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Press release from GlobeNewswire (a Nasdaq OMX company)

Fulton Financial Reports Second Quarter Earnings of $0.18 Per Share

Tuesday, July 19, 2011

Fulton Financial Reports Second Quarter Earnings of $0.18 Per Share13:30 EDT Tuesday, July 19, 2011 Diluted earnings per share for the second quarter of 2011 was 18 cents, a 5.9 percent increase from the first quarter of 2011. The provision for credit losses was $36.0 million for the second quarter of 2011, a $2.0 million, or 5.3 percent, decrease from the first quarter of 2011 and a $4.0 million, or 10.0 percent, decrease from the second quarter of 2010. Non-performing loans decreased $7.2 million, or 2.3 percent, in comparison to the first quarter of 2011, representing the third consecutive quarterly decrease in the level of non-performing loans. Other income, excluding investment securities gains and losses, increased $3.8 million, or 8.7 percent, in comparison to the first quarter of 2011 due to strong growth in most fee categories. As in the first quarter of 2011, the Corporation raised its dividend to common shareholders by one cent, to $0.05 per common share for the second quarter of 2011. LANCASTER, Pa., July 19, 2011 (GLOBE NEWSWIRE) -- Fulton Financial Corporation (Nasdaq:FULT) reported net income of $36.4 million, or 18 cents per diluted share, for the second quarter ended June 30, 2011, compared to $33.8 million, or 17 cents per diluted share, for the first quarter of 2011. "Our second quarter financial performance showed continued improvement," said R. Scott Smith, Jr., Chairman and Chief Executive Officer. "In the credit area, we saw reductions in non-performing loans, loan charge-offs, overall loan delinquency and the provision for credit losses. We also produced strong growth in other income while keeping a tight rein on expenses. Residential mortgage activity and related sale gains showed improvement as did our investment management and brokerage activities. Further reduction of funding costs within our deposit base enabled us to expand the net interest margin. With our strong liquidity position, we are well positioned to grow quality loans and related interest income when improved business and consumer confidence leads to more robust demand for credit. We were also pleased to increase our cash dividend again this quarter." In the second quarter of 2011, net income increased $2.6 million, or 7.7 percent, in comparison to the first quarter of 2011. This increase was due to a $2.0 million reduction in the provision for credit losses, a $1.2 million, or 2.6 percent, increase in other income and a $1.1 million, or 0.8 percent, increase in net interest income. The favorable impact of these items was partially offset by a $915,000, or 0.9 percent, increase in other expenses and a $779,000, or 6.3 percent, increase in income tax expense. For the six months ended June 30, 2011, net income available to common shareholders increased $21.1 million, or 43.1 percent, in comparison to the prior year. This increase was primarily due to a $10.4 million, or 12.5 percent, increase in other income, a $10.1 million decrease in preferred stock costs, a $6.0 million, or 7.5 percent, decrease in the provision for credit losses and a $2.5 million, or 0.9 percent, increase in net interest income. The favorable impact of these items was partially offset by a $5.0 million, or 24.2 percent, increase in income tax expense and a $2.9 million, or 1.4 percent, increase in other expenses.Asset Quality Non-performing assets were $348.3 million, or 2.18 percent of total assets, at June 30, 2011, compared to $355.1 million, or 2.22 percent of total assets, at March 31, 2011 and $342.6 million, or 2.06 percent of total assets, at June 30, 2010. The $6.7 million, or 1.9 percent, decrease in non-performing assets in comparison to the first quarter of 2011 was primarily due to a decrease in non-performing construction and residential mortgages, partially offset by an increase in non-performing commercial loans and commercial mortgages. Annualized net charge-offs for the quarter ended June 30, 2011 were 1.30 percent of average total loans, compared to 1.42 percent for the quarter ended March 31, 2011. The allowance for credit losses as a percentage of non-performing loans was 86.4 percent at June 30, 2011 in comparison to 85.3 percent at March 31, 2011 and 88.5 percent at June 30, 2010. The provision for credit losses for the second quarter of 2011 decreased $2.0 million, or 5.3 percent, to $36.0 million as a result of improved credit quality metrics, including a continuing trend of decreasing non-performing asset levels that began during the fourth quarter of 2010.Net Interest Income and Margin Net interest income for the second quarter of 2011 increased $1.1 million, or 0.8 percent, from the first quarter of 2011, primarily due to a 4 basis point, or 1.0 percent, increase in the net interest margin. Contributing to the improvement in net interest margin was a five basis point decline in funding costs, partially offset by a two basis point decrease in yields on interest-earning assets.Average Balance Sheet Total average assets for the second quarter of 2011 were $16.0 billion, a decrease of $124.0 million, or 0.8 percent, from the first quarter of 2011. Average loans, net of unearned income, decreased $38.4 million, or 0.3 percent, for the second quarter of 2011 in comparison to the first quarter of 2011.    Quarter Ended      Jun 30 Mar 31 Increase (decrease)  2011 2011 $ %     (dollars in thousands)             Loans, by type:                 Real estate - commercial mortgage    $ 4,430,046    $ 4,385,072    $ 44,974    1.0% Commercial - industrial, financial and agricultural     3,689,877    3,707,081    (17,204)    (0.5%) Real estate - home equity    1,623,438    1,628,550    (5,112)    (0.3%) Real estate - residential mortgage     1,023,471    1,017,439    6,032    0.6% Real estate - construction    712,638    779,556    (66,918)    (8.6%) Consumer    332,960    341,247    (8,287)    (2.4%) Leasing and other    70,589    62,497    8,092    12.9%                  Total Loans, net of unearned income    $ 11,883,019    $ 11,921,442    $ (38,423)    (0.3%) During the second quarter of 2011, commercial mortgages increased $45.0 million, or 1.0 percent. This increase was more than offset by a $66.9 million, or 8.6 percent, decline in construction loans and a $17.2 million, or 0.5 percent, decrease in commercial loans. Average investments for the second quarter of 2011 were $2.6 billion, a $195.8 million, or 7.0 percent, decrease from the first quarter of 2011. During the second quarter of 2011, sales and maturities of collateralized mortgage obligations and mortgage-backed securities exceeded purchases. Average deposits for the second quarter of 2011 increased $49.7 million, or 0.4 percent, from the first quarter of 2011.    Quarter Ended      Jun 30 Mar 31 Increase (decrease)  2011 2011 $ %     (dollars in thousands) Deposits, by type:                 Noninterest-bearing demand    $ 2,362,614    $ 2,238,200    $ 124,414    5.6% Interest-bearing demand    2,352,961    2,322,098    30,863    1.3% Savings deposits    3,356,361    3,282,790    73,571    2.2%Total demand and savings    8,071,936    7,843,088    228,848    2.9% Time deposits    4,353,352    4,532,528    (179,176)    (4.0%)                  Total Deposits    $ 12,425,288    $ 12,375,616    $ 49,672    0.4% The increase in deposits in the second quarter of 2011 in comparison to the first quarter of 2011 was due to a $228.8 million, or 2.9 percent, increase in demand and saving accounts, partially offset by a $179.2 million, or 4.0 percent, decrease in time deposits.Non-interest Income Other income, excluding investment securities gains, increased $3.8 million, or 8.7 percent, in comparison to the first quarter of 2011. Service charges on deposit accounts increased $1.0 million, or 7.7 percent, due to increases in overdraft and cash management fees. Other service charges and fees increased $1.2 million, or 10.7 percent, due mainly to growth in debit card and merchant fees. The following table summarizes the net realized gains and other-than-temporary impairment charges by type of investment security:    Quarter Ended  Jun 30 2011 Mar 31 2011     (in thousands) Net realized gains:          Debt securities    $ 15    $ 3,571 Equity securities    43    5 Other-than-temporary impairment charges:     Debt securities    (359)    (994) Equity securities    (34)    (297)          Investment securities gains (losses)    $ (335)    $ 2,285 Other-than-temporary impairment charges for debt and equity securities were related to the Corporation's investments in pooled trust preferred securities issued by financial institutions and stocks of financial institutions, respectively.Non-interest Expense Other expenses increased $915,000, or 0.9 percent, in the second quarter of 2011 compared to the first quarter of 2011, primarily due to a $1.8 million increase in salaries and employee benefits, a $607,000 increase in state taxes, primarily due to an increase in bank franchise tax, and a $605,000 increase in OREO and repossession expense. These increases were partially offset by a $1.5 million decrease in FDIC insurance expense and a $973,000 decrease in marketing expenses.  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, Mt. Laurel, NJ; Skylands Community Bank, Chester, 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 and uncertainties, some of which are beyond the Corporation's control and ability to predict, that could cause actual results to differ materially from those expressed 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: the impact of adverse changes in the economy and real estate markets; increases in non-performing assets which may reduce the level of earning assets and require the Corporation to increase the allowance for credit losses, charge-off loans and incur elevated collection and carrying costs related to such non-performing assets; acquisition and growth strategies; market risk; changes or adverse developments in 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 other 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; relative balances of rate-sensitive assets to rate-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.                      FULTON FINANCIAL CORPORATION          CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)         dollars in thousands                              % Change from   June 30 2011 June 30 2010 March 31 2011 June 30 2010 March 31 2011           ASSETS                     Cash and due from banks    $ 284,691    $ 268,371    $ 265,353    6.1%    7.3% Loans held for sale    47,133    93,504    30,903    (49.6%)    52.5% Other interest-earning assets    124,967    433,687    83,293    (71.2%)    50.0% Investment securities    2,663,044    2,892,890    2,697,434    (7.9%)    (1.3%) Loans, net of unearned income    11,852,491    11,943,384    11,873,208    (0.8%)    (0.2%) Allowance for loan losses    (266,683)    (272,042)    (270,272)    (2.0%)    (1.3%) Net Loans    11,585,808    11,671,342    11,602,936    (0.7%)    (0.1%) Premises and equipment    207,177    205,299    208,370    0.9%    (0.6%) Accrued interest receivable    51,387    54,763    52,878    (6.2%)    (2.8%) Goodwill and intangible assets    545,909    550,302    546,934    (0.8%)    (0.2%) Other assets    457,004    456,719    473,095    0.1%    (3.4%)Total Assets    $ 15,967,120    $ 16,626,877    $ 15,961,196    (4.0%)    --                       LIABILITIES AND SHAREHOLDERS' EQUITY                   Deposits    $ 12,262,895    $ 12,345,472    $ 12,408,610    (0.7%)    (1.2%) Short-term borrowings    546,581    458,334    414,398    19.3%    31.9% Federal Home Loan Bank advances and long-term debt  1,025,537    1,365,688    1,035,689    (24.9%)    (1.0%) Other liabilities    178,798    226,172    192,177    (20.9%)    (7.0%)Total Liabilities    14,013,811    14,395,666    14,050,874    (2.7%)    (0.3%) Preferred stock    --     371,009    --     (100.0%)    --  Common shareholders' equity    1,953,309    1,860,202    1,910,322    5.0%    2.3%Total Shareholders' Equity    1,953,309    2,231,211    1,910,322    (12.5%)    2.3%Total Liabilities and Shareholders' Equity  $ 15,967,120    $ 16,626,877    $ 15,961,196    (4.0%)    --                       LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:                   Loans, by type:                     Real estate - commercial mortgage    $ 4,443,025    $ 4,330,630    $ 4,392,679    2.6%    1.1% Commercial - industrial, financial and agricultural   3,678,858    3,664,603    3,692,668    0.4%    (0.4%) Real estate - home equity    1,626,545    1,637,171    1,620,340    (0.6%)    0.4% Real estate - residential mortgage     1,023,646    985,345    1,022,251    3.9%    0.1% Real estate - construction    681,588    893,305    747,806    (23.7%)    (8.9%) Consumer    330,965    368,631    337,413    (10.2%)    (1.9%) Leasing and other    67,864    63,699    60,051    6.5%    13.0%Total Loans, net of unearned income    $ 11,852,491    $ 11,943,384    $ 11,873,208    (0.8%)    (0.2%)                       Deposits, by type:                     Noninterest-bearing demand    $ 2,445,008    $ 2,147,153    $ 2,310,290    13.9%    5.8% Interest-bearing demand    2,290,478    2,024,033    2,324,988    13.2%    (1.5%) Savings deposits    3,252,200    3,136,492    3,333,403    3.7%    (2.4%) Time deposits    4,275,209    5,037,794    4,439,929    (15.1%)    (3.7%)Total Deposits    $ 12,262,895    $ 12,345,472    $ 12,408,610    (0.7%)    (1.2%)                       Short-term borrowings, by type:                     Customer repurchase agreements    $ 208,948    $ 247,775    $ 216,705    (15.7%)    (3.6%) Customer short-term promissory notes    171,454    200,992    189,408    (14.7%)    (9.5%) Federal funds purchased    166,179    9,567    8,285    1,637.0%    1,905.8%Total Short-term borrowings    $ 546,581    $ 458,334    $ 414,398    19.3%    31.9%                                                                FULTON FINANCIAL CORPORATION               CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)            dollars in thousands, except per-share data                 Quarter Ended   % Change from  Six Months Ended   Jun 30 Jun 30 Mar 31 Jun 30 Mar 31 June 30   2011 2010 2011 2010 2011 2011 2010 % Change                                 Interest Income:                               Interest income  $ 174,935    $ 187,680    $ 175,694    (6.8%)    (0.4%)    $ 350,629    $ 378,268    (7.3%) Interest expense  34,290    48,522    36,131    (29.3%)    (5.1%)    70,421    100,601    (30.0%)Net Interest Income  140,645    139,158    139,563    1.1%    0.8%    280,208    277,667    0.9% Provision for credit losses  36,000    40,000    38,000    (10.0%)    (5.3%)    74,000    80,000    (7.5%)Net Interest Income after Provision  104,645    99,158    101,563    5.5%    3.0%    206,208    197,667    4.3%                                 Other Income:                               Service charges on deposit accounts  14,332    15,482    13,305    (7.4%)    7.7%    27,637    29,749    (7.1%) Other service charges and fees  12,709    11,469    11,482    10.8%    10.7%    24,191    21,634    11.8% Investment management and trust services  9,638    8,655    9,204    11.4%    4.7%    18,842    16,743    12.5% Mortgage banking income  6,049    3,899    5,463    55.1%    10.7%    11,512    8,048    43.0% Investment securities gains (losses)  (335)    904    2,285    N/M     N/M     1,950    (1,319)    N/M  Other  4,979    4,503    4,421    10.6%    12.6%    9,400    8,317    13.0%Total Other Income  47,372    44,912    46,160    5.5%    2.6%    93,532    83,172    12.5%                                 Other Expenses:                               Salaries and employee benefits  56,070    54,654    54,308    2.6%    3.2%    110,378    106,999    3.2% Net occupancy expense  10,874    10,519    11,366    3.4%    (4.3%)    22,240    22,169    0.3% Equipment expense  3,377    2,663    3,132    26.8%    7.8%    6,509    5,754    13.1% FDIC insurance expense  3,264    5,136    4,754    (36.4%)    (31.3%)    8,018    10,090    (20.5%) Data processing  3,214    3,311    3,372    (2.9%)    (4.7%)    6,586    6,728    (2.1%) Professional fees  3,102    3,035    2,849    2.2%    8.9%    5,951    5,581    6.6% OREO and repossession expense  2,575    1,876    1,970    37.3%    30.7%    4,545    4,557    (0.3%) Marketing  1,863    2,271    2,836    (18.0%)    (34.3%)    4,699    4,101    14.6% Intangible amortization  1,172    1,341    1,178    (12.6%)    (0.5%)    2,350    2,655    (11.5%) Other  16,967    16,299    15,798    4.1%    7.4%    32,765    32,493    0.8%Total Other Expenses  102,478    101,105    101,563    1.4%    0.9%    204,041    201,127    1.4%Income Before Income Taxes  49,539    42,965    46,160    15.3%    7.3%    95,699    79,712    20.1% Income tax expense   13,154    11,283    12,375    16.6%    6.3%    25,529    20,550    24.2%Net Income   36,385    31,682    33,785    14.8%    7.7%    70,170    59,162    18.6% Preferred stock dividends and discount accretion  --     (5,066)    --     (100.0%)    --     --     (10,131)    (100.0%)Net Income Available to Common Shareholders  $ 36,385    $ 26,616    $ 33,785    36.7%    7.7%    $ 70,170    $ 49,031    43.1%                                                                PER COMMON SHARE:                               Net income:                               Basic  $ 0.18    $ 0.14    $ 0.17    28.6%    5.9%    $ 0.35    $ 0.27    29.6% Diluted  0.18    0.14    0.17    28.6%    5.9%    0.35    0.27    29.6%                                 Cash dividends  $ 0.05    $ 0.03    $ 0.04    66.7%    25.0%    $ 0.09    $ 0.06    50.0% Shareholders' equity 9.80   9.37   9.59    4.6%    2.2%   9.80   9.37    4.6% Shareholders' equity (tangible) 7.06   6.60   6.84    7.0%    3.2%   7.06   6.60    7.0%                                 Weighted average shares (basic)  198,772    190,221    198,599    4.5%    0.1%    198,686    183,236    8.4% Weighted average shares (diluted)  199,527    190,827    199,286    4.6%    0.1%    199,407    183,793    8.5% Shares outstanding, end of period  199,370    198,463    199,191    0.5%    0.1%    199,370    198,463    0.5%                                SELECTED FINANCIAL RATIOS:                               Return on average assets 0.91%   0.77%   0.85%           0.88%   0.72%     Return on average common shareholders' equity 7.53%   6.06%   7.21%           7.38%   5.90%     Return on average common shareholders' equity (tangible) 10.71%   9.10%   10.36%           10.54%   9.11%     Net interest margin 3.95%   3.76%   3.91%           3.93%   3.77%     Efficiency ratio 52.67%   53.34%   53.57%           53.11%   53.65%                                     N/M - Not meaningful                                              FULTON FINANCIAL CORPORATION   CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)   dollars in thousands           Quarter Ended  June 30, 2011June 30, 2010 March 31, 2011          Average Yield/ Average Yield/ Average Yield/  BalanceInterest (1)RateBalanceInterest (1)RateBalanceInterest (1)RateASSETS          Interest-earning assets:                   Loans, net of unearned income  $ 11,883,019  $ 151,974 5.13%  $ 11,959,176  $ 159,632 5.35%  $ 11,921,442  $ 151,686 5.15% Taxable investment securities  2,141,307  20,749 3.88%  2,386,695  25,146 4.22%  2,331,323  21,807 3.75% Tax-exempt investment securities  343,214  4,840 5.64%  355,186  5,152 5.80%  344,457  4,885 5.67% Equity securities  128,258  775 2.42%  140,271  733 2.09%  132,841  752 2.28%Total Investment Securities  2,612,779  26,364 4.04%  2,882,152  31,031 4.31%  2,808,621  27,444 3.91% Loans held for sale  36,793  492 5.34%  59,412  667 4.49%  45,418  500 4.41% Other interest-earning assets  163,548  101 0.25%  366,200  231 0.25%  66,381  33 0.20%Total Interest-earning Assets  14,696,139  178,931 4.88%  15,266,940  191,561 5.03%  14,841,862  179,663 4.90%                     Noninterest-earning assets:                   Cash and due from banks  278,393      261,576      260,395     Premises and equipment  207,141      203,928      207,389     Other assets  1,098,116      1,102,587      1,102,543     Less: allowance for loan losses  (273,593)      (275,209)      (282,017)    Total Assets  $ 16,006,196      $ 16,559,822      $ 16,130,172                                            LIABILITIES AND SHAREHOLDERS' EQUITY                 Interest-bearing liabilities:                   Demand deposits  $ 2,352,961  $ 1,371 0.23%  $ 2,019,605  $ 1,840 0.37%  $ 2,322,098  $ 1,436 0.25% Savings deposits  3,356,361  3,258 0.39%  3,090,857  5,388 0.70%  3,282,790  3,358 0.41% Time deposits  4,353,352  17,146 1.58%  5,120,648  24,591 1.93%  4,532,528  18,492 1.65%Total Interest-bearing Deposits  10,062,674  21,775 0.87%  10,231,110  31,819 1.25%  10,137,416  23,286 0.93% Short-term borrowings  455,831  168 0.15%  512,583  390 0.30%  622,662  254 0.16% Federal Home Loan Bank advances and long-term debt  1,025,637  12,347 4.82%  1,403,410  16,313 4.66%  1,061,523  12,591 4.78%Total Interest-bearing Liabilities  11,544,142  34,290 1.19%  12,147,103  48,522 1.60%  11,821,601  36,131 1.24%                     Noninterest-bearing liabilities:                   Demand deposits  2,362,614      2,079,674      2,238,200     Other   162,202      199,778      170,930    Total Liabilities  14,068,958      14,426,555      14,230,731     Shareholders' equity  1,937,238      2,133,267      1,899,441    Total Liabilities and Shareholders' Equity  $ 16,006,196      $ 16,559,822      $ 16,130,172                         Net interest income/net interest margin (fully taxable equivalent)  144,641 3.95%    143,039 3.76%    143,532 3.91% Tax equivalent adjustment    (3,996)      (3,881)      (3,969)   Net interest income    $ 140,645      $ 139,158      $ 139,563                      (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     June 30June 30March 31June 30March 31     20112010201120102011                             Loans, by type:                   Real estate - commercial mortgage  $ 4,430,046  $ 4,319,540  $ 4,385,072  2.6%  1.0%         Commercial - industrial, financial and agricultural   3,689,877  3,686,442  3,707,081  0.1%  (0.5%)         Real estate - home equity  1,623,438  1,638,260  1,628,550  (0.9%)  (0.3%)         Real estate - residential mortgage   1,023,471  972,129  1,017,439  5.3%  0.6%         Real estate - construction  712,638  909,836  779,556  (21.7%)  (8.6%)         Consumer  332,960  362,883  341,247  (8.2%)  (2.4%)         Leasing and other  70,589  70,086  62,497  0.7%  12.9%                            Total Loans, net of unearned income  $ 11,883,019  $ 11,959,176  $ 11,921,442  (0.6%)  (0.3%)                             Deposits, by type:                   Noninterest-bearing demand  $ 2,362,614  $ 2,079,674  $ 2,238,200  13.6%  5.6%         Interest-bearing demand  2,352,961  2,019,605  2,322,098  16.5%  1.3%         Savings deposits  3,356,361  3,090,857  3,282,790  8.6%  2.2%         Time deposits  4,353,352  5,120,648  4,532,528  (15.0%)  (4.0%)                            Total Deposits  $ 12,425,288  $ 12,310,784  $ 12,375,616  0.9%  0.4%                             Short-term borrowings, by type:                   Customer repurchase agreements  $ 217,657  $ 263,533  $ 212,931  (17.4%)  2.2%         Customer short-term promissory notes  171,958  207,100  190,385  (17.0%)  (9.7%)         Federal funds purchased  66,216  41,950  219,346  57.8%  (69.8%)                            Total Short-term borrowings  $ 455,831  $ 512,583  $ 622,662  (11.1%)  (26.8%)                FULTON FINANCIAL CORPORATION CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) dollars in thousands       Six Months Ended June 30 20112010 Average Balance Interest (1) Yield/RateAverage Balance Interest (1) Yield/RateASSETS       Interest-earning assets:             Loans, net of unearned income  $ 11,902,124  $ 303,660 5.14%  $ 11,965,446  $ 319,056 5.37% Taxable investment securities  2,235,789  42,556 3.81%  2,524,149  53,295 4.23% Tax-exempt investment securities  343,832  9,725 5.66%  371,488  10,683 5.75% Equity securities  130,537  1,527 2.35%  141,079  1,542 2.19%Total Investment Securities  2,710,158  53,808 3.97%  3,036,716  65,520 4.32% Loans held for sale  41,082  992 4.83%  51,220  1,223 4.77% Other interest-earning assets  115,233  134 0.23%  189,479  256 0.27%Total Interest-earning Assets  14,768,597  358,594 4.89%  15,242,861  386,055 5.10%               Noninterest-earning assets:           Cash and due from banks  269,444      262,357     Premises and equipment  207,263      203,757     Other assets  1,100,319      1,094,653     Less: allowance for loan losses  (277,782)      (274,322)    Total Assets  $ 16,067,841      $ 16,529,306                  LIABILITIES AND SHAREHOLDERS' EQUITY         Interest-bearing liabilities:             Demand deposits  $ 2,337,615  $ 2,807 0.24%  $ 2,000,734  $ 3,680 0.37% Savings deposits  3,319,778  6,616 0.40%  2,969,814  10,589 0.72% Time deposits  4,442,446  35,638 1.62%  5,161,583  51,288 2.00%Total Interest-bearing Deposits  10,099,839  45,061 0.90%  10,132,131  65,557 1.30% Short-term borrowings  538,786  422 0.16%  691,289  939 0.27% Federal Home Loan Bank advances and long-term debt  1,043,481  24,938 4.80%  1,443,600  34,105 4.75%Total Interest-bearing Liabilities  11,682,106  70,421 1.21%  12,267,020  100,601 1.65%               Noninterest-bearing liabilities:           Demand deposits  2,300,750      2,026,705     Other   166,541      190,207    Total Liabilities  14,149,397      14,483,932     Shareholders' equity  1,918,444      2,045,374    Total Liabilities and Shareholders' Equity  $ 16,067,841      $ 16,529,306                   Net interest income/net interest margin (fully taxable equivalent)  288,173 3.93%    285,454 3.77% Tax equivalent adjustment    (7,965)      (7,787)   Net interest income    $ 280,208      $ 277,667                (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:                      Six Months Ended     June 30     20112010% Change                    Loans, by type:             Real estate - commercial mortgage  $ 4,407,683  $ 4,312,942  2.2%       Commercial - industrial, financial and agricultural   3,698,430  3,686,425  0.3%       Real estate - home equity  1,625,980  1,639,579  (0.8%)       Real estate - residential mortgage  1,020,471  956,478  6.7%       Real estate - construction  745,912  935,861  (20.3%)       Consumer  337,080  362,549  (7.0%)       Leasing and other  66,568  71,612  (7.0%)                    Total Loans, net of unearned income  $ 11,902,124  $ 11,965,446  (0.5%)                     Deposits, by type:             Noninterest-bearing demand  $ 2,300,750  $ 2,026,705  13.5%       Interest-bearing demand  2,337,615  2,000,734  16.8%       Savings deposits  3,319,778  2,969,814  11.8%       Time deposits  4,442,446  5,161,583  (13.9%)                    Total Deposits  $ 12,400,589  $ 12,158,836  2.0%                     Short-term borrowings, by type:           Customer repurchase agreements  $ 215,307  $ 256,298  (16.0%)       Customer short-term promissory notes  181,121  215,224  (15.8%)       Federal funds purchased  142,358  219,767  (35.2%)                    Total Short-term borrowings  $ 538,786  $ 691,289  (22.1%)                                                              FULTON FINANCIAL CORPORATION             ASSET QUALITY INFORMATION (UNAUDITED)             dollars in thousands               Quarter Ended Six Months Ended         June 30June 30Mar 31 June 30          20112010201120112010        ALLOWANCE FOR CREDIT LOSSES:                          Balance at beginning of period  $ 271,156  $ 269,254  $ 275,498  $ 275,498  $ 257,553                 Loans charged off:                           Commercial - industrial, financial and agricultural (15,406) (13,390) (13,336) (28,742)  (16,371)                 Real estate - residential mortgage  (7,707) (1,880) (4,996) (12,703) (3,271)                 Real estate - construction (7,468)  (9,299) (13,894) (21,362) (29,852)                 Real estate - commercial mortgage (7,074) (3,915)  (10,047) (17,121) (6,259)                 Consumer and home equity (2,331) (2,438) (2,759) (5,090) (4,516)                 Leasing and other (689) (610) (497) (1,186) (1,255)                 Total loans charged off (40,675) (31,532) (45,529) (86,204) (61,524)                 Recoveries of loans charged off:                           Commercial - industrial, financial and agricultural 1,003  1,157 391 1,394  1,593                 Real estate - residential mortgage   190 3  44 234 4                 Real estate - construction 79  581 563 642 896                 Real estate - commercial mortgage 191 157 1,535 1,726 285                 Consumer and home equity 435 488 310  745 1,040                 Leasing and other 254 269 344 598 530                 Recoveries of loans previously charged off 2,152 2,655 3,187 5,339 4,348                 Net loans charged off  (38,523)  (28,877)  (42,342)  (80,865)  (57,176)                 Provision for credit losses   36,000  40,000  38,000  74,000  80,000                Balance at end of period  $ 268,633  $ 280,377  $ 271,156  $ 268,633  $ 280,377                                             Net charge-offs to average loans (annualized)  1.30%  0.97%  1.42%  1.36%  0.96%                                            NON-PERFORMING ASSETS:                           Non-accrual loans  $ 274,973  $ 263,227  $ 280,270                     Loans 90 days past due and accruing 35,869 53,707 37,768                     Total non-performing loans 310,842 316,934  318,038                     Other real estate owned 37,493 25,681 37,044                    Total non-performing assets  $ 348,335  $ 342,615  $ 355,082                                                NON-PERFORMING LOANS, BY TYPE:                           Real estate - commercial mortgage  $ 102,724  $ 101,378  $ 97,305                     Commercial - industrial, financial and agricultural 94,855 77,587 86,050                     Real estate - construction  58,381  79,122  72,880                     Real estate - residential mortgage  43,200 45,639 49,998                     Real estate - home equity 9,440 11,090 9,314                     Consumer 2,090  2,025 2,258                     Leasing 152 93 233                    Total non-performing loans  $ 310,842  $ 316,934  $ 318,038                                                DELINQUENCY RATES, BY TYPE:                              June 30, 2011  June 30, 2010  March 31, 2011  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 0.57% 2.32% 2.89% 0.81% 2.34%   3.15%   0.66%   2.21%   2.87% Commercial - industrial, financial and agricultural 0.54% 2.58% 3.12% 0.46% 2.12%   2.58%   0.50%   2.33%   2.83% Real estate - construction 0.62% 8.56% 9.18% 1.07% 8.86%   9.93%   0.56%   9.75%   10.31% Real estate - residential mortgage  3.37% 4.22% 7.59% 3.65% 4.63%   8.28%   3.47%   4.89%   8.36% Real estate - home equity 0.74% 0.58% 1.32% 0.83% 0.68%   1.51%   0.74%   0.57%   1.31% Consumer, leasing and other 1.22% 0.56% 1.78% 1.37% 0.49%   1.86%   1.26%   0.64%   1.90%Total 0.85% 2.63% 3.48% 0.98% 2.65%   3.63%   0.88%   2.67%   3.55%                             (1) Includes non-accrual loans                                                      ASSET QUALITY RATIOS:                            June 30June 30Mar 31           201120102011                     Non-accrual loans to total loans 2.32% 2.20% 2.36%                     Non-performing assets to total loans and OREO 2.93% 2.86% 2.98%                     Non-performing assets to total assets 2.18% 2.06% 2.22%                     Allowance for credit losses to loans outstanding 2.27% 2.35% 2.28%                     Allowance for credit losses to non-performing loans 86.42% 88.47% 85.26%                     Non-performing assets to tangible common shareholders' equity and allowance for credit losses 20.78% 21.54% 21.72%                    CONTACT: Media Contact: Laura J. Wakeley 717-291-2616