UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
July 21, 2015

Fulton Financial Corporation
(Exact name of Registrant as specified in its Charter)

Pennsylvania
0-10587
23-2195389
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification Number)
One Penn Square
Lancaster, Pennsylvania
 
17604
(Address of principal executive offices)
 
(Zip Code)
Registrant's telephone number, including area code: 717-291-2411
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
     £  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     £  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     £  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     £  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))












Item 2.02 - Results of Operations and Financial Condition

On July 21, 2015, Fulton Financial Corporation (“Fulton”) issued a press release (the “Press Release”) announcing its results of operations for the second quarter ended June 30, 2015. A copy of the Press Release and supplementary financial information which accompanied the Press Release, are attached as Exhibits 99.1 and 99.2, respectively, to this Current Report and are incorporated herein by reference. Fulton also posted on its Investor Relations website, www.fult.com, presentation materials Fulton intends to use during a conference call and webcast to discuss those results on Wednesday, July 22, 2015 at 10:00 a.m. Eastern Time. A copy of the presentation materials is attached as Exhibit 99.3 to this Current Report and is incorporated herein by reference.    



Forward-Looking Statements

This Current Report on Form 8-K, including the Exhibits hereto, may contain forward-looking statements with respect to Fulton’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. Statements relating to the “outlook” or “outlook for 2015” contained in Exhibit 99.3 to this Current Report are 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 Fulton’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 Fulton, and some of the factors that could cause Fulton’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 Fulton’s Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which have been filed with the Securities and Exchange Commission and are available in the Investors Relations section of Fulton’s website (www.fult.com) and on the Securities and Exchange Commission’s website (www.sec.gov). Fulton 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.

Item 9.01 Financial Statements And Exhibits
(d)    Exhibits.

Exhibit No.
Description
99.1
Press Release dated July 21, 2015.
99.2
Supplementary financial information for the quarter ended June 30, 2015.
99.3
Presentation materials to be discussed during the conference call and webcast on July 22, 2015.













SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: July 21, 2015
FULTON FINANCIAL CORPORATION

 
By:  /s/ Patrick S. Barrett                     
 
       Patrick S. Barrett
 
       Senior Executive Vice President and
 
       Chief Financial Officer







Exhibit 99.1

FULTON FINANCIAL
CORPORATION


FOR IMMEDIATE RELEASE
Media Contact: Laura J. Wakeley (717) 291-2616
Investor Contact: David C. Hostetter (717) 291-2456

Fulton Financial reports second quarter earnings of $0.21 per share

Diluted earnings per share was 21 cents, a 4.5 percent decrease from the first quarter of 2015 and unchanged from the second quarter of 2014.
Net interest income decreased $661,000, or 0.5 percent, compared to the first quarter of 2015 and decreased $5.0 million, or 3.9%, compared to the second quarter of 2014. The net interest margin decreased 7 basis points compared to the first quarter of 2015, to 3.20 percent. The net interest margin for the second quarter of 2014 was 3.41 percent.
Average loans increased $97.1 million, or 0.7 percent, compared to the first quarter of 2015 and $396.9 million, or 3.1 percent, compared to the second quarter of 2014. Average deposits increased $107.1 million, or 0.8 percent, compared to the first quarter of 2015 and $878.6 million, or 7.0 percent, compared to the second quarter of 2014.
The provision for credit losses was $2.2 million, compared to a $3.7 million negative provision in the first quarter of 2015 and a $3.5 million provision in the second quarter of 2014.
Non-interest income, excluding investment securities gains, increased $3.5 million, or 8.6 percent, in comparison to the first quarter of 2015, and increased $314,000, or 0.7 percent, in comparison to the second quarter of 2014.
Non-interest expense was largely unchanged compared to the first quarter of 2015 and increased $2.2 million, or 1.9 percent, compared to the second quarter of 2014.
In April 2015, the Corporation announced that its Board of Directors approved the repurchase of up to $50 million of the Corporation’s common stock through December 31, 2015. During the second quarter of 2015, 1.5 million shares were repurchased under this program at a total cost of $19.0 million.
In June 2015, the Corporation issued $150.0 million of subordinated debt, the net proceeds of which were used to redeem $150 million of trust preferred securities in July 2015.

(July 21, 2015) - Lancaster, PA - Fulton Financial Corporation (NASDAQ: FULT) reported net income of $36.7 million, or 21 cents per diluted share, for the second quarter of 2015, compared to $40.0 million, or 22 cents per diluted share, for the first quarter of 2015.





“We reported diluted earnings per share of 21 cents for the second quarter. During the quarter, we saw earning asset and core deposit growth, an increase in non-interest income across a number of key business lines and good control of other expenses”, said E. Philip Wenger, Chairman, President and CEO. “Lower yields on earning assets exerted pressure on our net interest margin during the quarter. In keeping with our goal of creating shareholder value, and in light of the current low interest rate environment, we took steps to reduce interest expense over the long term through the issuance of $150 million in subordinated debt which was used to redeem higher cost trust preferred securities in July”.
 
Net Interest Income and Margin
Net interest income for the second quarter of 2015 decreased $661,000, or 0.5 percent, from the first quarter of 2015. Net interest margin decreased seven basis points, or 2.1 percent, to 3.20 percent in the second quarter of 2015 from 3.27 percent in the first quarter of 2015. Average yields on interest-earning assets decreased nine basis points, while the average cost of interest-bearing liabilities decreased three basis points during the second quarter of 2015 in comparison to the first quarter of 2015.

Average Balance Sheet

Total average assets for the second quarter of 2015 were $17.2 billion, an increase of $85.0 million from the first quarter of 2015. Average loans, net of unearned income, increased $97.1 million, or 0.7 percent, in comparison to the first quarter of 2015.


 
Three Months Ended
 
Increase (decrease)
 
June 30, 2015
 
March 31, 2015
 
in Balance
 
Balance
 
Yield (1)
 
Balance
 
Yield (1)
 
$
 
%
 
(dollars in thousands)
Average Loans, net of unearned income, by type:
 
 
 
 
 
 
 
 
 
 
 
    Real estate - commercial mortgage
$
5,210,540

 
4.15
%
 
$
5,163,845

 
4.22
%
 
$
46,695

 
0.9
 %
    Commercial - industrial, financial, and agricultural
3,836,397

 
3.79
%
 
3,770,187

 
3.87
%
 
66,210

 
1.8
 %
    Real estate - home equity
1,695,171

 
4.11
%
 
1,721,300

 
4.14
%
 
(26,129
)
 
(1.5
)%
    Real estate - residential mortgage
1,356,464

 
3.82
%
 
1,370,376

 
3.84
%
 
(13,912
)
 
(1.0
)%
    Real estate - construction
698,685

 
3.97
%
 
688,690

 
3.93
%
 
9,995

 
1.5
 %
    Consumer
265,354

 
5.48
%
 
259,138

 
5.26
%
 
6,216

 
2.4
 %
    Leasing and other
129,989

 
6.94
%
 
121,992

 
8.41
%
 
7,997

 
6.6
 %
Total Average Loans, net of unearned income
$
13,192,600

 
4.05
%
 
$
13,095,528

 
4.11
%
 
$
97,072

 
0.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
    (1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
    




Total average liabilities increased $69.1 million, or 0.5 percent, from the first quarter of 2015, including a $107.1 million, or 0.8%, increase in average deposits. Average deposits and interest rates, by type, for the second quarter of 2015 in comparison to the first quarter of 2015, are summarized in the following table:
 
Three Months Ended
 
Increase (decrease)
 
June 30, 2015
 
March 31, 2015
 
in Balance
 
Balance
Rate
 
Balance
Rate
 
$
 
%
 
(dollars in thousands)
Average Deposits, by type:
 
 
 
 
 
 
 
 
 
    Noninterest-bearing demand
$
3,734,880

%
 
$
3,662,040

%
 
$
72,840

 
2.0
 %
    Interest-bearing demand
3,152,697

0.13
%
 
3,135,927

0.13
%
 
16,770

 
0.5
 %
    Savings deposits
3,568,579

0.14
%
 
3,517,057

0.13
%
 
51,522

 
1.5
 %
Total average demand and savings
10,456,156

0.09
%
 
10,315,024

0.08
%
 
141,132

 
1.4
 %
    Time deposits
3,027,520

1.04
%
 
3,061,593

1.02
%
 
(34,073
)
 
(1.1
)%
Total Average Deposits
$
13,483,676

0.30
%
 
$
13,376,617

0.30
%
 
$
107,059

 
0.8
 %


Asset Quality
Non-performing assets were $162.3 million, or 0.93 percent of total assets, at June 30, 2015, compared to $163.5 million, or 0.94 percent of total assets, at March 31, 2015 and $162.8 million, or 0.96 percent of total assets, at June 30, 2014.
Annualized net charge-offs for the quarter ended June 30, 2015 were 0.38 percent of total average loans, compared to 0.08 percent for the quarter ended March 31, 2015 and 0.28 percent for the quarter ended June 30, 2014. The increase in net charge-offs was mainly in commercial loans and was primarily due to two customer relationships that were placed on non-accrual status in the first quarter of 2015. The allowance for credit losses as a percentage of non-performing loans was 113.3 percent at June 30, 2015, as compared to 120.3 percent at March 31, 2015 and 129.6 percent at June 30, 2014.
During the second quarter of 2015, the Corporation recorded a $2.2 million provision for credits losses, compared to a $3.7 million negative provision for credit losses in the first quarter of 2015. The $5.9 million increase in the provision resulted from the consistent application of the Corporation’s allowance methodology.

Non-interest Income    
Non-interest income, excluding investment securities gains, increased $3.5 million, or 8.6 percent, in comparison to the first quarter of 2015. Service charges on deposit accounts increased $1.1 million, or 9.2 percent, primarily due to an increase in overdraft fees. Other service charges and fees increased $1.6 million, or 17.4 percent, primarily due to increases in debit card, merchant




and commercial loan swap fee income. Mortgage banking income increased $650,000, or 13.9 percent, mainly due to an increase in spreads on new loan commitments.
Gains on sales of investment securities decreased $1.7 million in comparison to the first quarter of 2015. Gains in the second quarter of 2015 were primarily realized gains on sales of equity securities.

Non-interest Expense
Non-interest expense decreased $124,000, or 0.1 percent, in the second quarter of 2015, compared to the first quarter of 2015. Occupancy expense decreased $1.9 million, or 13.8 percent, due primarily to seasonal fluctuations in snow removal and utilities costs. Other real estate owned (OREO) and repossession expense decreased $1.2 million, primarily due to an increase in net gains on sales of OREO. Partially offsetting these decreases was a $2.4 million, or 41.3 percent, increase in other outside services expenses.
During the first six months of 2015, the Corporation implemented several cost savings initiatives, including the consolidation of nine branches, the modification of certain retirement benefits and the elimination of certain positions. Annualized expense reductions from these cost savings initiatives are expected to be approximately $6.5 million. Implementation expenses associated with these initiatives were $520,000 and $1.5 million during the second and first quarters of 2015, respectively.

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, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which have been filed with the Securities and Exchange Commission and is 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.







Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 
 
 
FULTON FINANCIAL CORPORATION
 
 
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
 
 
dollars in thousands
 
 
 
 
 
 
 
 
 
 
 % Change from
 
 
June 30
 
June 30
 
March
 
June 30
 
March
 
 
2015
 
2014
 
2015
 
2014
 
2015
ASSETS
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
100,455

 
$
258,837

 
$
91,870

 
(61.2
)%
 
9.3
 %
 
Other interest-earning assets
387,324

 
305,518

 
703,667

 
26.8
 %
 
(45.0
)%
 
Loans held for sale
33,980

 
36,079

 
34,124

 
(5.8
)%
 
(0.4
)%
 
Investment securities
2,440,492

 
2,497,776

 
2,259,802

 
(2.3
)%
 
8.0
 %
 
Loans, net of unearned income
13,244,230

 
12,839,511

 
13,115,505

 
3.2
 %
 
1.0
 %
 
Allowance for loan losses
(167,485
)
 
(191,685
)
 
(177,701
)
 
(12.6
)%
 
(5.7
)%
 
     Net loans
13,076,745

 
12,647,826

 
12,937,804

 
3.4
 %
 
1.1
 %
 
Premises and equipment
226,794

 
225,168

 
226,241

 
0.7
 %
 
0.2
 %
 
Accrued interest receivable
41,193

 
42,116

 
42,216

 
(2.2
)%
 
(2.4
)%
 
Goodwill and intangible assets
531,567

 
532,432

 
531,672

 
(0.2
)%
 
 %
 
Other assets
526,923

 
487,887

 
535,945

 
8.0
 %
 
(1.7
)%
 
    Total Assets
$
17,365,473

 
$
17,033,639

 
$
17,363,341

 
1.9
 %
 
 %
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Deposits
$
13,505,709

 
$
12,693,659

 
$
13,514,497

 
6.4
 %
 
(0.1
)%
 
Short-term borrowings
409,035

 
1,008,307

 
410,105

 
(59.4
)%
 
(0.3
)%
 
Other liabilities
293,271

 
263,478

 
312,709

 
11.3
 %
 
(6.2
)%
 
FHLB advances and long-term debt
1,132,641

 
968,395

 
1,094,517

 
17.0
 %
 
3.5
 %
 
    Total Liabilities
15,340,656

 
14,933,839

 
15,331,828

 
2.7
 %
 
0.1
 %
 
Shareholders' equity
2,024,817

 
2,099,800

 
2,031,513

 
(3.6
)%
 
(0.3
)%
 
    Total Liabilities and Shareholders' Equity
$
17,365,473

 
$
17,033,639

 
$
17,363,341

 
1.9
 %
 
 %
 
 
 
 
 
 
 
 
 
 
 
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
 
 
 
 
 
 
 
 
Loans, by type:
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
$
5,237,800

 
$
5,128,734

 
$
5,227,101

 
2.1
 %
 
0.2
 %
 
Commercial - industrial, financial and agricultural
3,806,699

 
3,601,721

 
3,762,631

 
5.7
 %
 
1.2
 %
 
Real estate - home equity
1,689,688

 
1,730,497

 
1,701,623

 
(2.4
)%
 
(0.7
)%
 
Real estate - residential mortgage
1,369,103

 
1,361,976

 
1,364,788

 
0.5
 %
 
0.3
 %
 
Real estate - construction
731,925

 
634,018

 
677,806

 
15.4
 %
 
8.0
 %
 
Consumer
272,494

 
280,557

 
257,301

 
(2.9
)%
 
5.9
 %
 
Leasing and other
136,521

 
102,008

 
124,255

 
33.8
 %
 
9.9
 %
 
Total Loans, net of unearned income
$
13,244,230

 
$
12,839,511

 
$
13,115,505

 
3.2
 %
 
1.0
 %
Deposits, by type:
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
3,805,165

 
$
3,484,125

 
$
3,765,677

 
9.2
 %
 
1.0
 %
 
Interest-bearing demand
3,129,903

 
2,855,511

 
3,133,748

 
9.6
 %
 
(0.1
)%
 
Savings deposits
3,566,888

 
3,338,018

 
3,567,652

 
6.9
 %
 
 %
 
Time deposits
3,003,753

 
3,016,005

 
3,047,420

 
(0.4
)%
 
(1.4
)%
 
Total Deposits
$
13,505,709

 
$
12,693,659

 
$
13,514,497

 
6.4
 %
 
(0.1
)%
Short-term borrowings, by type:
 
 
 
 
 
 
 
 
 
Customer repurchase agreements
$
169,918

 
$
212,930

 
$
161,886

 
(20.2
)%
 
5.0
 %
 
Customer short-term promissory notes
74,059

 
86,366

 
93,176

 
(14.2
)%
 
(20.5
)%
 
Short-term FHLB advances
160,000

 
325,000

 
155,000

 
(50.8
)%
 
3.2
 %
 
Federal funds purchased
5,058

 
384,011

 
43

 
(98.7
)%
 
N/M

 
Total Short-term Borrowings
$
409,035

 
$
1,008,307

 
$
410,105

 
(59.4
)%
 
(0.3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
N/M - Not meaningful
 
 
 
 
 
 
 
 
 





FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
 
 
 
 
 
in thousands, except per-share data and percentages
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 % Change from
 
Six Months Ended
 
 
 
 
 
 
 
June 30
 
June 30
 
March 31
 
June 30
 
March 31
 
June 30
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
2015
 
2014
 
% Change
 
Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest income
 
 
$
144,229

 
$
147,902

 
$
145,772

 
(2.5
)%
 
(1.1
)%
 
$
290,001

 
$
296,694

 
(2.3
)%
 
 
Interest expense
 
 
21,309

 
20,004

 
22,191

 
6.5
 %
 
(4.0
)%
 
43,500

 
39,231

 
10.9
 %
 
 
    Net Interest Income
 
 
122,920

 
127,898

 
123,581

 
(3.9
)%
 
(0.5
)%
 
246,501

 
257,463

 
(4.3
)%
 
 
Provision for credit losses
 
 
2,200

 
3,500

 
(3,700
)
 
(37.1
)%
 
N/M

 
(1,500
)
 
6,000

 
N/M

 
 
    Net Interest Income after Provision
 
 
120,720

 
124,398

 
127,281

 
(3.0
)%
 
(5.2
)%
 
248,001

 
251,463

 
(1.4
)%
 
Non-Interest Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
 
 
12,637

 
12,552

 
11,569

 
0.7
 %
 
9.2
 %
 
24,206

 
24,263

 
(0.2
)%
 
 
Investment management and trust services
 
 
11,011

 
11,339

 
10,889

 
(2.9
)%
 
1.1
 %
 
21,900

 
22,297

 
(1.8
)%
 
 
Other service charges and fees
 
 
10,988

 
10,526

 
9,363

 
4.4
 %
 
17.4
 %
 
20,351

 
19,453

 
4.6
 %
 
 
Mortgage banking income
 
 
5,339

 
5,741

 
4,688

 
(7.0
)%
 
13.9
 %
 
10,027

 
9,346

 
7.3
 %
 
 
Investment securities gains
 
 
2,415

 
1,112

 
4,145

 
117.2
 %
 
(41.7
)%
 
6,560

 
1,112

 
489.9
 %
 
 
Other
 
 
4,099

 
3,602

 
4,083

 
13.8
 %
 
0.4
 %
 
8,182

 
6,907

 
18.5
 %
 
 
    Total Non-Interest Income
 
 
46,489

 
44,872

 
44,737

 
3.6
 %
 
3.9
 %
 
91,226

 
83,378

 
9.4
 %
 
Non-Interest Expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
 
65,067

 
63,623

 
64,990

 
2.3
 %
 
0.1
 %
 
130,057

 
123,189

 
5.6
 %
 
 
Net occupancy expense
 
 
11,809

 
11,464

 
13,692

 
3.0
 %
 
(13.8
)%
 
25,501

 
25,067

 
1.7
 %
 
 
Other outside services
 
 
8,125

 
7,240

 
5,750

 
12.2
 %
 
41.3
 %
 
13,875

 
11,052

 
25.5
 %
 
 
Data processing
 
 
4,894

 
4,331

 
4,768

 
13.0
 %
 
2.6
 %
 
9,662

 
8,127

 
18.9
 %
 
 
Software
 
 
3,376

 
3,209

 
3,318

 
5.2
 %
 
1.7
 %
 
6,694

 
6,134

 
9.1
 %
 
 
Equipment expense
 
 
3,335

 
3,360

 
3,958

 
(0.7
)%
 
(15.7
)%
 
7,293

 
6,962

 
4.8
 %
 
 
FDIC insurance expense
 
 
2,885

 
2,615

 
2,822

 
10.3
 %
 
2.2
 %
 
5,707

 
5,304

 
7.6
 %
 
 
Professional fees
 
 
2,731

 
3,559

 
2,871

 
(23.3
)%
 
(4.9
)%
 
5,602

 
6,463

 
(13.3
)%
 
 
Marketing
 
 
2,235

 
2,337

 
1,233

 
(4.4
)%
 
81.3
 %
 
3,468

 
3,921

 
(11.6
)%
 
 
Operating risk loss
 
 
674

 
716

 
827

 
(5.9
)%
 
(18.5
)%
 
1,501

 
2,544

 
(41.0
)%
 
 
Other real estate owned and repossession expense
 
 
129

 
748

 
1,362

 
(82.8
)%
 
(90.5
)%
 
1,491

 
1,731

 
(13.9
)%
 
 
Intangible amortization
 
 
106

 
315

 
130

 
(66.3
)%
 
(18.5
)%
 
236

 
630

 
(62.5
)%
 
 
Other
 
 
12,988

 
12,657

 
12,757

 
2.6
 %
 
1.8
 %
 
25,745

 
24,604

 
4.6
 %
 
 
    Total Non-Interest Expense
 
 
118,354

 
116,174

 
118,478

 
1.9
 %
 
(0.1
)%
 
236,832

 
225,728

 
4.9
 %
 
 
    Income Before Income Taxes
 
 
48,855

 
53,096

 
53,540

 
(8.0
)%
 
(8.8
)%
 
102,395

 
109,113

 
(6.2
)%
 
 
Income tax expense
 
 
12,175

 
13,500

 
13,504

 
(9.8
)%
 
(9.8
)%
 
25,679

 
27,734

 
(7.4
)%
 
 
    Net Income
 
 
$
36,680

 
$
39,596

 
$
40,036

 
(7.4
)%
 
(8.4
)%
 
$
76,716

 
$
81,379

 
(5.7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PER SHARE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Basic
 
 
$
0.21

 
$
0.21

 
$
0.22

 
 %
 
(4.5
)%
 
$
0.43

 
$
0.43

 
 %
 
 
    Diluted
 
 
0.21

 
0.21

 
0.22

 
 %
 
(4.5
)%
 
0.43

 
0.43

 
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends
 
 
$
0.09

 
$
0.08

 
$
0.09

 
12.5
 %
 
 %
 
$
0.18

 
$
0.16

 
12.5
 %
 
 
Shareholders' equity
 
 
11.50

 
11.11

 
11.34

 
3.5
 %
 
1.4
 %
 
11.50

 
11.11

 
3.5
 %
 
 
Shareholders' equity (tangible)
 
 
8.48

 
8.29

 
8.37

 
2.3
 %
 
1.3
 %
 
8.48

 
8.29

 
2.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average shares (basic)
 
 
176,433

 
188,139

 
178,471

 
(6.2
)%
 
(1.1
)%
 
177,446

 
188,799

 
(6.0
)%
 
 
Weighted average shares (diluted)
 
 
177,531

 
189,182

 
179,457

 
(6.2
)%
 
(1.1
)%
 
178,488

 
189,832

 
(6.0
)%
 
 
Shares outstanding, end of period
 
 
176,019

 
189,033

 
179,098

 
(6.9
)%
 
(1.7
)%
 
176,019

 
189,033

 
(6.9
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED FINANCIAL RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
 
0.86
%
 
0.94
%
 
0.95
%
 
 
 
 
 
0.90
%
 
0.97
%
 
 
 
 
Return on average shareholders' equity
 
 
7.24
%
 
7.63
%
 
8.05
%
 
 
 
 
 
7.64
%
 
7.92
%
 
 
 
 
Return on average shareholders' equity (tangible)
 
 
9.83
%
 
10.30
%
 
10.96
%
 
 
 
 
 
10.39
%
 
10.71
%
 
 
 
 
Net interest margin
 
 
3.20
%
 
3.41
%
 
3.27
%
 
 
 
 
 
3.24
%
 
3.44
%
 
 
 
 
Efficiency ratio
 
 
68.94
%
 
65.85
%
 
70.16
%
 
 
 
 
 
69.55
%
 
64.63
%
 
 
 
N/M - Not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 








FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
 
 
 
 
 
dollars in thousands
 
 
 
 
 
 
 
 
 Three Months Ended
 
 
June 30, 2015
 
June 30, 2014
 
March 31, 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
$
13,192,600

 
$
133,339

 
4.05%
 
$
12,795,747

 
$
134,387

 
4.21%
 
$
13,095,528

 
$
133,055

 
4.11%
 
Taxable investment securities
2,048,558

 
10,944

 
2.14%
 
2,211,004

 
12,418

 
2.25%
 
2,005,542

 
11,282

 
2.25%
 
Tax-exempt investment securities
216,355

 
2,894

 
5.35%
 
270,482

 
3,534

 
5.23%
 
229,082

 
3,212

 
5.61%
 
Equity securities
27,618

 
379

 
5.50%
 
33,922

 
419

 
4.95%
 
32,210

 
450

 
5.66%
 
Total Investment Securities
2,292,531

 
14,217

 
2.48%
 
2,515,408

 
16,371

 
2.60%
 
2,266,834

 
14,944

 
2.64%
 
Loans held for sale
26,335

 
265

 
4.03%
 
17,540

 
214

 
4.87%
 
17,002

 
173

 
4.07%
 
Other interest-earning assets
439,425

 
933

 
0.85%
 
238,921

 
1,207

 
2.02%
 
474,033

 
2,105

 
1.78%
 
Total Interest-earning Assets
15,950,891

 
148,754

 
3.74%
 
15,567,616

 
152,179

 
3.92%
 
15,853,397

 
150,277

 
3.83%
Noninterest-earning assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
104,723

 
 
 
 
 
198,291

 
 
 
 
 
105,271

 
 
 
 
 
Premises and equipment
226,569

 
 
 
 
 
224,586

 
 
 
 
 
226,391

 
 
 
 
 
Other assets
1,094,071

 
 
 
 
 
1,037,654

 
 
 
 
 
1,114,078

 
 
 
 
 
Less: allowance for loan losses
(176,085
)
 
 
 
 
 
(196,462
)
 
 
 
 
 
(183,927
)
 
 
 
 
 
Total Assets
$
17,200,169

 
 
 
 
 
$
16,831,685

 
 
 
 
 
$
17,115,210

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
$
3,152,697

 
$
987

 
0.13%
 
$
2,914,887

 
$
904

 
0.12%
 
$
3,135,927

 
$
983

 
0.13%
 
Savings deposits
3,568,579

 
1,247

 
0.14%
 
3,355,929

 
1,031

 
0.12%
 
3,517,057

 
1,119

 
0.13%
 
Time deposits
3,027,520

 
7,819

 
1.04%
 
3,012,061

 
6,750

 
0.90%
 
3,061,593

 
7,721

 
1.02%
 
Total Interest-bearing Deposits
9,748,796

 
10,053

 
0.41%
 
9,282,877

 
8,685

 
0.38%
 
9,714,577

 
9,823

 
0.41%
 
Short-term borrowings
379,988

 
103

 
0.11%
 
1,047,684

 
540

 
0.21%
 
309,215

 
77

 
0.10%
 
FHLB advances and long-term debt
1,026,987

 
11,153

 
4.35%
 
894,511

 
10,779

 
4.83%
 
1,124,074

 
12,291

 
4.40%
 
Total Interest-bearing Liabilities
11,155,771

 
21,309

 
0.77%
 
11,225,072

 
20,004

 
0.71%
 
11,147,866

 
22,191

 
0.80%
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
3,734,880

 
 
 
 
 
3,322,195

 
 
 
 
 
3,662,040

 
 
 
 
 
Other
277,730

 
 
 
 
 
202,520

 
 
 
 
 
289,341

 
 
 
 
 
Total Liabilities
15,168,381

 
 
 
 
 
14,749,787

 
 
 
 
 
15,099,247

 
 
 
 
 
Shareholders' equity
2,031,788

 
 
 
 
 
2,081,898

 
 
 
 
 
2,015,963

 
 
 
 
 
Total Liabilities and Shareholders' Equity
$
17,200,169

 
 
 
 
 
$
16,831,685

 
 
 
 
 
$
17,115,210

 
 
 
 
 
Net interest income/net interest margin (fully taxable equivalent)
 
 
127,445

 
3.20%
 
 
 
132,175

 
3.41%
 
 
 
128,086

 
3.27%
 
Tax equivalent adjustment
 
 
(4,525
)
 
 
 
 
 
(4,277
)
 
 
 
 
 
(4,505
)
 
 
 
Net interest income
 
 
$
122,920

 
 
 
 
 
$
127,898

 
 
 
 
 
$
123,581

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
% Change from
 
 
 
 
 
 
 
 
 
 
June 30
 
June 30
 
March 31
 
June 30
 
March 31
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
Loans, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
$
5,210,540

 
$
5,138,537

 
$
5,163,845

 
1.4
 %
 
0.9
 %
 
 
 
 
 
 
 
 
 
Commercial - industrial, financial and agricultural
3,836,397

 
3,617,977

 
3,770,187

 
6.0
 %
 
1.8
 %
 
 
 
 
 
 
 
 
 
Real estate - home equity
1,695,171

 
1,735,767

 
1,721,300

 
(2.3
)%
 
(1.5
)%
 
 
 
 
 
 
 
 
 
Real estate - residential mortgage
1,356,464

 
1,339,034

 
1,370,376

 
1.3
 %
 
(1.0
)%
 
 
 
 
 
 
 
 
 
Real estate - construction
698,685

 
588,176

 
688,690

 
18.8
 %
 
1.5
 %
 
 
 
 
 
 
 
 
 
Consumer
265,354

 
276,444

 
259,138

 
(4.0
)%
 
2.4
 %
 
 
 
 
 
 
 
 
 
Leasing and other
129,989

 
99,812

 
121,992

 
30.2
 %
 
6.6
 %
 
 
 
 
 
 
 
 
 
Total Loans, net of unearned income
$
13,192,600

 
$
12,795,747

 
$
13,095,528

 
3.1
 %
 
0.7
 %
 
 
 
 
 
 
 
 
Deposits, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
3,734,880

 
$
3,322,195

 
$
3,662,040

 
12.4
 %
 
2.0
 %
 
 
 
 
 
 
 
 
 
Interest-bearing demand
3,152,697

 
2,914,887

 
3,135,927

 
8.2
 %
 
0.5
 %
 
 
 
 
 
 
 
 
 
Savings deposits
3,568,579

 
3,355,929

 
3,517,057

 
6.3
 %
 
1.5
 %
 
 
 
 
 
 
 
 
 
Time deposits
3,027,520

 
3,012,061

 
3,061,593

 
0.5
 %
 
(1.1
)%
 
 
 
 
 
 
 
 
 
Total Deposits
$
13,483,676

 
$
12,605,072

 
$
13,376,617

 
7.0
 %
 
0.8
 %
 
 
 
 
 
 
 
 
Short-term borrowings, by type:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer repurchase agreements
$
179,804

 
$
216,212

 
$
173,625

 
(16.8
)%
 
3.6
 %
 
 
 
 
 
 
 
 
 
Customer short-term promissory notes
80,073

 
81,823

 
86,258

 
(2.1
)%
 
(7.2
)%
 
 
 
 
 
 
 
 
 
Federal funds purchased
108,078

 
444,429

 
25,054

 
(75.7
)%
 
331.4
 %
 
 
 
 
 
 
 
 
 
Short-term FHLB advances and other borrowings
12,033

 
305,220

 
24,278

 
(96.1
)%
 
(50.4
)%
 
 
 
 
 
 
 
 
 
Total Short-term Borrowings
$
379,988

 
$
1,047,684

 
$
309,215

 
(63.7
)%
 
22.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 






FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
 
 
 
 
 
 
dollars in thousands
 
 
 
 
 
 
 
 
 
Six Months Ended June 30
 
 
 
2015
 
2014
 
 
 
Average
 
 
 
 
 
Average
 
 
 
 
 
 
 
Balance
 
Interest (1)
 
Yield/Rate
 
Balance
 
Interest (1)
 
Yield/Rate
ASSETS
 
 
 
 
 
 
Interest-earning assets:
 
 
 
 
 
 
 
Loans, net of unearned income
 
$
13,144,332

 
$
266,394

 
4.08
 %
 
$
12,779,145

 
$
269,131

 
4.24
%
 
Taxable investment securities
 
2,027,170

 
22,226

 
2.19
 %
 
2,234,259

 
25,684

 
2.30
%
 
Tax-exempt investment securities
 
222,684

 
6,106

 
5.48
 %
 
274,856

 
7,147

 
5.20
%
 
Equity securities
 
29,901

 
829

 
5.58
 %
 
33,922

 
848

 
5.03
%
 
Total Investment Securities
 
2,279,755

 
29,161

 
2.56
 %
 
2,543,037

 
33,679

 
2.65
%
 
Loans held for sale
 
21,694

 
438

 
4.04
 %
 
15,494

 
348

 
4.49
%
 
Other interest-earning assets
 
456,633

 
3,038

 
1.33
 %
 
248,807

 
2,089

 
1.68
%
 
Total Interest-earning Assets
 
15,902,414

 
299,031

 
3.79
 %
 
15,586,483

 
305,247

 
3.95
%
Noninterest-earning assets:
 
 
 
 
 
 
 
Cash and due from banks
 
104,996

 
 
 
 
 
198,962

 
 
 
 
 
Premises and equipment
 
226,480

 
 
 
 
 
225,436

 
 
 
 
 
Other assets
 
1,104,019

 
 
 
 
 
1,034,877

 
 
 
 
 
Less: allowance for loan losses
 
(179,985
)
 
 
 
 
 
(199,813
)
 
 
 
 
 
Total Assets
 
$
17,157,924

 
 
 
 
 
$
16,845,945

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
Interest-bearing liabilities:
 
 
 
 
 
 
 
Demand deposits
 
$
3,144,358

 
$
1,970

 
0.13
 %
 
$
2,929,965

 
$
1,813

 
0.12
%
 
Savings deposits
 
3,542,960

 
2,366

 
0.13
 %
 
3,353,910

 
2,066

 
0.12
%
 
Time deposits
 
3,044,463

 
15,540

 
1.03
 %
 
2,972,480

 
12,702

 
0.86
%
 
Total Interest-bearing Deposits
 
9,731,781

 
19,876

 
0.41
 %
 
9,256,355

 
16,581

 
0.36
%
 
Short-term borrowings
 
344,797

 
180

 
0.10
 %
 
1,127,872

 
1,173

 
0.21
%
 
FHLB advances and long-term debt
 
1,075,262

 
23,444

 
4.38
 %
 
889,051

 
21,477

 
4.85
%
 
Total Interest-bearing Liabilities
 
11,151,840

 
43,500

 
0.78
 %
 
11,273,278

 
39,231

 
0.70
%
Noninterest-bearing liabilities:
 
 
 
 
 
 
 
Demand deposits
 
3,698,661

 
 
 
 
 
3,283,027

 
 
 
 
 
Other
 
283,504

 
 
 
 
 
217,181

 
 
 
 
 
Total Liabilities
 
15,134,005

 
 
 
 
 
14,773,486

 
 
 
 
 
Shareholders' equity
 
2,023,919

 
 
 
 
 
2,072,459

 
 
 
 
 
Total Liabilities and Shareholders' Equity
 
$
17,157,924

 
 
 
 
 
$
16,845,945

 
 
 
 
 
Net interest income/net interest margin (fully taxable equivalent)
 
 
 
255,531

 
3.24
 %
 
 
 
266,016

 
3.44
%
 
Tax equivalent adjustment
 
 
 
(9,030
)
 
 
 
 
 
(8,553
)
 
 
 
Net interest income
 
 
 
$
246,501

 
 
 
 
 
$
257,463

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Presented on a tax-equivalent basis using a 35% Federal tax rate and statutory interest expense disallowances.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
 
 
 
 
 
 
 
 
 
Six Months Ended
 
 
 
 
 
 
 
 
 
 
 
June 30
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
% Change
 
 
 
 
 
 
Loans, by type:
 
 
 
 
 
 
 
Real estate - commercial mortgage
 
$
5,187,322

 
$
5,111,979

 
1.5
 %
 
 
 
 
 
 
 
Commercial - industrial, financial and agricultural
 
3,803,475

 
3,627,471

 
4.9
 %
 
 
 
 
 
 
 
Real estate - home equity
 
1,708,163

 
1,745,503

 
(2.1
)%
 
 
 
 
 
 
 
Real estate - residential mortgage
 
1,363,382

 
1,337,686

 
1.9
 %
 
 
 
 
 
 
 
Real estate - construction
 
693,715

 
582,294

 
19.1
 %
 
 
 
 
 
 
 
Consumer
 
262,265

 
275,682

 
(4.9
)%
 
 
 
 
 
 
 
Leasing and other
 
126,010

 
98,530

 
27.9
 %
 
 
 
 
 
 
 
Total Loans, net of unearned income
 
$
13,144,332

 
$
12,779,145

 
2.9
 %
 
 
 
 
 
 
Deposits, by type:
 
 
 
 
 
 
 
Noninterest-bearing demand
 
$
3,698,661

 
$
3,283,027

 
12.7
 %
 
 
 
 
 
 
 
Interest-bearing demand
 
3,144,358

 
2,929,965

 
7.3
 %
 
 
 
 
 
 
 
Savings deposits
 
3,542,960

 
3,353,910

 
5.6
 %
 
 
 
 
 
 
 
Time deposits
 
3,044,463

 
2,972,480

 
2.4
 %
 
 
 
 
 
 
 
Total Deposits
 
$
13,430,442

 
$
12,539,382

 
7.1
 %
 
 
 
 
 
 
Short-term borrowings, by type:
 
 
 
 
 
 
 
Customer repurchase agreements
 
$
176,732

 
$
201,866

 
(12.5
)%
 
 
 
 
 
 
 
Customer short-term promissory notes
 
83,148

 
91,856

 
(9.5
)%
 
 
 
 
 
 
 
Federal funds purchased
 
66,795

 
430,407

 
(84.5
)%
 
 
 
 
 
 
 
Short-term FHLB advances and other borrowings
 
18,122

 
403,743

 
(95.5
)%
 
 
 
 
 
 
 
Total Short-term Borrowings
 
$
344,797

 
$
1,127,872

 
(69.4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





FULTON FINANCIAL CORPORATION
 
 
 
 
 
 
 
 
 
 
 
ASSET QUALITY INFORMATION (UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
dollars in thousands
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
 
 
 
 
 
Jun 30
 
Jun 30
 
Mar 31
 
Jun 30
 
Jun 30
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
 
 
 
 
 
 
 
 
ALLOWANCE FOR CREDIT LOSSES:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
179,658

 
$
199,006

 
$
185,931

 
$
185.931

 
$
204.917

 
 
 
 
 
 
 
 
 
Loans charged off:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Commercial - industrial, financial and agricultural
(11,166
)
 
(5,512
)
 
(1,863
)
 
(13,029
)
 
(10,637
)
 
 
 
 
 
 
 
 
 
    Real estate - commercial mortgage
(1,642
)
 
(2,141
)
 
(709
)
 
(2,351
)
 
(3,527
)
 
 
 
 
 
 
 
 
 
    Consumer and home equity
(1,227
)
 
(1,683
)
 
(1,548
)
 
(2,775
)
 
(4,085
)
 
 
 
 
 
 
 
 
 
    Real estate - residential mortgage
(783
)
 
(1,089
)
 
(1,281
)
 
(2,064
)
 
(1,935
)
 
 
 
 
 
 
 
 
 
    Real estate - construction
(87
)
 
(218
)
 

 
(87
)
 
(432
)
 
 
 
 
 
 
 
 
 
    Leasing and other
(467
)
 
(833
)
 
(363
)
 
(830
)
 
(1,128
)
 
 
 
 
 
 
 
 
 
    Total loans charged off
(15,372
)
 
(11,476
)
 
(5,764
)
 
(21,136
)
 
(21,744
)
 
 
 
 
 
 
 
 
Recoveries of loans previously charged off:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    Commercial - industrial, financial and agricultural
1,471

 
775

 
786

 
2,257

 
1,519

 
 
 
 
 
 
 
 
 
    Real estate - commercial mortgage
451

 
430

 
436

 
887

 
474

 
 
 
 
 
 
 
 
 
    Consumer and home equity
557

 
579

 
492

 
1,049

 
1,144

 
 
 
 
 
 
 
 
 
    Real estate - residential mortgage
187

 
108

 
159

 
346

 
224

 
 
 
 
 
 
 
 
 
    Real estate - construction
231

 
158

 
1,147

 
1,378

 
382

 
 
 
 
 
 
 
 
 
    Leasing and other
70

 
362

 
171

 
241

 
526

 
 
 
 
 
 
 
 
 
    Recoveries of loans previously charged off
2,967

 
2,412

 
3,191

 
6,158

 
4,269

 
 
 
 
 
 
 
 
Net loans charged off
(12,405
)
 
(9,064
)
 
(2,573
)
 
(14,978
)
 
(17,475
)
 
 
 
 
 
 
 
 
Provision for credit losses
2,200

 
3,500

 
(3,700
)
 
(1,500
)
 
6,000

 
 
 
 
 
 
 
 
Balance at end of period
$
169,453

 
$
193,442

 
$
179,658

 
$169,453
 
$
193,442

 
 
 
 
 
 
 
 
Net charge-offs to average loans (annualized)
0.38
%
 
0.28
%
 
0.08
%
 
0.23
%
 
0.27
%
 
 
 
 
 
 
 
 
NON-PERFORMING ASSETS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-accrual loans
$
129,152

 
$
129,934

 
$
129,929

 
 
 
 
 
 
 
 
 
 
 
 
 
Loans 90 days past due and accruing
20,353

 
19,378

 
19,365

 
 
 
 
 
 
 
 
 
 
 
 
 
    Total non-performing loans
149,505

 
149,312

 
149,294

 
 
 
 
 
 
 
 
 
 
 
 
 
Other real estate owned
12,763

 
13,482

 
14,251

 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-performing assets
$
162,268

 
$
162,794

 
$
163,545

 
 
 
 
 
 
 
 
 
 
 
 
NON-PERFORMING LOANS, BY TYPE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
$
49,932

 
$
44,015

 
$
46,331

 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial - industrial, financial and agricultural
35,839

 
38,163

 
43,265

 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - residential mortgage
31,562

 
27,887

 
28,595

 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer and home equity
17,215

 
18,919

 
16,939

 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - construction
14,884

 
20,268

 
14,140

 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing
73

 
60

 
24

 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-performing loans
$
149,505

 
$
149,312

 
$
149,294

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TROUBLED DEBT RESTRUCTURINGS (TDRs), BY TYPE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real-estate - residential mortgage
$
31,584

 
$
31,184

 
$
31,574

 
 
 
 
 
 
 
 
 
 
 
 
 
Real-estate - commercial mortgage
17,482

 
19,398

 
23,468

 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - construction
4,482

 
8,561

 
7,791

 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial - industrial, financial and agricultural
6,591

 
6,953

 
6,975

 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer and home equity
3,330

 
2,838

 
3,118

 
 
 
 
 
 
 
 
 
 
 
 
 
Total accruing TDRs
$
63,469

 
$
68,934

 
$
72,926

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-accrual TDRs (1)
27,230

 
25,526

 
29,392

 
 
 
 
 
 
 
 
 
 
 
 
 
Total TDRs
$
90,699

 
$
94,460

 
$
102,318

 
 
 
 
 
 
 
 
 
 
 
 
(1) Included within non-accrual loans above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DELINQUENCY RATES, BY TYPE:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30, 2015
 
June 30, 2014
 
March 31, 2015
 
 
 31-89 Days
 
 ≥90 Days (2)
 
 Total
 
 31-89 Days
 
 ≥90 Days (2)
 
 Total
 
 31-89 Days
 
 ≥90 Days (2)
 
 Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate - commercial mortgage
0.34
%
 
0.96
%
 
1.30
%
 
0.30
%
 
0.86
%
 
1.16
%
 
0.50
%
 
0.89
%
 
1.39
%
 
Commercial - industrial, financial and agricultural
0.22
%
 
0.93
%
 
1.15
%
 
0.47
%
 
1.05
%
 
1.52
%
 
0.26
%
 
1.15
%
 
1.41
%
 
Real estate - construction
0.02
%
 
2.04
%
 
2.06
%
 
0.10
%
 
3.20
%
 
3.30
%
 
0.31
%
 
2.09
%
 
2.40
%
 
Real estate - residential mortgage
1.53
%
 
2.30
%
 
3.83
%
 
1.78
%
 
2.05
%
 
3.83
%
 
1.75
%
 
2.10
%
 
3.85
%
 
Consumer, home equity, leasing and other
0.69
%
 
0.83
%
 
1.52
%
 
0.84
%
 
0.90
%
 
1.74
%
 
0.92
%
 
0.81
%
 
1.73
%
 
Total
0.47
%
 
1.13
%
 
1.60
%
 
0.58
%
 
1.17
%
 
1.75
%
 
0.62
%
 
1.14
%
 
1.76
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2) Includes non-accrual loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ASSET QUALITY RATIOS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jun 30
 
Jun 30
 
Mar 31
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-accrual loans to total loans
0.98
%
 
1.01
%
 
0.99
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-performing assets to total loans and OREO
1.22
%
 
1.27
%
 
1.25
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-performing assets to total assets
0.93
%
 
0.96
%
 
0.94
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses to loans outstanding
1.28
%
 
1.51
%
 
1.37
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses to non-performing loans
113.34
%
 
129.56
%
 
120.34
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-performing assets to tangible common shareholders' equity and allowance for credit losses
9.76
%
 
9.25
%
 
9.74
%
 
 
 
 
 
 
 
 
 
 
 
 






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
 
Six Months Ended
 
 
 
 
 
 
 
June 30
 
June 30
 
March 31
 
Jun 30
 
Jun 30
 
 
 
 
 
 
 
2015
 
2014
 
2015
 
2015
 
2014
Shareholders' equity (tangible), per share
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity
 
 
$
2,024,817

 
$
2,099,800

 
$
2,031,513

 
 
 
 
Less: Goodwill and intangible assets
 
 
(531,567
)
 
(532,432
)
 
(531,672
)
 
 
 
 
Tangible shareholders' equity (numerator)
 
 
$
1,493,250

 
$
1,567,368

 
$
1,499,841

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares outstanding, end of period (denominator)
 
 
176,019

 
189,033

 
179,098

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders' equity (tangible), per share
 
 
$
8.48

 
$
8.29

 
$
8.37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average common shareholders' equity (tangible)
 
 
 
 
 
 
 
 
 
 
Net income
 
 
$
36,680

 
$
39,596

 
$
40,036

 
$
76,716

 
$
81,379

Plus: Intangible amortization, net of tax
 
 
69

 
204

 
85

 
153

 
410

Numerator
 
$
36,749

 
$
39,800

 
$
40,121

 
$
76,869

 
$
81,789

 
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity
 
 
$
2,031,788

 
$
2,081,898

 
$
2,015,963

 
$
2,023,919

 
$
2,072,459

Less: Average goodwill and intangible assets
 
 
(531,618
)
 
(532,585
)
 
(531,732
)
 
(531,675
)
 
(532,742
)
Average tangible shareholders' equity (denominator)
 
$
1,500,170

 
$
1,549,313

 
$
1,484,231

 
$
1,492,244

 
$
1,539,717

 
 
 
 
 
 
 
 
 
 
 
Return on average common shareholders' equity (tangible), annualized
 
9.83
%
 
10.30
%
 
10.96
%
 
10.39
%
 
10.71
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-interest expense
 
 
$
118,354

 
$
116,174

 
$
118,478

 
$
236,832

 
$
225,728

Less: Intangible amortization
 
 
(106
)
 
(315
)
 
(130
)
 
(236
)
 
(630
)
Numerator
 
 
$
118,248

 
$
115,859

 
$
118,348

 
$
236,596

 
$
225,098

 
 
 
 
 
 
 
 
 
 
 
 
Net interest income (fully taxable equivalent)
 
 
$
127,445

 
$
132,175

 
$
128,086

 
$
255,531

 
$
266,016

Plus: Total Non-interest income
 
 
46,489

 
44,872

 
44,737

 
91,226

 
83,378

Less: Investment securities gains
 
 
(2,415
)
 
(1,112
)
 
(4,145
)
 
(6,560
)
 
(1,112
)
Denominator
 
 
$
171,519

 
$
175,935

 
$
168,678

 
$
340,197

 
$
348,282

 
 
 
 
 
 
 
 
 
 
 
 
Efficiency ratio
 
 
68.94
%
 
65.85
%
 
70.16
%
 
69.55
%
 
64.64
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-performing assets to tangible common shareholders' equity and allowance for credit losses
 
 
 
 
 
 
Non-performing assets (numerator)
 
 
$
162,268

 
$
162,794

 
$
163,545

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tangible shareholders' equity
 
 
$
1,493,250

 
$
1,567,368

 
$
1,499,841

 
 
 
 
Plus: Allowance for credit losses
 
 
169,453

 
193,442

 
179,658

 
 
 
 
Tangible shareholders' equity and allowance for credit losses (denominator)
$
1,662,703

 
$
1,760,810

 
$
1,679,499

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-performing assets to tangible common shareholders' equity and allowance for credit losses
9.76
%
 
9.25
%
 
9.74
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




D A T A A S O F J U N E 3 0 , 2 0 1 5 U N L E S S O T H E R W I S E N O T E D 2015 SECOND QUARTER RESULTS NASDAQ: FULT


 
FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements with respect to Fulton Financial 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. Management’s “2015 Outlook” contained herein is comprised of forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation’s control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 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, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, 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 uses certain non-GAAP financial measures in this presentation. These non-GAAP financial measures are reconciled to the most comparable GAAP measures at the end of this presentation. 2


 
SECOND QUARTER HIGHLIGHTS • Diluted Earnings Per Share Growth • 4.5% decrease compared to 1Q15 • Loans & Deposits • 0.7% increase in average loans compared to 1Q15, driven by Commercial and Commercial Real Estate; 3.1% increase compared to 2Q14 • 0.8% increase in average deposits compared to 1Q15, driven by an increase in savings and demand deposits; 7.0% increase compared to 2Q14 • Net Interest Income & Margin • 0.5% decrease in net interest income and a 7 basis point decrease in net interest margin compared to 1Q15 • Asset Quality • $2.2 million loan loss provision; increase in net charge-offs, stable non-performing loans • Non-Interest Income • Increased 8.6% compared to 1Q15 and increased 0.7% compared to 2Q14; increase in other service charges and fees in comparison to both periods • Non-Interest Expenses • Very slight (0.1%) decrease compared to 1Q15; 1.9% increase compared to 2Q14 • Strong Capital Levels • Capital levels remain above regulatory minimums under Basel III standards • Quarterly cash dividend to shareholders remained at nine cents; 1.5 million shares repurchased during 2Q15 • Issued $150 million of subordinated debt; proceeds used to redeem $150 million of trust preferred securities 3


 
INCOME STATEMENT SUMMARY – QUARTERLY COMPARISON Net Income of $36.7 million; an 8.4% decrease from 1Q15 and a 7.4% decrease from 2Q14 Net Interest Income  From 1Q15: Decrease of 0.5% due to a 7 bps decline in net interest margin (NIM)  From 2Q14: Decrease of 3.9% due to 21 bps decline in NIM, partially offset by 2.5% increase in average earning assets  Loan Loss Provision $3.7 million negative provision in Q1 2015 Non-Interest Income  From 1Q15: Increase of 8.6% driven by increases in overdraft fees, merchant and mortgage sale gains  From 2Q14: Increase of 0.7% due to increased merchant and debit card income and other service charges and fees Non-Interest Expenses  From 1Q15: Decrease of 0.1% reflecting lower occupancy and OREO costs, offset by higher outside services and marketing  From 2Q14: Increase of 1.9% due to higher staffing costs and outside services 4 Note: ROA is return an average assets determined by dividing net income for the period indicated by average assets (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 2Q15 1Q15 2Q14 Net Interest Income 122,920$ (661)$ (4,978)$ Loan Loss Provision 2,200 5,900 (1,300) Non-interest Income 44,074 3,482 314 Securities Gains 2,415 (1,730) 1,303 Non-interest Expense 118,354 (124) 2,180 Income Taxes 12,175 (1,329) (1,325) Net Income 36,680$ (3,356)$ (2,916)$ Per Share (Diluted) 0.21$ (0.01)$ -$ ROA 0.86% (0.09%) (0.08%) ROE (tangible) (1) 9.83% (1.13%) (0.47%) Efficiency ratio (1) 68.94% (1.22%) 3.09% (dollars in thousands, except per-share data) Change from


 
NET INTEREST INCOME AND MARGIN 5 Net Interest Income & Net Interest Margin ~ $730 million ~ $610 million $127.9 $129.4 $128.0 $123.6 $122.9 3.41% 3.39% 3.31% 3.27% 3.20% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Net Interest Income Net Interest Margin (Fully-taxable equivalent basis, or FTE) Average Interest-Earning Assets & Yields Average Liabilities & Rates $2.8 $2.8 $2.9 $2.8 $2.8 $12.8 $12.9 $13.1 $13.1 $13.2 3.92% 3.90% 3.85% 3.83% 3.74% 0.0% 2.0% 4.0% $- $4.0 $8.0 $12.0 $16.0 $20.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Securities & Other Loans Earning Asset Yield (FTE) $12.6 $13.0 $13.3 $13.4 $13.5 $1.9 $1.7 $1.5 $1.4 $1.4 0.71% 0.73% 0.76% 0.80% 0.77% 0.5% 0.7% 0.9% $- $4.0 $8.0 $12.0 $16 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Deposits Borrowings Cost of Interest-bearing Liabilities ($ IN MILLIONS) ($ IN BILLIONS) ($ IN BILLIONS)


 
ASSET QUALITY ($ IN MILLIONS) 6 Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans 129.56% 132.85% 134.26% 120.34% 113.34% 1.51% 1.47% 1.42% 1.37% 1.28% 0.00% 1.00% 2.00% 3.00% 0.00% 25.00% 50.00% 75.00% 100.00% 125.00% 150.00% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Allowance/NPLs Allowance/Loans Net Charge-offs (NCOs) and NCOs to Average Loans Allowance for Credit Losses (Allowance) to NPLs & Loans $9.1 $5.8 $8.2 $2.6 $12.4 0.28% 0.18% 0.25% 0.08% 0.38% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 Q2 2014 Q3 2014 Q4 2014 1 5 2 2015 NCOs NCOs/Average Loans $3.5 $3.5 $3.0 $(3.7) $2.2 $(6.0) $(4.0) $(2.0) $- $2.0 $4.0 $6.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $149.3 $143.8 $138.5 $149.3 $149.5 1.16% 1.10% 1.06% 1.14% 1.13% 0.00% 0.50% 1.00% 1.50% 2.00% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 NPL NPLs/Loans


 
NON-INTEREST INCOME, EXCLUDING SECURITIES GAINS ($ IN MILLIONS) 7 Non-interest Income, Excluding Securities Gains ~ $730 million ~ $610 million $43.8 $41.8 $41.3 $40.6 $44.1 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Mortgage Banking Income & Spreads Other Non-interest Income 1.15% 1.32% 1.03% 1.11% 1.62% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Gains on Sales Servicing Income Spread on Sales (1) $5.7 $4.0 $3.7 $4.7 $5.3 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40 $45.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Invt Mgmt & Trust Srvs Deposit Srv Chgs Oth Srv Chgs Other $38.0 $37.8 $37.5 $34.9 $38.7 8.6% (1) Represents Gains on Sales divided by total commitments to originate residential mortgage loans for customers.


 
NON-INTEREST EXPENSES ($ IN MILLIONS) 8 Non-interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $116.2 $115.8 $117.7 $118.5 $118.4 65.9% 65.8% 67.5% 70.2% 68.9% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Salaries and Employee Benefits & Staffing Other Non-interest Expenses 3,530 3,468 - 2,000 4,000 6,000 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Total Salaries Employee Benefits Average Full-time Equivalent Employees $63.6 $62.4 $65.4 $65.0 $65.1 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Occp & Equip Data Processing & Software Outside Srvs Other $52.6 $53.4 $52.3 $53.5 $53.3 - 0.1% (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non- GAAP Reconciliation” at the end of this presentation.


 
COMPLIANCE & RISK MANAGEMENT $1.8 $2.1 $3.2 $4.1 $4.6 $1.4 $8.2 $4.2 13 45 47 0 5 10 15 20 25 30 35 40 45 50 $- $3.0 $6.0 $9.0 $12.0 2011 2012 2013 2014 2015 (Projected) Salaries & Benefits Expense Outside Consulting Services# Staffing $0.8 YTD Jun15: $2.0 YTD Jun15: $3.0 $0.1 9 # Represents third-party consulting and legal services directly related to BSA/AML compliance program. 2015 and 2014 exclude $0.7 million and $0.6 million, respectively, of capitalized software costs. To tal A n n u al E xp e n ses , in m ill io n s • Strengthening Risk Management and Compliance infrastructures • Address deficiencies within BSA/AML compliance • Recent BSA/AML enforcement actions at the Corporation and banking subsidiaries • Significant investments in personnel, outside services and systems; largely in-line with amounts previously disclosed BSA/AML Compliance Program Expenses and Staffing To tal N u m b e r o f Em p lo ye e s at Pe rio d En d


 
PROFITABILITY & CAPITAL 10 ROA ROE (tangible) (1) Tangible Common Equity Ratio (1) Diluted Earnings Per Common Share 10.30% 9.88% 9.96% 10.96% 9.83% 0.00% 4.00% 8.00% 12.00% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 0.94% 0.90% 0.88% 0.95% 0.86% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Note: ROA is return an average assets determined by dividing net income for the period indicated by average assets (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 9.5% 9.3% 8.8% 8.9% 8.9% 0.0% 4. 8. 12.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $0.21 $0.21 $0.21 $0.22 $0.21 $- $0.05 $0.10 $0.15 $0.20 $0.25 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015


 
2015 OUTLOOK 11 Area Original Updated Loans & Deposits Annual average growth of 3%-7% Loans - Growth at lower end of range; Deposits - no change Net Interest Margin Compression of 0-4 bps per quarter, on average, based on the current interest rate environment Compression of 5-8 basis points over the second half of 2015 Asset Quality Continued modest provision; volatility may occur due to individual credits No change Non-Interest Income Mid- to high- single digit growth rate Growth at lower end of range Non-Interest Expense Low- single digit growth rate No change, except for $5.6 million of debt extinguishment costs in Q3 2015 Compliance, Risk Management and Technology Continued focus on program build- out No change Capital Continued commitment to return of capital to shareholders No change


 
NON-GAAP RECONCILIATION Note: The Corporation has presented the following non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations and financial condition. 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. 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. 12 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Efficiency ratio Non-interest expense 116,174$ 115,798$ 117,720$ 118,478$ 118,354$ Less: Intangible amortization (315) (314) (315) (130) (106) Numerator 115,859$ 115,484$ 117,405$ 118,348$ 118,248$ Net interest income (fully taxable equivalent) 132,175$ 133,692$ 132,614$ 128,085$ 127,444$ Plus: Total Non-interest income 44,872 41,900 42,101 44,737 46,489 Less: Investment securities (gains) losses (1,112) (81) (848) (4,145) (2,415) Denominator 175,935$ 175,511$ 173,867$ 168,677$ 171,518$ Efficiency ratio 65.85% 65.80% 67.53% 70.16% 68.94% Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Return on Average Shareholders' Equity (ROE) (Tangible) Net income 39,596$ 38,566$ 37,949$ 40,036$ 36,680$ Plus: Intangible amortization, net of tax 204 204 205 85 69 umer to 39,800$ 38,770$ 38,154$ 40,121$ 36,749$ Ave age sh r holders' equity 2,081,898$ 2,089,459$ 2,052,211$ 2,015,963$ 2,031,788$ Less: Average goodwill and intangible assets (532,585) (532,271) (531,955) (531,732) (531,618) Average tangible shareholders' equity (denominator) 1,549,313$ 1,557,188$ 1,520,256$ 1,484,231$ 1,500,170$ Return on average common shareholders' equity (tangible), annualized 10.30% 9.88% 9.96% 10.96% 9.83% Three Months Ended Three Months Ended (dollars in thousands) (dollars in thousands)


 
NON-GAAP RECONCILIATION (CON’T) 13 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Tangible Common Equity to Tangible Assets (TCE Ratio) Shareholders' equity 2,099,800$ 2,078,006$ 1,996,665$ 2,031,513$ 2,024,817$ Less: Intangible assets (532,432) (532,117) (531,803) (531,672) (531,567) Tangible shareholders' equity (numerator) 1,567,368$ 1,545,889$ 1,464,862$ 1,499,841$ 1,493,250$ Total assets 17,033,639$ 17,238,174$ 17,124,767$ 17,363,341$ 17,365,462$ Less: Intangible assets (532,432) (532,117) (531,803) (531,672) (531,567) Total tangible assets (denominator) 16,501,207$ 16,706,057$ 16,592,964$ 16,831,669$ 16,833,895$ Tangible Common Equity to Tangible Assets 9.5% 9.3% 8.8% 8.9% 8.9%


 
V E R S I O N 4 . 2 1 . 2 0 1 5 www.fult.com


 
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