Fulton Financial Corporation (NASDAQ: FULT) reported net income available to common shareholders of $22.4 million, or 13 cents per diluted share, for the first quarter ended March 31, 2010, compared to $19.3 million, or 11 cents per diluted share, for the fourth quarter of 2009.rnr
Fulton Financial Corporation (NASDAQ: FULT) reported net income available to common shareholders of $22.4 million, or 13 cents per diluted share, for the first quarter ended March 31, 2010, compared to $19.3 million, or 11 cents per diluted share, for the fourth quarter of 2009.rnrn”We were pleased to see the continuation of our positive earnings momentum in the first quarter. The results of our allowance allocation process enabled us to again reduce the provision for loan losses,” said R. Scott Smith, Jr., chairman and chief executive officer. “Despite slower loan demand and lower yields on earning assets, we were able to increase net interest income. The net interest margin expanded significantly as funding costs continued to decline. We believe that further stabilization in our credit quality, along with a rebound in overall economic activity, can provide the impetus for further earnings improvement. I want to again express my gratitude to our 3,950-member team for their unwavering commitment and dedication to positioning this company for future growth.”rnrnIn the first quarter of 2010, net income available to common shareholders increased $14.4 million, or 178.3 percent, in comparison to the first quarter of 2009. The increase in net income available to common shareholders was primarily due to a $14.4 million increase in net interest income, a $10.0 million decrease in the provision for loan losses, and a $7.1 million decrease in other expenses. These improvements were partially offset by a $5.1 million decrease in net gains on investment securities and a $4.3 million decrease in other income.rnrnAsset QualityrnrnThe Corporation’s credit quality metrics continued to stabilize in the first quarter of 2010, a trend that began in the second half of 2009. Non-performing assets were $312.2 million, or 1.90 percent of total assets, at March 31, 2010, compared to $305.0 million, or 1.83 percent, at December 31, 2009 and $269.2 million, or 1.63 percent of total assets, at March 31, 2009. The $7.2 million, or 2.4 percent, increase in non-performing assets since December 31, 2009 was primarily due to a $4.3 million increase in non-performing loans and a $2.9 million increase in other real estate owned. The increase in non-performing loans was primarily due to a $9.5 million, or 15.6 percent, increase in non-performing commercial mortgages and an $8.8 million, or 12.6 percent, increase in non-performing commercial loans, offset by a $13.3 million, or 14.3 percent, decrease in non-performing construction loans, largely due to $20.2 million of net charge-offs.rnrnAnnualized net charge-offs for the quarter ended March 31, 2010 were 0.95 percent of average total loans compared to 0.97 percent for the quarter ended December 31, 2009 and 1.00 percent for the quarter ended March 31, 2009. The allowance for credit losses as a percentage of non-performing loans increased to 94.1 percent at the end of the first quarter of 2010 in comparison to 91.4 percent at the end of the fourth quarter of 2009. The provision for loan losses decreased by $5.0 million, or 11.2 percent, in comparison to the prior quarter.rnrnNet Interest Income and MarginrnrnNet interest income for the first quarter of 2010 increased $2.4 million, or 1.8 percent, from the fourth quarter of 2009 and increased $14.4 million, or 11.6 percent, compared to the same period in 2009. The Corporation’s net interest margin was 3.78 percent for the first quarter of 2010, 3.67 percent for fourth quarter of 2009 and 3.45 percent for the first quarter of 2009. The increase in net interest income in comparison to the fourth quarter of 2009 was a result of the 11 basis point, or 3.0 percent, increase in net interest margin, which was mainly driven by the decline in time deposit costs, which decreased from 2.30 percent in the fourth quarter of 2009 to 2.08 percent in the first quarter of 2010. Yields on interest-earning assets decreased 3 basis points, or 0.6 percent, from the fourth quarter of 2009.rnrnAverage Balance SheetrnrnTotal average assets for the first quarter of 2010 were $16.5 billion, unchanged from the fourth quarter of 2009 and $224.2 million, or 1.4 percent, higher than the first quarter of 2009.rnrnAverage loans, net of unearned income, for the first quarter of 2010 decreased $17.5 million, or 0.1 percent, from the fourth quarter of 2009 and decreased $69.5 million, or 0.6 percent, from the first quarter of 2009.rnrn Quarter Endedrn ———————–rn Mar 31 Dec 31 Increase (decrease)rn 2010 2009 $ %rn ———– ———– ———- ———-rn (dollars in thousands)rnLoans, by type:rn Real estate – commercialrn mortgage $ 4,306,270 $ 4,240,436 $ 65,834 1.6%rn Commercial – industrial,rn financial andrn agricultural 3,686,405 3,713,926 (27,521) (0.7%)rn Real estate – homern equity 1,640,912 1,645,524 (4,612) (0.3%)rn Real estate -rn construction 962,175 1,018,057 (55,882) (5.5%)rn Real estate -rn residential mortgage 940,652 925,660 14,992 1.6%rn Consumer 362,212 370,258 (8,046) (2.2%)rn Leasing and other 73,160 75,453 (2,293) (3.0%)rn ———– ———– ———- ———-rnrn Total Loans, net ofrn unearned income $11,971,786 $11,989,314 (17,528) (0.1%)rn =========== =========== ========== ==========rnrnWeak loan demand hampered overall portfolio growth in the first quarter of 2010, continuing a trend which was evidenced throughout the prior year. In comparison to the fourth quarter of 2009, growth in average commercial and residential mortgages was more than offset by a decrease in construction loans as the Corporation actively managed its exposure in this portfolio.rnrnOpportunities for expanding commercial loans continued to be a challenge as economic uncertainty caused business clients to delay expansion plans. The Corporation was able to achieve commercial mortgage growth from both existing customers and new relationships, while maintaining its underwriting standards.rnrnAverage investments were $3.2 billion, a $62.1 million, or 2.0 percent, increase from the fourth quarter of 2009. The increase was due primarily to the reinvestment of portfolio cash flows in collateralized mortgage obligations at the end of the fourth quarter of 2009.rnrnAverage deposits for the first quarter of 2010 decreased $143.2 million, or 1.2 percent, from the fourth quarter of 2009 and increased $1.1 billion, or 10.1 percent, from the first quarter of 2009.rnrn Quarter Endedrn ———————– Increase (decrease)rn Mar 31 Dec 31 ———————-rn 2010 2009 $ %rn ———– ———– ———- ———-rn (dollars in thousands)rnDeposits, by type:rn Noninterest-bearingrn demand $ 1,973,146 $ 1,991,210 $ (18,064) (0.9%)rn Interest-bearing demand 1,981,653 1,969,681 11,972 0.6%rn Savings deposits 2,847,427 2,772,340 75,087 2.7%rn ———– ———– ———- ———-rnTotal, excluding timern deposits 6,802,226 6,733,231 68,995 1.0%rn Time deposits 5,202,975 5,415,169 (212,194) (3.9%)rn ———– ———– ———- ———-rnrn Total Deposits $12,005,201 $12,148,400 $ (143,199) (1.2%)rn ———– ———– ———- ———-rnrnDuring the first quarter of 2010, the Corporation experienced a $69.0 million, or 1.0 percent, increase in demand and savings deposits, offset by a $212.2 million, or 3.9 percent, decrease in time deposits. The increase in core deposits replaced other funding sources such as time deposits, which decreased as a result of lower customer demand.rnrnNon-interest IncomernrnOther income, excluding investment securities gains (losses), decreased $1.5 million, or 3.6 percent, in comparison to the fourth quarter of 2009. Service charges on deposit accounts decreased $907,000, or 6.0 percent, due to a $507,000 decrease in overdraft fees resulting from normal seasonal fluctuations and a $181,000 decrease in cash management fees due to the impact the current rate environment has had on this line of business as customers continue to shift funds to deposit accounts. Gains on sales of mortgage loans decreased $516,000 due to a decrease in refinance volumes.rnrnCompared to the first quarter of 2009, other income, excluding investment securities gains (losses), decreased $4.3 million, or 9.8 percent, primarily due to a $5.2 million decrease in gains on sales of mortgage loans, resulting from a decrease in refinance volumes and a $925,000 decrease in cash management fee income, offset by a $565,000 increase in foreign currency processing revenues and a $442,000 increase in overdraft fees.rnrnInvestment securities losses in the first quarter of 2010 were $2.2 million compared to losses of $1.9 million in the fourth quarter of 2009 and gains of $2.9 million in the first quarter of 2009.
