Fulton Financial Corporation (NASDAQ: FULT) (“Fulton” or the “Corporation”) declared net income of $62.10M, or $0.370 for each diluted share, for the 3rd-quarter of 2k19, and net income of $178.60M, or $1.060 for each diluted share, for the nine months finished September 30, 2k19.
“Overall, we were happy with our 3rd-quarter results. Our consumer and commercial businesses had strong loan growth during the quarter despite the competitive headwinds in the market. Other positives for the quarter included stable credit conditions, solid fee income growth and essentially flat operating costs, linked quarter, apart from charter consolidation costs, prepayment penalties on FHLB advances and FDIC insurance credits,” said E. Philip Wenger, Chairman, and CEO. “On the corporate front, we merged our last remaining associate banks into Fulton Bank in September. Also, in early October the Department of Justice informed us that the Department had accomplished its fair lending investigation of Fulton without taking any action against the company. These are two important milestones that should assist facilitate growth moving forward.”
Net income for each diluted share raised 5.70 percent in comparison to the $0.350 stated for the 2nd-quarter of 2k19 and remained unchanged from the $0.370 stated for the 3rd-quarter of 2k18. The incline in net income over the 2nd-quarter of 2k19 was the result of inclines in non-interest income and a decline in the provision for credit losses, partially offset by a decline in net interest income and a boost in non-interest cost.
Net Interest Income and Balance Sheet
Net interest income for the 3rd-quarter of 2k19 was $161.30M, a $3.30M decline from the 2nd-quarter of 2k19. The decline resulted from the impact of a 13.0 basis point decline in net interest margin, partially offset by balance sheet growth. The decline in net interest margin resulted from a 12.0 basis point decline in the yield on interest-earning assets and a one basis point incline in average cost of funds. The declines in asset yields were mainly the result of the 25.0 basis point declines in the federal funds’ target rate in July and in September 2k19, which had a more pronounced impact on loan yields than overall funding costs.
Total average assets for the 3rd-quarter of 2k19 were $21.50B, a boost of $400.80M from the 2nd-quarter of 2k19, with average loans, net of unearned income, increasing $121.00M, average other interest-earning assets increasing $100.00M and the remaining incline occurring mainly in non interest-earning assets.
Total average liabilities raised $386.40M, or 2.10 percent, from the 2nd-quarter of 2k19, with a $575.20M, or 3.50 percent, incline in average deposits being partially offset by a $209.20M, or 19.90 percent, decline in average Federal Home Loan Bank (FHLB) advances and long-term debt.
The provision for credit losses for the 3rd-quarter of 2k19 was $2.20M, down from $5.00M for the 2nd-quarter of 2k19.
Non-performing assets were $143.70M, or 0.660 percent of total assets, at September 30, 2k19, contrast to $155.00M, or 0.730 percent of total assets, at June 30, 2k19 and $130.80M, or 0.640 percent of total assets, at September 30, 2k18.
Annualized net charge-offs for the quarter finished September 30, 2k19 were 0.150 percent of total average loans, contrast to net recoveries of 0.040 percent for the quarter finished June 30, 2k19. The allowance for credit losses as a percentage of non-performing loans was 127.00 percent at September 30, 2k19, contrast to 120.00 percent at June 30, 2k19.
Non-interest income in the 3rd-quarter of 2k19, apart from investment securities gains, was $55.30M, a boost of $1.20M, or 2.20 percent, in comparison to the 2nd-quarter of 2k19 and a boost of $4.30M, or 8.40 percent, a contrast to the 3rd-quarter of 2k18.
The non-interest cost was $146.80M in the 3rd-quarter of 2k19, a boost of $2.60M, or 1.80 percent, contrast to the 2nd-quarter of 2k19 and a boost of $11.40M, or 8.40 percent, contrast to the 3rd-quarter of 2k18.
Costs incurred in the 3rd-quarter of 2k19 related to the consolidation of the remaining partner banks were comparable to the prior quarter, totaling about $5.20M, mainly in outside services and other costs. Inclines were realized in other costs, counting about $4.30M of penalties related to the prepayment of certain FHLB advances in conjunction with the formerly mentioned balance sheet restructuring. These inclines were partially offset by declines in occupancy costs and FDIC insurance because of the recognition of assessment credits of $2.60M in the 3rd-quarter of 2k19.
Income Tax Cost
The effective income tax rate for the 3rd-quarter of 2k19 was 13.90 percent, as contrast to 14.20 percent for the 2nd-quarter of 2k19.