SOURCE: Fulton Financial Corporation

Fulton Financial Corporation

October 18, 2016 16:30 ET

Fulton Financial reports third quarter earnings of $41 million, or $0.24 per share

LANCASTER, PA--(Marketwired - Oct 18, 2016) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the third quarter of 2016 were 24 cents, a 4.3 percent increase from second quarter of 2016 and a 20.0 percent increase from the third quarter of 2015. Pre-provision net revenue of $58.9 million was 10.4 percent higher than the second quarter of 2016 and 19.0 percent higher than the third quarter of 2015.
  • Net interest income for the third quarter of 2016 increased $1.6 million, or 1.3 percent, compared to the second quarter of 2016 and increased $4.9 million, or 3.9 percent, compared to third quarter of 2015.
  • Net interest margin decreased six basis points to 3.14 percent compared to the second quarter of 2016, and four basis points compared to the third quarter of 2015.
  • Loans at September 30, 2016 increased $236.1 million, or 1.7 percent, compared to June 30, 2016 and $854.9 million, or 6.3 percent, compared to September 30, 2015. Average loans for the third quarter of 2016 increased 1.8 percent and 6.3 percent compared to the second quarter of 2016 and the third quarter of 2015, respectively.
  • Deposits at September 30, 2016 increased $659.9 million, or 4.6 percent, compared to June 30, 2016 and increased $868.1 million, or 6.2 percent, compared to September 30, 2015. Average deposits for the third quarter of 2016 increased 2.5 percent compared to the second quarter of 2016, and increased 5.9 percent compared to the third quarter of 2015.
  • The provision for credit losses in the third quarter of 2016 was $4.1 million, compared to a $2.5 million provision in the second quarter of 2016 and a $1.0 million provision in the third quarter of 2015.
  • Non-interest income, excluding investment securities gains, increased $2.1 million, or 4.5 percent, in comparison to the second quarter of 2016, and increased $5.1 million, or 11.9 percent, in comparison to the third quarter of 2015.
  • Non-interest expense decreased $1.8 million, or 1.5 percent, compared to the second quarter of 2016 and, excluding the loss on redemption of trust preferred securities recognized in the third quarter of 2015, increased $585,000, or 0.5 percent, compared to the third quarter of 2015.

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $41.5 million, or 24 cents per diluted share, for the third quarter of 2016.

"We were pleased with the third quarter results as we were able to grow earnings per share by 4.3 percent linked quarter," said E. Philip Wenger, Chairman, President and CEO. "Despite a challenging interest rate and operating environment, we were able to grow revenues and reduce expenses, which enabled us to drive positive operating leverage for the quarter."

Net Interest Income and Margin
Net interest income for the third quarter of 2016 increased $1.6 million, or 1.3 percent, from the second quarter of 2016. Net interest margin decreased six basis points, or 1.9 percent, to 3.14 percent in the third quarter of 2016, from 3.20 percent in the second quarter of 2016. The average yield on interest-earning assets decreased six basis points, while the average cost of interest-bearing liabilities remained unchanged, during the third quarter of 2016 in comparison to the second quarter of 2016.

Average Balance Sheet
Total average assets for the third quarter of 2016 were $18.6 billion, an increase of $439.1 million from the second quarter of 2016. Average loans, net of unearned income, increased $246.2 million, or 1.8 percent, in comparison to the second quarter of 2016. Average loans and yields, by type, for the third quarter of 2016 in comparison to the second quarter of 2016, are summarized in the following table:

           
  Three Months Ended     Increase (decrease)  
  September 30, 2016     June 30, 2016     in Balance  
  Balance   Yield (1)     Balance   Yield (1)     $     %  
  (dollars in thousands)  
Average Loans, net of unearned income, by type:                                    
  Real estate - commercial mortgage $ 5,670,888   3.99 %   $ 5,557,680   4.00 %   $ 113,208     2.0 %
  Commercial - industrial, financial and agricultural   4,066,275   3.76 %     4,080,524   3.81 %     (14,249 )   (0.3 %)
  Real estate - home equity   1,640,913   4.08 %     1,656,140   4.10 %     (15,227 )   (0.9 %)
  Real estate - residential mortgage   1,503,209   3.76 %     1,399,851   3.78 %     103,358     7.4 %
  Real estate - construction   837,920   3.76 %     820,881   3.81 %     17,039     2.1 %
  Consumer   281,517   5.31 %     272,293   5.37 %     9,224     3.4 %
  Leasing and other   211,528   4.74 %     178,655   6.22 %     32,873     18.4 %
                                       
  Total Average Loans, net of unearned income $ 14,212,250   3.93 %   $ 13,966,024   3.98 %   $ 246,226     1.8 %
                                     
(1) Presented on a fully-taxable equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.                  
 

Total average liabilities increased $408.4 million, or 2.5 percent, from the second quarter of 2016, while average deposits increased $357.2 million, or 2.5 percent. Average deposits and interest rates, by type, for the third quarter of 2016 in comparison to the second quarter of 2016, are summarized in the following table:

             
    Three Months Ended     Increase (decrease)  
    September 30, 2016     June 30, 2016     in Balance  
    Balance   Rate     Balance   Rate     $     %  
    (dollars in thousands)        
Average Deposits, by type:                                      
  Noninterest-bearing demand   $ 4,227,639   - %   $ 4,077,642   - %   $ 149,997     3.7 %
  Interest-bearing demand     3,602,448   0.19 %     3,454,031   0.18 %     148,417     4.3 %
  Savings deposits     4,078,942   0.20 %     3,989,988   0.19 %     88,954     2.2 %
Total average demand and savings     11,909,029   0.13 %     11,521,661   0.12 %     387,368     3.4 %
  Time deposits     2,814,258   1.07 %     2,844,434   1.06 %     (30,176 )   (1.1 %)
                                       
  Total Average Deposits   $ 14,723,287   0.31 %   $ 14,366,095   0.30 %   $ 357,192     2.5 %
                                         

Asset Quality
Non-performing assets were $150.1 million, or 0.80 percent of total assets, at September 30, 2016, compared to $139.7 million, or 0.76 percent of total assets, at June 30, 2016 and $155.6 million, or 0.87 percent of total assets, at September 30, 2015.

Annualized net charge-offs for the quarter ended September 30, 2016 were 0.11 percent of total average loans, compared to 0.10 percent for the quarter ended June 30, 2016 and 0.03 percent for the quarter ended September 30, 2015. The allowance for credit losses as a percentage of non-performing loans was 119.6 percent at September 30, 2016, as compared to 129.3 percent at June 30, 2016 and 116.8 percent at September 30, 2015.

During the third quarter of 2016, the Corporation recorded a $4.1 million provision for credit losses, compared to a $2.5 million provision in the second quarter of 2016 and a $1.0 million provision in the third quarter of 2015. 

Non-interest Income
Non-interest income, excluding investment securities gains, increased $2.1 million, or 4.5 percent, in comparison to the second quarter of 2016. Other service charges and fees increased $1.4 million, or 11.0 percent, due to increases in commercial loan interest rate swap fees. Mortgage banking income increased $632,000, or 16.2 percent, primarily driven by gains on sales of loans as a result of higher volumes of new loan commitments. During the third quarter of 2016, an additional $1.3 million mortgage servicing rights impairment charge was recorded, compared to $1.7 million impairment charge in the prior quarter, as a reduction to mortgage banking income.

Compared to the third quarter of 2015, non-interest income, excluding investment securities gains, increased $5.1 million, or 11.9 percent, due to increases in commercial loan interest rate swap fees, mortgage banking income, and SBA loan sale gains.

Gains on sales of investment securities decreased $74,000 in comparison to the second quarter of 2016, and decreased $1.7 million from the third quarter of 2015.

Non-interest Expense
Non-interest expense decreased $1.8 million, or 1.5 percent, in the third quarter of 2016, compared to the second quarter of 2016. Decreases occurred in FDIC insurance expense, data processing, professional fees and operating risk loss, partially offset by increases in salaries and employee benefits, other real estate owned and repossession expense and other outside services.

In the third quarter of 2015, the Corporation incurred a $5.6 million loss on the redemption of trust preferred securities. Excluding this loss, non-interest expense remained relatively flat in the third quarter of 2016 compared to the prior year with increases in salaries and employee benefits and occupancy expense, offset by decreases in other outside services, FDIC insurance expense, and operating risk loss.

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 Reports on Form 10-Q for the quarters ended March 31, 2016 and June 30, 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  
    September 30     June 30     March 31     December 31       September 30     June 30     September 30  
    2016     2016     2016     2015       2015     2016     2015  
                                                       
ASSETS                                                      
                                                       
  Cash and due from banks   $ 86,497     $ 84,647     $ 83,479     $ 101,120       $ 93,803     2.2 %   (7.8 %)
  Other interest-earning assets     428,966       408,086       408,060       292,516         579,920     5.1 %   (26.0 %)
  Loans held for sale     27,836       34,330       19,719       16,886         26,937     (18.9 %)   3.3 %
  Investment securities     2,508,068       2,529,724       2,516,205       2,484,773         2,436,337     (0.9 %)   2.9 %
  Loans, net of unearned income     14,391,238       14,155,159       13,870,701       13,838,602         13,536,361     1.7 %   6.3 %
  Allowance for loan losses     (162,526 )     (162,546 )     (163,841 )     (169,054 )       (167,136 )   0.0 %   (2.8 %)
  Net loans     14,228,712       13,992,613       13,706,860       13,669,548         13,369,225     1.7 %   6.4 %
  Premises and equipment     228,009       228,861       228,057       225,535         225,705     (0.4 %)   1.0 %
  Accrued interest receivable     43,600       43,316       44,379       42,767         42,846     0.7 %   1.8 %
  Goodwill and intangible assets     531,556       531,556       531,556       531,556         531,562     0.0 %   0.0 %
  Other assets     617,818       626,902       583,939       550,017         531,724     (1.4 %)   16.2 %
                                                         
      Total Assets   $ 18,701,062     $ 18,480,035     $ 18,122,254     $ 17,914,718       $ 17,838,059     1.2 %   4.8 %
                                                       
LIABILITIES AND SHAREHOLDERS' EQUITY                                                      
                                                       
  Deposits   $ 14,952,479     $ 14,292,564     $ 14,404,280     $ 14,132,317       $ 14,084,394     4.6 %   6.2 %
  Short-term borrowings     264,042       722,214       352,883       497,663         431,631     (63.4 %)   (38.8 %)
  Other liabilities     389,819       392,708       326,128       293,302         316,697     (0.7 %)   23.1 %
  FHLB advances and long-term debt     965,286       965,552       965,654       949,542         979,433     0.0 %   (1.4 %)
                                                         
    Total Liabilities     16,571,626       16,373,038       16,048,945       15,872,824         15,812,155     1.2 %   4.8 %
                                                         
  Shareholders' equity     2,129,436       2,106,997       2,073,309       2,041,894         2,025,904     1.1 %   5.1 %
                                                         
      Total Liabilities and Shareholders' Equity   $ 18,701,062     $ 18,480,035     $ 18,122,254     $ 17,914,718       $ 17,838,059     1.2 %   4.8 %
                                                       
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                                                      
                                                       
Loans, by type:                                                      
  Real estate - commercial mortgage   $ 5,818,915     $ 5,635,347     $ 5,558,108     $ 5,462,330       $ 5,339,928     3.3 %   9.0 %
  Commercial - industrial, financial and agricultural     4,024,119       4,099,177       4,035,333       4,088,962         3,929,908     (1.8 %)   2.4 %
  Real estate - home equity     1,640,421       1,647,319       1,659,481       1,684,439         1,693,649     (0.4 %)   (3.1 %)
  Real estate - residential mortgage     1,542,696       1,447,292       1,377,459       1,376,160         1,382,085     6.6 %   11.6 %
  Real estate - construction     861,634       853,699       810,872       799,988         769,565     0.9 %   12.0 %
  Consumer     283,673       278,071       263,221       268,588         271,696     2.0 %   4.4 %
  Leasing and other     219,780       194,254       166,227       158,135         149,530     13.1 %   47.0 %
                                                         
  Total Loans, net of unearned income   $ 14,391,238     $ 14,155,159     $ 13,870,701     $ 13,838,602       $ 13,536,361     1.7 %   6.3 %
                                                       
Deposits, by type:                                                      
  Noninterest-bearing demand   $ 4,210,099     $ 4,125,375     $ 4,134,861     $ 3,948,114       $ 3,906,228     2.1 %   7.8 %
  Interest-bearing demand     3,703,048       3,358,536       3,430,206       3,451,207         3,362,336     10.3 %   10.1 %
  Savings deposits     4,235,015       3,986,008       3,972,199       3,868,046         3,880,103     6.2 %   9.1 %
  Time deposits     2,804,317       2,822,645       2,867,014       2,864,950         2,935,727     (0.6 %)   (4.5 %)
                                                         
  Total Deposits   $ 14,952,479     $ 14,292,564     $ 14,404,280     $ 14,132,317       $ 14,084,394     4.6 %   6.2 %
                                                       
Short-term borrowings, by type:                                                      
  Customer repurchase agreements   $ 189,727     $ 168,521     $ 162,431     $ 111,496       $ 145,225     12.6 %   30.6 %
  Customer short-term promissory notes     65,871       69,509       76,807       78,932         80,879     (5.2 %)   (18.6 %)
  Short-term FHLB advances     -       35,000       81,000       110,000         200,000     (100.0 %)   (100.0 %)
  Federal funds purchased     8,444       449,184       32,645       197,235         5,527     (98.1 %)   52.8 %
                                                         
  Total Short-term Borrowings   $ 264,042     $ 722,214     $ 352,883     $ 497,663       $ 431,631     (63.4 %)   (38.8 %)
                                                       
         
         
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     Jun 30     Mar 31     Dec 31     Sep 30     Jun 30     Sep 30       Sep 30        
      2016     2016     2016     2015     2015     2016     2015       2016     2015     % Change  
                                                                               
Interest Income:                                                                              
  Interest income     $ 151,468     $ 149,309     $ 149,311     $ 147,560     $ 146,228     1.4 %   3.6 %     $ 450,088     $ 436,229     3.2 %
  Interest expense       20,903       20,393       20,257       19,761       20,534     2.5 %   1.8 %       61,553       64,034     (3.9 %)
                                                                                 
    Net Interest Income       130,565       128,916       129,054       127,799       125,694     1.3 %   3.9 %       388,535       372,195     4.4 %
  Provision for credit losses       4,141       2,511       1,530       2,750       1,000     64.9 %   N/M         8,182       (500 )   N/M  
                                                                                 
    Net Interest Income after Provision       126,424       126,405       127,524       125,049       124,694     0.0 %   1.4 %       380,353       372,695     2.1 %
                                                                               
Non-Interest Income:                                                                              
  Other service charges and fees       14,407       12,983       10,750       12,676       10,965     11.0 %   31.4 %       38,140       31,316     21.8 %
  Service charges on deposit accounts       13,078       12,896       12,558       12,909       12,982     1.4 %   0.7 %       38,532       37,188     3.6 %
  Investment management and trust services       11,425       11,247       10,988       10,919       11,237     1.6 %   1.7 %       33,660       33,137     1.6 %
  Mortgage banking income       4,529       3,897       4,030       4,317       3,864     16.2 %   17.2 %       12,456       13,891     (10.3 %)
  Other       4,708       5,038       3,864       4,242       3,996     (6.6 %)   17.8 %       13,610       12,178     11.8 %
    Non-Interest Income before Investment Securities Gains       48,147       46,061       42,190       45,063       43,044     4.5 %   11.9 %       136,398       127,710     6.8 %
  Investment securities gains       2       76       947       776       1,730     (97.4 %)   (99.9 %)       1,025       8,290     (87.6 %)
                                                                                 
    Total Non-Interest Income       48,149       46,137       43,137       45,839       44,774     4.4 %   7.5 %       137,423       136,000     1.0 %
                                                                               
Non-Interest Expense:                                                                              
  Salaries and employee benefits       70,696       70,029       69,372       65,467       65,308     1.0 %   8.3 %       210,097       195,365     7.5 %
  Net occupancy expense       11,782       11,811       12,220       11,566       10,710     (0.2 %)   10.0 %       35,813       36,211     (1.1 %)
  Other outside services       5,783       5,508       6,056       6,537       7,373     5.0 %   (21.6 %)       17,347       21,248     (18.4 %)
  Data processing       4,610       5,476       5,400       5,127       5,105     (15.8 %)   (9.7 %)       15,486       14,767     4.9 %
  Software       4,117       3,953       3,921       4,068       3,984     4.1 %   3.3 %       11,991       10,678     12.3 %
  Equipment expense       3,137       2,872       3,371       3,626       3,595     9.2 %   (12.7 %)       9,380       10,888     (13.9 %)
  Professional fees       2,535       3,353       2,333       2,814       2,828     (24.4 %)   (10.4 %)       8,221       8,430     (2.5 %)
  FDIC insurance expense       1,791       2,960       2,949       2,896       2,867     (39.5 %)   (37.5 %)       7,700       8,574     (10.2 %)
  Marketing       1,774       1,916       1,624       1,754       2,102     (7.4 %)   (15.6 %)       5,314       5,570     (4.6 %)
  Other real estate owned and repossession expense       742       365       638       1,123       1,016     103.3 %   (27.0 %)       1,745       2,507     (30.4 %)
  Operating risk loss       556       986       540       987       1,136     (43.6 %)   (51.1 %)       2,082       2,637     (21.0 %)
  Intangible amortization       -       -       -       6       5     -     N/M         -       241     N/M  
  Loss on redemption of trust preferred securities       -       -       -       -       5,626     -     N/M         -       5,626     N/M  
  Other       12,325       12,408       11,989       12,468       13,234     (0.7 %)   (6.9 %)       36,722       38,979     (5.8 %)
                                                                                 
    Total Non-Interest Expense       119,848       121,637       120,413       118,439       124,889     (1.5 %)   (4.0 %)       361,898       361,721     0.0 %
                                                                                 
    Income before Income Taxes       54,725       50,905       50,248       52,449       44,579     7.5 %   22.8 %       155,878       146,974     6.1 %
  Income tax expense       13,257       11,155       11,991       13,914       10,328     18.8 %   28.4 %       36,403       36,007     1.1 %
                                                                                 
    Net Income     $ 41,468     $ 39,750     $ 38,257     $ 38,535     $ 34,251     4.3 %   21.1 %     $ 119,475     $ 110,967     7.7 %
                                                                               
                                                                               
PER SHARE:                                                                              
                                                                               
Net income:                                                                              
Basic     $ 0.24     $ 0.23     $ 0.22     $ 0.22     $ 0.20     4.3 %   20.0 %     $ 0.69     $ 0.63     9.5 %
Diluted       0.24       0.23       0.22       0.22       0.20     4.3 %   20.0 %       0.69       0.63     9.5 %
                                                                               
Cash dividends     $ 0.10     $ 0.10     $ 0.09     $ 0.11     $ 0.09     -     11.1 %     $ 0.29     $ 0.27     7.4 %
Shareholders' equity       12.30       12.17       11.96       11.72       11.66     1.1 %   5.5 %       12.30       11.66     5.5 %
Shareholders' equity (tangible)       9.23       9.10       8.89       8.67       8.60     1.4 %   7.3 %       9.23       8.60     7.3 %
                                                                               
Weighted average shares (basic)       173,020       173,394       173,331       173,709       174,338     (0.2 %)   (0.8 %)       173,248       176,399     (1.8 %)
Weighted average shares (diluted)       174,064       174,318       174,416       174,833       175,342     (0.1 %)   (0.7 %)       174,265       177,428     (1.8 %)
Shares outstanding, end of period       173,144       173,139       173,393       174,176       173,771     0.0 %   (0.4 %)       173,144       173,771     (0.4 %)
                                                                               
SELECTED FINANCIAL RATIOS:                                                                              
                                                                               
Return on average assets       0.89 %     0.88 %     0.86 %     0.86 %     0.78 %                   0.87 %     0.86 %      
Return on average shareholders' equity       7.78 %     7.65 %     7.47 %     7.51 %     6.72 %                   7.64 %     7.33 %      
Return on average shareholders' equity (tangible)       10.38 %     10.26 %     10.07 %     10.16 %     9.11 %                   10.24 %     9.96 %      
Net interest margin       3.14 %     3.20 %     3.23 %     3.19 %     3.18 %                   3.19 %     3.22 %      
Efficiency ratio       65.16 %     67.59 %     68.33 %     66.63 %     68.82 %                   67.01 %     69.30 %      
                                                                               
N/M - Not meaningful                                                                              
                                                           
 
FULTON FINANCIAL CORPORATION 
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) 
dollars in thousands 
   
  Three Months Ended  
  September 30, 2016     June 30, 2016     September 30, 2015  
  Average           Yield/     Average           Yield/     Average           Yield/  
  Balance     Interest (1)     Rate     Balance     Interest (1)     Rate     Balance     Interest (1)     Rate  
ASSETS                                                    
Interest-earning assets:                                                    
  Loans, net of unearned income $ 14,212,250     $ 140,434     3.93 %   $ 13,966,024     $ 138,317     3.98 %   $ 13,369,874     $ 135,268     4.02 %
  Taxable investment securities   2,110,084       10,872     2.06 %     2,127,780       11,159     2.10 %     2,148,403       11,252     2.09 %
  Tax-exempt investment securities   344,231       3,923     4.56 %     314,851       3,570     4.54 %     230,178       2,929     5.09 %
  Equity securities   14,209       196     5.50 %     14,220       185     5.23 %     18,280       257     5.58 %
                                                                   
  Total Investment Securities   2,468,524       14,991     2.43 %     2,456,851       14,914     2.43 %     2,396,861       14,438     2.41 %
                                                                   
  Loans held for sale   22,593       210     3.72 %     19,449       188     3.87 %     20,704       194     3.74 %
  Other interest-earning assets   501,666       1,051     0.84 %     357,211       864     0.96 %     477,145       884     0.74 %
                                                                   
  Total Interest-earning Assets   17,205,033       156,686     3.63 %     16,799,535       154,283     3.69 %     16,264,584       150,784     3.68 %
                                                                 
Noninterest-earning assets:                                                                
  Cash and due from banks   101,927                     100,860                     104,622                
  Premises and equipment   227,906                     227,517                     226,446                
  Other assets   1,219,844                     1,189,226                     1,097,600                
  Less: allowance for loan losses   (163,074 )                   (164,573 )                   (168,770 )              
                                                                   
  Total Assets $ 18,591,636                   $ 18,152,565                   $ 17,524,482                
                                                                 
                                                                 
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                
Interest-bearing liabilities:                                                                
  Demand deposits $ 3,602,448     $ 1,706     0.19 %   $ 3,454,031     $ 1,527     0.18 %   $ 3,316,532     $ 1,122     0.13 %
  Savings deposits   4,078,942       2,042     0.20 %     3,989,988       1,886     0.19 %     3,714,282       1,436     0.15 %
  Time deposits   2,814,258       7,562     1.07 %     2,844,434       7,474     1.06 %     2,963,774       7,659     1.03 %
                                                                   
  Total Interest-bearing Deposits   10,495,648       11,310     0.43 %     10,288,453       10,887     0.43 %     9,994,588       10,217     0.41 %
                                                                   
  Short-term borrowings   426,369       254     0.23 %     403,669       217     0.21 %     324,685       92     0.11 %
  FHLB advances and long-term debt   965,228       9,338     3.86 %     965,526       9,289     3.86 %     996,247       10,225     4.09 %
                                                                   
  Total Interest-bearing Liabilities   11,887,245       20,902     0.70 %     11,657,648       20,393     0.70 %     11,315,520       20,534     0.72 %
                                                                 
Noninterest-bearing liabilities:                                                                
  Demand deposits   4,227,639                     4,077,642                     3,904,176                
  Other   356,156                     327,360                     281,957                
                                                                   
  Total Liabilities   16,471,040                     16,062,650                     15,501,653                
                                                                   
  Shareholders' equity   2,120,596                     2,089,915                     2,022,829                
                                                                   
  Total Liabilities and Shareholders' Equity $ 18,591,636                   $ 18,152,565                   $ 17,524,482                
                                                                   
  Net interest income/net interest margin (fully taxable equivalent)           135,784     3.14 %             133,890     3.20 %             130,250     3.18 %
  Tax equivalent adjustment           (5,219 )                   (4,974 )                   (4,556 )      
  Net interest income         $ 130,565                   $ 128,916                   $ 125,694        
   
(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   June 30   March 31   December 31   September 30   June 30     September 30  
    2016   2016   2016   2015   2015   2016     2015  
                         
Loans, by type:                                
  Real estate - commercial mortgage   $ 5,670,888   $ 5,557,680   $ 5,487,421   $ 5,365,640   $ 5,242,021   2.0 %   8.2 %
  Commercial - industrial, financial and agricultural     4,066,275     4,080,524     4,095,268     4,035,287     3,887,161   (0.3 %)   4.6 %
  Real estate - home equity     1,640,913     1,656,140     1,674,032     1,694,455     1,692,860   (0.9 %)   (3.1 %)
  Real estate - residential mortgage     1,503,209     1,399,851     1,381,409     1,377,116     1,381,141   7.4 %   8.8 %
  Real estate - construction     837,920     820,881     792,014     765,555     753,584   2.1 %   11.2 %
  Consumer     281,517     272,293     263,295     267,726     270,391   3.4 %   4.1 %
  Leasing and other     211,528     178,655     159,981     153,487     142,716   18.4 %   48.2 %
                                             
  Total Loans, net of unearned income   $ 14,212,250   $ 13,966,024   $ 13,853,420   $ 13,659,266   $ 13,369,874   1.8 %   6.3 %
                                           
Deposits, by type:                                          
  Noninterest-bearing demand   $ 4,227,639   $ 4,077,642   $ 3,967,887   $ 3,999,118   $ 3,904,176   3.7 %   8.3 %
  Interest-bearing demand     3,602,448     3,454,031     3,438,355     3,411,904     3,316,532   4.3 %   8.6 %
  Savings deposits     4,078,942     3,989,988     3,932,824     3,903,741     3,714,282   2.2 %   9.8 %
  Time deposits     2,814,258     2,844,434     2,867,651     2,903,715     2,963,774   (1.1 %)   (5.0 %)
                                             
  Total Deposits   $ 14,723,287   $ 14,366,095   $ 14,206,717   $ 14,218,478   $ 13,898,764   2.5 %   5.9 %
                                           
Short-term borrowings, by type:                                          
  Customer repurchase agreements   $ 187,588   $ 180,595   $ 171,408   $ 142,004   $ 149,415   3.9 %   25.5 %
  Customer short-term promissory notes     70,072     77,535     74,013     80,568     79,308   (9.6 %)   (11.6 %)
  Federal funds purchased     148,546     138,012     183,970     44,468     85,092   7.6 %   74.6 %
  Short-term FHLB advances and other borrowings     20,163     7,527     16,011     14,457     10,870   167.9 %   85.5 %
                                             
  Total Short-term Borrowings   $ 426,369   $ 403,669   $ 445,402   $ 281,497   $ 324,685   5.6 %   31.3 %
 
 
FULTON FINANCIAL CORPORATION 
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) 
dollars in thousands 
   
    Nine Months Ended September 30  
    2016           2015        
    Average                 Average              
    Balance     Interest (1)     Yield/Rate     Balance     Interest (1)     Yield/Rate  
ASSETS                                    
Interest-earning assets:                                    
  Loans, net of unearned income   $ 14,011,301     $ 416,646     3.97 %   $ 13,220,339     $ 401,662     4.06 %
  Taxable investment securities     2,139,378       34,034     2.12 %     2,068,025       33,478     2.16 %
  Tax-exempt investment securities     306,298       10,631     4.63 %     225,209       9,035     5.35 %
  Equity securities     14,272       599     5.60 %     25,985       1,086     5.59 %
                                               
  Total Investment Securities     2,459,948       45,264     2.45 %     2,319,219       43,599     2.51 %
                                               
  Loans held for sale     18,114       529     3.90 %     21,360       632     3.94 %
  Other interest-earning assets     406,163       2,813     0.92 %     463,545       3,922     1.13 %
                                               
  Total Interest-earning Assets     16,895,526       465,252     3.68 %     16,024,463       449,815     3.75 %
                                             
Noninterest-earning assets:                                            
  Cash and due from banks     100,417                     104,870                
  Premises and equipment     227,237                     226,469                
  Other assets     1,182,260                     1,101,856                
  Less: allowance for loan losses     (164,999 )                   (176,205 )              
                                               
  Total Assets   $ 18,240,441                   $ 17,281,453                
                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                            
Interest-bearing liabilities:                                            
  Demand deposits   $ 3,498,659     $ 4,727     0.18 %   $ 3,202,380     $ 3,092     0.13 %
  Savings deposits     4,000,871       5,732     0.19 %     3,600,695       3,802     0.14 %
  Time deposits     2,842,011       22,465     1.06 %     3,017,271       23,199     1.03 %
                                               
  Total Interest-bearing Deposits     10,341,541       32,924     0.43 %     9,820,346       30,093     0.41 %
                                               
  Short-term borrowings     425,151       739     0.23 %     338,019       272     0.11 %
  FHLB advances and long-term debt     962,997       27,889     3.86 %     1,048,634       33,669     4.29 %
                                               
  Total Interest-bearing Liabilities     11,729,689       61,552     0.70 %     11,206,999       64,034     0.76 %
                                             
Noninterest-bearing liabilities:                                            
  Demand deposits     4,091,555                     3,767,919                
  Other     329,315                     282,983                
                                               
  Total Liabilities     16,150,559                     15,257,901                
                                               
  Shareholders' equity     2,089,882                     2,023,552                
                                               
  Total Liabilities and Shareholders' Equity   $ 18,240,441                   $ 17,281,453                
                                               
  Net interest income/net interest margin (fully taxable equivalent)             403,700     3.19 %             385,781     3.22 %
  Tax equivalent adjustment             (15,165 )                   (13,586 )      
  Net interest income           $ 388,535                   $ 372,195        
 
(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      
    2016   2015   % Change  
           
Loans, by type:              
  Real estate - commercial mortgage   $ 5,572,356   $ 5,205,755   7.0 %
  Commercial - industrial, financial and agricultural     4,080,638     3,831,678   6.5 %
  Real estate - home equity     1,656,969     1,703,006   (2.7 %)
  Real estate - residential mortgage     1,428,430     1,369,367   4.3 %
  Real estate - construction     817,014     713,893   14.4 %
  Consumer     272,402     265,002   2.8 %
  Leasing and other     183,492     131,638   39.4 %
                     
  Total Loans, net of unearned income   $ 14,011,301   $ 13,220,339   6.0 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 4,091,555   $ 3,767,919   8.6 %
  Interest-bearing demand     3,498,659     3,202,380   9.3 %
  Savings deposits     4,000,871     3,600,695   11.1 %
  Time deposits     2,842,011     3,017,271   (5.8 %)
                     
  Total Deposits   $ 14,433,096   $ 13,588,265   6.2 %
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 179,892   $ 167,526   7.4 %
  Customer short-term promissory notes     73,859     81,854   (9.8 %)
  Federal funds purchased     156,812     72,961   114.9 %
  Short-term FHLB advances and other borrowings     14,588     15,678   (7.0 %)
                     
  Total Short-term Borrowings   $ 425,151   $ 338,019   25.8 %
 
 
FULTON FINANCIAL CORPORATION 
ASSET QUALITY INFORMATION (UNAUDITED) 
dollars in thousands 
   
    Three Months Ended     Nine Months Ended  
    Sep 30     Jun 30     Mar 31     Dec 31     Sep 30     Sep 30     Sep 30  
    2016     2016     2016     2015     2015     2016     2015  
ALLOWANCE FOR CREDIT LOSSES:                                          
                                           
  Balance at beginning of period   $ 165,108     $ 166,065     $ 171,412     $ 169,395     $ 169,453     $ 171,412     $ 185,931  
                                                           
  Loans charged off:                                                        
    Commercial - industrial, financial and agricultural     (3,144 )     (4,625 )     (6,188 )     (970 )     (1,640 )     (13,957 )     (14,669 )
    Consumer and home equity     (1,394 )     (1,614 )     (2,548 )     (1,466 )     (1,590 )     (5,556 )     (4,365 )
    Real estate - commercial mortgage     (1,350 )     (1,474 )     (582 )     (1,207 )     (660 )     (3,406 )     (3,011 )
    Real estate - residential mortgage     (802 )     (340 )     (1,068 )     (513 )     (1,035 )     (2,210 )     (3,099 )
    Real estate - construction     (150 )     (742 )     (326 )     -       (114 )     (1,218 )     (201 )
    Leasing and other     (832 )     (1,951 )     (443 )     (1,304 )     (522 )     (3,226 )     (1,352 )
    Total loans charged off     (7,672 )     (10,746 )     (11,155 )     (5,460 )     (5,561 )     (29,573 )     (26,697 )
  Recoveries of loans previously charged off:                                                        
    Commercial - industrial, financial and agricultural     1,539       2,931       2,319       1,409       1,598       6,789       3,855  
    Consumer and home equity     463       889       534       825       618       1,886       1,667  
    Real estate - commercial mortgage     296       1,367       825       1,072       842       2,488       1,729  
    Real estate - residential mortgage     228       420       136       775       201       784       547  
    Real estate - construction     898       1,563       383       548       898       2,844       2,276  
    Leasing and other     168       108       81       98       346       357       587  
    Recoveries of loans previously charged off     3,592       7,278       4,278       4,727       4,503       15,148       10,661  
  Net loans charged off     (4,080 )     (3,468 )     (6,877 )     (733 )     (1,058 )     (14,425 )     (16,036 )
  Provision for credit losses     4,141       2,511       1,530       2,750       1,000       8,182       (500 )
                                                           
  Balance at end of period   $ 165,169     $ 165,108     $ 166,065     $ 171,412     $ 169,395     $ 165,169     $ 169,395  
                                                           
  Net charge-offs to average loans (annualized)     0.11 %     0.10 %     0.20 %     0.02 %     0.03 %     0.14 %     0.16 %
                                                         
NON-PERFORMING ASSETS:                                                        
                                                         
  Non-accrual loans   $ 124,017     $ 111,742     $ 122,170     $ 129,523     $ 132,154                  
  Loans 90 days past due and accruing     14,095       15,992       15,013       15,291       12,867                  
    Total non-performing loans     138,112       127,734       137,183       144,814       145,021                  
  Other real estate owned     11,981       11,918       10,946       11,099       10,561                  
                                                           
  Total non-performing assets   $ 150,093     $ 139,652     $ 148,129     $ 155,913     $ 155,582                  
                                                         
NON-PERFORMING LOANS, BY TYPE:                                                        
                         
  Commercial - industrial, financial and agricultural   $ 47,330     $ 38,902     $ 39,140     $ 44,071     $ 38,032                  
  Real estate - commercial mortgage     39,631       35,704       43,132       41,170       49,021                  
  Real estate - residential mortgage     23,451       25,030       25,182       28,484       27,707                  
  Consumer and home equity     16,426       16,061       16,210       17,123       15,186                  
  Real estate - construction     11,223       11,879       12,005       12,460       14,989                  
  Leasing     51       158       1,514       1,506       86                  
                                                           
  Total non-performing loans   $ 138,112     $ 127,734     $ 137,183     $ 144,814     $ 145,021                  
                                                         
                                                         
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:                                                        
                                                         
  Real-estate - residential mortgage   $ 26,854     $ 27,324     $ 27,565     $ 28,511     $ 29,330                  
  Real-estate - commercial mortgage     16,085       17,808       17,427       17,563       17,282                  
  Consumer and home equity     7,707       7,191       6,562       4,589       3,983                  
  Commercial - industrial, financial and agricultural     7,488       5,756       5,650       5,953       7,399                  
  Real estate - construction     843       3,086       3,092       3,942       4,363                  
  Total accruing TDRs     58,977       61,165       60,296       60,558       62,357                  
  Non-accrual TDRs (1)     27,904       24,887       27,277       31,035       27,618                  
  Total TDRs   $ 86,881     $ 86,052     $ 87,573     $ 91,593     $ 89,975                  
   
(1) Included within non-accrual loans above.
    Total Delinquency %  
DELINQUENCY RATES, BY TYPE:   Sep 30     Jun 30     Mar 31     Dec 31     Sep 30  
    2016     2016     2016     2015     2015  
                               
                               
  Real estate - commercial mortgage   0.87 %   0.81 %   0.93 %   0.91 %   1.08 %
  Commercial - industrial, financial and agricultural   1.48 %   1.25 %   1.46 %   1.27 %   1.32 %
  Real estate - construction   1.61 %   1.93 %   2.00 %   1.87 %   2.25 %
  Real estate - residential mortgage   2.67 %   2.70 %   3.10 %   3.40 %   3.27 %
  Consumer, home equity, leasing and other   1.53 %   1.47 %   1.48 %   1.58 %   1.41 %
                                 
  Total   1.38 %   1.30 %   1.44 %   1.41 %   1.49 %
                               
ASSET QUALITY RATIOS:                              
    Sep 30     Jun 30     Mar 31     Dec 31     Sep 30  
    2016     2016     2016     2015     2015  
                               
  Non-accrual loans to total loans   0.86 %   0.79 %   0.88 %   0.94 %   0.98 %
  Non-performing loans to total loans   0.96 %   0.90 %   0.99 %   1.05 %   1.07 %
  Non-performing assets to total loans and OREO   1.04 %   0.99 %   1.07 %   1.13 %   1.15 %
  Non-performing assets to total assets   0.80 %   0.76 %   0.82 %   0.87 %   0.87 %
  Allowance for credit losses to loans outstanding   1.15 %   1.17 %   1.20 %   1.24 %   1.25 %
  Allowance for credit losses to non-performing loans   119.59 %   129.26 %   121.05 %   118.37 %   116.81 %
  Non-performing assets to tangible common shareholders' equity and allowance for credit losses   8.51 %   8.02 %   8.67 %   9.27 %   9.35 %
 
 
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     Nine Months Ended  
    September 30     June 30     March 31     December 31     September 30     September 30     September 30  
    2016     2016     2016