CORRECTING and REPLACING Fulton Financial Announces First Quarter 2021 Results

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Please replace the release with the following corrected version due to multiple revisions.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210420006149/en/

The updated release reads:

FULTON FINANCIAL ANNOUNCES FIRST QUARTER 2021 RESULTS

Fulton Financial Corporation (NASDAQ: FULT) ("Fulton" or the "Corporation") reported net income available to common shareholders of $70 million, or $0.43 per diluted share, for the first quarter of 2021.

"Fulton achieved solid financial performance during the first quarter, despite the continuing challenges brought about by COVID-19," said E. Philip Wenger, Chairman and CEO of Fulton Financial Corporation. "We experienced record earnings per share, our mortgage business remained strong, our wealth management business grew to record highs, and asset quality remained stable. The balance sheet restructuring we announced in March had minimal net impact on our earnings in the first quarter, but it will meaningfully enhance our net interest income beginning in the second quarter and going forward."

Net Interest Income and Balance Sheet

Net interest income for the first quarter of 2021 was $164 million, $3 million higher than the fourth quarter of 2020. Net interest margin for the first quarter of 2021 increased 4 basis points, to 2.79%, from 2.75% in the fourth quarter of 2020. The increases in net interest income and net interest margin in comparison to the fourth quarter of 2020 were primarily due to the forgiveness of Paycheck Protection Program ("PPP") loans and the recognition of related fee income as well as growth in average investment securities and other earning assets during the quarter.

Total average assets for the first quarter of 2021 were $26.1 billion, an increase of $333 million from the fourth quarter of 2020, driven by growth in other interest-earning assets and investment securities. Average loans, net of unearned income, were $19.0 billion, relatively unchanged compared to the fourth quarter of 2020. Average loans included loans originated under the PPP. Average PPP loans were $1.7 billion for the first quarter of 2021 compared to $1.8 billion for the fourth quarter of 2020. First quarter loan balances were impacted by the net effect of $579 million of PPP loans forgiven and $685 million of new loans originated under the third phase of the PPP in the first quarter of 2021 .

Average loans and yields, by type, for the first quarter of 2021 in comparison to the fourth quarter of 2020 are summarized in the following table:

Three months ended

March 31, 2021

December 31, 2020

Growth

Balance

Yield (1)

Balance

Yield (1)

$

%

(dollars in thousands)

Average Loans, net of unearned income, by type:

Real estate - commercial mortgage

$

7,128,997

3.15

%

$

7,101,363

3.21

%

$

27,634

0.4

%

Commercial and industrial(2)

5,722,080

2.57

%

5,855,305

2.57

%

(133,225

)

(2.3

)

%

Real estate - residential mortgage

3,183,585

3.52

%

3,087,529

3.65

%

96,056

3.1

%

Real estate - home equity

1,175,218

3.75

%

1,212,113

3.91

%

(36,895

)

(3.0

)

%

Real estate - construction

1,054,718

3.09

%

1,009,284

3.11

%

45,434

4.5

%

Consumer

459,038

4.13

%

468,678

4.07

%

(9,640

)

(2.1

)

%

Equipment lease financing

266,405

4.11

%

279,059

3.98

%

(12,654

)

(4.5

)

%

Other(3)

(9,455

)

N/A

(18,817

)

N/A

9,362

(49.8

)

%

Total Average Loans, net of unearned income

$

18,980,586

3.53

%

$

18,994,514

3.45

%

$

(13,928

)

(0.1

)

%

(1) Presented on a fully-taxable equivalent basis using a 21% Federal tax rate and statutory interest expense disallowances.

(2) Includes average PPP loans of $1.7 billion and $1.8 billion for the three months ended March 31, 2021 and December 31, 2020, respectively.

(3) Consists of overdrafts and net origination fees and costs.

Total average liabilities in the first quarter of 2021 increased $241 million, to $23.4 billion, from the fourth quarter of 2020 driven by increases in demand and savings deposits, partially offset by decreases in time deposits and short-term borrowings. Average deposits and interest rates, by type, for the first quarter of 2021 in comparison to the fourth quarter of 2020 are summarized in the following table:

Three months ended

March 31, 2021

December 31, 2020

Growth

Balance

Rate

Balance

Rate

$

%

(dollars in thousands)

Average Deposits, by type:

Noninterest-bearing demand

$

6,672,832

$

6,477,228

$

195,604

3.0

%

Interest-bearing demand

5,832,174

0.08

%

5,762,150

0.10

%

70,024

1.2

%

Savings

6,137,084

0.10

%

5,905,137

0.13

%

231,947

3.9

%

Total average demand and savings

18,642,090

0.06

%

18,144,515

0.07

%

497,575

2.7

%

Brokered

324,364

0.49

%

340,451

0.53

%

(16,087

)

(4.7

)

%

Time

2,150,570

1.23

%

2,306,556

1.39

%

(155,986

)

(6.8

)

%

Total Average Deposits

$

21,117,024

0.18

%

$

20,791,522

0.23

%

$

325,502

1.6

%

Asset Quality

In the first quarter of 2021 a reversal of provision of credit losses of $6 million was recognized, as compared to provisions for credit losses of $6 million, and $44 million for the fourth quarter of 2020 and first quarter of 2020, respectively. Several factors as of the end of the first quarter of 2021 in comparison to the end of the fourth quarter of 2020, including improved economic forecasts and a decrease in specific allocations within the allowance for credit losses for loans evaluated individually, reduced the level of the allowance for credit losses determined to be necessary at the end of the first quarter of 2021, resulting in the negative provision for credit losses.

The $44 million provision for credit losses in the first quarter of 2020 was driven primarily by assessment of the initial estimated impacts of the COVID-19 pandemic, as reflected in economic forecasts as of the end of the first quarter of 2020, on the level of expected credit losses.

Non-performing assets were $156 million, or 0.60% of total assets, at March 31, 2021, compared to $151 million, or 0.58% of total assets, and $147 million, or 0.64% of total assets at December 31, 2020 and March 31, 2020, respectively.

Annualized net charge-offs for the quarter ended March 31, 2021 were 0.13% of total average loans, compared to annualized net recoveries of 0.07% and annualized net charge-offs of 0.26% for the quarters ended December 31, 2020 and March 31, 2020, respectively.

Non-interest Income

Non-interest income in the first quarter of 2021, excluding investment securities gains, was $62 million, an increase of $6 million, or 11%, from the fourth quarter of 2020, primarily driven by increases of $5 million in mortgage banking income and $2 million in wealth management fees. The increase in mortgage banking income was due to a $6 million reversal of the valuation allowance for mortgage servicing assets.

Compared to the first quarter of 2020, non-interest income, excluding investment securities gains, in the first quarter of 2021 increased $7 million, or 13%, from $55 million, primarily driven by an $8 million increase in mortgage banking income, resulting from a combination of higher mortgage sales gains and a $6 million reversal of the mortgage servicing valuation allowance, both due to lower mortgage interest rates.

In the first quarter of 2021, Fulton completed a balance sheet restructuring involving gains on sales of Visa, Inc. Class B restricted shares of $34 million, which were offset in non-interest expense by corresponding debt extinguishment costs of $32 million, other securities losses of $0.4 million and a write-off of $1 million recognized in net interest income in connection with the purchase of certain of the Corporation's outstanding senior and subordinated notes and the prepayment of certain term Federal Home Loan Bank advances.

Non-interest Expense

Non-interest expense was $178 million in the first quarter of 2021, an increase of $24 million compared to the fourth quarter of 2020, which was driven by costs recognized during the first quarter of 2021 associated with the aforementioned balance sheet restructuring. In the fourth quarter of 2020, $15 million of charges, reflected in salaries and employee benefits and other expense, were recognized in connection with the cost saving initiatives announced in October 2020.

Compared to the first quarter of 2020, non-interest expense increased $36 million, or 25% in the first quarter of 2021, due primarily to costs associated with the previously mentioned balance sheet restructuring. Other increases were recognized in salaries and employee benefits and data processing and software, partially offset by lower professional fees.

Income Tax Expense

The effective income tax rate (ETR) for the first quarter of 2021 was 16%, as compared to 10% for both the fourth quarter of 2020 and first quarter of 2020. The increase was a result of higher income before income taxes.

Additional information on Fulton is available on the Internet at www.fult.com.

Safe Harbor Statement

This news 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, they 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, 2020 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission and are or will be available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov).

Non-GAAP Financial Measures

The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.

FULTON FINANCIAL CORPORATION

SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)

in thousands, except per-share data and percentages

Three months ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

2021

2020

2020

2020

2020

Ending Balances

Investments

$

3,612,010

$

3,340,424

$

3,097,721

$

2,974,813

$

3,141,440

Loans, net of unearned income

18,990,986

18,900,820

19,028,621

18,704,722

17,077,403

Total assets

25,892,990

25,906,733

25,543,281

24,617,863

22,929,859

Deposits

21,633,838

20,839,207

20,730,051

19,884,208

17,365,026

Shareholders' equity

2,629,655

2,616,828

2,390,261

2,340,501

2,285,748

Average Balances

Investments

$

3,448,166

$

3,221,289

$

2,977,672

$

3,096,632

$

3,071,828

Loans, net of unearned income

18,980,586

18,994,514

18,880,519

18,331,797

16,860,067

Total assets

26,082,816

25,749,405

25,169,508

24,139,116

22,252,099

Deposits

21,117,024

20,791,522

20,388,447

19,276,658

17,121,428

Shareholders' equity

2,637,098

2,544,866

2,374,091

2,309,133

2,337,016

Income Statement

Net interest income

$

164,448

$

161,591

$

154,116

$

152,754

$

160,746

Provision for credit losses

(5,500

)

6,240

7,080

19,570

44,030

Non-interest income

95,397

55,574

63,248

55,922

54,644

Non-interest expense

178,384

154,737

139,147

143,006

142,552

Income before taxes

86,961

56,187

71,137

46,101

28,808

Net income available to common shareholders

70,472

48,690

61,607

39,559

26,047

Pre-provision net revenue(1)

81,795

64,092

80,043

67,125

74,374

Per Share

Net income available to common shareholders (basic)

$

0.43

$

0.30

$

0.38

$

0.24

$

0.16

Net income available to common shareholders (diluted)

$

0.43

$

0.30

$

0.38

$

0.24

$

0.16

Cash dividends

$

0.14

$

0.17

$

0.13

$

0.13

$

0.13

Common shareholders' equity

$

14.99

$

14.93

$

14.74

$

14.45

$

14.16

Common shareholders' equity (tangible)(1)

$

11.69

$

11.62

$

11.44

$

11.15

$

10.84

Weighted average shares (basic)

162,441

162,242

162,061

161,715

163,475

Weighted average shares (diluted)

163,737

163,071

162,579

162,267

164,417

(1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.

Three months ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

2021

2020

2020

2020

2020

Asset Quality

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

0.13

%

(0.07

)%

)%

0.09

%

0.26

%

Non-performing loans to total loans

0.80

%

0.78

%

0.75

%

0.75

%

0.82

%

Non-performing assets to total assets

0.60

%

0.58

%

0.57

...

%

0.59

%

0.64

%

ACL - loans(2) to total loans

1.40

%

1.47

%

1.40

%

1.37

%

1.40

%

ACL - loans(2) to non-performing loans

174

%

189

%

188

%

183

%

170

%

Asset Quality, excluding PPP(1)(3)

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

0.14

%

(0.08

)%

(0.06

)%

0.10

%

%

Non-performing loans to total adjusted loans

0.88

%

0.85

%

0.83

%

0.83

%

%

ACL - loans(2) to total adjusted loans

1.54

%

1.60

%

1.56

%

1.53

%

%

Profitability

Return on average assets

1.14

%

0.79

%

0.97

%

0.66

%

0.47

%

Return on average shareholders' equity

11.24

%

7.95

%

10.32

%

6.89

%

4.48

%

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

15.00

%

10.32

%

13.50

%

8.99

%

5.84

%

Net interest margin

2.79

%

2.75

%

2.70

%

2.81

%

3.21

%

Efficiency ratio(1)

63.0

%

62.5

%

62.3

%

66.4

%

64.5

%

Capital Ratios

Tangible common equity ratio(1)

7.5

%

7.4

%

7.4

%

7.5

%

7.8

%

Tier 1 leverage ratio(4)

8.3

%

8.2

%

7.4

%

7.6

%

7.9

%

Common equity Tier 1 capital ratio(4)

9.8

%

9.5

%

9.5

%

9.5

%

9.4

%

Tier 1 capital ratio(4)

10.8

%

10.5

%

9.5

%

9.5

%

9.4

%

Total risk-based capital ratio(4)

14.2

%

14.4

%

13.9

%

13.8

%

13.8

%

(1) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.

(2) "ACL - loans" relates to the allowance for credit losses ("ACL") specifically on "Loans, net of unearned income" and does not include the ACL related to off-balance-sheet ("OBS") credit exposures.

(3) Asset quality information excluding Paycheck Protection Program ("PPP") loans. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this document.

(4) Regulatory capital ratios as of March 31, 2021 are preliminary and prior periods are actual.

FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)

dollars in thousands

% Change from

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

Mar 31

2021

2020

2020

2020

2020

2020

2020

ASSETS

Cash and due from banks

$

102,570

$

120,462

$

139,304

$

141,702

$

181,777

(14.9

)

%

(43.6

)

%

Other interest-earning assets

1,625,515

1,819,499

1,489,550

1,007,939

793,572

(10.7

)

%

104.8

%

Loans held for sale

34,092

83,886

93,621

77,415

40,645

(59.4

)

%

(16.1

)

%

Investment securities

3,612,010

3,340,424

3,097,721

2,974,813

3,141,440

8.1

%

15.0

%

Net Loans

18,990,986

18,900,820

19,028,621

18,704,722

17,077,403

0.5

%

11.2

%

Less: ACL - loans(1)

(265,986

)

(277,567

)

(266,825

)

(256,537

)

(238,508

)

(4.2

)

%

11.5

%

Loans, net

18,725,000

18,623,253

18,761,796

18,448,185

16,838,895

0.5

%

11.2

%

Net, premises and equipment

229,035

231,480

236,943

239,596

236,908

(1.1

)

%

(3.3

)

%

Accrued interest receivable

65,649

72,942

70,766

73,720

59,365

(10.0

)

%

10.6

%

Goodwill and intangible assets

536,544

536,659

534,907

535,039

535,171

%

0.3

%

Other assets

962,575

1,078,128

1,118,673

1,119,454

1,102,086

(10.7

)

%

(12.7

)

%

Total Assets

$

25,892,990

$

25,906,733

$

25,543,281

$

24,617,863

$

22,929,859

(0.1

)

%

12.9

%

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits

$

21,633,838

$

20,839,207

$

20,730,051

$

19,884,208

$

17,365,026

3.8

%

24.6

%

Short-term borrowings

520,989

630,066

611,727

572,551

1,386,808

(17.3

)

%

(62.4

)

%

Other liabilities

482,101

524,369

515,230

525,407

513,811

(8.1

)

%

(6.2

)

%

FHLB advances and long-term debt

626,407

1,296,263

1,296,012

1,295,196

1,378,466

(51.7

)

%

(54.6

)

%

Total Liabilities

23,263,335

23,289,905

23,153,020

22,277,362

20,644,111

(0.1

)

%

12.7

%

Shareholders' equity

2,629,655

2,616,828

2,390,261

2,340,501

2,285,748

0.5

%

15.0

%

Total Liabilities and Shareholders' Equity

$

25,892,990

$

25,906,733

$

25,543,281

$

24,617,863

$

22,929,859

(0.1

)

%

12.9

%

LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:

Loans, by type:

Real estate - commercial mortgage

$

7,142,137

$

7,105,092

$

7,046,330

$

6,934,936

$

6,895,069

0.5

%

3.6

%

Commercial and industrial

3,986,858

4,088,561

4,007,278

4,033,439

4,450,557

(2.5

)

%

(10.4

)

%

Real estate - residential mortgage

3,254,058

3,141,915

3,061,835

2,862,226

2,718,290

3.6

%

19.7

%

Real estate - home equity

1,149,958

1,202,913

1,222,709

1,251,455

1,292,677

(4.4

)

%

(11.0

)

%

Real estate - construction

1,083,494

1,047,218

1,007,534

972,909

947,768

3.5

%

14.3

%

Consumer

451,857

466,772

469,551

465,610

468,172

(3.2

)

%

(3.5

)

%

Equipment lease financing

260,907

279,118

280,286

281,897

289,726

(6.5

)

%

(9.9

)

%

Other(2)

(26,677

)

(12,481

)

(27,067

)

(34,784

)

15,144

113.7

%

N/M

Loans, net of unearned income before PPP

17,302,592

17,319,108

17,068,456

16,767,688

17,077,403

(0.1

)

%

1.3

%

PPP

1,688,394

1,581,712

1,960,165

1,937,034

6.7

%

N/M

Total Loans, net of unearned income

$

18,990,986

$

18,900,820

$

19,028,621

$

18,704,722

$

17,077,403

0.5

%

11.2

%

Deposits, by type:

Noninterest-bearing demand

$

7,046,116

$

6,531,002

$

6,378,077

$

6,239,055

$

4,531,872

7.9

%

55.5

%

Interest-bearing demand

5,959,909

5,818,564

5,813,935

5,099,405

4,724,520

2.4

%

26.1

%

Savings

6,244,513

5,929,792

5,805,431

5,667,893

5,092,865

5.3

%

22.6

%

Total demand and savings

19,250,538

18,279,358

17,997,443

17,006,353

14,349,257

5.3

%

34.2

%

Brokered

309,873

335,185

317,588

310,689

313,337

(7.6

)

%

(1.1

)

%

Time

2,073,427

2,224,664

2,415,020

2,567,166

2,702,432

(6.8

)

%

(23.3

)

%

Total Deposits

$

21,633,838

$

20,839,207

$

20,730,051

$

19,884,208

$

17,365,026

3.8

%

24.6

%

Short-term borrowings, by type:

Customer funding

$

520,989

$

630,066

$

611,727

$

572,551

$

461,808

(17.3

)

%

12.8

%

Federal funds purchased

200,000

N/M

(100.0

)

%

Short-term FHLB advances

725,000

N/M

(100.0

)

%

Total Short-term Borrowings

$

520,989

$

630,066

$

611,727

$

572,551

$

1,386,808

(17.3

)

%

(62.4

)

%

N/M - Not meaningful

(1) "ACL - loans" relates to the ACL specifically on "Loans, net of unearned income" and does not include the ACL related to OBS credit

exposures.

(2) Consists of overdrafts and net origination fees and costs.

FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

dollars in thousands

Three Months Ended

% Change from

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

Mar 31

2021

2020

2020

2020

2020

2020

2020

Interest Income:

Interest income

$

184,936

$

183,645

$

179,159

$

180,696

$

199,378

0.7

%

(7.2

)

%

Interest expense

20,488

22,054

25,043

27,942

38,632

(7.1

)

%

(47.0

)

%

Net Interest Income

164,448

161,591

154,116

152,754

160,746

1.8

%

2.3

%

Provision for credit losses

(5,500

)

6,240

7,080

19,570

44,030

N/M

(112.5

)

%

Net Interest Income after Provision

169,948

155,351

147,036

133,184

116,716

9.4

%

45.6

%

Non-Interest Income:

Commercial banking:

Merchant and card

5,768

5,953

6,237

5,326

5,624

(3.1

)

%

2.6

%

Cash management

4,921

4,737

4,742

4,503

4,742

3.9

%

3.8

%

Capital markets

2,800

3,513

4,696

5,004

5,075

(20.3

)

%

(44.8

)

%

Other commercial banking

2,853

2,606

2,636

1,914

2,978

9.5

%

(4.2

)

%

Total commercial banking

16,342

16,809

18,311

16,748

18,419

(2.8

)

%

(11.3

)

%

Consumer banking:

Card

5,878

5,123

5,002

4,966

4,685

14.7

%

25.5

%

Overdraft

2,724

3,376

3,015

2,107

4,058

(19.3

)

%

(32.9

)

%

Other consumer banking

2,152

2,298

2,406

2,065

2,496

(6.4

)

%

(13.8

)

%

Total consumer banking

10,754

10,797

10,423

9,138

11,239

(0.4

)

%

(4.3

)

%

Wealth management

17,347

15,653

14,943

13,407

15,055

10.8

%

15.2

%

Mortgage banking

13,960

9,311

16,801

9,964

6,234

49.9

%

123.9

%

Other

3,519

3,004

2,769

3,660

3,651

17.1

%

(3.6

)

%

Non-interest income before investment securities gains

61,922

55,574

63,246

52,917

54,598

11.4

%

13.4

%

Investment securities gains, net

33,475

2

3,005

46

N/M

N/M

Total Non-Interest Income

95,397

55,574

63,248

55,922

54,644

71.7

%

74.6

%

Non-Interest Expense:

Salaries and employee benefits

82,586

83,929

79,227

81,012

80,228

(1.6

)

%

2.9

%

Net occupancy

13,982

13,161

13,221

13,144

13,486

6.2

%

3.7

%

Data processing and software

13,561

11,951

12,285

12,193

11,645

13.5

%

16.5

%

Other outside services

8,490

8,334

7,617

7,600

7,881

1.9

%

7.7

%

Equipment

3,428

3,563

3,711

3,193

3,418

(3.8

)

%

0.3

%

Professional fees

2,779

2,424

2,879

3,331

4,202

14.6

%

(33.9

)

%

FDIC insurance

2,624

2,346

1,578

2,133

2,808

11.8

%

(6.6

)

%

Amortization of tax credit investments

1,531

1,532

1,694

1,450

1,450

(0.1

)

%

5.6

%

Marketing

1,002

1,098

1,147

1,303

1,579

(8.7

)

%

(36.5

)

%

Intangible amortization

115

132

132

132

132

(12.9

)

%

(12.9

)

%

Debt extinguishment

32,163

2,878

N/M

N/M

Other

16,123

26,268

15,654

14,637

15,723

(38.6

)

%

2.5

%

Total Non-Interest Expense

178,384

154,737

139,145

143,006

142,552

15.3

%

25.1

%

Income Before Income Taxes

86,961

56,187

71,139

46,100

28,808

54.8

%

N/M

Income tax expense

13,898

5,362

9,529

6,542

2,761

N/M

N/M

Net Income

73,063

50,825

61,610

39,558

26,047

43.8

%

N/M

Preferred stock dividends

(2,591

)

(2,135

)

21.4

%

N/M

Net Income Available to Common Shareholders

$

70,472

$

48,690

$

61,610

$

39,558

$

26,047

44.7

%

N/M

PER SHARE:

Net income:

Basic

$

0.43

$

0.30

$

0.38

$

0.24

$

0.16

43.3

%

N/M

Diluted

0.43

0.30

0.38

0.24

0.16

43.3

%

N/M

Cash dividends

0.14

0.17

0.13

0.13

0.13

(17.6

)

%

7.7

%

Weighted average shares (basic)

162,441

162,242

162,061

161,715

163,475

0.1

%

(0.6

)

%

Weighted average shares (diluted)

163,737

163,071

162,579

162,267

164,417

0.4

%

(0.4

)

%

FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)

dollars in thousands

Three months ended

March 31, 2021

December 31, 2020

March 31, 2020

Average

Interest

Yield/

Average

Interest

Yield/

Average

Interest

Yield/

Balance

(1)

Rate

Balance

(1)

Rate

Balance

(1)

Rate

ASSETS

Interest-earning assets:

Loans, net of unearned income

$

18,980,586

$

165,462

3.53

%

$

18,994,514

$

164,329

3.45

%

$

16,860,067

$

177,496

4.23

%

Taxable investment securities

2,438,496

13,691

2.08

%

2,233,730

13,559

2.43

%

2,284,457

16,294

2.85

%

Tax-exempt investment securities

911,648

7,156

3.13

%

886,329

7,044

3.17

%

720,223

5,960

3.29

%

Total Investment Securities

3,350,144

20,847

2.49

%

3,120,059

20,603

2.64

%

3,004,680

22,254

2.96

%

Loans held for sale

53,465

471

3.53

%

76,871

521

2.71

%

27,178

320

4.71

%

Other interest-earning assets

1,900,199

1,136

0.24

%

1,668,454

1,179

0.28

%

602,270

2,532

1.69

%

Total Interest-earning Assets

24,284,394

187,916

3.13

%

23,859,898

186,632

3.12

%

20,494,195

202,602

3.97

%

Noninterest-earning assets:

Cash and due from banks

120,181

126,190

138,248

Premises and equipment

230,649

236,265

239,619

Other assets

1,728,473

1,799,381

1,590,666

Less: ACL - loans(2)

(280,881

)

(272,329

)

(210,629

)

Total Assets

$

26,082,816

$

25,749,405

$

22,252,099

LIABILITIES AND SHAREHOLDERS' EQUITY

Interest-bearing liabilities:

Demand deposits

$

5,832,174

$

1,160

0.08

%

$

5,762,150

$

1,457

0.10

%

$

4,649,905

$

5,643

0.49

%

Savings deposits

6,137,084

1,526

0.10

%

5,905,137

1,866

0.13

%

5,127,662

7,110

0.56

%

Brokered deposits

324,364

395

0.49

%

340,451

451

0.53

%

275,359

1,073

1.57

%

Time deposits

2,150,570

6,521

1.23

%

2,306,556

8,082

1.39

%

2,761,474

12,614

1.84

%

Total Interest-bearing Deposits

14,444,192

9,602

0.27

%

14,314,294

11,856

0.33

%

12,814,400

26,440

0.83

%

Short-term borrowings

570,775

188

0.13

%

622,623

268

0.17

%

1,303,047

4,073

1.25

%

FHLB advances and long-term debt

1,271,170

10,698

3.38

%

1,296,139

9,930

3.06

%

1,063,214

8,119

3.06

%

Total Interest-bearing Liabilities

16,286,137

20,488

0.51

%

16,233,056

22,054

0.54

%

15,180,661

38,632

1.02

%

Noninterest-bearing liabilities:

Demand deposits

6,672,832

6,477,228

4,307,027

Total Deposits/Cost of Deposits

21,117,024

0.18

%

20,791,522

0.23

%

17,121,427

0.62

%

Other

486,749

494,255

427,395

Total Liabilities

23,445,718

23,204,539

19,915,083

Total Interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds")

22,958,969

0.36

%

22,710,284

0.39

%

19,487,688

0.80

%

Shareholders' equity

2,637,098

2,544,866

2,337,016

Total Liabilities and Shareholders' Equity

$

26,082,816

$

25,749,405

$

22,252,099

Net interest income/net interest margin (fully taxable equivalent)

167,428

2.79

%

164,578

2.75

%

$

163,970

3.21

%

Tax equivalent adjustment

(2,979

)

(2,987

)

$

(3,224

)

Net interest income

$

164,449

$

161,591

$

160,746

(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances.

(2) "ACL - loans" relates to the ACL specifically on "Loans, net of unearned income" and does not include the ACL related to OBS credit exposures.

FULTON FINANCIAL CORPORATION

AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL (UNAUDITED):

dollars in thousands

Three months ended

% Change from

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

Mar 31

2021

2020

2020

2020

2020

2020

2020

Loans, by type:

Real estate - commercial mortgage

$

7,128,997

$

7,101,363

$

6,986,528

$

6,875,872

$

6,746,766

0.4

%

5.7

%

Commercial and industrial

4,033,367

4,024,879

4,030,750

4,451,228

4,446,750

0.2

%

(9.3

)

%

Real estate - residential mortgage

3,183,585

3,087,529

2,975,516

2,769,682

2,670,019

3.1

%

19.2

%

Real estate - home equity

1,175,218

1,212,113

1,237,602

1,271,190

1,300,132

(3.0

)

%

(9.6

)

%

Real estate - construction

1,054,718

1,009,284

981,589

941,079

929,529

4.5

%

13.5

%

Consumer

459,038

468,678

464,851

465,728

466,415

(2.1

)

%

(1.6

)

%

Equipment lease financing

266,405

279,059

279,217

284,658

284,566

(4.5

)

%

(6.4

)

%

Other(1)

(9,455

)

(18,817

)

(28,656

)

13,443

15,890

(49.8

)

%

N/M

Loans, net of unearned income before PPP

17,291,873

17,164,088

16,927,397

17,072,880

16,860,067

0.7

%

2.6

%

PPP

1,688,713

1,830,426

1,953,122

1,258,917

(7.7

)

%

N/M

Total Loans, net of unearned income

$

18,980,586

$

18,994,514

$

18,880,519

$

18,331,797

$

16,860,067

(0.1

)

%

12.6

%

Deposits, by type:

Noninterest-bearing demand

$

6,672,832

$

6,477,228

$

6,270,683

$

5,789,788

$

4,307,027

3.0

%

54.9

%

Interest-bearing demand

5,832,174

5,762,150

5,591,548

5,103,419

4,649,905

1.2

%

25.4

%

Savings

6,137,084

5,905,137

5,716,050

5,446,368

5,127,662

3.9

%

19.7

%

Total demand and savings

18,642,090

18,144,515

17,578,281

16,339,575

14,084,594

2.7

%

32.4

%

Brokered

324,364

340,451

314,721

312,121

275,359

(4.7

)

%

17.8

%

Time

2,150,570

2,306,556

2,495,445

2,624,962

2,761,474

(6.8

)

%

(22.1

)

%

Total Deposits

$

21,117,024

$

20,791,522

$

20,388,447

$

19,276,658

$

17,121,427

1.6

%

23.3

%

Short-term borrowings, by type:

Customer funding

$

570,775

$

622,623

$

613,127

$

546,716

$

428,240

(8.3

)

%

33.3

%

Federal funds purchased

74,231

186,868

N/M

(100.0

)

%

Short-term FHLB advances and other borrowings

86,824

687,937

N/M

(100.0

)

%

Total Short-term borrowings

$

570,775

$

622,623

$

613,127

$

707,771

$

1,303,045

(8.3

)

%

(56.2

)

%

(1) Consists of overdrafts and net origination fees and costs.

FULTON FINANCIAL CORPORATION

ASSET QUALITY INFORMATION (UNAUDITED)

dollars in thousands

Three months ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

2021

2020

2020

2020

2020

Allowance for credit losses related to Loans, net of unearned income:

Balance at beginning of period

$

277,567

$

266,825

$

256,537

$

238,508

$

163,620

Impact of adopting CECL

45,724

Loans charged off:

Commercial and industrial

(4,319

)

(1,567

)

(2,969

)

(3,480

)

(10,899

)

Real estate - commercial mortgage

(1,837

)

(300

)

(746

)

(2,324

)

(855

)

Consumer and home equity

(847

)

(668

)

(1,093

)

(1,303

)

(1,529

)

Real estate - residential mortgage

(192

)

(198

)

(235

)

(187

)

Real estate - construction

(39

)

(17

)

Equipment lease financing and other

(968

)

(483

)

(483

)

(688

)

(533

)

Total loans charged off

(8,202

)

(3,018

)

(5,489

)

(8,047

)

(14,003

)

Recoveries of loans previously charged off:

Commercial and industrial

769

4,581

2,103

2,978

1,734

Real estate - commercial mortgage

174

588

100

95

244

Consumer and home equity

440

594

491

649

646

Real estate - residential mortgage

95

199

95

112

85

Real estate - construction

384

179

4,873

70

Equipment lease financing and other

159

219

185

92

108

Recoveries of loans previously charged off

2,021

6,360

7,847

3,926

2,887

Net loans recovered (charged off)

(6,181

)

3,342

2,358

(4,121

)

(11,116

)

Provision for credit losses

(5,400

)

7,400

7,930

22,150

40,280

Balance at end of period

$

265,986

$

277,567

$

266,825

$

256,537

$

238,508

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

0.13

%

(0.07

)

%

(0.05

)

%

0.09

%

0.26

%

Allowance credit losses related to OBS Credit Exposures(1)

Balance at beginning of period

$

14,373

$

15,533

$

16,383

$

18,963

$

2,588

Impact of adopting CECL

12,625

Provision for credit losses

(100

)

(1,160

)

(850

)

(2,580

)

3,750

Balance at end of period

$

14,273

$

14,373

$

15,533

$

16,383

$

18,963

NON-PERFORMING ASSETS:

Non-accrual loans

$

143,889

$

137,198

$

128,321

$

125,037

$

120,345

Loans 90 days past due and accruing

8,559

9,929

13,761

14,767

19,593

Total non-performing loans

152,448

147,127

142,082

139,804

139,938

Other real estate owned

3,664

4,178

4,565

5,418

6,593

Total non-performing assets

$

156,112

$

151,305

$

146,647

$

145,222

$

146,531

NON-PERFORMING LOANS, BY TYPE:

Commercial and industrial

$

31,871

$

32,610

$

37,224

$

39,730

$

41,318

Real estate - commercial mortgage

54,164

52,647

43,426

42,374

36,538

Real estate - residential mortgage

36,152

30,793

28,287

22,887

25,832

Consumer and home equity

13,072

13,090

12,292

11,911

11,226

Real estate - construction

1,440

1,550

4,051

4,525

4,379

Equipment lease financing and other

15,749

16,437

16,802

18,377

20,645

Total non-performing loans

$

152,448

$

147,127