SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

July 22, 2014 16:30 ET

Fulton Financial Reports Second Quarter Earnings of $0.21 per Share

LANCASTER, PA--(Marketwired - Jul 22, 2014) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the second quarter of 2014 was 21 cents, a 4.5 percent decrease from the first quarter of 2014 and unchanged from the second quarter of 2013.
  • Net interest income for the second quarter of 2014 decreased $1.7 million, or 1.3 percent, compared to the first quarter of 2014. The net interest margin for the second quarter of 2014 decreased six basis points compared to the first quarter of 2014, to 3.41 percent.
  • The provision for credit losses was $3.5 million for the second quarter of 2014, a $1.0 million increase from the first quarter of 2014 and a $10.0 million, or 74.1 percent, decrease from the second quarter of 2013. Non-performing loans decreased $5.6 million, or 3.6 percent, in comparison to March 31, 2014 and decreased $39.9 million, or 21.1 percent, in comparison to June 30, 2013.
  • Non-interest income, excluding investment securities gains, increased $5.3 million, or 13.6 percent, in comparison to the first quarter of 2014, while non-interest expense increased $6.6 million, or 6.0 percent.
  • In May 2014, the Corporation announced that its Board of Directors approved the repurchase of up to four million shares of the Corporation's common stock, or approximately 2.1% of outstanding shares, through December 31, 2014. No shares were repurchased during the second quarter of 2014.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $39.6 million, or 21 cents per diluted share, for the second quarter of 2014, compared to $41.8 million, or 22 cents per diluted share, for the first quarter of 2014.

"Loans increased in the second quarter and overall asset quality continued to improve," said E. Philip Wenger, Chairman, CEO and President. "We also saw a significant increase in non-interest income. Noninterest-bearing deposits showed continued good growth, but lower yields on earning assets combined with higher overall funding costs put modest pressure on our net interest margin. Non-interest expenses reflected the continued build-out of our risk management and regulatory compliance infrastructures. During the quarter, we were pleased to announce another four million share stock repurchase program through the end of the year."

Net Interest Income and Margin
Net interest income for the second quarter of 2014 decreased $1.7 million, or 1.3 percent, from the first quarter of 2014. The net interest margin decreased six basis points, or 1.7 percent, to 3.41 percent, in the second quarter of 2014 from 3.47 percent in the first quarter of 2014. Average yields on interest-earning assets decreased five basis points, while the average cost of interest-bearing liabilities increased two basis points.

Average Balance Sheet
Total average assets for the second quarter of 2014 were $16.8 billion, a decrease of $28.7 million, or 0.2 percent, from the first quarter of 2014. Average loans, net of unearned income, increased $33.4 million, or 0.3 percent, in comparison to the first quarter of 2014.

             
    Three Months Ended     Increase (decrease)  
    June 30, 2014     March 31, 2014     in Balance  
    Balance   Yield (1)     Balance   Yield (1)     $     %  
    (dollars in thousands)  
Average Loans, net of unearned income, by type:                                      
  Real estate - commercial mortgage   $ 5,138,537   4.36 %   $ 5,085,128   4.44 %   $ 53,409     1.1 %
  Commercial - industrial, financial and agricultural     3,617,977   3.95 %     3,637,075   4.03 %     (19,098 )   (0.5 %)
  Real estate - home equity     1,735,767   4.18 %     1,755,346   4.18 %     (19,579 )   (1.1 %)
  Real estate - residential mortgage     1,339,034   3.97 %     1,336,323   3.99 %     2,711     0.2 %
  Real estate - construction     588,176   4.17 %     576,346   4.08 %     11,830     2.1 %
  Consumer     276,444   4.56 %     274,910   4.82 %     1,534     0.6 %
  Leasing and other     99,812   8.83 %     97,229   9.79 %     2,583     2.7 %
                                       
  Total Average Loans, net of unearned income   $ 12,795,747   4.21 %   $ 12,762,357   4.28 %   $ 33,390     0.3 %
                                       
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
   

Total average liabilities decreased $47.7 million, or 0.3 percent, from the first quarter of 2014, due mainly to a $161.3 million, or 13.3%, decrease in short-term borrowings, partially offset by a $132.1 million, or 1.1 percent, increase in average deposits.

             
    Three Months Ended     Increase (decrease)  
    June 30, 2014     March 31, 2014     in Balance  
    Balance   Rate     Balance   Rate     $     %  
    (dollars in thousands)        
Average Deposits, by type:                                      
  Noninterest-bearing demand   $ 3,322,195   - %   $ 3,243,424   - %   $ 78,771     2.4 %
  Interest-bearing demand     2,914,887   0.12 %     2,945,211   0.13 %     (30,324 )   (1.0 %)
  Savings deposits     3,355,929   0.12 %     3,351,871   0.13 %     4,058     0.1 %
Total average demand and savings     9,593,011   0.08 %     9,540,506   0.08 %     52,505     0.6 %
  Time deposits     3,012,061   0.90 %     2,932,456   0.82 %     79,605     2.7 %
                                       
  Total Average Deposits   $ 12,605,072   0.28 %   $ 12,472,962   0.26 %   $ 132,110     1.1 %
                                       
                                       

Asset Quality
Non-performing assets were $162.8 million, or 0.96 percent of total assets, at June 30, 2014, compared to $170.2 million, or 1.01 percent of total assets, at March 31, 2014 and $210.2 million, or 1.23 percent of total assets, at June 30, 2013. The $7.4 million, or 4.4 percent, decrease in non-performing assets in comparison to the first quarter of 2014 was primarily due to decreases in non-performing commercial mortgages, residential mortgages, consumer and home equity loans and other real estate owned.

Annualized net charge-offs for the quarter ended June 30, 2014 were 0.28 percent of average total loans, compared to 0.26 percent for the quarter ended March 31, 2014 and 0.56 percent for the quarter ended June 30, 2013. The allowance for credit losses as a percentage of non-performing loans was 129.6 percent at June 30, 2014, as compared to 128.5 percent at March 31, 2014 and 115.0 percent at June 30, 2013.

Non-interest Income
Non-interest income, excluding investment securities gains, increased $5.3 million, or 13.6 percent, in comparison to the first quarter of 2014. Mortgage banking income increased $2.1 million as volumes increased and amortization of mortgage servicing rights declined in the second quarter. Other service charges and fees increased $1.6 million, or 17.9%, including a $1.1 million increase in merchant fee income. Service charges on deposit accounts increased $841,000, or 7.2 percent, including a $245,000 increase in overdraft fees.

Non-interest Expense
Non-interest expense increased $6.6 million, or 6.0 percent, in the second quarter of 2014 compared to the first quarter of 2014. Salaries and employee benefits increased $4.1 million, or 6.8 percent, in comparison to the first quarter of 2014, due primarily to increases in incentive compensation accruals, self-insured healthcare costs and stock compensation expense, partially offset by a seasonal decrease in payroll taxes. Also contributing to the increase in non-interest expense was a $3.4 million increase in other outside services, associated, in part, with the recent acceleration of risk management and compliance efforts, including those in connection with the enhancement of the Corporation's program for compliance with the Bank Secrecy Act, the USA Patriot Act of 2001 and related anti-money laundering regulations, which is the subject of recent enforcement orders received by three of the Corporation's banking subsidiaries. These enforcement orders were discussed in greater detail in the Corporation's Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2014. Net occupancy expense decreased $2.1 million due to snow removal costs incurred in the first quarter of 2014, and the impact of branch consolidations.

About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company that has banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates, headquartered as indicated: 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 under the Fulton Mortgage Company brand.

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.

A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2013, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2014, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov). The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 

Non-GAAP Financial Measures
The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.

   
   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)  
dollars in thousands  
   
                      % Change from  
    June 30     June 30     March 31     June 30     March 31  
    2014     2013     2014     2013     2014  
                                     
ASSETS                                    
                                     
  Cash and due from banks   $ 258,837     $ 219,944     $ 260,389     17.7 %   (0.6 %)
  Other interest-earning assets     305,518       225,398       307,062     35.5 %   (0.5 %)
  Loans held for sale     36,079       60,909       24,417     (40.8 %)   47.8 %
  Investment securities     2,497,776       2,819,192       2,501,198     (11.4 %)   (0.1 %)
  Loans, net of unearned income     12,839,511       12,645,418       12,733,792     1.5 %   0.8 %
  Allowance for loan losses     (191,685 )     (216,431 )     (197,089 )   (11.4 %)   (2.7 %)
    Net loans     12,647,826       12,428,987       12,536,703     1.8 %   0.9 %
  Premises and equipment     225,168       224,418       225,647     0.3 %   (0.2 %)
  Accrued interest receivable     42,116       45,713       43,376     (7.9 %)   (2.9 %)
  Goodwill and intangible assets     532,432       534,452       532,747     (0.4 %)   (0.1 %)
  Other assets     487,887       463,397       480,350     5.3 %   1.6 %
      Total Assets   $ 17,033,639     $ 17,022,410     $ 16,911,889     0.1 %   0.7 %
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
                                     
  Deposits   $ 12,693,659     $ 12,257,809     $ 12,669,917     3.6 %   0.2 %
  Short-term borrowings     1,008,307       1,620,318       1,069,684     (37.8 %)   (5.7 %)
  Other liabilities     263,478       226,384       230,108     16.4 %   14.5 %
  FHLB advances and long-term debt     968,395       889,167       883,461     8.9 %   9.6 %
    Total Liabilities     14,933,839       14,993,678       14,853,170     (0.4 %)   0.5 %
                                       
  Shareholders' equity     2,099,800       2,028,732       2,058,719     3.5 %   2.0 %
      Total Liabilities and Shareholders' Equity   $ 17,033,639     $ 17,022,410     $ 16,911,889     0.1 %   0.7 %
                                     
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                                    
                                     
Loans, by type:                                    
  Real estate - commercial mortgage   $ 5,128,734     $ 4,856,916     $ 5,137,454     5.6 %   (0.2 %)
  Commercial - industrial, financial and agricultural     3,601,721       3,712,974       3,574,130     (3.0 %)   0.8 %
  Real estate - home equity     1,730,497       1,760,268       1,740,496     (1.7 %)   (0.6 %)
  Real estate - residential mortgage     1,361,976       1,313,345       1,331,465     3.7 %   2.3 %
  Real estate - construction     634,018       610,280       584,217     3.9 %   8.5 %
  Consumer     280,557       300,233       270,021     (6.6 %)   3.9 %
  Leasing and other     102,008       91,402       96,009     11.6 %   6.2 %
  Total Loans, net of unearned income   $ 12,839,511     $ 12,645,418     $ 12,733,792     1.5 %   0.8 %
                                     
Deposits, by type:                                    
  Noninterest-bearing demand   $ 3,484,125     $ 3,168,781     $ 3,359,900     10.0 %   3.7 %
  Interest-bearing demand     2,855,511       2,714,545       2,960,577     5.2 %   (3.5 %)
  Savings deposits     3,338,018       3,272,557       3,346,880     2.0 %   (0.3 %)
  Time deposits     3,016,005       3,101,926       3,002,560     (2.8 %)   0.4 %
  Total Deposits   $ 12,693,659     $ 12,257,809     $ 12,669,917     3.6 %   0.2 %
                                     
Short-term borrowings, by type:                                    
  Customer repurchase agreements   $ 212,930     $ 196,188     $ 220,426     8.5 %   (3.4 %)
  Customer short-term promissory notes     86,366       93,671       88,160     (7.8 %)   (2.0 %)
  Federal funds purchased     384,011       780,459       361,098     (50.8 %)   6.3 %
  Short-term FHLB advances     325,000       550,000       400,000     (40.9 %)   (18.8 %)
  Total Short-term Borrowings   $ 1,008,307     $ 1,620,318     $ 1,069,684     (37.8 %)   (5.7 %)
                                     
                                     
   
   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)  
in thousands, except per-share data and percentages  
                                       
    Three Months Ended     % Change from     Six Months Ended        
    Jun 30     Jun 30     Mar 31     Jun 30     Mar 31     Jun 30        
    2014     2013     2014     2013     2014     2014     2013     % Change  
                                                           
Interest Income:                                                          
  Interest income   $ 147,902     $ 153,078     $ 148,792     (3.4 %)   (0.6 %)   $ 296,694     $ 304,400     (2.5 %)
  Interest expense     20,004       21,013       19,227     (4.8 %)   4.0 %     39,231       42,691     (8.1 %)
                                                           
    Net Interest Income     127,898       132,065       129,565     (3.2 %)   (1.3 %)     257,463       261,709     (1.6 %)
  Provision for credit losses     3,500       13,500       2,500     (74.1 %)   40.0 %     6,000       28,500     (78.9 %)
                                                           
    Net Interest Income after Provision     124,398       118,565       127,065     4.9 %   (2.1 %)     251,463       233,209     7.8 %
                                                           
Non-Interest Income:                                                          
  Service charges on deposit accounts     12,552       14,651       11,711     (14.3 %)   7.2 %     24,263       28,762     (15.6 %)
  Investment management and trust services     11,339       10,601       10,958     7.0 %   3.5 %     22,297       20,697     7.7 %
  Other service charges and fees     10,526       9,508       8,927     10.7 %   17.9 %     19,453       18,018     8.0 %
  Mortgage banking income     5,741       10,997       3,605     (47.8 %)   59.3 %     9,346       19,170     (51.2 %)
  Investment securities gains     1,112       2,865       -     (61.2 %)   N/M       1,112       5,338     (79.2 %)
  Other     3,602       3,694       3,305     (2.5 %)   9.0 %     6,907       7,590     (9.0 %)
                                                           
    Total Non-Interest Income     44,872       52,316       38,506     (14.2 %)   16.5 %     83,378       99,575     (16.3 %)
                                                           
Non-Interest Expense:                                                          
  Salaries and employee benefits     63,623       63,490       59,566     0.2 %   6.8 %     123,189       124,702     (1.2 %)
  Net occupancy expense     11,464       11,447       13,603     0.1 %   (15.7 %)     25,067       23,291     7.6 %
  Other outside services     7,240       5,315       3,812     36.2 %   89.9 %     11,052       8,175     35.2 %
  Data processing     4,331       4,509       3,796     (3.9 %)   14.1 %     8,127       8,412     (3.4 %)
  Professional fees     3,559       3,395       2,904     4.8 %   22.6 %     6,463       6,442     0.3 %
  Equipment expense     3,360       3,893       3,602     (13.7 %)   (6.7 %)     6,962       7,801     (10.8 %)
  Software     3,209       3,094       2,925     3.7 %   9.7 %     6,134       5,842     5.0 %
  FDIC insurance expense     2,615       3,001       2,689     (12.9 %)   (2.8 %)     5,304       5,848     (9.3 %)
  Marketing     2,337       1,922       1,584     21.6 %   47.5 %     3,921       3,794     3.3 %
  Other real estate owned and repossession expense     748       1,941       983     (61.5 %)   (23.9 %)     1,731       4,795     (63.9 %)
  Operating risk loss     716       1,860       1,828     (61.5 %)   (60.8 %)     2,544       3,626     (29.8 %)
  Intangible amortization     315       535       315     (41.1 %)   -       630       1,069     (41.1 %)
  Other     12,657       12,728       11,947     (0.6 %)   5.9 %     24,604       24,269     1.4 %
                                                           
    Total Non-Interest Expense     116,174       117,130       109,554     (0.8 %)   6.0 %     225,728       228,066     (1.0 %)
                                                           
    Income Before Income Taxes     53,096       53,751       56,017     (1.2 %)   (5.2 %)     109,113       104,718     4.2 %
  Income tax expense     13,500       13,169       14,234     2.5 %   (5.2 %)     27,734       24,909     11.3 %
                                                           
    Net Income   $ 39,596     $ 40,582     $ 41,783     (2.4 %)   (5.2 %)   $ 81,379     $ 79,809     2.0 %
                                                           
                                                           
PER SHARE:                                                          
                                                           
  Net income:                                                          
    Basic   $ 0.21     $ 0.21     $ 0.22     -     (4.5 %)   $ 0.43     $ 0.41     4.9 %
    Diluted     0.21       0.21       0.22     -     (4.5 %)     0.43       0.41     4.9 %
                                                           
  Cash dividends   $ 0.08     $ 0.08     $ 0.08     -     -     $ 0.16     $ 0.16     -  
  Shareholders' equity     11.11       10.48       10.90     6.0 %   1.9 %     11.11       10.48     6.0 %
  Shareholders' equity (tangible)     8.29       7.72       8.08     7.4 %   2.6 %     8.29       7.72     7.4 %
                                                             
  Weighted average shares (basic)     188,139       193,273       189,467     (2.7 %)   (0.7 %)     188,799       194,777     (3.1 %)
  Weighted average shares (diluted)     189,182       194,346       190,489     (2.7 %)   (0.7 %)     189,832       195,773     (3.0 %)
  Shares outstanding, end of period     189,033       193,658       188,850     (2.4 %)   0.1 %     189,033       193,658     (2.4 %)
                                                           
SELECTED FINANCIAL RATIOS:                                                          
                                                           
  Return on average assets     0.94 %     0.97 %     1.01 %                 0.97 %     0.97 %      
  Return on average shareholders' equity     7.63 %     7.89 %     8.21 %                 7.92 %     7.78 %      
  Return on average shareholders' equity (tangible)     10.30 %     10.75 %     11.13 %                 10.71 %     10.59 %      
  Net interest margin     3.41 %     3.52 %     3.47 %                 3.44 %     3.54 %      
  Efficiency ratio     65.85 %     62.73 %     63.38 %                 64.63 %     62.27 %      
                                                           
N/M - Not meaningful                                                          
                                                           
                                     
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)  
dollars in thousands  
   
    Three Months Ended  
    June 30, 2014     June 30, 2013     March 31, 2014  
    Average Balance   Interest (1)     Yield/Rate     Average Balance   Interest (1)     Yield/Rate     Average Balance     Interest (1)     Yield/Rate  
ASSETS                                                              
                                                               
Interest-earning assets:                                                              
  Loans, net of unearned income   $ 12,795,747   $ 134,387     4.21 %   $ 12,528,562   $ 138,002     4.42 %   $ 12,762,357     $ 134,744     4.28 %
  Taxable investment securities     2,211,004     12,418     2.25 %     2,410,004     14,516     2.41 %     2,257,773       13,266     2.35 %
  Tax-exempt investment securities     270,482     3,534     5.23 %     280,508     3,608     5.15 %     279,278       3,613     5.17 %
  Equity securities     33,922     419     4.95 %     40,778     471     4.63 %     33,922       429     5.11 %
                                                                 
  Total Investment Securities     2,515,408     16,371     2.60 %     2,731,290     18,595     2.72 %     2,570,973       17,308     2.70 %
                                                                 
  Loans held for sale     17,540     214     4.87 %     42,158     384     3.64 %     13,426       134     4.00 %
  Other interest-earning assets     238,921     1,207     2.02 %     226,662     439     0.77 %     258,803       882     1.36 %
                                                                 
  Total Interest-earning Assets     15,567,616     152,179     3.92 %     15,528,672     157,420     4.07 %     15,605,559       153,068     3.97 %
                                                               
Noninterest-earning assets:                                                              
  Cash and due from banks     198,291                   206,090                   199,641                
  Premises and equipment     224,586                   225,915                   226,295                
  Other assets     1,037,654                   1,061,448                   1,032,071                
  Less: allowance for loan losses     (196,462 )                 (221,541 )                 (203,201 )              
                                                                 
  Total Assets   $ 16,831,685                 $ 16,800,584                 $ 16,860,365                
                                                               
                                                               
LIABILITIES AND SHAREHOLDERS' EQUITY                                                              
                                                               
Interest-bearing liabilities:                                                              
  Demand deposits   $ 2,914,887   $ 904     0.12 %   $ 2,718,679   $ 872     0.13 %   $ 2,945,211     $ 909     0.13 %
  Savings deposits     3,355,929     1,031     0.12 %     3,350,856     1,016     0.12 %     3,351,871       1,035     0.13 %
  Time deposits     3,012,061     6,750     0.90 %     3,169,141     7,610     0.96 %     2,932,456       5,952     0.82 %
                                                                 
  Total Interest-bearing Deposits     9,282,877     8,685     0.38 %     9,238,676     9,498     0.41 %     9,229,538       7,896     0.35 %
                                                                 
  Short-term borrowings     1,047,684     540     0.21 %     1,313,424     700     0.21 %     1,208,953       633     0.21 %
  FHLB advances and long-term debt     894,511     10,779     4.83 %     889,186     10,815     4.87 %     883,532       10,698     4.88 %
                                                                 
  Total Interest-bearing Liabilities     11,225,072     20,004     0.71 %     11,441,286     21,013     0.74 %     11,322,023       19,227     0.69 %
                                                               
Noninterest-bearing liabilities:                                                              
  Demand deposits     3,322,195                   3,116,940                   3,243,424                
  Other     202,520                   179,875                   232,004                
                                                                 
  Total Liabilities     14,749,787                   14,738,101                   14,797,451                
                                                                 
  Shareholders' equity     2,081,898                   2,062,483                   2,062,914                
                                                                 
  Total Liabilities and Shareholders' Equity   $ 16,831,685                 $ 16,800,584                 $ 16,860,365                
                                                                 
  Net interest income/net interest margin (fully taxable equivalent)           132,175     3.41 %           136,407     3.52 %             133,841     3.47 %
  Tax equivalent adjustment           (4,277 )                 (4,342 )                   (4,276 )      
                                                                 
  Net interest income         $ 127,898                 $ 132,065                   $ 129,565        
     
  (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:  
                         
    Three Months Ended   % Change from  
    June 30   June 30   March 31   June 30     March 31  
    2014   2013   2014   2013     2014  
                               
Loans, by type:                              
  Real estate - commercial mortgage   $ 5,138,537   $ 4,758,060   $ 5,085,128   8.0 %   1.1 %
  Commercial - industrial, financial and agricultural     3,617,977     3,714,683     3,637,075   (2.6 %)   (0.5 %)
  Real estate - home equity     1,735,767     1,732,704     1,755,346   0.2 %   (1.1 %)
  Real estate - residential mortgage     1,339,034     1,308,713     1,336,323   2.3 %   0.2 %
  Real estate - construction     588,176     617,577     576,346   (4.8 %)   2.1 %
  Consumer     276,444     304,918     274,910   (9.3 %)   0.6 %
  Leasing and other     99,812     91,907     97,229   8.6 %   2.7 %
                                 
  Total Loans, net of unearned income   $ 12,795,747   $ 12,528,562   $ 12,762,357   2.1 %   0.3 %
                               
Deposits, by type:                              
  Noninterest-bearing demand   $ 3,322,195   $ 3,116,940   $ 3,243,424   6.6 %   2.4 %
  Interest-bearing demand     2,914,887     2,718,679     2,945,211   7.2 %   (1.0 %)
  Savings deposits     3,355,929     3,350,856     3,351,871   0.2 %   0.1 %
  Time deposits     3,012,061     3,169,141     2,932,456   (5.0 %)   2.7 %
                                 
  Total Deposits   $ 12,605,072   $ 12,355,616   $ 12,472,962   2.0 %   1.1 %
                               
Short-term borrowings, by type:                              
  Customer repurchase agreements   $ 216,212   $ 188,339   $ 187,362   14.8 %   15.4 %
  Customer short-term promissory notes     81,823     98,207     102,000   (16.7 %)   (19.8 %)
  Federal funds purchased     444,429     776,603     416,230   (42.8 %)   6.8 %
  Short-term FHLB advances and other borrowings     305,220     250,275     503,361   22.0 %   (39.4 %)
                                 
  Total Short-term Borrowings   $ 1,047,684   $ 1,313,424   $ 1,208,953   (20.2 %)   (13.3 %)
                                 
                                 
   
   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)  
dollars in thousands  
   
    Six Months Ended June 30  
    2014     2013  
    Average Balance   Interest (1)   Yield/Rate     Average Balance   Interest (1)   Yield/Rate  
                                     
ASSETS                                    
                                     
Interest-earning assets:                                    
  Loans, net of unearned income   $ 12,779,145   $ 269,131   4.24 %   $ 12,393,670   $ 274,950   4.47 %
  Taxable investment securities     2,234,259     25,684   2.30 %     2,415,562     27,913   2.31 %
  Tax-exempt investment securities     274,856     7,147   5.20 %     286,281     7,422   5.19 %
  Equity securities     33,922     848   5.03 %     42,565     981   4.64 %
                                       
  Total Investment Securities     2,543,037     33,679   2.65 %     2,744,408     36,316   2.65 %
                                       
  Loans held for sale     15,494     348   4.49 %     45,005     879   3.91 %
  Other interest-earning assets     248,807     2,089   1.68 %     208,718     868   0.83 %
                                       
  Total Interest-earning Assets     15,586,483     305,247   3.95 %     15,391,801     313,013   4.10 %
                                     
Noninterest-earning assets:                                    
  Cash and due from banks     198,962                 204,308            
  Premises and equipment     225,436                 226,189            
  Other assets     1,034,877                 1,066,416            
  Less: allowance for loan losses     (199,813 )               (224,682 )          
                                       
  Total Assets   $ 16,845,945               $ 16,664,032            
                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                    
                                     
Interest-bearing liabilities:                                    
  Demand deposits   $ 2,929,965   $ 1,813   0.12 %   $ 2,712,292   $ 1,749   0.13 %
  Savings deposits     3,353,910     2,066   0.12 %     3,342,626     2,039   0.12 %
  Time deposits     2,972,480     12,702   0.86 %     3,244,805     16,111   1.00 %
                                       
  Total Interest-bearing Deposits     9,256,355     16,581   0.36 %     9,299,723     19,899   0.43 %
                                       
  Short-term borrowings     1,127,872     1,173   0.21 %     1,173,550     1,209   0.21 %
  Federal Home Loan Bank advances and long-term debt     889,051     21,477   4.85 %     890,174     21,583   4.87 %
                                       
  Total Interest-bearing Liabilities     11,273,278     39,231   0.70 %     11,363,447     42,691   0.76 %
                                     
Noninterest-bearing liabilities:                                    
  Demand deposits     3,283,027                 3,043,268            
  Other     217,181                 189,357            
                                       
  Total Liabilities     14,773,486                 14,596,072            
                                       
  Shareholders' equity     2,072,459                 2,067,960            
                                       
  Total Liabilities and Shareholders' Equity   $ 16,845,945               $ 16,664,032            
                                       
  Net interest income/net interest margin (fully taxable equivalent)           266,016   3.44 %           270,322   3.54 %
  Tax equivalent adjustment           (8,553 )               (8,613 )    
                                       
  Net interest income         $ 257,463               $ 261,709      
                                       
     
  (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:      
               
    Six Months Ended      
    June 30      
    2014   2013   % Change  
             
Loans, by type:                  
  Real estate - commercial mortgage   $ 5,111,979   $ 4,712,530   8.5 %
  Commercial - industrial, financial and agricultural     3,627,471     3,688,767   (1.7 %)
  Real estate - home equity     1,745,503     1,697,634   2.8 %
  Real estate - residential mortgage     1,337,686     1,296,012   3.2 %
  Real estate - construction     582,294     604,531   (3.7 %)
  Consumer     275,682     305,199   (9.7 %)
  Leasing and other     98,530     88,997   10.7 %
                     
  Total Loans, net of unearned income   $ 12,779,145   $ 12,393,670   3.1 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 3,283,027   $ 3,043,268   7.9 %
  Interest-bearing demand     2,929,965     2,712,292   8.0 %
  Savings deposits     3,353,910     3,342,626   0.3 %
  Time deposits     2,972,480     3,244,805   (8.4 %)
                     
  Total Deposits   $ 12,539,382   $ 12,342,991   1.6 %
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 201,866   $ 176,788   14.2 %
  Customer short-term promissory notes     91,856     105,086   (12.6 %)
  Federal funds purchased     430,407     743,376   (42.1 %)
  Short-term FHLB advances and other borrowings     403,743     148,300   172.2 %
                     
  Total Short-term Borrowings   $ 1,127,872   $ 1,173,550   (3.9 %)
   
   
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
                               
    Three Months Ended     Six Months Ended  
    Jun 30     Jun 30     Mar 31     Jun 30  
    2014     2013     2014     2014     2013  
ALLOWANCE FOR CREDIT LOSSES:                                        
                                         
  Balance at beginning of period   $ 199,006     $ 221,527     $ 204,917     $ 204,917     $ 225,439  
                                         
  Loans charged off:                                        
    Commercial - industrial, financial and agricultural     (5,512 )     (5,960 )     (5,125 )     (10,637 )     (15,462 )
    Real estate - commercial mortgage     (2,141 )     (5,193 )     (1,386 )     (3,527 )     (9,326 )
    Consumer and home equity     (1,683 )     (2,399 )     (2,402 )     (4,085 )     (5,353 )
    Real estate - residential mortgage     (1,089 )     (4,465 )     (846 )     (1,935 )     (7,515 )
    Real estate - construction     (218 )     (2,597 )     (214 )     (432 )     (4,583 )
    Leasing and other     (833 )     (769 )     (295 )     (1,128 )     (1,250 )
    Total loans charged off     (11,476 )     (21,383 )     (10,268 )     (21,744 )     (43,489 )
  Recoveries of loans previously charged off:                                        
    Commercial - industrial, financial and agricultural     775       756       744       1,519       1,135  
    Real estate - commercial mortgage     430       1,505       44       474       2,569  
    Consumer and home equity     579       598       565       1,144       1,435  
    Real estate - residential mortgage     108       116       116       224       197  
    Real estate - construction     158       744       224       382       1,415  
    Leasing and other     362       263       164       526       425  
    Recoveries of loans previously charged off     2,412       3,982       1,857       4,269       7,176  
  Net loans charged off     (9,064 )     (17,401 )     (8,411 )     (17,475 )     (36,313 )
  Provision for credit losses     3,500       13,500       2,500       6,000       28,500  
                                           
  Balance at end of period   $ 193,442     $ 217,626     $ 199,006     $ 193,442     $ 217,626  
                                           
  Net charge-offs to average loans (annualized)     0.28 %     0.56 %     0.26 %     0.27 %     0.59 %
                                         
NON-PERFORMING ASSETS:                                        
                                         
  Non-accrual loans   $ 129,934     $ 164,039     $ 133,705                  
  Loans 90 days past due and accruing     19,378       25,159       21,225                  
    Total non-performing loans     149,312       189,198       154,930                  
  Other real estate owned     13,482       20,984       15,300                  
                                           
  Total non-performing assets   $ 162,794     $ 210,182     $ 170,230                  
                                         
NON-PERFORMING LOANS, BY TYPE:                                        
                                         
  Real estate - commercial mortgage   $ 44,015     $ 49,429     $ 45,876                  
  Commercial - industrial, financial and agricultural     38,163       57,219       38,830                  
  Real estate - residential mortgage     27,887       30,660       29,305                  
  Real estate - construction     20,268       29,964       20,758                  
  Consumer and home equity     18,919       21,826       20,087                  
  Leasing     60       100       74                  
                                           
  Total non-performing loans   $ 149,312     $ 189,198     $ 154,930                  
                                         
                                         
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                        
                                         
  Real-estate - residential mortgage   $ 31,184     $ 28,948     $ 30,363                  
  Real-estate - commercial mortgage     19,398       24,828       19,514                  
  Real estate - construction     8,561       10,599       8,430                  
  Commercial - industrial, financial and agricultural     6,953       8,394       6,755                  
  Consumer and home equity     2,838       1,562       2,622                  
  Total accruing TDRs     68,934       74,331       67,684                  
  Non-accrual TDRs (1)     25,526       30,377       27,487                  
  Total TDRs   $ 94,460     $ 104,708     $ 95,171                  
                                         
(1) Included within non-accrual loans above.                                        
                                                       
DELINQUENCY RATES, BY TYPE:                                                      
    June 30, 2014     June 30, 2013     March 31, 2014  
    31-89 Days     ≥90 Days (2)     Total     31-89 Days     ≥90 Days (2)     Total     31-89 Days     ≥90 Days (2)     Total  
                                                       
  Real estate - commercial mortgage   0.30 %   0.86 %   1.16 %   0.47 %   1.01 %   1.48 %   0.35 %   0.89 %   1.24 %
  Commercial - industrial, financial and agricultural   0.47 %   1.05 %   1.52 %   0.41 %   1.54 %   1.95 %   0.33 %   1.09 %   1.42 %
  Real estate - construction   0.10 %   3.20 %   3.30 %   0.42 %   4.91 %   5.33 %   0.43 %   3.55 %   3.98 %
  Real estate - residential mortgage   1.78 %   2.05 %   3.83 %   2.12 %   2.33 %   4.45 %   1.53 %   2.20 %   3.73 %
  Consumer, home equity, leasing and other   0.84 %   0.90 %   1.74 %   0.82 %   1.02 %   1.84 %   0.89 %   0.96 %   1.85 %
                                                         
  Total   0.58 %   1.17 %   1.75 %   0.68 %   1.50 %   2.18 %   0.56 %   1.22 %   1.78 %
                                                       
(2) Includes non-accrual loans                                                      
                                                     
ASSET QUALITY RATIOS:                                                    
    Jun 30     Jun 30     Mar 31                                    
    2014     2013     2014                                    
                                                     
  Non-accrual loans to total loans   1.01 %   1.30 %   1.05 %                                  
  Non-performing assets to total loans and OREO   1.27 %   1.66 %   1.34 %                                  
  Non-performing assets to total assets   0.96 %   1.23 %   1.01 %                                  
  Allowance for credit losses to loans outstanding   1.51 %   1.72 %   1.56 %                                  
  Allowance for credit losses to non-performing loans   129.56 %   115.03 %   128.45 %                                  
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses   9.25 %   12.28 %   9.87 %                                  
                                                     
 
 
FULTON FINANCIAL CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (UNAUDITED)
in thousands, except per share data and percentages
   
  Explanatory note: This press release contains certain financial information, as detailed below, which has been derived by methods other than Generally Accepted Accounting Principles ("GAAP"). The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's quarterly results of operations. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Management believes that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate the Corporation's results. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow:
                               
                               
    Three Months Ended     Six Months Ended  
    June 30     June 30     March 31     June 30  
    2014     2013     2014     2014     2013  
Shareholders' equity (tangible), per share                                        
Shareholders' equity   $ 2,099,800     $ 2,028,732     $ 2,058,719                  
Less: Goodwill and intangible assets     (532,432 )     (534,452 )     (532,747 )                
Tangible shareholders' equity (numerator)   $ 1,567,368     $ 1,494,280     $ 1,525,972                  
                                         
Shares outstanding, end of period (denominator)     189,033       193,658       188,850                  
                                         
  Shareholders' equity (tangible), per share   $ 8.29     $ 7.72     $ 8.08                  
                                         
Return on average common shareholders' equity (tangible)                                        
Net income   $ 39,596     $ 40,582     $ 41,783     $ 81,379     $ 79,809  
Plus: Intangible amortization, net of tax     204       349       204       410       696  
Numerator   $ 39,800     $ 40,931     $ 41,987     $ 81,789     $ 80,505  
                                         
Average shareholders' equity   $ 2,081,898     $ 2,062,483       2,062,914       2,072,459       2,067,960  
Less: Average goodwill and intangible assets     (532,585 )     (534,713 )     (532,901 )     (532,742 )     (534,982 )
Average tangible shareholders' equity (denominator)   $ 1,549,313     $ 1,527,770     $ 1,530,013     $ 1,539,717     $ 1,532,978  
                                         
  Return on average common shareholders' equity (tangible), annualized     10.30 %     10.75 %     11.13 %     10.71 %     10.59 %
                                         
Efficiency ratio                                        
Non-interest expense   $ 116,174     $ 117,130     $ 109,554     $ 225,728     $ 228,066  
Less: Intangible amortization     (315 )     (535 )     (315 )     (630 )     (1,069 )
Numerator   $ 115,859     $ 116,595     $ 109,239     $ 225,098     $ 226,997  
                                         
Net interest income (fully taxable equivalent)   $ 132,175     $ 136,407     $ 133,841     $ 266,016     $ 270,322  
Plus: Total Non-interest income     44,872       52,316       38,506       83,378       99,575  
Less: Investment securities gains     (1,112 )     (2,865 )     -       (1,112 )     (5,338 )
Denominator   $ 175,935     $ 185,858     $ 172,347     $ 348,282     $ 364,559  
                                         
  Efficiency ratio     65.85 %     62.73 %     63.38 %     64.64 %     62.27 %
                                         
Non-performing assets to tangible common shareholders' equity and allowance for credit losses                                        
Non-performing assets (numerator)   $ 162,794     $ 210,182     $ 170,230                  
                                         
Tangible shareholders' equity   $ 1,567,368     $ 1,494,280     $ 1,525,972                  
Plus: Allowance for credit losses     193,442       217,626       199,006                  
Tangible shareholders' equity and allowance for credit losses (denominator)   $ 1,760,810     $ 1,711,906     $ 1,724,978                  
                                         
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses     9.25 %     12.28 %     9.87 %                
                                           
                                           

Contact Information

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    (717) 291-2616


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    (717) 291-2456