SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

July 19, 2016 16:30 ET

Fulton Financial Reports Second Quarter Earnings of $40 Million, or $0.23 per Share

LANCASTER, PA--(Marketwired - Jul 19, 2016) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the second quarter of 2016 were 23 cents, a 4.5 percent increase from first quarter of 2016 and a 9.5 percent increase from the second quarter of 2015. Pre-provision net revenue of $53.3 million was 4.9 percent higher than the first quarter of 2016 and 9.7 percent higher than the second quarter of 2015.
  • Net interest income for the second quarter of 2016 was flat compared to the first quarter of 2016 and increased $6.0 million, or 4.9 percent, compared to the second quarter of 2015.
  • Net interest margin decreased three basis points to 3.20 percent compared to the first quarter of 2016, and was unchanged compared to the second quarter of 2015.
  • Loans at June 30, 2016 increased $284.5 million, or 2.1 percent, compared to March 31, 2016 and $910.9 million, or 6.9 percent, compared to June 30, 2015. Average loans for the second quarter of 2016 increased 0.8 percent and 5.9 percent compared to the first quarter of 2016 and the second quarter of 2015, respectively.
  • Deposits at June 30, 2016 decreased $111.7 million, or 0.8 percent, compared to March 31, 2016 and increased $786.9 million, or 5.8 percent, compared to June 30, 2015. Average deposits for the second quarter of 2016 increased 1.1 percent compared to the first quarter of 2016, and increased 6.5 percent, compared to the second quarter of 2015.
  • The provision for credit losses in the second quarter of 2016 was $2.5 million, compared to a $1.5 million provision in the first quarter of 2016 and $2.2 million provision in the second quarter of 2015.
  • Non-interest income, excluding investment securities gains, increased $3.9 million, or 9.2 percent, in comparison to the first quarter of 2016, and increased $2.0 million, or 4.5 percent, in comparison to the second quarter of 2015.
  • Non-interest expense increased $1.2 million, or 1.0 percent, compared to the first quarter of 2016 and $3.3 million, or 2.8 percent, compared to the second quarter of 2015.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $39.8 million, or 23 cents per diluted share, for the second quarter of 2016.

"We were pleased with the second quarter results as we were able to grow earnings per share by 4.5 percent linked quarter and 9.5 percent year over year," said E. Philip Wenger, Chairman, President and CEO. "After a good first quarter, we saw meaningful loan growth in the second quarter, with favorable credit conditions, combined with strong noninterest income growth and prudent expense management."

Net Interest Income and Margin
Net interest income for the second quarter of 2016 decreased $138,000, or 0.1 percent, from the first quarter of 2016. Net interest margin decreased three basis points, or 0.9 percent, to 3.20 percent in the second quarter of 2016, from 3.23 percent in the first quarter of 2016. The average yield on interest-earning assets decreased three basis points, while the average cost of interest-bearing liabilities remained unchanged, during the second quarter of 2016 in comparison to the first quarter of 2016.

Average Balance Sheet
Total average assets for the second quarter of 2016 were $18.2 billion, an increase of $179.3 million from the first quarter of 2016. Average loans, net of unearned income, increased $112.6 million, or 0.8 percent, in comparison to the first quarter of 2016. Average loans and yields, by type, for the second quarter of 2016 in comparison to the first quarter of 2016, are summarized in the following table:

             
    Three Months Ended     Increase (decrease)  
    June 30, 2016     March 31, 2016     in Balance  
    Balance   Yield (1)     Balance   Yield (1)     $     %  
    (dollars in thousands)  
Average Loans, net of unearned income, by type:                                
  Real estate - commercial mortgage   $ 5,557,680   4.00 %   $ 5,487,421   4.03 %   $ 70,259     1.3 %
  Commercial - industrial, financial and agricultural     4,080,524   3.81 %     4,095,268   3.79 %     (14,744 )   (0.4 %)
  Real estate - home equity     1,656,140   4.10 %     1,674,032   4.10 %     (17,892 )   (1.1 %)
  Real estate - residential mortgage     1,399,851   3.78 %     1,381,409   3.78 %     18,442     1.3 %
  Real estate - construction     820,881   3.81 %     792,014   3.82 %     28,867     3.6 %
  Consumer     272,293   5.37 %     263,295   5.53 %     8,998     3.4 %
  Leasing and other     178,655   6.22 %     159,981   7.46 %     18,674     11.7 %
                                       
  Total Average Loans, net of unearned income   $ 13,966,024   3.98 %   $ 13,853,420   4.00 %   $ 112,604     0.8 %
(1) Presented on a fully-taxable equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
   

Total average liabilities increased $148.2 million, or 0.9 percent, from the first quarter of 2016, while average deposits increased $159.4 million, or 1.1 percent. Average deposits and interest rates, by type, for the second quarter of 2016 in comparison to the first quarter of 2016, are summarized in the following table:

             
    Three Months Ended     Increase (decrease)  
    June 30, 2016     March 31, 2016     in Balance  
    Balance   Rate     Balance   Rate     $     %  
    (dollars in thousands)        
Average Deposits, by type:                                
  Noninterest-bearing demand   $ 4,077,642   - %   $ 3,967,887   - %   $ 109,755     2.8 %
  Interest-bearing demand     3,454,031   0.18 %     3,438,355   0.17 %     15,676     0.5 %
  Savings deposits     3,989,988   0.19 %     3,932,824   0.18 %     57,164     1.5 %
Total average demand and savings     11,521,661   0.12 %     11,339,066   0.12 %     182,595     1.6 %
  Time deposits     2,844,434   1.06 %     2,867,651   1.04 %     (23,217 )   (0.8 %)
                                       
  Total Average Deposits   $ 14,366,095   0.30 %   $ 14,206,717   0.30 %   $ 159,378     1.1 %
                                         

Asset Quality
Non-performing assets were $139.7 million, or 0.76 percent of total assets, at June 30, 2016, compared to $148.1 million, or 0.82 percent of total assets, at March 31, 2016 and $162.3 million, or 0.93 percent of total assets, at June 30, 2015.

Annualized net charge-offs for the quarter ended June 30, 2016 were 0.10 percent of total average loans, compared to 0.20 percent for the quarter ended March 31, 2016 and 0.38 percent for the quarter ended June 30, 2015. The allowance for credit losses as a percentage of non-performing loans was 129.3 percent at June 30, 2016, as compared to 121.1 percent at March 31, 2016 and 113.3 percent at June 30, 2015.

During the second quarter of 2016, the Corporation recorded a $2.5 million provision for credit losses, compared to a $1.5 million provision for credit losses in the first quarter of 2016 and a $2.2 million provision in the second quarter of 2015. 

Non-interest Income
Non-interest income, excluding investment securities gains, increased $3.9 million, or 9.2 percent, in comparison to the first quarter of 2016. Other service charges and fees increased $2.2 million, or 20.8 percent, due to increases in commercial loan interest rate swap fees, merchant fees and debit card income. Service charges on deposits increased $338,000, or 2.7 percent, due to increases in cash management and overdraft fee income. Mortgage banking income decreased $133,000, or 3.3 percent, reflecting the net effect of a $1.8 million increase in gains on sale of mortgages being offset by a $1.9 million decrease in servicing income. The decrease in mortgage servicing income was a result of a $1.7 million mortgage servicing rights impairment charge, while the increase in gain on sales of loans was a result of an increase in pricing spreads and the volume of new loan commitments.

Compared to the second quarter of 2015, non-interest income, excluding investment securities gains, increased $2.0 million, or 4.5 percent, due to increases in commercial loan interest rate swap fees, other service charges and fees, investment management and trust services income, and merchant fees, partially offset by a decrease in mortgage banking income.

Gains on sales of investment securities decreased $871,000 in comparison to the first quarter of 2016, and decreased $2.3 million from the second quarter of 2015.

Non-interest Expense
Non-interest expense increased $1.2 million, or 1.0 percent, in the second quarter of 2016, compared to the first quarter of 2016. Professional fees increased $1.0 million, or 43.7% in the second quarter. Salaries and employee benefits increased $657,000, or 0.9 percent, driven by an increase in variable compensation expense, partially offset by a decrease in payroll taxes. Offsetting these increases were net decreases in multiple expense categories.

Compared to the second quarter of 2015, non-interest expense increased $3.3 million, or 2.8 percent, reflecting increases in salaries and employee benefits and professional fees, partially offset by lower expenses for outside services.

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, Bethlehem, 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, 2015 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, 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     March 31     December 31     September 30     June 30     March 31     June 30  
    2016     2016     2015     2015     2015     2016     2015  
                                           
ASSETS                                          
  Cash and due from banks   $ 84,647     $ 83,479     $ 101,120     $ 93,803     $ 100,455     1.4 %   -15.7 %
  Other interest-earning assets     408,086       408,060       292,516       579,920       387,324     0.0 %   5.4 %
  Loans held for sale     34,330       19,719       16,886       26,937       33,980     74.1 %   1.0 %
  Investment securities     2,529,724       2,516,205       2,484,773       2,436,337       2,440,492     0.5 %   3.7 %
  Loans, net of unearned income     14,155,159       13,870,701       13,838,602       13,536,361       13,244,230     2.1 %   6.9 %
  Allowance for loan losses     (162,546 )     (163,841 )     (169,054 )     (167,136 )     (167,485 )   -0.8 %   -2.9 %
    Net loans     13,992,613       13,706,860       13,669,548       13,369,225       13,076,745     2.1 %   7.0 %
  Premises and equipment     228,861       228,057       225,535       225,705       226,794     0.4 %   0.9 %
  Accrued interest receivable     43,316       44,379       42,767       42,846       41,193     -2.4 %   5.2 %
  Goodwill and intangible assets     531,556       531,556       531,556       531,562       531,567     0.0 %   0.0 %
  Other assets     626,902       583,939       550,017       531,724       526,923     7.4 %   19.0 %
      Total Assets   $ 18,480,035     $ 18,122,254     $ 17,914,718     $ 17,838,059     $ 17,365,473     2.0 %   6.4 %
                                                     
LIABILITIES AND SHAREHOLDERS' EQUITY                                                    
  Deposits   $ 14,292,564     $ 14,404,280     $ 14,132,317     $ 14,084,394     $ 13,505,709     -0.8 %   5.8 %
  Short-term borrowings     722,214       352,883       497,663       431,631       409,035     104.7 %   76.6 %
  Other liabilities     392,708       326,128       293,302       316,697       293,271     20.4 %   33.9 %
  FHLB advances and long-term debt     965,552       965,654       949,542       979,433       1,132,641     0.0 %   -14.8 %
    Total Liabilities     16,373,038       16,048,945       15,872,824       15,812,155       15,340,656     2.0 %   6.7 %
  Shareholders' equity     2,106,997       2,073,309       2,041,894       2,025,904       2,024,817     1.6 %   4.1 %
      Total Liabilities and Shareholders' Equity   $ 18,480,035     $ 18,122,254     $ 17,914,718     $ 17,838,059     $ 17,365,473     2.0 %   6.4 %
                                                     
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                                                    
Loans, by type:                                                    
  Real estate - commercial mortgage   $ 5,635,347     $ 5,558,108     $ 5,462,330     $ 5,339,928     $ 5,237,800     1.4 %   7.6 %
  Commercial - industrial, financial and agricultural     4,099,177       4,035,333       4,088,962       3,929,908       3,806,699     1.6 %   7.7 %
  Real estate - home equity     1,647,319       1,659,481       1,684,439       1,693,649       1,689,688     -0.7 %   -2.5 %
  Real estate - residential mortgage     1,447,292       1,377,459       1,376,160       1,382,085       1,369,103     5.1 %   5.7 %
  Real estate - construction     853,699       810,872       799,988       769,565       731,925     5.3 %   16.6 %
  Consumer     278,071       263,221       268,588       271,696       272,494     5.6 %   2.0 %
  Leasing and other     194,254       166,227       158,135       149,530       136,521     16.9 %   42.3 %
  Total Loans, net of unearned income   $ 14,155,159     $ 13,870,701     $ 13,838,602     $ 13,536,361     $ 13,244,230     2.1 %   6.9 %
                                                     
Deposits, by type:                                                    
  Noninterest-bearing demand   $ 4,125,375     $ 4,134,861     $ 3,948,114     $ 3,906,228     $ 3,805,165     -0.2 %   8.4 %
  Interest-bearing demand     3,358,536       3,430,206       3,451,207       3,362,336       3,129,903     -2.1 %   7.3 %
  Savings deposits     3,986,008       3,972,199       3,868,046       3,880,103       3,566,888     0.3 %   11.8 %
  Time deposits     2,822,645       2,867,014       2,864,950       2,935,727       3,003,753     -1.5 %   -6.0 %
  Total Deposits   $ 14,292,564     $ 14,404,280     $ 14,132,317     $ 14,084,394     $ 13,505,709     -0.8 %   5.8 %
                                                     
Short-term borrowings, by type:                                                    
  Customer repurchase agreements   $ 168,521     $ 162,431     $ 111,496     $ 145,225     $ 169,918     3.7 %   -0.8 %
  Customer short-term promissory notes     69,509       76,807       78,932       80,879       74,059     -9.5 %   -6.1 %
  Short-term FHLB advances     35,000       81,000       110,000       200,000       160,000     -56.8 %   -78.1 %
  Federal funds purchased     449,184       32,645       197,235       5,527       5,058     N/M     N/M  
  Total Short-term Borrowings   $ 722,214     $ 352,883     $ 497,663     $ 431,631     $ 409,035     104.7 %   76.6 %
N/M - Not meaningful                                                    
                                                     
                                                     
 
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     Mar 31     Dec 31     Sep 30     Jun 30     Mar 31     Jun 30     Jun 30              
    2016     2016     2015     2015     2015     2016     2015     2016     2015     $ Change     % Change  
                                                                   
Interest Income:                                                                  
  Interest income   $ 149,309     $ 149,311     $ 147,560     $ 146,228     $ 144,229     (0.0 %)   3.5 %   $ 298,620     $ 290,001       8,619     3.0 %
  Interest expense     20,393       20,257       19,761       20,534       21,309     0.7 %   (4.3 %)     40,650       43,500       (2,850 )   (6.6 %)
    Net Interest Income     128,916       129,054       127,799       125,694       122,920     (0.1 %)   4.9 %     257,970       246,501       11,469     4.7 %
  Provision for credit losses     2,511       1,530       2,750       1,000       2,200     64.1 %   14.1 %     4,041       (1,500 )     5,541     N/M  
    Net Interest Income after Provision     126,405       127,524       125,049       124,694       120,720     (0.9 %)   4.7 %     253,929       248,001       5,928     2.4 %
Non-Interest Income:                                                                                  
  Other service charges and fees     12,983       10,750       12,676       10,965       10,988     20.8 %   18.2 %     23,733       20,351       3,382     16.6 %
  Service charges on deposit accounts     12,896       12,558       12,909       12,982       12,637     2.7 %   2.0 %     25,454       24,206       1,248     5.2 %
  Investment management and trust services     11,247       10,988       10,919       11,237       11,011     2.4 %   2.1 %     22,235       21,900       335     1.5 %
  Mortgage banking income     3,897       4,030       4,317       3,864       5,339     (3.3 %)   (27.0 %)     7,927       10,027       (2,100 )   (20.9 %)
  Other     5,038       3,864       4,242       3,996       4,099     30.4 %   22.9 %     8,902       8,182       720     8.8 %
    Non-Interest Income before Investment Securities Gains     46,061       42,190       45,063       43,044       44,074     9.2 %   4.5 %     88,251       84,666       3,585     4.2 %
  Investment securities gains     76       947       776       1,730       2,415     (92.0 %)   (96.9 %)     1,023       6,560       (5,537 )   (84.4 %)
    Total Non-Interest Income     46,137       43,137       45,839       44,774       46,489     7.0 %   (0.8 %)     89,274       91,226       (1,952 )   (2.1 %)
                                                                                   
Non-Interest Expense:                                                                                  
  Salaries and employee benefits     70,029       69,372       65,467       65,308       65,067     0.9 %   7.6 %     139,401       130,057       9,344     7.2 %
  Net occupancy expense     11,811       12,220       11,566       10,710       11,809     (3.3 %)   0.0 %     24,031       25,501       (1,470 )   (5.8 %)
  Other outside services     5,508       6,056       6,537       7,373       8,125     (9.0 %)   (32.2 %)     11,564       13,875       (2,311 )   (16.7 %)
  Data processing     5,476       5,400       5,127       5,105       4,894     1.4 %   11.9 %     10,876       9,662       1,214     12.6 %
  Software     3,953       3,921       4,068       3,984       3,376     0.8 %   17.1 %     7,874       6,694       1,180     17.6 %
  Professional fees     3,353       2,333       2,814       2,828       2,731     43.7 %   22.8 %     5,686       5,602       84     1.5 %
  FDIC insurance expense     2,960       2,949       2,896       2,867       2,885     0.4 %   2.6 %     5,909       5,707       202     3.5 %
  Equipment expense     2,872       3,371       3,626       3,595       3,335     (14.8 %)   (13.9 %)     6,243       7,293       (1,050 )   (14.4 %)
  Marketing     1,916       1,624       1,754       2,102       2,235     18.0 %   (14.3 %)     3,540       3,468       72     2.1 %
  Operating risk loss     986       540       987       1,136       674     82.6 %   46.3 %     1,526       1,501       25     1.7 %
  Other real estate owned and repossession expense     365       638       1,123       1,016       129     (42.8 %)   182.9 %     1,003       1,491       (488 )   (32.7 %)
  Intangible amortization     -       -       6       5       106     -     N/M       -       236       (236 )   (100.0 %)
  Loss on redemption of trust preferred securities     -       -       -       5,626       -     -     -       -       -       -     -  
  Other     12,408       11,989       12,468       13,234       12,988     3.5 %   (4.5 %)     24,397       25,745       (1,348 )   (5.2 %)
    Total Non-Interest Expense     121,637       120,413       118,439       124,889       118,354     1.0 %   2.8 %     242,050       236,832       5,218     2.2 %
    Income before Income Taxes     50,905       50,248       52,449       44,579       48,855     1.3 %   4.2 %     101,153       102,395       (1,242 )   (1.2 %)
  Income tax expense     11,155       11,991       13,914       10,328       12,175     (7.0 %)   (8.4 %)     23,146       25,679       (2,533 )   (9.9 %)
    Net Income   $ 39,750     $ 38,257     $ 38,535     $ 34,251     $ 36,680     3.9 %   8.4 %   $ 78,007     $ 76,716     $ 1,291     1.7 %
                                                                                   
PER SHARE:                                                                                  
  Net income:                                                                                  
    Basic   $ 0.23     $ 0.22     $ 0.22     $ 0.20     $ 0.21     4.5 %   9.5 %   $ 0.45     $ 0.43     $ 0.02     4.7 %
    Diluted     0.23       0.22       0.22       0.20       0.21     4.5 %   9.5 %     0.45       0.43       0.02     4.7 %
                                                                                   
  Cash dividends   $ 0.10     $ 0.09     $ 0.11     $ 0.09     $ 0.09     11.1 %   11.1 %   $ 0.19     $ 0.18     $ 0.01     5.6 %
  Shareholders' equity     12.17       11.96       11.72       11.66       11.50     1.8 %   5.8 %     12.17       11.50       0.67     5.8 %
  Shareholders' equity (tangible)     9.10       8.89       8.67       8.60       8.48     2.4 %   7.3 %     9.10       8.48       0.62     7.3 %
                                                                                   
  Weighted average shares (basic)     173,394       173,331       173,709       174,338       176,433     0.0 %   (1.7 %)     173,363       177,446       (4,083 )   (2.3 %)
  Weighted average shares (diluted)     174,318       174,416       174,833       175,342       177,531     (0.1 %)   (1.8 %)     174,367       178,488       (4,121 )   (2.3 %)
  Shares outstanding, end of period     173,139       173,393       174,176       173,771       176,019     (0.1 %)   (1.6 %)     173,139       176,019       (2,880 )   (1.6 %)
                                                                                   
SELECTED FINANCIAL RATIOS:                                                                                  
                                                                                   
  Return on average assets     0.88 %     0.86 %     0.86 %     0.78 %     0.86 %                 0.87 %     0.90 %              
  Return on average shareholders' equity     7.65 %     7.47 %     7.51 %     6.72 %     7.24 %                 7.56 %     7.64 %              
  Return on average shareholders' equity (tangible)     10.26 %     10.07 %     10.16 %     9.11 %     9.83 %                 10.17 %     10.39 %              
  Net interest margin     3.20 %     3.23 %     3.19 %     3.18 %     3.20 %                 3.22 %     3.24 %              
  Efficiency ratio     67.59 %     68.33 %     66.63 %     68.82 %     68.94 %                 67.96 %     69.55 %              
N/M - Not meaningful
 
 
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
                                       
    Three Months Ended  
    June 30, 2016     March 31, 2016     June 30, 2015  
    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   $ 13,966,024     $ 138,317     3.98 %   $ 13,853,420     $ 137,895     4.00 %   $ 13,192,600     $ 133,339     4.05 %
  Taxable investment securities     2,127,780       11,159     2.10 %     2,180,593       12,003     2.20 %     2,048,558       10,944     2.14 %
  Tax-exempt investment securities     314,851       3,570     4.54 %     259,396       3,138     4.84 %     216,355       2,894     5.35 %
  Equity securities     14,220       185     5.23 %     14,386       218     6.10 %     27,618       379     5.50 %
  Total Investment Securities     2,456,851       14,914     2.43 %     2,454,375       15,359     2.50 %     2,292,531       14,217     2.48 %
  Loans held for sale     19,449       188     3.87 %     12,252       131     4.28 %     26,335       265     4.03 %
  Other interest-earning assets     357,211       864     0.96 %     358,562       898     1.00 %     439,425       933     0.85 %
  Total Interest-earning Assets     16,799,535       154,283     3.69 %     16,678,609       154,283     3.72 %     15,950,891       148,754     3.74 %
Noninterest-earning assets:                                                                  
  Cash and due from banks     100,860                     98,449                     104,723                
  Premises and equipment     227,517                     226,284                     226,569                
  Other assets     1,189,226                     1,137,292                     1,094,071                
  Less: allowance for loan losses     (164,573 )                   (167,372 )                   (176,085 )              
  Total Assets   $ 18,152,565                   $ 17,973,262                   $ 17,200,169                
                                                                   
                                                                   
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                  
Interest-bearing liabilities:                                                                  
  Demand deposits   $ 3,454,031     $ 1,527     0.18 %   $ 3,438,355     $ 1,494     0.17 %   $ 3,152,697     $ 987     0.13 %
  Savings deposits     3,989,988       1,886     0.19 %     3,932,824       1,804     0.18 %     3,568,579       1,247     0.14 %
  Time deposits     2,844,434       7,474     1.06 %     2,867,651       7,429     1.04 %     3,027,520       7,819     1.04 %
  Total Interest-bearing Deposits     10,288,453       10,887     0.43 %     10,238,830       10,727     0.42 %     9,748,796       10,053     0.41 %
  Short-term borrowings     403,669       217     0.21 %     445,402       268     0.24 %     379,988       103     0.11 %
  FHLB advances and long-term debt     965,526       9,289     3.86 %     958,213       9,262     3.88 %     1,026,987       11,153     4.35 %
  Total Interest-bearing Liabilities     11,657,648       20,393     0.70 %     11,642,445       20,257     0.70 %     11,155,771       21,309     0.77 %
                                                                   
Noninterest-bearing liabilities:                                                                  
  Demand deposits     4,077,642                     3,967,887                     3,734,880                
  Other     327,360                     304,131                     277,730                
  Total Liabilities     16,062,650                     15,914,463                     15,168,381                
  Shareholders' equity     2,089,915                     2,058,799                     2,031,788                
  Total Liabilities and Shareholders' Equity   $ 18,152,565                   $ 17,973,262                   $ 17,200,169                
                                                                     
  Net interest income/net interest margin (fully taxable equivalent)             133,890     3.20 %             134,026     3.23 %             127,445     3.20 %
  Tax equivalent adjustment             (4,974 )                   (4,972 )                   (4,525 )      
  Net interest income           $ 128,916                   $ 129,054                   $ 122,920        
(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   March 31   December 31   September 30   June 30   March 31     June 30  
    2016   2016   2015   2015   2015   2016     2015  
                         
Loans, by type:                                
  Real estate - commercial mortgage   $ 5,557,680   $ 5,487,421   $ 5,365,640   $ 5,242,021   $ 5,210,540   1.3 %   6.7 %
  Commercial - industrial, financial and agricultural     4,080,524     4,095,268     4,035,287     3,887,161     3,836,397   (0.4 %)   6.4 %
  Real estate - home equity     1,656,140     1,674,032     1,694,455     1,692,860     1,695,171   (1.1 %)   (2.3 %)
  Real estate - residential mortgage     1,399,851     1,381,409     1,377,116     1,381,141     1,356,464   1.3 %   3.2 %
  Real estate - construction     820,881     792,014     765,555     753,584     698,685   3.6 %   17.5 %
  Consumer     272,293     263,295     267,726     270,391     265,354   3.4 %   2.6 %
  Leasing and other     178,655     159,981     153,487     142,716     129,989   11.7 %   37.4 %
  Total Loans, net of unearned income   $ 13,966,024   $ 13,853,420   $ 13,659,266   $ 13,369,874   $ 13,192,600   0.8 %   5.9 %
                                           
Deposits, by type:                                          
  Noninterest-bearing demand   $ 4,077,642   $ 3,967,887   $ 3,999,118   $ 3,904,176   $ 3,734,880   2.8 %   9.2 %
  Interest-bearing demand     3,454,031     3,438,355     3,411,904     3,316,532     3,152,697   0.5 %   9.6 %
  Savings deposits     3,989,988     3,932,824     3,903,741     3,714,282     3,568,579   1.5 %   11.8 %
  Time deposits     2,844,434     2,867,651     2,903,715     2,963,774     3,027,520   (0.8 %)   (6.0 %)
  Total Deposits   $ 14,366,095   $ 14,206,717   $ 14,218,478   $ 13,898,764   $ 13,483,676   1.1 %   6.5 %
                                           
Short-term borrowings, by type:                                          
  Customer repurchase agreements   $ 180,595   $ 171,408   $ 142,004   $ 149,415   $ 179,804   5.4 %   0.4 %
  Customer short-term promissory notes     77,535     74,013     80,568     79,308     80,073   4.8 %   (3.2 %)
  Federal funds purchased     138,012     183,970     44,468     85,092     108,078   (25.0 %)   27.7 %
  Short-term FHLB advances and other borrowings     7,527     16,011     14,457     10,870     12,033   (53.0 %)   (37.4 %)
  Total Short-term Borrowings   $ 403,669   $ 445,402   $ 281,497   $ 324,685   $ 379,988   (9.4 %)   6.2 %
                                             
                                             
                                             
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
                     
    Six Months Ended June 30  
    2016           2015        
    Average
Balance
   
Interest (1)
   
Yield/Rate
    Average
Balance
   
Interest (1)
   
Yield/Rate
 
ASSETS                                    
Interest-earning assets:                                    
  Loans, net of unearned income   $ 13,909,722     $ 276,212     3.99 %   $ 13,144,332     $ 266,394     4.08 %
  Taxable investment securities     2,154,187       23,162     2.15 %     2,027,170       22,226     2.19 %
  Tax-exempt investment securities     287,123       6,708     4.67 %     222,684       6,106     5.48 %
  Equity securities     14,303       403     5.67 %     29,901       829     5.58 %
  Total Investment Securities     2,455,613       30,273     2.47 %     2,279,755       29,161     2.56 %
  Loans held for sale     15,850       319     4.03 %     21,694       438     4.04 %
  Other interest-earning assets     357,887       1,762     0.98 %     456,633       3,038     1.33 %
  Total Interest-earning Assets     16,739,072       308,566     3.70 %     15,902,414       299,031     3.79 %
Noninterest-earning assets:                                            
  Cash and due from banks     99,654                     104,996                
  Premises and equipment     226,901                     226,480                
  Other assets     1,163,259                     1,104,019                
  Less: allowance for loan losses     (165,972 )                   (179,985 )              
  Total Assets   $ 18,062,914                   $ 17,157,924                
                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                            
                                             
Interest-bearing liabilities:                                            
  Demand deposits   $ 3,446,193     $ 3,021     0.18 %   $ 3,144,358     $ 1,970     0.13 %
  Savings deposits     3,961,405       3,690     0.19 %     3,542,960       2,366     0.13 %
  Time deposits     2,856,044       14,903     1.05 %     3,044,463       15,540     1.03 %
  Total Interest-bearing Deposits     10,263,642       21,614     0.42 %     9,731,781       19,876     0.41 %
  Short-term borrowings     424,535       485     0.23 %     344,797       180     0.10 %
  FHLB advances and long-term debt     961,870       18,551     3.87 %     1,075,262       23,444     4.38 %
  Total Interest-bearing Liabilities     11,650,047       40,650     0.70 %     11,151,840       43,500     0.78 %
                                             
Noninterest-bearing liabilities:                                            
  Demand deposits     4,022,764                     3,698,661                
  Other     315,746                     283,504                
  Total Liabilities     15,988,557                     15,134,005                
  Shareholders' equity     2,074,357                     2,023,919                
  Total Liabilities and Shareholders' Equity   $ 18,062,914                   $ 17,157,924                
                                             
  Net interest income/net interest margin (fully taxable equivalent)             267,916     3.22 %             255,531     3.24 %
  Tax equivalent adjustment             (9,946 )                   (9,030 )      
  Net interest income           $ 257,970                   $ 246,501        
(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      
    2016   2015   % Change  
           
Loans, by type:              
  Real estate - commercial mortgage   $ 5,522,550   $ 5,187,322   6.5 %
  Commercial - industrial, financial and agricultural     4,087,897     3,803,475   7.5 %
  Real estate - home equity     1,665,086     1,708,163   (2.5 %)
  Real estate - residential mortgage     1,390,631     1,363,382   2.0 %
  Real estate - construction     806,448     693,715   16.3 %
  Consumer     267,794     262,265   2.1 %
  Leasing and other     169,316     126,010   34.4 %
  Total Loans, net of unearned income   $ 13,909,722   $ 13,144,332   5.8 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 4,022,764   $ 3,698,661   8.8 %
  Interest-bearing demand     3,446,193     3,144,358   9.6 %
  Savings deposits     3,961,405     3,542,960   11.8 %
  Time deposits     2,856,044     3,044,463   (6.2 %)
  Total Deposits   $ 14,286,406   $ 13,430,442   6.4 %
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 176,001   $ 176,732   (0.4 %)
  Customer short-term promissory notes     75,774     83,148   (8.9 %)
  Federal funds purchased     160,991     66,795   141.0 %
  Short-term FHLB advances and other borrowings     11,769     18,122   (35.1 %)
  Total Short-term Borrowings   $ 424,535   $ 344,797   23.1 %
                     
                     
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
                                           
    Three Months Ended     Six Months Ended  
    Jun 30     Mar 31     Dec 31     Sep 30     Jun 30     Jun 30     Jun 30  
    2016     2016     2015     2015     2015     2016     2015  
ALLOWANCE FOR CREDIT LOSSES:                                          
                                           
  Balance at beginning of period   $ 166,065     $ 171,412     $ 169,395     $ 169,453     $ 179,658     $ 171,412     $ 185,931  
  Loans charged off:                                                        
    Commercial - industrial, financial and agricultural     (4,625 )     (6,188 )     (970 )     (1,640 )     (11,166 )     (10,813 )     (13,029 )
    Consumer and home equity     (1,614 )     (2,548 )     (1,466 )     (1,590 )     (1,227 )     (4,162 )     (2,775 )
    Real estate - residential mortgage     (340 )     (1,068 )     (513 )     (1,035 )     (783 )     (1,408 )     (2,064 )
    Real estate - commercial mortgage     (1,474 )     (582 )     (1,207 )     (660 )     (1,642 )     (2,056 )     (2,351 )
    Real estate - construction     (742 )     (326 )     -       (114 )     (87 )     (1,068 )     (87 )
    Leasing and other     (1,951 )     (443 )     (1,304 )     (522 )     (467 )     (2,394 )     (830 )
    Total loans charged off     (10,746 )     (11,155 )     (5,460 )     (5,561 )     (15,372 )     (21,901 )     (21,136 )
  Recoveries of loans previously charged off:                                                        
    Commercial - industrial, financial and agricultural     2,931       2,319       1,409       1,598       1,471       5,250       2,257  
    Consumer and home equity     889       534       825       618       557       1,423       1,049  
    Real estate - residential mortgage     420       136       775       201       187       556       346  
    Real estate - commercial mortgage     1,367       825       1,072       842       451       2,192       887  
    Real estate - construction     1,563       383       548       898       231       1,946       1,378  
    Leasing and other     108       81       98       346       70       189       241  
    Recoveries of loans previously charged off     7,278       4,278       4,727       4,503       2,967       11,556       6,158  
  Net loans charged off     (3,468 )     (6,877 )     (733 )     (1,058 )     (12,405 )     (10,345 )     (14,978 )
  Provision for credit losses     2,511       1,530       2,750       1,000       2,200       4,041       (1,500 )
  Balance at end of period   $ 165,108     $ 166,065     $ 171,412     $ 169,395     $ 169,453     $ 165,108     $ 169,453  
                                                           
  Net charge-offs to average loans (annualized)     0.10 %     0.20 %     0.02 %     0.03 %     0.38 %     0.15 %     0.23 %
                                                         
NON-PERFORMING ASSETS:                                                        
                                                         
  Non-accrual loans   $ 111,742     $ 122,170     $ 129,523     $ 132,154     $ 129,152                  
  Loans 90 days past due and accruing     15,992       15,013       15,291       12,867       20,353                  
    Total non-performing loans     127,734       137,183       144,814       145,021       149,505                  
  Other real estate owned     11,918       10,946       11,099       10,561       12,763                  
  Total non-performing assets   $ 139,652     $ 148,129     $ 155,913     $ 155,582     $ 162,268                  
                                                         
NON-PERFORMING LOANS, BY TYPE:                                                        
  Commercial - industrial, financial and agricultural   $ 38,902     $ 39,140     $ 44,071     $ 38,032     $ 35,839                  
  Real estate - commercial mortgage     35,704       43,132       41,170       49,021       49,932                  
  Real estate - residential mortgage     25,030       25,182       28,484       27,707       31,562                  
  Consumer and home equity     16,061       16,210       17,123       15,186       17,215                  
  Real estate - construction     11,879       12,005       12,460       14,989       14,884                  
  Leasing     158       1,514       1,506       86       73                  
  Total non-performing loans   $ 127,734     $ 137,183     $ 144,814     $ 145,021     $ 149,505                  
                                                         
                                                         
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                                        
  Real-estate - residential mortgage   $ 27,324     $ 27,565     $ 28,511     $ 29,330     $ 31,584                  
  Real-estate - commercial mortgage     17,808       17,427       17,563       17,282       17,482                  
  Consumer and home equity     7,191       6,562       4,589       3,983       3,330                  
  Commercial - industrial, financial and agricultural     5,756       5,650       5,953       7,399       6,591                  
  Real estate - construction     3,086       3,092       3,942       4,363       4,482                  
  Total accruing TDRs     61,165       60,296       60,558       62,357       63,469                  
  Non-accrual TDRs (1)     24,887       27,277       31,035       27,618       27,230                  
  Total TDRs   $ 86,052     $ 87,573     $ 91,593     $ 89,975     $ 90,699                  
(1) Included within non-accrual loans above.
                               
    Total Delinquency %  
DELINQUENCY RATES, BY TYPE:   Jun 30     Mar 31     Dec 31     Sep 30     Jun 30  
    2016     2016     2015     2015     2015  
                               
                               
  Real estate - commercial mortgage   0.81 %   0.93 %   0.91 %   1.08 %   1.30 %
  Commercial - industrial, financial and agricultural   1.25 %   1.46 %   1.27 %   1.32 %   1.16 %
  Real estate - construction   1.93 %   2.00 %   1.87 %   2.25 %   2.05 %
  Real estate - residential mortgage   2.70 %   3.10 %   3.40 %   3.27 %   3.83 %
  Consumer, home equity, leasing and other   1.47 %   1.48 %   1.58 %   1.41 %   1.52 %
                               
  Total   1.30 %   1.44 %   1.41 %   1.49 %   1.60 %
                               
(2) Includes non-accrual loans                              
                               
ASSET QUALITY RATIOS:                              
    Jun 30     Mar 31     Dec 31     Sep 30     Jun 30  
    2016     2016     2015     2015     2015  
                               
  Non-accrual loans to total loans   0.79 %   0.88 %   0.94 %   0.98 %   0.98 %
  Non-performing loans to total loans   0.90 %   0.99 %   1.05 %   1.07 %   1.13 %
  Non-performing assets to total loans and OREO   0.99 %   1.07 %   1.13 %   1.15 %   1.22 %
  Non-performing assets to total assets   0.76 %   0.82 %   0.87 %   0.87 %   0.93 %
  Allowance for credit losses to loans outstanding   1.17 %   1.20 %   1.24 %   1.25 %   1.28 %
  Allowance for credit losses to non-performing loans   129.26 %   121.05 %   118.37 %   116.81 %   113.34 %
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses   8.02 %   8.67 %   9.27 %   9.35 %   9.76 %
 
 
 
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 supplemental 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 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     Year Ended  
    June 30     March 31     December 31     September 30     June 30     June 30     June 30  
    2016     2016     2015     2015     2015     2016     2015  
Shareholders' equity (tangible), per share                                          
Shareholders' equity   $ 2,106,997     $ 2,073,309     $ 2,041,894     $ 2,025,904     $ 2,024,817                  
Less: Goodwill and intangible assets     (531,556 )     (531,556 )     (531,556 )     (531,562 )     (531,567 )                
Tangible shareholders' equity (numerator)   $ 1,575,441     $ 1,541,753     $ 1,510,338     $ 1,494,342     $ 1,493,250                  
                                                         
Shares outstanding, end of period (denominator)     173,139       173,393       174,176       173,771       176,019                  
                                                         
  Shareholders' equity (tangible), per share   $ 9.10     $ 8.89     $ 8.67     $ 8.60     $ 8.48                  
                                                         
Return on average common shareholders' equity (tangible)                                                        
Net income   $ 39,750     $ 38,257     $ 38,535     $ 34,251     $ 36,680     $ 78,007     $ 76,716  
Plus: Intangible amortization, net of tax     -       -       4       3       69       -       153  
Numerator   $ 39,750     $ 38,257     $ 38,539     $ 34,254     $ 36,749     $ 78,007     $ 76,869  
                                                         
Average shareholders' equity   $ 2,089,915     $ 2,058,799     $ 2,036,769     $ 2,022,829     $ 2,031,788     $ 2,074,357     $ 2,023,919  
Less: Average goodwill and intangible assets