Overview of the Third Quarter of 2010
  • Diluted earnings per share for the third quarter of 2010 increased two cents, or 14.3 percent, in comparison to the second quarter of 2010. One cent of this increase resulted from a $3.3 million increase in mortgage banking income as a result of a change in the valuation methodology for the Corporation's mortgage pipeline.
  • Provision for loan losses of $40.0 million, which remained unchanged from the second quarter of 2010. Non-performing assets increased $30.2 million, or 8.8 percent, over the second quarter of 2010.
  • In July 2010, the Corporation redeemed all of its outstanding preferred stock held by the U.S. Department of the Treasury (UST) for $376.5 million. Upon redemption, the Corporation accreted its remaining preferred stock discount, resulting in a $5.5 million, or three cents per diluted share, reduction to third quarter net income available to common shareholders.
  • In September 2010, the Corporation repurchased its outstanding common stock warrant for the purchase of 5.5 million shares of its common stock, also held by the UST, for $10.8 million. The repurchase of the warrant had no impact on diluted earnings per share.

LANCASTER, Pa., Oct. 19, 2010 (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 third quarter ended September 30, 2010, compared to $26.6 million, or 14 cents per diluted share, for the second quarter of 2010.

"Residential mortgage activity along with an increase in our net interest margin contributed to continued earnings improvement in the third quarter. Our strong capital position enabled us to repay our U. S. Treasury TARP funds, in full, and to repurchase the associated warrant," said R. Scott Smith, Jr., Chairman and CEO. "Since the economic recovery has been slower than anticipated, our financial performance continues to reflect asset quality challenges. While deposit growth has been good, loan demand has been comparatively light, as consumer and business spending patterns reflect continued economic uncertainty. Expenses were again well controlled."

In the third quarter of 2010, net income available to common shareholders increased $13.2 million, or 72.2 percent, in comparison to the third quarter of 2009. This increase was primarily due to a $9.3 million increase in gains on sales of mortgage loans, a $7.4 million increase in net interest income and a $5.0 million decrease in the provision for loan losses, partially offset by a $7.0 million increase in income taxes.

For the nine months ended September 30, 2010, net income available to common shareholders increased $46.1 million, or 134.0 percent, in comparison to the prior year. The increase was primarily due to a $33.0 million increase in net interest income, a $25.0 million decrease in the provision for loan losses and a $6.9 million decrease in FDIC insurance expense, partially offset by a $23.5 million increase in income taxes.

Asset Quality

Non-performing assets were $372.8 million, or 2.28 percent of total assets, at September 30, 2010, compared to $342.6 million, or 2.06 percent, at June 30, 2010 and $300.9 million, or 1.82 percent of total assets, at September 30, 2009. The increase in non-performing assets in comparison to the second quarter of 2010 occurred primarily in construction loans, commercial loans and residential mortgages.

Annualized net charge-offs for the quarter ended September 30, 2010 were 1.19 percent of average total loans compared to 0.97 percent for the quarter ended June 30, 2010 and 0.81 percent for the quarter ended September 30, 2009. The allowance for credit losses as a percentage of non-performing loans was 83.2 percent at September 30, 2010 in comparison to 88.5 percent at June 30, 2010 and 85.8 percent at September 30, 2009.

Net Interest Income and Margin

Net interest income for the third quarter of 2010 increased $1.0 million, or 0.7 percent, from the second quarter of 2010 and increased $7.4 million, or 5.6 percent, compared to the same period in 2009. The Corporation's net interest margin was 3.81 percent for the third quarter of 2010, 3.76 percent for second quarter of 2010 and 3.55 percent for the third quarter of 2009.

In May 2010, the Corporation issued 21.8 million shares of its common stock for total proceeds of $226.3 million. The proceeds from the common stock issuance were held in other interest-earning assets until the Corporation was able to redeem its outstanding preferred stock in July 2010. Had the preferred stock been redeemed concurrently with the common stock issuance, the net interest margin for the third and second quarters of 2010 would have been 3.83 percent and 3.82 percent, respectively.

Average Balance Sheet

Total average assets for the third quarter of 2010 were $16.4 billion, a decrease of $197.8 million, or 1.2 percent, from the second quarter of 2010 and a decrease of $200.9 million, or 1.2 percent, from the third quarter of 2009.

The majority of the decrease from the second quarter of 2010 occurred in other interest-earning assets and resulted from the delay between the common stock issuance and the redemption of the preferred stock, as noted above.

Average loans, net of unearned income, for the third quarter of 2010 were essentially unchanged in comparison to the second quarter of 2010.
  Quarter Ended    
  Sep 30 Jun 30 Increase (decrease)
  2010 2010 $ %
  (dollars in thousands)  
Loans, by type:        
Real estate - commercial mortgage  $ 4,341,685  $ 4,319,540  $ 22,145  0.5%
Commercial - industrial, financial and agricultural   3,671,128  3,686,442  (15,314)  (0.4%)
Real estate - home equity  1,643,615  1,638,260  5,355  0.3%
Real estate - residential mortgage   998,165  972,129  26,036  2.7%
Real estate - construction  868,497  909,836  (41,339)  (4.5%)
Consumer  366,719  362,883  3,836  1.1%
Leasing and other  68,336  70,086  (1,750)  (2.5%)
         
Total Loans, net of unearned income  $ 11,958,145  $ 11,959,176  $ (1,031)  -- % 

As in the first half of 2010, weak loan demand continued to hamper overall portfolio growth in the third quarter of 2010. Growth in average residential mortgages and commercial mortgages was more than offset by a decrease in construction loans and commercial loans.

Average investments were $2.8 billion, a $94.2 million, or 3.3 percent, decrease from the second quarter of 2010. Sales and maturities of collateralized mortgage obligations and mortgage backed securities exceeded purchases due to the low interest rate environment.

Average deposits for the third quarter of 2010 increased $161.3 million, or 1.3 percent, from the second quarter of 2010.
  Quarter Ended    
  Sep 30 Jun 30 Increase (decrease)
  2010 2010 $ %
  (dollars in thousands)  
Deposits, by type:        
Noninterest-bearing demand  $ 2,140,866  $ 2,079,674  $ 61,192  2.9%
Interest-bearing demand  2,129,407  2,019,605  109,802  5.4%
Savings deposits  3,214,558  3,090,857  123,701  4.0%
Total, excluding time deposits  7,484,831  7,190,136  294,695  4.1%
Time deposits  4,987,212  5,120,648  (133,436)  (2.6%)
         
Total Deposits  $12,472,043  $12,310,784  $ 161,259  1.3%

Non-interest Income

Other income, excluding investment securities gains, increased $7.2 million, or 16.7 percent, in comparison to the second quarter of 2010. Gains on sales of mortgage loans increased $9.0 million, or 295.4 percent, due to an increase in the volume of loans sold and the margin on such sales. In addition, during the third quarter 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. Offsetting this increase was a $730,000, or 4.7 percent, decrease in service charges on deposit accounts, due to a decrease in overdraft fees as a result of regulatory changes, and a $1.2 million, or 22.0 percent, decrease in other income, primarily due to a decrease in gains on sales of other real estate and a $550,000 increase in the reserve for mortgage servicing rights impairment recorded in the third quarter of 2010.

Compared to the third quarter of 2009, other income, excluding investment securities gains (losses), increased $9.0 million, or 21.9 percent, primarily due to a $9.3 million increase in gains on sales of mortgage loans due to an increase in the margin on loans sold and the aforementioned $3.3 million change. Other service charges and fees increased $634,000, or 6.3 percent, as debit card fees grew due to an increase in transaction volumes partially due to the introduction of a new rewards points program in 2010. Investment management and trust services income increased $413,000 or 5.0 percent, due to an increase in brokerage revenue. These increases were offset by a $569,000, or 3.7 percent, decrease in service charges on deposit accounts, due almost entirely to a decrease in overdraft fees, and a $550,000 increase in the reserve for mortgage servicing rights impairment recorded in the third quarter of 2010.

Investment securities gains in the third quarter of 2010 were $1.8 million compared to gains of $904,000 in the second quarter of 2010 and losses of $45,000 in the third quarter of 2009. The following table summarizes the net realized gains (losses) and other-than-temporary impairment charges by type of security:
  Quarter Ended
  Sep 30 2010 Jun 30 2010 Sep 30 2009
  (in thousands)
Net realized gains (losses):      
Debt securities  $ 4,431  $ 4,388  $ 3,109
Equity securities  210  14  (359)
Other-than-temporary impairment charges:      
Debt securities  (2,335)  (2,989)  (1,846)
Equity securities  (480)  (509)  (949)
       
Investment securities gains (losses)  $ 1,826  $ 904  $ (45)

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 financial institutions stocks, respectively.

Non-interest Expense

Other expenses increased $1.7 million, or 1.6 percent, in the third quarter of 2010 compared to the second quarter of 2010. Marketing expenses increased $330,000, or 14.5 percent, due to additional promotional activities during the third quarter. The $1.7 million, or 10.8 percent, increase in other expenses was primarily due to a $742,000, or 39.5 percent, increase in repossession and expenses related to the sale and maintenance of other real estate owned, a $435,000 increase in litigation reserves associated with the Corporation's share of indemnification liabilities with Visa, Inc. and a $355,000 increase in software maintenance costs. Offsetting these increases was a $427,000 decrease in FDIC insurance expense, due to the Corporation opting out of the Transaction Account Guarantee (TAG) program.

Other expenses increased $2.0 million, or 2.0 percent, in the third quarter of 2010 compared to the same period in 2009.

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; Delaware National Bank, Georgetown, DE; 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" and "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 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 mortgages and other asset-backed securities and for commercial paper and other short-term borrowings; changes in the levels of 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.
       
FULTON FINANCIAL CORPORATION      
FINANCIAL HIGHLIGHTS (UNAUDITED)      
dollars in thousands, except per-share data      
  September 30        
BALANCE SHEET DATA 2010 2009 % Change      
             
Total assets  $ 16,330,773  $ 16,526,709  (1.2%)      
Loans, net of unearned income  11,950,618  11,968,246  (0.1%)      
Investment securities  2,762,238  3,274,399  (15.6%)      
Deposits   12,568,117  12,032,680  4.4%      
Shareholders' equity  1,876,310  1,923,763  (2.5%)      
             
  Quarter Ended September 30   Nine Months Ended September 30  
INCOME SUMMARY 2010 2009 % Change 2010 2009 % Change
             
Interest income  $ 185,356  $ 197,861  (6.3%)  $ 563,624  $ 591,525  (4.7%)
Interest expense  (45,170)  (65,060)  (30.6%)  (145,771)  (206,664)  (29.5%)
Net interest income  140,186  132,801  5.6%  417,853  384,861  8.6%
Provision for loan losses  (40,000)  (45,000)  (11.1%)  (120,000)  (145,000)  (17.2%)
Investment securities gains (losses)  1,826  (45)  N/M   507  2,951  (82.8%)
Other income  50,269  41,225  21.9%  133,020  130,520  1.9%
Other expenses  (101,808)  (99,810)  2.0%  (301,195)  (313,988)  (4.1%)
Income before income taxes  50,473  29,171  73.0%  130,185  59,344  119.4%
Income tax expense  (12,793)  (5,825)  119.6%  (33,343)  (9,802)  240.2%
Net income   37,680  23,346  61.4%  96,842  49,542  95.5%
Preferred stock dividends and discount accretion  (6,172)  (5,046)  22.3%  (16,303)  (15,123)  7.8%
Net income available to common shareholders  $ 31,508  $ 18,300  72.2%  $ 80,539  $ 34,419  134.0%
             
PER COMMON SHARE:            
             
Net income:            
Basic  $ 0.16  $ 0.10  60.0%  $ 0.43  $ 0.20  115.0%
Diluted  0.16  0.10  60.0%  0.43  0.20  115.0%
Cash dividends  0.03  0.03  --   0.09  0.09  -- 
             
Shareholders' equity  9.43  8.82  6.9%  9.43  8.82  6.9%
Shareholders' equity (tangible)  6.67  5.68  17.4%  6.67  5.68  17.4%
             
SELECTED FINANCIAL RATIOS:            
             
Return on average assets 0.91% 0.56%   0.79% 0.40%  
Return on average common shareholders' equity 6.67% 4.78%   6.18% 3.06%  
Return on average common shareholders' equity (tangible) 9.68% 7.91%   9.33% 5.24%  
Net interest margin 3.81% 3.55%   3.79% 3.48%  
Efficiency ratio 51.73% 55.33%   52.84% 58.76%  
Tangible common equity to tangible assets 8.41% 6.26%   8.41% 6.26%  
Non-performing assets to total assets 2.28% 1.82%   2.28% 1.82%  
             
N/M - Not meaningful            
     
     
FULTON FINANCIAL CORPORATION    
CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED)    
dollars in thousands    
         % Change from 
  September 30 2010 September 30 2009 Jun 30 2010 September 30 2009 Jun 30 2010
           
ASSETS          
Cash and due from banks  $ 255,800  $ 252,004  $ 268,371  1.5%  (4.7%)
Loans held for sale  103,240  84,766  93,504  21.8%  10.4%
Other interest-earning assets  193,421  24,048  433,687  704.3%  (55.4%)
Investment securities  2,762,238  3,274,399  2,892,890  (15.6%)  (4.5%)
Loans, net of unearned income  11,950,618  11,968,246  11,943,384  (0.1%)  0.1%
Allowance for loan losses  (281,724)  (234,511)  (272,042)  20.1%  3.6%
Net Loans  11,668,894  11,733,735  11,671,342  (0.6%)  -- 
Premises and equipment  204,001  204,520  205,299  (0.3%)  (0.6%)
Accrued interest receivable  55,167  60,433  54,763  (8.7%)  0.7%
Goodwill and intangible assets  549,170  554,041  550,302  (0.9%)  (0.2%)
Other assets  538,842  338,763  456,719  59.1%  18.0%
Total Assets  $ 16,330,773  $ 16,526,709  $ 16,626,877  (1.2%)  (1.8%)
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits  $ 12,568,117  $ 12,032,680  $ 12,345,472  4.4%  1.8%
Short-term borrowings  471,081  722,618  458,334  (34.8%)  2.8%
Federal Home Loan Bank advances and long-term debt  1,199,513  1,650,870  1,365,688  (27.3%)  (12.2%)
Other liabilities  215,752  196,778  226,172  9.6%  (4.6%)
Total Liabilities  14,454,463  14,602,946  14,395,666  (1.0%)  0.4%
Preferred stock  --   369,950  371,009  (100.0%)  (100.0%)
Common shareholders' equity  1,876,310  1,553,813  1,860,202  20.8%  0.9%
Total Shareholders' Equity  1,876,310  1,923,763  2,231,211  (2.5%)  (15.9%)
Total Liabilities and Shareholders' Equity  $ 16,330,773  $ 16,526,709  $ 16,626,877  (1.2%)  (1.8%)
           
LOANS, DEPOSITS AND SHORT-TERM BORROWINGS DETAIL:          
Loans, by type:          
Real estate - commercial mortgage  $ 4,346,120  $ 4,186,654  $ 4,330,630  3.8%  0.4%
Commercial - industrial, financial and agricultural   3,683,577  3,719,966  3,664,603  (1.0%)  0.5%
Real estate - home equity  1,654,359  1,651,711  1,637,171  0.2%  1.0%
Real estate - residential mortgage   1,001,837  930,207  985,345  7.7%  1.7%
Real estate - construction  834,266  1,029,079  893,305  (18.9%)  (6.6%)
Consumer  366,927  375,685  368,631  (2.3%)  (0.5%)
Leasing and other  63,532  74,944  63,699  (15.2%)  (0.3%)
Total Loans, net of unearned income  $ 11,950,618  $ 11,968,246  $ 11,943,384  (0.1%)  0.1%
           
Deposits, by type:          
Noninterest-bearing demand  $ 2,163,807  $ 1,932,382  $ 2,147,153  12.0%  0.8%
Interest-bearing demand  2,221,213  1,922,648  2,024,033  15.5%  9.7%
Savings deposits  3,291,838  2,732,284  3,136,492  20.5%  5.0%
Time deposits  4,891,259  5,445,366  5,037,794  (10.2%)  (2.9%)
Total Deposits  $ 12,568,117  $ 12,032,680  $ 12,345,472  4.4%  1.8%
           
Short-term borrowings, by type:          
Customer repurchase agreements  $ 256,977  $ 252,842  $ 247,775  1.6%  3.7%
Customer short-term promissory notes  205,240  258,911  200,992  (20.7%)  2.1%
Federal funds purchased  8,864  210,865  9,567  (95.8%)  (7.3%)
Total Short-term borrowings  $ 471,081  $ 722,618  $ 458,334  (34.8%)  2.8%
 
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
dollars in thousands, except per-share data
   Quarter Ended   % Change from  Nine Months Ended  
  Sep 30 Sep 30 Jun 30 Sep 30 Jun 30 September 30  
  2010 2009 2010 2009 2010 2010 2009 % Change
                 
Interest Income:                
Interest income  $ 185,356  $ 197,861  $ 187,680  (6.3%)  (1.2%)  $ 563,624  $ 591,525  (4.7%)
Interest expense  45,170  65,060  48,522  (30.6%)  (6.9%)  145,771  206,664  (29.5%)
Net Interest Income  140,186  132,801  139,158  5.6%  0.7%  417,853  384,861  8.6%
Provision for loan losses  40,000  45,000  40,000  (11.1%)  --   120,000  145,000  (17.2%)
Net Interest Income after Provision  100,186  87,801  99,158  14.1%  1.0%  297,853  239,861  24.2%
                 
Other Income:                
Service charges on deposit accounts  14,752  15,321  15,482  (3.7%)  (4.7%)  44,501  45,276  (1.7%)
Other service charges and fees  10,637  10,003  10,522  6.3%  1.1%  30,531  27,952  9.2%
Gains on sales of mortgage loans  12,111  2,778  3,063  336.0%  295.4%  18,538  18,764  (1.2%)
Investment management and trust services  8,604  8,191  8,655  5.0%  (0.6%)  25,347  23,970  5.7%
Investment securities gains (losses)  1,826  (45)  904  N/M   102.0%  507  2,951  (82.8%)
Other  4,165  4,932  5,339  (15.6%)  (22.0%)  14,103  14,558  (3.1%)
Total Other Income  52,095  41,180  43,965  26.5%  18.5%  133,527  133,471  -- 
                 
Other Expenses:                
Salaries and employee benefits  54,533  54,086  54,654  0.8%  (0.2%)  161,532  165,189  (2.2%)
Net occupancy expense  10,519  10,165  10,519  3.5%  --   32,688  31,428  4.0%
FDIC insurance expense  4,709  5,244  5,136  (10.2%)  (8.3%)  14,799  21,738  (31.9%)
Professional fees  3,040  2,385  3,035  27.5%  0.2%  8,621  6,701  28.7%
Equipment expense  2,956  3,281  2,663  (9.9%)  11.0%  8,710  9,660  (9.8%)
Marketing  2,601  1,982  2,271  31.2%  14.5%  6,702  6,277  6.8%
Data processing  2,284  3,121  2,364  (26.8%)  (3.4%)  7,272  9,100  (20.1%)
Telecommunications  2,084  2,139  2,086  (2.6%)  (0.1%)  6,440  6,483  (0.7%)
Intangible amortization  1,293  1,429  1,341  (9.5%)  (3.6%)  3,948  4,326  (8.7%)
Operating risk loss  666  338  640  97.0%  4.1%  1,817  6,683  (72.8%)
Other  17,123  15,640  15,449  9.5%  10.8%  48,666  46,403  4.9%
Total Other Expenses  101,808  99,810  100,158  2.0%  1.6%  301,195  313,988  (4.1%)
Income Before Income Taxes  50,473  29,171  42,965  73.0%  17.5%  130,185  59,344  119.4%
Income tax expense   12,793  5,825  11,283  119.6%  13.4%  33,343  9,802  240.2%
Net Income   37,680  23,346  31,682  61.4%  18.9%  96,842  49,542  95.5%
Preferred stock dividends and discount accretion  (6,172)  (5,046)  (5,066)  22.3%  21.8%  (16,303)  (15,123)  7.8%
Net Income Available to Common Shareholders  $ 31,508  $ 18,300  $ 26,616  72.2%  18.4%  $ 80,539  $ 34,419  134.0%
                 
PER COMMON SHARE:                
Net income:                
Basic  $ 0.16  $ 0.10  $ 0.14  60.0%  14.3%  $ 0.43  $ 0.20  115.0%
Diluted  0.16  0.10  0.14  60.0%  14.3%  0.43  0.20  115.0%
                 
Cash dividends  $ 0.03  $ 0.03  $ 0.03  --   --   $ 0.09  $ 0.09  -- 
Shareholders' equity 9.43 8.82 9.37  6.9%  0.6% 9.43 8.82  6.9%
Shareholders' equity (tangible) 6.67 5.68 6.60  17.4%  1.1% 6.67 5.68  17.4%
                 
Weighted average shares (basic)  198,282  175,783  190,221  12.8%  4.2%  188,306  175,552  7.3%
Weighted average shares (diluted)  198,792  176,078  190,827  12.9%  4.2%  188,835  175,785  7.4%
Shares outstanding, end of period  198,883  176,149  198,463  12.9%  0.2%  198,883  176,149  12.9%
                 
SELECTED FINANCIAL RATIOS:                
Return on average assets 0.91% 0.56% 0.77%     0.79% 0.40%  
Return on average common shareholders' equity 6.67% 4.78% 6.06%     6.18% 3.06%  
Return on average common shareholders' equity (tangible) 9.68% 7.91% 9.10%     9.33% 5.24%  
Net interest margin 3.81% 3.55% 3.76%     3.79% 3.48%  
Efficiency ratio 51.73% 55.33% 53.10%     52.84% 58.76%  
                 
N/M - Not meaningful                
 
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
   Quarter Ended 
  September 30, 2010 September 30, 2009 June 30, 2010
  Average Balance Interest (1) Yield/ Rate Average Balance Interest (1) Yield/ Rate Average Balance Interest (1) Yield/ Rate
ASSETS                  
Interest-earning assets:                  
Loans, net of unearned income  $ 11,958,145  $ 160,125 5.32%  $ 11,913,581  $ 163,915 5.46%  $ 11,959,176  $ 159,632 5.35%
Taxable investment securities  2,303,692  22,363 3.88%  2,722,751  29,376 4.31%  2,386,695  25,146 4.22%
Tax-exempt investment securities  345,281  4,961 5.75%  436,209  6,101 5.59%  355,186  5,152 5.80%
Equity securities  138,993  760 2.18%  132,176  632 1.90%  140,271  733 2.09%
Total Investment Securities  2,787,966  28,084 4.03%  3,291,136  36,109 4.39%  2,882,152  31,031 4.31%
Loans held for sale  78,862  919 4.66%  102,367  1,550 6.06%  59,412  667 4.49%
Other interest-earning assets  204,601  102 0.20%  24,348  51 0.83%  366,200  231 0.25%
Total Interest-earning Assets  15,029,574  189,230 5.01%  15,331,432  201,625 5.23%  15,266,940  191,561 5.03%
                   
Noninterest-earning assets:                  
Cash and due from banks  280,784      301,875      261,576    
Premises and equipment  203,995      204,416      203,928    
Other assets  1,133,469      959,628      1,102,587    
Less: allowance for loan losses  (285,801)      (234,446)      (275,209)    
Total Assets  $ 16,362,021      $ 16,562,905      $ 16,559,822    
                   
LIABILITIES AND SHAREHOLDERS' EQUITY                  
Interest-bearing liabilities:                  
Demand deposits  $ 2,129,407  $ 1,868 0.35%  $ 1,883,087  $ 2,119 0.45%  $ 2,019,605  $ 1,840 0.37%
Savings deposits  3,214,558  4,972 0.61%  2,556,717  5,187 0.80%  3,090,857  5,388 0.70%
Time deposits  4,987,212  22,915 1.82%  5,554,349  36,519 2.61%  5,120,648  24,591 1.93%
Total Interest-bearing Deposits  10,331,177  29,755 1.14%  9,994,153  43,825 1.74%  10,231,110  31,819 1.25%
Short-term borrowings  489,013  267 0.22%  863,281  835 0.38%  512,583  390 0.30%
Federal Home Loan Bank advances and long-term debt  1,274,411  15,148 4.73%  1,695,427  20,400 4.77%  1,403,410  16,313 4.66%
Total Interest-bearing Liabilities  12,094,601  45,170 1.48%  12,552,861  65,060 2.06%  12,147,103  48,522 1.60%
                   
Noninterest-bearing liabilities:                  
Demand deposits  2,140,866      1,922,460      2,079,674    
Other   198,922      198,314      199,778    
Total Liabilities  14,434,389      14,673,635      14,426,555    
Shareholders' equity  1,927,632      1,889,270      2,133,267    
Total Liabilities and Shareholders' Equity  $ 16,362,021      $ 16,562,905      $ 16,559,822    
                   
Net interest income/net interest margin (fully taxable equivalent)    144,060 3.81%    136,565 3.55%    143,039 3.76%
Tax equivalent adjustment    (3,874)      (3,764)      (3,881)  
Net interest income    $ 140,186      $ 132,801      $ 139,158  
                   
(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 30 2010 September 30 2009 Jun 30 2010 September 30 2009 Jun 30 2010        
               
Loans, by type:                  
Real estate - commercial mortgage  $ 4,341,685  $ 4,158,802  $ 4,319,540  4.4%  0.5%        
Commercial - industrial, financial and agricultural   3,671,128  3,667,854  3,686,442  0.1%  (0.4%)        
Real estate - home equity  1,643,615  1,651,400  1,638,260  (0.5%)  0.3%        
Real estate - residential mortgage   998,165  933,943  972,129  6.9%  2.7%        
Real estate - construction  868,497  1,050,359  909,836  (17.3%)  (4.5%)        
Consumer  366,719  371,676  362,883  (1.3%)  1.1%        
Leasing and other  68,336  79,547  70,086  (14.1%)  (2.5%)        
                   
Total Loans, net of unearned income  $ 11,958,145  $ 11,913,581  $ 11,959,176  0.4%  --         
                   
Deposits, by type:                  
Noninterest-bearing demand  $ 2,140,866  $ 1,922,460  $ 2,079,674  11.4%  2.9%        
Interest-bearing demand  2,129,407  1,883,087  2,019,605  13.1%  5.4%        
Savings deposits  3,214,558  2,556,717  3,090,857  25.7%  4.0%        
Time deposits  4,987,212  5,554,349  5,120,648  (10.2%)  (2.6%)        
                   
Total Deposits  $ 12,472,043  $ 11,916,613  $ 12,310,784  4.7%  1.3%        
                   
Short-term borrowings, by type:                  
Customer repurchase agreements  $ 257,510  $ 254,789  $ 263,533  1.1%  (2.3%)        
Customer short-term promissory notes  203,158  259,534  207,100  (21.7%)  (1.9%)        
Federal funds purchased  28,345  348,444  41,950  (91.9%)  (32.4%)        
Other  --   514  --   (100.0%)  --         
                   
Total Short-term borrowings  $ 489,013  $ 863,281  $ 512,583  (43.4%)  (4.6%)        
 
 
FULTON FINANCIAL CORPORATION
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)
dollars in thousands
  Nine Months Ended September 30
  2010 2009
  Average Balance Interest (1) Yield/Rate Average Balance Interest (1) Yield/Rate
ASSETS            
Interest-earning assets:            
Loans, net of unearned income  $ 11,962,986  $ 479,181 5.35%  $ 11,971,378  $ 491,412 5.49%
Taxable investment securities  2,449,856  75,658 4.12%  2,538,045  85,648 4.50%
Tax-exempt investment securities  362,656  15,644 5.75%  467,242  19,413 5.54%
Equity securities  140,376  2,302 2.19%  134,710  2,066 2.05%
Total Investment Securities  2,952,888  93,604 4.23%  3,139,997  107,127 4.55%
Loans held for sale  60,535  2,142 4.72%  115,388  4,439 5.13%
Other interest-earning assets  194,575  358 0.25%  20,754  140 0.90%
Total Interest-earning Assets  15,170,984  575,285 5.07%  15,247,517  603,118 5.29%
             
Noninterest-earning assets:            
Cash and due from banks  268,567      301,009    
Premises and equipment  203,838      203,919    
Other assets  1,107,733      940,974    
Less: allowance for loan losses  (278,190)      (211,105)    
Total Assets  $ 16,472,932      $ 16,482,314    
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Interest-bearing liabilities:            
Demand deposits  $ 2,044,096  $ 5,548 0.36%  $ 1,819,135  $ 5,896 0.43%
Savings deposits  3,052,292  15,561 0.68%  2,309,103  13,941 0.81%
Time deposits  5,102,822  74,203 1.94%  5,538,068  121,890 2.94%
Total Interest-bearing Deposits  10,199,210  95,312 1.25%  9,666,306  141,727 1.96%
Short-term borrowings  623,123  1,206 0.26%  1,186,568  3,193 0.36%
Federal Home Loan Bank advances and long-term debt  1,386,583  49,253 4.74%  1,754,010  61,744 4.71%
Total Interest-bearing Liabilities  12,208,916  145,771 1.60%  12,606,884  206,664 2.19%
             
Noninterest-bearing liabilities:            
Demand deposits  2,065,176      1,798,522    
Other   193,144      202,209    
Total Liabilities  14,467,236      14,607,615    
Shareholders' equity  2,005,696      1,874,699    
Total Liabilities and Shareholders' Equity  $ 16,472,932      $ 16,482,314    
             
Net interest income/net interest margin (fully taxable equivalent)    429,514 3.79%    396,454 3.48%
Tax equivalent adjustment    (11,661)      (11,593)  
Net interest income    $ 417,853      $ 384,861  
             
(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        
  2010 2009 % Change      
           
Loans, by type:            
Real estate - commercial mortgage  $ 4,322,628  $ 4,100,119  5.4%      
Commercial - industrial, financial and agricultural   3,681,270  3,660,083  0.6%      
Real estate - home equity  1,640,939  1,672,678  (1.9%)      
Real estate - residential mortgage  970,526  942,407  3.0%      
Real estate - construction  913,159  1,143,476  (20.1%)      
Consumer  363,953  368,109  (1.1%)      
Leasing and other  70,511  84,506  (16.6%)      
             
Total Loans, net of unearned income  $ 11,962,986  $ 11,971,378  (0.1%)      
             
Deposits, by type:            
Noninterest-bearing demand  $ 2,065,176  $ 1,798,522  14.8%      
Interest-bearing demand  2,044,096  1,819,135  12.4%      
Savings deposits  3,052,292  2,309,103  32.2%      
Time deposits  5,102,822  5,538,068  (7.9%)      
             
Total Deposits  $ 12,264,386  $ 11,464,828  7.0%      
             
Short-term borrowings, by type:            
Customer repurchase agreements  $ 256,706  $ 252,539  1.7%      
Customer short-term promissory notes  211,158  297,831  (29.1%)      
Federal funds purchased  155,259  571,864  (72.9%)      
Federal Reserve Bank borrowings  --   61,685  (100.0%)      
Other  --   2,649  (100.0%)      
             
Total Short-term borrowings  $ 623,123  $ 1,186,568  (47.5%)      
 
 
FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)
dollars in thousands
   Quarter Ended  Nine Months Ended        
  Sep 30 Sep 30 Jun 30  Sep 30         
  2010 2009 2010 2010 2009        
ALLOWANCE FOR CREDIT LOSSES:            
Balance at beginning of period  $ 280,377  $ 220,954  $ 269,254  $ 257,553  $ 180,137        
Loans charged off:                  
Commercial - industrial, agricultural and financial (6,601) (7,787)  (13,390) (22,972) (24,683)        
Real estate - construction (23,139)  (9,356)  (9,299) (52,991)  (32,892)        
Real estate - commercial mortgage (4,262) (3,554)  (3,915) (10,521) (13,475)        
Consumer and home equity (3,254) (2,527)  (2,438) (7,770) (7,667)        
Real estate - residential mortgage  (751) (1,065)  (1,880) (4,022) (4,832)        
Leasing and other (790) (1,637)  (610) (2,045) (4,682)        
Total loans charged off (38,797) (25,926) (31,532) (100,321) (88,231)        
Recoveries of loans charged off:                  
Commercial - industrial, agricultural and financial 2,088  444  1,157 3,681 1,654        
Real estate - construction 189  26  581 1,085  352        
Real estate - commercial mortgage 571 493  157 856 528        
Consumer and home equity 246 354  488 1,286 1,294        
Real estate - residential mortgage   3 1  3 7 149        
Leasing and other 197 375  269 727 838        
Recoveries of loans previously charged off 3,294 1,693 2,655 7,642 4,815        
Net loans charged off  (35,503)  (24,233)  (28,877)  (92,679)  (83,416)        
Provision for loan losses   40,000  45,000  40,000  120,000  145,000        
Balance at end of period  $ 284,874  $ 241,721  $ 280,377  $ 284,874  $ 241,721        
                   
Net charge-offs to average loans (annualized)  1.19%  0.81%  0.97% 1.03% 0.93%        
                   
NON-PERFORMING ASSETS:            
Non-accrual loans  $ 284,408  $ 228,961  $ 263,227            
Loans 90 days past due and accruing 58,164 52,797 53,707            
Total non-performing loans 342,572 281,758  316,934            
Other real estate owned 30,195 19,151 25,681            
Total non-performing assets  $ 372,767  $ 300,909  $ 342,615            
                   
NON-PERFORMING LOANS, BY TYPE:            
Real estate - commercial mortgage  $ 100,286  $ 54,930  $ 101,378            
Real estate - construction  91,591  104,789  79,122            
Commercial - industrial, agricultural and financial 85,103 63,217 77,587            
Real estate - residential mortgage  52,038 46,192 45,639            
Home Equity 11,272 10,297 11,090            
Consumer 1,882 1,995 2,025            
Leasing 400 338 93            
Total non-performing loans  $ 342,572  $ 281,758  $ 316,934            
                   
DELINQUENCY RATES, BY TYPE:            
   September 30, 2010   September 30, 2009   June 30, 2010 
   30-60 Days   >90 Days (1)   Total   30-60 Days   >90 Days (1)   Total   30-60 Days   >90 Days (1)   Total 
                   
Real estate - commercial mortgage 0.56% 2.29% 2.85% 0.53% 1.31% 1.84% 0.80% 2.33% 3.13%
Commercial - industrial, agricultural and financial 0.77% 2.31% 3.08% 0.61% 1.65% 2.26% 0.46% 2.12% 2.58%
Real estate - residential mortgage  3.93% 5.26% 9.19% 4.14% 5.14% 9.28% 3.67% 4.69% 8.36%
Real estate - construction 1.04% 10.98% 12.02% 1.25% 10.12% 11.37% 1.07% 8.86% 9.93%
Consumer, home equity, leases and other 0.88% 0.65% 1.53% 1.14% 0.60% 1.74% 0.94% 0.64% 1.58%
Total 0.99% 2.87% 3.86% 1.00% 2.34% 3.34% 0.98% 2.65% 3.63%
                   
(1) Includes non-accrual loans                  
                   
ASSET QUALITY RATIOS:            
  Sep 30 2010 Sep 30 2009 Jun 30 2010            
Non-accrual loans to total loans 2.38% 1.91% 2.20%            
Non-performing assets to total loans and OREO 3.11% 2.51% 2.86%            
Non-performing assets to total assets 2.28% 1.82% 2.06%            
Allowance for credit losses to loans outstanding 2.38% 2.02% 2.35%            
Allowance for credit losses to non-performing loans 83.16% 85.79% 88.47%            
Non-performing assets to tangible common shareholders' equity and allowance for credit losses 23.12% 24.24% 21.54%            
CONTACT:  Fulton Financial Corporation          Media Contact:          Laura J. Wakeley          717-291-2616