Fulton Financial Announces Fourth Quarter and 2020 Results

Rhea-AI Summary

Fulton Financial Corporation (NASDAQ:FULT) reported a net income of $49 million, or $0.30 per diluted share, for Q4 2020, and $176 million, or $1.08 per diluted share, for the full year. Key highlights include an increase in net interest income to $162 million, driven by Paycheck Protection Program (PPP) loan forgiveness and stable asset quality. However, annual net interest income dropped to $629 million, down $19 million from 2019, amid a declining net interest margin of 2.86%. Total average assets increased to $25.7 billion in Q4 2020, reflecting solid growth despite a challenging low-interest-rate environment.

Positive

• Net income for Q4 2020 was $49 million, demonstrating profitability.
• Net interest income increased by $7.5 million from the previous quarter.
• PPP loan forgiveness contributed to improved fee income recognition.
• Average assets rose to $25.7 billion, indicating growth.
• Stable asset quality was maintained during a challenging economic period.

Negative

• Annual net interest income decreased by $19 million compared to 2019.
• Net interest margin declined to 2.86% from 3.36% in 2019.
• Average loans remained relatively unchanged compared to the third quarter.

Fulton Financial Corporation (NASDAQ:FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $49 million, or $0.30 per diluted share, for the fourth quarter of 2020 and $176 million, or $1.08 per diluted share, for the year ended December 31, 2020.

“We were pleased with our company’s achievements for the 4th quarter and for the year as a whole, given the challenges presented by the lingering presence of COVID-19,” said E. Philip Wenger, Chairman and CEO of Fulton Financial Corporation. “The low interest rate environment continued to put pressure on our margin, but even in this challenging environment, we had stable asset quality, were able to provide Paycheck Protection Program and Main Street loans to our customers, helped our mortgage business grow to historic highs, and saw wealth management business performance that was beyond our expectations.”

Net Interest Income and Balance Sheet

Net interest income for the fourth quarter of 2020 was $162 million, $7.5 million higher than the third quarter of 2020. Net interest margin for the fourth quarter of 2020 increased 5 basis points, to 2.75%, from 2.70% in the third quarter of 2020. The increases in net interest income and net interest margin were primarily due to the forgiveness of Paycheck Protection Program ("PPP") loans and the acceleration of the recognition of related fee income as well as growth in average loans and investments securities during the quarter. For the year ended December 31, 2020, net interest income was $629 million, a decrease of $19 million in comparison to the year ended December 31, 2019, as the 90 basis point decline in yields on average interest-earning assets outpaced the 42 basis point decline in the cost of funds. The net interest margin in 2020 was 2.86% compared 3.36% in 2019.

Total average assets for the fourth quarter of 2020 were $25.7 billion, an increase of $580 million from the third quarter of 2020. Average loans, net of unearned income, were $19.0 billion, relatively unchanged compared to the third quarter of 2020. Beginning in the second quarter of 2020, average loans included loans originated under PPP. PPP loans had an average balance of $1.8 billion for the fourth quarter of 2020, compared to $2.0 billion for the third quarter of 2020.

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

		Three months ended
		December 31, 2020							September 30, 2020							Growth
		Balance				Yield (1)			Balance				Yield (1)			$				%
		(dollars in thousands)
Average Loans, net of unearned income, by type:
Real estate - commercial mortgage		$	7,101,363			3.21	%		$	6,986,528			3.27	%		$	114,835			1.6	%
Commercial and industrial(2)		5,855,305				2.57	%		5,983,872				2.53	%		(128,567)				(2.1)	%
Real estate - residential mortgage		3,087,529				3.65	%		2,975,516				3.73	%		112,013				3.8	%
Real estate - home equity		1,212,113				3.91	%		1,237,602				3.87	%		(25,489)				(2.1)	%
Real estate - construction		1,009,284				3.11	%		981,589				3.84	%		27,695				2.8	%
Consumer		468,678				4.07	%		464,851				4.07	%		3,827				0.8	%
Equipment lease financing		279,059				3.98	%		279,217				3.96	%		(158)				(0.1)	%
Other(3)		(18,817)				N/A			(28,656)				N/A			9,839				(34.3)	%
Total Average Loans, net of unearned income		$	18,994,514			3.45	%		$	18,880,519			3.38	%		$	113,995			0.6	%
(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 $1.8 billion and $2.0 billion for the three months ended December 31, 2020 and September 30, 2020, respectively.
(3) Consists of overdrafts and net origination fees and costs.

Total average assets for the year ended December 31, 2020 were $24.3 billion, an increase of $3.1 billion from 2019. Average loans, net of unearned income, were $18.3 billion, an increase of $1.8 billion from 2019. Included in average loans are loans originated under the PPP, which had an average balance of $1.3 billion for the year ended December 31, 2020. The remaining increase was mainly in residential mortgage loans.

Total average liabilities increased $409 million from the third quarter of 2020 driven by increases in demand and savings deposits. Average deposits and interest rates, by type, for the fourth quarter of 2020 in comparison to the third quarter of 2020 are summarized in the following table:

Three months ended

December 31, 2020

September 30, 2020

Growth

Balance

Rate

FAQ

What were the earnings per share for Fulton Financial in Q4 2020?

Fulton Financial reported earnings of $0.30 per diluted share for Q4 2020.

How much was the net income for Fulton Financial for the year 2020?

The net income for Fulton Financial for the year ended December 31, 2020, was $176 million.

What was the net interest income for Fulton in Q4 2020?

Fulton Financial's net interest income for Q4 2020 was $162 million.

What is the net interest margin for Fulton Financial for 2020?

The net interest margin for Fulton Financial in 2020 was 2.86%.

How did Fulton Financial's total average assets change in Q4 2020?

Total average assets for Fulton Financial increased to $25.7 billion in Q4 2020.