Fulton Financial Reports 2012 Earnings

Marketwired

LANCASTER, PA--(Marketwire - Jan 15, 2013) - Fulton Financial Corporation (NASDAQ: FULT)

  • Diluted earnings per share for the fourth quarter of 2012 was 20 cents, a 4.8 percent decrease from the third quarter of 2012 and an 11.1 percent increase from the fourth quarter of 2011. For the year ended December 31, 2012, diluted earnings per share was 80 cents, a 9.6 percent increase from 2011.
  • The provision for credit losses was $17.5 million for the fourth quarter of 2012, a $5.5 million, or 23.9 percent, decrease compared to the third quarter of 2012. For the year ended December 31, 2012, the provision for loan losses decreased $41.0 million, or 30.4 percent, compared to 2011. Non-performing loans decreased $1.8 million, or 0.8 percent, in comparison to September 30, 2012 and $75.5 million, or 26.3 percent, in comparison to December 31, 2011.
  • Net interest income for the fourth quarter of 2012 decreased $3.7 million, or 2.7 percent, compared to the third quarter of 2012 due to a decrease in net interest margin of 9 basis points, or 2.4 percent. For the year ended December 31, 2012, net interest income decreased $15.8 million, or 2.8 percent, in comparison to 2011.
  • On December 31, 2012, the Corporation's wholly owned subsidiary, Fulton Bank, N.A., completed the divestiture of its Global Exchange Group division (Global Exchange) for a pre-tax gain of $6.2 million. The federal tax liability associated with this transaction was $4.0 million due to the write-off of non-deductible goodwill, resulting in an after tax gain on the transaction of $2.2 million. The proceeds from this transaction and short-term borrowings were used to prepay approximately $20 million of Federal Home Loan Bank (FHLB) advances, with a weighted average interest rate of 4.38 percent and maturing in January 2017. The Corporation incurred a $3.0 million ($2.0 million, net of tax) penalty in connection with prepaying these FHLB advances. 
  • In January 2013, the Corporation announced that its board of directors approved the repurchase of up to eight million shares, or approximately 4.0 percent of the Corporation's outstanding shares, through June 30, 2013. Under the Corporation's previous 2012 repurchase program, the Corporation repurchased approximately 2.1 million shares. 

Fulton Financial Corporation (NASDAQ: FULT) reported net income of $40.2 million, or 20 cents per diluted share, for the fourth quarter ended December 31, 2012, compared to $41.6 million, or 21 cents per diluted share, for the third quarter of 2012. For the year ended December 31, 2012, net income was $159.8 million, or 80 cents per diluted share, compared to $145.6 million, or 73 cents per diluted share, for 2011.

"2012 was a good year for us. We saw continued improvement in earnings and asset quality, a significant reduction in our provision for credit losses, strong residential mortgage activity, good core deposit growth and higher returns on assets and equity," said E. Philip Wenger, Chairman, CEO and President. "From a shareholder perspective, we continued to deploy capital by initiating a share repurchase program and by increasing our quarterly cash dividend. In the fourth quarter, we were particularly pleased to see a pick-up in loan demand across all our markets, although the persistently low interest rate environment continues to put pressure on our net interest margin. Our primary strategic focus for 2013 is quality interest-earning asset growth."

Asset Quality
Non-performing assets were $237.2 million, or 1.44 percent of total assets, at December 31, 2012, compared to $242.0 million, or 1.49 percent of total assets, at September 30, 2012 and $317.3 million, or 1.94 percent of total assets, at December 31, 2011. The $4.8 million, or 2.0 percent, decrease in non-performing assets in comparison to the third quarter of 2012 was primarily due to a decrease in other real estate owned and decreases in non-performing commercial mortgages and commercial loans, partially offset by an increase in non-performing residential mortgages and home equity loans.

Annualized net charge-offs for the quarter ended December 31, 2012 were 0.91 percent of average total loans, compared to 0.84 percent for the quarter ended September 30, 2012 and 1.36 percent for the quarter ended December 31, 2011. The allowance for credit losses as a percentage of non-performing loans was 106.8 percent at December 31, 2012 in comparison to 110.5 percent at September 30, 2012 and 90.1 percent at December 31, 2011.

Net Interest Income and Margin
Net interest income for the fourth quarter of 2012 decreased $3.7 million, or 2.7 percent, from the third quarter of 2012, primarily due to a decrease in the net interest margin. The net interest margin decreased 9 basis points, or 2.4 percent, from 3.74 percent in the third quarter of 2012, to 3.65 percent in the fourth quarter of 2012. Average yields on interest-earning assets decreased 14 basis points, while the decline in the average costs of interest-bearing liabilities was limited to 5 basis points.

For the year ended December 31, 2012, net interest income decreased $15.8 million, or 2.8 percent, compared to 2011. Net interest margin was 3.76 percent for 2012, as compared to 3.90 percent for 2011.

Average Balance Sheet
Total average assets for the fourth quarter of 2012 were $16.2 billion, a decrease of $43.0 million, or 0.3 percent, from the third quarter of 2012. This decrease was due to a $104.9 million, or 3.8 percent, decrease in investment securities, partially offset by an $80.5 million, or 0.7 percent, increase in loans, net of unearned income.

                 
    Quarter Ended            
    Dec 31   Sep 30   Increase (decrease)  
    2012   2012   $     %  
    (dollars in thousands)  
Loans, by type:                          
  Real estate - commercial mortgage   $ 4,623,158   $ 4,603,388   $ 19,770     0.4 %
  Commercial - industrial, financial and agricultural     3,559,171     3,529,733     29,438     0.8 %
  Real estate - home equity     1,611,868     1,597,230     14,638     0.9 %
  Real estate - residential mortgage     1,223,589     1,200,752     22,837     1.9 %
  Real estate - construction     593,351     605,910     (12,559 )   (2.1 %)
  Consumer     305,766     304,235     1,531     0.5 %
  Leasing and other     83,747     78,945     4,802     6.1 %
                             
  Total Loans, net of unearned income   $ 12,000,650   $ 11,920,193   $ 80,457     0.7 %
                           

For the year ended December 31, 2012, average loans, net of unearned income, increased $61.8 million, or 0.5 percent, in comparison to 2011.

Total average liabilities decreased $61.1 million, or 0.4 percent, from the third quarter of 2012, due primarily to a $100.3 million, or 17.0 percent, decrease in short-term borrowings, partially offset by a $36.5 million, or 0.3 percent, increase in average deposits.

                 
    Quarter Ended            
    Dec 31   Sep 30   Increase (decrease)  
    2012   2012   $     %  
    (dollars in thousands)        
Deposits, by type:                          
  Noninterest-bearing demand   $ 2,953,861   $ 2,836,166   $ 117,695     4.1 %
  Interest-bearing demand     2,684,063     2,608,202     75,861     2.9 %
  Savings deposits     3,391,988     3,364,109     27,879     0.8 %
Total demand and savings     9,029,912     8,808,477     221,435     2.5 %
  Time deposits     3,472,692     3,657,616     (184,924 )   (5.1 %)
                           
  Total Deposits   $ 12,502,604   $ 12,466,093   $ 36,511     0.3 %
                           
 

For the year ended December 31, 2012, average deposits decreased $64.7 million, or 0.5 percent, compared to 2011. This decrease was due to a $579.6 million, or 13.5 percent, decrease in average time deposits, partially offset by a $514.8 million, or 6.3 percent, increase in average demand and saving accounts. 

Non-interest Income
Non-interest income, excluding investment securities gains, increased $7.4 million, or 14.3 percent, in comparison to the third quarter of 2012, primarily due to the aforementioned $6.2 million gain on the divestiture of Global Exchange. Mortgage banking income increased $2.2 million, or 20.9 percent. Net servicing income increased $2.0 million as a result of a $2.1 million mortgage servicing rights impairment charge recorded during the third quarter of 2012, while gains on sales of mortgage loans increased $185,000. Other income decreased $1.2 million due to a decrease in gains from investments in corporate owned life insurance.

For the year ended December 31, 2012, non-interest income, excluding investment securities gains, increased $30.4 million, or 16.6 percent, compared to 2011 due primarily to the $6.2 million gain on the divestiture of Global Exchange and an $18.9 million increase in mortgage banking income.

Non-interest Expense
Non-interest expenses increased $6.6 million, or 6.0 percent, in the fourth quarter of 2012 compared to the third quarter of 2012. As noted above, during the fourth quarter of 2012, the Corporation prepaid approximately $20 million of FHLB advances, incurring a $3.0 million prepayment penalty. Marketing expense increased $1.9 million due to the timing of promotional campaigns. Other expenses increased $1.9 million, primarily related to reversals of reserves for non-income state taxes in the third quarter of 2012. Operating risk loss increased $1.2 million due to increases in reserves for losses on previously sold residential mortgages. Partially offsetting these increases in non-interest expenses was a $1.5 million decrease in other outside services expense as a result of a decrease in consulting expenses associated with risk management and compliance efforts and an $858,000 decrease in salaries and employee benefits, largely a result of lower healthcare costs.

For the year ended December 31, 2012, non-interest expenses increased $33.0 million, or 7.9 percent, due primarily to increases in salaries and employee benefits, operating risk loss and other outside services.

About Fulton Financial
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Fulton Bank of New Jersey, Mt. Laurel, NJ; and The Columbia Bank, Columbia, MD.

The Corporation's investment management and trust services are offered at all banks through Fulton Financial Advisors, a division of Fulton Bank, N.A. Residential mortgage lending is offered by all banks under the Fulton Mortgage Company brand.

Additional information on Fulton Financial Corporation is available on the Internet at www.fult.com.

Safe Harbor Statement
This news release may contain forward-looking statements with respect to the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends" and similar expressions which are intended to identify forward-looking statements.

These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation's control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements. 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. 

Many factors could affect future financial results including, without limitation: the impact of adverse changes in the economy and real estate markets; increases in non-performing assets which may reduce the level of earning assets and require the Corporation to increase the allowance for credit losses, charge-off loans and incur elevated collection and carrying costs related to such non-performing assets; acquisition and growth strategies; market risk; changes or adverse developments in political or regulatory conditions; a disruption in, or abnormal functioning of, credit and other markets, including the lack of or reduced access to markets for mortgages and other asset-backed securities and for commercial paper and other short-term borrowings; changes in the levels of, or methodology for determining, FDIC deposit insurance premiums and assessments; the effect of competition and interest rates on net interest margin and net interest income; investment strategy and other income growth; investment securities gains and losses; declines in the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth or a decline in loans originated; relative balances of rate-sensitive assets to rate-sensitive liabilities; salaries and employee benefits and other expenses; amortization of intangible assets; goodwill impairment; capital and liquidity strategies, and other financial and business matters for future periods.

For a more complete discussion of certain risks and uncertainties affecting the Corporation, please see the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" set forth in the Corporation's filings with the Securities and Exchange Commission.

   
FULTON FINANCIAL CORPORATION  
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)  
dollars in thousands  
                   
                % Change from  
    December 31   December 31   September 30   December 31   September 30  
    2012   2011   2012   2011   2012  
                             
ASSETS                            
                             
  Cash and due from banks   $ 256,300   $ 292,598   $ 217,207   (12.4 %) 18.0 %
  Other interest-earning assets     173,257     175,336     202,305   (1.2 %) (14.4 %)
  Loans held for sale     64,331     47,009     85,477   36.8 % (24.7 %)
  Investment securities     2,794,017     2,679,967     2,790,138   4.3 % 0.1 %
  Loans, net of unearned income     12,148,172     11,968,970     11,933,001   1.5 % 1.8 %
  Allowance for loan losses     (223,903 )   (256,471 )   (233,864 ) (12.7 %) (4.3 %)
    Net loans     11,924,269     11,712,499     11,699,137   1.8 % 1.9 %
  Premises and equipment     227,723     212,274     225,771   7.3 % 0.9 %
  Accrued interest receivable     45,786     51,098     49,784   (10.4 %) (8.0 %)
  Goodwill and intangible assets     535,563     544,209     541,845   (1.6 %) (1.2 %)
  Other assets     506,907     655,518     461,465   (22.7 %) 9.8 %
                               
      Total Assets   $ 16,528,153   $ 16,370,508   $ 16,273,129   1.0 % 1.6 %
                             
LIABILITIES AND SHAREHOLDERS' EQUITY                            
                             
  Deposits   $ 12,473,091   $ 12,525,739   $ 12,601,310   (0.4 %) (1.0 %)
  Short-term borrowings     868,399     597,033     486,971   45.5 % 78.3 %
  Other liabilities     210,754     215,048     215,542   (2.0 %) (2.2 %)
  FHLB advances and long-term debt     894,253     1,040,149     908,623   (14.0 %) (1.6 %)
                               
    Total Liabilities     14,446,497     14,377,969     14,212,446   0.5 % 1.6 %
                               
  Shareholders' equity     2,081,656     1,992,539     2,060,683   4.5 % 1.0 %
                               
    Total Liabilities and Shareholders' Equity   $ 16,528,153   $ 16,370,508   $ 16,273,129   1.0 % 1.6 %
                             
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                      
                             
Loans, by type:                            
  Real estate - commercial mortgage   $ 4,664,426   $ 4,602,596   $ 4,632,509   1.3 % 0.7 %
  Commercial - industrial, financial and agricultural     3,612,065     3,639,368     3,507,846   (0.8 %) 3.0 %
  Real estate - home equity     1,632,390     1,624,562     1,603,456   0.5 % 1.8 %
  Real estate - residential mortgage     1,256,991     1,097,192     1,213,831   14.6 % 3.6 %
  Real estate - construction     587,686     615,445     597,358   (4.5 %) (1.6 %)
  Consumer     309,220     318,101     301,182   (2.8 %) 2.7 %
  Leasing and other     85,394     71,706     76,819   19.1 % 11.2 %
                               
  Total Loans, net of unearned income   $ 12,148,172   $ 11,968,970   $ 11,933,001   1.5 % 1.8 %
                             
Deposits, by type:                            
  Noninterest-bearing demand   $ 3,008,675   $ 2,588,034   $ 2,903,591   16.3 % 3.6 %
  Interest-bearing demand     2,755,603     2,529,388     2,702,710   8.9 % 2.0 %
  Savings deposits     3,325,475     3,394,367     3,416,011   (2.0 %) (2.7 %)
  Time deposits     3,383,338     4,013,950     3,578,998   (15.7 %) (5.5 %)
                               
  Total Deposits   $ 12,473,091   $ 12,525,739   $ 12,601,310   (0.4 %) (1.0 %)
                             
Short-term borrowings, by type:                            
  Customer repurchase agreements   $ 156,238   $ 186,735   $ 192,082   (16.3 %) (18.7 %)
  Customer short-term promissory notes     119,691     156,828     124,628   (23.7 %) (4.0 %)
  Federal funds purchased     592,470     253,470     170,261   133.7 % 248.0 %
                               
  Total Short-term Borrowings   $ 868,399   $ 597,033   $ 486,971   45.5 % 78.3 %
                             
                             
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
dollars in thousands, except per-share data
                                                 
    Quarter Ended     % Change from     Year Ended        
    Dec 31     Dec 31     Sep 30     Dec 31     Sep 30     Dec 31        
    2012     2011     2012     2011     2012     2012     2011     % Change  
                                                           
Interest Income:                                                          
                                                           
  Interest income   $ 155,560     $ 169,333     $ 161,060     (8.1 %)   (3.4 %)   $ 647,496     $ 693,698     (6.7 %)
  Interest expense     23,338       30,874       25,179     (24.4 %)   (7.3 %)     103,168       133,538     (22.7 %)
                                                             
    Net Interest Income     132,222       138,459       135,881     (4.5 %)   (2.7 %)     544,328       560,160     (2.8 %)
  Provision for credit losses     17,500       30,000       23,000     (41.7 %)   (23.9 %)     94,000       135,000     (30.4 %)
                                                             
    Net Interest Income after Provision     114,722       108,459       112,881     5.8 %   1.6 %     450,328       425,160     5.9 %
                                                           
Non-Interest Income:                                                          
  Service charges on deposit accounts     15,642       15,277       15,651     2.4 %   (0.1 %)     61,502       58,078     5.9 %
  Mortgage banking income     12,813       6,220       10,594     106.0 %   20.9 %     44,600       25,674     73.7 %
  Other service charges and fees     11,164       10,784       11,119     3.5 %   0.4 %     44,345       47,482     (6.6 %)
  Investment management and trust services     9,611       8,727       9,429     10.1 %   1.9 %     38,239       36,483     4.8 %
  Gain on sale of Global Exchange     6,215       -       -     100.0 %   100.0 %     6,215       -     100.0 %
  Investment securities gains     195       3,054       42     (93.6 %)   364.3 %     3,026       4,561     (33.7 %)
  Other     3,936       4,286       5,169     (8.2 %)   (23.9 %)     18,697       15,449     21.0 %
                                                             
    Total Non-Interest Income     59,576       48,348       52,004     23.2 %   14.6 %     216,624       187,727     15.4 %
                                                           
Non-Interest Expenses:                                                          
  Salaries and employee benefits     61,303       58,109       62,161     5.5 %   (1.4 %)     243,915       227,435     7.2 %
  Net occupancy expense     11,362       10,973       11,161     3.5 %   1.8 %     44,663       44,003     1.5 %
  Equipment expense     3,873       3,329       3,816     16.3 %   1.5 %     14,243       12,870     10.7 %
  Data processing     3,713       3,482       3,776     6.6 %   (1.7 %)     14,936       13,541     10.3 %
  Other outside services     3,528       2,595       4,996     36.0 %   (29.4 %)     15,310       7,851     95.0 %
  Professional fees     3,228       2,961       2,728     9.0 %   18.3 %     11,522       12,159     (5.2 %)
  FHLB advances prepayment penalty     3,007       -       -     100.0 %   100.0 %     3,007       -     100.0 %
  FDIC insurance expense     2,944       2,730       3,029     7.8 %   (2.8 %)     11,996       14,480     (17.2 %)
  Operating risk loss     2,627       1,022       1,404     157.0 %   87.1 %     9,454       1,328     611.9 %
  Software     2,562       2,254       2,511     13.7 %   2.0 %     9,520       8,400     13.3 %
  Marketing     2,537       3,045       648     (16.7 %)   291.5 %     8,240       9,667     (14.8 %)
  OREO and repossession expense     2,349       3,565       2,096     (34.1 %)   12.1 %     10,196       8,366     21.9 %
  Other     13,576       14,795       11,717     (8.2 %)   15.9 %     52,504       56,376     (6.9 %)
                                                             
    Total Non-Interest Expenses     116,609       108,860       110,043     7.1 %   6.0 %     449,506       416,476     7.9 %
                                                             
    Income Before Income Taxes     57,689       47,947       54,842     20.3 %   5.2 %     217,446       196,411     10.7 %
  Income tax expense     17,449       11,868       13,260     47.0 %   31.6 %     57,601       50,838     13.3 %
                                                             
    Net Income   $ 40,240     $ 36,079     $ 41,582     11.5 %   (3.2 %)   $ 159,845     $ 145,573     9.8 %
                                                           
                                                           
PER SHARE:                                                          
                                                           
  Net income:                                                          
    Basic   $ 0.20     $ 0.18     $ 0.21     11.1 %   (4.8 %)   $ 0.80     $ 0.73     9.6 %
    Diluted     0.20       0.18       0.21     11.1 %   (4.8 %)     0.80       0.73     9.6 %
                                                             
  Cash dividends   $ 0.08     $ 0.06     $ 0.08     33.3 %   -     $ 0.30     $ 0.20     50.0 %
  Shareholders' equity     10.45       9.95       10.36     5.0 %   0.9 %     10.45       9.95     5.0 %
  Shareholders' equity (tangible)     7.76       7.24       7.63     7.2 %   1.7 %     7.76       7.24     7.2 %
                                                             
  Weighted average shares (basic)     198,161       199,239       198,956     (0.5 %)   (0.4 %)     199,067       198,912     0.1 %
  Weighted average shares (diluted)     199,198       199,997       199,808     (0.4 %)   (0.3 %)     200,039       199,658     0.2 %
  Shares outstanding, end of period     199,225       200,164       198,975     (0.5 %)   0.1 %     199,225       200,164     (0.5 %)
                                                           
SELECTED FINANCIAL RATIOS:                                                          
                                                           
  Return on average assets     0.99 %     0.88 %     1.02 %                 0.98 %     0.90 %      
  Return on average common shareholders' equity     7.70 %     7.16 %     8.03 %                 7.79 %     7.45 %      
  Return on average common shareholders' equity (tangible)     10.53 %     10.02 %     11.02 %                 10.73 %     10.54 %      
  Net interest margin     3.65 %     3.81 %     3.74 %                 3.76 %     3.90 %      
  Efficiency ratio     59.17 %     57.44 %     56.91 %                 57.63 %     54.28 %      
                                                             
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
    Quarter Ended  
    December 31, 2012     December 31, 2011     September 30, 2012  
    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   $ 12,000,650     $ 141,014     4.68 %   $ 11,926,246     $ 150,195     5.00 %   $ 11,920,193     $ 143,211     4.78 %
  Taxable investment securities     2,279,551       13,406     2.35 %     2,279,658       17,462     3.06 %     2,392,043       16,658     2.78 %
  Tax-exempt investment securities     286,400       3,857     5.39 %     307,713       4,340     5.64 %     286,225       3,936     5.50 %
  Equity securities     117,333       984     3.35 %     121,219       774     2.55 %     109,884       820     2.98 %
                                                                     
  Total Investment Securities     2,683,284       18,247     2.72 %     2,708,590       22,576     3.33 %     2,788,152       21,414     3.07 %
                                                                     
  Loans held for sale     59,977       517     3.45 %     54,013       541     4.01 %     61,001       578     3.79 %
  Other interest-earning assets     145,170       45     0.12 %     192,574       133     0.27 %     147,432       35     0.09 %
                                                                     
  Total Interest-earning Assets     14,889,081       159,823     4.28 %     14,881,423       173,445     4.63 %     14,916,778       165,238     4.42 %
                                                                   
Noninterest-earning assets:                                                                  
  Cash and due from banks     221,309                     282,993                     221,946                
  Premises and equipment     224,852                     207,744                     222,544                
  Other assets     1,067,484                     1,125,429                     1,088,807                
  Less: allowance for loan losses     (235,563 )                   (275,160 )                   (239,931 )              
                                                                     
  Total Assets   $ 16,167,163                   $ 16,222,429                   $ 16,210,144                
                                                                   
                                                                   
LIABILITIES AND SHAREHOLDERS' EQUITY                                                                  
                                                                   
Interest-bearing liabilities:                                                                  
  Demand deposits   $ 2,684,063     $ 1,055     0.16 %   $ 2,462,551     $ 1,243     0.20 %   $ 2,608,202     $ 1,071     0.16 %
  Savings deposits     3,391,988       1,251     0.14 %     3,466,104       2,356     0.27 %     3,364,109       1,431     0.17 %
  Time deposits     3,472,692       9,748     1.12 %     4,084,278       14,739     1.43 %     3,657,616       11,346     1.23 %
                                                                     
  Total Interest-bearing Deposits     9,548,743       12,054     0.50 %     10,012,933       18,338     0.73 %     9,629,927       13,848     0.57 %
                                                                     
  Short-term borrowings     488,310       156     0.13 %     463,659       173     0.15 %     588,568       220     0.15 %
  FHLB advances and long-term debt     914,013       11,128     4.86 %     1,025,683       12,363     4.80 %     908,767       11,111     4.88 %
                                                                     
  Total Interest-bearing Liabilities     10,951,066       23,338     0.85 %     11,502,275       30,874     1.07 %     11,127,262       25,179     0.90 %
                                                                   
Noninterest-bearing liabilities:                                                                  
  Demand deposits     2,953,861                     2,529,548                     2,836,166                
  Other     182,890                     192,806                     185,441                
                                                                     
  Total Liabilities     14,087,817                     14,224,629                     14,148,869                
                                                                     
  Shareholders' equity     2,079,346                     1,997,800                     2,061,275                
                                                                     
  Total Liabilities and Shareholders' Equity   $ 16,167,163                   $ 16,222,429                   $ 16,210,144                
                                                                   
  Net interest income/net interest margin (fully taxable equivalent)             136,485     3.65 %             142,571     3.81 %             140,059     3.74 %
  Tax equivalent adjustment             (4,263 )                   (4,112 )                   (4,178 )      
                                                                   
  Net interest income           $ 132,222                   $ 138,459                   $ 135,881        
 
(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:  
                         
    Quarter Ended   % Change from  
    December 31   December 31   September 30   December 31     September 30  
    2012   2011   2012   2011     2012  
                   
Loans, by type:                              
  Real estate - commercial mortgage   $ 4,623,158   $ 4,554,161   $ 4,603,388   1.5 %   0.4 %
  Commercial - industrial, financial and agricultural     3,559,171     3,637,465     3,529,733   (2.2 %)   0.8 %
  Real estate - home equity     1,611,868     1,628,406     1,597,230   (1.0 %)   0.9 %
  Real estate - residential mortgage     1,223,589     1,066,463     1,200,752   14.7 %   1.9 %
  Real estate - construction     593,351     641,485     605,910   (7.5 %)   (2.1 %)
  Consumer     305,766     326,818     304,235   (6.4 %)   0.5 %
  Leasing and other     83,747     71,448     78,945   17.2 %   6.1 %
                                 
  Total Loans, net of unearned income   $ 12,000,650   $ 11,926,246   $ 11,920,193   0.6 %   0.7 %
                               
Deposits, by type:                              
  Noninterest-bearing demand   $ 2,953,861   $ 2,529,548   $ 2,836,166   16.8 %   4.1 %
  Interest-bearing demand     2,684,063     2,462,551     2,608,202   9.0 %   2.9 %
  Savings deposits     3,391,988     3,466,104     3,364,109   (2.1 %)   0.8 %
  Time deposits     3,472,692     4,084,278     3,657,616   (15.0 %)   (5.1 %)
                                 
  Total Deposits   $ 12,502,604   $ 12,542,481   $ 12,466,093   (0.3 %)   0.3 %
                               
Short-term borrowings, by type:                              
  Customer repurchase agreements   $ 189,922   $ 195,372   $ 210,830   (2.8 %)   (9.9 %)
  Customer short-term promissory notes     125,933     165,677     127,479   (24.0 %)   (1.2 %)
  Federal funds purchased and other     172,455     102,610     250,259   68.1 %   (31.1 %)
                                 
  Total Short-term Borrowings   $ 488,310   $ 463,659   $ 588,568   5.3 %   (17.0 %)
                                 
 
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
                         
    Year ended December 31  
    2012           2011        
    Average                 Average              
    Balance     Interest (1)     Yield/Rate     Balance     Interest (1)     Yield/Rate  
ASSETS                                            
                                             
Interest-earning assets:                                            
  Loans, net of unearned income   $ 11,966,347     $ 575,534     4.81 %   $ 11,904,529     $ 605,671     5.09 %
  Taxable investment securities     2,401,343       67,349     2.80 %     2,223,376       80,184     3.61 %
  Tax-exempt investment securities     287,763       15,942     5.54 %     330,087       18,521     5.61 %
  Equity securities     112,448       3,291     2.93 %     126,766       3,078     2.43 %
                                               
  Total Investment Securities     2,801,554       86,582     3.09 %     2,680,229       101,783     3.80 %
                                               
  Loans held for sale     54,351       2,064     3.80 %     43,470       1,958     4.50 %
  Other interest-earning assets     130,946       178     0.14 %     160,664       358     0.22 %
                                               
  Total Interest-earning Assets     14,953,198       664,358     4.45 %     14,788,892       709,770     4.80 %
                                             
Noninterest-earning assets:                                            
  Cash and due from banks     234,880                     274,527                
  Premises and equipment     219,236                     207,081                
  Other assets     1,088,151                     1,108,359                
  Less: allowance for loan losses     (250,160 )                   (276,278 )              
                                               
  Total Assets   $ 16,245,305                   $ 16,102,581                
                                             
LIABILITIES AND SHAREHOLDERS' EQUITY                                            
                                             
Interest-bearing liabilities:                                            
  Demand deposits   $ 2,560,831     $ 4,187     0.16 %   $ 2,391,043     $ 5,312     0.22 %
  Savings deposits     3,347,606       6,002     0.18 %     3,359,109       11,536     0.34 %
  Time deposits     3,717,556       46,706     1.26 %     4,297,106       66,235     1.54 %
                                               
  Total Interest-bearing Deposits     9,625,993       56,895     0.59 %     10,047,258       83,083     0.83 %
                                               
  Short-term borrowings     690,883       1,068     0.15 %     495,791       746     0.15 %
  FHLB advances and long-term debt     933,727       45,205     4.84 %     1,034,475       49,709     4.81 %
                                               
  Total Interest-bearing Liabilities     11,250,603       103,168     0.92 %     11,577,524       133,538     1.15 %
                                             
Noninterest-bearing liabilities:                                            
  Demand deposits     2,756,826                     2,400,293                
  Other     186,882                     171,368                
                                               
  Total Liabilities     14,194,311                     14,149,185                
                                               
  Shareholders' equity     2,050,994                     1,953,396                
                                               
  Total Liabilities and Shareholders' Equity   $ 16,245,305                   $ 16,102,581                
                                             
  Net interest income/net interest margin (fully taxable equivalent)       561,190     3.76 %             576,232     3.90 %
  Tax equivalent adjustment             (16,862 )                   (16,072 )      
                                             
  Net interest income           $ 544,328                   $ 560,160        
 
(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:  
               
    Year Ended      
    December 31      
    2012   2011   % Change  
             
Loans, by type:                  
  Real estate - commercial mortgage   $ 4,619,587   $ 4,458,205   3.6 %
  Commercial - industrial, financial and agricultural     3,551,056     3,681,321   (3.5 %)
  Real estate - home equity     1,605,088     1,627,308   (1.4 %)
  Real estate - residential mortgage     1,185,516     1,036,474   14.4 %
  Real estate - construction     620,166     700,071   (11.4 %)
  Consumer     307,154     332,613   (7.7 %)
  Leasing and other     77,780     68,537   13.5 %
                     
  Total Loans, net of unearned income   $ 11,966,347   $ 11,904,529   0.5 %
                   
Deposits, by type:                  
  Noninterest-bearing demand   $ 2,756,826   $ 2,400,293   14.9 %
  Interest-bearing demand     2,560,831     2,391,043   7.1 %
  Savings deposits     3,347,606     3,359,109   (0.3 %)
  Time deposits     3,717,556     4,297,106   (13.5 %)
                     
  Total Deposits   $ 12,382,819   $ 12,447,551   (0.5 %)
                   
Short-term borrowings, by type:                  
  Customer repurchase agreements   $ 206,842   $ 208,144   (0.6 %)
  Customer short-term promissory notes     138,632     174,624   (20.6 %)
  Federal funds purchased and other     345,409     113,023   205.6 %
                     
  Total Short-term Borrowings   $ 690,883   $ 495,791   39.3 %
                     
   
   
FULTON FINANCIAL CORPORATION  
ASSET QUALITY INFORMATION (UNAUDITED)  
dollars in thousands  
                               
    Quarter Ended     Year Ended  
    Dec 31     Dec 31     Sep 30     December 31  
    2012     2011     2012     2012     2011  
ALLOWANCE FOR CREDIT LOSSES:                                        
                                         
  Balance at beginning of period   $ 235,268     $ 268,817     $ 237,316     $ 258,177     $ 275,498  
                                           
  Loans charged off:                                        
    Commercial - industrial, financial and agricultural     (12,711 )     (8,719 )     (10,471 )     (41,868 )     (52,301 )
    Real estate - commercial mortgage     (8,935 )     (3,189 )     (7,463 )     (51,988 )     (26,032 )
    Real estate - home equity     (3,464 )     (2,121 )     (1,688 )     (10,147 )     (6,397 )
    Consumer     (1,533 )     (683 )     (685 )     (3,323 )     (3,289 )
    Real estate - residential mortgage     (1,500 )     (18,316 )     (670 )     (4,509 )     (32,533 )
    Real estate - construction     (873 )     (8,716 )     (8,364 )     (26,250 )     (38,613 )
    Leasing and other     (585 )     (496 )     (625 )     (2,281 )     (2,168 )
    Total loans charged off     (29,601 )     (42,240 )     (29,966 )     (140,366 )     (161,333 )
  Recoveries of loans charged off:                                        
    Commercial - industrial, financial and agricultural     1,236       432       1,693       4,282       2,521  
    Real estate - commercial mortgage     85       -       1,317       3,371       1,967  
    Real estate - home equity     63       37       343       704       63  
    Consumer     274       335       202       1,107       1,368  
    Real estate - residential mortgage     290       55       25       459       325  
    Real estate - construction     171       509       1,040       2,814       1,746  
    Leasing and other     153       232       298       891       1,022  
    Recoveries of loans previously charged off     2,272       1,600       4,918       13,628       9,012  
  Net loans charged off     (27,329 )     (40,640 )     (25,048 )     (126,738 )     (152,321 )
  Provision for credit losses     17,500       30,000       23,000       94,000       135,000  
                                           
  Balance at end of period   $ 225,439     $ 258,177     $ 235,268     $ 225,439     $ 258,177  
                                           
  Net charge-offs to average loans (annualized)     0.91 %     1.36 %     0.84 %     1.06 %     1.28 %
                                         
NON-PERFORMING ASSETS:                                        
                                         
Non-accrual loans   $ 184,832     $ 257,761     $ 185,791                  
Loans 90 days past due and accruing     26,221       28,767       27,035                  
  Total non-performing loans     211,053       286,528       212,826                  
Other real estate owned     26,146       30,803       29,217                  
                                         
Total non-performing assets   $ 237,199     $ 317,331     $ 242,043                  
                                         
NON-PERFORMING LOANS, BY TYPE:                                        
                 
Commercial - industrial, financial and agricultural   $ 66,954     $ 80,944     $ 73,879                  
Real estate - commercial mortgage     57,120       113,806       64,609                  
Real estate - residential mortgage     34,436       16,336       24,910                  
Real estate - construction     32,005       60,744       32,742                  
Real estate - home equity     15,519       11,207       12,644                  
Consumer     5,000       3,384       3,942                  
Leasing     19       107       100                  
                                         
Total non-performing loans   $ 211,053     $ 286,528     $ 212,826                  
                                         
   
DELINQUENCY RATES, BY TYPE:  
   
  December 31, 2012   December 31, 2011   September 30, 2012  
  31-89 Days   > / =
90 Days (1)
  Total   31-89 Days   > / =
90 Days (1)
  Total   31-89 Days   > / =
90 Days (1)
  Total  
                                     
Real estate - commercial mortgage 0.46 % 1.22 % 1.68 % 0.56 % 2.47 % 3.03 % 0.46 % 1.39 % 1.85 %
Commercial - industrial, financial and agricultural 0.46 % 1.85 % 2.31 % 0.41 % 2.23 % 2.64 % 0.45 % 2.11 % 2.56 %
Real estate - construction 0.23 % 5.44 % 5.67 % 1.55 % 9.87 % 11.42 % 0.95 % 5.48 % 6.43 %
Real estate - residential mortgage 2.56 % 2.74 % 5.30 % 3.38 % 1.49 % 4.87 % 2.66 % 2.05 % 4.71 %
Real estate - home equity 0.77 % 0.96 % 1.73 % 0.72 % 0.69 % 1.41 % 0.85 % 0.78 % 1.63 %
Consumer, leasing and other 1.72 % 1.27 % 2.99 % 1.92 % 0.90 % 2.82 % 1.85 % 1.07 % 2.92 %
                                     
Total 0.75 % 1.74 % 2.49 % 0.89 % 2.39 % 3.28 % 0.80 % 1.78 % 2.58 %
                                     
(1) Includes non-accrual loans  
   
                   
ASSET QUALITY RATIOS:                  
    Dec 31     Dec 31     Sep 30  
    2012     2011     2012  
                   
Non-accrual loans to total loans   1.52 %   2.15 %   1.56 %
Non-performing assets to total loans and OREO   1.95 %   2.64 %   2.02 %
Non-performing assets to total assets   1.44 %   1.94 %   1.49 %
Allowance for credit losses to loans outstanding   1.86 %   2.16 %   1.97 %
Allowance for credit losses to non-performing loans   106.82 %   90.11 %   110.54 %
Non-performing assets to tangible common shareholders' equity and allowance for credit losses   13.39 %   18.60 %   13.80 %
                   
Contact:
Media
Laura J. Wakeley
(717) 291-2616


Investor
David C. Hostetter
(717) 291-2456

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