Fulton Financial Reports 2008 Results
- Press Release
- Source: Fulton Financial Corporation
- On 4:30 pm EST, Tuesday January 20, 2009
LANCASTER, PA--(MARKET WIRE)--Jan 20, 2009 -- Fulton Financial Corporation (NasdaqGS:FULT - News) reported a net loss available to common shareholders of $102.3 million and $6.1 million for the fourth quarter and year ended December 31, 2008, respectively, compared to net income of $38.2 million and $152.7 million for the fourth quarter and year ended December 31, 2007, respectively.
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Net loss available to common shareholders represents net income (loss) reduced for the dividends that are payable on $376.5 million of preferred stock issued to the United States Treasury on December 23, 2008 under the Capital Purchase Program. The Corporation's voluntary participation in this program was previously disclosed in a filing with the Securities and Exchange Commission (SEC) on December 23, 2008.
The Corporation's earnings for the fourth quarter and year ended December 31, 2008 in comparison to the same periods in 2007 were impacted by a number of significant items. A detail of these items and their impact on the Corporation's earnings is included below in the supplemental financial information.
The Corporation's adjusted net income available to common shareholders for the quarter ended December 31, 2008, as shown below in the supplemental financial information, was $8.7 million, or $0.05 per diluted share, compared to $38.5 million, or $0.22 per diluted share, for the same period in 2007. Additionally, as previously announced, in the fourth quarter of 2008 the Corporation recorded an increase in the provision for loan losses of $58.2 million ($37.8 million net of tax, or $0.22 per diluted share).
For the year ended December 31, 2008, the Corporation's adjusted net income available to common shareholders, as shown below in the supplemental financial information, was $127.1 million, or $0.73 per diluted share, compared to $167.9 million, or $0.96 per diluted share, for the same period in 2007. The increase in the provision for loan losses for the year was $104.6 million ($68.0 million net of tax, or $0.39 per diluted share).
On December 16, 2008, the Corporation disclosed in a filing with the SEC that it expected to record, in the fourth quarter of 2008, a $90.0 million goodwill impairment charge, an approximately $65 million provision for loan losses and approximately $15 million of other-than-temporary impairment charges for pooled trust preferred debt securities. During the fourth quarter of 2008, the Corporation recorded the goodwill impairment charge and the provision for loan losses, as previously disclosed. The other-than-temporary impairment charge related to pooled trust preferred securities recorded by the Corporation during the fourth quarter of 2008 was $12.8 million. In addition, a $13.3 million other-than-temporary impairment charge was recorded related to the Corporation's investment in equity securities.
"Our disappointing fourth quarter and 2008 performance resulted from a combination of significant financial challenges and continued economic deterioration," said R. Scott Smith Jr., chairman, and chief executive officer. "Goodwill impairment from our most recent bank acquisition, the need to further increase our allowance for loan losses along with write-downs within our securities portfolio all combined to more than offset our other earnings from banking operations in 2008."
"We are positioning the company for improved earnings performance when the economy rebounds," Smith continued. "Fourth quarter deposit growth and residential mortgage refinance activity improved somewhat. Loan growth was good as we continued to make loans to creditworthy businesses and consumers. Our strong capital base, our risk management process and our diversified loan portfolio are key strengths that will enable us to successfully weather the current storm."
Loans, net of unearned income, increased $838.2 million, or 7.5 percent, to $12.0 billion at December 31, 2008, compared to $11.2 billion at December 31, 2007. The increase was due to a $580.5 million, or 16.6 percent, increase in commercial mortgages, a $322.9 million, or 13.7 percent, increase in residential mortgage and home equity loans and a $208.5 million, or 6.1 percent, increase in commercial loans. These increases were offset by a decrease of $146.9 million, or 10.9 percent, in construction loans and a $135.3 million, or 27.0 percent, decrease in consumer loans. In comparison to September 30, 2008, loans, net of unearned income, increased $219.1 million, or 1.9 percent, due mainly to a $185.1 million, or 4.7 percent, increase in commercial mortgages and a $80.9 million, or 2.3 percent, increase in commercial loans, offset by an $81.5 million, or 6.4 percent decrease in construction loans.
Non-performing assets were $219.0 million, or 1.35 percent, of total assets at December 31, 2008, compared to $120.9 million, or 0.76 percent, at December 31, 2007 and $186.4 million, or 1.15 percent, at September 30, 2008. The $98.1 million, or 81.2 percent, increase in non-performing assets since December 31, 2007 was due to worsening economic conditions, which resulted in increases in non-performing assets across almost all loan types.
Annualized net charge-offs for the quarter ended December 31, 2008 were 0.89 percent of average total loans, compared to 0.15 percent for the quarter ended December 31, 2007 and 0.38 percent for the quarter ended September 30, 2008. For the year ended December 31, 2008, net charge-offs were 0.45 percent of average total loans, compared to 0.09 percent for the year ended December 31, 2007. Net charge-offs increased $22.7 million in the fourth quarter of 2008 in comparison to the same period in 2007 and increased $15.6 million in comparison to the third quarter of 2008 with increased charge-offs across almost all loan types. The provision for loan losses increased $58.2 million, as compared to the same period in 2007. In comparison to the third quarter of 2008, the provision for loan losses increased $38.3 million. For the year ended December 31, 2008, the provision for loan losses was $119.6 million, an increase of $104.6 million in comparison to 2007. The increase in the provision for loan losses was due to the increase in the level of non-performing assets, which required additional allocations to the allowance for credit losses.
Total deposits increased $446.5 million, or 4.4 percent, to $10.6 billion at December 31, 2008, compared to $10.1 billion at December 31, 2007. Demand and savings deposits decreased $115.1 million, or 2.1 percent, offset by a $561.6 million, or 12.4 percent, increase in time deposits. In comparison to September 30, 2008, total deposits increased $635.4 million, or 6.4 percent, due to a $729.4 million, or 16.7 percent, increase in time deposits, offset by a $94.0 million, or 1.7 percent, decrease in demand and savings accounts.
Net interest income for the fourth quarter increased $8.7 million, or 7.0 percent, compared to the fourth quarter of 2007 and decreased $1.7 million, or 1.3 percent, from the third quarter of 2008. The Corporation's net interest margin was 3.64 percent for the fourth quarter of 2008, 3.56 percent for the fourth quarter of 2007 and 3.74 percent for the third quarter of 2008.
Other income, excluding investment securities losses, increased $3.0 million, or 8.4 percent, in the fourth quarter of 2008 compared to the same period in 2007. The increase was due to an increase in fee income on deposit accounts of $2.8 million, an increase related to fees earned in 2008 under an ongoing marketing agreement with the purchaser of the Corporation's credit card portfolio of $1.1 million and an increase in gains on sale of mortgage loans of $904,000, offset by a decrease in investment management and trust services income of $1.8 million. Compared to the third quarter of 2008, other income decreased $1.6 million, or 3.9 percent, due to a $671,000 decrease in other service charges and a $504,000 decrease in investment management and trust services income.
Investment securities losses in the fourth quarter of 2008 were $28.3 million, compared to $537,000 for the same period in 2007. The fourth quarter loss included $12.8 million of other-than-temporary impairment charges related to debt securities issued by financial institutions in the form of pooled trust preferred securities and $12.9 million of other-than-temporary impairment charges related to bank stocks. For the year ended December 31, 2008, investment securities losses totaled $58.2 million, which included other-than-temporary impairment charges of $43.1 million for bank stocks and $15.8 million for pooled trust preferred debt securities issued by financial institutions.
Other expenses, excluding the goodwill impairment charge recorded in the fourth quarter of 2008, increased $2.4 million, or 2.5 percent, compared to the fourth quarter of 2007, to $100.9 million. Compared to the third quarter of 2008, other expenses, excluding the goodwill impairment charge, increased $1.5 million, or 1.5 percent.
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has nearly 3,900 employees and operates more than 265 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Hagerstown Trust Company, Hagerstown, MD; Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; The Peoples Bank of Elkton, Elkton, MD; Skylands Community Bank, Hackettstown, NJ and The Columbia Bank, Columbia, MD.
The Corporation's financial services affiliates include: Fulton Financial Advisors, N.A., Lancaster, PA; Fulton Insurance Services Group, Inc., Lancaster, PA; and Dearden, Maguire, Weaver and Barrett, LLC, West Conshohocken, PA. Residential mortgage lending is offered by all banks through Fulton Mortgage Company.
Additional information on Fulton Financial Corporation is available on the Internet at www.fult.com.
Safe Harbor Statement:
This news release may contain forward-looking statements with respect to our financial condition, results of operations and business. Forward-looking statements are encouraged by the Private Securities Litigation Reform Act of 1995. When words such as "believes," "expects," "anticipates" or similar expressions are used in this release, the Corporation is making forward-looking statements.
Such forward-looking statements reflect the Corporation's current views and expectations based largely on information currently available to its management, and on its current expectations, assumptions, plan, estimates, judgments, and projections about its business and its industry, and they involve inherent risks, contingencies, uncertainties and other factors. Although the Corporation believes that these forward-looking statements are based on reasonable estimates and assumptions, the Corporation is unable to provide any assurance that its expectations will, in fact, occur or that its estimates or assumptions will be correct and actual results could differ materially from those expressed or implied by such forward-looking statements and such statements are not guarantees of future performance. The Corporation undertakes no obligation to update or revise any forward-looking statements. Accordingly, investors and others are cautioned not to place undue reliance on such forward-looking statements.
Many factors could affect future financial results including, without limitation, acquisition and growth strategies; market risk; changes or adverse developments in economic, political or regulatory conditions; a continuation or worsening of the current disruption in credit and other markets, including the lack of or reduced access to, and the abnormal functioning of markets for mortgage and other asset-backed securities and for commercial paper and other short-term borrowings; the effect of competition and interest rates on net interest margin and net interest income; investment strategy and income growth; investment securities gains; declines in the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth; asset quality and the impact on assets from adverse changes in the economy and in credit and other markets and resulting effects on credit risk and asset values; balances of risk-sensitive assets to risk-sensitive liabilities; salaries and employee benefits and other expenses; amortization of intangible assets; goodwill impairment; capital and liquidity strategies; and other financial and business matters for future periods.
For a more complete discussion of certain risks and uncertainties affecting the Corporation, please see the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in the Corporation's filings with the Securities and Exchange Commission.
2009
FULTON FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (UNAUDITED)
dollars in thousands, except per-share data
December 31
--------------------------
BALANCE SHEET DATA 2008 2007 % Change
------------ ------------ -----------
Total assets $ 16,185,106 $ 15,923,098 1.6%
Loans, net of unearned income 12,042,620 11,204,424 7.5%
Investment securities 2,724,841 3,153,552 (13.6%)
Deposits 10,551,916 10,105,445 4.4%
Shareholders' equity 1,859,647 1,574,920 18.1%
Quarter Ended December 31
--------------------------
INCOME SUMMARY 2008 2007 % Change
------------ ------------ -----------
Interest income $ 209,073 $ 240,069 (12.9%)
Interest expense (76,732) (116,418) (34.1%)
------------ ------------
Net interest income 132,341 123,651 7.0%
Provision for loan losses (65,000) (6,800) 855.9%
Investment securities (losses)
gains (28,339) (537) N/M
Gain on sale of credit card
portfolio - - N/A
Other income 38,750 35,748 8.4%
Goodwill impairment (90,000) - N/A
Other expenses (100,874) (98,447) 2.5%
------------ ------------
(Loss) income before income
taxes (113,122) 53,615 (311.0%)
Income tax benefit (expense) 11,255 (15,436) (172.9%)
------------ ------------
Net (loss) income $ (101,867) $ 38,179 (366.8%)
Preferred stock dividends and
discount accretion (463) - N/A
------------ ------------
Net (loss) income available to
common shareholders $ (102,330) $ 38,179 (368.0%)
============ ============
PER COMMON SHARE:
Net (loss) income:
Basic $ (0.58) $ 0.22 (363.6%)
Diluted (0.58) 0.22 (363.6%)
Cash dividends 0.15 0.15 -
Shareholders' equity 8.47 9.08 (6.7%)
Shareholders' equity (tangible) 5.29 5.30 (0.2%)
SELECTED FINANCIAL RATIOS:
Return on average assets (2.51%) 0.97%
Return on average shareholders'
equity (24.89%) 9.72%
Return on average shareholders'
equity (tangible) (4.35%) 17.44%
Net interest margin 3.64% 3.56%
Efficiency ratio 56.57% 59.09%
Non-performing assets to total
assets 1.35% 0.76%
Year Ended December 31
--------------------------
INCOME SUMMARY 2008 2007 % Change
------------ ------------ -----------
Interest income $ 867,494 $ 939,577 (7.7%)
Interest expense (343,346) (450,833) (23.8%)
------------ ------------
Net interest income 524,148 488,744 7.2%
Provision for loan losses (119,626) (15,063) 694.2%
Investment securities (losses)
gains (58,241) 1,740 N/M
Gain on sale of credit card
portfolio 13,910 - N/A
Other income 155,387 146,284 6.2%
Goodwill impairment (90,000) - N/A
Other expenses (406,625) (405,455) 0.3%
------------ ------------
Income before income taxes 18,953 216,250 (91.2%)
Income tax benefit (expense) (24,570) (63,532) (61.3%)
------------ ------------
Net (loss) income $ (5,617) $ 152,718 (103.7%)
Preferred stock dividends and
discount accretion (463) - N/A
------------ ------------
Net (loss) income available to
common shareholders $ (6,080) $ 152,718 (104.0%)
============ ============
PER COMMON SHARE:
Net (loss) income:
Basic $ (0.03) $ 0.88 (103.4%)
Diluted (0.03) 0.88 (103.4%)
Cash dividends 0.600 0.598 0.3%
SELECTED FINANCIAL RATIOS:
Return on average assets (0.04%) 1.01%
Return on average shareholders'
equity (0.35%) 9.98%
Return on average shareholders'
equity (tangible) 9.29% 18.16%
Net interest margin 3.68% 3.66%
Efficiency ratio 56.31% 61.19%
Non-performing assets to total
assets
N/M - Not meaningful
N/A - Not applicable
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
dollars in thousands
% Change from
----------------------
December 31 December 31 September 30 December 31 September 30
2008 2007 2008 2007 2008
----------- ----------- ----------- ---------- ----------
ASSETS
Cash and
due from
banks $ 331,164 $ 381,283 $ 315,841 (13.1%) 4.9%
Loans held
for sale 95,840 103,984 71,090 (7.8%) 34.8%
Other
interest-
earning
assets 21,710 21,153 50,189 2.6% (56.7%)
Investment
securities 2,724,841 3,153,552 2,806,535 (13.6%) (2.9%)
Loans, net
of unearned
income 12,042,620 11,204,424 11,823,529 7.5% 1.9%
Allowance
for loan
losses (173,946) (107,547) (136,988) 61.7% 27.0%
----------- ----------- -----------
Net Loans 11,868,674 11,096,877 11,686,541 7.0% 1.6%
Premises and
equipment 202,657 193,296 199,464 4.8% 1.6%
Accrued
interest
receivable 58,566 73,435 62,018 (20.2%) (5.6%)
Goodwill and
intangible
assets 557,833 654,908 649,635 (14.8%) (14.1%)
Other assets 323,821 244,610 294,832 32.4% 9.8%
----------- ----------- -----------
Total
Assets $16,185,106 $15,923,098 $16,136,145 1.6% 0.3%
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $10,551,916 $10,105,445 $ 9,916,555 4.4% 6.4%
Short-term
borrowings 1,762,770 2,383,944 2,589,966 (26.1%) (31.9%)
Federal
Home Loan
Bank advances
and long-
term debt 1,787,797 1,642,133 1,819,889 8.9% (1.8%)
Other
liabilities 222,976 216,656 205,825 2.9% 8.3%
----------- ----------- -----------
Total
Liabili-
ties 14,325,459 14,348,178 14,532,235 (0.2%) (1.4%)
Share-
holders'
equity 1,859,647 1,574,920 1,603,910 18.1% 15.9%
----------- ----------- -----------
Total
Liabili-
ties and
Share-
holders'
Equity $16,185,106 $15,923,098 $16,136,145 1.6% 0.3%
=========== =========== ===========
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Loans, by type:
Real estate -
commercial
mortgage $ 4,082,755 $ 3,502,282 $ 3,897,703 16.6% 4.7%
Commercial -
industrial,
financial and
agricultural 3,635,544 3,427,085 3,554,615 6.1% 2.3%
Real estate -
home equity 1,695,671 1,501,231 1,647,245 13.0% 2.9%
Real estate -
construction 1,196,050 1,342,923 1,277,552 (10.9%) (6.4%)
Real estate -
residential
mortgage 980,022 851,577 979,486 15.1% 0.1%
Consumer 365,419 500,708 387,849 (27.0%) (5.8%)
Leasing and
other 87,159 78,618 79,079 10.9% 10.2%
----------- ----------- -----------
Total Loans,
net of
unearned
income $12,042,620 $11,204,424 $11,823,529 7.5% 1.9%
=========== =========== ===========
Deposits, by type:
Noninterest-
bearing
demand $ 1,653,440 $ 1,722,211 $ 1,690,499 (4.0%) (2.2%)
Interest-
bearing
demand 1,789,833 1,715,315 1,690,330 4.3% 5.9%
Savings
deposits 2,010,526 2,131,374 2,166,998 (5.7%) (7.2%)
Time
deposits 5,098,117 4,536,545 4,368,728 12.4% 16.7%
----------- ----------- -----------
Total
Deposits $10,551,916 $10,105,445 $ 9,916,555 4.4% 6.4%
=========== =========== ===========
Short-term borrowings, by type:
Federal
funds
purchased $ 1,147,673 $ 1,057,335 $ 1,326,873 8.5% (13.5%)
Short-term
promissory
notes 356,788 443,002 460,512 (19.5%) (22.5%)
Customer
repurchase
agreements 255,796 228,061 222,415 12.2% 15.0%
Other
short-term
borrowings 2,513 655,546 580,166 (99.6%) (99.6%)
----------- ----------- -----------
Total
Short-term
borrowings $ 1,762,770 $ 2,383,944 $ 2,589,966 (26.1%) (31.9%)
=========== =========== ===========
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION (UNAUDITED)
dollars in thousands, except per-share data
Quarter Ended % Change from
--------------------------------- ------------------
December December September December September
31 2008 31 2007 30 2008 31 2007 30 2008
----------- --------- --------- -------- --------
Interest Income:
Interest Income $ 209,073 $ 240,069 $ 213,809 (12.9%) (2.2%)
Interest Expense 76,732 116,418 79,791 (34.1%) (3.8%)
----------- --------- ---------
Net Interest
Income 132,341 123,651 134,018 7.0% (1.3%)
Provision for Loan
Losses 65,000 6,800 26,700 855.9% 143.4%
----------- --------- ---------
Net Interest
Income after
Provision 67,341 116,851 107,318 (42.4%) (37.3%)
Other Income:
Service charges on
deposit accounts 16,177 13,355 16,177 21.1% -
Other service
charges and fees 8,927 8,405 9,598 6.2% (7.0%)
Investment
management and
trust services 7,541 9,291 8,045 (18.8%) (6.3%)
Gains on sale of
mortgage loans 3,085 2,181 2,266 41.4% 36.1%
Investment
securities
(losses) gains (28,339) (537) (9,501) N/M (198.3%)
Gain on sale of
credit card
portfolio - - - N/A N/A
Other 3,020 2,516 4,230 20.0% (28.6%)
----------- --------- ---------
Total Other
Income 10,411 35,211 30,815 (70.4%) (66.2%)
Other Expenses:
Salaries and
employee benefits 48,771 53,173 55,310 (8.3%) (11.8%)
Net occupancy
expense 11,240 10,002 10,237 12.4% 9.8%
Operating risk
loss 5,200 767 3,480 578.4% 49.4%
Marketing 3,746 3,465 3,097 8.1% 21.0%
Equipment expense 3,425 3,303 3,061 3.7% 11.9%
Data processing 3,209 3,205 3,242 0.1% (1.0%)
Intangible
amortization 1,776 2,158 1,730 (17.7%) 2.7%
Goodwill
impairment 90,000 - - N/A N/A
Other 23,507 22,374 19,198 5.1% 22.4%
----------- --------- ---------
Total Other
Expenses 190,874 98,447 99,355 93.9% 92.1%
----------- --------- ---------
(Loss) Income
Before Income
Taxes (113,122) 53,615 38,778 (311.0%) (391.7%)
Income tax
(benefit) expense (11,255) 15,436 9,702 (172.9%) (216.0%)
----------- --------- ---------
Net (Loss)
Income $ (101,867) $ 38,179 $ 29,076 (366.8%) (450.3%)
Preferred stock
dividends and
discount
accretion (463) - - N/A N/A
----------- --------- ---------
Net (loss)
income
available to
common
shareholders $ (102,330) $ 38,179 $ 29,076 (368.0%) (451.9%)
=========== ========= =========
PER COMMON SHARE:
Net (loss) income:
Basic $ (0.58) $ 0.22 $ 0.17 (363.6%) (441.2%)
Diluted (0.58) 0.22 0.17 (363.6%) (441.2%)
Cash dividends $ 0.15 $ 0.15 $ 0.15 - -
Shareholders' equity 8.47 9.08 9.18 (6.7%) (7.7%)
Shareholders'
equity (tangible) 5.29 5.30 5.41 (0.2%) (2.2%)
Weighted average
shares (basic) 174,889 173,416 174,463 0.8% 0.2%
Weighted average
shares (diluted) 175,255 174,155 174,912 0.6% 0.2%
Shares outstanding,
end of period 175,044 173,503 174,687 0.9% 0.2%
SELECTED FINANCIAL RATIOS:
Return on average
assets (2.51%) 0.97% 0.73%
Return on average
shareholders'
equity (24.89%) 9.72% 7.25%
Return on average
shareholders'
equity (tangible) (4.35%) 17.44% 12.72%
Net interest
margin 3.64% 3.56% 3.74%
Efficiency ratio 56.57% 59.09% 54.69%
=========== ========= =========
Year Ended December 31
------------------------
2008 2007 % Change
----------- ----------- -----------
Interest Income:
Interest Income $ 867,494 $ 939,577 (7.7%)
Interest Expense 343,346 450,833 (23.8%)
----------- -----------
Net Interest
Income 524,148 488,744 7.2%
Provision for Loan
Losses 119,626 15,063 694.2%
----------- -----------
Net Interest
Income after
Provision 404,522 473,681 (14.6%)
Other Income:
Service charges on
deposit accounts 61,640 46,500 32.6%
Other service
charges and fees 36,247 32,151 12.7%
Investment
management and
trust services 32,734 38,665 (15.3%)
Gains on sale of
mortgage loans 10,332 14,294 (27.7%)
Investment
securities
(losses) gains (58,241) 1,740 N/M
Gain on sale of
credit card
portfolio 13,910 - N/A
Other 14,434 14,674 (1.6%)
----------- -----------
Total Other
Income 111,056 148,024 (25.0%)
Other Expenses:
Salaries and
employee benefits 213,557 217,526 (1.8%)
Net occupancy
expense 42,239 39,965 5.7%
Operating risk
loss 24,308 27,229 (10.7%)
Marketing 13,267 11,334 17.1%
Equipment expense 13,332 13,892 (4.0%)
Data processing 12,813 12,755 0.5%
Intangible
amortization 7,162 8,334 (14.1%)
Goodwill
impairment 90,000 - N/A
Other 79,947 74,420 7.4%
----------- -----------
Total Other
Expenses 496,625 405,455 22.5%
----------- -----------
Income Before
Income Taxes 18,953 216,250 (91.2%)
Income tax
(benefit) expense 24,570 63,532 (61.3%)
----------- -----------
Net (Loss)
Income $ (5,617) $ 152,718 (103.7%)
Preferred stock
dividends and
discount
accretion (463) - N/A
----------- -----------
Net (loss)
income
available to
common
shareholders $ (6,080) $ 152,718 (104.0%)
=========== ===========
PER COMMON SHARE:
Net (loss) income:
Basic $ (0.03) $ 0.88 (103.4%)
Diluted (0.03) 0.88 (103.4%)
Cash dividends $ 0.600 $ 0.598 0.3%
Shareholders' equity
Shareholders'
equity (tangible)
Weighted average
shares (basic) 174,236 173,295 0.5%
Weighted average
shares (diluted) 174,728 174,386 0.2%
Shares outstanding,
end of period
SELECTED FINANCIAL RATIOS:
Return on average
assets (0.04%) 1.01%
Return on average
shareholders'
equity (0.35%) 9.98%
Return on average
shareholders'
equity (tangible) 9.29% 18.16%
Net interest
margin 3.68% 3.66%
Efficiency ratio 56.31% 61.19%
=========== ===========
N/M - Not meaningful
N/A - Not applicable
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Quarter Ended
----------------------------------------
December 31, 2008
----------------------------------------
Average Yield/
Balance Interest (1) Rate
------------ ------------ ------------
ASSETS
Interest-earning assets:
Loans, net of unearned income $ 11,960,067 $ 178,096 5.93%
Taxable investment securities 2,086,808 26,106 4.72%
Tax-exempt investment
securities 516,045 7,073 5.48%
Equity securities 154,660 797 2.05%
------------ ------------ ------------
Total Investment Securities 2,757,513 33,976 4.71%
Loans held for sale 64,096 975 6.08%
Other interest-earning assets 23,889 124 2.08%
------------ ------------ ------------
Total Interest-earning Assets 14,805,565 213,171 5.70%
Noninterest-earning assets:
Cash and due from banks 317,571
Premises and equipment 200,918
Other assets 960,606
Less: allowance for loan losses (150,266)
------------
Total Assets $ 16,134,394
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 1,727,874 $ 2,630 0.61%
Savings deposits 2,070,931 6,124 1.18%
Time deposits 4,818,068 41,553 3.43%
------------ ------------ ------------
Total Interest-bearing Deposits 8,616,873 50,307 2.32%
Short-term borrowings 2,251,571 5,998 1.05%
Federal Home Loan Bank advances
and long-term debt 1,798,688 20,427 4.53%
------------ ------------ ------------
Total Interest-bearing
Liabilities 12,667,132 76,732 2.41%
Noninterest-bearing liabilities:
Demand deposits 1,643,118
Other 196,004
------------
Total Liabilities 14,506,254
Shareholders' equity 1,628,140
------------
Total Liabilities and
Shareholders' Equity $ 16,134,394
============
Net interest income/net
interest margin (fully
taxable equivalent) 136,439 3.64%
============
Tax equivalent adjustment (4,098)
------------
Net interest income $ 132,341
============
Quarter Ended
----------------------------------------
December 31, 2007
----------------------------------------
Average Yield/
Balance Interest (1) Rate
------------ ------------ ------------
ASSETS
Interest-earning assets:
Loans, net of unearned income $ 11,082,957 $ 204,281 7.32%
Taxable investment securities 2,348,449 28,420 4.84%
Tax-exempt investment
securities 494,790 6,462 5.22%
Equity securities 201,554 2,445 4.84%
------------ ------------ ------------
Total Investment Securities 3,044,793 37,327 4.90%
Loans held for sale 101,788 1,730 6.79%
Other interest-earning assets 24,136 291 4.78%
------------ ------------ ------------
Total Interest-earning Assets 14,253,674 243,629 6.80%
Noninterest-earning assets:
Cash and due from banks 323,490
Premises and equipment 191,502
Other assets 907,267
Less: allowance for loan losses (110,922)
------------
Total Assets $ 15,565,011
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 1,721,831 $ 6,598 1.52%
Savings deposits 2,179,753 12,046 2.19%
Time deposits 4,603,944 54,341 4.68%
------------ ------------ ------------
Total Interest-bearing Deposits 8,505,528 72,985 3.40%
Short-term borrowings 2,020,751 22,249 4.33%
Federal Home Loan Bank advances
and long-term debt 1,624,613 21,184 5.19%
------------ ------------ ------------
Total Interest-bearing
Liabilities 12,150,892 116,418 3.80%
Noninterest-bearing liabilities:
Demand deposits 1,675,528
Other 180,907
------------
Total Liabilities 14,007,327
Shareholders' equity 1,557,684
------------
Total Liabilities and
Shareholders' Equity $ 15,565,011
============
Net interest income/net
interest margin (fully
taxable equivalent) 127,211 3.56%
============
Tax equivalent adjustment (3,560)
------------
Net interest income $ 123,651
============
Quarter Ended
----------------------------------------
September 30, 2008
----------------------------------------
Average Yield/
Balance Interest (1) Rate
------------ ------------ ------------
ASSETS
Interest-earning assets:
Loans, net of unearned income $ 11,696,841 $ 181,562 6.18%
Taxable investment securities 2,117,207 26,025 4.70%
Tax-exempt investment
securities 509,994 6,944 5.45%
Equity securities 168,690 1,614 3.82%
------------ ------------ ------------
Total Investment Securities 2,795,891 34,583 4.78%
Loans held for sale 101,319 1,539 6.08%
Other interest-earning assets 19,013 142 2.94%
------------ ------------ ------------
Total Interest-earning Assets 14,613,064 217,826 5.91%
Noninterest-earning assets:
Cash and due from banks 322,550
Premises and equipment 197,895
Other assets 933,303
Less: allowance for loan losses (123,865)
------------
Total Assets $ 15,942,947
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 1,734,198 $ 3,166 0.73%
Savings deposits 2,192,747 6,633 1.20%
Time deposits 4,308,903 37,393 3.45%
------------ ------------ ------------
Total Interest-bearing Deposits 8,235,848 47,192 2.28%
Short-term borrowings 2,432,109 12,877 2.08%
Federal Home Loan Bank advances
and long-term debt 1,819,897 19,722 4.32%
------------ ------------ ------------
Total Interest-bearing
Liabilities 12,487,854 79,791 2.54%
Noninterest-bearing liabilities:
Demand deposits 1,669,908
Other 190,012
------------
Total Liabilities 14,347,774
Shareholders' equity 1,595,173
------------
Total Liabilities and
Shareholders' Equity $ 15,942,947
============
Net interest income/net
interest margin (fully
taxable equivalent) 138,035 3.74%
============
Tax equivalent adjustment (4,017)
------------
Net interest income $ 134,018
============
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and
statutory interest expense disallowances.
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Quarter Ended % Change from
-------------------------------------- --------------
December 31 December 31 September 30 Dec 31 Sept 30
2008 2007 2008 2007 2008
------------ ------------ ------------ ----- -----
Loans, by type:
Real estate -
commercial
mortgage $ 3,994,730 $ 3,438,386 $ 3,820,045 16.2% 4.6%
Commercial -
industrial,
financial and
agricultural 3,603,790 3,364,211 3,557,142 7.1% 1.3%
Real estate -
home equity 1,673,834 1,486,367 1,619,935 12.6% 3.3%
Real estate -
construction 1,232,082 1,377,391 1,293,096 (10.5%) (4.7%)
Real estate -
residential
mortgage 985,660 831,825 953,420 18.5% 3.4%
Consumer 378,422 499,253 368,804 (24.2%) 2.6%
Leasing and other 91,549 85,524 84,399 7.0% 8.5%
------------ ------------ ------------
Total Loans, net of
unearned income $ 11,960,067 $ 11,082,957 $ 11,696,841 7.9% 2.3%
============ ============ ============
Deposits, by type:
Noninterest-bearing
demand $ 1,643,118 $ 1,675,528 $ 1,669,908 (1.9%) (1.6%)
Interest-bearing
demand 1,727,874 1,721,831 1,734,198 0.4% (0.4%)
Savings deposits 2,070,931 2,179,753 2,192,747 (5.0%) (5.6%)
Time deposits 4,818,068 4,603,944 4,308,903 4.7% 11.8%
------------ ------------ ------------
Total Deposits $ 10,259,991 $ 10,181,056 $ 9,905,756 0.8% 3.6%
============ ============ ============
Short-term borrowings, by type:
Federal funds
purchased $ 1,426,618 $ 975,732 $ 1,399,130 46.2% 2.0%
Short-term
promissory notes 391,781 478,018 486,179 (18.0%) (19.4%)
Customer repurchase
agreements 244,633 237,346 213,827 3.1% 14.4%
Other short-term
borrowings 188,539 329,655 332,973 (42.8%) (43.4%)
------------ ------------ ------------
Total Short-term
borrowings $ 2,251,571 $ 2,020,751 $ 2,432,109 11.4% (7.4%)
============ ============ ============
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Year Ended December 31
------------------------------------------------------------
2008 2007
----------------------------- -----------------------------
Average Yield Average Yield
Balance Interest (1) /Rate Balance Interest (1) /Rate
----------- ---------- ---- ----------- ---------- ----
ASSETS
Interest-earning assets:
Loans, net
of unearned
income $11,595,243 $ 732,533 6.32% $10,736,566 $ 805,881 7.51%
Taxable
investment
securities 2,228,204 110,220 4.82% 2,157,325 99,621 4.62%
Tax-exempt
investment
securities 512,920 27,904 5.44% 496,820 25,856 5.20%
Equity
securities 183,216 6,520 3.56% 189,333 9,073 4.79%
----------- ---------- ---- ----------- ---------- ----
Total
Investment
Securities 2,924,340 144,644 4.85% 2,843,478 134,550 4.73%
Loans held
for sale 93,085 5,701 6.12% 166,437 11,501 6.91%
Other
interest-
earning
assets 21,503 586 2.71% 33,015 1,630 4.90%
----------- ---------- ---- ----------- ---------- ----
Total
Interest-
earning
Assets 14,634,171 883,464 6.02% 13,779,496 953,562 6.93%
Noninterest-
earning
assets:
Cash and
due from
banks 318,524 329,814
Premises and
equipment 197,967 190,910
Other assets 951,270 899,292
Less:
allowance
for loan
losses (125,061) (109,054)
----------- -----------
Total
Assets $15,976,871 $15,090,458
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-
bearing
liabilities:
Demand
deposits $ 1,714,029 $ 13,168 0.77% $ 1,696,624 $ 28,331 1.67%
Savings
deposits 2,152,158 28,520 1.32% 2,258,113 53,312 2.36%
Time
deposits 4,502,399 170,426 3.79% 4,553,994 212,752 4.67%
----------- ---------- ---- ----------- ---------- ----
Total
Interest-
bearing
Deposits 8,368,586 212,114 2.53% 8,508,731 294,395 3.46%
Short-term
borrowings 2,336,526 50,091 2.12% 1,574,495 73,983 4.66%
Federal Home
Loan Bank
advances
and long-
term debt 1,822,115 81,141 4.45% 1,579,527 82,455 5.22%
----------- ---------- ---- ----------- ---------- ----
Total
Interest-
bearing
Liabilities 12,527,227 343,346 2.74% 11,662,753 450,833 3.86%
Noninterest-
bearing
liabilities:
Demand
deposits 1,647,942 1,713,863
Other 191,874 183,229
----------- -----------
Total
Liabilities 14,367,043 13,559,845
Shareholders'
equity 1,609,828 1,530,613
----------- -----------
Total
Liabilities
and Share-
holders'
Equity $15,976,871 $15,090,458
=========== ===========
Net
interest
income/net
interest
margin
(fully
taxable
equivalent) 540,118 3.68% 502,729 3.66%
==== ====
Tax equivalent
adjustment (15,970) (13,985)
---------- ----------
Net interest
income $ 524,148 $ 488,744
========== ==========
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate
and statutory interest expense disallowances.
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Year Ended
December 31
------------------------
2008 2007 % Change
----------- ----------- -----
Loans, by type:
Real estate -
commercial
mortgage $ 3,765,762 $ 3,337,762 12.8%
Commercial -
industrial,
financial and
agricultural 3,536,125 3,213,357 10.0%
Real estate -
home equity 1,597,376 1,454,753 9.8%
Real estate -
construction 1,286,111 1,384,548 (7.1%)
Real estate -
residential
mortgage 923,947 753,789 22.6%
Consumer 399,112 506,201 (21.2%)
Leasing and
other 86,810 86,156 0.8%
----------- -----------
Total Loans,
net of
unearned
income $11,595,243 $10,736,566 8.0%
=========== ===========
Deposits, by type:
Noninterest-
bearing
demand $ 1,647,942 $ 1,713,863 (3.8%)
Interest-
bearing
demand 1,714,029 1,696,624 1.0%
Savings
deposits 2,152,158 2,258,113 (4.7%)
Time
deposits 4,502,399 4,553,994 (1.1%)
----------- -----------
Total
Deposits $10,016,528 $10,222,594 (2.0%)
=========== ===========
Short-term borrowings, by type:
Federal funds
purchased $ 1,328,888 $ 808,358 64.4%
Short-term
promissory
notes 454,473 404,527 12.3%
Customer
repurchase
agreements 227,130 247,948 (8.4%)
Other
short-term
borrowings 326,035 113,662 186.8%
----------- -----------
Total
Short-term
borrowings $ 2,336,526 $ 1,574,495 48.4%
=========== ===========
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
Quarter Ended Year Ended
---------------------------------- December 31
December 31 December 31 September 30 --------------------
2008 2007 2008 2008 2007
---------- ---------- ---------- --------- ---------
ALLOWANCE FOR CREDIT LOSSES:
Balance at
beginning of
period $ 141,829 $ 109,435 $ 126,223 $ 112,209 $ 106,884
Loans
charged off:
Commercial -
financial and
agricultural (6,392) (2,200) (4,684) (18,592) (6,796)
Real estate -
mortgage (19,464) (679) (5,857) (28,275) (1,206)
Consumer (1,450) (1,169) (991) (5,188) (3,678)
Leasing and
other (1,033) (1,020) (1,166) (4,804) (2,059)
---------- ---------- ---------- --------- ---------
Total loans
charged off (28,339) (5,068) (12,698) (56,859) (13,739)
Recoveries of
loans charged
off:
Commercial -
financial and
agricultural 770 197 749 1,795 1,664
Real estate -
mortgage 61 89 238 446 178
Consumer 465 343 304 1,487 1,246
Leasing and
other 351 413 313 1,433 913
---------- ---------- ---------- --------- ---------
Recoveries of
loans
previously
charged off 1,647 1,042 1,604 5,161 4,001
---------- ---------- ---------- --------- ---------
Net loans
charged off (26,692) (4,026) (11,094) (51,698) (9,738)
Provision for
loan losses 65,000 6,800 26,700 119,626 15,063
---------- ---------- ---------- --------- ---------
Balance at end
of period $ 180,137 $ 112,209 $ 141,829 $ 180,137 $ 112,209
========== ========== ========== ========= =========
Net charge-offs
to average
loans
(annualized) 0.89% 0.15% 0.38% 0.45% 0.09%
========== ========== ========== ========= =========
COMPONENTS OF ALLOWANCE FOR CREDIT LOSSES:
Allowance for
loan losses $ 173,946 $ 107,547 $ 136,988
Reserve for
unfunded
lending
commitments 6,191 4,662 4,841
---------- ---------- ----------
Allowance for
credit losses $ 180,137 $ 112,209 $ 141,829
========== ========== ==========
NON-PERFORMING ASSETS:
Non-accrual
loans $ 161,962 $ 76,150 $ 143,310
Loans 90 days
past due and
accruing 35,177 29,782 21,354
---------- ---------- ----------
Total
non-performing
loans 197,139 105,932 164,664
Other real
estate owned 21,855 14,934 21,706
---------- ---------- ----------
Total
non-performing
assets $ 218,994 $ 120,866 $ 186,370
========== ========== ==========
NON-PERFORMING LOANS, BY TYPE:
Commercial -
industrial,
agricultural
and financial $ 40,294 $ 27,715 $ 41,489
Real estate -
commercial
mortgage 41,745 14,515 32,642
Real estate -
residential
mortgage and
home equity 26,304 25,774 26,274
Real estate -
construction 80,083 30,927 57,436
Consumer 8,374 4,741 6,558
Leasing 339 2,260 265
---------- ---------- ----------
Total
non-performing
loans $ 197,139 $ 105,932 $ 164,664
========== ========== ==========
ASSET QUALITY RATIOS:
Non-accrual
loans to total
loans 1.34% 0.68% 1.21%
Non-performing
assets to total
loans and OREO 1.82% 1.08% 1.57%
Non-performing
assets to total
assets 1.35% 0.76% 1.15%
Allowance for
credit losses
to loans
outstanding 1.50% 1.00% 1.20%
Allowance for
loan losses to
loans
outstanding 1.44% 0.96% 1.16%
Allowance for
credit losses
to non-performing
loans 91% 106% 86%
FULTON FINANCIAL CORPORATION
RECONCILIATION OF NON-GAAP MEASURE (UNAUDITED)
dollars in thousands, except per-share data
Explanatory note: This press release contains certain financial
information, as detailed below, which has been derived
by methods other than Generally Accepted Accounting
Standards ("GAAP") that Management uses in its analysis
of the Corporation's performance. The Corporation has
presented these non-GAAP measures because it believes
that they provide more useful and comparative
information to assess trends in the Corporation's
quarterly and year end results of operations. These
non-GAAP 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.
Quarter Ended
----------------------------------
December 31, 2008
----------------------------------
Pre-tax After-tax Diluted
(Expense)/ (Expense)/ EPS
Income Income Impact
---------- ---------- ----------
Goodwill impairment charge $ (90,000) $ (90,000) $ (0.51)
Other-than-temporary impairment of
securities (26,065) (16,942) (0.10)
Guarantee related to purchase of
customer auction rate securities (3,950) (2,568) (0.01)
Investment securities gains and
(losses) on sale (2,274) (1,478) (0.01)
---------- ---------- ----------
Totals (122,289) (110,988) (0.63)
Net (loss) income available to common
shareholders (102,330) (0.58)
---------- ----------
Adjusted net income available to
common shareholders $ 8,658 $ 0.05
========== ==========
Quarter Ended
----------------------------------
December 31, 2007
----------------------------------
Pre-tax After-tax Diluted
(Expense)/ (Expense)/ EPS
Income Income Impact
---------- ---------- ----------
Goodwill impairment charge $ - $ - $ -
Other-than-temporary impairment of
securities (175) (114) -
Guarantee related to purchase of
customer auction rate securities - - -
Investment securities gains and
(losses) on sale (362) (235) -
---------- ---------- ----------
Totals (537) (349) -
Net (loss) income available to common
shareholders 38,179 0.22
---------- ----------
Adjusted net income available to
common shareholders $ 38,528 $ 0.22
========== ==========
Quarter Ended
----------------------------------
September 30, 2008
----------------------------------
Pre-tax After-tax Diluted
(Expense)/ (Expense)/ EPS
Income Income Impact
---------- ---------- ----------
Goodwill impairment charge $ - $ - $ -
Other-than-temporary impairment of
securities (10,682) (6,943) (0.04)
Guarantee related to purchase of
customer auction rate securities (2,660) (1,729) (0.01)
Investment securities gains and
(losses) on sale 1,181 768 -
---------- ---------- ----------
Totals (12,161) (7,904) (0.05)
Net (loss) income available to common
shareholders 29,076 0.17
---------- ----------
Adjusted net income available to
common shareholders $ 36,980 $ 0.21
========== ==========
Year Ended December 31
----------------------------------
2008
----------------------------------
Pre-tax After-tax Diluted
(Expense)/ (Expense)/ EPS
Income Income Impact
---------- ---------- ----------
Goodwill impairment charge $ (90,000) $ (90,000) $ (0.52)
Other-than-temporary impairment of
securities (65,336) (42,468) (0.24)
Guarantee related to purchase of
customer auction rate securities (19,810) (12,877) (0.07)
Gain on sale of credit card portfolio 13,900 9,035 0.05
Investment securities gains and
(losses) on sale 7,095 4,612 0.03
Contingent losses related to
repurchase of previously sold loans (2,300) (1,495) (0.01)
---------- ---------- ----------
Totals $ (156,451) $ (133,193) (0.76)
Net (loss) income available to common
shareholders (6,080) (0.03)
---------- ----------
Adjusted net income available to
common shareholders $ 127,113 $ 0.73
========== ==========
Year Ended December 31
----------------------------------
2007
----------------------------------
Pre-tax After-tax Diluted
(Expense)/ (Expense)/ EPS
Income Income Impact
---------- ---------- ----------
Goodwill impairment charge $ - $ - $ -
Other-than-temporary impairment of
securities (292) (190) -
Guarantee related to purchase of
customer auction rate securities - - -
Gain on sale of credit card portfolio - - -
Investment securities gains and
(losses) on sale 2,032 1,321 0.01
Contingent losses related to
repurchase of previously sold loans (25,100) (16,315) (0.09)
---------- ---------- ----------
Totals $ (23,360) $ (15,184) (0.09)
Net (loss) income available to common
shareholders 152,718 0.88
---------- ----------
Adjusted net income available to
common shareholders $ 167,902 $ 0.96
========== ==========
Contact:
Contact:
Laura J. Wakeley
Office: 717-291-2616
Related Headlines
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