-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lt07NNa+DpaqZbP6jVBCBFJJy8eB4j2rqVXalncfKmYJh+EJoEmNoZ/Vi1N8obyU JjXMq2xfWH6wC5eRNunUAw== 0000893220-09-000070.txt : 20090120 0000893220-09-000070.hdr.sgml : 20090119 20090120164425 ACCESSION NUMBER: 0000893220-09-000070 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20090120 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090120 DATE AS OF CHANGE: 20090120 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FULTON FINANCIAL CORP CENTRAL INDEX KEY: 0000700564 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 232195389 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10587 FILM NUMBER: 09534600 BUSINESS ADDRESS: STREET 1: ONE PENN SQ STREET 2: PO BOX 4887 CITY: LANCASTER STATE: PA ZIP: 17604 BUSINESS PHONE: 7172912411 MAIL ADDRESS: STREET 1: ONE PENN SQ STREET 2: PO BOX 4887 CITY: LANCASTER STATE: PA ZIP: 17604 8-K 1 w72371e8vk.htm 8-K e8vk
 
 
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: January 20, 2009
(Date of earliest event reported): January 20, 2009
Commission File No. 0-10587
FULTON FINANCIAL CORPORATION
 
(Exact name of Registrant as specified in its Charter)
     
Pennsylvania
(State or other jurisdiction of incorporation) 		  23-2195389
(IRS Employer Identification Number)
     
One Penn Square
Lancaster, Pennsylvania
(Address of principal executive offices) 		  17602
(Zip Code)
Registrant’s telephone number, including area code: 717-291-2411
Former name or former address, if changed since last Report: N/A
     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:
o      Written communications pursuant to Rule 425 under the Securities Act
o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act
o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
o      Pre-commencement to communications pursuant to Rule 13e-4(c) under the Exchange Act
 
 

 

 

Item 2.02 — Results of Operations and Financial Condition
On January 20, 2009 Fulton Financial Corporation announced its results of operations for the fourth quarter and year ended December 31, 2008. A copy of the earnings release is attached as Exhibit 99.1 to this Form 8-K. Supplemental financial information included with the earnings release is attached as Exhibit 99.2 to this report.
Item 9.01 Financial Statements And Exhibits
(d) Exhibits.
     
Exhibit No.   Description
 
    
99.1
  Earnings Release dated January 20, 2009.
99.2
  Supplemental financial information for the quarter and year ended December 31, 2008.

2

 

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 thereunto duly authorized.
         
Date: January 20, 2009   FULTON FINANCIAL CORPORATION
 		  
  By:   /s/ Charles J. Nugent    
    Charles J. Nugent   
    Senior Executive Vice President and
Chief Financial Officer 		  
 

3

EX-99.1 2 w72371exv99w1.htm EX-99.1 exv99w1
EXHIBIT 99.1
(FULTON FINANCIAL CORPORATION LOGO)
         
FOR IMMEDIATE RELEASE
  Contact:   Laura J. Wakeley
 
  Office:   717-291-2616
Fulton Financial reports 2008 results
     (January 20) — Lancaster, PA — Fulton Financial Corporation (Nasdaq: FULT) reported a net loss available to common shareholders of $102.3 million and $6.1 million for the fourth quarter and year ended December 31, 2008, respectively, compared to net income of $38.2 million and $152.7 million for the fourth quarter and year ended December 31, 2007, respectively.
     Net loss available to common shareholders represents net income (loss) reduced for the dividends that are payable on $376.5 million of preferred stock issued to the United States Treasury on December 23, 2008 under the Capital Purchase Program. The Corporation’s voluntary participation in this program was previously disclosed in a filing with the Securities and Exchange Commission (SEC) on December 23, 2008.
     The Corporation’s earnings for the fourth quarter and year ended December 31, 2008 in comparison to the same periods in 2007 were impacted by a number of significant items. A detail of these items and their impact on the Corporation’s earnings is included on page 7 of the attached supplemental financial information.
     The Corporation’s adjusted net income available to common shareholders for the quarter ended December 31, 2008, as shown on page 7 of the attached supplemental financial information, was $8.7 million, or $0.05 cents per diluted share, compared to $38.5 million, or $0.22 cents per diluted share, for the same period in 2007. Additionally, as previously announced, in the fourth quarter of 2008 the Corporation recorded an increase in the provision for loan losses of $58.2 million ($37.8 million net of tax, or $0.22 per diluted share).
     For the year ended December 31, 2008, the Corporation’s adjusted net income available to common shareholders, as shown on page 7 of the attached supplemental financial information, was $127.1 million, or $0.73 per diluted share, compared to $167.9 million, or $0.96 per diluted share, for the same period in 2007. The increase in the provision for loan losses for the year was $104.6 million ($68.0 million net of tax, or $0.39 per diluted share).
     On December 16, 2008, the Corporation disclosed in a filing with the SEC that it expected to record, in the fourth quarter of 2008, a $90.0 million goodwill impairment charge, an approximately $65 million provision for loan losses and approximately $15 million of other-than-
- MORE -

 

 

Page 2 ... Fulton Financial reports 2008 results
temporary impairment charges for pooled trust preferred debt securities. During the fourth quarter of 2008, the Corporation recorded the goodwill impairment charge and the provision for loan losses, as previously disclosed. The other-than-temporary impairment charge related to pooled trust preferred securities recorded by the Corporation during the fourth quarter of 2008 was $12.8 million. In addition, a $13.3 million other-than-temporary impairment charge was recorded related to the Corporation’s investment in equity securities.
     “Our disappointing fourth quarter and 2008 performance resulted from a combination of significant financial challenges and continued economic deterioration,” said R. Scott Smith Jr., chairman, and chief executive officer. “Goodwill impairment from our most recent bank acquisition, the need to further increase our allowance for loan losses along with write-downs within our securities portfolio all combined to more than offset our other earnings from banking operations in 2008.”
     “We are positioning the company for improved earnings performance when the economy rebounds,” Smith continued. “Fourth quarter deposit growth and residential mortgage refinance activity improved somewhat. Loan growth was good as we continued to make loans to creditworthy businesses and consumers. Our strong capital base, our risk management process and our diversified loan portfolio are key strengths that will enable us to successfully weather the current storm.”
     Loans, net of unearned income, increased $838.2 million, or 7.5 percent, to $12.0 billion at December 31, 2008, compared to $11.2 billion at December 31, 2007. The increase was due to a $580.5 million, or 16.6 percent, increase in commercial mortgages, a $322.9 million, or 13.7 percent, increase in residential mortgage and home equity loans and a $208.5 million, or 6.1 percent, increase in commercial loans. These increases were offset by a decrease of $146.9 million, or 10.9 percent, in construction loans and a $135.3 million, or 27.0 percent, decrease in consumer loans. In comparison to September 30, 2008, loans, net of unearned income, increased $219.1 million, or 1.9 percent, due mainly to a $185.1 million, or 4.7 percent, increase in commercial mortgages and a $80.9 million, or 2.3 percent, increase in commercial loans, offset by an $81.5 million, or 6.4 percent decrease in construction loans.
     Non-performing assets were $219.0 million, or 1.35 percent, of total assets at December 31, 2008, compared to $120.9 million, or 0.76 percent, at December 31, 2007 and $186.4 million, or 1.15 percent, at September 30, 2008. The $98.1 million, or 81.2 percent, increase in non-performing assets since December 31, 2007 was due to worsening economic conditions, which resulted in increases in non-performing assets across almost all loan types.
     Annualized net charge-offs for the quarter ended December 31, 2008 were 0.89 percent of average total loans, compared to 0.15 percent for the quarter ended December 31, 2007 and 0.38

 

 

Page 3 ... Fulton Financial reports 2008 results
percent for the quarter ended September 30, 2008. For the year ended December 31, 2008, net charge-offs were 0.45 percent of average total loans, compared to 0.09 percent for the year ended December 31, 2007. Net charge-offs increased $22.7 million in the fourth quarter of 2008 in comparison to the same period in 2007 and increased $15.6 million in comparison to the third quarter of 2008 with increased charge-offs across almost all loan types. The provision for loan losses increased $58.2 million, as compared to the same period in 2007. In comparison to the third quarter of 2008, the provision for loan losses increased $38.3 million. For the year ended December 31, 2008, the provision for loan losses was $119.6 million, an increase of $104.6 million in comparison to 2007. The increase in the provision for loan losses was due to the increase in the level of non-performing assets, which required additional allocations to the allowance for credit losses.
     Total deposits increased $446.5 million, or 4.4 percent, to $10.6 billion at December 31, 2008, compared to $10.1 billion at December 31, 2007. Demand and savings deposits decreased $115.1 million, or 2.1 percent, offset by a $561.6 million, or 12.4 percent, increase in time deposits. In comparison to September 30, 2008, total deposits increased $635.4 million, or 6.4 percent, due to a $729.4 million, or 16.7 percent, increase in time deposits, offset by a $94.0 million, or 1.7 percent, decrease in demand and savings accounts.
     Net interest income for the fourth quarter increased $8.7 million, or 7.0 percent, compared to the fourth quarter of 2007 and decreased $1.7 million, or 1.3 percent, from the third quarter of 2008. The Corporation’s net interest margin was 3.64 percent for the fourth quarter of 2008, 3.56 percent for the fourth quarter of 2007 and 3.74 percent for the third quarter of 2008.
     Other income, excluding investment securities losses, increased $3.0 million, or 8.4 percent, in the fourth quarter of 2008 compared to the same period in 2007. The increase was due to an increase in fee income on deposit accounts of $2.8 million, an increase related to fees earned in 2008 under an ongoing marketing agreement with the purchaser of the Corporation’s credit card portfolio of $1.1 million and an increase in gains on sale of mortgage loans of $904,000, offset by a decrease in investment management and trust services income of $1.8 million. Compared to the third quarter of 2008, other income decreased $1.6 million, or 3.9 percent, due to a $671,000 decrease in other service charges and a $504,000 decrease in investment management and trust services income.
     Investment securities losses in the fourth quarter of 2008 were $28.3 million, compared to $537,000 for the same period in 2007. The fourth quarter loss included $12.8 million of other-than-temporary impairment charges related to debt securities issued by financial institutions in the form of pooled trust preferred securities and $12.9 million of other-than-temporary impairment charges related to bank stocks. For the year ended December 31, 2008, investment securities

 

 

Page 4 ... Fulton Financial reports 2008 results
losses totaled $58.2 million, which included other-than-temporary impairment charges of $43.1 million for bank stocks and $15.8 million for pooled trust preferred debt securities issued by financial institutions.
     Other expenses, excluding the goodwill impairment charge recorded in the fourth quarter of 2008, increased $2.4 million, or 2.5 percent, compared to the fourth quarter of 2007, to $100.9 million. Compared to the third quarter of 2008, other expenses, excluding the goodwill impairment charge, increased $1.5 million, or 1.5 percent.
     Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has nearly 3,900 employees and operates more than 265 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Hagerstown Trust Company, Hagerstown, MD; Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; The Peoples Bank of Elkton, Elkton, MD; Skylands Community Bank, Hackettstown, NJ and The Columbia Bank, Columbia, MD.
     The Corporation’s financial services affiliates include: Fulton Financial Advisors, N.A., Lancaster, PA; Fulton Insurance Services Group, Inc., Lancaster, PA; and Dearden, Maguire, Weaver and Barrett, LLC, West Conshohocken, PA. Residential mortgage lending is offered by all banks through Fulton Mortgage Company.
     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 our financial condition, results of operations and business. Forward-looking statements are encouraged by the Private Securities Litigation Reform Act of 1995. When words such as “believes,” “expects,” “anticipates” or similar expressions are used in this release, the Corporation is making forward-looking statements.
     Such forward-looking statements reflect the Corporation’s current views and expectations based largely on information currently available to its management, and on its current expectations, assumptions, plan, estimates, judgments, and projections about its business and its industry, and they involve inherent risks, contingencies, uncertainties and other factors. Although the Corporation believes that these forward-looking statements are based on reasonable estimates and assumptions, the Corporation is unable to provide any assurance that its expectations will, in fact, occur or that its estimates or assumptions will be correct and

 

 

Page 5 ... Fulton Financial reports 2008 results
actual results could differ materially from those expressed or implied by such forward-looking statements and such statements are not guarantees of future performance. The Corporation undertakes no obligation to update or revise any forward-looking statements. Accordingly, investors and others are cautioned not to place undue reliance on such forward-looking statements.
     Many factors could affect future financial results including, without limitation, acquisition and growth strategies; market risk; changes or adverse developments in economic, political or regulatory conditions; a continuation or worsening of the current disruption in credit and other markets, including the lack of or reduced access to, and the abnormal functioning of markets for mortgage and other asset-backed securities and for commercial paper and other short-term borrowings; the effect of competition and interest rates on net interest margin and net interest income; investment strategy and income growth; investment securities gains; declines in the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth; asset quality and the impact on assets from adverse changes in the economy and in credit and other markets and resulting effects on credit risk and asset values; balances of risk-sensitive assets to risk-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.
# # #
2009

 

EX-99.2 3 w72371exv99w2.htm EX-99.2 exv99w2
Exhibit 99.2
FULTON FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (UNAUDITED)
dollars in thousands, except per-share data
                         
    December 31    
    2008   2007   % Change
 
                        
BALANCE SHEET DATA
                        
Total assets
   $ 16,185,106     $ 15,923,098       1.6 %
Loans, net of unearned income
     12,042,620       11,204,424       7.5 %
Investment securities
     2,724,841       3,153,552       (13.6 %)
Deposits
     10,551,916       10,105,445       4.4 %
Shareholders’ equity
     1,859,647       1,574,920       18.1 %
                                                 
    Quarter Ended December 31             Year Ended December 31        
    2008     2007     % Change     2008     2007     % Change  
INCOME SUMMARY
                                                
 
                                                
Interest income
   $ 209,073     $ 240,069       (12.9 %)   $ 867,494     $ 939,577       (7.7 %)
Interest expense
     (76,732 )     (116,418 )     (34.1 %)     (343,346 )     (450,833 )     (23.8 %)
 
                                        
Net interest income
     132,341       123,651       7.0 %     524,148       488,744       7.2 %
Provision for loan losses
     (65,000 )     (6,800 )     855.9 %     (119,626 )     (15,063 )     694.2 %
Investment securities (losses) gains
     (28,339 )     (537 )     N/M       (58,241 )     1,740       N/M  
Gain on sale of credit card portfolio
     —       —       N/A       13,910       —       N/A  
Other income
     38,750       35,748       8.4 %     155,387       146,284       6.2 %
Goodwill impairment
     (90,000 )     —       N/A       (90,000 )     —       N/A  
Other expenses
     (100,874 )     (98,447 )     2.5 %     (406,625 )     (405,455 )     0.3 %
 
                                        
(Loss) Income before income taxes
     (113,122 )     53,615       (311.0 %)     18,953       216,250       (91.2 %)
Income tax benefit (expense)
     11,255       (15,436 )     (172.9 %)     (24,570 )     (63,532 )     (61.3 %)
 
                                        
Net (loss) income
   $ (101,867 )   $ 38,179       (366.8 %)   $ (5,617 )   $ 152,718       (103.7 %)
Preferred stock dividends and discount accretion
     (463 )     —       N/A       (463 )     —       N/A  
 
                                        
Net (loss) income available to common shareholders
   $ (102,330 )   $ 38,179       (368.0 %)   $ (6,080 )   $ 152,718       (104.0 %)
 
                                        
 
                                                
PER COMMON SHARE:
                                                
 
                                                
Net (loss) income:
                                                
Basic
   $ (0.58 )   $ 0.22       (363.6 %)   $ (0.03 )   $ 0.88       (103.4 %)
Diluted
     (0.58 )     0.22       (363.6 %)     (0.03 )     0.88       (103.4 %)
Cash dividends
     0.15       0.15       —       0.600       0.598       0.3 %
 
Shareholders’ equity
     8.47       9.08       (6.7 %)                        
Shareholders’ equity (tangible)
     5.29       5.30       (0.2 %)                        
 
                                                
SELECTED FINANCIAL RATIOS:
                                                
 
                                                
Return on average assets
     (2.51 %)     0.97 %             (0.04 %)     1.01 %        
Return on average shareholders’ equity
     (24.89 %)     9.72 %             (0.35 %)     9.98 %        
Return on average shareholders’ equity (tangible)
     (4.35 %)     17.44 %             9.29 %     18.16 %        
Net interest margin
     3.64 %     3.56 %             3.68 %     3.66 %        
Efficiency ratio
     56.57 %     59.09 %             56.31 %     61.19 %        
Non-performing assets to total assets
     1.35 %     0.76 %                                
 
N/M — Not meaningful   
 
N/A — Not applicable   

 

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
dollars in thousands
                                         
                            % Change from  
    December 31     December 31     September 30     December 31     September 30  
    2008     2007     2008     2007     2008  
 
                                        
ASSETS
                                        
Cash and due from banks
   $ 331,164     $ 381,283     $ 315,841       (13.1 %)     4.9 %
Loans held for sale
     95,840       103,984       71,090       (7.8 %)     34.8 %
Other interest-earning assets
     21,710       21,153       50,189       2.6 %     (56.7 %)
Investment securities
     2,724,841       3,153,552       2,806,535       (13.6 %)     (2.9 %)
Loans, net of unearned income
     12,042,620       11,204,424       11,823,529       7.5 %     1.9 %
Allowance for loan losses
     (173,946 )     (107,547 )     (136,988 )     61.7 %     27.0 %
 
                                  
Net Loans
     11,868,674       11,096,877       11,686,541       7.0 %     1.6 %
Premises and equipment
     202,657       193,296       199,464       4.8 %     1.6 %
Accrued interest receivable
     58,566       73,435       62,018       (20.2 %)     (5.6 %)
Goodwill and intangible assets
     557,833       654,908       649,635       (14.8 %)     (14.1 %)
Other assets
     323,821       244,610       294,832       32.4 %     9.8 %
 
                                  
Total Assets
   $ 16,185,106     $ 15,923,098     $ 16,136,145       1.6 %     0.3 %
 
                                  
 
                                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                        
Deposits
   $ 10,551,916     $ 10,105,445     $ 9,916,555       4.4 %     6.4 %
Short-term borrowings
     1,762,770       2,383,944       2,589,966       (26.1 %)     (31.9 %)
Federal Home Loan Bank advances and long-term debt
     1,787,797       1,642,133       1,819,889       8.9 %     (1.8 %)
Other liabilities
     222,976       216,656       205,825       2.9 %     8.3 %
 
                                  
Total Liabilities
     14,325,459       14,348,178       14,532,235       (0.2 %)     (1.4 %)
Shareholders’ equity
     1,859,647       1,574,920       1,603,910       18.1 %     15.9 %
 
                                  
Total Liabilities and Shareholders’ Equity
   $ 16,185,106     $ 15,923,098     $ 16,136,145       1.6 %     0.3 %
 
                                  
 
                                        
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:
                                        
Loans, by type:
                                        
Real estate — commercial mortgage
   $ 4,082,755     $ 3,502,282     $ 3,897,703       16.6 %     4.7 %
Commercial — industrial, financial and agricultural
     3,635,544       3,427,085       3,554,615       6.1 %     2.3 %
Real estate — home equity
     1,695,671       1,501,231       1,647,245       13.0 %     2.9 %
Real estate — construction
     1,196,050       1,342,923       1,277,552       (10.9 %)     (6.4 %)
Real estate — residential mortgage
     980,022       851,577       979,486       15.1 %     0.1 %
Consumer
     365,419       500,708       387,849       (27.0 %)     (5.8 %)
Leasing and other
     87,159       78,618       79,079       10.9 %     10.2 %
 
                                  
Total Loans, net of unearned income
   $ 12,042,620     $ 11,204,424     $ 11,823,529       7.5 %     1.9 %
 
                                  
 
                                        
Deposits, by type:
                                        
Noninterest-bearing demand
   $ 1,653,440     $ 1,722,211     $ 1,690,499       (4.0 %)     (2.2 %)
Interest-bearing demand
     1,789,833       1,715,315       1,690,330       4.3 %     5.9 %
Savings deposits
     2,010,526       2,131,374       2,166,998       (5.7 %)     (7.2 %)
Time deposits
     5,098,117       4,536,545       4,368,728       12.4 %     16.7 %
 
                                  
Total Deposits
   $ 10,551,916     $ 10,105,445     $ 9,916,555       4.4 %     6.4 %
 
                                  
 
                                        
Short-term borrowings, by type:
                                        
Federal funds purchased
   $ 1,147,673     $ 1,057,335     $ 1,326,873       8.5 %     (13.5 %)
Short-term promissory notes
     356,788       443,002       460,512       (19.5 %)     (22.5 %)
Customer repurchase agreements
     255,796       228,061       222,415       12.2 %     15.0 %
Other short-term borrowings
     2,513       655,546       580,166       (99.6 %)     (99.6 %)
 
                                  
Total Short-term borrowings
   $ 1,762,770     $ 2,383,944     $ 2,589,966       (26.1 %)     (31.9 %)
 
                                  

2

 

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION (UNAUDITED)
dollars in thousands, except per-share data
                                                                       
      Quarter Ended     % Change from                  
      December 31     December 31     September 30     December 31     September 30       Year Ended December 31          
      2008     2007     2008     2007     2008       2008     2007     % Change    
Interest Income:
                                                                      
Interest Income
     $ 209,073     $ 240,069     $ 213,809       (12.9 %)     (2.2 %)     $ 867,494     $ 939,577       (7.7 %)  
Interest Expense
       76,732       116,418       79,791       (34.1 %)     (3.8 %)       343,346       450,833       (23.8 %)  
 
                                                            
Net Interest Income
       132,341       123,651       134,018       7.0 %     (1.3 %)       524,148       488,744       7.2 %  
Provision for Loan Losses
       65,000       6,800       26,700       855.9 %     143.4 %       119,626       15,063       694.2 %  
 
                                                            
Net Interest Income after Provision
       67,341       116,851       107,318       (42.4 %)     (37.3 %)       404,522       473,681       (14.6 %)  
 
                                                                      
Other Income:
                                                                      
Service charges on deposit accounts
       16,177       13,355       16,177       21.1 %     —         61,640       46,500       32.6 %  
Other service charges and fees
       8,927       8,405       9,598       6.2 %     (7.0 %)       36,247       32,151       12.7 %  
Investment management and trust services
       7,541       9,291       8,045       (18.8 %)     (6.3 %)       32,734       38,665       (15.3 %)  
Gains on sale of mortgage loans
       3,085       2,181       2,266       41.4 %     36.1 %       10,332       14,294       (27.7 %)  
Investment securities (losses) gains
       (28,339 )     (537 )     (9,501 )     N/M       (198.3 %)       (58,241 )     1,740       N/M    
Gain on sale of credit card portfolio
       —       —       —       N/A       N/A         13,910       —       N/A    
Other
       3,020       2,516       4,230       20.0 %     (28.6 %)       14,434       14,674       (1.6 %)  
 
                                                            
Total Other Income
       10,411       35,211       30,815       (70.4 %)     (66.2 %)       111,056       148,024       (25.0 %)  
Other Expenses:
                                                                      
Salaries and employee benefits
       48,771       53,173       55,310       (8.3 %)     (11.8 %)       213,557       217,526       (1.8 %)  
Net occupancy expense
       11,240       10,002       10,237       12.4 %     9.8 %       42,239       39,965       5.7 %  
Operating risk loss
       5,200       767       3,480       578.4 %     49.4 %       24,308       27,229       (10.7 %)  
Marketing
       3,746       3,465       3,097       8.1 %     21.0 %       13,267       11,334       17.1 %  
Equipment expense
       3,425       3,303       3,061       3.7 %     11.9 %       13,332       13,892       (4.0 %)  
Data processing
       3,209       3,205       3,242       0.1 %     (1.0 %)       12,813       12,755       0.5 %  
Intangible amortization
       1,776       2,158       1,730       (17.7 %)     2.7 %       7,162       8,334       (14.1 %)  
Goodwill impairment
       90,000       —       —       N/A       N/A         90,000       —       N/A    
Other
       23,507       22,374       19,198       5.1 %     22.4 %       79,947       74,420       7.4 %  
 
                                                            
Total Other Expenses
       190,874       98,447       99,355       93.9 %     92.1 %       496,625       405,455       22.5 %  
 
                                                            
(Loss) Income Before Income Taxes
       (113,122 )     53,615       38,778       (311.0 %)     (391.7 %)       18,953       216,250       (91.2 %)  
Income tax (benefit) expense
       (11,255 )     15,436       9,702       (172.9 %)     (216.0 %)       24,570       63,532       (61.3 %)  
 
                                                            
Net (Loss) Income
     $ (101,867 )   $ 38,179     $ 29,076       (366.8 %)     (450.3 %)     $ (5,617 )   $ 152,718       (103.7 %)  
Preferred stock dividends and discount accretion
       (463 )     —       —       N/A       N/A         (463 )     —       N/A    
 
                                                            
Net (loss) income available to common shareholders
     $ (102,330 )   $ 38,179     $ 29,076       (368.0 %)     (451.9 %)     $ (6,080 )   $ 152,718       (104.0 %)  
 
                                                            
 
                                                                      
PER COMMON SHARE:
                                                                      
Net (loss) income:
                                                                      
Basic
     $ (0.58 )   $ 0.22     $ 0.17       (363.6 %)     (441.2 %)     $ (0.03 )   $ 0.88       (103.4 %)  
Diluted
       (0.58 )     0.22       0.17       (363.6 %)     (441.2 %)       (0.03 )     0.88       (103.4 %)  
 
                                                                      
Cash dividends
     $ 0.15     $ 0.15     $ 0.15       —       —       $ 0.600     $ 0.598       0.3 %  
Shareholders’ equity
       8.47       9.08       9.18       (6.7 %)     (7.7 %)                            
Shareholders’ equity (tangible)
       5.29       5.30       5.41       (0.2 %)     (2.2 %)                            
 
                                                                      
Weighted average shares (basic)
       174,889       173,416       174,463       0.8 %     0.2 %       174,236       173,295       0.5 %  
Weighted average shares (diluted)
       175,255       174,155       174,912       0.6 %     0.2 %       174,728       174,386       0.2 %  
Shares outstanding, end of period
       175,044       173,503       174,687       0.9 %     0.2 %                            
 
                                                                      
SELECTED FINANCIAL RATIOS:
                                                                      
Return on average assets
       (2.51 %)     0.97 %     0.73 %                       (0.04 %)     1.01 %          
Return on average shareholders’ equity
       (24.89 %)     9.72 %     7.25 %                       (0.35 %)     9.98 %          
Return on average shareholders’ equity (tangible)
       (4.35 %)     17.44 %     12.72 %                       9.29 %     18.16 %          
Net interest margin
       3.64 %     3.56 %     3.74 %                       3.68 %     3.66 %          
Efficiency ratio
       56.57 %     59.09 %     54.69 %                       56.31 %     61.19 %          
 
                                                            
 
N/M — Not meaningful   
 
N/A — Not applicable   

3

 

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
                                                                         
    Quarter Ended  
    December 31, 2008     December 31, 2007     September 30, 2008  
    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
   $ 11,960,067     $ 178,096       5.93 %   $ 11,082,957     $ 204,281       7.32 %   $ 11,696,841     $ 181,562       6.18 %
Taxable investment securities
     2,086,808       26,106       4.72 %     2,348,449       28,420       4.84 %     2,117,207       26,025       4.70 %
Tax-exempt investment securities
     516,045       7,073       5.48 %     494,790       6,462       5.22 %     509,994       6,944       5.45 %
Equity securities
     154,660       797       2.05 %     201,554       2,445       4.84 %     168,690       1,614       3.82 %
 
                                                      
Total Investment Securities
     2,757,513       33,976       4.71 %     3,044,793       37,327       4.90 %     2,795,891       34,583       4.78 %
Loans held for sale
     64,096       975       6.08 %     101,788       1,730       6.79 %     101,319       1,539       6.08 %
Other interest-earning assets
     23,889       124       2.08 %     24,136       291       4.78 %     19,013       142       2.94 %
 
                                                      
Total Interest-earning Assets
     14,805,565       213,171       5.70 %     14,253,674       243,629       6.80 %     14,613,064       217,826       5.91 %
Noninterest-earning assets:
                                                                        
Cash and due from banks
     317,571                       323,490                       322,550                  
Premises and equipment
     200,918                       191,502                       197,895                  
Other assets
     960,606                       907,267                       933,303                  
Less: allowance for loan losses
     (150,266 )                     (110,922 )                     (123,865 )                
 
                                                                  
Total Assets
   $ 16,134,394                     $ 15,565,011                     $ 15,942,947                  
 
                                                                  
 
                                                                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                                        
Interest-bearing liabilities:
                                                                        
Demand deposits
   $ 1,727,874     $ 2,630       0.61 %   $ 1,721,831     $ 6,598       1.52 %   $ 1,734,198     $ 3,166       0.73 %
Savings deposits
     2,070,931       6,124       1.18 %     2,179,753       12,046       2.19 %     2,192,747       6,633       1.20 %
Time deposits
     4,818,068       41,553       3.43 %     4,603,944       54,341       4.68 %     4,308,903       37,393       3.45 %
 
                                                      
Total Interest-bearing Deposits
     8,616,873       50,307       2.32 %     8,505,528       72,985       3.40 %     8,235,848       47,192       2.28 %
Short-term borrowings
     2,251,571       5,998       1.05 %     2,020,751       22,249       4.33 %     2,432,109       12,877       2.08 %
Federal Home Loan Bank advances and long-term debt
     1,798,688       20,427       4.53 %     1,624,613       21,184       5.19 %     1,819,897       19,722       4.32 %
 
                                                      
Total Interest-bearing Liabilities
     12,667,132       76,732       2.41 %     12,150,892       116,418       3.80 %     12,487,854       79,791       2.54 %
Noninterest-bearing liabilities:
                                                                        
Demand deposits
     1,643,118                       1,675,528                       1,669,908                  
Other
     196,004                       180,907                       190,012                  
 
                                                                  
Total Liabilities
     14,506,254                       14,007,327                       14,347,774                  
Shareholders’ equity
     1,628,140                       1,557,684                       1,595,173                  
 
                                                                  
Total Liabilities and Shareholders’ Equity
   $ 16,134,394                     $ 15,565,011                     $ 15,942,947                  
 
                                                                  
Net interest income/net interest margin (fully taxable equivalent)
             136,439       3.64 %             127,211       3.56 %             138,035       3.74 %
 
                                                                  
Tax equivalent adjustment
             (4,098 )                     (3,560 )                     (4,017 )        
 
                                                                  
Net interest income
           $ 132,341                     $ 123,651                     $ 134,018          
 
                                                                  
 
(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  
    2008     2007     2008     2007     2008  
 
                                        
Loans, by type:
                                        
Real estate — commercial mortgage
   $ 3,994,730     $ 3,438,386     $ 3,820,045       16.2 %     4.6 %
Commercial — industrial, financial and agricultural
     3,603,790       3,364,211       3,557,142       7.1 %     1.3 %
Real estate — home equity
     1,673,834       1,486,367       1,619,935       12.6 %     3.3 %
Real estate — construction
     1,232,082       1,377,391       1,293,096       (10.5 %)     (4.7 %)
Real estate — residential mortgage
     985,660       831,825       953,420       18.5 %     3.4 %
Consumer
     378,422       499,253       368,804       (24.2 %)     2.6 %
Leasing and other
     91,549       85,524       84,399       7.0 %     8.5 %
 
                                  
 
                                        
Total Loans, net of unearned income
   $ 11,960,067     $ 11,082,957     $ 11,696,841       7.9 %     2.3 %
 
                                  
 
                                        
Deposits, by type:
                                        
Noninterest-bearing demand
   $ 1,643,118     $ 1,675,528     $ 1,669,908       (1.9 %)     (1.6 %)
Interest-bearing demand
     1,727,874       1,721,831       1,734,198       0.4 %     (0.4 %)
Savings deposits
     2,070,931       2,179,753       2,192,747       (5.0 %)     (5.6 %)
Time deposits
     4,818,068       4,603,944       4,308,903       4.7 %     11.8 %
 
                                  
 
                                        
Total Deposits
   $ 10,259,991     $ 10,181,056     $ 9,905,756       0.8 %     3.6 %
 
                                  
 
                                        
Short-term borrowings, by type:
                                        
Federal funds purchased
   $ 1,426,618     $ 975,732     $ 1,399,130       46.2 %     2.0 %
Short-term promissory notes
     391,781       478,018       486,179       (18.0 %)     (19.4 %)
Customer repurchase agreements
     244,633       237,346       213,827       3.1 %     14.4 %
Other short-term borrowings
     188,539       329,655       332,973       (42.8 %)     (43.4 %)
 
                                  
 
                                        
Total Short-term borrowings
   $ 2,251,571     $ 2,020,751     $ 2,432,109       11.4 %     (7.4 %)
 
                                  

4

 

FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
                                                 
    Year Ended December 31  
    2008     2007  
    Average                     Average              
    Balance     Interest (1)     Yield/Rate     Balance     Interest (1)     Yield/Rate  
ASSETS
                                                
Interest-earning assets:
                                                
Loans, net of unearned income
   $ 11,595,243     $ 732,533       6.32 %   $ 10,736,566     $ 805,881       7.51 %
Taxable investment securities
     2,228,204       110,220       4.82 %     2,157,325       99,621       4.62 %
Tax-exempt investment securities
     512,920       27,904       5.44 %     496,820       25,856       5.20 %
Equity securities
     183,216       6,520       3.56 %     189,333       9,073       4.79 %
 
                                    
Total Investment Securities
     2,924,340       144,644       4.85 %     2,843,478       134,550       4.73 %
Loans held for sale
     93,085       5,701       6.12 %     166,437       11,501       6.91 %
Other interest-earning assets
     21,503       586       2.71 %     33,015       1,630       4.90 %
 
                                    
Total Interest-earning Assets
     14,634,171       883,464       6.02 %     13,779,496       953,562       6.93 %
Noninterest-earning assets:
                                                
Cash and due from banks
     318,524                       329,814                  
Premises and equipment
     197,967                       190,910                  
Other assets
     951,270                       899,292                  
Less: allowance for loan losses
     (125,061 )                     (109,054 )                
 
                                            
Total Assets
   $ 15,976,871                     $ 15,090,458                  
 
                                            
 
                                                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                                                
Interest-bearing liabilities:
                                                
Demand deposits
   $ 1,714,029     $ 13,168       0.77 %   $ 1,696,624     $ 28,331       1.67 %
Savings deposits
     2,152,158       28,520       1.32 %     2,258,113       53,312       2.36 %
Time deposits
     4,502,399       170,426       3.79 %     4,553,994       212,752       4.67 %
 
                                    
Total Interest-bearing Deposits
     8,368,586       212,114       2.53 %     8,508,731       294,395       3.46 %
Short-term borrowings
     2,336,526       50,091       2.12 %     1,574,495       73,983       4.66 %
Federal Home Loan Bank advances and long-term debt
     1,822,115       81,141       4.45 %     1,579,527       82,455       5.22 %
 
                                    
Total Interest-bearing Liabilities
     12,527,227       343,346       2.74 %     11,662,753       450,833       3.86 %
Noninterest-bearing liabilities:
                                                
Demand deposits
     1,647,942                       1,713,863                  
Other
     191,874                       183,229                  
 
                                            
Total Liabilities
     14,367,043                       13,559,845                  
Shareholders’ equity
     1,609,828                       1,530,613                  
 
                                            
Total Liabilities and Shareholders’ Equity
   $ 15,976,871                     $ 15,090,458                  
 
                                            
Net interest income/net interest margin (fully taxable equivalent)
         540,118       3.68 %             502,729       3.66 %
 
                                            
Tax equivalent adjustment
             (15,970 )                     (13,985 )        
 
                                            
Net interest income
           $ 524,148                     $ 488,744          
 
                                            
 
(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        
    2008     2007     % Change  
Loans, by type:
                        
Real estate — commercial mortgage
   $ 3,765,762     $ 3,337,762       12.8 %
Commercial — industrial, financial and agricultural
     3,536,125       3,213,357       10.0 %
Real estate — home equity
     1,597,376       1,454,753       9.8 %
Real estate — construction
     1,286,111       1,384,548       (7.1 %)
Real estate — residential mortgage
     923,947       753,789       22.6 %
Consumer
     399,112       506,201       (21.2 %)
Leasing and other
     86,810       86,156       0.8 %
 
                    
 
                        
Total Loans, net of unearned income
   $ 11,595,243     $ 10,736,566       8.0 %
 
                    
 
                        
Deposits, by type:
                        
Noninterest-bearing demand
   $ 1,647,942     $ 1,713,863       (3.8 %)
Interest-bearing demand
     1,714,029       1,696,624       1.0 %
Savings deposits
     2,152,158       2,258,113       (4.7 %)
Time deposits
     4,502,399       4,553,994       (1.1 %)
 
                    
 
                        
Total Deposits
   $ 10,016,528     $ 10,222,594       (2.0 %)
 
                    
 
                        
Short-term borrowings, by type:
                        
Federal funds purchased
   $ 1,328,888     $ 808,358       64.4 %
Short-term promissory notes
     454,473       404,527       12.3 %
Customer repurchase agreements
     227,130       247,948       (8.4 %)
Other short-term borrowings
     326,035       113,662       186.8 %
 
                    
 
                        
Total Short-term borrowings
   $ 2,336,526     $ 1,574,495       48.4 %
 
                    

5

 

FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
                                         
    Quarter Ended     Year Ended  
    December 31     December 31     September 30     December 31  
    2008     2007     2008     2008     2007  
ALLOWANCE FOR CREDIT LOSSES:
                                        
Balance at beginning of period
   $ 141,829     $ 109,435     $ 126,223     $ 112,209     $ 106,884  
 
                                        
Loans charged off:
                                        
Commercial — financial and agricultural
     (6,392 )     (2,200 )     (4,684 )     (18,592 )     (6,796 )
Real estate — mortgage
     (19,464 )     (679 )     (5,857 )     (28,275 )     (1,206 )
Consumer
     (1,450 )     (1,169 )     (991 )     (5,188 )     (3,678 )
Leasing and other
     (1,033 )     (1,020 )     (1,166 )     (4,804 )     (2,059 )
 
                              
Total loans charged off
     (28,339 )     (5,068 )     (12,698 )     (56,859 )     (13,739 )
Recoveries of loans charged off:
                                        
Commercial — financial and agricultural
     770       197       749       1,795       1,664  
Real estate — mortgage
     61       89       238       446       178  
Consumer
     465       343       304       1,487       1,246  
Leasing and other
     351       413       313       1,433       913  
 
                              
Recoveries of loans previously charged off
     1,647       1,042       1,604       5,161       4,001  
 
                              
Net loans charged off
     (26,692 )     (4,026 )     (11,094 )     (51,698 )     (9,738 )
Provision for loan losses
     65,000       6,800       26,700       119,626       15,063  
 
                              
Balance at end of period
   $ 180,137     $ 112,209     $ 141,829     $ 180,137     $ 112,209  
 
                              
 
                                        
Net charge-offs to average loans (annualized)
     0.89 %     0.15 %     0.38 %     0.45 %     0.09 %
 
                              
 
                                        
COMPONENTS OF ALLOWANCE FOR CREDIT LOSSES:
                                        
Allowance for loan losses
   $ 173,946     $ 107,547     $ 136,988                  
Reserve for unfunded lending commitments
     6,191       4,662       4,841                  
 
                                  
Allowance for credit losses
   $ 180,137     $ 112,209     $ 141,829                  
 
                                  
 
                                        
NON-PERFORMING ASSETS:
                                        
Non-accrual loans
   $ 161,962     $ 76,150     $ 143,310                  
Loans 90 days past due and accruing
     35,177       29,782       21,354                  
 
                                  
Total non-performing loans
     197,139       105,932       164,664                  
Other real estate owned
     21,855       14,934       21,706                  
 
                                  
Total non-performing assets
   $ 218,994     $ 120,866     $ 186,370                  
 
                                  
 
                                        
NON-PERFORMING LOANS, BY TYPE:
                                        
Commercial — industrial, agricultural and financial
   $ 40,294     $ 27,715     $ 41,489                  
Real estate — commercial mortgage
     41,745       14,515       32,642                  
Real estate — residential mortgage and home equity
     26,304       25,774       26,274                  
Real estate — construction
     80,083       30,927       57,436                  
Consumer
     8,374       4,741       6,558                  
Leasing
     339       2,260       265                  
 
                                  
Total non-performing loans
   $ 197,139     $ 105,932     $ 164,664                  
 
                                  
 
                                        
ASSET QUALITY RATIOS:
                                        
Non-accrual loans to total loans
     1.34 %     0.68 %     1.21 %                
Non-performing assets to total loans and OREO
     1.82 %     1.08 %     1.57 %                
Non-performing assets to total assets
     1.35 %     0.76 %     1.15 %                
Allowance for credit losses to loans outstanding
     1.50 %     1.00 %     1.20 %                
Allowance for loan losses to loans outstanding
     1.44 %     0.96 %     1.16 %                
Allowance for credit losses to non-performing loans
     91 %     106 %     86 %                

6

 

FULTON FINANCIAL CORPORATION
RECONCILIATION OF NON-GAAP MEASURE (UNAUDITED)
dollars in thousands, except per-share data
     
Explanatory note:
  This press release contains certain financial information, as detailed below, which has been derived by methods other than Generally Accepted Accounting Standards (“GAAP”) that Management uses in its analysis of the Corporation’s performance. The Corporation has presented these non-GAAP measures because it believes that they provide more useful and comparative information to assess trends in the Corporation’s quarterly and year end results of operations. These non-GAAP 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.
                                                                         
    Quarter Ended  
    December 31, 2008     December 31, 2007     September 30, 2008  
    Pre-tax     After-tax     Diluted     Pre-tax     After-tax     Diluted     Pre-tax     After-tax     Diluted  
    (Expense)/     (Expense)/     EPS     (Expense)/     (Expense)/     EPS     (Expense)/     (Expense)/     EPS  
    Income     Income     Impact     Income     Income     Impact     Income     Income     Impact  
                                                                         
Goodwill impairment charge
   $ (90,000 )   $ (90,000 )   $ (0.51 )   $ —     $ —     $ —     $ —     $ —     $ —  
Other-than-temporary impairment of securities
     (26,065 )     (16,942 )     (0.10 )     (175 )     (114 )     —       (10,682 )     (6,943 )     (0.04 )
Guarantee related to purchase of customer auction rate securities
     (3,950 )     (2,568 )     (0.01 )     —       —       —       (2,660 )     (1,729 )     (0.01 )
Investment securities gains and (losses) on sale
     (2,274 )     (1,478 )     (0.01 )     (362 )     (235 )     —       1,181       768       —  
 
                                                      
Totals
     (122,289 )     (110,988 )     (0.63 )     (537 )     (349 )     —       (12,161 )     (7,904 )     (0.05 )
 
                                                                        
Net (loss) income available to common shareholders
             (102,330 )     (0.58 )             38,179       0.22               29,076       0.17  
 
                                                            
 
                                                                        
Adjusted net income available to common shareholders
           $ 8,658     $ 0.05             $ 38,528     $ 0.22             $ 36,980     $ 0.21  
 
                                                            
                                                 
    Year Ended December 31  
    2008     2007  
    Pre-tax     After-tax     Diluted     Pre-tax     After-tax     Diluted  
    (Expense)/     (Expense)/     EPS     (Expense)/     (Expense)/     EPS  
    Income     Income     Impact     Income     Income     Impact  
 
Goodwill impairment charge
   $ (90,000 )   $ (90,000 )   $ (0.52 )   $ —     $ —     $ —  
Other-than-temporary impairment of securities
     (65,336 )     (42,468 )     (0.24 )     (292 )     (190 )     —  
Guarantee related to purchase of customer auction rate securities
     (19,810 )     (12,877 )     (0.07 )     —       —       —  
Gain on sale of credit card portfolio
     13,900       9,035       0.05       —       —       —  
Investment securities gains and (losses) on sale
     7,095       4,612       0.03       2,032       1,321       0.01  
Contingent losses related to repurchase of previously sold loans
     (2,300 )     (1,495 )     (0.01 )     (25,100 )     (16,315 )     (0.09 )
 
                                    
Totals
   $ (156,451 )   $ (133,193 )     (0.76 )   $ (23,360 )   $ (15,184 )     (0.09 )
 
                                                
Net (loss) income available to common shareholders
             (6,080 )     (0.03 )             152,718       0.88  
 
                                        
 
                                                
Adjusted net income available to common shareholders
           $ 127,113     $ 0.73             $ 167,902     $ 0.96  
 
                                        

7

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