Business Wire | Jul 21, 2020 04:30PM EDT

Fulton Financial Announces Second Quarter Earnings

Jul. 21, 2020

LANCASTER, Pa.--(BUSINESS WIRE)--Jul. 21, 2020--Fulton Financial Corporation (NASDAQ:FULT) ("Fulton" or the "Corporation") reported net income of $40 million, or $0.24 per diluted share, for the second quarter of 2020.

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"COVID-19 continues to have a significant impact on our world and our company," said E. Philip Wenger, Chairman and CEO, "however, we are pleased with what Fulton was able to achieve in the second quarter during this period of great uncertainty. Our earnings were strong, with lower credit losses and relatively stable fee income and expenses. And our employees have done an outstanding job, continuing to support our customers through this challenging and ever-changing environment."

Net Interest Income and Balance Sheet

Net interest income for the second quarter of 2020 was $153 million, a decrease of $8 million from the first quarter of 2020, driven by lower yields on loans and other interest-earning assets. Net interest margin for the second quarter of 2020 decreased 40 basis points, to 2.81% from 3.21% in the first quarter of 2020.

Total average assets for the second quarter of 2020 were $24.1 billion, an increase of $1.9 billion from the first quarter of 2020. Average loans, net of unearned income, of $18.3 billion increased $1.5 billion from the first quarter of 2020. The increase was principally due to loans originated under the Paycheck Protection Program ("PPP"), which were $1.9 billion as of June 30, 2020.

Average loans and yields, by type, for the second quarter of 2020 in comparison to the first quarter of 2020 are summarized in the following table:

Three months ended

June 30, 2020 March 31, 2020 Growth

Balance Yield Balance Yield $ % (1) (1)

(dollars in thousands)

AverageLoans, netof unearned income, bytype:

Real estate- commercial $ 6,875,872 3.47 % $ 6,746,766 4.20 % $ 129,106 1.9 %mortgage

Commercialand 5,710,145 3.35 % 4,446,750 4.21 % 1,263,395 28.4 %industrial

Real estate- 2,769,682 3.88 % 2,670,019 3.97 % 99,663 3.7 %residentialmortgage

Real estate- home 1,271,190 3.91 % 1,300,132 4.73 % (28,942) (2.2) %equity

Real estate- 941,079 3.53 % 929,529 4.13 % 11,550 1.2 %construction

Consumer 465,728 4.17 % 466,415 4.34 % (687) (0.1) %

Equipmentlease 284,658 3.44 % 284,566 4.32 % 92 0.0 %financing

Other 13,443 N/A 15,890 N/A (2,447) (15.4) %

TotalAverageLoans, net $ 18,331,797 3.52 % $ 16,860,067 4.23 % $ 1,471,730 8.7 %of unearnedincome



(1) Presented on a fully-taxable equivalent basis using a 21% Federal tax rateand statutory interest expense disallowances.

Total average liabilities increased $1.9 billion, from the first quarter of 2020 driven by increases in noninterest-bearing demand deposits. Average deposits and interest rates, by type, for the second quarter of 2020 in comparison to the first quarter of 2020 are summarized in the following table:

Three months ended

June 30, 2020 March 31, 2020 Growth

Balance Rate Balance Rate $ %

(dollars in thousands)

Average Deposits, by type:

Noninterest-bearing demand $ 5,789,788 0.00 % $ 4,307,027 0.00 % $ 1,482,761 34.4 %

Interest-bearing demand 5,103,419 0.17 % 4,649,905 0.49 % 453,514 9.8 %

Savings 5,446,368 0.25 % 5,127,662 0.56 % 318,706 6.2 %

Total average demand and 16,339,575 0.14 % 14,084,594 0.36 % 2,254,981 16.0 %savings

Brokered 312,121 0.54 % 275,359 1.57 % 36,762 13.4 %

Time 2,624,962 1.71 % 2,761,474 1.84 % (136,512) (4.9) %

Total Average Deposits $ 19,276,658 0.36 % $ 17,121,427 0.62 % $ 2,155,231 12.6 %

Asset Quality

The provision for credit losses for the second quarter of 2020 was $20 million, which reflects current expected credit losses based on forecasted economic and other assumptions, including the estimated impacts of COVID-19, over the remaining expected lives of financial assets and off-balance-sheet credit exposures.

Non-performing assets were $145 million, or 0.59% of total assets, at June 30, 2020, a decrease from both March 31, 2020 and June 30, 2019.

Annualized net charge-offs (recoveries) for the quarter ended June 30, 2020 were 0.09% of total average loans, compared to 0.26% and (0.04)% for the quarters ended March 31, 2020 and June 30, 2019, respectively.

Non-interest Income

Non-interest income in the second quarter of 2020, excluding investment securities gains, was $53 million, a decrease of $2 million, or 3%, from the first quarter of 2020, primarily driven by a decline in overdraft and wealth management fees, partially offset by higher mortgage banking income.

Mortgage banking income increased $4 million from the first quarter of 2020, reflecting the net result of a $10 million increase in gains on mortgage loan sales due largely to higher refinance activity, partially offset by a $7 million mortgage servicing rights impairment charge recorded in the second quarter of 2020 as a result of rapidly declining interest rates and related increases in current and expected levels of prepayments. A $1 million mortgage servicing rights impairment charge was recorded in the first quarter of 2020.

Compared to the second quarter of 2019, non-interest income, excluding investment securities gains, decreased $1 million or 2% in the second quarter of 2020 due mainly to declines in overdraft fees, merchant and card income and wealth management fees, partially offset by an increase in mortgage banking and capital markets income.

Net investment securities gains of $3 million were realized in the second quarter of 2020, related to a limited balance sheet restructuring that included $3 million of prepayment penalties recorded in non-interest expense for the redemption of FHLB advances.

Non-interest Expense

Non-interest expense was $143 million in the second quarter of 2020, relatively unchanged compared to the first quarter of 2020. The $3 million prepayment penalty on redemption of FHLB advances as well as an increase in salaries and employee benefits, were offset by decreases in multiple categories.

Compared to the second quarter of 2019, non-interest expenses decreased $1 million, or 1% due primarily to decreases in other outside services, occupancy and marketing, partially offset by increases in salaries and employee benefits and the FHLB prepayment penalty.

Income Tax Expense

The effective income tax rate for the second quarter of 2020 was 14%, as compared to 10% and 14% for the first quarter of 2020 and second quarter of 2019, respectively. The increase in the effective income tax rate compared to the first quarter of 2020 resulted from the increase in income before income taxes.

Additional information on Fulton 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," "projects," the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation's future financial performance, expected levels of future expenses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation's business or financial results.

Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, they are based on current beliefs, expectations and assumptions regarding the future of the Corporation's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation's control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2019, Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission and are or will be available in the Investor Relations section of the Corporation's website (www.fult.com) and on the Securities and Exchange Commission's website (www.sec.gov).

Non-GAAP Financial Measures

The Corporation uses certain non-GAAP financial measures in this earnings release. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this release.

FULTON FINANCIAL CORPORATION

SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

in thousands, except per-share data and percentages

Three months ended

Jun 30 Mar 31 Dec 31 Sep 30 Jun 30

2020 2020 2019 2019 2019

Ending Balances

Investments $ 2,974,813 $ 3,141,440 $ 2,867,378 $ 2,705,610 $ 2,853,358

Loans, net ofunearned 18,704,722 17,077,403 16,837,526 16,686,866 16,368,458 income

Total assets 24,617,863 22,929,859 21,886,040 21,703,618 21,308,670

Deposits 19,884,208 17,365,026 17,393,913 17,342,717 16,388,895

Shareholders' 2,340,501 2,285,748 2,342,176 2,324,016 2,308,798 equity



Average Balances

Investments $ 3,096,632 $ 3,071,828 $ 2,830,999 $ 2,829,672 $ 2,790,392

Loans, net ofunearned 18,331,797 16,860,067 16,768,057 16,436,507 16,316,076 income

Total assets 24,139,116 22,252,099 21,812,438 21,457,800 21,057,030

Deposits 19,276,658 17,121,428 17,449,565 16,950,667 16,375,457

Shareholders' 2,309,133 2,337,016 2,341,397 2,315,585 2,301,258 equity



Income Statement

Net interest $ 152,754 $ 160,746 $ 159,270 $ 161,260 $ 164,544 income

Provision for 19,570 44,030 20,530 2,170 5,025 credit losses

Non-interest 55,922 54,644 55,281 59,813 54,316 income

Non-interest 143,006 142,552 138,974 146,770 144,168 expense

Income before 46,101 28,808 55,047 72,133 69,667 taxes

Net income 39,559 26,047 47,789 62,108 59,780

Pre-provision 67,126 74,374 77,224 76,741 76,115 net revenue(1)



Per Share

Net income $ 0.24 $ 0.16 $ 0.29 $ 0.38 $ 0.36 (basic)

Net income $ 0.24 $ 0.16 $ 0.29 $ 0.37 $ 0.35 (diluted)

Cash dividends $ 0.13 $ 0.13 $ 0.17 $ 0.13 $ 0.13

Shareholders'equity $ 11.15 $ 10.84 $ 11.00 $ 10.91 $ 10.63 (tangible)(1)

Weightedaverage shares 161,715 163,475 164,135 165,324 168,343 (basic)

Weightedaverage shares 162,267 164,417 165,039 166,126 169,168 (diluted)



Asset Quality (2)

Netcharge-offs(recoveries) 0.09 % 0.26 % 0.65 % 0.15 % (0.04) % to averageloans(annualized)

Non-performingloans to total 0.75 % 0.82 % 0.84 % 0.81 % 0.90 % loans

Non-performingassets to 0.59 % 0.64 % 0.68 % 0.66 % 0.73 % total assets

ACL - loans(3) 1.37 % 1.40 % 0.97 % 1.00 % 1.04 % to total loans

ACL - loans(3)to 183 % 170 % 116 % 122 % 115 % non-performingloans

Non-performingassets toshareholders'equity 7.04 % 7.37 % 7.51 % 7.35 % 7.97 % (tangible) andACL - loans(1)(3)



Asset Quality,excluding PPP (1)(4)

Non-performingloans to total 0.83 % adjusted loans

ACL - loans(3)to adjusted 1.53 % total loans



Profitability

Return on 0.66 % 0.47 % 0.87 % 1.15 % 1.14 % average assets

Return onaverage 6.89 % 4.48 % 8.10 % 10.64 % 10.42 % shareholders'equity

Return onaverageshareholders' 8.99 % 5.84 % 10.52 % 14.03 % 13.60 % equity(tangible)(1)

Net interest 2.81 % 3.21 % 3.22 % 3.31 % 3.44 % margin

Efficiency 66.4 % 64.5 % 63.1 % 63.6 % 64.2 % ratio(1)



Capital Ratios

Tangiblecommon equity 7.5 % 7.8 % 8.5 % 8.5 % 8.5 % ratio(1)

Tier 1leverage ratio 7.4 % 7.9 % 8.4 % 8.5 % 8.7 % (5)

Common equityTier 1 capital 9.5 % 9.4 % 9.7 % 9.6 % 10.0 % ratio(5)

Tier 1 capital 9.5 % 9.4 % 9.7 % 9.6 % 10.0 % ratio(5)

Totalrisk-based 14.0 % 13.8 % 11.8 % 12.0 % 12.4 % capital ratio(5)



(1) Non-GAAP financial measure. Refer to the calculation on the page titled"Reconciliation of Non-GAAP Measures" at the end of this document.

(2) Effective January 1, 2020, Fulton adopted Accounting Standards Update2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement ofCredit Losses on Financial Instruments," referred to as the current expectedcredit loss model ("CECL"). This accounting standard requires that creditlosses for financial assets and off-balance-sheet ("OBS") credit exposures bemeasured based on expected credit losses, rather than on incurred credit lossesas in prior periods.

(3) "ACL - loans" relates to the allowance for credit losses ("ACL")specifically on "Loans, net of unearned income" and does not include the ACLrelated to OBS credit exposures.

(4) Asset quality information excluding Paycheck Protection Program (PPP) loansof $1.9 billion at June 30, 2020.

(5) Regulatory capital ratios as of June 30, 2020 are preliminary and priorperiods are actual.

FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)

dollars in thousands

% Change from

Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Jun 30

2020 2020 2019 2019 2019 2020 2019

ASSETS

Cash and due from $ 141,702 $ 181,777 $ 132,283 $ 120,671 $ 107,091 (22.0) % 32.3 % banks

Other interest-earning 1,007,939 793,572 482,930 572,499 488,968 27.0 % 106.1 % assets

Loans held for sale 77,415 40,645 37,828 33,945 45,754 90.5 % 69.2 %

Investment 2,974,813 3,141,440 2,867,378 2,705,610 2,853,358 (5.3) % 4.3 % securities

Loans, net of 18,704,722 17,077,403 16,837,526 16,686,866 16,368,458 9.5 % 14.3 % unearned income

Less: ACL - loans (256,537) (238,508) (163,622) (166,135) (170,233) 7.6 % 50.7 %

Net loans 18,448,185 16,838,895 16,673,904 16,520,731 16,198,225 9.6 % 13.9 %

Premises and 239,596 236,908 240,046 237,344 243,300 1.1 % (1.5) % equipment

Accrued interest 73,720 59,365 60,898 60,447 62,984 24.2 % 17.0 % receivable

Goodwill and 535,039 535,171 535,303 534,178 535,249 - % - % intangible assets

Other assets 1,119,454 1,102,086 855,470 918,193 773,741 1.6 % 44.7 %

Total Assets $ 24,617,863 $ 22,929,859 $ 21,886,040 $ 21,703,618 $ 21,308,670 7.4 % 15.5 %

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits $ 19,884,208 $ 17,365,026 $ 17,393,913 $ 17,342,717 $ 16,388,895 14.5 % 21.3 %

Short-term 572,551 1,386,808 883,241 832,860 1,188,390 (58.7) % (51.8) % borrowings

Other liabilities 525,407 513,811 384,941 477,311 435,171 2.3 % 20.7 %

FHLB advances and 1,295,196 1,378,466 881,769 726,714 987,416 (6.0) % 31.2 % long-term debt

Total Liabilities 22,277,362 20,644,111 19,543,864 19,379,602 18,999,872 7.9 % 17.3 %

Shareholders' 2,340,501 2,285,748 2,342,176 2,324,016 2,308,798 2.4 % 1.4 % equity

Total Liabilities and Shareholders' $ 24,617,863 $ 22,929,859 $ 21,886,040 $ 21,703,618 $ 21,308,670 7.4 % 15.5 % Equity



LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:

Loans, by type:

Real estate - $ 6,934,936 $ 6,895,069 $ 6,700,776 $ 6,604,634 $ 6,497,973 0.6 % 6.7 % commercial mortgage

Commercial and 5,970,473 4,451,239 4,446,701 4,494,496 4,365,248 34.1 % 36.8 % industrial

Real estate - residential 2,862,226 2,718,290 2,641,465 2,570,793 2,451,966 5.3 % 16.7 % mortgage

Real estate - home 1,251,455 1,292,677 1,314,944 1,346,115 1,386,974 (3.2) % (9.8) % equity

Real estate - 972,909 947,768 971,079 913,644 922,547 2.7 % 5.5 % construction

Consumer 465,610 468,172 463,164 464,213 452,874 (0.5) % 2.8 %

Equipment lease 247,113 304,188 299,397 292,971 290,876 (18.8) % (15.0) % financing and other

Total Loans, net of $ 18,704,722 $ 17,077,403 $ 16,837,526 $ 16,686,866 $ 16,368,458 9.5 % 14.3 % unearned income

Deposits, by type:

Noninterest-bearing $ 6,239,055 $ 4,531,872 $ 4,453,324 $ 4,240,478 $ 4,226,404 37.7 % 47.6 % demand

Interest-bearing 5,099,405 4,724,520 4,720,188 4,771,109 4,083,615 7.9 % 24.9 % demand

Savings 5,667,893 5,092,865 5,153,941 5,094,387 4,938,998 11.3 % 14.8 %

Total demand and 17,006,353 14,349,257 14,327,453 14,105,974 13,249,017 18.5 % 28.4 % savings

Brokered 310,689 313,337 264,531 256,870 246,116 (0.8) % 26.2 %

Time 2,567,166 2,702,432 2,801,929 2,979,873 2,893,762 (5.0) % (11.3) %

Total Deposits $ 19,884,208 $ 17,365,026 $ 17,393,913 $ 17,342,717 $ 16,388,895 14.5 % 21.3 %

Short-term borrowings, by type:

Customer funding 572,551 461,808 383,241 337,860 338,390 24.0 % 69.2 %

Federal funds - 200,000 - 20,000 200,000 N/M N/M purchased

Short-term FHLB - 725,000 500,000 475,000 650,000 N/M N/M advances

Total Short-term $ 572,551 $ 1,386,808 $ 883,241 $ 832,860 $ 1,188,390 (58.7) % (51.8) % Borrowings



N/M - Not meaningful

(1) "ACL - loans" relates to the ACL specifically on "Loans, net of unearnedincome" and does not include the ACL related to OBS credit exposures.

FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

dollars in thousands

Three Months Ended % Change from Six months ended

Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Jun 30 Jun 30

2020 2020 2019 2019 2019 2020 2019 2020 2019 % Change

Interest Income:

Interest income $ 180,696 $ 199,378 $ 202,159 $ 208,413 $ 210,034 (9.4) % (14.0) % $ 380,074 $ 414,734 (8.4) %

Interest expense 27,942 38,632 42,889 47,153 45,490 (27.7) % (38.6) % 66,574 86,875 (23.4) %

Net Interest Income 152,754 160,746 159,270 161,260 164,544 (5.0) % (7.2) % 313,500 327,859 (4.4) %

Provision for credit 19,570 44,030 20,530 2,170 5,025 (55.6) % N/M 63,600 10,125 N/M losses

Net Interest Income 133,184 116,716 138,740 159,090 159,519 14.1 % (16.5) % 249,900 317,734 (21.3) % after Provision

Non-Interest Income:

Wealth management 13,407 15,055 14,419 13,867 14,153 (10.9) % (5.3) % 28,462 27,392 3.9 %

Mortgage banking 9,964 6,234 5,076 6,658 6,593 59.8 % 51.1 % 16,198 11,365 42.5 %

Consumer banking:

Card 4,966 4,685 4,991 5,791 5,047 6.0 % (1.6) % 9,651 9,733 (0.8) %

Overdraft 2,107 4,058 4,750 4,682 4,413 (48.1) % (52.3) % 6,165 8,517 (27.6) %

Other consumer 2,065 2,496 2,688 2,860 2,907 (17.3) % (29.0) % 4,561 5,494 (17.0) % banking

Total consumer 9,138 11,239 12,429 13,333 12,367 (18.7) % (26.1) % 20,377 23,744 (14.2) % banking

Commercial banking:

Merchant and card 5,326 5,624 5,841 6,166 6,512 (5.3) % (18.2) % 10,950 12,070 (9.3) %

Cash management 4,503 4,742 4,697 4,696 4,638 (5.0) % (2.9) % 9,245 8,999 2.7 %

Capital markets 5,004 5,075 5,939 4,448 4,053 (1.4) % 23.5 % 10,079 6,568 53.5 %

Other commercial 1,914 2,978 3,664 3,478 3,815 (35.7) % (49.8) % 4,892 6,631 (26.2) % banking

Total commercial 16,748 18,419 20,141 18,788 19,018 (9.1) % (11.9) % 35,167 34,268 2.6 % banking

Other 3,660 3,651 3,216 2,675 2,009 0.2 % 82.2 % 7,311 4,056 80.3 %

Non-interest income before investment 52,917 54,598 55,281 55,321 54,140 (3.1) % (2.3) % 107,515 100,825 6.6 % securities gains

Investment securities 3,005 46 - 4,492 176 N/M N/M 3,051 241 N/M gains, net

Total Non-Interest 55,922 54,644 55,281 59,813 54,316 2.3 % 3.0 % 110,566 101,066 9.4 % Income

Non-Interest Expense:

Salaries and employee 81,012 80,228 76,975 78,211 78,991 1.0 % 2.6 % 161,240 156,748 2.9 % benefits

Net occupancy 13,144 13,486 13,080 12,368 14,469 (2.5) % (9.2) % 26,630 27,378 (2.7) %

Data processing and 12,193 11,645 11,468 11,590 11,268 4.7 % 8.2 % 23,838 21,621 10.3 % software

Other outside 7,600 7,881 8,215 12,163 11,259 (3.6) % (32.5) % 15,481 19,611 (21.1) % services

Equipment 3,193 3,418 3,475 3,459 3,299 (6.6) % (3.2) % 6,611 6,641 (0.5) %

Professional fees 3,331 4,202 2,873 3,331 2,970 (20.7) % 12.2 % 7,533 6,930 8.7 %

Marketing 1,303 1,579 1,503 3,322 2,863 (17.5) % (54.5) % 2,882 5,023 (42.6) %

Amortization of tax 1,450 1,450 1,505 1,533 1,492 - % (2.8) % 2,900 2,983 (2.8) % credit investments

FDIC insurance 2,133 2,808 2,177 239 2,755 (24.0) % (22.6) % 4,941 5,364 (7.9) %

Intangible 132 132 142 1,071 107 - % 23.4 % 264 214 23.4 % amortization

Prepayment penalty on 2,878 - - 4,326 - N/M N/M 2,878 - N/M FHLB advances

Other 14,637 15,723 17,561 15,157 14,695 (6.9) % (0.4) % 30,360 29,479 3.0 %

Total Non-Interest 143,006 142,552 138,974 146,770 144,168 0.3 % (0.8) % 285,558 281,992 1.3 % Expense

Income Before Income 46,101 28,808 55,047 72,133 69,667 60.0 % (33.8) % 74,909 136,808 (45.2) % Taxes

Income tax expense 6,542 2,761 7,258 10,025 9,887 136.9 % (33.8) % 9,303 20,366 (54.3) %

Net Income $ 39,559 $ 26,047 $ 47,789 $ 62,108 $ 59,780 51.9 % (33.8) % $ 65,606 $ 116,442 (43.7) %



PER SHARE:

Net income:

Basic $ 0.24 $ 0.16 $ 0.29 $ 0.38 $ 0.36 50.0 % (33.3) % $ 0.40 $ 0.69 (42.0) %

Diluted 0.24 0.16 0.29 0.37 0.35 50.0 % (31.4) % 0.40 0.68 (41.2) %

Cash dividends 0.13 0.13 0.17 0.13 0.13 - % - % $ 0.26 $ 0.26 - %



Weighted average 161,715 163,475 164,135 165,324 168,343 (1.1) % (3.9) % 162,582 169,109 (3.9) % shares (basic)

Weighted average 162,267 164,417 165,039 166,126 169,168 (1.3) % (4.1) % 163,326 170,042 (3.9) % shares (diluted)





FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)

dollars in thousands

Three months ended

June 30, 2020 March 31, 2020 June 30, 2019

Average Interest Yield/ Average Interest Yield/ Average Interest Yield/

Balance (1) Rate Balance (1) Rate Balance (1) Rate

ASSETS



Interest-earning assets:

Loans, net of unearned $ 18,331,797 $ 160,613 3.52 % $ 16,860,067 $ 177,496 4.23 % $ 16,316,076 $ 190,694 4.69 % income

Taxable investment 2,200,870 15,171 2.76 % 2,284,457 16,294 2.85 % 2,348,443 15,935 2.71 % securities

Tax-exempt investment 830,836 6,737 3.23 % 720,223 5,960 3.29 % 444,227 4,141 3.70 % securities

Total Investment 3,031,706 21,908 2.89 % 3,004,680 22,254 2.96 % 2,792,670 20,076 2.87 % Securities

Loans held for sale 55,608 509 3.66 % 27,178 320 4.71 % 24,568 350 5.71 %

Other interest-earning 815,910 766 0.38 % 602,270 2,532 1.69 % 409,617 2,168 2.12 % assets

Total Interest-earning 22,235,021 183,796 3.32 % 20,494,195 202,602 3.97 % 19,542,931 213,288 4.37 % Assets



Noninterest-earning assets:

Cash and due from banks 153,728 138,248 116,285

Premises and equipment 240,417 239,619 240,666

Other assets 1,761,038 1,590,666 1,321,057

Less: ACL - loans(2) (251,088) (210,629) (163,909)

Total Assets $ 24,139,116 $ 22,252,099 $ 21,057,030



LIABILITIES AND SHAREHOLDERS' EQUITY



Interest-bearing liabilities:

Demand deposits $ 5,103,419 $ 2,219 0.17 % $ 4,649,905 $ 5,643 0.49 % $ 4,186,280 $ 8,173 0.78 %

Savings deposits 5,446,368 3,331 0.25 % 5,127,662 7,110 0.56 % 4,925,788 10,550 0.86 %

Brokered deposits 312,121 422 0.54 % 275,359 1,073 1.57 % 246,154 1,582 2.58 %

Time deposits 2,624,962 11,145 1.71 % 2,761,474 12,614 1.84 % 2,816,424 12,245 1.74 %

Total Interest-bearing 13,486,870 17,118 0.51 % 12,814,400 26,440 0.83 % 12,174,646 32,550 1.07 % Deposits



Short-term borrowings 707,771 517 0.29 % 1,303,047 4,073 1.25 % 941,504 4462 1.89 %

FHLB advances and 1,361,421 10,307 3.03 % 1,063,214 8,119 3.06 % 1,051,919 8,480 3.23 % long-term debt

Total Interest-bearing $ 15,556,062 $ 27,942 0.72 % $ 15,180,661 $ 38,632 1.02 % $ 14,168,069 $ 45,492 1.29 % Liabilities



Noninterest-bearing liabilities:

Demand deposits 5,789,788 4,307,027 4,200,810

Total Deposits/Cost of 19,276,658 0.36 % 17,121,427 0.62 % 16,375,456 0.80 % Deposits

Other 484,133 427,395 386,893

Total Liabilities $ 21,829,983 $ 19,915,083 $ 18,755,772

Total Interest-bearing liabilities and non-interest bearing 21,345,850 0.53 % 19,487,688 0.80 % 18,368,879 0.93 % deposits ("Cost of Funds")



Shareholders' equity 2,309,133 2,337,016 2,301,258

Total Liabilities and $ 24,139,116 $ 22,252,099 $ 21,057,030 Shareholders' Equity



Net interest income/net interest margin (fully 155,854 2.81 % 163,970 3.21 % 167,796 3.44 % taxable equivalent)

Tax equivalent (3,100) (3,224) (3,252) adjustment

Net interest income $ 152,754 $ 160,746 $ 164,544



(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rateand statutory interest expense disallowances.

FULTON FINANCIAL CORPORATION

AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL (UNAUDITED):

dollars in thousands





Three months ended % Change from

Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 Jun 30

2020 2020 2019 2019 2019 2020 2019



Loans, by type:

Real estate - commercial $ 6,875,872 $ 6,746,766 $ 6,561,029 $ 6,489,456 $ 6,424,213 1.9 % 7.0 % mortgage

Commercial and industrial 5,710,145 4,446,750 4,574,047 4,414,992 4,440,860 28.4 % 28.6 %

Real estate - residential 2,769,682 2,670,019 2,606,136 2,512,899 2,366,685 3.7 % 17.0 % mortgage

Real estate - home equity 1,271,190 1,300,132 1,331,088 1,364,161 1,404,141 (2.2) % (9.5) %

Real estate - construction 941,079 929,529 934,556 905,060 943,080 1.2 % (0.2) %

Consumer 465,728 466,415 464,606 457,524 445,666 (0.1) % 4.5 %

Equipment lease financing 298,101 300,456 296,595 292,415 291,431 (0.8) % 2.3 % and other

Total Loans, net of $ 18,331,797 $ 16,860,067 $ 16,768,057 $ 16,436,507 $ 16,316,076 8.7 % 12.4 % unearned income



Deposits, by type:

Noninterest-bearing demand $ 5,789,788 $ 4,307,027 $ 4,324,568 $ 4,247,820 $ 4,200,810 34.4 % 37.8 %

Interest-bearing demand 5,103,419 4,649,905 4,699,040 4,448,112 4,186,280 9.8 % 21.9 %

Savings 5,446,368 5,127,662 5,205,260 5,026,316 4,925,788 6.2 % 10.6 %

Total demand and savings 16,339,575 14,084,594 14,228,868 13,722,248 13,312,878 16.0 % 22.7 %

Brokered 312,121 275,359 261,689 253,426 246,154 13.4 % 26.8 %

Time 2,624,962 2,761,474 2,959,008 2,974,993 2,816,425 (4.9) % (6.8) %

Total Deposits $ 19,276,658 $ 17,121,427 $ 17,449,565 $ 16,950,667 $ 16,375,457 12.6 % 17.7 %



Short-term borrowings, by type:

Customer funding $ 546,716 $ 428,240 $ 377,529 $ 332,893 $ 344,867 27.7 % 58.5 %

Federal funds purchased 74,231 186,868 91,467 101,022 181,769 (60.3) % (59.2) %

Short-term FHLB advances 86,824 687,937 248,815 485,782 414,868 (87.4) % (79.1) % and other borrowings

Total Short-term $ 707,771 $ 1,303,045 $ 717,811 $ 919,697 $ 941,504 (45.7) % (24.8) % borrowings

FULTON FINANCIAL CORPORATION

CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)

dollars in thousands

Six months ended June 30

2020 2019

Average Average

Balance Interest Yield/ Balance Interest Yield/ (1) Rate (1) Rate

ASSETS



Interest-earning assets:

Loans, net of $ 17,595,932 $ 338,110 3.86 % $ 16,255,562 $ 376,816 4.67 % unearned income

Taxable investment 2,242,663 31,465 2.81 % 2,317,257 31,370 2.71 % securities

Tax-exempt investment 775,530 12,698 3.26 % 444,180 8,291 3.71 % securities



Total Investment 3,018,193 44,163 2.92 % 2,761,437 39,661 2.87 % Securities

Loans held for 41,393 829 4.00 % 20,523 590 5.76 % sale

Other interest-earning 709,091 3,297 4.31 % 388,016 4,170 2.16 % assets

Total Interest-earning $ 21,364,609 386,399 3.63 % $ 19,425,538 421,237 4.36 % Assets



Noninterest-earning assets:

Cash and due 145,988 113,504 from banks

Premises and 240,019 238,905 equipment

Other assets 1,675,849 1,259,388

Less: allowance (230,858) (162,624) for loan losses

Total Assets $ 23,195,607 $ 20,874,711



LIABILITIES AND SHAREHOLDERS' EQUITY



Interest-bearing liabilities:

Demand deposits $ 4,876,662 $ 8,020 0.33 % $ 4,170,221 $ 15,692 0.76 %

Savings deposits 5,287,015 10,441 0.40 % 4,919,357 20,512 0.84 %

Brokered 293,756 1,495 1.02 % 233,244 2,964 2.56 % deposits

Time deposits 2,693,202 23,602 1.76 % 2,791,216 23,071 1.67 %

Total Interest-bearing 13,150,635 43,558 0.67 % 12,114,038 62,239 1.04 % Deposits



Short-term 1,005,409 4,590 0.91 % 881,115 8,044 1.83 % borrowings

FHLB advances and long-term 1,212,318 18,426 3.04 % 1,027,328 16,594 3.24 % debt

Total Interest-bearing $ 15,368,362 $ 66,574 0.87 % $ 14,022,481 $ 86,877 1.25 % Liabilities



Noninterest-bearing liabilities:

Demand deposits 5,048,408 4,211,782

Total Deposits/ 18,199,043 0.48 % 16,325,820 0.77 % Cost of Deposits

Other 455,763 357,170

Total $ 20,872,533 $ 18,591,433 Liabilities

Total Interest-bearing liabilities and non-interest 20,416,770 0.65 % 18,234,263 0.96 % bearing deposits ("Cost of Funds")



Shareholders' 2,323,074 2,283,278 equity

Total Liabilities and $ 23,195,607 $ 20,874,711 Shareholders' Equity



Net interest income/net interest margin 319,825 3.01 % 334,360 3.46 % (fully taxable equivalent)

Tax equivalent (6,325) (6,501) adjustment

Net interest $ 313,500 $ 327,859 income



(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rateand statutory interest expense disallowances.

FULTON FINANCIAL CORPORATION

AVERAGE LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL (UNAUDITED):

dollars in thousands



Six months ended June 30

2020 2019 % Change



Loans, by type:

Real estate - commercial mortgage $ 6,811,318 $ 6,401,305 6.4 %

Commercial and industrial 5,078,448 4,451,342 14.1 %

Real estate - residential mortgage 2,719,851 2,321,897 17.1 %

Real estate - home equity 1,285,661 1,418,776 (9.4) %

Real estate - construction 935,304 936,699 (0.1) %

Consumer 466,071 435,131 7.1 %

Equipment lease financing and 299,279 290,412 3.1 % other

Total Loans, net of unearned $ 17,595,932 $ 16,255,562 8.2 % income



Deposits, by type:

Noninterest-bearing demand $ 5,048,408 $ 4,211,782 19.9 %

Interest-bearing demand 4,876,662 4,170,221 16.9 %

Savings 5,287,015 4,919,357 7.5 %

Total demand and savings 15,212,085 13,301,360 14.4 %

Brokered 293,756 233,244 25.9 %

Time 2,693,202 2,791,216 (3.5) %

Total Deposits $ 18,199,043 $ 16,325,820 11.5 %



Short-term borrowings, by type:

Customer funding $ 487,478 $ 356,767 36.6 %

Federal funds purchased 130,549 169,514 (23.0) %

Short-term FHLB advances and other 387,382 354,834 9.2 % borrowings

Total Short-term Borrowings $ 1,005,409 $ 881,115 14.1 %

FULTON FINANCIAL CORPORATION

ASSET QUALITYINFORMATION (UNAUDITED)

dollars in thousands

Three months ended

Jun 30 Mar 31 Dec 31 Sep 30 Jun 30

2020 2020 2019 2019 2019

Allowance forcredit lossesrelated to Loans, net ofunearned income:

Balance atbeginning of $ 238,508 $ 163,620 $ 166,135 $ 170,233 $ 162,109 period



Impact of - 45,724 - - - adopting CECL



Loans charged off:

Commercial and (3,480) (10,899) (30,547) (7,181) (1,895) industrial

Real estate - commercial (2,324) (855) (68) (394) (230) mortgage

Consumer and (1,303) (1,529) (1,416) (1,375) (1,001) home equity

Real estate - residential (235) (187) (223) (533) (134) mortgage

Real estate - (17) - - (45) (3) construction

Equipment lease (688) (533) (727) (600) (448) financing and other

Total loans (8,047) (14,003) (32,981) (10,128) (3,711) charged off

Recoveries ofloans previously charged off:

Commercial and 2,978 1,734 2,487 2,311 2,680 industrial

Real estate - commercial 95 244 1,453 444 169 mortgage

Consumer and 649 646 437 348 802 home equity

Real estate - residential 112 85 206 440 211 mortgage

Real estate - - 70 1,098 164 1,245 construction

Equipment lease 92 108 182 107 148 financing and other

Recoveries of loans 3,926 2,887 5,863 3,814 5,255 previously charged off

Net loans(charged off) (4,121) (11,116) (27,118) (6,314) 1,544 recovered

Provision for 22,150 40,280 24,603 2,216 6,580 credit losses

Balance at end $ 256,537 $ 238,508 $ 163,620 $ 166,135 $ 170,233 of period

Net charge-offs(recoveries) to 0.09 % 0.26 % 0.65 % 0.15 % (0.04) % average loans(annualized)



Allowance creditlosses related to OBS CreditExposures^(1)

Balance at beginning of $ 18,963 $ 2,588 $ 6,662 $ 6,708 $ 8,263 period

Impact of - 12,625 - - - adopting CECL

Provision for (2,580) 3,750 (4,074) (46) (1,555) credit losses

Balance at end $ 16,383 $ 18,963 $ 2,588 $ 6,662 $ 6,708 of period



NON-PERFORMING ASSETS:

Non-accrual $ 125,037 $ 120,345 $ 125,098 $ 124,287 $ 133,118 loans

Loans 90 days past due and 14,767 19,593 16,057 11,689 14,598 accruing

Total non-performing 139,804 139,938 141,155 135,976 147,716 loans

Other real 5,418 6,593 6,831 7,706 7,241 estate owned

Total non-performing $ 145,222 $ 146,531 $ 147,986 $ 143,682 $ 154,957 assets



NON-PERFORMING LOANS, BY TYPE:

Commercial and $ 39,730 $ 41,318 $ 49,491 $ 37,126 $ 47,260 industrial

Real estate - commercial 42,374 36,538 37,279 45,710 43,850 mortgage

Real estate - residential 22,887 25,832 22,411 20,150 21,659 mortgage

Consumer and 11,911 11,226 11,026 11,012 12,378 home equity

Real estate - 4,525 4,379 4,306 4,312 4,632 construction

Equipment lease 18,377 20,645 16,642 17,666 17,937 financing and other

Total non-performing $ 139,804 $ 139,938 $ 141,155 $ 135,976 $ 147,716 loans



(1) The allowance for credit losses related to OBS Credit Exposures ispresented in "other liabilities" on the consolidated balance sheets.

FULTON FINANCIAL CORPORATIONRECONCILIATION OF NON-GAAP MEASURES (UNAUDITED)in thousands, except per share data and percentages This press release contains supplemental financial information, as detailed below, which has been derived by methods other than Generally Accepted Accounting Principles ("GAAP"). The Corporation has presented these non-GAAP financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluationExplanatory of companies in the Corporation's industry. Management believesnote: that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate the Corporation's results. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow:



Three months ended

Jun 30 Mar 31 Dec 31 Sep 30 Jun 30

2020 2020 2019 2019 2019

Shareholders'equity (tangible), pershare

Shareholders' $ 2,340,501 $ 2,285,748 $ 2,342,176 $ 2,324,016 $ 2,308,798 equity

Less: Goodwilland intangible (535,039) (535,171) (535,303) (534,178) (535,249) assets

Tangibleshareholders' $ 1,805,462 $ 1,750,577 $ 1,806,873 $ 1,789,838 $ 1,773,549 equity(numerator)



Sharesoutstanding, end 161,958 161,435 164,218 164,036 166,903 of period(denominator)



Shareholders'equity $ 11.15 $ 10.84 $ 11.00 $ 10.91 $ 10.63 (tangible), pershare



Return on average shareholders' equity (tangible)

Net income $ 39,559 $ 26,047 $ 47,789 $ 62,108 $ 59,780

Plus: Intangibleamortization, net 104 104 112 846 85 of tax

(Numerator) $ 39,663 $ 26,151 $ 47,901 $ 62,954 $ 59,865



Averageshareholders' $ 2,309,133 $ 2,337,016 $ 2,341,397 $ 2,315,585 $ 2,301,258 equity

Less: Averagegoodwill and (535,103) (535,235) (534,190) (535,184) (535,301) intangible assets

Average tangibleshareholders' $ 1,774,030 $ 1,801,781 $ 1,807,207 $ 1,780,401 $ 1,765,957 equity(denominator)



Return on averageshareholders' 8.99 % 5.84 % 10.52 % 14.03 % 13.60 % equity (tangible),annualized



Tangible CommonEquity to Tangible Assets(TCE Ratio)

Shareholders' $ 2,340,501 $ 2,285,748 $ 2,342,176 $ 2,324,016 $ 2,308,798 equity

Less: Goodwilland intangible (535,039) (535,171) (535,303) (534,178) (535,249) assets

Tangibleshareholders' $ 1,805,462 $ 1,750,577 $ 1,806,873 $ 1,789,838 $ 1,773,549 equity(numerator)



Total $ 24,617,863 $ 22,929,859 $ 21,886,040 $ 21,703,618 $ 21,308,670 assets

Less: Goodwilland intangible (535,039) (535,171) (535,303) (534,178) (535,249) assets

Total tangibleassets $ 24,082,824 $ 22,394,688 $ 21,350,737 $ 21,169,440 $ 20,773,421 (denominator)



Tangible CommonEquity to 7.50 % 7.82 % 8.46 % 8.45 % 8.54 % Tangible Assets



Efficiency ratio

Non-interest $ 143,006 $ 142,552 $ 138,974 $ 146,770 $ 144,168 expense

Less: Intangible (132) (132) (142) (1,071) (107) amortization

Less:Amortization of (1,450) (1,450) (1,505) (1,533) (1,492) tax creditinvestments

Less: Prepaymentpenalty of FHLB (2,878) - - (4,326) - advances

Non-interestexpense $ 138,546 $ 140,970 $ 137,327 $ 139,840 $ 142,569 (numerator)



Net interestincome (fully $ 155,854 $ 163,970 $ 162,479 $ 164,517 $ 167,794 taxableequivalent)

Plus: TotalNon-interest 55,922 54,644 55,281 59,813 54,316 income

Less: Investmentsecurities gains, (3,005) (46) - (4,492) (176) net

Net interestincome $ 208,771 $ 218,568 $ 217,760 $ 219,838 $ 221,934 (denominator)



Efficiency ratio 66.4 % 64.5 % 63.1 % 63.6 % 64.2 %



Non-performing assets to shareholders' equity (tangible) and ACL - loans(1)

Non-performingassets $ 145,222 $ 146,531 $ 147,986 $ 143,682 $ 154,957 (numerator)



Tangibleshareholders' $ 1,805,462 $ 1,750,577 1,806,873 1,789,838 $ 1,773,549 equity

Plus: ACL - loans 256,537 238,508 163,622 166,135 170,233

Tangibleshareholders' equity $ 2,061,999 $ 1,989,085 $ 1,970,495 $ 1,955,973 $ 1,943,782 and ACL - loans(denominator)



Non-performing assetsto tangible 7.04 % 7.37 % 7.51 % 7.35 % 7.97 % shareholders' equityand ACL - loans





Asset Quality, excluding PPP

Non-performing $ 139,804 $ 139,938 $ 141,155 $ 135,976 $ 147,716 loans (numerator)



Loans, net of $ 18,704,722 $ 17,077,403 $ 16,837,526 $ 16,686,866 $ 16,368,458 unearned income

Less: PPP loans (1,937,034) - - - -

Total adjustedloans $ 16,767,688 $ 16,767,688 $ 16,767,688 $ 16,767,688 $ 16,767,688 (denominator)



Non-performingloans to adjusted 0.83 % 0.83 % 0.84 % 0.81 % 0.88 % total loans



ACL - loans $ 256,537 $ 238,508 163,622 166,135 $ 170,233 (numerator)



Loans, net of $ 18,704,722 $ 17,077,403 $ 16,837,526 $ 16,686,866 $ 16,368,458 unearned income

Less: PPP loans (1,937,034) - - - -

Total adjustedloans $ 16,767,688 $ 17,077,403 $ 16,837,526 $ 16,686,866 $ 16,368,458 (denominator)



ACL - loans toadjusted total 1.53 % 1.40 % 0.97 % 1.00 % 1.04 % loans



Pre-provision net revenue

Net interest $ 152,754 $ 160,746 $ 159,270 $ 161,260 $ 164,544 income

Non-interest 55,922 54,644 55,281 59,813 54,316 income

Less:Investment (3,005) (46) - (4,492) (176) securitiesgains, net

Total revenue $ 205,671 $ 215,344 $ 214,551 $ 216,581 $ 218,684



Non-interest $ 143,006 $ 142,552 $ 138,974 $ 146,770 $ 144,168 expense

Less:Prepayment (2,878) - - (4,326) - penalty ofFHLB advances

Less:Amortization (1,450) (1,450) (1,505) (1,533) (1,492) on tax creditinvestments

Less:Intangible (132) (132) (142) (1,071) (107) amortization

Totalnon-interest $ 138,546 $ 140,970 $ 137,327 $ 139,840 $ 142,569 expense



Pre-provision $ 67,126 $ 74,374 $ 77,224 $ 76,741 $ 76,115 net revenue



Note: numbers may not sum due to rounding.

(1) "ACL - loans" relates to the ACL specifically on "Loans, net of unearnedincome" and does not include the ACL related to OBS credit exposures.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200721005932/en/

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