Safe and Sound

Fulton Bank, National Association

Lancaster, PA
4
Star Rating
Lancaster, PA-based Fulton Bank, National Association is an FDIC-insured bank founded in 1882. As of December 31, 2017, the bank held equity of $1.36 billion on assets of $11.53 billion.

Thanks to the work of 1,273 full-time employees in 117 offices in multiple states, the bank holds loans and leases worth $9.39 billion, including real estate loans of $6.59 billion. The bank currently holds $8.65 billion in deposits from U.S. customers.

Overall, Bankrate believes that, as of December 31, 2017, Fulton Bank, National Association exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a breakdown of how the bank did on the three major criteria Bankrate used to evaluate American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital is an essential measurement of a bank's financial strength. It works as a cushion against losses and affords protection for accountholders during periods of financial instability for the bank. When it comes to safety and soundness, the higher the capital, the better.

On our test to measure the adequacy of a bank's capital, Fulton Bank, National Association received a score of 10 out of a possible 30 points, falling short of the national average of 13.19.

One widely used measure of this buffer is a bank's Tier 1 capital ratio. Fulton Bank, National Association's Tier 1 capital ratio was 10.91 percent, above the 6 percent level considered adequate by regulators, but lower than the national average of 25.67 percent. A higher capital ratio means the bank will be better able to stand up to economic difficulties.

Overall, Fulton Bank, National Association held equity amounting to 11.41 percent of its assets, which was lower than the national average of 12.04 percent.

Asset Quality Score

Bankrate uses this test to estimate the effect of troubled assets, such as unpaid loans, on the bank's capitalization and allocated loan loss reserves.

Having lots of these kinds of assets may eventually force a bank to use capital to cover losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, pushing down earnings and elevating the risk of a failure in the future.

Fulton Bank, National Association scored below the national average of 37.70 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, 0.87 percent of Fulton Bank, National Association's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.14 percent.

Banks maintain a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the reserve's size to the total amount of at-risk loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on Fulton Bank, National Association's loan loss allowance in its most recent filings.

Earnings score

A bank's earnings performance has an effect on its safety and soundness. A bank can retain its earnings, giving a boost to its capital buffer, or use them to deal with problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, lessen a bank's ability to do those things.

On Bankrate's test of earnings, Fulton Bank, National Association scored 18 out of a possible 30, beating the national average of 16.06.

One important measure of a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for Fulton Bank, National Association was 9.12 percent, above the national average of 8.10 percent.

The bank recorded net income of $115.6 million on total equity of $1.36 billion for the twelve months ended December 31, 2017. The bank experienced an annualized return on average assets, or ROA, of 1.03 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.