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Press release from GlobeNewswire (a Nasdaq OMX company)

Fulton Financial Reports 2010 Earnings

Tuesday, January 18, 2011

Fulton Financial Reports 2010 Earnings13:30 EST Tuesday, January 18, 2011 Diluted earnings per share for the fourth quarter of 2010 was 16 cents, unchanged from the third quarter of 2010. For the year ended December 31, 2010, diluted earnings per share was 59 cents, a 90.3 percent increase from 2009. The provision for credit losses was $40.0 million for the fourth quarter of 2010, which remained unchanged from the third quarter of 2010. Non-performing assets decreased $11.0 million, or 3.0 percent, in comparison to the third quarter of 2010. Annualized net charge-offs to average loans increased to 1.65 percent for the fourth quarter of 2010 from 1.19 percent for the third quarter of 2010. During the third quarter of 2010, the Corporation ended its participation in the U.S. Department of Treasury's (UST) Capital Purchase Program, redeeming all of its preferred stock and repurchasing its outstanding common stock warrant held by the UST. As a result, preferred stock costs decreased $6.2 million in the fourth quarter of 2010. LANCASTER, Pa., Jan. 17, 2011 (GLOBE NEWSWIRE) -- Fulton Financial Corporation (Nasdaq:FULT) reported net income available to common shareholders of $31.5 million, or 16 cents per diluted share, for the fourth quarter ended December 31, 2010, unchanged from the third quarter of 2010. Total other expenses increased $4.4 million and other income decreased $4.3 million. The unfavorable after-tax impact of these items was offset by a $6.2 million decrease in preferred stock costs. For the year ended December 31, 2010, net income available to common shareholders was $112.0 million, or 59 cents per diluted share, compared to $53.8 million, or 31 cents per diluted share, for 2009. The $58.3 million, or 108.4 percent, increase in the Corporation's earnings was due to a $37.8 million, or 7.3 percent, increase in net interest income, a $30.0 million, or 15.8 percent, decrease in the provision for credit losses, a $9.0 million increase in other income and a $6.6 million decrease in other expenses. In addition, preferred stock costs decreased $3.9 million. Partially offsetting these favorable variances was a $29.0 million, or 188.2 percent, increase in income tax expense. "While we saw a reduction in our non-performing loans and overall loan delinquency in the fourth quarter, credit costs remain elevated," said R. Scott Smith, Jr., Chairman and Chief Executive Officer. "We closed the year with continued strong core deposit growth as a result of industry trends, our relationship banking strategy and increased marketing and promotional activity throughout our five-state geography. During the quarter, our net interest margin improved. With our solid capital base and strong liquidity position, we believe we are well positioned for earning asset growth as the economy rebounds. Loan growth, however, remains a challenge."Asset Quality Non-performing assets were $361.7 million, or 2.22 percent of total assets, at December 31, 2010, compared to $372.8 million, or 2.28 percent of total assets, at September 30, 2010 and $305.0 million, or 1.83 percent of total assets, at December 31, 2009. The decrease in non-performing assets in comparison to the third quarter of 2010 was primarily due to a decrease in non-performing construction loans and commercial mortgages. Annualized net charge-offs for the quarter ended December 31, 2010 were 1.65 percent of average total loans compared to 1.19 percent for the quarter ended September 30, 2010. For the fourth quarter of 2010, net charge-offs increased $13.9 million, or 39.1 percent, compared to the third quarter of 2010. The increase was primarily due to an increase in commercial mortgage, commercial loan and residential mortgage net charge-offs, partially offset by a decrease in construction loan net charge-offs. For the year ended December 31, 2010, net charge-offs were 1.19 percent of average loans, compared to 0.94 percent for 2009. The allowance for credit losses as a percentage of non-performing loans was 83.8 percent at December 31, 2010 in comparison to 83.2 percent at September 30, 2010 and 91.4 percent at December 31, 2009. The provision for credit losses for the fourth quarter of 2010 was $40.0 million, unchanged from the third quarter of 2010. For the year ended December 31, 2010, the provision for credit losses was $160.0 million, a decrease of $30.0 million, or 15.8 percent, from 2009.Net Interest Income and Margin Net interest income for the fourth quarter of 2010 increased $707,000, or 0.5 percent, from the third quarter of 2010. The Corporation's net interest margin improved to 3.85 percent in the fourth quarter of 2010, compared to 3.81 percent for third quarter of 2010. For the year ended December 31, 2010, net interest income increased $37.8 million, or 7.3 percent, in comparison to 2009, due to the increase in the net interest margin to 3.80 percent in 2010 from 3.52 percent in 2009.                The improvements in net interest income and margin during the fourth quarter and for the year ended December 31, 2010 were due to declines in funding costs, partially offset by decreases in yields on interest-earning assets.Average Balance Sheet Total average assets for the fourth quarter of 2010 were $16.3 billion, a decrease of $73.5 million, or 0.4 percent, from the third quarter of 2010. Average loans, net of unearned income, for the fourth quarter of 2010 decreased slightly in comparison to the third quarter of 2010.  Quarter Ended      Dec 31Sep 30Increase (decrease)  20102010$%   (dollars in thousands)   Loans, by type:         Real estate - commercial mortgage  $ 4,365,245  $ 4,341,685  $ 23,560  0.5% Commercial - industrial, financial and agricultural   3,682,949  3,671,128  11,821  0.3% Real estate - home equity  1,649,111  1,643,615  5,496  0.3% Real estate - residential mortgage   999,814  998,165  1,649  0.2% Real estate - construction  818,367  868,497  (50,130)  (5.8%) Consumer  360,432  366,719  (6,287)  (1.7%) Leasing and other  69,014  68,336  678  1.0%          Total Loans, net of unearned income  $ 11,944,932  $ 11,958,145  $ (13,213)  (0.1%) During the fourth quarter of 2010, the Corporation generated a $35.4 million increase in commercial mortgage and commercial loans, which was more than offset by a $50.1 million decrease in construction loans. For the year ended December 31, 2010 in comparison to 2009, average loans decreased $17.5 million, or 0.1 percent, due to a decrease in construction loans, partially offset by an increase in commercial mortgages. During 2010, the Corporation reduced its construction loan exposure, while weak economic conditions hampered commercial loan and commercial mortgage growth.  Average investments for the fourth quarter of 2010 were $2.7 billion, a $45.2 million, or 1.6 percent, decrease from the third quarter of 2010. For the year ended December 31, 2010 in comparison to 2009, average investments decreased $237.8 million, or 7.6 percent, as sales and maturities exceeded purchases due to the low interest rate environment. Average deposits for the fourth quarter of 2010 increased $107.6 million, or 0.9 percent, from the third quarter of 2010.  Quarter Ended      Dec 31Sep 30Increase (decrease)  20102010$%   (dollars in thousands)   Deposits, by type:         Noninterest-bearing demand  $ 2,219,267  $ 2,140,866  $ 78,401  3.7% Interest-bearing demand  2,262,027  2,129,407  132,620  6.2% Savings deposits  3,337,407  3,214,558  122,849  3.8%Total, excluding time deposits  7,818,701  7,484,831  333,870  4.5% Time deposits  4,760,929  4,987,212  (226,283)  (4.5%)          Total Deposits  $ 12,579,630  $ 12,472,043  $ 107,587  0.9% For the year ended December 31, 2010 in comparison to 2009, average deposits increased $706.7 million, or 6.1 percent, due to a $1.2 billion, or 19.5 percent, increase in non-interest and interest bearing demand and saving accounts and a $490.4 million, or 8.9 percent, decrease in time deposits. During 2010, customer accounts migrated from time deposits to non-time deposit accounts. The net growth is consistent with overall industry trends as economic conditions slowed consumer spending and encouraged saving.Non-interest Income Other income, excluding investment securities gains, decreased $2.6 million, or 5.1 percent, in comparison to the third quarter of 2010. Mortgage banking income decreased $3.5 million, or 28.6 percent. During the third quarter of 2010 the Corporation revised the methodology for determining the fair value of its mortgage banking pipeline to properly recognize expected gains in the period when mortgage rates are locked with the borrowers. This change in methodology resulted in an acceleration of mortgage banking income in the third quarter, totaling $3.3 million. In addition, service charges on deposit accounts decreased $661,000 due to a decrease in overdraft fees as a result of required regulatory changes implemented in August 2010. Partially offsetting these decreases were a $594,000 increase in gains on sales of other real estate, a $309,000 increase in other service charges and fees and a $222,000 increase in investment management and trust services income. For the year ended December 31, 2010 in comparison to 2009, other income, excluding investment securities gains, increased $9.4 million, with increases in mortgage banking income, other service charges and fees and investment management and trust services revenues partially offset by a decrease in service charges on deposit accounts. The following table summarizes the net realized gains and other-than-temporary impairment charges by type of investment security:  Quarter EndedYear Ended  Dec 31Sep 30December 31,  2010201020102009   (in thousands) Net realized gains (losses):         Debt securities $2,196 $4,431 $12,934 $14,503 Equity securities 658 210 1,718 (23) Other-than-temporary impairment charges:         Debt securities (2,492) (2,335) (11,969) (9,470) Equity securities (168) (480) (1,982) (3,931)          Investment securities gains  $194 $1,826 $701 $1,079 Other-than-temporary impairment charges for debt and equity securities were primarily related to the Corporation's investments in pooled trust preferred securities issued by financial institutions and financial institutions stocks, respectively.Non-interest Expense Other expenses increased $4.4 million, or 4.2 percent, in the fourth quarter of 2010 compared to the third quarter of 2010, primarily due to increases in marketing expenses, operating risk loss, salaries and employee benefits and net occupancy expense. For the year ended December 31, 2010, other expenses decreased $6.6 million, or 1.6 percent, in comparison to 2009, due primarily to declines in FDIC insurance expense and operating risk loss.About Fulton Financial Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has nearly 3,800 employees and operates more than 270 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, N.A., Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; The Bank, Woodbury, NJ; Skylands Community Bank, Hackettstown, NJ and The Columbia Bank, Columbia, MD. The Corporation's investment management and trust services are offered at all banks through Fulton Financial Advisors, a division of Fulton Bank, N.A. Residential mortgage lending is offered by all banks 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 the Corporation's financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," and similar expressions which are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Corporation's control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. The Corporation 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.  Many factors could affect future financial results including, without limitation: 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; acquisition and growth strategies; market risk; changes or adverse developments in economic, political or regulatory conditions; a disruption in, or abnormal functioning of, credit and other markets, including the lack of or reduced access to markets for mortgages and other asset-backed securities and for commercial paper and other short-term borrowings; changes in the levels of, or methodology for determining, FDIC deposit insurance premiums and assessments; the effect of competition and interest rates on net interest margin and net interest income; investment strategy and income growth; investment securities gains and losses; declines in the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth or a decline in loans originated; 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. 2011FULTON FINANCIAL CORPORATION          CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)          dollars in thousands                       % Change from     December 31 2010December 31 2009September 30 2010December 31 2009September 30 2010              ASSETS                           Cash and due from banks    $ 198,954  $ 284,508  $ 255,800  (30.1%)  (22.2%) Loans held for sale    83,940  85,384  103,240  (1.7%)  (18.7%) Other interest-earning assets  33,297  16,591  193,421  100.7%  (82.8%) Investment securities    2,861,484  3,267,086  2,762,238  (12.4%)  3.6% Loans, net of unearned income  11,933,307  11,972,424  11,950,618  (0.3%)  (0.1%) Allowance for loan losses    (274,271)  (256,698)  (281,724)  6.8%  (2.6%) Net Loans    11,659,036  11,715,726  11,668,894  (0.5%)  (0.1%) Premises and equipment    208,016  204,203  204,001  1.9%  2.0% Accrued interest receivable    53,841  58,515  55,167  (8.0%)  (2.4%) Goodwill and intangible assets  547,979  552,563  549,170  (0.8%)  (0.2%) Other assets    628,707  451,059  538,842  39.4%  16.7%Total Assets    $ 16,275,254  $ 16,635,635  $ 16,330,773  (2.2%)  (0.3%)              LIABILITIES AND SHAREHOLDERS' EQUITY                         Deposits    $ 12,388,581  $ 12,097,914  $ 12,568,117  2.4%  (1.4%) Short-term borrowings    674,077  868,940  471,081  (22.4%)  43.1% Federal Home Loan Bank advances and long-term debt  1,119,450  1,540,773  1,199,513  (27.3%)  (6.7%) Other liabilities    212,757  191,526  215,752  11.1%  (1.4%)              Total Liabilities    14,394,865  14,699,153  14,454,463  (2.1%)  (0.4%)               Preferred stock    --   370,290  --   (100.0%)  --  Common shareholders' equity  1,880,389  1,566,192  1,876,310  20.1%  0.2%              Total Shareholders' Equity  1,880,389  1,936,482  1,876,310  (2.9%)  0.2%Total Liabilities and Shareholders' Equity  $ 16,275,254  $ 16,635,635  $ 16,330,773  (2.2%)  (0.3%)              LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                         Loans, by type:             Real estate - commercial mortgage  $ 4,375,980  $ 4,292,300  $ 4,346,120  1.9%  0.7% Commercial - industrial, financial and agricultural   3,704,384  3,699,198  3,683,577  0.1%  0.6% Real estate - home equity    1,641,777  1,644,260  1,654,359  (0.2%)  (0.8%) Real estate - residential mortgage   995,990  921,741  1,001,837  8.1%  (0.6%) Real estate - construction    801,185  978,267  834,266  (18.1%)  (4.0%) Consumer    350,161  360,698  366,927  (2.9%)  (4.6%) Leasing and other    63,830  75,960  63,532  (16.0%)  0.5%              Total Loans, net of unearned income  $ 11,933,307  $ 11,972,424  $ 11,950,618  (0.3%)  (0.1%)               Deposits, by type:             Noninterest-bearing demand  $ 2,194,988  $ 2,012,837  $ 2,163,807  9.0%  1.4% Interest-bearing demand    2,277,190  2,022,746  2,221,213  12.6%  2.5% Savings deposits    3,286,435  2,748,467  3,291,838  19.6%  (0.2%) Time deposits    4,629,968  5,313,864  4,891,259  (12.9%)  (5.3%)              Total Deposits    $ 12,388,581  $ 12,097,914  $ 12,568,117  2.4%  (1.4%)               Short-term borrowings, by type:           Federal funds purchased    $ 267,844  $ 378,068  $ 8,864  (29.2%)  N/M  Customer repurchase agreements  204,800  259,458  256,977  (21.1%)  (20.3%) Customer short-term promissory notes  201,433  231,414  205,240  (13.0%)  (1.9%)              Total Short-term borrowings  $ 674,077  $ 868,940  $ 471,081  (22.4%)  43.1%             N/M - Not meaningful                            FULTON FINANCIAL CORPORATION                CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                dollars in thousands, except per-share data                   Quarter Ended  % Change from Year Ended    Dec 31Dec 31Sep 30Dec 31Sep 30December 31    2010200920102009201020102009% Change                   Interest Income:                 Interest income  $ 181,749  $ 194,942  $ 185,356  (6.8%)  (1.9%)  $ 745,373  $ 786,467  (5.2%) Interest expense  40,856  58,849  45,170  (30.6%)  (9.6%)  186,627  265,513  (29.7%)                  Net Interest Income  140,893  136,093  140,186  3.5%  0.5%  558,746  520,954  7.3% Provision for credit losses  40,000  45,020  40,000  (11.2%)  --   160,000  190,020  (15.8%)                  Net Interest Income after Provision  100,893  91,073  100,186  10.8%  0.7%  398,746  330,934  20.5%                   Other Income:                 Service charges on deposit accounts  14,091  15,174  14,752  (7.1%)  (4.5%)  58,592  60,450  (3.1%) Other service charges and fees  11,849  10,120  11,540  17.1%  2.7%  45,023  40,425  11.4% Mortgage banking income  8,857  4,711  12,400  88.0%  (28.6%)  29,304  25,061  16.9% Investment management and trust services  8,826  8,106  8,604  8.9%  2.6%  34,173  32,076  6.5% Investment securities gains (losses)  194  (1,872)  1,826  N/M   (89.4%)  701  1,079  (35.0%) Other  4,915  3,797  3,876  29.4%  26.8%  17,109  16,769  2.0%                  Total Other Income  48,732  40,036  52,998  21.7%  (8.0%)  184,902  175,860  5.1%                   Other Expenses:                 Salaries and employee benefits  54,955  53,623  54,533  2.5%  0.8%  216,487  218,812  (1.1%) Net occupancy expense  10,845  10,612  10,519  2.2%  3.1%  43,533  42,040  3.6% FDIC insurance expense  4,916  4,841  4,709  1.5%  4.4%  19,715  26,579  (25.8%) Marketing  4,461  2,638  2,601  69.1%  71.5%  11,163  8,915  25.2% Data processing  3,348  2,979  3,187  12.4%  5.1%  13,263  14,432  (8.1%) Equipment expense  2,982  3,160  2,956  (5.6%)  0.9%  11,692  12,820  (8.8%) Professional fees  2,902  2,397  3,040  21.1%  (4.5%)  11,523  9,099  26.6% OREO and repossession expense  2,848  2,773  2,618  2.7%  8.8%  10,023  8,866  13.1% Intangible amortization  1,292  1,421  1,293  (9.1%)  (0.1%)  5,240  5,747  (8.8%) Operating risk loss  1,207  867  666  39.3%  81.3%  3,025  7,550  (59.9%) Other  17,313  15,811  16,589  9.5%  4.4%  65,243  62,602  4.2%                  Total Other Expenses  107,069  101,121  102,711  5.9%  4.2%  410,907  417,462  (1.6%)                  Income Before Income Taxes  42,556  29,988  50,473  41.9%  (15.7%)  172,741  89,332  93.4% Income tax expense   11,066  5,606  12,793  97.4%  (13.5%)  44,409  15,408  188.2%                  Net Income   31,490  24,382  37,680  29.2%  (16.4%)  128,332  73,924  73.6% Preferred stock dividends and discount accretion  --   (5,046)  (6,172)  (100.0%)  (100.0%)  (16,303)  (20,169)  (19.2%)                  Net Income Available to Common Shareholders  $ 31,490  $ 19,336  $ 31,508  62.9%  (0.1%)  $ 112,029  $ 53,755  108.4%                  PER COMMON SHARE:                                   Net income:                 Basic  $ 0.16  $ 0.11  $ 0.16  45.5%  --   $ 0.59  $ 0.31  90.3% Diluted  0.16  0.11  0.16  45.5%  --   0.59  0.31  90.3%                   Cash dividends  $ 0.03  $ 0.03  $ 0.03  --   --   $ 0.12  $ 0.12  --  Shareholders' equity 9.45 8.88 9.43  6.4%  0.2% 9.45 8.88  6.4% Shareholders' equity (tangible) 6.69 5.75 6.67  16.3%  0.3% 6.69 5.75  16.3%                   Weighted average shares (basic)  198,437  175,988  198,282  12.8%  0.1%  190,860  175,662  8.7% Weighted average shares (diluted)  198,999  176,413  198,792  12.8%  0.1%  191,397  175,943  8.8% Shares outstanding, end of period  199,050  176,364  198,883  12.9%  0.1%  199,050  176,364  12.9%                  SELECTED FINANCIAL RATIOS:                                   Return on average assets 0.77% 0.59% 0.91%     0.78% 0.45%   Return on average common shareholders' equity 6.60% 4.91% 6.67%     6.29% 3.54%   Return on average common shareholders' equity (tangible) 9.54% 7.96% 9.68%     9.39% 5.96%   Net interest margin 3.85% 3.67% 3.81%     3.80% 3.52%   Efficiency ratio 54.73% 54.79% 51.95%     53.49% 57.88%                     N/M - Not meaningful                                    FULTON FINANCIAL CORPORATION                  CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)                  dollars in thousands                     Quarter Ended   December 31, 2010December 31, 2009September 30, 2010  Average BalanceInterest (1)Yield/  RateAverage BalanceInterest (1)Yield/  RateAverage BalanceInterest (1)Yield/ RateASSETS                                       Interest-earning assets:                   Loans, net of unearned income  $ 11,944,932  $ 158,257 5.26%  $ 11,989,314  $ 163,972 5.43%  $ 11,958,145  $ 160,125 5.32% Taxable investment securities  2,264,784  20,579 3.63%  2,580,754  27,297 4.23%  2,303,692  22,363 3.88% Tax-exempt investment securities  341,909  4,868 5.69%  406,088  5,767 5.68%  345,281  4,961 5.75% Equity securities  136,075  801 2.35%  144,071  851 2.35%  138,993  760 2.18%                    Total Investment Securities  2,742,768  26,248 3.83%  3,130,913  33,915 4.33%  2,787,966  28,084 4.03%                     Loans held for sale  94,741  947 4.00%  74,438  951 5.11%  78,862  919 4.66% Other interest-earning assets  187,881  147 0.31%  22,745  56 0.98%  204,601  102 0.20%                    Total Interest-earning Assets  14,970,322  185,599 4.93%  15,217,410  198,894 5.20%  15,029,574  189,230 5.01%                     Noninterest-earning assets:                   Cash and due from banks  268,758      318,472      280,784     Premises and equipment  205,740      203,699      203,995     Other assets  1,135,276      987,094      1,133,469     Less: allowance for loan losses  (291,541)      (250,871)      (285,801)                        Total Assets  $ 16,288,555      $ 16,475,804      $ 16,362,021                                            LIABILITIES AND SHAREHOLDERS' EQUITY                                       Interest-bearing liabilities:                   Demand deposits  $ 2,262,027  $ 1,793 0.31%  $ 1,969,681  $ 2,099 0.42%  $ 2,129,407  $ 1,868 0.35% Savings deposits  3,337,407  4,328 0.51%  2,772,340  5,546 0.79%  3,214,558  4,972 0.61% Time deposits  4,760,929  20,926 1.74%  5,415,169  31,454 2.30%  4,987,212  22,915 1.82%                    Total Interest-bearing Deposits  10,360,363  27,047 1.04%  10,157,190  39,099 1.53%  10,331,177  29,755 1.14%                     Short-term borrowings  482,197  249 0.20%  618,087  584 0.37%  489,013  267 0.22% Federal Home Loan Bank advances and long-term debt  1,148,009  13,560 4.70%  1,589,839  19,166 4.78%  1,274,411  15,148 4.73%                    Total Interest-bearing Liabilities  11,990,569  40,856 1.35%  12,365,116  58,849 1.89%  12,094,601  45,170 1.48%                     Noninterest-bearing liabilities:                   Demand deposits  2,219,267      1,991,210      2,140,866     Other   186,211      185,817      198,922                        Total Liabilities  14,396,047      14,542,143      14,434,389                         Shareholders' equity  1,892,508      1,933,661      1,927,632                        Total Liabilities and Shareholders' Equity  $ 16,288,555      $ 16,475,804      $ 16,362,021                         Net interest income/net interest margin (fully taxable equivalent)    144,743 3.85%    140,045 3.67%    144,060 3.81% Tax equivalent adjustment    (3,850)      (3,952)      (3,874)                       Net interest income    $ 140,893      $ 136,093      $ 140,186                      (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 2010December 31 2009September 30 2010December 31 2009September 30 2010                         Loans, by type:                   Real estate - commercial mortgage  $ 4,365,245  $ 4,240,436  $ 4,341,685  2.9%  0.5%         Commercial - industrial, financial and agricultural   3,682,949  3,713,926  3,671,128  (0.8%)  0.3%         Real estate - home equity  1,649,111  1,645,524  1,643,615  0.2%  0.3%         Real estate - residential mortgage   999,814  925,660  998,165  8.0%  0.2%         Real estate - construction  818,367  1,018,057  868,497  (19.6%)  (5.8%)         Consumer  360,432  370,258  366,719  (2.7%)  (1.7%)         Leasing and other  69,014  75,453  68,336  (8.5%)  1.0%                            Total Loans, net of unearned income  $ 11,944,932  $ 11,989,314  $ 11,958,145  (0.4%)  (0.1%)                             Deposits, by type:                   Noninterest-bearing demand  $ 2,219,267  $ 1,991,210  $ 2,140,866  11.5%  3.7%         Interest-bearing demand  2,262,027  1,969,681  2,129,407  14.8%  6.2%         Savings deposits  3,337,407  2,772,340  3,214,558  20.4%  3.8%         Time deposits  4,760,929  5,415,169  4,987,212  (12.1%)  (4.5%)                            Total Deposits  $ 12,579,630  $ 12,148,400  $ 12,472,043  3.5%  0.9%                             Short-term borrowings, by type:                   Customer repurchase agreements  $ 240,548  $ 260,962  $ 257,510  (7.8%)  (6.6%)         Customer short-term promissory notes  205,637  255,776  203,158  (19.6%)  1.2%         Federal funds purchased  36,012  101,349  28,345  (64.5%)  27.0%                            Total Short-term borrowings  $ 482,197  $ 618,087  $ 489,013  (22.0%)  (1.4%)                      FULTON FINANCIAL CORPORATION            CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)          dollars in thousands              Year Ended December 31  20102009  Average BalanceInterest (1)Yield/ RateAverage BalanceInterest (1)Yield/ RateASSETS                           Interest-earning assets:             Loans, net of unearned income  $ 11,958,435  $ 637,438 5.33%  $ 11,975,899  $ 655,384 5.47% Taxable investment securities  2,403,206  96,237 4.00%  2,548,810  112,945 4.43% Tax-exempt investment securities  357,427  20,512 5.74%  451,828  25,180 5.57% Equity securities  139,292  3,103 2.23%  137,070  2,917 2.13%              Total Investment Securities  2,899,925  119,852 4.13%  3,137,708  141,042 4.50%               Loans held for sale  69,157  3,089 4.47%  105,067  5,390 5.13% Other interest-earning assets  192,888  505 0.26%  21,255  196 0.92%              Total Interest-earning Assets  15,120,405  760,884 5.04%  15,239,929  802,012 5.27%               Noninterest-earning assets:             Cash and due from banks  268,615      305,410     Premises and equipment  204,316      203,865     Other assets  1,114,678      952,597     Less: allowance for loan losses  (281,555)      (221,128)                  Total Assets  $ 16,426,459      $ 16,480,673                  LIABILITIES AND SHAREHOLDERS' EQUITY                           Interest-bearing liabilities:             Demand deposits  $ 2,099,026  $ 7,341 0.35%  $ 1,857,081  $ 7,995 0.43% Savings deposits  3,124,157  19,889 0.63%  2,425,864  19,487 0.80% Time deposits  5,016,645  95,129 1.90%  5,507,090  153,344 2.78%Total Interest-bearing Deposits  10,239,828  122,359 1.19%  9,790,035  180,826 1.85%               Short-term borrowings  587,602  1,455 0.25%  1,043,279  3,777 0.36% Federal Home Loan Bank advances and long-term debt  1,326,449  62,813 4.74%  1,712,630  80,910 4.72%Total Interest-bearing Liabilities  12,153,879  186,627 1.54%  12,545,944  265,513 2.12%               Noninterest-bearing liabilities:             Demand deposits  2,104,016      1,847,090     Other   191,398      198,078    Total Liabilities  14,449,293      14,591,112                   Shareholders' equity  1,977,166      1,889,561    Total Liabilities and Shareholders' Equity  $ 16,426,459      $ 16,480,673                   Net interest income/net interest margin (fully taxable equivalent)    574,257 3.80%    536,499 3.52% Tax equivalent adjustment    (15,511)      (15,545)   Net interest income    $ 558,746      $ 520,954                (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          20102009% Change                   Loans, by type:             Real estate - commercial mortgage  $ 4,333,371  $ 4,135,486  4.8%       Commercial - industrial, financial and agricultural   3,681,692  3,673,654  0.2%       Real estate - home equity  1,642,999  1,665,834  (1.4%)       Real estate - residential mortgage  977,909  938,187  4.2%       Real estate - construction  889,267  1,111,863  (20.0%)       Consumer  363,066  368,651  (1.5%)       Leasing and other  70,131  82,224  (14.7%)                    Total Loans, net of unearned income  $ 11,958,435  $ 11,975,899  (0.1%)                     Deposits, by type:             Noninterest-bearing demand  $ 2,104,016  $ 1,847,090  13.9%       Interest-bearing demand  2,099,026  1,857,081  13.0%       Savings deposits  3,124,157  2,425,864  28.8%       Time deposits  5,016,645  5,507,090  (8.9%)                    Total Deposits  $ 12,343,844  $ 11,637,125  6.1%                     Short-term borrowings, by type:             Customer repurchase agreements  $ 252,634  $ 254,662  (0.8%)       Customer short-term promissory notes  209,766  287,231  (27.0%)       Federal funds purchased  125,202  453,268  (72.4%)       Federal Reserve Bank borrowings  --   46,137  (100.0%)       Other  --   1,981  (100.0%)                    Total Short-term borrowings  $ 587,602  $ 1,043,279  (43.7%)                          FULTON FINANCIAL CORPORATION                  ASSET QUALITY INFORMATION (UNAUDITED)                  dollars in thousands                     Quarter Ended Year Ended          Dec 31Dec 31Sep 30 Dec 31           20102009201020102009        ALLOWANCE FOR CREDIT LOSSES:                                      Balance at beginning of period  $ 284,874  $ 241,721  $ 280,377  $ 257,553  $ 180,137                             Loans charged off:                   Real estate - commercial mortgage (17,688) (2,055)  (4,262) (28,209) (15,530)         Real estate - construction (13,421)  (12,017)  (23,139) (66,412)  (44,909)         Commercial - industrial, agricultural and financial (12,893) (10,078)  (6,601) (35,865) (34,761)         Consumer and home equity (3,440) (3,103)  (3,254) (11,210) (10,770)         Real estate - residential mortgage  (2,874) (2,224)  (751) (6,896) (7,056)         Leasing and other (788) (1,366)  (790) (2,833) (6,048)         Total loans charged off (51,104) (30,843) (38,797) (151,425) (119,074)         Recoveries of loans charged off:                   Real estate - commercial mortgage 152 8  571 1,008 536         Real estate - construction 211  842  189 1,296  1,194         Commercial - industrial, agricultural and financial 855  25  2,088 4,536 1,679         Consumer and home equity 254 384  246 1,540 1,678         Real estate - residential mortgage   2 1  3  9 150         Leasing and other 254 395  197 981 1,233         Recoveries of loans previously charged off 1,728 1,655 3,294 9,370 6,470         Net loans charged off  (49,376)  (29,188)  (35,503)  (142,055)  (112,604)         Provision for credit losses   40,000  45,020  40,000  160,000  190,020        Balance at end of period  $ 275,498  $ 257,553  $ 284,874  $ 275,498  $ 257,553                             Net charge-offs to average loans (annualized)  1.65%  0.97%  1.19%  1.19% 0.94%                            NON-PERFORMING ASSETS:                                       Non-accrual loans  $ 280,688  $ 238,360  $ 284,408             Loans 90 days past due and accruing 48,084 43,359 58,164             Total non-performing loans 328,772 281,719  342,572             Other real estate owned 32,959 23,309 30,195            Total non-performing assets  $ 361,731  $ 305,028  $ 372,767                                NON-PERFORMING LOANS, BY TYPE:                                   Real estate - commercial mortgage  $ 93,720  $ 61,052  $ 100,286             Real estate - construction  84,616  92,841  91,591             Commercial - industrial, agricultural and financial 87,455 69,604 85,103             Real estate - residential mortgage  50,412 45,748 52,038             Real estate - home equity 10,188 10,790 11,272             Consumer 2,154  1,529 1,882             Leasing 227 155 400            Total non-performing loans  $ 328,772  $ 281,719  $ 342,572                                DELINQUENCY RATES, BY TYPE:                     December 31, 2010  December 31, 2009  September 30, 2010    31-89 Days  ≥90 Days (1)  Total  31-89 Days  ≥90 Days (1)  Total  31-89 Days  ≥90 Days (1)  Total                      Real estate - commercial mortgage 0.55% 2.14% 2.69% 0.91% 1.42% 2.33% 0.56% 2.29% 2.85% Commercial - industrial, agricultural and financial 0.36% 2.36% 2.72% 0.63% 1.88% 2.51% 0.77% 2.31% 3.08% Real estate - residential mortgage  3.65% 5.11% 8.76% 4.12% 5.10% 9.22% 3.93% 5.26% 9.19% Real estate - construction 0.91% 10.56% 11.47% 0.70% 9.43% 10.13% 1.04% 10.98% 12.02% Consumer, home equity, leases and other 0.88% 0.61% 1.49% 1.12% 0.60% 1.72% 0.88% 0.65% 1.53%Total 0.83% 2.75% 3.58% 1.09% 2.35% 3.44% 0.99% 2.87% 3.86%                     (1) Includes non-accrual loans                                      ASSET QUALITY RATIOS:                    Dec 31 2010Dec 31 2009Sep 30 2010                                 Non-accrual loans to total loans 2.35% 1.99% 2.38%             Non-performing assets to total loans and OREO 3.02% 2.54% 3.11%             Non-performing assets to total assets 2.22% 1.83% 2.28%             Allowance for credit losses to loans outstanding 2.31% 2.15% 2.38%             Allowance for credit losses to non-performing loans 83.80% 91.42% 83.16%             Non-performing assets to tangible common shareholders' equity and allowance for credit losses 22.50% 24.00% 23.12%                               CONTACT: Media Contact: Laura J. Wakeley 717-291-2616