Good morning, ladies and gentlemen. Welcome to the Fulton Financial Corporation’s Second Quarter Earnings Call. This call is being recorded. I will now turn the call over to Laura Wakeley, Senior Vice President of Corporate Communications.

Thank you, Stephanie. Good morning everyone and thanks for joining us for our conference call and webcast to discuss earnings for the second quarter of 2014. Your host for today's conference call is Phil Wenger, and Phil is Chairman, President and Chief Executive Officer of Fulton Financial, and joining him is Pat Barrett, Senior Executive Vice President and Chief Financial Officer. Our comments today will refer to the financial information included with our earnings announcement, which we released at 4:30 yesterday afternoon. These documents can be found on our website at fult.com by clicking on Investor Relations and then on News. On this call, representatives of Fulton may make forward-looking statements with respect to Fulton's financial condition, results of operations and business. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond Fulton's control and difficult to predict and which could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Fulton undertakes no obligation, other than required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In our earnings release, we've included our Safe Harbor statement on forward-looking statements, and we refer you to this section, and incorporate it into today's presentation. For a more complete discussion of certain risks and uncertainties affecting Fulton, please see the sections entitled Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations set forth in our filings with the SEC. In discussing Fulton’s performance, representatives of Fulton may refer to certain non-GAAP financial measures. Please refer to the supplemental financial information included with the earnings announcement we released yesterday for a reconciliation of those non-GAAP financial measures to the most comparable GAAP measures. Now I’d like to turn the call over to your host, Phil Wenger.

Thank you, Laura. Good morning, everyone and thank you for joining us. After my prepared remarks, our Chief Financial Officer, Pat Barrett will review our financials in detail. Then we will both respond to your questions. We reported diluted per share earnings of $0.21, down $0.01 from the first quarter and unchanged from the second quarter of last year. Our return on average assets came in at 0.94% and our return on average tangible shareholder equity was 10.3%. We were pleased to see a modest resumption of our loan growth. Linked quarter we grew lending loans by $106 million and average loans by $33 million. Our focus on quality earning asset growth continues. Commercial and small business loan pipelines increased linked quarter. That being said, our relationship managers tell us that pressure on loan pricing continues. On the liability side of the balance sheet, we successfully implemented our promotional strategy to lock in longer CD funding to guard against rising rates. Average time deposit balances increased by 2.7%. We also saw our core deposits increase by 0.6% as a result of continued growth in core households. As long as the current interest rate and competitive environment continues, our net interest margin is likely to undergo further pressure. But we feel we are well positioned for margin expansion when interest rates rise, and Pat will provide more details in his financial discussion. Overall asset quality improved further this quarter. We saw decreases in non-performing loans, non-accrual loans, classified and criticized loans and in overall delinquency. Total nonperforming assets fell to 0.96%. That is the first time we have seen that number below 1% since the second quarter of 2008. Our other income grew a very strong 14% linked quarter excluding security gains. All business lines contributed to this overall lift. These…

Thank you, Phil and good morning to everyone on the call. Unless I note otherwise, quarterly comparisons will be with the first quarter of 2014. As Phil noted, earnings per diluted share this quarter were $0.21 on net income of $40 million, which represents a $2.1 million or 5.2% decrease in earnings compared to the prior period. Earnings per share was flat compared to the second quarter of 2013. The decrease in earnings resulted from higher non-interest expense, lower net interest income and an increase in the provision for loan losses, partially offset by growth in non-interest income. Net interest income decreased $1.7 million or 1.3% due mainly to the effect of a 6 basis point decline in our net interest margin. The impact of this decline was partially offset by an additional day in the quarter which generated approximately $1.1 million in net interest income. Average yield on interest earning assets decreased 5 basis points. Average earning assets decreased $38 million or 0.2% as the decline in average investment securities of $56 million was partially offset by an increase in average loan balances of $33 million. After steady improvement in 2013, new loan origination yields have flattened out in 2014 to a second quarter level of just below 4%, while rates on maturing loans have continued to come down and are just over 4% at this point. This has closed the negative gap between maturities and new originations to less than 10 basis points. The average cost of interest bearing liabilities increased 2 basis points. This resulted from the success of time deposit promotions intended to lock in longer term rates. Average deposits increased $132 million or 1.1% due to a $52 million increase in demand and savings accounts and an $80 million increase in time deposits. Growth in…

(Operator instructions). And we go first to Chris McGratty with KBW Financial. Chris McGratty – KBW Financial: Pat, on your prepared remarks on the expenses, I just want to make sure I heard you. Once you get through the next two quarters, it was a $5 million annual reduction in just the professional services line. Is that the right way to think about it?

That’s right. It was Phil who mentioned that, but I think that’s the right way to think about it. Chris McGratty – KBW Financial: Okay. And I guess with other expense initiatives that are ongoing, how should we think about kind of confidence that the BSA issues are largely behind you by the end of this year? I mean have you -- are all the systems kind of invested already? And maybe you could speak to it maybe in terms of the efficiency ratio next year.

Chris, this is Phil. And we do have some technology initiatives put into place over the next six months. And we’re working actively on those. It's really going to be I think two phase. The first phase will be starting shortly and will have little impact on the next expense standpoint. And then the second phase will be next year, and its impact from an expense standpoint should not be substantial on a quarterly basis either. And so we are as we were last year at this time, we are reviewing all expense categories again and everything is on the table. And we’ve -- our target has been on efficiency ratio to be between 60 and 65, and that’s going to be our goal for next year also. Chris McGratty – KBW Financial: Okay, so 60% to 65% with all of this investment is kind of the way to think about it next year. Okay. On capital, you guys didn't buy stock in the second quarter. What are your limitations if any with the consent owner, and how aggressively can you buy stock kind of over the next couple quarters?

So, Chris when we heard from the regulators regarding that purchase program, the $4 million shares that we announced, I think we had one or two days that prior to the blackout beginning. And that’s why we didn’t repurchase any in the second quarter. We would have no restrictions as soon as the blackout ends this week.

And we’ll go now to Casey Haire with Jefferies. Casey Haire – Jefferies & Company: Good morning guys. Just wanted to follow up on Chris's comments on the expense relief. So if I'm hearing this correctly, so professional services gets $5 million of relief next year. And assuming that it runs elevated in the second half; you are more or less expecting professional fees to run around $8 million or $9 million next year from the baseline of $13 million or $14 million. Is that correct?

No. First off, we are only talking about professional fees as they relate to outside services. The $9 million that we’ve expended to date that I mentioned I think half of that was in 2012, and half in 2013 and 2014. So we’re looking at outside services related to BSA this year, only this year to be in the $8 to $10 million range. And we think that number will be decreased by approximately $5 million from next year. Casey Haire – Jefferies & Company: Okay. And then that comes down, and then the full-time employees that you hire add -- did you mentioned, Phil, was $600,000 of expense annually that would show up in the comp line?

That would be an additional 600 annually, yes from where we are right now. Casey Haire – Jefferies & Company: Okay. And then Phil, just -- I mean, I'm sorry, Pat -- to focus in on the comp line, you kind of ran through some of the ins and outs this quarter. It did seem a little surprising to see it up this much, with incentive comp kind of driving it in a quarter where EPS is down. Can you just walk through some of the drivers and what might be, if anything, temporary this quarter?

Yeah, so just -- this is Phil. On the incentive comp, in the first quarter as we outlined in our proxy information, first the executive bonuses were reduced by 30% because of where we stood. But we had had accrued for 100%. So the first quarter incentive comp was a much lower number because of that reversal, about $2.5 million. The second quarter’s is an accrual number that at the end of the year may or may not get adjusted again. Does that add some color to that? Casey Haire – Jefferies & Company: Yes, no that’s helpful. Thank you. And then just lastly on the NIM guide, it sounds like there’s a little bit of pressure coming here. Just curious, is this all -- is the NIM guide predicated on assume all asset yield pressure, or are you expecting funding costs to rise as well?

I think it’s a combination of both. I think that the days of seeing declining funding costs are certainly behind us and we’ve enjoyed very flat funding costs for a number of quarters. Liquidity and liquidity preferences have remained pretty high and I think that we are gearing up for a more competitive interest environment. And focusing as always a great deal of our energy on our funding mix and feel pretty good about testing the waters and being able to lock in $200 million, $225 million of three to five year funding at the rates that we did this quarter. Casey Haire – Jefferies & Company: Okay, and just new money yield on loan production these days versus that 4.21%?

I think we are in the 390 range, similar to last quarter.

And we’ll go now to David Bishop with Drexel Hamilton. David Bishop – Drexel Hamilton: The increase of the 50 professionals, those are -- I just want to confirm those are, you were talking about full-time employees as you move forward for the BSA department?

That is correct. David Bishop – Drexel Hamilton: Okay, great. And then shifting topics real quick in terms of the nature of loan growth, just curious if you can speak to some of the markets where you saw the pockets of loan growth this quarter?

So a good question, we actually saw growth in all the states that we operate in, in both ending loan growth in each State and we also saw upticks in pipelines in every area. David Bishop – Drexel Hamilton: Got you. And then one follow-up in terms of the loan yields. So, a little bit of a pop on the construction loan yields. Anything going on there in terms of firming up pricing, increasing spreads that you are seeing in that segment?

I wouldn’t necessarily say that we are seeing increases in spreads. That really can be impacted by one or two specific deals because of the size of the portfolio.

And we go next to David Darst with Guggenheim Securities David Darst – Guggenheim Securities: Phil, I think in the past couple quarters you talked about introducing some loan campaigns to stimulate growth. Just wondered if you had any specifics kind of around the success, or do you expect it to be more successful with the pipeline growth?

So the -- one of those is on the consumer side and I would say that our consumer pipeline right now is as large as it’s been in recent memory. We think that’s been pretty successful and then the other would be on the commercial real estate. And we think we are also seeing some success from that program. David Darst – Guggenheim Securities: Okay. Is commercial real estate one of the areas where you are seeing more of the competition, or is it in C&I?

Well, the most intense competition is in the C&I area. I mean there’s competition in every loan-pricing category, but it’s worse in the C&I area than the commercial real estate. David Darst – Guggenheim Securities: Okay. And then as you are working through the series of investments you've had over the past 18 months, you kind of -- the BSA part now, you’ve done stress testing, done your core system. Is any of the strength in the case to consolidate some of your subsidiary banks further?

Well, as I mentioned, we’re looking at all our expenses. And I think everything is on the table, and that would be included in the everything category. David Darst – Guggenheim Securities: Do you have any way to frame what the cost saves could be from doing that?

Yeah. We’re going to be looking at it very closely over the next quarter. And I think we would be able to frame that out for you before the end of the year.

We go now to Matthew Kelley with Sterne, Agee. Chris Jackson – Sterne Agee & Leach: Hi, this is actually Chris Jackson for Matthew Kelley. Just a couple of questions. Can you tell us what the utilization rate for C&I loans in the quarter was, and how does it compare to first quarter and the year-ago period?

I can. So our utilization rate was 37.7%. That’s up slightly from the first quarter when it was 37.2%. It's down. Second quarter of ‘12, we were at 41.5%. Second quarter of ‘13, we were at 38.3%. Chris Jackson – Sterne Agee & Leach: Okay, great. Thanks. And then just one follow-up. How low could you take the loan-loss reserve coverage ratio from the 1.49% at period end?

Well, we’re still substantially ahead or higher than our peers. I think at the end of the first quarter our peer average was somewhere around 120. So I would expect that in the near terms that it could continue to go down. But it's going to -- where it ends up is just going to depend on so many different factors. But in what we see right now, I would expect in the next couple quarters it would probably go down some.

(Operator instructions). And we go now to Matthew Keating with Barclays. Matthew Keating – Barclays: So as it relates to the BSA, the strengthening of your compliance procedures, so the 50 incremental employees, what base is that off of? Like so how many employees do you have involved in BSA compliance before you start to make these investments?

So in 2011 I think we might have been at 8. At the beginning of 2012, we had 13. Matthew Keating – Barclays: Got you. Okay, that’s helpful. Maybe you could just explain as you sort of strengthen these systems and procedures, so obviously you add people. But from a system standpoint, is this something you contract with a third-party outsource or is it more a system you have to build yourself? How does the investment in the systems actually work in practice? Thanks.

It's a combination. So we would buy outside software and then we would tailor it to fit our specific framework. Matthew Keating – Barclays: Okay, understood. So at least the systems cost plateau, would you think they’d plateau by the end of this year and then just stay in a run rate and then some of the professional and outside services fees as you mentioned roll off? Is that the best way to think about some of these investments that you're making on the technology side?

Actually the technology investments will be more in -- the cost will be more in 2015 than 2014. And so we’re putting in one system. We’ve started that now. You don’t start amortizing it till it’s completely up and running, which probably will be by the end of the year and then the second system probably we’ll begin amortizing in the June to September timeframe of next year. Matthew Keating – Barclays: Okay. And I guess just generally, we have seen a lot -- a few banks mention the need to sort of strengthen BSA compliance. Is it your feeling that regulators are taking a harder line on this issue? I mean certainly that is what everyone thinks, but maybe you could just talk about whether you were surprised by this level of investment that’s required? Or do you think your peers are also facing similar type of reviews? Thanks.

Well, if you were to ask me in early 2011 would we ever have this many people in our BSA area, I would have told no way. But as we have been strengthening, we think it’s now the appropriate number. I guess you can interpret that answer any way you want to. Matthew Keating – Barclays: No, that’s helpful. I appreciate all the color. Thank you.

And we go now to Bob Ramsey with FBR Capital Markets. Travis Potts – FBR Capital Markets: Good morning. This is Travis Potts for Bob. I just wanted to clarify, I think you said you had $9 million to date. And I think you said that was related to the outside services. Do you have how much expenses you’ve incurred in total for the enhancements to your BSA/AML platform?

Yeah, so just to go through those numbers again. We’ve -- outside services since 2012 have been $9 million to date. We are expecting another $4 million to $6 million. So, that puts us at $14 million, $15 million on the outside services. Our salaries will increase -- from that same time period our salaries will have increased another $3.5 million. And then we would expect not all of the outside services are going to go away next year. A good chunk of them, but I would expect another $2 million to $4 million of outside services next year. If you add it all up it’s going to be I would say between $20 million and $25 million. Travis Potts – FBR Capital Markets: Okay, thank you for the clarification. And then do you expect this enforcement order to sort of preclude you from any acquisition or any other growth activities?

Yes, I would. And we’ll get more clarification on that as we move through, but certainly in the short term the answer is yes. And if I could just add, as we’ve been saying we really didn’t anticipate being active in the acquisition area for at least the coming 12 months. I think we’ve been pretty clear in communicating that.

And we’ll go to Blair Brantley with BB&T Capital Markets. Blair Brantley – BB&T Capital Markets: I had a question about the loans to deposit ratio, and just kind of your thoughts around that. I had a question about the loan to deposit ration and kind of what your thoughts are around it being north of 100% and any type of plans you may have to get it below that threshold.

So it is north of 100%, but barely north. We are comfortable where we are, but we don’t want to see large increases from where we are. We try to manage between that 97% to 103%. Blair Brantley – BB&T Capital Markets: Okay. And do you expect to do any more types of deposit promotions going forward, similar to what you’ve done recently?

So our current strategy has been, our most recent strategy has been to try to extend the duration of our deposit base. And we are going to selectively continue that strategy as we move forward. Blair Brantley – BB&T Capital Markets: Okay and then one last question regarding service charges. Obviously, they have been on a downward trend. Is that purely customer behavior? Is there anything else going on there?

That would be a primarily a customer behavior and hopefully we’ve hit the bottom and we are going to start seeing growth again.

I’d also add that just from a lot of those line items across our income statement and in fee income particularly, a function of the amount of time people have to swipe and spend and invest in the first quarter was more than just one day less. In our markets it was several days less because of weather. So we are definitely seeing a rebound just because of the more other fingers in the air normal type of run rate of quarter end activity which is good to see. Blair Brantley – BB&T Capital Markets: Right, but they are still down 14% year-over-year. So are we closer to a bottom then, you think, with those year-over-year kind of changes?

I think we are, yes.

We go now to Frank Schiraldi with Sandler O'Neill. Frank Schiraldi – Sandler O'Neill: Good morning. Just two questions. Just one, just wondering your thoughts, Phil, on the other subs that you may get some sort of enforcement agreement on BSA. Just wondering your thoughts on how good a handle you think you have on what those potential consent orders could entail in terms of expense. Do you feel like that is very much baked into guidance here, or could we see potential tick-up if and when those are put in place?

We think it’s baked in. The function is a centralized function at the holding company. We think that they’ll be similar if and when they occur, but you never know. Frank Schiraldi – Sandler O'Neill: Right. Okay. And then just on -- sorry if I missed it, but just on loan growth, expectations going forward. I believe in the past, perhaps last call, you talked about maybe a 3% to 7% annualized loan growth expectation. Is that still viable given what we have seen first half of the year? Should we maybe anticipate towards the lower end of that range, or what are your thoughts for the back half of the year here?

So we do think based on what we see today that we can still get within that range. I’d say there is a better chance that we’ll be at the lower end of the range than the higher end.

We go to Chris McGratty with KBW Financial. Chris McGratty – KBW Financial: Yes, just a follow-up Phil. In the past we’ve talked about your (inaudible) borrowing costing almost 5%. We are a couple years removed from those conversations, but presumably the penalty may be a little bit less. Is there any -- and your capital levels are building, right? Is there any discussion about whether to take them out and to extend the duration that way?

Yeah, Chris, most of that comes due in ‘16 and ‘17 and we are looking at that again, but there still are penalties. So I’m not sure how it’s going to work out, but are still are substantial penalties. We are taking a look at it. If it makes sense we would definitely consider it, but I can’t tell you positive either way right now. Chris McGratty – KBW Financial: Okay. And then one for Pat. The investment portfolio, how should we be thinking about the near-term size? Is it going to be used to fund loan growth or should it grow at all?

I think we’d like to see it stay flat. We’ve had a tough time like everybody else finding yield that meets what we are looking for. But I wouldn’t expect to see it run off materially.

And with no further questions, I would like to turn the call back to you Mr. Phil Wenger.

Well, thank you all for joining us today. We hope you’d be able to be with us when we discuss third quarter results in October.