7,478,077 5,521,017 5,722,695 5,757,487
Savings 7,740,595 7,563,495 6,846,038 6,616,901 6,707,729
Total demand and savings 21,021,766 20,650,955 17,453,569 17,653,690 18,040,590
Brokered 843,473 995,975 1,152,427 1,144,692 941,059
Time 4,286,905 3,912,724 3,135,954 2,739,241 2,439,940
Total Deposits $ 26,152,144 $ 25,559,654 $ 21,741,950 $ 21,537,623 $ 21,421,589
Borrowings, by type:
Federal funds purchased $ - $ - $ - $ 240,000 $ 544,000
Federal Home Loan Bank advances 950,000 750,000 900,000 1,100,000 730,000
Senior debt and subordinated debt 535,917 535,741 535,566 535,384 540,174
Other borrowings 566,310 892,856 860,474 612,142 555,938
Total Borrowings $ 2,052,227 $ 2,178,597 $ 2,296,040 $ 2,487,526 $ 2,370,112
(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 Nine months ended
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Sep 30
2024 2024 2024 2023 2023 2024 2023
Net Interest Income:
Interest income $ 427,656 $ 400,506 $ 339,666 $ 338,134 $ 330,371 $ 1,167,828 $ 935,103
Interest expense 169,647 158,786 132,729 126,128 116,529 461,162 292,822
Net Interest Income 258,009 241,720 206,937 212,006 213,842 706,666 642,281
Provision for credit losses 11,929 32,056 10,925 9,808 9,937 54,910 44,228
Net Interest Income after Provision 246,080 209,664 196,012 202,198 203,905 651,756 598,053
Non-Interest Income:
Wealth management 21,596 20,990 20,155 19,388 19,413 62,741 56,152
Commercial banking:
Merchant and card 7,496 7,798 6,808 7,045 7,626 22,103 22,160
Cash management 7,201 6,966 6,305 6,030 5,960 20,473 17,310
Capital markets 3,311 2,585 2,341 4,258 2,960 8,236 11,396
Other commercial banking 4,281 4,061 3,375 3,447 3,176 11,716 9,514
Total commercial banking 22,289 21,410 18,829 20,780 19,722 62,528 60,380
Consumer banking:
Card 7,917 8,305 6,628 6,739 6,770 22,850 19,604
Overdraft 3,957 3,377 2,786 2,991 2,996 10,120 8,425
Other consumer banking 3,054 2,918 2,254 2,357 2,407 8,226 7,081
Total consumer banking 14,928 14,600 11,668 12,087 12,173 41,196 35,110
Mortgage banking 3,142 3,951 3,090 2,288 3,190 10,183 8,100
Gain on acquisition, net of tax (7,706) 47,392 - - - 39,685 -
Other 5,425 4,933 3,398 5,587 1,463 13,756 8,539
Non-interest income before investment securities gains (losses) 59,674 113,276 57,140 60,130 55,961 230,089 168,281
Investment securities gains (losses), net (1) (20,282) - (752) - (20,283) 19
Total Non-Interest Income 59,673 92,994 57,140 59,378 55,961 209,806 168,300
Non-Interest Expense:
Salaries and employee benefits 118,824 110,630 95,481 97,275 96,757 324,935 280,142
Data processing and software 20,314 20,357 17,661 16,985 16,914 58,332 49,486
Net occupancy 18,999 17,793 16,149 14,647 14,561 52,942 43,373
Other outside services 15,839 16,933 13,283 14,670 12,094 46,055 33,054
Intangible amortization 6,287 4,688 573 597 601 11,548 2,347
FDIC insurance 5,109 6,696 6,104 11,138 4,738 17,909 14,427
Equipment 4,860 4,561 4,040 3,995 3,475 13,461 10,395
Professional fees 2,811 2,571 2,088 2,302 1,869 7,470 6,090
Marketing 2,251 2,101 1,912 3,550 1,913 6,263 5,454
Acquisition-related expenses 14,195 13,803 - - - 27,998 -
Other 16,600 (645) 20,309 15,393 18,098 36,263 53,888
Total Non-Interest Expense 226,089 199,488 177,600 180,552 171,020 603,176 498,656
Income Before Income Taxes 79,664 103,170 75,552 81,024 88,846 258,386 267,697
Income tax expense 16,458 8,195 13,611 16,761 16,749 38,264 47,680
Net Income 63,206 94,975 61,941 64,263 72,097 220,122 220,017
Preferred stock dividends (2,562) (2,562) (2,562) (2,562) (2,562) (7,686) (7,686)
Net Income Available to Common Shareholders $ 60,644 $ 92,413 $ 59,379 $ 61,701 $ 69,535 $ 212,436 $ 212,331
Three months ended Nine months ended
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Sep 30
2024 2024 2024 2023 2023 2024 2023
PER SHARE:
Net income available to common shareholders (basic) $0.33 $0.53 $0.36 $0.38 $0.42 $1.23 $1.28
Net income available to common shareholders (diluted) $0.33 $0.52 $0.36 $0.37 $0.42 $1.21 $1.27
Cash dividends $0.17 $0.17 $0.17 $0.17 $0.16 $0.51 $0.47
Weighted average shares (basic) 181,905 175,305 162,706 163,975 164,566 173,337 165,667
Weighted average shares (diluted) 183,609 176,934 164,520 165,650 166,023 175,033 167,181
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
(dollars in thousands)
Three months ended
September 30, 2024 June 30, 2024 September 30, 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) $ 24,147,801 $ 376,160 6.20% $ 23,345,914 $ 355,533 6.12% $ 21,121,277 $ 304,167 5.72%
Investment securities(3) 4,526,885 37,853 3.34% 4,396,050 33,799 3.07% 4,197,550 27,274 2.59%
Other interest-earning assets 1,338,592 18,068 5.37% 1,125,886 15,730 5.61% 263,244 3,372 5.11%
Total Interest-Earning Assets 30,013,278 432,081 5.74% 28,867,850 405,062 5.64% 25,582,071 334,813 5.20%
Noninterest-earning assets:
Cash and due from banks 306,427 302,381 306,496
Premises and equipment 181,285 203,166 217,447
Other assets 1,772,052 1,759,138 1,562,233
Less: ACL - loans(4) (377,807) (357,644) (290,411)
Total Assets $ 31,895,235 $ 30,774,891 $ 27,377,836
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 7,668,583 $ 38,768 2.01% $ 7,080,302 $ 31,748 1.80% $ 5,740,229 $ 18,690 1.29%
Savings deposits 7,663,599 49,477 2.57% 7,309,141 44,901 2.47% 6,676,792 34,277 2.04%
Brokered deposits 842,661 11,344 5.36% 1,123,328 15,074 5.40% 937,657 12,250 5.18%
Time deposits 4,107,466 45,735 4.43% 3,670,158 39,364 4.31% 2,330,206 18,939 3.22%
Total Interest-Bearing Deposits 20,282,309 145,324 2.85% 19,182,929 131,087 2.75% 15,684,884 84,156 2.13%
Borrowings and other interest-bearing liabilities 2,229,348 24,324 4.34% 2,441,691 27,699 4.53% 2,691,087 32,373 4.74%
Total Interest-Bearing Liabilities 22,511,657 169,648 3.00% 21,624,620 158,786 2.95% 18,375,971 116,529 2.51%
Noninterest-bearing liabilities:
Demand deposits 5,495,950 5,460,025 5,672,411
Other liabilities 727,306 737,575 683,477
Total Liabilities 28,734,913 27,822,220 24,731,859
Shareholders' equity 3,160,322 2,952,671 2,645,977
Total Liabilities and Shareholders' Equity $ 31,895,235 $ 30,774,891 $ 27,377,836
Net interest income/net interest margin (fully 262,433 3.49% 246,276 3.43% 218,284 3.40%
taxable equivalent)
Tax equivalent adjustment (4,424) (4,556) (4,442)
Net Interest Income $ 258,009 $ 241,720 $ 213,842
(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
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2024 2024 2024 2023 2023
Loans, by type:
Real estate - commercial mortgage $ 9,318,273 $ 8,958,139 $ 8,166,018 $ 8,090,627 $ 7,912,801
Commercial and industrial 4,998,051 4,853,583 4,517,179 4,579,441 4,611,376
Real estate - residential mortgage 6,268,922 5,977,132 5,353,905 5,303,632 5,209,105
Real estate - home equity 1,122,313 1,117,367 1,039,321 1,043,753 1,045,806
Real estate - construction 1,437,907 1,430,057 1,240,640 1,153,601 1,254,577
Consumer 682,602 685,183 721,523 746,011 761,273
Leases and other loans(1) 319,733 324,453 331,447 338,714 326,339
Total Net Loans $ 24,147,801 $ 23,345,914 $ 21,370,033 $ 21,255,779 $ 21,121,277
Deposits, by type:
Noninterest-bearing demand $ 5,495,950 $ 5,460,025 $ 5,061,075 $ 5,440,098 $ 5,672,411
Interest-bearing demand 7,668,583 7,080,302 5,596,725 5,723,169 5,740,229
Savings 7,663,599 7,309,141 6,669,228 6,682,512 6,676,792
Total demand and savings 20,828,132 19,849,468 17,327,028 17,845,779 18,089,432
Brokered 842,661 1,123,328 1,083,382 1,051,369 937,657
Time 4,107,466 3,670,158 2,968,344 2,579,400 2,330,206
Total Deposits $ 25,778,259 $ 24,642,954 $ 21,378,754 $ 21,476,548 $ 21,357,295
Borrowings, by type:
Federal funds purchased $ - $ 32,637 $ 173,659 $ 446,707 $ 634,163
Federal Home Loan Bank advances 754,130 833,726 902,890 760,087 793,098
Senior debt and subordinated debt 535,831 535,656 535,479 539,186 540,086
Other borrowings and other interest-bearing liabilities 939,387 1,039,672 996,348 795,747 723,740
Total Borrowings $ 2,229,348 $ 2,441,691 $ 2,608,376 $ 2,541,727 $ 2,691,087
(1) Includes equipment lease financing, overdraft and net origination fees and costs.
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
(dollars in thousands)
Nine months ended September 30
2024 2023
Average Yield/ Average Yield/
Balance Interest(1) Rate Balance Interest(1) Rate
ASSETS
Interest-earning assets:
Net loans(2) $ 22,918,845 $ 1,045,573 6.09% $ 20,819,280 $ 854,384 5.49%
Investment securities(3) 4,303,048 98,701 3.05% 4,240,093 82,098 2.58%
Other interest-earning assets 921,483 37,126 5.38% 427,810 11,882 3.71%
Total Interest-Earning Assets 28,143,376 1,181,400 5.60% 25,487,183 948,364 4.97%
Noninterest-Earning assets:
Cash and due from banks 297,268 193,083
Premises and equipment 202,531 219,087
Other assets 1,828,085 1,555,891
Less: ACL - loans(4) (353,567) (282,144)
Total Assets $ 30,117,693 $ 27,173,100
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-Bearing liabilities:
Demand deposits $ 6,785,106 $ 91,016 1.79% $ 5,535,671 $ 41,756 1.01%
Savings deposits 7,215,631 133,175 2.47% 6,593,703 84,102 1.71%
Brokered deposits 1,015,823 41,073 5.40% 779,191 29,557 5.07%
Time deposits 3,583,905 114,721 4.28% 2,032,360 40,160 2.64%
Total Interest-Bearing Deposits 18,600,465 379,985 2.73% 14,940,925 195,575 1.75%
Borrowings and other interest-bearing liabilities 2,425,753 81,177 4.47% 2,848,704 97,247 4.53%
Total Interest-Bearing Liabilities 21,026,218 461,162 2.93% 17,789,629 292,822 2.20%
Noninterest-Bearing liabilities:
Demand deposits 5,339,590 6,108,197
Other liabilities 791,175 639,569
Total Liabilities 27,156,983 24,537,395
Shareholders' equity 2,960,710 2,635,705
Total Liabilities and Shareholders' Equity $ 30,117,693 $ 27,173,100
Net interest income/net interest margin (fully taxable equivalent) 720,238 3.42% 655,542 3.44%
Tax equivalent adjustment (13,572) (13,261)
Net Interest Income $ 706,666 $ 642,281
(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 AFS; 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)
Nine months ended September 30
2024 2023
Loans, by type:
Real estate - commercial mortgage $ 8,803,503 $ 7,803,775
Commercial and industrial 4,786,976 4,602,573
Real estate - residential mortgage 5,844,317 5,004,289
Real estate - home equity 1,091,526 1,066,003
Real estate - construction 1,370,134 1,278,923
Consumer 697,204 748,788
Leases and other loans(1) 325,185 314,929
Total Net Loans $ 22,918,845 $ 20,819,280
Deposits, by type:
Noninterest-bearing demand $ 5,339,590 $ 6,108,197
Interest-bearing demand 6,785,106 5,535,671
Savings 7,215,631 6,593,703
Total demand and savings 19,340,327 18,237,571
Brokered 1,015,823 779,191
Time 3,583,905 2,032,360
Total Deposits $ 23,940,055 $ 21,049,122
Borrowings, by type:
Federal funds purchased $ 68,515 $ 606,708
Federal Home Loan Bank advances 829,971 976,783
Senior debt and subordinated debt 535,656 539,907
Other borrowings 991,611 725,306
Total Borrowings $ 2,425,753 $ 2,848,704
(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 Nine months ended September 30
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 Sep 30 Sep 30
2024 2024 2024 2023 2023 2024 2023
Allowance for credit losses related to net loans:
Balance at beginning of period $ 375,941 $ 297,888 $ 293,404 $ 292,739 $ 287,442 $ 293,404 $ 269,366
CECL day 1 provision expense(1) - 23,444 - - - 23,444 -
Initial purchased credit deteriorated allowance for credit losses (1,139) 55,906 - - - 54,767 -
Loans charged off:
Real estate - commercial mortgage (2,723) (7,853) (26) (3,547) (860) (10,602) (14,452)
Commercial and industrial (6,256) (2,955) (7,632) (3,397) (3,220) (16,843) (5,849)
Real estate - residential mortgage (1,131) (35) (251) - - (1,417) (62)
Consumer and home equity (2,308) (1,766) (2,238) (2,192) (1,803) (6,312) (5,322)
Real estate - construction - - - - - - -
Leases and other loans(2) (726) (1,398) (805) (1,096) (1,396) (2,929) (3,284)
Total loans charged off (13,144) (14,007) (10,952) (10,232) (7,279) (38,103) (28,969)
Recoveries of loans previously charged off:
Real estate - commercial mortgage 107 146 152 160 101 405 916
Commercial and industrial 1,008 796 1,248 779 620 3,052 2,694
Real estate - residential mortgage 130 122 116 278 37 368 143
Consumer and home equity 545 1,161 676 555 1,023 2,382 2,643
Real estate - construction 103 233 - 87 - 336 771
Leases and other loans(2) 129 247 162 374 400 538 729
Recoveries of loans previously charged off 2,022 2,705 2,354 2,233 2,181 7,081 7,896
Net loans charged off (11,122) (11,302) (8,598) (7,999) (5,098) (31,022) (21,073)
Provision for credit losses(1) 12,281 10,005 13,082 8,664 10,395 35,368 44,446
Balance at end of period $ 375,961 $ 375,941 $ 297,888 $ 293,404 $ 292,739 $ 375,961 $ 292,739
Net charge-offs to average loans 0.18% 0.19% 0.16% 0.15% 0.10% 0.18% 0.13%
Provision for credit losses related to OBS Credit Exposures
Provision for credit losses(1) $ (352) $ (1,393) $ (2,157) $ 1,144 $ (458) $ (3,902) $ (218)
NON-PERFORMING ASSETS:
Non-accrual loans $ 175,861 $ 145,630 $ 129,628 $ 121,620 $ 113,022
Loans 90 days past due and accruing 26,286 26,962 26,521 31,721 27,962
Total non-performing loans 202,147 172,592 156,149 153,341 140,984
Other real estate owned 2,844 1,444 277 896 2,549
Total non-performing assets $ 204,991 $ 174,036 $ 156,426 $ 154,237 $ 143,533
NON-PERFORMING LOANS, BY TYPE:
Commercial and industrial $ 64,450 $ 58,433 $ 44,118 $ 41,020 $ 33,365
Real estate - commercial mortgage 71,505 48,615 47,891 46,527 44,058
Real estate - residential mortgage 41,727 41,033 40,685 42,029 40,560
Consumer and home equity 12,792 11,886 10,172 10,878 11,580
Leases and other loans(2) 9,927 9,993 10,135 10,011 10,744
Real estate - construction 1,746 2,632 3,148 2,876 677
Total non-performing loans $ 202,147 $ 172,592 $ 156,149 $ 153,341 $ 140,984
(1) The sum of these amounts are reflected in the provision for credit losses in the Condensed Consolidated Statements of Income.
(2) 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
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2024 2024 2024 2023 2023
Operating net income available to common shareholders
Net income available to common shareholders $ 60,644 $ 92,413 $ 59,379 $ 61,701 $ 69,535
Less: Non-PCD credit-related interest income from acquisition (815) (571) - - -
Less: Interest rate derivative transition valuation(1) 138 (137) (151) (1,102) 2,958
Less: Loss (gain) on acquisition, net of tax 7,706 (47,392) - - -
Plus: Loss on securities restructuring - 20,282 - - -
Plus: Core deposit intangible amortization 6,155 4,556 441 441 441
Plus: Acquisition-related expense 14,195 13,803 - - -
Plus: CECL day 1 provision expense - 23,444 - - -
Less: Gain on sale-leaseback - (20,266) - - -
Plus: FDIC special assessment (16) - 956 6,494 -
Plus: FultonFirst implementation and asset disposals 9,385 6,323 6,329 3,197 -
Less: Tax impact of adjustments (6,099) (9,961) (1,591) (1,896) (714)
Operating net income available to common shareholders (numerator) $ 91,293 $ 82,494 $ 65,363 $ 68,835 $ 72,220
Weighted average shares (diluted) (denominator) 183,609 176,934 164,520 165,650 166,023
Operating net income available to common shareholders, per share (diluted) $ 0.50 $ 0.47 $ 0.40 $ 0.42 $ 0.43
Common shareholders' equity (tangible), per share
Shareholders' equity $ 3,203,943 $ 3,101,609 $ 2,757,679 $ 2,760,139 $ 2,566,693
Less: Preferred stock (192,878) (192,878) (192,878) (192,878) (192,878)
Less: Goodwill and intangible assets (641,739) (648,026) (560,114) (560,687) (561,284)
Tangible common shareholders' equity (numerator) $ 2,369,326 $ 2,260,705 $ 2,004,687 $ 2,006,574 $ 1,812,531
Shares outstanding, end of period (denominator) 181,957 181,831 162,087 163,801 164,084
Common shareholders' equity (tangible), per share $ 13.02 $ 12.43 $ 12.37 $ 12.25 $ 11.05
(1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
(2) Results are annualized.
Three months ended
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2024 2024 2024 2023 2023
Operating return on average assets(2)
Net income $ 63,206 $ 94,975 $ 61,941 $ 64,263 $ 72,097
Less: Non-PCD credit-related interest income from acquisition (815) (571) - - -
Less: Interest rate derivative transition valuation(1) 138 (137) (151) (1,102) 2,958
Less: Loss (gain) on acquisition, net of tax 7,706 (47,392) - - -
Plus: Loss on securities restructuring - 20,282 - - -
Plus: Core deposit intangible amortization 6,155 4,556 441 441 441
Plus: Acquisition-related expense 14,195 13,803 - - -
Plus: CECL day 1 provision expense - 23,444 - - -
Less: Gain on sale-leaseback - (20,266) - - -
Plus: FDIC special assessment (16) - 956 6,494 -
Plus: FultonFirst implementation and asset disposals 9,385 6,323 6,329 3,197 -
Less: Tax impact of adjustments (6,099) (9,961) (1,591) (1,896) (714)
Operating net income (numerator) $ 93,855 $ 85,056 $ 67,925 $ 71,397 $ 74,782
Total average assets $ 31,895,235 $ 30,774,891 $ 27,427,626 $ 27,397,671 $ 27,377,836
Less: Average net core deposit intangible (89,350) (68,234) (4,666) (5,106) (5,548)
Total operating average assets (denominator) $ 31,805,885 $ 30,706,657 $ 27,422,960 $ 27,392,565 $ 27,372,288
Operating return on average assets 1.17% 1.11% 1.00% 1.03% 1.08%
Operating return on average common shareholders' equity (tangible)(2)
Net income available to common shareholders $ 60,644 $ 92,413 $ 59,379 $ 61,701 $ 69,535
Less: Non-PCD credit-related interest income from acquisition (815) (571) - - -
Less: Interest rate derivative transition valuation(1) 138 (137) (151) (1,102) 2,958
Less: Loss (gain) on acquisition, net of tax 7,706 (47,392) - - -
Plus: Loss on securities restructuring - 20,282 - - -
Plus: Intangible amortization 6,287 4,688 573 597 601
Plus: Acquisition-related expense 14,195 13,803 - - -
Plus: CECL day 1 provision expense - 23,444 - - -
Less: Gain on sale-leaseback - (20,266) - - -
Plus: FDIC special assessment (16) - 956 6,494 -
Plus: FultonFirst implementation and asset disposals 9,385 6,323 6,329 3,197 -
Less: Tax impact of adjustments (6,127) (9,989) (1,618) (1,929) (747)
Adjusted net income available to common shareholders (numerator) $ 91,397 $ 82,598 $ 65,468 $ 68,958 $ 72,347
Average shareholders' equity $ 3,160,322 $ 2,952,671 $ 2,766,945 $ 2,618,024 $ 2,645,977
Less: Average preferred stock (192,878) (192,878) (192,878) (192,878) (192,878)
Less: Average goodwill and intangible assets (644,814) (624,471) (560,393) (560,977) (561,578)
Average tangible common shareholders' equity (denominator) $ 2,322,630 $ 2,135,322 $ 2,013,674 $ 1,864,169 $ 1,891,521
Operating return on average common shareholders' equity (tangible) 15.65% 15.56% 13.08% 14.68% 15.17%
(1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
(2) Results are annualized.
Three months ended
Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
2024 2024 2024 2023 2023
Tangible common equity to tangible assets (TCE Ratio)
Shareholders' equity $ 3,203,943 $ 3,101,609 $ 2,757,679 $ 2,760,139 $ 2,566,693
Less: Preferred stock (192,878) (192,878) (192,878) (192,878) (192,878)
Less: Goodwill and intangible assets (641,739) (648,026) (560,114) (560,687) (561,284)
Tangible common shareholders' equity (numerator) $ 2,369,326 $ 2,260,705 $ 2,004,687 $ 2,006,574 $ 1,812,531
Total assets $ 32,185,726 $ 31,769,813 $ 27,642,957 $ 27,571,915 $ 27,375,177
Less: Goodwill and intangible assets (641,739) (648,026) (560,114) (560,687) (561,284)
Total tangible assets (denominator) $ 31,543,987 $ 31,121,787 $ 27,082,843 $ 27,011,228 $ 26,813,893
Tangible common equity to tangible assets 7.51% 7.26% 7.40% 7.43% 6.76%
Efficiency ratio
Non-interest expense $ 226,089 $ 199,488 $ 177,600 $ 180,552 $ 171,020
Less: Acquisition-related expense (14,195) (13,803) - - -
Plus: Gain on sale-leaseback - 20,266 - - -
Less: FDIC special assessment 16 - (956) (6,494) -
Less: FultonFirst implementation and asset disposals (9,385) (6,323) (6,329) (3,197) -
Less: Intangible amortization (6,287) (4,688) (573) (597) (601)
Less: Debt extinguishment - - - 720 -
Operating non-interest expense (numerator) $ 196,238 $ 194,940 $ 169,742 $ 170,984 $ 170,419
Net interest income $ 258,009 $ 241,720 $ 206,937 $ 212,006 $ 213,842
Tax equivalent adjustment 4,424 4,556 4,592 4,549 4,442
Plus: Total non-interest income 59,673 92,994 57,140 59,378 55,961
Less: Interest rate derivative transition valuation(1) 138 (137) (151) (1,102) 2,958
Less: Non-PCD credit-related interest income from acquisition (815) (571) - - -
Less: Loss (gain) on acquisition, net of tax 7,706 (47,392) - - -
Plus: Investment securities (gains) losses, net 1 20,282 - 752 -
Total revenue (denominator) $ 329,136 $ 311,452 $ 268,518 $ 275,583 $ 277,203
Efficiency ratio 59.62% 62.59% 63.21% 62.04% 61.48%
Operating non-interest expense to total average assets
Non-interest expense $ 226,089 $ 199,488 $ 177,600 $ 180,552 $ 171,020
Less: Intangible amortization (6,287) (4,688) (573) (597) (601)
Less: Acquisition-related expense (14,195) (13,803) - - -
Plus: Gain on sale-leaseback - 20,266 - - -
Less: FDIC special assessment 16 - (956) (6,494) -
Less: FultonFirst implementation and asset disposals (9,385) (6,323) (6,329) (3,197) -
Operating non-interest expense (numerator) $ 196,238 $ 194,940 $ 169,742 $ 170,264 $ 170,419
Total average assets (denominator) $ 31,895,235 $ 30,774,891 $ 27,427,626 $ 27,397,671 $ 27,377,836
Operating non-interest expenses to total average assets 2.45% 2.55% 2.49% 2.47% 2.47%
(1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
(2) Results are annualized.
Note: numbers in this report may not sum due to rounding.
Media Contact: Lacey Dean (717) 735-8688Investor Contact: Matt Jozwiak (717) 327-2657
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