U.S. Markets close in 4 hrs 28 mins
  • S&P 500

    4,179.17
    +59.96 (+1.46%)
     
  • Dow 30

    33,981.25
    -111.71 (-0.33%)
     
  • Nasdaq

    12,173.19
    +356.87 (+3.02%)
     
  • Russell 2000

    1,997.79
    +36.97 (+1.89%)
     
  • Crude Oil

    75.82
    -0.59 (-0.77%)
     
  • Gold

    1,936.10
    -6.70 (-0.34%)
     
  • Silver

    23.76
    +0.16 (+0.66%)
     
  • EUR/USD

    1.0928
    -0.0066 (-0.6010%)
     
  • 10-Yr Bond

    3.3400
    -0.0570 (-1.68%)
     
  • Vix

    17.69
    -0.18 (-1.01%)
     
  • GBP/USD

    1.2272
    -0.0099 (-0.8038%)
     
  • USD/JPY

    128.3940
    -0.5310 (-0.4119%)
     
  • BTC-USD

    23,856.00
    +824.19 (+3.58%)
     
  • CMC Crypto 200

    545.03
    -0.29 (-0.05%)
     
  • FTSE 100

    7,812.90
    +51.79 (+0.67%)
     
  • Nikkei 225

    27,402.05
    +55.17 (+0.20%)
     

Fulton Financial Corporation Announces Third Quarter 2022 Results

LANCASTER, Pa., October 18, 2022--(BUSINESS WIRE)--Fulton Financial Corporation (NASDAQ:FULT) ("Fulton" or the "Corporation") reported net income available to common shareholders of $68.3 million, or $0.40 per diluted share, for the third quarter of 2022, an increase of $0.9 million, or 1.3%, in comparison to the second quarter of 2022. The Corporation reported net income available to common shareholders of $197.5 million, or $1.20 per diluted share, for the nine months ended September 30, 2022, a decrease of $8.4 million or 4.1%, in comparison to the nine months ended September 30, 2021. The results for the third quarter of 2022 include the impact of the consummation of the acquisition by the Corporation of Prudential Bancorp, Inc. ("Prudential Bancorp") on July 1, 2022.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20221018006226/en/

"I'm pleased to report that we had a strong third quarter, with operating earnings being at an all-time high for Fulton," said E. Phillip Wenger, Chairman and CEO. "As I retire from my current role on December 31, I have tremendous confidence in my successor, Curt Myers, our senior management team and directors, and the more than 3,300 talented team members to continue to change lives for the better for our customers and our shareholders."

"We are grateful to Phil Wenger for all the contributions he has made over his 43 years of service to Fulton, and we look forward to carrying on his legacy" said Curtis J. Myers, President and COO. "As Phil noted, our third quarter performance was strong, driven primarily by increased net interest income, which was helped by rising interest rates, good loan growth, consistent fee income, and the effect of our acquisition of Prudential Bancorp completed on July 1, 2022."

Operating net income available to common shareholders was $80.5 million, or $0.48 per diluted share, for the third quarter of 2022, calculated as shown below.

Three months ended

(in thousands except per share data)

September 30, 2022

Net income available to common shareholders

$68,309

Plus: Core deposit intangible amortization, net of tax

406

Plus: Merger-related expenses, net of tax

5,535

Plus: Current expected credit losses ("CECL") day 1 provision expense, net of tax

6,283

Operating net income available to common shareholders

$80,533

Weighted average shares (diluted) (denominator)

168,781

Operating net income available to common shareholders per share (diluted)

$0.48

Net Interest Income and Balance Sheet

Net interest income for the third quarter of 2022 was $215.6 million, an increase of $36.8 million in comparison to the second quarter of 2022. The net interest margin for the third quarter of 2022 increased 50 basis points, to 3.54%, in comparison to 3.04% in the second quarter of 2022.

The linked-quarter increase in net interest income was primarily due to rising interest rates resulting in increases in interest income from net loans and investment securities of $41.3 million and $1.7 million, respectively. An increase in the average balances for net loans and investment securities of $926.7 million and $102.0 million, respectively, driven in part by the Prudential Bancorp acquisition, also contributed to the increase in interest income. Interest income from Prudential Bancorp was approximately $10.9 million in the third quarter of 2022. Interest expense from interest-bearing liabilities for the third quarter of 2022 increased by $6.6 million in comparison to $11.5 million in the second quarter of 2022, and included $2.7 million from Prudential Bancorp.

For the third quarter of 2022, net interest income was $215.6 million, an increase of $44.3 million, or 25.9%, in comparison to the third quarter of 2021 primarily driven by higher interest rates resulting in an increase in interest income from net loans of $43.6 million. An increase in the average balances for net loans and investment securities of $1,149.7 million and $678.9 million, respectively, driven in part by the Prudential Bancorp acquisition, also contributed to the increase in interest income. Interest income from Prudential Bancorp was approximately $10.9 million in the third quarter of 2022. Interest expense from interest-bearing liabilities for the third quarter of 2022 increased by $5.3 million in comparison to $12.8 million in the third quarter of 2021, and included $2.7 million from Prudential Bancorp.

Total average interest-earning assets for the third quarter of 2022 was $24.7 billion, an increase of $709.0 million from the second quarter of 2022, primarily driven by the aforementioned increases in average net loans of $926.7 million and average investment securities of $102.0 million, partially offset by a decrease in other interest-earning assets of $315.6 million.

Total average interest-earning assets for the third quarter of 2022 increased by $122.6 million from the third quarter of 2021. Average net loans for the third quarter of 2022 were $19.6 billion, an increase of $1,149.7 million from the same period in 2021. Included in average net loans for the third quarter of 2022 were Paycheck Protection Program ("PPP") loans with an average balance of $49.2 million, a decrease of $801.4 million from the third quarter of 2021. Compared to the third quarter of 2021, average other interest-earning assets decreased $1,678.7 million and average investment securities increased $678.9 million, respectively.

Total average interest-bearing liabilities increased $731.7 million, to $15.6 billion, in the third quarter of 2022 in comparison to $14.9 billion in the second quarter of 2022, due in part to the Prudential Bancorp acquisition, and driven overall by increases in average balances of interest-bearing deposits, long-term borrowings and short-term borrowings of $376.2 million, $204.5 million and $151.0 million, respectively.

Total average interest-bearing liabilities for the third quarter of 2022 decreased $194.3 million in comparison to $15.8 billion in the third quarter of 2021, driven by a decrease in the average total interest-bearing deposits of $431.6 million, partially offset by increases in average balances of long-term borrowings and short-term borrowings of $134.2 million and $103.1 million, respectively.

Asset Quality

In the third quarter of 2022, a provision for credit losses of $19.0 million was recorded in comparison to a provision for credit losses of $1.5 million in the second quarter of 2022, and a negative provision for credit losses of $0.6 million in the third quarter of 2021. Included in the third quarter of 2022 provision for credit losses was a CECL "Day 1" provision for credit losses of $8.0 million for the acquired Prudential Bancorp loan portfolio (the "CECL "Day 1" Provision"). Excluding the CECL "Day 1" Provision for credit losses, the provision for credit losses was $11.0 million and was primarily due to an increase in non-performing loans, as well as increases in reserves for the office building and residential mortgage loan portfolios.

Non-performing assets were $198.6 million, or 0.76% of total assets, at September 30, 2022, in comparison to $178.3 million, or 0.71% at June 30, 2022, and $152.1 million, or 0.58% of total assets, at September 30, 2021.

Annualized net charge-offs (recoveries) for the third quarter of 2022, was 0.01% of total average loans, in comparison to (0.08%) and (0.05)% in the second quarter of 2022 and the third quarter of 2021, respectively.

Non-interest Income

Non-interest income before investment securities gains in the third quarter of 2022 was $59.2 million, an increase of $0.8 million, or 1.4%, from the second quarter of 2022. The increase in non-interest income was driven primarily by an increase of $0.8 million in consumer banking fees.

Compared to the third quarter of 2021, non-interest income before investment securities gains in the third quarter of 2022 decreased $3.4 million, or 5.4%, from $62.6 million. The decrease in non-interest income was due to decreases of $5.8 million in mortgage banking income, $2.2 million in other income primarily due to equity method investments, and $0.9 million in wealth management revenues, partially offset by increases of $4.1 million in commercial banking revenues and $1.5 million in consumer banking fees.

Non-interest Expense

Non-interest expense, excluding merger-related expenses of $7.0 million and intangible amortization of $0.7 million, was $161.9 million in the third quarter of 2022, an increase of $13.3 million, or 9.0%, compared to the second quarter of 2022. The increase was primarily due to an $8.9 million increase in salaries and employee benefits expense that included $2.6 million in additional performance-based accruals and $2.0 million of salaries and employee benefits costs from Prudential Bancorp. In addition, compared to the second quarter of 2022, data processing and software expense increased $1.1 million, charitable contributions, reflected in other expense, increased $0.8 million due to contributions made to the Fulton Forward Foundation, and other outside services increased $0.6 million. The total impact on non-interest expense from Prudential Bancorp in the third quarter of 2022 was $3.6 million.

Compared to the third quarter of 2021, non-interest expense, excluding merger-related expenses of $7.0 million and intangible amortization of $0.7 million, increased $17.4 million, or 12.1%, in the third quarter of 2022, primarily due to an increase in salaries and employee benefits expense of $11.6 million. In addition, compared to the third quarter of 2021, data processing and software expense increased $1.5 million, other outside services increased $1.5 million and net occupancy costs increased $1.1 million.

Income Tax Expense

For the third quarter of 2022, the effective tax rate was 17.8%, in comparison to 17.6% for the full-year of 2021.

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, 2021, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022 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 generally accepted accounting principles ("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)

in thousands, except per-share data and percentages

Three months ended

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

2022

2022

2022

2021

2021

Ending Balances

Investments

$

3,936,694

$

4,117,801

$

4,288,674

$

4,167,774

$

4,000,760

Net loans

19,695,199

18,920,950

18,476,119

18,325,350

18,269,407

Total assets

26,146,042

25,252,686

25,598,310

25,796,398

26,390,832

Deposits

21,376,554

21,143,866

21,541,174

21,573,499

22,074,041

Shareholders' equity

2,471,159

2,471,093

2,569,535

2,712,680

2,699,818

Average Balances

Investments

$

4,254,216

$

4,216,507

$

4,228,827

$

3,980,045

$

3,914,627

Net loans

19,563,825

18,637,175

18,383,118

18,220,550

18,414,153

Total assets

26,357,095

25,578,432

25,622,462

26,136,536

26,440,876

Deposits

21,788,052

21,523,713

21,480,183

21,876,938

22,123,480

Shareholders' equity

2,604,057

2,531,346

2,688,834

2,713,198

2,722,833

Income Statement

Net interest income

$

215,582

$

178,831

$

161,310

$

165,613

$

171,270

Provision for credit losses

18,958

1,500

(6,950

)

(5,000

)

(600

)

Non-interest income

59,162

58,391

55,256

63,881

62,577

Non-interest expense

169,558

149,730

145,978

154,019

144,596

Income before taxes

86,228

85,992

77,538

80,475

89,851

Net income available to common shareholders

68,309

67,427

61,726

59,325

73,021

Pre-provision net revenue(1)

113,631

89,384

71,842

77,837

90,947

Per Share

Net income available to common shareholders (basic)

$

0.41

$

0.42

$

0.38

$

0.37

$

0.45

Net income available to common shareholders (diluted)

$

0.40

$

0.42

$

0.38

$

0.37

$

0.45

Operating net income available to common shareholders(1)

$

0.48

$

0.42

$

0.38

$

0.37

$

0.45

Cash dividends

$

0.15

$

0.15

$

0.15

$

0.22

$

0.14

Common shareholders' equity

$

13.61

$

14.15

$

14.79

$

15.70

$

15.53

Common shareholders' equity (tangible)(1)

$

10.26

$

10.81

$

11.44

$

12.35

$

12.21

Weighted average shares (basic)

167,353

160,920

160,588

161,210

162,506

Weighted average shares (diluted)

168,781

162,075

161,911

162,355

163,456

(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

2022

2022

2022

2021

2021

Asset Quality

Net (recoveries) charge offs to average loans (annualized)

0.01

%

(0.08

)%

(0.02

)%

0.07

%

(0.05

)%

Non-performing loans to total loans

0.98

%

0.92

%

0.87

%

0.83

%

0.82

%

Non-performing assets to total assets

0.76

%

0.71

%

0.64

%

0.60

%

0.58

%

ACL - loans(2) to total loans

1.35

%

1.31

%

1.32

%

1.36

%

1.41

%

ACL - loans(2) to non-performing loans

138

%

143

%

151

%

164

%

171

%

Asset Quality, excluding PPP(1)(3)

Net (recoveries) charge offs to adjusted average loans (annualized)

0.01

%

(0.08

)%

(0.02

)%

0.07

%

(0.05

)%

Non-performing loans to total adjusted loans

0.98

%

0.92

%

0.88

%

0.84

%

0.85

%

ACL - loans(2) to total adjusted loans

1.36

%

1.32

%

1.33

%

1.38

%

1.45

%

Profitability

Return on average assets, annualized

1.07

%

1.10

%

1.02

%

0.94

%

1.13

%

Operating return on average assets, annualized(1)

1.25

%

1.11

%

1.02

%

0.94

%

1.13

%

Return on average common shareholders' equity, annualized

11.24

%

11.57

%

10.03

%

9.34

%

11.45

%

Return on average common shareholders' equity (tangible), annualized(1)

17.31

%

15.23

%

12.88

%

11.89

%

14.56

%

Net interest margin

3.54

%

3.04

%

2.78

%

2.77

%

2.82

%

Efficiency ratio(1)

57.8

%

61.4

%

65.8

%

65.2

%

60.3

%

Non-interest expenses to total average assets

2.55

%

2.35

%

2.31

%

2.34

%

2.17

%

Operating non-interest expenses to total average assets(1)

2.43

%

2.32

%

2.29

%

2.30

%

2.14

%

Capital Ratios

Tangible common equity ratio ("TCE")(1)

6.7

%

7.0

%

7.3

%

7.8

%

7.6

%

TCE ratio, (excluding AOCI)(1)(5)

8.3

%

8.2

%

7.9

%

7.8

%

7.5

%

Tier 1 leverage ratio(4)

9.3

%

9.1

%

8.9

%

8.6

%

8.4

%

Common equity Tier 1 capital ratio(4)

10.0

%

9.9

%

10.0

%

9.9

%

10.1

%

Tier 1 risk-based capital ratio(4)

10.9

%

10.8

%

10.9

%

10.9

%

11.1

%

Total risk-based capital ratio(4)

13.7

%

13.7

%

13.8

%

14.1

%

14.4

%

(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.

(2) "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.

(3) Asset quality information excluding PPP loans.

(4) Regulatory capital ratios as of September 30, 2022 are preliminary and prior periods are actual.

(5) Tangible common equity ("TCE") ratio, excluding accumulated other comprehensive income ("AOCI")

FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)

dollars in thousands

% Change from

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

Sep 30

2022

2022

2022

2021

2021

2022

2021

ASSETS

Cash and due from banks

$

143,465

$

158,605

$

161,462

$

172,276

$

260,564

(9.5

)%

(44.9

)%

Other interest-earning assets

467,164

383,715

1,054,232

1,523,973

2,271,738

21.7

%

(79.4

)%

Loans held for sale

14,411

17,528

27,675

35,768

43,123

(17.8

)%

(66.6

)%

Investment securities

3,936,694

4,117,801

4,288,674

4,167,774