SOURCE: Fulton Financial Corporation

October 21, 2008 16:30 ET

Fulton Financial Reports Third Quarter Earnings

LANCASTER, PA--(Marketwire - October 21, 2008) - Fulton Financial Corporation (NASDAQ: FULT) earned $29.1 million for the third quarter ended September 30, 2008, a 13.4 percent decrease from the same period in 2007. Diluted net income per share for the quarter was 17 cents, a 10.5 percent decrease from the 19 cents reported in the same period in 2007. Diluted net income per share for the quarter increased 13.3 percent from the 15 cents reported in the second quarter of 2008.

The Corporation's earnings for the third quarter ended September 30, 2008, in comparison to the same period in 2007 and the second quarter of 2008 were impacted by a number of previously disclosed significant items recorded in those prior periods. During the third quarter of 2007, the Corporation recorded a $16.0 million pre-tax charge related to its mortgage banking operations. During the second quarter of 2008, the Corporation recorded a $13.9 million pre-tax gain on the sale of its credit card portfolio, offset by pre-tax charges of $13.2 million related to the establishment of a reserve related to the purchase of auction rate securities (ARCs) held in customer accounts and $24.7 million for other-than-temporary impairment of bank stocks. During the third quarter of 2008, the Corporation recorded an additional $10.8 million of pre-tax charges related to the other-than-temporary impairment of bank stocks and certain debt securities. Excluding these items, the decrease in net income for the third quarter of 2008 in comparison to the same period in 2007 and the second quarter of 2008 was primarily due to an increase in the provision for loan losses.

Net income was $96.3 million for the nine months ended September 30, 2008, a 16.0 percent decrease from the same period in 2007. Diluted net income per share for the nine months ended September 30, 2008 was 55 cents, a 16.7 percent decrease from the 66 cents reported in 2007. Total assets at September 30, 2008 were approximately $16.1 billion.

"Our third quarter performance was negatively impacted by write downs in the investment portfolio and a significant increase in the provision for loan losses due to deteriorating economic conditions," said R. Scott Smith, Jr., chairman, chief executive officer and president. "We do not expect improvement in our asset quality metrics until we begin to see tangible signs of economic recovery. Many households and businesses are currently struggling. We are committed to helping our customers weather these difficult conditions. Overall loan growth remains healthy due to increased market share opportunities and we continue to see steady growth in our net interest income. Retail funding remains a challenge and we will continue to attract customer deposits through ongoing marketing and promotional activity. Core banking non-interest income is strong and expenses are well controlled as a result of our ongoing process improvement initiatives."

Loans, net of unearned income, increased $835.2 million, or 7.6 percent, to $11.8 billion at September 30, 2008, compared to $11.0 billion at September 30, 2007. The increase was primarily due to a $490.0 million, or 14.4 percent, increase in commercial mortgages, a $225.7 million, or 6.8 percent, increase in commercial loans, a $174.9 million, or 11.9 percent, increase in home equity loans and a $170.3 million, or 21.1 percent, increase in residential mortgages. These increases were partially offset by a $112.2 million, or 22.4 percent, decrease in consumer loans, largely due to the aforementioned sale of the credit card portfolio in the second quarter of 2008, and a $111.6 million, or 8.0 percent, decrease in construction loans. In comparison to the second quarter of 2008, loans, net of unearned income, increased $246.0 million, or 2.1 percent, which was mainly due to growth in commercial mortgages of $105.4 million, or 2.8 percent, an increase in home equity loans of $53.5 million, or 3.4 percent, and an increase in residential mortgages of $50.2 million, or 5.4 percent.

Non-performing assets were $186.4 million, or 1.15 percent of total assets, at September 30, 2008, compared to $107.0 million, or 0.69 percent, at September 30, 2007 and $164.5 million, or 1.02 percent, at June 30, 2008. The $79.4 million, or 74.2 percent, increase in non-performing assets since September 30, 2007 was primarily due to deteriorating general economic conditions with increases in non-performing loans across most loan types.

Annualized net charge-offs for the quarter ended September 30, 2008 were 0.38 percent of average total loans, compared to 0.08 percent for the quarter ended September 30, 2007 and 0.33 percent for the quarter ended June 30, 2008. Net loans charged off increased $9.0 million, or 437.8 percent, for the quarter ended September 30, 2008 in comparison to the same period in 2007. The increase in charge-offs was across all loan types. For the nine months ended September 30, 2008, annualized net charge-offs were 0.29 percent of average total loans, compared to 0.07 percent for the same period in 2007. The provision for loan losses increased $22.1 million for the third quarter of 2008, as compared to the same period in 2007, and increased $10.0 million from the second quarter of 2008. For the nine months ended September 30, 2008, the provision for loan losses was $54.6 million, a 561.1 percent increase from the $8.3 million recorded during the same period in 2007. The increase in the provision for loan losses was due to the increase in the level of non-performing assets, which required additional allocations to the allowance for credit losses and reflects the negative impact of weakening economic conditions on borrowers' ability to repay their loans.

Total deposits decreased $374.6 million, or 3.6 percent, to $9.9 billion at September 30, 2008 compared to $10.3 billion at September 30, 2007. The decrease was due to a $291.6 million, or 6.3 percent, decrease in time deposits and an $83.0 million, or 1.5 percent, decrease in demand and savings deposits. In comparison to the second quarter of 2008, total deposits decreased $21.6 million, or 0.2 percent, due to a $120.7 million, or 2.1 percent, decrease in demand and savings deposits, offset by a $99.1 million, or 2.3 percent, increase in time deposits.

Net interest income for the third quarter of 2008 increased $11.6 million, or 9.5 percent, compared to the same period in 2007 and increased $2.1 million, or 1.6 percent, from the second quarter of 2008. The Corporation's net interest margin was 3.74 percent for the third quarter of 2008, 3.62 percent for the third quarter of 2007 and 3.75 percent for the second quarter of 2008. The improvement in net interest income in comparison to the same period in 2007 was mainly due to the Corporation's increased use of lower cost short-term borrowings, rather than higher cost interest-bearing deposit accounts, to fund asset growth.

Other income, excluding investment securities (losses) gains, increased $3.2 million, or 8.8 percent, in the third quarter of 2008 compared to the same period in 2007. The increase was due to an increase in fee income on deposit accounts of $4.9 million, an increase due to fees earned in 2008 under an ongoing marketing agreement with the purchaser of the credit card portfolio of $1.3 million and an increase in fees on non-deposit services of $1.1 million. These increases in comparison to the same period in 2007 were partially offset by a $2.1 million gain from the sale of certain mortgage-related assets and the settlement of related lawsuits recorded during the third quarter of 2007 and a $1.2 million decrease in investment management and trust services income. Compared to the second quarter of 2008, other income, excluding securities (losses) gains and the gain on the sale of the credit card portfolio, was essentially unchanged.

Investment securities losses in the third quarter of 2008 were $9.5 million compared to $134,000 in the third quarter of 2007. The third quarter loss resulted from $2.1 million other-than-temporary impairment charges on bank stocks and $8.7 million of other-than-temporary impairment charges on other securities. These losses were partially offset by $1.3 million in net gains on the sale of equity and debt securities. During the second quarter of 2008, the Corporation recorded the aforementioned $24.7 million of other-than-temporary impairment charge on bank stocks. As of September 30, 2008, the bank stock portfolio has a carrying value of $55.2 million and a fair value of $54.3 million.

Other expenses decreased $8.8 million, or 8.2 percent, compared to the same period in 2007, to $99.2 million. The decrease was primarily due to the aforementioned $16.0 million pre-tax charge in 2007 related to the Corporation's potential repurchase of previously sold residential mortgage loans and home equity loans, partially offset by a $2.8 million increase in salaries and employee benefits and an additional $2.7 million loss in 2008 due to a decrease in the estimated fair value of ARCs still held in customer accounts. Compared to the second quarter of 2008, other expenses decreased $10.6 million, or 9.6 percent, due primarily to the aforementioned $13.2 million loss recorded in the second quarter of 2008 related to ARCs.

Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which has nearly 3,900 employees and operates more than 265 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, Lancaster, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Hagerstown Trust Company, Hagerstown, MD; Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; The Peoples Bank of Elkton, Elkton, MD; Skylands Community Bank, Hackettstown, NJ and The Columbia Bank, Columbia, MD.

The Corporation's financial services affiliates include: Fulton Financial Advisors, N.A., Lancaster, PA; Fulton Insurance Services Group, Inc., Lancaster, PA; and Dearden, Maguire, Weaver and Barrett, LLC, West Conshohocken, PA. 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 our financial condition, results of operations and business. Forward-looking statements are encouraged by the Private Securities Litigation Reform Act of 1995. When words such as "believes," "expects," "anticipates" or similar expressions are used in this release, the Corporation is making forward-looking statements.

Such forward-looking statements reflect the Corporation's current views and expectations based largely on information currently available to its management, and on its current expectations, assumptions, plan, estimates, judgments, and projections about its business and its industry, and they involve inherent risks, contingencies, uncertainties and other factors. Although the Corporation believes that these forward-looking statements are based on reasonable estimates and assumptions, the Corporation is unable to provide any assurance that its expectations will, in fact, occur or that its estimates or assumptions will be correct and actual results could differ materially from those expressed or implied by such forward-looking statements and such statements are not guarantees of future performance. The Corporation undertakes no obligation to update or revise any forward-looking statements. Accordingly, investors and others are cautioned not to place undue reliance on such forward-looking statements.

Many factors could affect future financial results including, without limitation, acquisition and growth strategies; market risk; changes or adverse developments in economic, political or regulatory conditions; a continuation or worsening of the current disruption in credit and other markets, including the lack of or reduced access to, and the abnormal functioning of markets for mortgage and other asset-backed securities and for commercial paper and other short-term borrowings; the effect of competition and interest rates on net interest margin and net interest income; investment strategy and income growth; investment securities gains; declines in the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth; 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; 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.

2008

FULTON FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (UNAUDITED)
dollars in thousands, except per-share data

                                           September 30
                                     -------------------------
BALANCE SHEET DATA                       2008         2007       % Change
                                     ------------ ------------ -----------

Total assets                         $ 16,136,145 $ 15,438,177        4.5%
Loans, net of unearned income          11,823,529   10,988,307        7.6%
Investment securities                   2,806,535    2,948,262       (4.8%)
Deposits                                9,916,555   10,291,186       (3.6%)
Shareholders' equity                    1,603,910    1,554,120        3.2%


                  Quarter Ended                Nine Months Ended
                  September 30                   September 30
              --------------------           --------------------
INCOME                                 %                              %
 SUMMARY        2008       2007     Change     2008       2007     Change
              ---------  ---------  -------  ---------  ---------  -------

Interest
 income       $ 213,809  $ 238,740   (10.4%) $ 658,421  $ 699,508    (5.9%)
Interest
 expense        (79,791)  (116,330)  (31.4%)  (266,614)  (334,415)  (20.3%)
              ---------  ---------           ---------  ---------
  Net
   interest
   income       134,018    122,410     9.5%    391,807    365,093     7.3%
Provision for
 loan losses    (26,700)    (4,606)  479.7%    (54,626)    (8,263)  561.1%
Investment
 securities
 (losses)
 gains           (9,501)      (134)    N/M     (29,902)     2,277     N/M
Gain on sale
 of credit
 card
 portfolio            -          -     N/A      13,910          -     N/A
Other income     40,116     36,877     8.8%    116,437    110,536     5.3%
Other
 expenses       (99,155)  (107,996)   (8.2%)  (305,551)  (307,008)   (0.5%)
              ---------  ---------           ---------  ---------
  Income
   before
   income
   taxes         38,778     46,551   (16.7%)   132,075    162,635   (18.8%)
Income taxes     (9,702)   (12,985)  (25.3%)   (35,825)   (48,096)  (25.5%)
              ---------  ---------           ---------  ---------
  Net income  $  29,076  $  33,566   (13.4%) $  96,250  $ 114,539   (16.0%)
              =========  =========           =========  =========

PER-SHARE
 DATA:

Net income:
   Basic      $    0.17  $    0.19   (10.5%) $    0.55  $    0.66   (16.7%)
   Diluted         0.17       0.19   (10.5%)      0.55       0.66   (16.7%)
   Cash
    dividends      0.15       0.15       -       0.450      0.448     0.4%

Shareholders'
 equity            9.18       8.96     2.5%
Shareholders'
 equity
 (tangible)        5.46       5.17     5.6%

SELECTED
 FINANCIAL
 RATIOS:

Return on
 average
 assets            0.73%      0.88%               0.81%      1.03%
Return on
 average
 shareholders'
 equity            7.25%      8.67%               8.02%     10.07%
Return on
 average
 shareholders'
 equity
 (tangible)       12.72%     15.76%              14.00%     18.42%
Net interest
 margin            3.74%      3.62%               3.69%      3.69%
Efficiency
 ratio            54.69%     65.17%              56.21%     61.97%
Non-performing
 assets to
 total assets      1.15%      0.69%


N/M - Not meaningful
N/A - Not applicable



FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)
dollars in thousands

                                                            % Change from
                                                          ----------------
                    September    September               September
                        30           30        June 30       30    June 30
                       2008         2007         2008       2007     2008
                   -----------  -----------  -----------  -------  -------

ASSETS
  Cash and due
   from banks      $   315,841  $   337,306  $   420,273    (6.4%)  (24.8%)
  Loans held for
   sale                 71,090      116,451      116,351   (39.0%)  (38.9%)
  Other
   interest-earning
   assets               50,189       19,673       10,234   155.1%   390.4%
  Investment
   securities        2,806,535    2,948,262    2,706,949    (4.8%)    3.7%
  Loans, net of
   unearned income  11,823,529   10,988,307   11,577,495     7.6%     2.1%
  Allowance for
   loan losses        (136,988)    (109,435)    (122,340)   25.2%    12.0%
                   -----------  -----------  -----------
       Net Loans    11,686,541   10,878,872   11,455,155     7.4%     2.0%
  Premises and
   equipment           199,464      190,092      196,934     4.9%     1.3%
  Accrued interest
   receivable           62,018       73,927       61,366   (16.1%)    1.1%
  Goodwill and
   intangible
   assets              649,635      658,274      651,324    (1.3%)   (0.3%)
  Other assets         294,832      215,320      439,539    36.9%   (32.9%)
                   -----------  -----------  -----------
     Total Assets  $16,136,145  $15,438,177  $16,058,125     4.5%     0.5%
                   ===========  ===========  ===========

LIABILITIES AND
 SHAREHOLDERS'
 EQUITY
  Deposits         $ 9,916,555  $10,291,186  $ 9,938,194    (3.6%)   (0.2%)
  Short-term
   borrowings        2,589,966    1,773,083    2,497,387    46.1%     3.7%
  Federal Home
   Loan Bank
   advances and
   long-term debt    1,819,889    1,632,980    1,819,428    11.4%       -
  Other
   liabilities         205,825      186,808      209,638    10.2%    (1.8%)
                   -----------  -----------  -----------
     Total
      Liabilities   14,532,235   13,884,057   14,464,647     4.7%     0.5%
  Shareholders'
   equity            1,603,910    1,554,120    1,593,478     3.2%     0.7%
                   -----------  -----------  -----------
     Total
      Liabilities
      and
      Shareholder's
      Equity       $16,136,145  $15,438,177  $16,058,125     4.5%     0.5%
                   ===========  ===========  ===========

LOANS, DEPOSITS
 AND SHORT-TERM
 BORROWINGS
 DETAIL:
Loans, by type:
  Real estate -
   commercial
   mortgage        $ 3,897,703  $ 3,407,715  $ 3,792,326    14.4%     2.8%
  Commercial -
   industrial,
   financial and
   agricultural      3,554,615    3,328,963    3,518,483     6.8%     1.0%
  Real estate -
   home equity       1,647,245    1,472,376    1,593,775    11.9%     3.4%
  Real estate -
   residential
   mortgage            979,486      809,148      929,252    21.1%     5.4%
  Real estate -
   construction      1,277,552    1,389,164    1,296,400    (8.0%)   (1.5%)
  Consumer             387,849      500,021      362,555   (22.4%)    7.0%
  Leasing and
   other                79,079       80,920       84,704    (2.3%)   (6.6%)
                   -----------  -----------  -----------
  Total Loans, net
   of unearned
   income          $11,823,529  $10,988,307  $11,577,495     7.6%     2.1%
                   ===========  ===========  ===========
Deposits, by type:
  Noninterest-
   bearing demand  $ 1,690,499  $ 1,696,871  $ 1,789,150    (0.4%)   (5.5%)
  Interest-bearing
   demand            1,690,330    1,738,605    1,671,769    (2.8%)    1.1%
  Savings deposits   2,166,998    2,195,363    2,207,617    (1.3%)   (1.8%)
  Time deposits      4,368,728    4,660,347    4,269,658    (6.3%)    2.3%
                   -----------  -----------  -----------
  Total Deposits   $ 9,916,555  $10,291,186  $ 9,938,194    (3.6%)   (0.2%)
                   ===========  ===========  ===========
Short-term
 borrowings, by
 type:
  Federal funds
   purchased       $ 1,326,873  $   842,476  $ 1,531,568    57.5%   (13.4%)
  Short-term
   promissory
   notes               460,512      476,249      480,489    (3.3%)   (4.2%)
  Customer
   repurchase
   agreements          222,415      248,915      219,716   (10.6%)    1.2%
  Overnight
   borrowings and
   other               580,166      205,443      265,614   182.4%   118.4%
                   -----------  -----------  -----------
  Total Short-term
   borrowings      $ 2,589,966  $ 1,773,083  $ 2,497,387    46.1%     3.7%
                   ===========  ===========  ===========



FULTON FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (UNAUDITED)
dollars in thousands, except per-share data

                              Quarter Ended               % Change from
                     -------------------------------  --------------------
                     September  September             September
                        30         30       June 30      30       June 30
                       2008       2007       2008       2007       2008
                     ---------  ---------  ---------  ---------  ---------

Interest Income:
  Interest Income    $ 213,809  $ 238,740  $ 215,392     (10.4%)     (0.7%)
  Interest Expense      79,791    116,330     83,502     (31.4%)     (4.4%)
                     ---------  ---------  ---------
    Net Interest
     Income            134,018    122,410    131,890       9.5%       1.6%
  Provision for Loan
   Losses               26,700      4,606     16,706     479.7%      59.8%
                     ---------  ---------  ---------
    Net Interest
     Income after
     Provision         107,318    117,804    115,184      (8.9%)     (6.8%)
Other Income:
  Service charges on
   deposit accounts     16,177     11,293     15,319      43.2%       5.6%
  Other service
   charges and fees      9,598      8,530      9,131      12.5%       5.1%
  Investment
   management and
   trust services        8,045      9,291      8,389     (13.4%)     (4.1%)
  Gains on sale of
   mortgage loans        2,266      2,532      2,670     (10.5%)    (15.1%)
  Investment
   securities
   (losses) gains       (9,501)      (134)   (21,647)      N/M       56.1%
  Gain on sale of
   credit card
   portfolio                 -          -     13,910       N/A        N/A
  Other                  4,030      5,231      4,378     (23.0%)     (7.9%)
                     ---------  ---------  ---------
    Total Other
     Income             30,615     36,743     32,150     (16.7%)     (4.8%)
Other Expenses:
  Salaries and
   employee benefits    55,310     52,505     54,281       5.3%       1.9%
  Net occupancy
   expense              10,237      9,813     10,238       4.3%         -
  Operating risk
   loss                  3,480     16,345     14,385     (78.7%)    (75.8%)
  Data processing        3,242      3,131      3,116       3.5%       4.0%
  Advertising            3,097      2,470      3,519      25.4%     (12.0%)
  Equipment expense      3,061      3,438      3,398     (11.0%)     (9.9%)
  Intangible
   amortization          1,730      1,995      1,799     (13.3%)     (3.8%)
  Other                 18,998     18,299     19,000       3.8%         -
                     ---------  ---------  ---------
    Total Other
     Expenses           99,155    107,996    109,736      (8.2%)     (9.6%)
                     ---------  ---------  ---------
    Income Before
     Income Taxes       38,778     46,551     37,598     (16.7%)      3.1%
  Income Taxes           9,702     12,985     11,920     (25.3%)    (18.6%)
                     ---------  ---------  ---------
    Net Income       $  29,076  $  33,566  $  25,678     (13.4%)     13.2%
                     =========  =========  =========

SHARE AND PER-SHARE
 INFORMATION:
  Net income:
    Basic            $    0.17  $    0.19  $    0.15     (10.5%)     13.3%
    Diluted               0.17       0.19       0.15     (10.5%)     13.3%

  Cash dividends     $    0.15  $    0.15  $    0.15         -          -
  Shareholders'
   equity                 9.18       8.96       9.15       2.5%       0.3%
  Shareholders'
   equity (tangible)      5.46       5.17       5.41       5.6%       0.9%

  Weighted average
   shares (basic)      174,463    173,304    173,959       0.7%       0.3%
  Weighted average
   shares (diluted)    174,912    174,370    174,528       0.3%       0.2%
  Shares
   outstanding, end
   of period           174,687    173,394    174,107       0.7%       0.3%

SELECTED FINANCIAL
 RATIOS:
  Return on average
   assets                 0.73%      0.88%      0.65%
  Return on average
   shareholders'
   equity                 7.25%      8.67%      6.33%
  Return on average
   shareholders'
   equity (tangible)     12.72%     15.76%     11.03%
  Net interest
   margin                 3.74%      3.62%      3.75%
  Efficiency ratio       54.69%     65.17%     56.93%



                       Nine Months Ended
                         September 30
                     --------------------
                       2008       2007     % Change
                     ---------  ---------  ---------

Interest Income:
  Interest Income    $ 658,421  $ 699,508      (5.9%)
  Interest Expense     266,614    334,415     (20.3%)
                     ---------  ---------
    Net Interest
     Income            391,807    365,093       7.3%
  Provision for Loan
   Losses               54,626      8,263     561.1%
                     ---------  ---------
    Net Interest
     Income after
     Provision         337,181    356,830      (5.5%)
Other Income:
  Service charges on
   deposit accounts     45,463     33,145      37.2%
  Other service
   charges and fees     27,320     23,746      15.1%
  Investment
   management and
   trust services       25,193     29,374     (14.2%)
  Gains on sale of
   mortgage loans        7,247     12,113     (40.2%)
  Investment
   securities
   (losses) gains      (29,902)     2,277       N/M
  Gain on sale of
   credit card
   portfolio            13,910          -       N/A
  Other                 11,214     12,158      (7.8%)
                     ---------  ---------
    Total Other
     Income            100,445    112,813     (11.0%)
Other Expenses:
  Salaries and
   employee benefits   164,786    164,353       0.3%
  Net occupancy
   expense              30,999     29,963       3.5%
  Operating risk
   loss                 19,108     26,462     (27.8%)
  Data processing        9,604      9,550       0.6%
  Advertising            9,521      7,869      21.0%
  Equipment expense      9,907     10,589      (6.4%)
  Intangible
   amortization          5,386      6,176     (12.8%)
  Other                 56,240     52,046       8.1%
                     ---------  ---------
    Total Other
     Expenses          305,551    307,008      (0.5%)
                     ---------  ---------
    Income Before
     Income Taxes      132,075    162,635     (18.8%)
  Income Taxes          35,825     48,096     (25.5%)
                     ---------  ---------
    Net Income       $  96,250  $ 114,539     (16.0%)
                     =========  =========

SHARE AND PER-SHARE
 INFORMATION:
  Net income:
    Basic            $    0.55  $    0.66     (16.7%)
    Diluted               0.55       0.66     (16.7%)

  Cash dividends     $   0.450  $   0.448       0.4%
  Shareholders'
   equity
  Shareholders'
   equity (tangible)

  Weighted average
   shares (basic)      174,017    173,254       0.4%
  Weighted average
   shares (diluted)    174,551    174,493         -
  Shares
   outstanding, end
   of period

SELECTED FINANCIAL
 RATIOS:
  Return on average
   assets                 0.81%      1.03%
  Return on average
   shareholders'
   equity                 8.02%     10.07%
  Return on average
   shareholders'
   equity (tangible)     14.00%     18.42%
  Net interest
   margin                 3.69%      3.69%
  Efficiency ratio       56.21%     61.97%


N/M - Not meaningful
N/A - Not applicable


FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands

                                                Quarter Ended
                                  ----------------------------------------
                                             September 30, 2008
                                  ----------------------------------------
                                    Average                      Yield/
                                    Balance     Interest (1)      Rate
                                  ------------  ------------  ------------
ASSETS
Interest-earning assets:
  Loans, net of unearned income   $ 11,696,841  $    181,562          6.18%
  Taxable investment securities      2,117,207        26,025          4.70%
  Tax-exempt investment
   securities                          509,994         6,944          5.45%
  Equity securities                    168,690         1,614          3.82%
                                  ------------  ------------  ------------
  Total Investment Securities        2,795,891        34,583          4.78%
  Loans held for sale                  101,319         1,539          6.08%
  Other interest-earning assets         19,013           142          2.94%
                                  ------------  ------------  ------------
  Total Interest-earning Assets     14,613,064       217,826          5.91%
Noninterest-earning assets:
  Cash and due from banks              322,550
  Premises and equipment               197,895
  Other assets                         933,303
  Less: allowance for loan losses     (123,865)
                                  ------------
  Total Assets                    $ 15,942,947
                                  ============


LIABILITIES AND SHAREHOLDERS'
 EQUITY
Interest-bearing liabilities:
  Demand deposits                 $  1,734,198  $      3,166          0.73%
  Savings deposits                   2,192,747         6,633          1.20%
  Time deposits                      4,308,903        37,393          3.45%
                                  ------------  ------------  ------------
  Total Interest-bearing Deposits    8,235,848        47,192          2.28%
  Short-term borrowings              2,432,109        12,877          2.08%
  Federal Home Loan Bank advances
   and long-term debt                1,819,897        19,722          4.32%
                                  ------------  ------------  ------------
  Total Interest-bearing
   Liabilities                      12,487,854        79,791          2.54%
Noninterest-bearing liabilities:
  Demand deposits                    1,669,908
  Other                                190,012
                                  ------------
  Total Liabilities                 14,347,774
  Shareholders' equity               1,595,173
                                  ------------
  Total Liabilities and
   Shareholders' Equity           $ 15,942,947
                                  ============

  Net interest income/net
   interest margin (fully taxable
   equivalent)                                       138,035          3.74%
                                                              ============
  Tax equivalent adjustment                           (4,017)
                                                ------------
  Net interest income                           $    134,018
                                                ============



                                                Quarter Ended
                                  ----------------------------------------
                                             September 30, 2007
                                  ----------------------------------------
                                    Average                      Yield/
                                    Balance     Interest (1)      Rate
                                  ------------  ------------  ------------
ASSETS
Interest-earning assets:
  Loans, net of unearned income   $ 10,857,636  $    205,747          7.52%
  Taxable investment securities      2,116,123        24,583          4.65%
  Tax-exempt investment
   securities                          499,389         6,377          5.11%
  Equity securities                    188,490         2,269          4.80%
                                  ------------  ------------  ------------
  Total Investment Securities        2,804,002        33,229          4.74%
  Loans held for sale                  159,492         2,694          6.76%
  Other interest-earning assets         34,536           432          4.91%
                                  ------------  ------------  ------------
  Total Interest-earning Assets     13,855,666       242,102          6.95%
Noninterest-earning assets:
  Cash and due from banks              338,862
  Premises and equipment               190,175
  Other assets                         890,901
  Less: allowance for loan losses     (108,628)
                                  ------------
  Total Assets                    $ 15,166,976
                                  ============


LIABILITIES AND SHAREHOLDERS'
 EQUITY
Interest-bearing liabilities:
  Demand deposits                 $  1,729,357  $      7,630          1.75%
  Savings deposits                   2,259,231        13,680          2.40%
  Time deposits                      4,626,160        55,093          4.72%
                                  ------------  ------------  ------------
  Total Interest-bearing Deposits    8,614,748        76,403          3.52%
  Short-term borrowings              1,477,288        17,786          4.74%
  Federal Home Loan Bank advances
   and long-term debt                1,655,599        22,141          5.32%
                                  ------------  ------------  ------------
  Total Interest-bearing
   Liabilities                      11,747,635       116,330          3.93%
Noninterest-bearing liabilities:
  Demand deposits                    1,703,137
  Other                                179,391
                                  ------------
  Total Liabilities                 13,630,163
  Shareholders' equity               1,536,813
                                  ------------
  Total Liabilities and
   Shareholders' Equity           $ 15,166,976
                                  ============

  Net interest income/net
   interest margin (fully taxable
   equivalent)                                       125,772          3.62%
                                                              ============
  Tax equivalent adjustment                           (3,362)
                                                ------------
  Net interest income                           $    122,410
                                                ============



                                                Quarter Ended
                                  ----------------------------------------
                                                June 30, 2008
                                  ----------------------------------------
                                    Average                      Yield/
                                    Balance     Interest (1)      Rate
                                  ------------  ------------  ------------
ASSETS
Interest-earning assets:
  Loans, net of unearned income   $ 11,423,409  $    180,433          6.35%
  Taxable investment securities      2,304,391        28,528          4.90%
  Tax-exempt investment
   securities                          509,784         6,911          5.42%
  Equity securities                    196,981         1,729          3.52%
                                  ------------  ------------  ------------
  Total Investment Securities        3,011,156        37,168          4.90%
  Loans held for sale                  108,478         1,610          5.94%
  Other interest-earning assets         16,325           102          2.50%
                                  ------------  ------------  ------------
  Total Interest-earning Assets     14,559,368       219,313          6.05%
Noninterest-earning assets:
  Cash and due from banks              323,223
  Premises and equipment               196,990
  Other assets                         984,000
  Less: allowance for loan losses     (115,936)
                                  ------------
  Total Assets                    $ 15,947,645
                                  ============


LIABILITIES AND SHAREHOLDERS'
 EQUITY
Interest-bearing liabilities:
  Demand deposits                 $  1,708,050  $      2,967          0.70%
  Savings deposits                   2,207,699         6,600          1.20%
  Time deposits                      4,361,280        41,562          3.83%
                                  ------------  ------------  ------------
  Total Interest-bearing Deposits    8,277,029        51,129          2.48%
  Short-term borrowings              2,314,845        12,388          2.13%
  Federal Home Loan Bank advances
   and long-term debt                1,871,649        19,985          4.29%
                                  ------------  ------------  ------------
  Total Interest-bearing
   Liabilities                      12,463,523        83,502          2.69%
Noninterest-bearing liabilities:
  Demand deposits                    1,662,266
  Other                                190,963
                                  ------------
  Total Liabilities                 14,316,752
  Shareholders' equity               1,630,893
                                  ------------
  Total Liabilities and
   Shareholders' Equity           $ 15,947,645
                                  ============

  Net interest income/net
   interest margin (fully taxable
   equivalent)                                       135,811          3.75%
                                                              ============
  Tax equivalent adjustment                           (3,921)
                                                ------------
  Net interest income                           $    131,890
                                                ============

  (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
                   -------------------------------------- ----------------
                                                         September
                   September 30 September 30   June 30       30    June 30
                       2008         2007         2008       2007     2008
                   ------------ ------------ ------------ -------  -------

Loans, by type:
  Real estate -
   commercial
   mortgage        $  3,820,045 $  3,383,487 $  3,697,650   12.9%     3.3%
  Commercial -
   industrial,
   financial and
   agricultural       3,557,142    3,281,342    3,510,150    8.4%     1.3%
  Real estate -
   home equity        1,619,935    1,454,947    1,568,173   11.3%     3.3%
  Real estate -
   residential
   mortgage             953,420      769,381      894,652   23.9%     6.6%
  Real estate -
   construction       1,293,096    1,382,951    1,291,064   (6.5%)    0.2%
  Consumer              368,804      502,482      376,537  (26.6%)   (2.1%)
  Leasing and
   other                 84,399       83,046       85,183    1.6%    (0.9%)
                   ------------ ------------ ------------

  Total Loans, net
   of unearned
   income          $ 11,696,841 $ 10,857,636 $ 11,423,409    7.7%     2.4%
                   ============ ============ ============

Deposits, by type:
  Noninterest-
   bearing demand  $  1,669,908 $  1,703,137 $  1,662,266   (2.0%)    0.5%
  Interest-bearing
   demand             1,734,198    1,729,357    1,708,050    0.3%     1.5%
  Savings deposits    2,192,747    2,259,231    2,207,699   (2.9%)   (0.7%)
  Time deposits       4,308,903    4,626,160    4,361,280   (6.9%)   (1.2%)
                   ------------ ------------ ------------

  Total Deposits   $  9,905,756 $ 10,317,885 $  9,939,295   (4.0%)   (0.3%)
                   ============ ============ ============

Short-term
 borrowings, by
 type:
  Federal funds
   purchased       $  1,399,130 $    756,360 $  1,303,590   85.0%     7.3%
  Short-term
   promissory
   notes                486,179      446,182      468,802    9.0%     3.7%
  Customer
   repurchase
   agreements           213,827      242,375      223,092  (11.8%)   (4.2%)
  Overnight
   borrowings and
   other                332,973       32,371      319,361  928.6%     4.3%
                   ------------ ------------ ------------

  Total Short-term
   borrowings      $  2,432,109 $  1,477,288 $  2,314,845   64.6%     5.1%
                   ============ ============ ============



FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands

                             Nine Months Ended September 30
              ------------------------------------------------------------
                           2008                           2007
              -----------------------------  -----------------------------
                Average     Interest  Yield    Average     Interest  Yield
                Balance        (1)    /Rate    Balance        (1)    /Rate
              ------------  ---------  ----  ------------  ---------  ----
ASSETS
Interest-
 earning assets:
  Loans, net
   of
   unearned
   income     $ 11,472,748  $ 554,437  6.45% $ 10,619,834  $ 601,390  7.57%
  Taxable
   investment
   securities    2,275,681     84,114  4.84%    2,092,916     71,201  4.54%
  Tax-exempt
   investment
   securities      511,871     20,831  5.43%      497,504     19,010  5.09%
  Equity
   securities      192,803      5,723  3.96%      185,215      6,628  4.78%
              ------------  ---------  ----  ------------  ---------  ----
  Total
   Investment
   Securities    2,980,355    110,668  4.89%    2,775,635     96,839  4.65%
  Loans held
   for sale        102,819      4,726  6.13%      188,223      9,771  6.92%
  Other
   interest-
   earning
   assets           20,701        462  2.96%       36,008      1,339  4.93%
              ------------  ---------  ----  ------------  ---------  ----
  Total
   Interest-
   earning
   Assets       14,576,623    670,293  6.13%   13,619,700    709,339  6.96%
Noninterest-
 earning
 assets:
  Cash and
   due from
   banks           318,844                        331,945
  Premises
   and
   equipment       196,977                        190,711
  Other
   assets          948,134                        896,604
  Less:
   allowance
   for loan
   losses         (116,598)                      (108,425)
              ------------                   ------------
  Total
   Assets     $ 15,923,980                   $ 14,930,535
              ============                   ============

LIABILITIES
 AND
 SHAREHOLDERS'
 EQUITY
Interest-
 bearing
 liabilities:
  Demand
   deposits   $  1,709,380  $  10,538  0.82% $  1,688,129  $  21,733  1.72%
  Savings
   deposits      2,179,432     22,396  1.37%    2,284,521     41,266  2.41%
  Time
   deposits      4,396,409    128,873  3.92%    4,537,160    158,411  4.67%
              ------------  ---------  ----  ------------  ---------  ----
  Total
   Interest-
   bearing
   Deposits      8,285,221    161,807  2.61%    8,509,810    221,410  3.48%
  Short-term
   borrowings    2,365,052     44,093  2.46%    1,424,109     51,734  4.82%
  Federal
   Home Loan
   Bank
   advances
   and
   long-term
   debt          1,829,981     60,714  4.43%    1,564,333     61,271  5.23%
              ------------  ---------  ----  ------------  ---------  ----
  Total
   Interest-
   bearing
   Liabilities  12,480,254    266,614  2.85%   11,498,252    334,415  3.88%
Noninterest-
 bearing
 liabilities:
  Demand
   deposits      1,649,560                      1,726,782
  Other            190,487                        184,010
              ------------                   ------------
  Total
   Liabilities  14,320,301                     13,409,044
  Share-
   holders'
   equity        1,603,679                      1,521,491
              ------------                   ------------
  Total
   Liabilities
   and Share-
   holders'
   Equity     $ 15,923,980                   $ 14,930,535
              ============                   ============

  Net
   interest
   income/net
   interest
   margin
   (fully
   taxable
   equivalent)                403,679  3.69%                 374,924  3.69%
                                       ====                           ====
  Tax
   equivalent
   adjustment                 (11,872)                        (9,831)
                            ---------                      ---------
  Net
   interest
   income                   $ 391,807                      $ 365,093
                            =========                      =========

  (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:


                                         Nine Months Ended
                                           September 30
                                     -------------------------
                                         2008         2007       % Change
                                     ------------ ------------ -----------

Loans, by type:
  Real estate - commercial mortgage  $  3,688,880 $  3,303,854       11.7%
  Commercial - industrial, financial
   and agricultural                     3,513,406    3,162,524       11.1%
  Real estate - home equity             1,571,705    1,444,100        8.8%
  Real estate - residential mortgage      903,226      727,491       24.2%
  Real estate - construction            1,304,252    1,386,960       (6.0%)
  Consumer                                406,058      508,544      (20.2%)
  Leasing and other                        85,221       86,361       (1.3%)
                                     ------------ ------------

  Total Loans, net of unearned
   income                            $ 11,472,748 $ 10,619,834        8.0%
                                     ============ ============

Deposits, by type:
  Noninterest-bearing demand         $  1,649,560 $  1,726,782       (4.5%)
  Interest-bearing demand               1,709,380    1,688,129        1.3%
  Savings deposits                      2,179,432    2,284,521       (4.6%)
  Time deposits                         4,396,409    4,537,160       (3.1%)
                                     ------------ ------------

  Total Deposits                     $  9,934,781 $ 10,236,592       (2.9%)
                                     ============ ============

Short-term borrowings, by type:
  Federal funds purchased            $  1,296,074 $    751,954       72.4%
  Short-term promissory notes             475,523      379,761       25.2%
  Customer repurchase agreements          221,253      251,520      (12.0%)
  Overnight borrowings and other          372,202       40,874      810.6%
                                     ------------ ------------

  Total Short-term borrowings        $  2,365,052 $  1,424,109       66.1%
                                     ============ ============



FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands


                              Quarter Ended
                     -------------------------------   Nine Months Ended
                     September  September                 September 30
                         30         30      June 30   ---------  ---------
                       2008       2007       2008       2008       2007
                     ---------  ---------  ---------  ---------  ---------
ALLOWANCE FOR CREDIT
 LOSSES:
  Balance at
   beginning of
   period            $ 126,223  $ 106,892  $ 119,069  $ 112,209  $ 106,884
  Loans charged-off:
    Commercial -
     financial and
     agricultural       (4,684)    (1,452)    (4,752)   (12,200)    (4,596)
    Real estate -
     mortgage           (5,857)      (122)    (2,105)    (8,811)      (527)
    Consumer              (991)      (874)    (1,366)    (3,738)    (2,509)
    Leasing and
     other              (1,166)      (357)    (1,973)    (3,771)    (1,039)
                     ---------  ---------  ---------  ---------  ---------
    Total loans
     charged off       (12,698)    (2,805)   (10,196)   (28,520)    (8,671)
  Recoveries of
   loans charged
   off:
    Commercial -
     financial and
     agricultural          749        267          -      1,025      1,467
    Real estate -
     mortgage              238          8         67        385         89
    Consumer               304        324        300      1,022        903
    Leasing and
     other                 313        143        277      1,082        500
                     ---------  ---------  ---------  ---------  ---------
    Recoveries of
     loans
     previously
     charged off         1,604        742        644      3,514      2,959
                     ---------  ---------  ---------  ---------  ---------
  Net loans charged
   off                 (11,094)    (2,063)    (9,552)   (25,006)    (5,712)
  Provision for loan
   losses               26,700      4,606     16,706     54,626      8,263
                     ---------  ---------  ---------  ---------  ---------
  Balance at end of
   period            $ 141,829  $ 109,435  $ 126,223  $ 141,829  $ 109,435
                     =========  =========  =========  =========  =========

  Net charge-offs to
   average loans
   (annualized)           0.38%      0.08%      0.33%      0.29%      0.07%
                     =========  =========  =========  =========  =========

COMPONENTS OF
 ALLOWANCE FOR
 CREDIT LOSSES:
  Allowance for loan
   losses            $ 136,988  $ 109,435  $ 122,340
  Reserve for
   unfunded lending
   commitments (1)       4,841          -      3,883
                     ---------  ---------  ---------
  Allowance for
   credit losses     $ 141,829  $ 109,435  $ 126,223
                     =========  =========  =========

  (1) Reserve for unfunded commitments transferred to other liabilities
   as of December 31, 2007. Prior periods were not reclassified.


NON-PERFORMING
 ASSETS:
  Non-accrual loans  $ 143,310  $  71,043  $ 108,699
  Loans 90 days past
   due and accruing     21,354     23,406     35,656
                     ---------  ---------  ---------
    Total
     non-performing
     loans             164,664     94,449    144,355
  Other real estate
   owned                21,706     12,536     20,156
                     ---------  ---------  ---------
  Total
   non-performing
   assets            $ 186,370  $ 106,985  $ 164,511
                     =========  =========  =========

NON-PERFORMING
 LOANS, BY TYPE:
  Commercial -
   industrial,
   agricultural and
   financial         $  41,489  $  24,078  $  40,127
  Real estate -
   commercial
   mortgage             32,642     14,254     39,099
  Real estate -
   residential
   mortgage and home
   equity               26,274     24,505     21,988
  Real estate -
   construction         57,436     28,029     37,003
  Consumer               6,558      3,447      5,748
  Leasing                  265        136        390
                     ---------  ---------  ---------
  Total
   non-performing
   loans             $ 164,664  $  94,449  $ 144,355
                     =========  =========  =========

ASSET QUALITY
 RATIOS:
  Non-accrual loans
   to total loans         1.21%      0.65%      0.94%
  Non-performing
   assets to total
   loans and OREO         1.57%      0.97%      1.42%
  Non-performing
   assets to total
   assets                 1.15%      0.69%      1.02%
  Allowance for
   credit losses to
   loans outstanding      1.20%      1.00%      1.09%
  Allowance for loan
   losses to loans
   outstanding            1.16%      1.00%      1.06%
  Allowance for
   credit losses to
   non-performing
   loans                    86%       116%        87%

Contact Information

  • Media Contact:
    Laura J. Wakeley
    Office: 717-291-2616