f11k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K

(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year end December 31, 2012

OR

( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from ______ to ______

COMMISSION FILE NUMBER 0-10587

Fulton Financial Corporation
401(k) Retirement Plan
(Full title of the Plan)

FULTON FINANCIAL CORPORATION
One Penn Square
Lancaster, PA 17602
(Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office)

_____________________________________________________________________________



 
 

 

FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN

FINANCIAL STATEMENTS
December 31, 2012 and 2011

 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN

Lancaster, Pennsylvania

FINANCIAL STATEMENTS
December 31, 2012 and 2011







CONTENTS







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                   1


FINANCIAL STATEMENTS

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS                                              2

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
  FOR BENEFITS                                                                                                                                 3

NOTES TO FINANCIAL STATEMENTS                                                                                       4


SUPPLEMENTAL SCHEDULES

SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)                       9


       SCHEDULE G, Part III – SCHEDULE OF NONEXEMPT TRANSACTIONS                             10
 
 
 

 
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


 
Retirement Plans Administrative Committee
Fulton Financial Corporation 401(k) Retirement Plan
Lancaster, Pennsylvania
 
We have audited the accompanying statements of net assets available for benefits of Fulton Financial Corporation 401(k) Retirement Plan as of December 31, 2012 and 2011, and the related statements of changes in net assets available for benefits for the years then ended.  These financial statements are the responsibility of the Plan's management.  Our responsibility is to express an opinion on these financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2012 and 2011, and the changes in net assets available for benefits for the years then ended in conformity with U.S. generally accepted accounting principles.
 
Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole.  The supplemental Schedule H, Line 4i – Schedule of Assets (Held at End of Year) and Schedule G, Part III – Schedule of Nonexempt Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  The supplemental schedules are the responsibility of the Plan's management.  The supplemental schedules have been subjected to the auditing procedures applied in the audit of the basic 2012 financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic 2012 financial statements taken as a whole.
 
 
 
 
 
 
Crowe Horwath LLP
 
Columbus, Ohio
July 1, 2013

1.
 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2012 and 2011
 

 

       
2012
   
2011
               
ASSETS
           
 
  Cash
   $
   212,911
 
16,049
 
  Investments at fair value (Note 4)
   
242,985,281
   
219,755,512
               
 
Receivables
           
 
    Other receivable
   
-
   
6,174
 
    Notes receivable from participants
   
19,886
   
43,999
 
    Accrued income
   
112,610
   
251,353
 
    Employer contribution
   
4,898,412
   
4,902,441
               
 
    Total receivables
   
5,030,908
   
5,203,967
               
 
Total assets
   
248,229,100
   
224,975,528
               
LIABILITIES
           
 
Security transaction payable
   
87,174
   
21,143
 
Administrative expenses payable
   
-
   
27,773
 
Total liabilities
   
87,174
   
48,916
               
 
Net assets available for benefits
   $
248,141,926
 
        224,926,612






See accompanying notes to financial statements.

2.
 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years ended December 31, 2012 and 2011



       
2012
   
2011
Additions to net assets attributed to:
       
 
Investment income (loss)
         
   
Net appreciation (depreciation) in fair
         
   
  value of investments (Note 4)
  $
20,405,495
 
(6,569,259)
   
Interest and dividends
 
5,511,405
   
3,924,133
       
25,916,900
   
(2,645,126)
               
 
Contributions
         
   
Employer contributions
 
11,549,396
   
11,008,846
   
Participant contributions
 
10,197,008
   
9,510,419
   
Participant rollovers
 
459,671
   
668,339
       
22,206,075
   
21,187,604
               
 
       Total additions
 
48,122,975
   
18,542,478
               
Deductions from net assets attributed to:
       
 
Benefits paid to participants
   
24,801,818
   
17,341,386
 
Administrative expenses
   
105,843
   
136,618
 
       Total deductions
 
24,907,661
   
17,478,004
               
Net increase
 
23,215,314
   
1,064,474
               
Net assets available for benefits
         
 
Beginning of year
   
224,926,612
   
223,862,138
               
 
End of year
   $
248,141,926
 
224,926,612
               




See accompanying notes to financial statements.

3.
 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011



NOTE 1 - DESCRIPTION OF PLAN

The following description of the Fulton Financial Corporation 401(k) Retirement Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete
description of the Plan’s provisions.

General: The Plan’s eligibility requirements include substantially all employees of Fulton Financial Corporation (the “Company” or the “Employer”) and its subsidiaries. Eligible employees who have
completed 90 days of service and who have attained age 21 may make employee contributions to the Plan. To receive an employer matching contribution, an employee must complete a year of service and
attain age 21. The Plan provides for retirement, death, and disability benefits. The Plan is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

In connection with the mergers of certain qualified defined contribution plans into the Plan, the Plan shall receive and accept certain promissory notes from unpaid loans previously made by these qualified plans to participants.

Contributions: The employer profit sharing contribution is discretionary and is allocated uniformly on the basis of compensation. To be eligible for an employer profit sharing contribution, an employee had (1) to be hired prior to July 1, 2007 and be eligible to participate in this Plan under the eligibility requirements in effect on that date or (2) to be an active participant in the Fulton Financial Affiliates Defined Benefit Pension Plan as of December 31, 2007.  For the years ended December 31, 2012 and 2011, an employer profit sharing contribution of 5% of eligible compensation was made to eligible participants.

Eligible employees may elect to contribute 1% to 50% of eligible compensation not to exceed the maximum allowed by law. Any participant who has attained age 50 by the end of the Plan year may make
catch-up contributions in accordance with Code Section 414(v).

The employer shall make a matching contribution equal to 100% of the first 5% of compensation deferred. Participants direct the investment of their participant and employer contributions into various investment options offered by the Plan.

Participant Accounts: Each participant’s account is credited with the participant’s contributions, an allocation of the Company contributions and Plan earnings/(losses) and charged with his or her withdrawals. Allocations are based on participant earnings or account balances, as defined in the Plan. The benefit to which a participant is entitled is the vested benefit that can be provided from the participant’s account.

Retirement, Death and Disability: A participant is entitled to 100% of his or her account balance upon retirement, death or disability.

Vesting: Participants are immediately vested in their voluntary, employer matching, and rollover contributions plus actual earnings thereon. Vesting in the remainder of the accounts is based on years of
service. Participants become 100% vested after completion of five years of credited service.

Participants of the Resource Bank subsidiary shall be vested based on a two year cliff vesting schedule for employer contributions made prior to January 1, 2009.

Payment of Benefits: Upon termination of service, death, disability or retirement, a participant may elect to receive an amount equal to the value of the participant’s vested interest in his or her account. Benefit payments are distributed as either a lump sum or in installment payments over a period. The period over which benefits are paid is not to exceed either the life expectancy of the participant or the joint life expectancies of the participant and the participant’s beneficiary.



(Continued)

4.
 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011
 
 




NOTE 1 - DESCRIPTION OF PLAN (Continued)

Forfeitures: Forfeitures represent the nonvested portion of the participant’s account plus earnings thereon that are not fully distributable to participants who terminate employment before they are 100% vested. Forfeitures are used to reduce the future contributions to the Plan. Forfeitures used to reduce the employer contributions for the plan years ended December 31, 2012 and 2011 were $16,846 and $70,755, respectively.

Expenses: Fees incurred in the administration of the Plan are paid by the Plan or the Company. Fees paid by the Plan for investment management services are included as reduction of the return earned by each fund. Any rebates on investment fees received by the trustee on behalf of the Plan are deposited into the Plan and are reflected in the applicable fund investment returns.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Basis: The Plan’s financial statements are prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures, and actual results may differ from these estimates.

Risk and Uncertainties: The Plan provides for various investment options including any combination of certain mutual funds or common stock of the Company. Investment securities are exposed to various risks, such as interest rate, market, liquidity, and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of net assets available for benefits and participants’ individual account balances.

Investment Valuation and Income Recognition: The Plan’s investments are reported at fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date.

Fair value is the price that would be received by the Plan for an asset or paid by the Plan to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date in the Plan’s principal or most advantageous market for the asset or liability. Fair value measurements are determined by maximizing the use of observable inputs and minimizing the use of unobservable inputs. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (level 1 measurements) and gives the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs within the fair value hierarchy are defined as follows:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Plan has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are
observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect the Plan’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.



(Continued)

5.
 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011






NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

In some cases, a valuation technique used to measure fair value may include inputs from multiple levels of the fair value hierarchy. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy.

The fair values of mutual fund investments and publicly traded common stocks are determined by obtaining quoted prices on nationally recognized securities exchanges (level 1 inputs).

Investments measured at fair value on a recurring basis are summarized below:

       
Fair Value Measurements
at December 31, 2012 Using
       
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Investments:
       
     Mutual Funds
       
          Equity Mutual Funds
 
$  130,847,366
          Fixed Income Mutual Funds
 
60,449,041
          Blended Mutual Funds
 
29,851,302
     Common Stock
   
          Fulton Financial Corporation common stock
 
21,837,572
         
There were no transfers between Level 1 and Level 2 during 2012.

       
Fair Value Measurements
at December 31, 2011 Using
       
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Investments:
       
     Mutual Funds
       
          Equity Mutual Funds
 
$  115,494,440
          Fixed Income Mutual Funds
 
56,191,469
          Blended Mutual Funds
 
24,172,364
     Common Stock
   
          Fulton Financial Corporation common stock
 
23,897,239
         
There were no transfers between Level 1 and Level 2 during 2011.





(Continued)

6.
 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011






NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration of Credit Risk: At December 31, 2012 and 2011, approximately 9% and 11% of the Plan’s assets were invested in Fulton Financial Corporation common stock, respectively.

Notes Receivable from Participants: Notes receivable from participants are reported at their unpaid principal balance plus any accrued but unpaid interest, with no allowance for credit losses, as repayments of principal and interest are received through payroll deductions and the notes are collateralized by the participants’ account balances.

Payment of Benefits: Benefits are recorded when paid.

NOTE 3 - RIGHTS UPON PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants would become 100% vested in their accounts.

NOTE 4 – INVESTMENTS

The following presents investments that represent 5 percent or more of the Plan’s net assets available for benefits (at fair value).

     
December 31, 2012
     
Units or Shares
 
Fair Value
           
 
Fulton Financial Corporation Common Stock
 
2,272,380
 
$ 21,837,572
 
American Century Heritage Fund
 
775,026
 
17,732,591
 
Loomis Sayles Small Cap Value Fund
 
462,497
 
13,907,280
 
Vanguard 500 Index Fund
 
216,782
 
23,525,228
 
Goldman Sachs Financial Square Government Fund
 
22,556,485
 
22,556,485
 
MFS Value Fund
 
691,759
 
17,612,179
 
MFS Research International Fund
 
910,680
 
14,343,211
 
Federated Total Return Bond Fund
 
2,714,668
 
31,028,659
 
T Rowe Price Growth Stock Fund
 
    676,113
 
25,543,542
           

     
December 31, 2011
     
Units or Shares
 
Fair Value
           
 
Fulton Financial Corporation Common Stock
 
2,436,008
 
$ 23,897,239
 
American Century Heritage Fund
 
790,833
 
15,879,918
 
Loomis Sayles Small Cap Value Fund
 
496,725
 
12,979,435
 
Vanguard 500 Index Fund
 
210,987
 
20,180,950
 
Goldman Sachs Financial Square Government Fund
 
21,681,108
 
21,681,108
 
MFS Value Fund
 
696,985
 
15,661,242
 
MFS Research International Fund
 
921,799
 
12,656,300
 
Federated Total Return Bond Fund
 
2,453,001
 
27,669,965
 
T Rowe Price Growth Stock Fund
 
701,157
 
22,317,843
           




(Continued)

7.
 
 

 
FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2012 and 2011






NOTE 4 - INVESTMENTS (Continued)

During 2012 and 2011, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated/(depreciated) in value by $20,405,495 and $(6,569,259), respectively, as follows:

   
2012
   
2011
           
Mutual Funds
$
20,797,803
 
$
(8,149,632)
Collective Trust Fund
 
-
   
2,736,434
Fulton Financial Corporation Common Stock
 
(392,308)
   
(1,156,061)
 
$
20,405,495
 
$
(6,569,259)
           
           
           


NOTE 5 - TERMINATED PARTICIPANTS

Included in net assets available for benefits are amounts allocated to individuals who have elected to withdraw from the Plan, but who have not yet been paid.  Plan assets allocated to these participants were $23,320 at December 31, 2012 and $351,909 at December 31, 2011.


NOTE 6 - PARTIES-IN-INTEREST

Parties-in-interest are defined under Department of Labor Regulations as any fiduciary of the Plan, any party rendering service to the Plan, the employer, and certain others. Certain professional fees for the administration of the Plan were paid by the Company. Fees paid by the Plan to Conrad Siegel for recordkeeping services totaled $440 and $38,914 for 2012 and 2011, respectively. Fees paid to Fulton Financial Advisors (FFA) related to benefits paid to participants and recordkeeping services totaled $75,165 and $64,946 for 2012 and 2011, respectively. Fees paid to Crowe Horwath LLP, the auditor for the Plan, totaled $28,300 and $31,600 for 2012 and 2011, respectively. Fees paid to Newkirk Products totaled $1,938 and $1,158 for 2012 and 2011, respectively.

At December 31, 2012 and 2011, the Plan had investments of $21,837,572 and $23,897,239, respectively, in Fulton Financial Corporation common stock.  Approximately $692,089 and $407,555 of cash dividends were paid to the Plan by Fulton Financial Corporation during 2012 and 2011, respectively. Notes receivable from participants also reflect party-in-interest transactions.

Certain immaterial rebates on investment fees received by FFA were not deposited into the Plan on a timely basis which constituted non-exempt transactions under ERISA with a party-in-interest.  Management finished correcting these transactions in accordance with the applicable regulatory guidelines during 2012.


NOTE 7 - TAX STATUS

The Internal Revenue Service has determined and informed the Company by a letter dated April 23, 2004, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (“IRC”). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in material compliance with the applicable requirements of the IRC.



8.
 
 
 
 

 
 
SUPPLEMENTAL SCHEDULES

 

 
 

 
FULTON FINANCIAL CORPORATION
401(K) RETIREMENT PLAN
SCHEDULE H, LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2012




Name of Plan Sponsor:    Fulton Financial Corporation                                                    
 
EIN:                23-2195389                                          
 
Plan number:             001                                  
 

 
 
 
 
(a)
 (b)
Identity of Issue, 
Borrower, Lessor, 
or Similar Party
 (c)
Description of Investment Including
Maturity Date, Rate of Interest
Collateral, Par or Maturity Value
 
 
     (d)
    Cost
 
      (e)
    Current
    Value
 
 

     
Mutual Funds
       
               
 
Vanguard
 
Vanguard 500 Index Fund
 
ü
$
23,525,228
 
Vanguard
 
Vanguard Small Cap Value Index Fund
 
ü
 
3,686,265
 
Vanguard
 
Vanguard Mid Cap Index Fund
 
ü
 
3,501,399
 
Vanguard
 
Vanguard Star Fund
 
ü
 
3,260,687
 
Goldman Sachs & Co.
 
Goldman Sachs Financial Square
       
     
  Government Fund
 
ü
 
22,556,485
 
Goldman Sachs & Co.
 
Goldman Sachs Mid Cap Value Fund
 
ü
 
4,448,208
 
Fidelity Investments
 
Fidelity Advisor Small Cap Value Fund
 
ü
 
3,286,776
 
Loomis Sayles
 
Loomis Sayles Small Cap Value Fund
 
ü
 
13,907,280
 
MFS Investment
           
 
  Management
 
MFS Research International Fund
 
ü
 
14,343,211
 
MFS Investment
           
 
  Management
 
MFS Value Fund
 
ü
 
17,612,179
 
Goldman Sachs & Co.
 
Goldman Sachs Financial Square
     
21,261
     
  Prime Institutional Fund
 
ü
   
 
Federated
           
 
  Investors, Inc.
 
Federated Total Return Bond Fund
 
ü
 
31,028,659
 
T Rowe Price
 
T Rowe Price New Income Fund
 
ü
 
6,842,636
 
T Rowe Price
 
T Rowe Price Growth Stock Fund
 
ü
 
25,543,542
 
T Rowe Price
 
T Rowe Price Retirement 2010 Fund
 
ü
 
3,556,884
 
T Rowe Price
 
T Rowe Price Retirement 2020 Fund
 
ü
 
11,311,337
 
T Rowe Price
 
T Rowe Price Retirement 2030 Fund
 
ü
 
8,877,672
 
T Rowe Price
 
T Rowe Price Retirement 2040 Fund
 
ü
 
5,191,632
 
T Rowe Price
 
T Rowe Price Retirement 2050 Fund
 
ü
 
913,777
 
American Century
 
American Century Heritage Fund
 
ü
 
17,732,591
               
     
Common Stock
       
               
    *
Fulton Financial
           
 
  Corporation
 
Common Stock
 
ü
 
21,837,572
               
     
Participant Loans
       
               
    *
Plan Participants
 
Participant Loans interest rates
       
     
  ranging from 5.00% - 6.49%
 
ü
 
19,886
               
     
Total
   
$
243,005,167


* Party-in-interest
üAll investments are participant directed, therefore, historical cost information is not required.

 
 



 9.
 
 

 

 
 
 
 

 
 
 
 
 
 

 
 
 
 
 
 

 
 
 
 
 

 
 
 
 
 
 
 
 
 

 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the administrators of the Fulton Financial Corporation 401(k) Retirement Plan have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

FULTON FINANCIAL CORPORATION
401(k) RETIREMENT PLAN



Date: July 1, 2013
By: /s/ Louis Yoka                                        
       Louis Yoka
       Vice President, Compensation & Benefits




.
 
 

 

EXHIBIT INDEX


EXHIBIT DESCRIPTION

23.1  Consent of Independent Auditors