Fulton Financial Corp. is banking on its mortgage portfolio to drive growth in the first quarter and beyond.
Fourth-quarter mortgage banking income increased by $2.4 million, or 53.7%, from the third quarter. On the company's fourth-quarter 2016 earnings call, Chairman, President and CEO E. Philip Wenger said growth in the mortgage loan portfolio will be a "function of our strategic priorities and market pricing in the secondary market." The company's average residential mortgage portfolio increased 6.8% year over year.
"We have been hiring additional mortgage originators. And we have been successful, I think, at picking up market share," Wenger said. "In fact, our percentage of production purchase versus refinance was higher than, I think, the industry average. ... We think we can continue to pick up market share and grow that revenue."
The company's average commercial mortgage portfolio increased 7.4% year over year. Wenger said that growth was spread throughout the company's footprint, but was driven primarily in Pennsylvania. Growth in the Philadelphia market continues to be a goal for the company, he said. Wenger noted that over the past year, the company has added commercial relationship mangers throughout its footprint, and in Philadelphia it also added a regional president. He added that further key additions were made in the company's Small Business Administration commercial leasing and agricultural specialty lending areas.
"We believe these additions, along with improved business activity, improved customer sentiment and [a] more favorable economic outlook will drive growth in 2017 and beyond," Wenger said.
Wenger noted that deposit growth was a "bright spot" for the quarter. Year over year, average deposits increased 6.1% and average core deposits increased 9.3%.
Executives remained relatively mum regarding the Department of Justice investigation involving possible lending discrimination. In the company's third-quarter Form 10-Q, it reported that the DOJ was expanding its investigation to include additional geographies and four of the company's subsidiary banks. Wenger said the company is continuing to cooperate with the department in "all aspects of this investigation" and has no additional information to report.
Fulton Financial reported earnings per share of 24 cents for the fourth quarter of 2016, unchanged from the third quarter of 2016 and an increase from the year-ago period's 22 cents per share. The S&P Capital IQ consensus estimate for normalized EPS in the most recent quarter was 24 cents.