SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

October 21, 2014 16:30 ET

Fulton Financial Reports Third Quarter Earnings of $0.21 per Share

LANCASTER, PA--(Marketwired - Oct 21, 2014) -  Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the third quarter of 2014 was 21 cents, unchanged from the second quarter of 2014 and the third quarter of 2013.
  • Net interest income for the third quarter of 2014 increased $1.5 million, or 1.1 percent, compared to the second quarter of 2014. The net interest margin for the third quarter of 2014 decreased two basis points, to 3.39 percent, compared to the second quarter of 2014.
  • Average loans for the third quarter of 2014 increased $127.1 million, or 1.0 percent, compared to the second quarter of 2014. Average non-interest-bearing and interest-bearing demand and savings deposits for the third quarter of 2014 increased $437.2 million, or 4.6 percent, compared to the second quarter of 2014.
  • The provision for credit losses was $3.5 million for the third quarter of 2014, unchanged from the second quarter of 2014 and a $6.0 million, or 63.2 percent, decrease from the third quarter of 2013. Non-performing loans decreased $5.5 million, or 3.7 percent, in comparison to June 30, 2014 and decreased $24.4 million, or 14.5 percent, in comparison to September 30, 2013.
  • Non-interest income, excluding investment securities gains, decreased $1.9 million, or 4.4 percent, in comparison to the second quarter of 2014, while non-interest expense decreased $376,000, or 0.3 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. All four million shares were repurchased during the third quarter of 2014.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $38.6 million, or 21 cents per diluted share, for the third quarter of 2014, compared to $39.6 million, or 21 cents per diluted share, for the second quarter of 2014.

"Good loan growth, further improvement in asset quality and higher net interest income all contributed to our solid financial performance in the third quarter," said E. Philip Wenger, Chairman, CEO and President. "We continue to execute on our strategic priorities. They include positioning the company for profitable future growth, deploying capital to enhance long term shareholder value, ensuring a superior customer experience by investing in systems and technology, and building out our risk management and compliance processes." 

Net Interest Income and Margin
Net interest income for the third quarter of 2014 increased $1.5 million, or 1.1 percent, from the second quarter of 2014. The net interest margin decreased two basis points to 3.39 percent in the third quarter of 2014 from 3.41 percent in the second quarter of 2014. Average yields on interest-earning assets decreased two basis points, while the average cost of interest-bearing liabilities increased two basis points.

Average Balance Sheet
Total average assets for the third quarter of 2014 were $17.0 billion, an increase of $170.3 million, or 1.0 percent, from the second quarter of 2014. Average loans, net of unearned income, increased $127.1 million, or 1.0 percent, in comparison to the second quarter of 2014.

           
  Three Months Ended        
  September 30, 2014     June 30, 2014     Increase (decrease) in Balance  
  Balance   Yield (1)     Balance   Yield (1)     $     %  
  (dollars in thousands)  
Average Loans, net of unearned income, by type:                                    
  Real estate - commercial mortgage $ 5,114,221   4.35 %   $ 5,138,537   4.36 %   $ (24,316 )   (0.5 %)
  Commercial - industrial, financial and agricultural   3,657,047   3.97 %     3,617,977   3.95 %     39,070     1.1 %
  Real estate - home equity   1,727,253   4.18 %     1,735,767   4.18 %     (8,514 )   (0.5 %)
  Real estate - residential mortgage   1,369,087   3.93 %     1,339,034   3.97 %     30,053     2.2 %
  Real estate - construction   663,922   3.98 %     588,176   4.17 %     75,746     12.9 %
  Consumer   284,630   5.39 %     276,444   4.56 %     8,186     3.0 %
  Leasing and other   106,661   7.16 %     99,812   8.83 %     6,849     6.9 %
                                       
  Total Average Loans, net of unearned income $ 12,922,821   4.20 %   $ 12,795,747   4.21 %   $ 127,074     1.0 %
                                       
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
   

Total average liabilities increased $162.7 million, or 1.1 percent, from the second quarter of 2014, due mainly to a $434.3 million, or 3.4 percent, increase in average deposits and a $101.0 million, or 11.3 percent, increase in FHLB Advances and long-term debt, partially offset by a $380.3 million, or 36.3 percent, decrease in average short-term borrowings.

           
  Three Months Ended        
  September 30, 2014     June 30, 2014     Increase (decrease) in Balance  
  Balance   Rate     Balance   Rate     $     %  
  (dollars in thousands)        
Average Deposits, by type:                                    
  Noninterest-bearing demand $ 3,514,033   - %   $ 3,322,195   - %   $ 191,838     5.8 %
  Interest-bearing demand   3,047,191   0.12 %     2,914,887   0.12 %     132,304     4.5 %
  Savings deposits   3,468,958   0.12 %     3,355,929   0.12 %     113,029     3.4 %
Total average demand and savings   10,030,182   0.08 %     9,593,011   0.08 %     437,171     4.6 %
  Time deposits   3,009,225   0.92 %     3,012,061   0.90 %     (2,836 )   (0.1 %)
                                     
Total Average Deposits $ 13,039,407   0.27 %   $ 12,605,072   0.28 %   $ 434,335     3.4 %
                                     

Asset Quality
Non-performing assets were $157.3 million, or 0.91 percent of total assets, at September 30, 2014, compared to $162.8 million, or 0.96 percent of total assets, at June 30, 2014 and $186.5 million, or 1.09 percent of total assets, at September 30, 2013. The $5.5 million, or 3.4 percent, decrease in non-performing assets in comparison to the second quarter of 2014 was primarily due to decreases in non-performing commercial loans, and non-performing consumer and home equity loans.

Annualized net charge-offs for the third quarter ended September 30, 2014 were 0.18 percent of average total loans, compared to 0.28 percent for the second quarter of 2014 and 0.45 percent for the third quarter ended September 30, 2013. The allowance for credit losses as a percentage of non-performing loans was 132.9 percent at September 30, 2014, as compared to 129.6 percent at June 30, 2014 and 126.5 percent at September 30, 2013.

Non-interest Income 
Non-interest income, excluding investment securities gains, decreased $1.9 million, or 4.4 percent, in comparison to the second quarter of 2014. Mortgage banking income decreased $1.7 million, or 29.7 percent, as amortization of mortgage servicing rights increased and sales volumes decreased in the third quarter. Other service charges and fees decreased $572,000, or 5.4 percent, including a $456,000 decrease in commercial swap fees. Service charges on deposit accounts increased $249,000, or 2.0 percent, due to a $264,000 increase in overdraft fees.

Non-interest Expense
Non-interest expense decreased $376,000, or 0.3 percent, in the third quarter of 2014 compared to the second quarter of 2014. Salaries and employee benefits decreased $1.2 million, or 1.9 percent, in comparison to the second quarter of 2014, due primarily to a decrease in self-insured healthcare costs. Marketing expenses decreased $539,000, or 23.1 percent. Other non-interest expense decreased $1.6 million, or 13.0 percent, including a reduction in the reserve for debit card reward points. Partially offsetting these decreases in non-interest expense was a $1.4 million, or 19.2 percent, increase in other outside services largely attributable to continuing risk management and compliance efforts, including the enhancement of the Corporation's Bank Secrecy Act and anti-money laundering compliance program (the "BSA/AML Compliance Program"). These enhanced risk management and compliance efforts continue the Corporation's ongoing efforts to improve its BSA/AML Compliance Program and to remediate deficiencies specified in the previously disclosed regulatory enforcement orders received by the Corporation and four of its banking subsidiaries during the third quarter of 2014. In addition, other real estate owned and repossession expense and operating risk loss increased $555,000 and $526,000, respectively, in comparison to the second quarter of 2014. 

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 Reports on Form 10-Q for the quarters ended March 31, 2014 and June 30, 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  
  September 30   September 30   June 30   September 30   June 30  
  2014   2013   2014   2013   2014  
                           
ASSETS                          
                           
  Cash and due from banks $ 220,946   $ 262,938   $ 258,837   (16.0 %) (14.6 %)
  Other interest-earning assets   377,579     308,924     305,518   22.2 % 23.6 %
  Loans held for sale   25,212     39,273     36,079   (35.8 %) (30.1 %)
  Investment securities   2,470,609     2,597,435     2,497,776   (4.9 %) (1.1 %)
  Loans, net of unearned income   13,030,405     12,780,899     12,839,511   2.0 % 1.5 %
  Allowance for loan losses   (189,477 )   (210,486 )   (191,685 ) (10.0 %) (1.2 %)
    Net loans   12,840,928     12,570,413     12,647,826   2.2 % 1.5 %
  Premises and equipment   224,441     227,299     225,168   (1.3 %) (0.3 %)
  Accrued interest receivable   43,544     44,715     42,116   (2.6 %) 3.4 %
  Goodwill and intangible assets   532,117     533,918     532,432   (0.3 %) (0.1 %)
  Other assets   502,798     465,856     487,887   7.9 % 3.1 %
                             
      Total Assets $ 17,238,174   $ 17,050,771   $ 17,033,639   1.1 % 1.2 %
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
                           
  Deposits $ 13,333,627   $ 12,721,121   $ 12,693,659   4.8 % 5.0 %
  Short-term borrowings   564,952     1,198,577     1,008,307   (52.9 %) (44.0 %)
  Other liabilities   243,300     212,987     263,478   14.2 % (7.7 %)
  FHLB advances and long-term debt   1,018,289     889,122     968,395   14.5 % 5.2 %
                             
    Total Liabilities   15,160,168     15,021,807     14,933,839   0.9 % 1.5 %
                             
  Shareholders' equity   2,078,006     2,028,964     2,099,800   2.4 % (1.0 %)
                             
      Total Liabilities and Shareholders' Equity $ 17,238,174   $ 17,050,771   $ 17,033,639   1.1 % 1.2 %
                           
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                      
                           
Loans, by type:                          
  Real estate - commercial mortgage $ 5,156,979   $ 5,063,373   $ 5,128,734   1.8 % 0.6 %
  Commercial - industrial, financial and agricultural   3,691,262     3,645,270     3,601,721   1.3 % 2.5 %
  Real estate - home equity   1,733,036     1,773,554     1,730,497   (2.3 %) 0.1 %
  Real estate - residential mortgage   1,372,033     1,327,469     1,361,976   3.4 % 0.7 %
  Real estate - construction   687,728     577,342     634,018   19.1 % 8.5 %
  Consumer   278,219     296,142     280,557   (6.1 %) (0.8 %)
  Leasing and other   111,148     97,749     102,008   13.7 % 9.0 %
                             
  Total Loans, net of unearned income $ 13,030,405   $ 12,780,899   $ 12,839,511   2.0 % 1.5 %
                           
Deposits, by type:                          
  Noninterest-bearing demand $ 3,556,810   $ 3,338,075   $ 3,484,125   6.6 % 2.1 %
  Interest-bearing demand   3,164,514     2,986,549     2,855,511   6.0 % 10.8 %
  Savings deposits   3,620,919     3,371,923     3,338,018   7.4 % 8.5 %
  Time deposits   2,991,384     3,024,574     3,016,005   (1.1 %) (0.8 %)
                             
  Total Deposits $ 13,333,627   $ 12,721,121   $ 12,693,659   4.8 % 5.0 %
                           
Short-term borrowings, by type:                          
  Customer repurchase agreements $ 195,121   $ 209,800   $ 212,930   (7.0 %) (8.4 %)
  Customer short-term promissory notes   78,225     95,503     86,366   (18.1 %) (9.4 %)
  Federal funds purchased   6,606     493,274     384,011   (98.7 %) (98.3 %)
  Short-term FHLB advances   285,000     400,000     325,000   (28.8 %) (12.3 %)
                             
  Total Short-term Borrowings $ 564,952   $ 1,198,577   $ 1,008,307   (52.9 %) (44.0 %)
                           
                           
                           
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
in thousands, except per-share data and percentages
   
  Three Months Ended     % Change from     Nine Months Ended Sep 30        
  Sep 30 2014     Sep 30 2013     Jun 30 2014     Sep 30 2013     Jun 30 2014     2014     2013     % Change  
                                                         
Interest Income:                                                        
  Interest income $ 149,790     $ 152,832     $ 147,902     (2.0 %)   1.3 %   $ 446,484     $ 457,232     (2.4 %)
  Interest expense   20,424       20,299       20,004     0.6 %   2.1 %     59,655       62,990     (5.3 %)
                                                           
    Net Interest Income   129,366       132,533       127,898     (2.4 %)   1.1 %     386,829       394,242     (1.9 %)
  Provision for credit losses   3,500       9,500       3,500     (63.2 %)   -       9,500       38,000     (75.0 %)
                                                           
    Net Interest Income after Provision   125,866       123,033       124,398     2.3 %   1.2 %     377,329       356,242     5.9 %
                                                         
Non-Interest Income:                                                        
  Service charges on deposit accounts   12,801       13,938       12,552     (8.2 %)   2.0 %     37,064       42,700     (13.2 %)
  Investment management and trust services   11,120       10,420       11,339     6.7 %   (1.9 %)     33,417       31,117     7.4 %
  Other service charges and fees   9,954       9,518       10,526     4.6 %   (5.4 %)     29,407       27,536     6.8 %
  Mortgage banking income   4,038       7,123       5,741     (43.3 %)   (29.7 %)     13,384       26,293     (49.1 %)
  Investment securities gains   81       2,633       1,112     (96.9 %)   (92.7 %)     1,193       7,971     (85.0 %)
  Other   3,906       3,725       3,602     4.9 %   8.4 %     10,813       11,315     (4.4 %)
                                                           
    Total Non-Interest Income   41,900       47,357       44,872     (11.5 %)   (6.6 %)     125,278       146,932     (14.7 %)
                                                         
Non-Interest Expense:                                                        
  Salaries and employee benefits   62,434       63,344       63,623     (1.4 %)   (1.9 %)     185,623       188,046     (1.3 %)
  Net occupancy expense   11,582       11,519       11,464     0.5 %   1.0 %     36,649       34,810     5.3 %
  Other outside services   8,632       5,048       7,240     71.0 %   19.2 %     19,684       13,223     48.9 %
  Data processing   4,689       4,757       4,331     (1.4 %)   8.3 %     12,816       13,169     (2.7 %)
  Software   3,353       3,268       3,209     2.6 %   4.5 %     9,487       9,110     4.1 %
  Equipment expense   3,307       3,646       3,360     (9.3 %)   (1.6 %)     10,269       11,447     (10.3 %)
  Professional fees   3,252       3,329       3,559     (2.3 %)   (8.6 %)     9,715       9,771     (0.6 %)
  FDIC insurance expense   2,882       2,918       2,615     (1.2 %)   10.2 %     8,186       8,766     (6.6 %)
  Marketing   1,798       2,251       2,337     (20.1 %)   (23.1 %)     5,719       6,045     (5.4 %)
  Other real estate owned and repossession expense   1,303       1,453       748     (10.3 %)   74.2 %     3,034       6,248     (51.4 %)
  Operating risk loss   1,242       3,297       716     (62.3 %)   73.5 %     3,786       6,923     (45.3 %)
  Intangible amortization   314       534       315     (41.2 %)   (0.3 %)     944       1,603     (41.1 %)
  Other   11,010       11,241       12,657     (2.1 %)   (13.0 %)     35,614       35,510     0.3 %
                                                           
    Total Non-Interest Expense   115,798       116,605       116,174     (0.7 %)   (0.3 %)     341,526       344,671     (0.9 %)
                                                           
    Income Before Income Taxes   51,968       53,785       53,096     (3.4 %)   (2.1 %)     161,081       158,503     1.6 %
  Income tax expense   13,402       13,837       13,500     (3.1 %)   (0.7 %)     41,136       38,746     6.2 %
                                                           
    Net Income $ 38,566     $ 39,948     $ 39,596     (3.5 %)   (2.6 %)   $ 119,945     $ 119,757     0.2 %
                                                         
                                                         
PER SHARE:                                                        
                                                         
  Net income:                                                        
    Basic $ 0.21     $ 0.21     $ 0.21     -     -     $ 0.64     $ 0.62     3.2 %
    Diluted   0.21       0.21       0.21     -     -       0.64       0.61     4.9 %
                                                           
  Cash dividends $ 0.08     $ 0.08     $ 0.08     -     -     $ 0.24     $ 0.24     -  
  Shareholders' equity   11.22       10.55       11.11     6.4 %   1.0 %     11.22       10.55     6.4 %
  Shareholders' equity (tangible)   8.35       7.77       8.29     7.5 %   0.7 %     8.35       7.77     7.5 %
                                                           
  Weighted average shares (basic)   186,109       192,251       188,139     (3.2 %)   (1.1 %)     187,893       193,926     (3.1 %)
  Weighted average shares (diluted)   186,955       193,259       189,182     (3.3 %)   (1.2 %)     188,863       194,926     (3.1 %)
  Shares outstanding, end of period   185,158       192,332       189,033     (3.7 %)   (2.0 %)     185,158       192,332     (3.7 %)
                                                         
SELECTED FINANCIAL RATIOS:                                                        
                                                         
  Return on average assets   0.90 %     0.93 %     0.94 %                 0.95 %     0.95 %      
  Return on average shareholders' equity   7.32 %     7.81 %     7.63 %                 7.72 %     7.79 %      
  Return on average shareholders' equity (tangible)   9.88 %     10.69 %     10.30 %                 10.43 %     10.62 %      
  Net interest margin   3.39 %     3.45 %     3.41 %                 3.42 %     3.51 %      
  Efficiency ratio   65.80 %     63.92 %     65.85 %                 65.02 %     62.81 %      
                                                         
                                                         
                                                         
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
     
  Three Months Ended  
  September 30, 2014     September 30, 2013     June 30, 2014  
  Average   Interest   Yield/     Average     Interest     Yield/     Average   Interest   Yield/  
  Balance   (1)   Rate     Balance     (1)     Rate     Balance   (1)   Rate  
ASSETS                                                        
                                                         
Interest-earning assets:                                                        
  Loans, net of unearned income $ 12,922,821   $ 136,773   4.20 %   $ 12,728,162     $ 139,141     4.34 %   $ 12,795,747   $ 134,387   4.21 %
  Taxable investment securities   2,181,099     12,278   2.25 %     2,446,583       12,977     2.12 %     2,211,004     12,418   2.25 %
  Tax-exempt investment securities   256,303     3,414   5.33 %     284,372       3,581     5.04 %     270,482     3,534   5.23 %
  Equity securities   34,002     438   5.12 %     35,999       435     4.82 %     33,922     419   4.95 %
                                                           
  Total Investment Securities   2,471,404     16,130   2.61 %     2,766,954       16,993     2.46 %     2,515,408     16,371   2.60 %
                                                           
  Loans held for sale   23,699     237   4.01 %     36,450       382     4.19 %     17,540     214   4.87 %
  Other interest-earning assets   293,286     976   1.33 %     236,185       659     1.12 %     238,921     1,207   2.02 %
                                                           
  Total Interest-earning Assets   15,711,210     154,116   3.90 %     15,767,751       157,175     3.96 %     15,567,616     152,179   3.92 %
                                                         
Noninterest-earning assets:                                                        
  Cash and due from banks   203,134                 210,525                     198,291            
  Premises and equipment   224,241                 224,837                     224,586            
  Other assets   1,055,521                 1,009,162                     1,037,654            
  Less: allowance for loan losses   (192,163 )               (220,342 )                   (196,462 )          
                                                           
  Total Assets $ 17,001,943               $ 16,991,933                   $ 16,831,685            
                                                         
                                                         
LIABILITIES AND SHAREHOLDERS' EQUITY                                                        
                                                         
Interest-bearing liabilities:                                                        
  Demand deposits $ 3,047,191   $ 953   0.12 %   $ 2,895,156     $ 938     0.13 %   $ 2,914,887   $ 904   0.12 %
  Savings deposits   3,468,958     1,061   0.12 %     3,359,795       1,015     0.12 %     3,355,929     1,031   0.12 %
  Time deposits   3,009,225     6,984   0.92 %     3,065,210       6,790     0.88 %     3,012,061     6,750   0.90 %
                                                           
  Total Interest-bearing Deposits   9,525,374     8,998   0.37 %     9,320,161       8,743     0.37 %     9,282,877     8,685   0.38 %
                                                           
  Short-term borrowings   667,397     297   0.18 %     1,337,742       691     0.20 %     1,047,684     540   0.21 %
  FHLB advances and long-term debt   995,486     11,129   4.45 %     889,141       10,865     4.87 %     894,511     10,779   4.83 %
                                                           
  Total Interest-bearing Liabilities   11,188,257     20,424   0.73 %     11,547,044       20,299     0.70 %     11,225,072     20,004   0.71 %
                                                         
Noninterest-bearing liabilities:                                                        
  Demand deposits   3,514,033                 3,221,648                     3,322,195            
  Other   210,194                 194,163                     202,520            
                                                           
  Total Liabilities   14,912,484                 14,962,855                     14,749,787            
                                                           
  Shareholders' equity   2,089,459                 2,029,078                     2,081,898            
                                                           
  Total Liabilities and Shareholders' Equity $ 17,001,943               $ 16,991,933                   $ 16,831,685            
                                                         
  Net interest income/net interest margin (fully taxable equivalent)     133,692   3.39 %             136,876     3.45 %           132,175   3.41 %
  Tax equivalent adjustment         (4,326 )                 (4,343 )                 (4,277 )    
                                                         
  Net interest income       $ 129,366                 $ 132,533                 $ 127,898      
                                                           
(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  
  September 30   September 30   June 30   September 30   June 30  
  2014   2013   2014   2013   2014  
               
Loans, by type:                          
  Real estate - commercial mortgage $ 5,114,221   $ 4,961,871   $ 5,138,537   3.1 % (0.5 %)
  Commercial - industrial, financial and agricultural   3,657,047     3,706,113     3,617,977   (1.3 %) 1.1 %
  Real estate - home equity   1,727,253     1,767,095     1,735,767   (2.3 %) (0.5 %)
  Real estate - residential mortgage   1,369,087     1,323,972     1,339,034   3.4 % 2.2 %
  Real estate - construction   663,922     576,222     588,176   15.2 % 12.9 %
  Consumer   284,630     299,057     276,444   (4.8 %) 3.0 %
  Leasing and other   106,661     93,832     99,812   13.7 % 6.9 %
                             
  Total Loans, net of unearned income $ 12,922,821   $ 12,728,162   $ 12,795,747   1.5 % 1.0 %
                           
Deposits, by type:                          
  Noninterest-bearing demand $ 3,514,033   $ 3,221,648   $ 3,322,195   9.1 % 5.8 %
  Interest-bearing demand   3,047,191     2,895,156     2,914,887   5.3 % 4.5 %
  Savings deposits   3,468,958     3,359,795     3,355,929   3.2 % 3.4 %
  Time deposits   3,009,225     3,065,210     3,012,061   (1.8 %) (0.1 %)
                           
  Total Deposits $ 13,039,407   $ 12,541,809   $ 12,605,072   4.0 % 3.4 %
                           
Short-term borrowings, by type:                          
  Customer repurchase agreements $ 202,809   $ 196,503   $ 216,212   3.2 % (6.2 %)
  Customer short-term promissory notes   83,734     91,573     81,823   (8.6 %) 2.3 %
  Federal funds purchased   224,930     559,992     444,429   (59.8 %) (49.4 %)
  Short-term FHLB advances and other borrowings   155,924     489,674     305,220   (68.2 %) (48.9 %)
                             
  Total Short-term Borrowings $ 667,397   $ 1,337,742   $ 1,047,684   (50.1 %) (36.3 %)
                             
                             
                             
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
       
    Nine Months Ended September 30  
    2014   2013  
    Average   Interest   Yield/   Average   Interest   Yield/  
    Balance   (1)   Rate   Balance   (1)   Rate  
ASSETS                                  
                                   
Interest-earning assets:                                  
  Loans, net of unearned income   $ 12,827,563   $ 405,904   4.23 % $ 12,506,393   $ 414,091   4.43 %
  Taxable investment securities     2,216,344     37,962   2.28 %   2,426,015     40,890   2.25 %
  Tax-exempt investment securities     268,604     10,561   5.24 %   285,638     11,003   5.14 %
  Equity securities     33,949     1,286   5.06 %   40,352     1,416   4.69 %
                                     
  Total Investment Securities     2,518,897     49,809   2.64 %   2,752,005     53,309   2.58 %
                                   
  Loans held for sale     18,259     585   4.27 %   42,122     1,261   3.99 %
  Other interest-earning assets     263,797     3,065   1.55 %   217,975     1,527   0.93 %
                                   
  Total Interest-earning Assets     15,628,516     459,363   3.93 %   15,518,495     470,188   4.05 %
                                   
Noninterest-earning assets:                                  
  Cash and due from banks     200,368               206,403            
  Premises and equipment     225,033               225,733            
  Other assets     1,041,834               1,047,122            
  Less: allowance for loan losses     (197,235 )             (223,220 )          
                                   
  Total Assets   $ 16,898,516             $ 16,774,533            
                                   
LIABILITIES AND SHAREHOLDERS' EQUITY                                  
                                   
Interest-bearing liabilities:                                  
  Demand deposits   $ 2,969,470   $ 2,766   0.12 % $ 2,773,917   $ 2,687   0.13 %
  Savings deposits     3,392,681     3,127   0.12 %   3,348,413     3,054   0.12 %
  Time deposits     2,984,861     19,686   0.88 %   3,184,281     22,901   0.96 %
                                     
  Total Interest-bearing Deposits     9,347,012     25,579   0.37 %   9,306,611     28,642   0.41 %
                                   
  Short-term borrowings     972,694     1,470   0.20 %   1,228,882     1,900   0.20 %
  Federal Home Loan Bank advances and long-term debt     924,920     32,606   4.71 %   889,826     32,448   4.87 %
                                     
  Total Interest-bearing Liabilities     11,244,626     59,655   0.71 %   11,425,319     62,990   0.74 %
                                   
Noninterest-bearing liabilities:                                  
  Demand deposits     3,360,876               3,103,381            
  Other     214,826               190,976            
                                   
  Total Liabilities     14,820,328               14,719,676            
                                     
  Shareholders' equity     2,078,188               2,054,857            
                                     
  Total Liabilities and Shareholders' Equity   $ 16,898,516             $ 16,774,533            
                                   
  Net interest income/net interest margin (fully taxable equivalent)     399,708   3.42 %         407,198   3.51 %
  Tax equivalent adjustment           (12,879 )             (12,956 )    
                                   
  Net interest income         $ 386,829             $ 394,242      
                                   
(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:        
                                   
    Nine Months Ended                      
    September 30                      
    2014   2013   % Change                  
                             
Loans, by type:                                  
  Real estate - commercial mortgage   $ 5,112,735   $ 4,796,557   6.6 %                
  Commercial - industrial, financial and agricultural     3,637,440     3,694,612   (1.5 %)                
  Real estate - home equity     1,739,352     1,721,041   1.1 %                
  Real estate - residential mortgage     1,348,269     1,305,434   3.3 %                
  Real estate - construction     609,803     594,991   2.5 %                
  Consumer     278,697     303,127   (8.1 %)                
  Leasing and other     101,267     90,631   11.7 %                
                                     
  Total Loans, net of unearned income   $ 12,827,563   $ 12,506,393   2.6 %                
                                   
Deposits, by type:                                  
  Noninterest-bearing demand   $ 3,360,876   $ 3,103,381   8.3 %                
  Interest-bearing demand     2,969,470     2,773,917   7.0 %                
  Savings deposits     3,392,681     3,348,413   1.3 %                
  Time deposits     2,984,861     3,184,281   (6.3 %)                
                                     
  Total Deposits   $ 12,707,888   $ 12,409,992   2.4 %                
                                   
Short-term borrowings, by type:                                  
  Customer repurchase agreements   $ 202,184   $ 183,432   10.2 %                
  Customer short-term promissory notes     89,119     100,532   (11.4 %)                
  Federal funds purchased     361,162     681,576   (47.0 %)                
  Short-term FHLB advances and other borrowings     320,229     263,342   21.6 %                
                                     
  Total Short-term Borrowings   $ 972,694   $ 1,228,882   (20.8 %)                
                                     
                                     
                                     
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
   
  Three Months Ended     Nine Months Ended  
                    Sep 30  
  Sep 30 2014     Sep 30 2013     Jun 30 2014     2014     2013  
ALLOWANCE FOR CREDIT LOSSES:                                      
                                       
  Balance at beginning of period $ 193,442     $ 217,626     $ 199,006     $ 204,917     $ 225,439  
                                         
  Loans charged off:                                      
    Commercial - industrial, financial and agricultural   (5,167 )     (9,394 )     (5,512 )     (15,804 )     (24,856 )
    Consumer and home equity   (2,030 )     (2,838 )     (1,683 )     (6,115 )     (8,191 )
    Real estate - commercial mortgage   (1,557 )     (3,724 )     (2,141 )     (5,084 )     (13,050 )
    Real estate - construction   (313 )     (598 )     (218 )     (745 )     (5,181 )
    Leasing and other   (306 )     (787 )     (833 )     (1,434 )     (2,037 )
    Real estate - residential mortgage   (231 )     (767 )     (1,089 )     (2,166 )     (8,282 )
    Total loans charged off   (9,604 )     (18,108 )     (11,476 )     (31,348 )     (61,597 )
  Recoveries of loans previously charged off:                                      
    Commercial - industrial, financial and agricultural   1,013       2,295       775       2,532       3,430  
    Consumer and home equity   784       492       579       1,928       1,927  
    Real estate - commercial mortgage   1,167       185       430       1,641       2,754  
    Real estate - construction   470       379       158       852       1,794  
    Leasing and other   241       224       362       767       649  
    Real estate - residential mortgage   95       245       108       319       442  
    Recoveries of loans previously charged off   3,770       3,820       2,412       8,039       10,996  
  Net loans charged off   (5,834 )     (14,288 )     (9,064 )     (23,309 )     (50,601 )
  Provision for credit losses   3,500       9,500       3,500       9,500       38,000  
                                         
  Balance at end of period $ 191,108     $ 212,838     $ 193,442     $ 191,108     $ 212,838  
                                       
  Net charge-offs to average loans (annualized)   0.18 %     0.45 %     0.28 %     0.24 %     0.54 %
                                       
NON-PERFORMING ASSETS:                                      
                                       
  Non-accrual loans $ 126,420     $ 143,012     $ 129,934                  
  Loans 90 days past due and accruing   17,428       25,271       19,378                  
    Total non-performing loans   143,848       168,283       149,312                  
  Other real estate owned   13,489       18,173       13,482                  
                                         
  Total non-performing assets $ 157,337     $ 186,456     $ 162,794                  
                                       
NON-PERFORMING LOANS, BY TYPE:                                      
                                       
  Real estate - commercial mortgage $ 44,602     $ 42,623     $ 44,015                  
  Commercial - industrial, financial and agricultural   33,277       45,184       38,163                  
  Real estate - residential mortgage   28,135       34,309       27,887                  
  Real estate - construction   19,860       24,396       20,268                  
  Consumer and home equity   17,586       21,704       18,919                  
  Leasing   388       67       60                  
                                         
  Total non-performing loans $ 143,848     $ 168,283     $ 149,312                  
                                       
                                       
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                  
                                       
  Real-estate - residential mortgage $ 30,850     $ 27,820     $ 31,184                  
  Real-estate - commercial mortgage   18,869       22,644       19,398                  
  Real estate - construction   9,251       9,841       8,561                  
  Commercial - industrial, financial and agricultural   5,115       8,184       6,953                  
  Consumer and home equity   2,927       1,678       2,838                  
  Total accruing TDRs   67,012       70,167       68,934                  
  Non-accrual TDRs (1)   27,724       30,501       25,526                  
  Total TDRs $ 94,736     $ 100,668     $ 94,460                  
                                       
(1) Included within non-accrual loans above.  
   
   
DELINQUENCY RATES, BY TYPE:  
  Sep 30, 2014   Sep 30, 2013   June 30, 2014  
  31-89 Days   Greater than or equal to 90 Days (2)   Total   31-89 Days   Greater than or equal to 90 Days (2)   Total   31-89 Days   Greater than or equal to 90 Days (2)   Total  
                                     
  Real estate - commercial mortgage 0.48 % 0.86 % 1.34 % 0.40 % 0.84 % 1.24 % 0.30 % 0.86 % 1.16 %
  Commercial - industrial, financial and agricultural 0.28 % 0.91 % 1.19 % 0.32 % 1.24 % 1.56 % 0.47 % 1.05 % 1.52 %
  Real estate - construction 0.03 % 2.89 % 2.92 % 0.40 % 4.22 % 4.62 % 0.10 % 3.20 % 3.30 %
  Real estate - residential mortgage 1.81 % 2.06 % 3.87 % 1.82 % 2.58 % 4.40 % 1.78 % 2.05 % 3.83 %
  Consumer, home equity, leasing and other 0.74 % 0.85 % 1.59 % 1.19 % 1.00 % 2.19 % 0.84 % 0.90 % 1.74 %
                                       
  Total 0.58 % 1.11 % 1.69 % 0.66 % 1.31 % 1.97 % 0.58 % 1.17 % 1.75 %
                                     
(2) Includes non-accrual loans  
   
   
ASSET QUALITY RATIOS:           
  Sep 30     Sep 30     Jun 30  
  2014     2013     2014  
                 
  Non-accrual loans to total loans 0.97 %   1.12 %   1.01 %
  Non-performing assets to total loans and OREO 1.21 %   1.46 %   1.27 %
  Non-performing assets to total assets 0.91 %   1.09 %   0.96 %
  Allowance for credit losses to loans outstanding 1.47 %   1.67 %   1.51 %
  Allowance for credit losses to non-performing loans 132.85 %   126.48 %   129.56 %
  Non-performing assets to tangible common shareholders'                
  equity and allowance for credit losses 9.06 %   10.92 %   9.25 %
                 
                 
                 
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     Nine Months Ended  
        September 30  
  September 30 2014     September 30 2013     June 30 2014     2014     2013  
Shareholders' equity (tangible), per share                                      
Shareholders' equity $ 2,078,006     $ 2,028,964     $ 2,099,800                  
Less: Goodwill and intangible assets   (532,117 )     (533,918 )     (532,432 )                
Tangible shareholders' equity (numerator) $ 1,545,889     $ 1,495,046     $ 1,567,368                  
                                       
Shares outstanding, end of period (denominator)   185,158       192,332       189,033                  
                                       
  Shareholders' equity (tangible), per share $ 8.35     $ 7.77     $ 8.29                  
                                       
Return on average common shareholders' equity (tangible)                                      
Net income $ 38,566     $ 39,948     $ 39,596     $ 119,945     $ 119,757  
Plus: Intangible amortization, net of tax   203       347       204       614       1,042  
Numerator $ 38,769     $ 40,295     $ 39,800     $ 120,559     $ 120,799  
                                       
Average shareholders' equity $ 2,089,459     $ 2,029,078       2,081,898       2,078,188       2,054,857  
Less: Average goodwill and intangible assets   (532,271 )     (534,179 )     (532,585 )     (532,584 )     (534,712 )
Average tangible shareholders' equity (denominator) $ 1,557,188     $ 1,494,899     $ 1,549,313     $ 1,545,604     $ 1,520,145  
                                       
  Return on average common shareholders' equity (tangible), annualized   9.88 %     10.69 %     10.30 %     10.43 %     10.62 %
                                       
Efficiency ratio                                      
Non-interest expense $ 115,798     $ 116,605     $ 116,174     $ 341,526     $ 344,671  
Less: Intangible amortization   (314 )     (534 )     (315 )     (944 )     (1,603 )
Numerator $ 115,484     $ 116,071     $ 115,859     $ 340,582     $ 343,068  
                                       
Net interest income (fully taxable equivalent) $ 133,692     $ 136,876     $ 132,175     $ 399,708     $ 407,198  
Plus: Total Non-interest income   41,900       47,357       44,872       125,278       146,932  
Less: Investment securities gains   (81 )     (2,633 )     (1,112 )     (1,193 )     (7,971 )
Denominator $ 175,511     $ 181,600     $ 175,935     $ 523,793     $ 546,159  
                                       
  Efficiency ratio   65.80 %     63.92 %     65.85 %     65.02 %     62.81 %
                                       
Non-performing assets to tangible common shareholders' equity and allowance for credit losses                                      
Non-performing assets (numerator) $ 157,337     $ 186,456     $ 162,794                  
                                       
Tangible shareholders' equity $ 1,545,889     $ 1,495,046     $ 1,567,368                  
Plus: Allowance for credit losses   191,108       212,838       193,442                  
Tangible shareholders' equity and allowance for credit losses (denominator) $ 1,736,997     $ 1,707,884     $ 1,760,810                  
                                       
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses   9.06 %     10.92 %     9.25 %                
                                         

Contact Information

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    (717) 291-2616


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