SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

January 17, 2012 16:30 ET

Fulton Financial Reports 2011 Earnings

LANCASTER, PA--(Marketwire - Jan 17, 2012) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the fourth quarter of 2011 was 18 cents, a 10.0 percent decrease from the third quarter of 2011 and a 12.5 percent increase from the fourth quarter of 2010. For the year ended December 31, 2011, diluted earnings per share was 73 cents, a 23.7 percent increase from 2010.
  • Net interest income for the fourth quarter of 2011 decreased $3.0 million, or 2.1 percent, compared to the third quarter of 2011 due to a decrease in net interest margin of 12 basis points, or 3.1 percent. For the year ended December 31, 2011, net interest income increased $1.4 million, or 0.3 percent, in comparison to 2010. Net interest margin was 3.90 percent for 2011 compared to 3.80 percent for 2010.
  • Non-performing loans decreased $24.1 million, or 7.8 percent, in comparison to the third quarter of 2011 and $42.2 million, or 12.8 percent, in comparison to December 31, 2010. In December 2011, the Corporation sold $34.7 million of non-performing residential mortgages and $152,000 of non-performing home equity loans to an investor, resulting in a charge-off to the allowance for credit losses of $17.4 million.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $36.1 million, or 18 cents per diluted share, for the fourth quarter ended December 31, 2011, compared to $39.3 million, or 20 cents per diluted share, for the third quarter of 2011.

For the year ended December 31, 2011, net income available to common shareholders was $145.6 million, or 73 cents per diluted share, compared to $112.0 million, or 59 cents per diluted share, for 2010.

"2011 was characterized by significant earnings improvement, a lower provision for credit losses, strong core deposit growth, good expense control and an increase in our cash dividend," said R. Scott Smith, Jr., Chairman and CEO. "In the fourth quarter, we were pleased to see moderate loan growth, a reduction in overall loan delinquency and improvement in our credit quality metrics as a result of the continued resolution of distressed assets along with the sale of non-performing residential mortgages. Earnings for the quarter were down from the prior quarter due to an increase in operating expenses, Federal regulations that reduced debit card interchange revenue and compression of our net interest margin."

Asset Quality
As mentioned above, in December 2011, the Corporation sold $34.7 million of non-performing residential mortgages and $152,000 of non-performing home equity loans to an investor. Below is a summary of the transaction (dollars in thousands):

Recorded investment in loans sold $ 34,810
Proceeds from sale, net of selling expenses 17,420
Total charge-off $ (17,390 )
Existing allocation for credit losses on sold loans $ (12,360 )

Non-performing assets were $317.3 million, or 1.94 percent of total assets, at December 31, 2011, compared to $348.0 million, or 2.14 percent of total assets, at September 30, 2011 and $361.7 million, or 2.22 percent of total assets, at December 31, 2010. The $30.7 million, or 8.8 percent, decrease in non-performing assets in comparison to the third quarter of 2011 was primarily due to the aforementioned sale of non-performing residential mortgages and home equity loans and a decrease in non-performing commercial loans, partially offset by increases in non-performing commercial mortgages and construction loans.

Annualized net charge-offs for the quarter ended December 31, 2011 were 1.36 percent of average total loans, compared to 1.04 percent for the quarter ended September 30, 2011. Excluding the impact of the loan sale, which resulted in fourth quarter charge-offs of $17.4 million, annualized net charge-offs to average loans for the fourth quarter and for the year ended December 31, 2011 were 0.78 percent and 1.13 percent, respectively.

The provision for credit losses for the fourth quarter of 2011 was $30.0 million, a decrease of $1.0 million, or 3.2 percent, compared to the third quarter of 2011. For the year ended December 31, 2011, the provision for credit losses was $135.0 million, a $25.0 million, or 15.6 percent, decrease in comparison to 2010.

Net Interest Income and Margin
Net interest income for the fourth quarter of 2011 decreased $3.0 million, or 2.1 percent, from the third quarter of 2011, primarily due to a decrease in net interest margin. During the fourth quarter of 2011, net interest margin decreased 12 basis points, or 3.1 percent, from 3.93 percent in the third quarter of 2011, to 3.81 percent in the fourth quarter of 2011. Net interest income and margin were negatively impacted by prepayments on mortgage backed securities and the resulting accelerated amortization of premiums, which increased $2.9 million in comparison to the third quarter of 2011. This increase in amortization equates to an approximately 8 basis point decrease in the net interest margin.

For the year ended December 31, 2011, net interest income increased $1.4 million, or 0.3 percent, compared to 2010. Net interest margin was 3.90 percent for 2011, as compared to 3.80 percent for 2010.

Average Balance Sheet
Total average assets for the fourth quarter of 2011 were $16.2 billion, an increase of $171.3 million, or 1.1 percent, from the third quarter of 2011.

Average loans, net of unearned income, increased $38.7 million, or 0.3 percent, in comparison to the third quarter of 2011.

Quarter Ended
Dec 31 Sep 30 Increase (decrease)
2011 2011 $ %
(dollars in thousands)
Loans, by type:
Real estate - commercial mortgage $ 4,554,161 $ 4,461,646 $ 92,515 2.1 %
Commercial - industrial, financial and agricultural 3,637,465 3,691,516 (54,051 ) (1.5 %)
Real estate - home equity 1,628,406 1,628,822 (416 ) - %
Real estate - residential mortgage 1,066,463 1,037,968 28,495 2.7 %
Real estate - construction 641,485 668,464 (26,979 ) (4.0 %)
Consumer 326,818 329,619 (2,801 ) (0.8 %)
Leasing and other 71,448 69,509 1,939 2.8 %
Total Loans, net of unearned income $ 11,926,246 $ 11,887,544 $ 38,702 0.3 %

Changes in loans, by type, included a $92.5 million, or 2.1 percent, increase in commercial mortgages and a $28.5 million, or 2.7 percent, increase in residential mortgages. These increases were partially offset by a $54.1 million, or 1.5 percent, decline in commercial loans and a $27.0 million, or 4.0 percent, decrease in construction loans.

For the year ended December 31, 2011, average loans, net of unearned income decreased $53.9 million, or 0.5 percent, compared to 2010.

Average deposits for the fourth quarter of 2011 increased $97.5 million, or 0.8 percent, from the third quarter of 2011.

Quarter Ended
Dec 31 Sep 30 Increase (decrease)
2011 2011 $ %
(dollars in thousands)
Deposits, by type:
Noninterest-bearing demand $ 2,529,548 $ 2,466,877 $ 62,671 2.5 %
Interest-bearing demand 2,462,551 2,424,646 37,905 1.6 %
Savings deposits 3,466,104 3,329,489 136,615 4.1 %
Total demand and savings 8,458,203 8,221,012 237,191 2.9 %
Time deposits 4,084,278 4,224,001 (139,723 ) (3.3 %)
Total Deposits $ 12,542,481 $ 12,445,013 $ 97,468 0.8 %

The increase in deposits in the fourth quarter of 2011 in comparison to the third quarter of 2011 was due to a $237.2 million, or 2.9 percent, increase in demand and saving accounts, partially offset by a $139.7 million, or 3.3 percent, decrease in time deposits.

For the year ended December 31, 2011, average deposits increased $103.7 million, or 0.8 percent, compared to 2010.

Non-interest Income
Other income, excluding investment securities gains, decreased $3.3 million, or 6.8 percent, in comparison to the third quarter of 2011. Mortgage banking income decreased $1.7 million, or 21.7 percent, due to a decrease in the volume of new loan commitments. The Corporation elected to hold certain 10 and 15 year residential mortgages in portfolio rather than selling them in the secondary market. During the fourth quarter, an additional $1.4 million of gains would have been realized if these loans had been sold. Other service charges and fees decreased $1.7 million, or 13.8 percent, mainly due to a $2.4 million, or 51.9 percent, decrease in debit card fees, which occurred as a result of new regulations, which became effective October 1, 2011, that established maximum interchange fees issuers could charge on debit card transactions. Partially offsetting the decrease in debit card fees was a $541,000, or 22.0 percent, increase in merchant fees.

For the year ended December 31, 2011, other income, excluding investment securities gains, increased $1.5 million, or 0.9 percent, compared to 2010 due to increases in other service charges and fees and investment management and trust services revenue, partially offset by a decline in mortgage banking income.

Investment securities gains for the fourth quarter of 2011 were $3.1 million, compared to investment securities losses of $443,000 for the third quarter of 2011. During the fourth quarter of 2011, the Corporation recorded $3.1 million and $640,000 of gains on sales of debt and equity securities, respectively. These gains were partially offset by $636,000 of other-than-temporary impairment charges for stocks of financial institutions. During the third quarter of 2011, the Corporation recorded $147,000 of gains on sales of equity securities, offset by $346,000 of other-than-temporary impairment charges for debt securities and $244,000 of other-than-temporary impairment charges for stocks of financial institutions.

Non-interest Expense
Other expenses increased $3.0 million, or 2.8 percent, in the fourth quarter of 2011 compared to the third quarter of 2011, primarily due to a $1.1 million, or 58.3 percent, increase in marketing expenses, a $1.0 million, or 39.9 percent, increase in other real estate owned and repossession expense and a $797,000 increase in losses on the sales of fixed assets. The increase in marketing expense was primarily due to the merger of the Corporation's New Jersey banks in October 2011. Increases in non-interest expense were partially offset by a $1.0 million, or 26.8 percent, decrease in FDIC insurance expense and an $839,000, or 1.4 percent, decrease in salaries and employee benefits. The decrease in salaries and employee benefits was largely due to a $1.6 million decrease in stock compensation expense, partially offset by a $523,000 increase in severance expense.

For the year ended December 31, 2011, other expenses increased $8.2 million, or 2.0 percent, due to an increase in salaries and employee benefits and equipment expense, partially offset by a decrease in FDIC insurance expense and marketing expense.

About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has 3,850 employees and operates more than 270 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Fulton Bank of New Jersey, Mt. Laurel, NJ; and The Columbia Bank, Columbia, MD.

The Corporation's investment management and trust services are offered at all banks through Fulton Financial Advisors, a division of Fulton Bank, N.A. Residential mortgage lending is offered by all banks through Fulton Mortgage Company.

Additional information on Fulton Financial Corporation 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" and similar expressions which are intended to identify forward-looking statements.

These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation's control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements. The Corporation undertakes no obligation, other than required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Many factors could affect future financial results including, without limitation: the impact of adverse changes in the economy and real estate markets; increases in non-performing assets which may reduce the level of earning assets and require the Corporation to increase the allowance for credit losses, charge-off loans and incur elevated collection and carrying costs related to such non-performing assets; acquisition and growth strategies; market risk; changes or adverse developments in political or regulatory conditions; a disruption in or abnormal functioning of credit and other markets, including the lack of or reduced access to markets for mortgages and other asset-backed securities and for commercial paper and other short-term borrowings; changes in the levels of, or methodology for determining, FDIC deposit insurance premiums and assessments; the effect of competition and interest rates on net interest margin and net interest income; investment strategy and other income growth; investment securities gains and losses; declines in the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth or a decline in loans originated; relative balances of rate-sensitive assets to rate-sensitive liabilities; salaries and employee benefits and other expenses; amortization of intangible assets; goodwill impairment; capital and liquidity strategies, and other financial and business matters for future periods.

For a more complete discussion of certain risks and uncertainties affecting the Corporation, please see the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in the Corporation's filings with the Securities and Exchange Commission.

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
dollars in thousands
% Change from
December 31 December 31 September 30 December 31 September 30
2011 2010 2011 2010 2011
ASSETS
Cash and due from banks $ 292,598 $ 198,954 $ 291,870 47.1 % 0.2 %
Loans held for sale 47,009 83,940 63,554 (44.0 %) (26.0 %)
Other interest-earning assets 175,336 33,297 256,360 426.6 % (31.6 %)
Investment securities 2,679,967 2,861,484 2,776,557 (6.3 %) (3.5 %)
Loans, net of unearned income 11,968,970 11,933,307 11,895,655 0.3 % 0.6 %
Allowance for loan losses (256,471 ) (274,271 ) (266,978 ) (6.5 %) (3.9 %)
Net Loans 11,712,499 11,659,036 11,628,677 0.5 % 0.7 %
Premises and equipment 212,274 208,016 206,170 2.0 % 3.0 %
Accrued interest receivable 51,098 53,841 52,460 (5.1 %) (2.6 %)
Goodwill and intangible assets 544,209 547,979 545,098 (0.7 %) (0.2 %)
Other assets 655,518 628,707 475,105 4.3 % 38.0 %
Total Assets $ 16,370,508 $ 16,275,254 $ 16,295,851 0.6 % 0.5 %
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 12,525,739 $ 12,388,581 $ 12,637,624 1.1 % (0.9 %)
Short-term borrowings 597,033 674,077 448,955 (11.4 %) 33.0 %
Federal Home Loan Bank advances and long-term debt 1,040,149 1,119,450 1,025,505 (7.1 %) 1.4 %
Other liabilities 215,048 212,757 199,108 1.1 % 8.0 %
Total Liabilities 14,377,969 14,394,865 14,311,192 (0.1 %) 0.5 %
Shareholders' equity 1,992,539 1,880,389 1,984,659 6.0 % 0.4 %
Total Liabilities and Shareholders' Equity $ 16,370,508 $ 16,275,254 $ 16,295,851 0.6 % 0.5 %
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Loans, by type:
Real estate - commercial mortgage $ 4,602,596 $ 4,375,980 $ 4,491,155 5.2 % 2.5 %
Commercial - industrial, financial and agricultural 3,639,368 3,704,384 3,690,164 (1.8 %) (1.4 %)
Real estate - home equity 1,624,562 1,641,777 1,630,880 (1.0 %) (0.4 %)
Real estate - residential mortgage 1,097,192 995,990 1,041,463 10.2 % 5.4 %
Real estate - construction 615,445 801,185 648,398 (23.2 %) (5.1 %)
Consumer 318,101 350,161 327,054 (9.2 %) (2.7 %)
Leasing and other 71,706 63,830 66,541 12.3 % 7.8 %
Total Loans, net of unearned income $ 11,968,970 $ 11,933,307 $ 11,895,655 0.3 % 0.6 %
Deposits, by type:
Noninterest-bearing demand $ 2,588,034 $ 2,194,988 $ 2,535,744 17.9 % 2.1 %
Interest-bearing demand 2,529,388 2,277,190 2,517,124 11.1 % 0.5 %
Savings deposits 3,394,367 3,286,435 3,434,398 3.3 % (1.2 %)
Time deposits 4,013,950 4,629,968 4,150,358 (13.3 %) (3.3 %)
Total Deposits $ 12,525,739 $ 12,388,581 $ 12,637,624 1.1 % (0.9 %)
Short-term borrowings, by type:
Customer repurchase agreements $ 186,735 $ 204,800 $ 202,154 (8.8 %) (7.6 %)
Customer short-term promissory notes 156,828 201,433 170,839 (22.1 %) (8.2 %)
Federal funds purchased 253,470 267,844 75,962 (5.4 %) 233.7 %
Total Short-term borrowings $ 597,033 $ 674,077 $ 448,955 (11.4 %) 33.0 %
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
dollars in thousands, except per-share data
Quarter Ended % Change from Year Ended
Dec 31 Dec 31 Sep 30 Dec 31 Sep 30 December 31
2011 2010 2011 2010 2011 2011 2010 % Change
Interest Income:
Interest income $ 169,333 $ 181,749 $ 173,736 (6.8 %) (2.5 %) $ 693,698 $ 745,373 (6.9 %)
Interest expense 30,874 40,856 32,243 (24.4 %) (4.2 %) 133,538 186,627 (28.4 %)
Net Interest Income 138,459 140,893 141,493 (1.7 %) (2.1 %) 560,160 558,746 0.3 %
Provision for credit losses 30,000 40,000 31,000 (25.0 %) (3.2 %) 135,000 160,000 (15.6 %)
Net Interest Income after Provision 108,459 100,893 110,493 7.5 % (1.8 %) 425,160 398,746 6.6 %
Other Income:
Service charges on deposit accounts 15,277 14,091 15,164 8.4 % 0.7 % 58,078 58,592 (0.9 %)
Other service charges and fees 10,784 11,849 12,507 (9.0 %) (13.8 %) 47,482 45,023 5.5 %
Investment management and trust services 8,727 8,826 8,914 (1.1 %) (2.1 %) 36,483 34,173 6.8 %
Mortgage banking income 6,220 8,857 7,942 (29.8 %) (21.7 %) 25,674 29,304 (12.4 %)
Investment securities gains (losses) 3,054 194 (443 ) 1,474.2 % N/M 4,561 701 550.6 %
Other 4,286 3,940 4,055 8.8 % 5.7 % 15,449 14,527 6.3 %
Total Other Income 48,348 47,757 48,139 1.2 % 0.4 % 187,727 182,320 3.0 %
Other Expenses:
Salaries and employee benefits 58,109 54,955 58,948 5.7 % (1.4 %) 227,435 216,487 5.1 %
Net occupancy expense 10,973 10,845 10,790 1.2 % 1.7 % 44,003 43,533 1.1 %
OREO and repossession expense 3,565 1,873 2,548 90.3 % 39.9 % 8,366 7,441 12.4 %
Data processing 3,482 3,348 3,473 4.0 % 0.3 % 13,541 13,263 2.1 %
Equipment expense 3,329 2,982 3,032 11.6 % 9.8 % 12,870 11,692 10.1 %
Marketing 3,045 4,461 1,923 (31.7 %) 58.3 % 9,667 11,163 (13.4 %)
Professional fees 2,961 2,902 3,247 2.0 % (8.8 %) 12,159 11,523 5.5 %
FDIC insurance expense 2,730 4,916 3,732 (44.5 %) (26.8 %) 14,480 19,715 (26.6 %)
Intangible amortization 954 1,292 953 (26.2 %) 0.1 % 4,257 5,240 (18.8 %)
Other 19,712 18,520 17,221 6.4 % 14.5 % 69,698 68,268 2.1 %
Total Other Expenses 108,860 106,094 105,867 2.6 % 2.8 % 416,476 408,325 2.0 %
Income Before Income Taxes 47,947 42,556 52,765 12.7 % (9.1 %) 196,411 172,741 13.7 %
Income tax expense 11,868 11,066 13,441 7.2 % (11.7 %) 50,838 44,409 14.5 %
Net Income 36,079 31,490 39,324 14.6 % (8.3 %) 145,573 128,332 13.4 %
Preferred stock dividends and discount accretion - - - - - - (16,303 ) (100.0 %)
Net Income Available to Common Shareholders $ 36,079 $ 31,490 $ 39,324 14.6 % (8.3 %) $ 145,573 $ 112,029 29.9 %
PER COMMON SHARE:
Net income:
Basic $ 0.18 $ 0.16 $ 0.20 12.5 % (10.0 %) $ 0.73 $ 0.59 23.7 %
Diluted 0.18 0.16 0.20 12.5 % (10.0 %) 0.73 0.59 23.7 %
Cash dividends $ 0.06 $ 0.03 $ 0.05 100.0 % 20.0 % $ 0.20 $ 0.12 66.7 %
Shareholders' equity 9.95 9.45 9.93 5.3 % 0.2 % 9.95 9.45 5.3 %
Shareholders' equity (tangible) 7.24 6.69 7.20 8.2 % 0.6 % 7.24 6.69 8.2 %
Weighted average shares (basic) 199,239 198,437 199,028 0.4 % 0.1 % 198,912 190,860 4.2 %
Weighted average shares (diluted) 199,997 198,999 199,814 0.5 % 0.1 % 199,658 191,397 4.3 %
Shares outstanding, end of period 200,164 199,050 199,891 0.6 % 0.1 % 200,164 199,050 0.6 %
SELECTED FINANCIAL RATIOS:
Return on average assets 0.88 % 0.77 % 0.97 % 0.90 % 0.78 %
Return on average common shareholders' equity 7.16 % 6.60 % 7.89 % 7.45 % 6.29 %
Return on average common shareholders' equity (tangible) 10.02 % 9.54 % 11.06 % 10.54 % 9.39 %
Net interest margin 3.81 % 3.85 % 3.93 % 3.90 % 3.80 %
Efficiency ratio 57.44 % 54.50 % 54.06 % 54.28 % 53.33 %
N/M - Not meaningful
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Quarter Ended
December 31, 2011 December 31, 2010 September 30, 2011
Average Yield/ Average Yield/ Average Yield/
Balance Interest (1) Rate Balance Interest (1) Rate Balance Interest (1) Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income $ 11,926,246 $ 150,195 5.00 % $ 11,944,932 $ 158,257 5.26 % $ 11,887,544 $ 151,816 5.07 %
Taxable investment securities 2,279,658 17,462 3.06 % 2,264,784 20,579 3.63 % 2,142,670 20,166 3.76 %
Tax-exempt investment securities 307,713 4,340 5.65 % 341,909 4,868 5.69 % 325,420 4,456 5.48 %
Equity securities 121,219 774 2.55 % 136,075 801 2.35 % 124,893 777 2.48 %
Total Investment Securities 2,708,590 22,576 3.33 % 2,742,768 26,248 3.83 % 2,592,983 25,399 3.92 %
Loans held for sale 54,013 541 4.01 % 94,741 947 4.00 % 37,626 425 4.52 %
Other interest-earning assets 192,574 133 0.27 % 187,881 147 0.31 % 218,135 91 0.17 %
Total Interest-earning Assets 14,881,423 173,445 4.63 % 14,970,322 185,599 4.93 % 14,736,288 177,731 4.80 %
Noninterest-earning assets:
Cash and due from banks 282,993 268,758 276,063
Premises and equipment 207,744 205,740 206,059
Other assets 1,125,429 1,135,276 1,107,107
Less: allowance for loan losses (275,160 ) (291,541 ) (274,436 )
Total Assets $ 16,222,429 $ 16,288,555 $ 16,051,081
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 2,462,551 $ 1,243 0.20 % $ 2,262,027 $ 1,793 0.31 % $ 2,424,646 $ 1,262 0.21 %
Savings deposits 3,466,104 2,356 0.27 % 3,337,407 4,328 0.51 % 3,329,489 2,564 0.30 %
Time deposits 4,084,278 14,739 1.43 % 4,760,929 20,926 1.74 % 4,224,001 15,858 1.49 %
Total Interest-bearing Deposits 10,012,933 18,338 0.73 % 10,360,363 27,047 1.04 % 9,978,136 19,684 0.78 %
Short-term borrowings 463,659 173 0.15 % 482,197 249 0.20 % 443,337 151 0.14 %
Federal Home Loan Bank advances and long-term debt 1,025,683 12,363 4.80 % 1,148,009 13,560 4.70 % 1,025,546 12,408 4.82 %
Total Interest-bearing Liabilities 11,502,275 30,874 1.07 % 11,990,569 40,856 1.35 % 11,447,019 32,243 1.12 %
Noninterest-bearing liabilities:
Demand deposits 2,529,548 2,219,267 2,466,877
Other 192,806 186,211 159,430
Total Liabilities 14,224,629 14,396,047 14,073,326
Shareholders' equity 1,997,800 1,892,508 1,977,755
Total Liabilities and Shareholders' Equity $ 16,222,429 $ 16,288,555 $ 16,051,081
Net interest income/net interest margin (fully taxable equivalent) 142,571 3.81 % 144,743 3.85 % 145,488 3.93 %
Tax equivalent adjustment (4,112 ) (3,850 ) (3,995 )
Net interest income $ 138,459 $ 140,893 $ 141,493
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Quarter Ended % Change from
December 31 December 31 September 30 December 31 September 30
2011 2010 2011 2010 2011
Loans, by type:
Real estate - commercial mortgage $ 4,554,161 $ 4,365,245 $ 4,461,646 4.3 % 2.1 %
Commercial - industrial, financial and agricultural 3,637,465 3,682,949 3,691,516 (1.2 %) (1.5 %)
Real estate - home equity 1,628,406 1,649,111 1,628,822 (1.3 %) - %
Real estate - residential mortgage 1,066,463 999,814 1,037,968 6.7 % 2.7 %
Real estate - construction 641,485 818,367 668,464 (21.6 %) (4.0 %)
Consumer 326,818 360,432 329,619 (9.3 %) (0.8 %)
Leasing and other 71,448 69,014 69,509 3.5 % 2.8 %
Total Loans, net of unearned income $ 11,926,246 $ 11,944,932 $ 11,887,544 (0.2 %) 0.3 %
Deposits, by type:
Noninterest-bearing demand $ 2,529,548 $ 2,219,267 $ 2,466,877 14.0 % 2.5 %
Interest-bearing demand 2,462,551 2,262,027 2,424,646 8.9 % 1.6 %
Savings deposits 3,466,104 3,337,407 3,329,489 3.9 % 4.1 %
Time deposits 4,084,278 4,760,929 4,224,001 (14.2 %) (3.3 %)
Total Deposits $ 12,542,481 $ 12,579,630 $ 12,445,013 (0.3 %) 0.8 %
Short-term borrowings, by type:
Customer repurchase agreements $ 195,372 $ 240,548 $ 206,824 (18.8 %) (5.5 %)
Customer short-term promissory notes 165,677 205,637 170,790 (19.4 %) (3.0 %)
Federal funds purchased and other 102,610 36,012 65,723 184.9 % 56.1 %
Total Short-term borrowings $ 463,659 $ 482,197 $ 443,337 (3.8 %) 4.6 %

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
Year Ended December 31
2011 2010
Average Average
Balance Interest (1) Yield/Rate Balance Interest (1) Yield/Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income $ 11,904,529 $ 605,671 5.09 % $ 11,958,435 $ 637,438 5.33 %
Taxable investment securities 2,223,376 80,184 3.61 % 2,403,206 96,237 4.00 %
Tax-exempt investment securities 330,087 18,521 5.61 % 357,427 20,513 5.74 %
Equity securities 126,766 3,078 2.43 % 139,292 3,103 2.23 %
Total Investment Securities 2,680,229 101,783 3.80 % 2,899,925 119,853 4.13 %
Loans held for sale 43,470 1,958 4.50 % 69,157 3,088 4.47 %
Other interest-earning assets 160,664 358 0.22 % 192,888 505 0.26 %
Total Interest-earning Assets 14,788,892 709,770 4.80 % 15,120,405 760,884 5.04 %
Noninterest-earning assets:
Cash and due from banks 274,527 268,615
Premises and equipment 207,081 204,316
Other assets 1,108,359 1,114,678
Less: allowance for loan losses (276,278 ) (281,555 )
Total Assets $ 16,102,581 $ 16,426,459
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits $ 2,391,043 $ 5,312 0.22 % $ 2,099,026 $ 7,341 0.35 %
Savings deposits 3,359,109 11,536 0.34 % 3,124,157 19,889 0.63 %
Time deposits 4,297,106 66,235 1.54 % 5,016,645 95,129 1.90 %
Total Interest-bearing Deposits 10,047,258 83,083 0.83 % 10,239,828 122,359 1.19 %
Short-term borrowings 495,791 746 0.15 % 587,602 1,455 0.25 %
Federal Home Loan Bank advances and long-term debt 1,034,475 49,709 4.81 % 1,326,449 62,813 4.74 %
Total Interest-bearing Liabilities 11,577,524 133,538 1.15 % 12,153,879 186,627 1.54 %
Noninterest-bearing liabilities:
Demand deposits 2,400,293 2,104,016
Other 171,368 191,398
Total Liabilities 14,149,185 14,449,293
Shareholders' equity 1,953,396 1,977,166
Total Liabilities and Shareholders' Equity $ 16,102,581 $ 16,426,459
Net interest income/net interest margin (fully taxable equivalent) 576,232 3.90 % 574,257 3.80 %
Tax equivalent adjustment (16,072 ) (15,511 )
Net interest income $ 560,160 $ 558,746
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.

AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
Year Ended
December 31
2011 2010 % Change
Loans, by type:
Real estate - commercial mortgage $ 4,458,205 $ 4,333,371 2.9 %
Commercial - industrial, financial and agricultural 3,681,321 3,681,692 - %
Real estate - home equity 1,627,308 1,642,999 (1.0 %)
Real estate - residential mortgage 1,036,474 977,909 6.0 %
Real estate - construction 700,071 889,267 (21.3 %)
Consumer 332,613 363,066 (8.4 %)
Leasing and other 68,537 70,131 (2.3 %)
Total Loans, net of unearned income $ 11,904,529 $ 11,958,435 (0.5 %)
Deposits, by type:
Noninterest-bearing demand $ 2,400,293 $ 2,104,016 14.1 %
Interest-bearing demand 2,391,043 2,099,026 13.9 %
Savings deposits 3,359,109 3,124,157 7.5 %
Time deposits 4,297,106 5,016,645 (14.3 %)
Total Deposits $ 12,447,551 $ 12,343,844 0.8 %
Short-term borrowings, by type:
Customer repurchase agreements $ 208,144 $ 252,634 (17.6 %)
Customer short-term promissory notes 174,624 209,766 (16.8 %)
Federal funds purchased and other 113,023 125,202 (9.7 %)
Total Short-term borrowings $ 495,791 $ 587,602 (15.6 %)

FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
Quarter Ended Year Ended
Dec 31 Dec 31 Sept 30 Dec 31
2011 2010 2011 2011 2010
ALLOWANCE FOR CREDIT LOSSES:
Balance at beginning of period $ 268,817 $ 284,874 $ 268,633 $ 275,498 $ 257,553
Loans charged off:
Real estate - residential mortgage (18,316 ) (2,874 ) (1,514 ) (32,533 ) (6,896 )
Commercial - industrial, financial and agricultural (8,719 ) (12,893 ) (14,840 ) (52,301 ) (35,865 )
Real estate - construction (8,716 ) (13,421 ) (8,535 ) (38,613 ) (66,412 )
Real estate - commercial mortgage (3,189 ) (17,688 ) (5,730 ) (26,032 ) (28,209 )
Consumer and home equity (2,804 ) (3,440 ) (1,792 ) (9,686 ) (11,210 )
Leasing and other (496 ) (788 ) (486 ) (2,168 ) (2,833 )
Total loans charged off (42,240 ) (51,104 ) (32,897 ) (161,333 ) (151,425 )
Recoveries of loans charged off:
Real estate - residential mortgage 55 2 36 325 9
Commercial - industrial, financial and agricultural 432 855 695 2,521 4,536
Real estate - construction 509 211 595 1,746 1,296
Real estate - commercial mortgage - 152 249 1,967 1,008
Consumer and home equity 372 254 314 1,431 1,540
Leasing and other 232 254 192 1,022 981
Recoveries of loans previously charged off 1,600 1,728 2,081 9,012 9,370
Net loans charged off (40,640 ) (49,376 ) (30,816 ) (152,321 ) (142,055 )
Provision for credit losses 30,000 40,000 31,000 135,000 160,000
Balance at end of period $ 258,177 $ 275,498 $ 268,817 $ 258,177 $ 275,498
Net charge-offs to average loans (annualized) 1.36 % 1.65 % 1.04 % 1.28 % 1.19 %
NON-PERFORMING ASSETS:
Non-accrual loans $ 257,761 $ 280,688 $ 269,176
Loans 90 days past due and accruing 28,767 48,084 41,427
Total non-performing loans 286,528 328,772 310,603
Other real estate owned 30,803 32,959 37,399
Total non-performing assets $ 317,331 $ 361,731 $ 348,002
NON-PERFORMING LOANS, BY TYPE:
Real estate - commercial mortgage $ 113,806 $ 93,720 $ 102,928
Commercial - industrial, financial and agricultural 80,944 87,455 92,385
Real estate - construction 60,744 84,616 52,381
Real estate - residential mortgage 16,336 50,412 48,086
Real estate - home equity 11,207 10,188 12,097
Consumer 3,384 2,154 2,614
Leasing 107 227 112
Total non-performing loans $ 286,528 $ 328,772 $ 310,603

DELINQUENCY RATES, BY TYPE:
December 31, 2011 December 31, 2010 September 30, 2011
31-89 Days > / = 90 Days (1) Total 31-89 Days > / = 90 Days (1) Total 31-89 Days > / = 90 Days (1) Total
Real estate - commercial mortgage 0.56 % 2.47 % 3.03 % 0.56 % 2.14 % 2.70 % 0.84 % 2.29 % 3.13 %
Commercial - industrial, financial and agricultural 0.41 % 2.23 % 2.64 % 0.36 % 2.36 % 2.72 % 0.57 % 2.50 % 3.07 %
Real estate - construction 1.55 % 9.87 % 11.42 % 0.91 % 10.56 % 11.47 % 1.28 % 8.08 % 9.36 %
Real estate - residential mortgage 3.38 % 1.49 % 4.87 % 3.65 % 5.06 % 8.71 % 3.02 % 4.62 % 7.64 %
Real estate - home equity 0.72 % 0.69 % 1.41 % 0.73 % 0.62 % 1.35 % 0.74 % 0.74 % 1.48 %
Consumer, leasing and other 1.92 % 0.90 % 2.82 % 1.48 % 0.58 % 2.06 % 1.71 % 0.69 % 2.40 %
Total 0.89 % 2.39 % 3.28 % 0.83 % 2.76 % 3.59 % 0.99 % 2.61 % 3.60 %
(1) Includes non-accrual loans
ASSET QUALITY RATIOS:
Dec 31 Dec 31 Sept 30
2011 2010 2011
Non-accrual loans to total loans 2.15 % 2.35 % 2.26 %
Non-performing assets to total loans and OREO 2.64 % 3.02 % 2.92 %
Non-performing assets to total assets 1.94 % 2.22 % 2.14 %
Allowance for credit losses to loans outstanding 2.16 % 2.31 % 2.26 %
Allowance for credit losses to non-performing loans 90.11 % 83.80 % 86.55 %
Non-performing assets to tangible common shareholders' equity and allowance for credit losses 18.60 % 22.50 % 20.37 %

Contact Information

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