8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20459

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported): January 17, 2006

FULTON FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	0-010587	23-2195389
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

One Penn Square, P.O. Box 4887, Lancaster, Pennsylvania	17604
(Address of principal executive offices)	(Zip Code)

(717) 291-2411

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Earnings Release dated January 17, 2006.

Supplemental financial information for the quarter and year ended December 31, 2005.

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On January 17, 2006 Fulton Financial Corporation announced its results of operations for the fourth quarter ended December 31, 2005. A copy of the earnings release is attached as Exhibit 99.1 to this Form 8-K. Supplemental financial information included with the earnings release is attached as Exhibit 99.2 to this report.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits.

Exhibit No.	Description
99.1	Earnings Release dated January 17, 2006.
99.2	Supplemental financial information for the quarter and year ended December 31, 2005

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FULTON FINANCIAL CORPORATION

Date:	January 17, 2006	/s/	Charles J. Nugent
			Charles J. Nugent
			Senior Executive Vice President and
			Chief Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	Contact:	Laura J. Wakeley
	Office:	717-291-2739

Fulton Financial reports 2005 earnings

     (January 17) — Lancaster, PA — Fulton Financial Corporation (Nasdaq: FULT) earned $166.1 million for the year ended December 31, 2005, an 11.0 percent increase over the same period in 2004. Diluted net income per share for the year increased to $1.05, a 6.1 percent increase over the 99 cents reported (as restated) in 2004. Total assets at December 31, 2005 were approximately $12.4 billion.

          Fulton Financial reported net income of $40.9 million for the fourth quarter of 2005, a 2.2 percent increase over $40.0 million for the same period in 2004. Diluted net income per share was 26 cents, unchanged from the fourth quarter of 2004. Annualized return on average assets was 1.32 percent for the quarter, while annualized return on average equity was 12.65 percent and annualized return on tangible equity was 19.89 percent.

          As disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2006, a tentative legal settlement was reached in a lawsuit against Resource Bank, a wholly-owned subsidiary of Fulton Financial. The suit alleged Resource Bank violated the Telephone Consumer Protection Act (TCPA), prior to being acquired by Fulton Financial in April 2004. The settlement resulted in a $2.2 million charge to other expense, or one cent per diluted share, during the fourth quarter, which represents the total estimated settlement amount, less expected insurance recoveries. The settlement is subject to court approval.

          In the third quarter of 2005, Fulton Financial adopted Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (Statement 123R), using modified retrospective application. Statement 123R requires the recognition of compensation expense for stock options and, under modified retrospective application, prior period results are restated. As a result, net income and diluted net income per share for the year ended December 31, 2004 were reduced by $3.3 million and two cents, respectively. There was no impact on diluted net income per share for the quarter ended December 31, 2004 as a result of the restatement.

          “In the fourth quarter, we experienced strong loan growth, good growth in certificates of deposit, continued good asset quality, growth in non-interest income, particularly from our investment management and trust services area, and flat operating expenses,” said R. Scott Smith, chairman, chief executive officer and president. “We were also able to sustain our net interest margin despite the flat yield curve. Offsetting these positive factors was a slowdown in our mortgage banking operations as

well as a one-time charge to fourth quarter earnings in anticipation of costs associated with the settlement of pending litigation.”

     Loans, net of unearned income, increased $840 million, or 11.1 percent, to $8.4 billion at December 31, 2005, compared to $7.6 billion at December 31, 2004. Approximately $305 million of this increase resulted from the July 1, 2005 acquisition of Somerset Valley Bank. The remaining increase was realized mainly in commercial mortgages, which grew $229 million, or 9.3 percent, and construction loans, which increased $191 million, or 30.4 percent.

     Nonperforming assets were 0.38 percent of total assets at December 31, 2005, 0.39 percent at September 30, 2005 and 0.30 percent at December 31, 2004. Annualized net charge-offs for the quarter ended December 31, 2005 were 0.09 percent of average total loans, compared to 0.02 percent for the quarter ended September 30, 2005 and 0.09 percent for the quarter ended December 31, 2004. For the year ended December 31, 2005, net charge-offs were 0.04 percent of average loans, compared to 0.06 percent for 2004. The provision for loan losses decreased $272,000, or 25.9 percent, for the fourth quarter of 2005 as compared to the same period in 2004.

          Total deposits increased $915 million, or 11.6 percent, from December 31, 2004 to December 31, 2005, to $8.8 billion. Approximately $475 million of this increase resulted from the Somerset Valley acquisition, with the remaining $440 million increase realized in both core deposit accounts and time deposits.

     Net interest income for the fourth quarter increased $14.4 million, or 15.4 percent, compared to the fourth quarter of 2004. The increase from the third quarter of 2005 was $1.4 million, or 1.3 percent. Fulton Financial’s net interest margin was 3.92 percent for the both the fourth and third quarters of 2005, as well as the fourth quarter of 2004.

     Other income, including investment securities gains, decreased $1.2 million, or 3.5 percent, in the fourth quarter of 2005 compared to the same period in 2004. Excluding security gains, other income increased $990,000, or 3.1 percent, to $33.0 million. First Washington State Bank, which was acquired on December 31, 2004, and Somerset Valley contributed $948,000 to the increase. Internal increases in fee income were almost totally offset by decreases in mortgage banking income. Compared to the third quarter of 2005, other income, excluding security gains, decreased $2.3 million, or 6.5 percent, almost entirely due to a decrease in mortgage banking income as volumes and pricing decreased in response to the changing yield curve.

     Other expenses increased $12.2 million, or 17.3 percent, compared to the fourth quarter of 2004, to $82.7 million. First Washington and Somerset Valley added $6.4 million to the other expense increase. The remaining increase of $5.8 million, or 8.2 percent, includes the $2.2 million loss accrued for the settlement of the TCPA case, as well as an increase from normal growth. Compared to the third quarter

of 2005, other expenses increased $1.2 million, or 1.5 percent. Fulton Financial’s efficiency ratio for the fourth quarter of 2005 was 56.7 percent, compared to 55.5 percent for the third quarter of 2005 and 54.4 percent for the fourth quarter of 2004.

     Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial holding company which operates 232 banking offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia through the following affiliates: Fulton Bank, Lancaster, PA; Lebanon Valley Farmers Bank, Lebanon, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Hagerstown Trust, Hagerstown, MD; Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; The Peoples Bank of Elkton, Elkton, MD; Skylands Community Bank, Hackettstown, NJ; Premier Bank, Doylestown, PA; Resource Bank, Virginia Beach, VA; First Washington State Bank, Windsor, NJ; and Somerset Valley Bank, Somerville, NJ.

     In July, the Corporation announced its intent to acquire Columbia Bancorp and its sole banking subsidiary, The Columbia Bank, based in Columbia, Maryland. The Columbia Bank operates 19 full-service community banking offices and 5 retirement community banking offices in Howard, Montgomery, Prince George’s and Baltimore Counties as well as Baltimore City and has approximately $1.3 billion in assets. The acquisition is expected to be completed in the first quarter of 2006.

     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 or Resource Mortgage.

     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 about Fulton Financial Corporation’s future financial performance. Forward-looking statements are encouraged by the Private Securities Litigation Reform Act of 1995.

Such forward-looking information is based upon certain underlying assumptions, risks and uncertainties. Because of the possibility of change in the underlying assumptions, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: pricing pressures on loans and deposits, actions of bank and non-bank competitors, changes in local and national economic conditions, changes in regulatory requirements, actions of the Federal Reserve Board, creditworthiness of current borrowers, the Corporation’s success in merger and acquisition integration, and customers’ acceptance of the Corporation’s products and services.

EX-99.2

Exhibit 99.2

FULTON FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (UNAUDITED)

	Quarter Ended
	December 31				Variance
	2005		2004		$			%
	(in thousands, except per-share data)
INCOME SUMMARY:
Interest income	$	172,263	$	130,736	$	41,527			31.8	%
Interest expense		64,354		37,261		27,093			72.7	%
Net Interest Income		107,909		93,475		14,434			15.4	%
Provision for loan losses		780		1,052		(272	)		-25.9	%
Investment securities gains		987		3,199		(2,212	)		-69.1	%
Other income		32,961		31,971		990			3.1	%
Other expenses		82,737		70,537		12,200			17.3	%
Income Before Income Taxes		58,340		57,056		1,284			2.3	%
Income taxes		17,434		17,035		399			2.3	%
Net Income	$	40,906	$	40,021	$	885			2.2	%
Fully taxable equivalent (FTE) net interest income	$	110,435	$	95,599	$	14,836			15.5	%
PER-SHARE DATA:
Net income:
Basic	$	0.26	$	0.27	$	(0.01	)		-3.7	%
Diluted		0.26		0.26		—			—
Cash dividends		0.145		0.132		0.013			9.8	%
ENDING BALANCES:
Total assets	$	12,402,504	$	11,160,148	$	1,242,356			11.1	%
Loans, net of unearned income		8,424,728		7,584,547		840,181			11.1	%
Deposits		8,810,765		7,895,524		915,241			11.6	%
Short-term borrowings		1,298,962		1,194,524		104,438			8.7	%
Long-term debt		860,345		684,236		176,109			25.7	%
Shareholders’ equity		1,279,907		1,244,087		35,820			2.9	%
AVERAGE BALANCES:
Total assets	$	12,290,617	$	10,544,080	$	1,746,537			16.6	%
Loans, net of unearned income		8,379,369		7,304,717		1,074,652			14.7	%
Deposits		8,781,120		7,508,299		1,272,821			17.0	%
Short-term borrowings		1,211,397		1,117,620		93,777			8.4	%
Long-term debt		870,405		668,239		202,166			30.3	%
Shareholders’ equity		1,282,894		1,121,249		161,645			14.4	%

NOTE: All financial information for 2004 has been restated for the impact of adopting Statement of Financial Accounting Standards No. 123R, “Share-Based Payment”. Statement 123R requires the recognition of compensation expense for stock options.

1

FULTON FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (UNAUDITED)

	Year Ended
	December 31				Variance
	2005		2004		$			%
			(in thousands, except per-share data)
INCOME SUMMARY:
Interest income	$	625,797	$	493,643	$	132,154			26.8	%
Interest expense		213,219		135,994		77,225			56.8	%
Net Interest Income		412,578		357,649		54,929			15.4	%
Provision for loan losses		3,120		4,717		(1,597	)		-33.9	%
Investment securities gains		6,625		17,712		(11,087	)		-62.6	%
Other income		137,643		121,152		16,491			13.6	%
Other expenses		316,291		277,515		38,776			14.0	%
Income Before Income Taxes		237,435		214,281		23,154			10.8	%
Income taxes		71,361		64,673		6,688			10.3	%
Net Income	$	166,074	$	149,608	$	16,466			11.0	%
Fully taxable equivalent (FTE) net interest income	$	422,356	$	366,825	$	55,531			15.1	%
PER-SHARE DATA:
Net income:
Basic	$	1.06	$	1.00	$	0.06			6.0	%
Diluted		1.05		0.99		0.06			6.1	%
Cash dividends		0.567		0.518		0.049			9.5	%
AVERAGE BALANCES:
Total assets	$	11,780,096	$	10,344,768	$	1,435,328			13.9	%
Loans, net of unearned income		8,022,782		6,901,452		1,121,330			16.2	%
Deposits		8,367,291		7,285,134		1,082,157			14.9	%
Short-term borrowings		1,186,464		1,238,073		(51,609	)		-4.2	%
Long-term debt		837,305		637,654		199,651			31.3	%
Shareholders’ equity		1,252,620		1,069,904		182,716			17.1	%

2

FULTON FINANCIAL CORPORATION
FINANCIAL HIGHLIGHTS (UNAUDITED)

	Quarter Ended				Variance
	December 31		September 30
	2005		2005		$			%
			(in thousands, except per-share data)
INCOME SUMMARY:
Interest income	$	172,263	$	164,113	$	8,150			5.0	%
Interest expense		64,354		57,617		6,737			11.7	%
Net Interest Income		107,909		106,496		1,413			1.3	%
Provision for loan losses		780		815		(35	)		-4.3	%
Investment securities gains		987		905		82			9.1	%
Other income		32,961		35,247		(2,286	)		-6.5	%
Other expenses		82,737		81,537		1,200			1.5	%
Income Before Income Taxes		58,340		60,296		(1,956	)		-3.2	%
Income taxes		17,434		18,168		(734	)		-4.0	%
Net Income	$	40,906	$	42,128	$	(1,222	)		-2.9	%
Fully taxable equivalent (FTE) net interest income	$	110,435	$	109,059	$	1,376			1.3	%
PER-SHARE DATA:
Net income:
Basic	$	0.26	$	0.27	$	(0.01	)		-3.7	%
Diluted		0.26		0.27		(0.01	)		-3.7	%
Cash dividends		0.145		0.145		—			—
ENDING BALANCES:
Total assets	$	12,402,504	$	12,305,927	$	96,577			0.8	%
Loans, net of unearned income		8,424,728		8,325,683		99,045			1.2	%
Deposits		8,810,765		8,816,021		(5,256	)		-0.1	%
Short-term borrowings		1,298,962		1,165,293		133,669			11.5	%
Long-term debt		860,345		897,944		(37,599	)		-4.2	%
Shareholders’ equity		1,279,907		1,275,206		4,701			0.4	%
AVERAGE BALANCES:
Total assets	$	12,290,617	$	12,182,655	$	107,962			0.9	%
Loans, net of unearned income		8,379,369		8,234,531		144,838			1.8	%
Deposits		8,781,120		8,703,395		77,725			0.9	%
Short-term borrowings		1,211,397		1,115,122		96,275			8.6	%
Long-term debt		870,405		952,372		(81,967	)		-8.6	%
Shareholders’ equity		1,282,894		1,278,102		4,792			0.4	%

3

FULTON FINANCIAL CORPORATION
CONSOLIDATED ENDING BALANCE SHEET (UNAUDITED)

	December 31						Variance
	2005			2004			$			%
				(in thousands)
ASSETS
Cash and due from banks	$	368,043		$	278,065		$	89,978			32.4	%
Loans held for sale		243,378			158,872			84,506			53.2	%
Other interest-earning assets		31,932			36,688			(4,756	)		-13.0	%
Investment securities		2,562,145			2,449,859			112,286			4.6	%
Loans, net of unearned		8,424,728			7,584,547			840,181			11.1	%
Allowance for loan losses		(92,847	)		(89,627	)		(3,220	)		3.6	%
Net Loans		8,331,881			7,494,920			836,961			11.2	%
Premises and equipment		170,254			146,911			23,343			15.9	%
Accrued interest receivable		53,313			40,633			12,680			31.2	%
Goodwill and intangible assets		448,422			389,322			59,100			15.2	%
Other assets		193,136			164,878			28,258			17.1	%
Total Assets	$	12,402,504		$	11,160,148		$	1,242,356			11.1	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	$	8,810,765		$	7,895,524		$	915,241			11.6	%
Short-term borrowings		1,298,962			1,194,524			104,438			8.7	%
Long-term debt		860,345			684,236			176,109			25.7	%
Other liabilities		152,525			141,777			10,748			7.6	%
Total Liabilities		11,122,597			9,916,061			1,206,536			12.2	%
Shareholders’ equity		1,279,907			1,244,087			35,820			2.9	%
Total Liabilities and Shareholders’ Equity	$	12,402,504		$	11,160,148		$	1,242,356			11.1	%
LOANS AND DEPOSITS DETAIL:
Loans, by type:
Commercial — industrial and financial	$	2,044,010		$	1,946,962		$	97,048			5.0	%
Commercial — agricultural		331,659			326,176			5,483			1.7	%
Real estate — commercial mortgage		2,831,405			2,461,016			370,389			15.1	%
Real estate — residential mortgage and home equity		1,774,260			1,651,321			122,939			7.4	%
Real estate — construction		851,451			626,786			224,665			35.8	%
Consumer		519,094			506,290			12,804			2.5	%
Leasing and other		72,849			65,996			6,853			10.4	%
Total Loans, net of unearned income	$	8,424,728		$	7,584,547		$	840,181			11.1	%
Deposits, by type:
Noninterest-bearing demand	$	1,672,637		$	1,507,799		$	164,838			10.9	%
Interest-bearing demand		1,637,007			1,501,476			135,531			9.0	%
Savings deposits		2,125,475			1,917,203			208,272			10.9	%
Time deposits		3,375,646			2,969,046			406,600			13.7	%
Total Deposits	$	8,810,765		$	7,895,524		$	915,241			11.6	%

4

FULTON FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENT (UNAUDITED)

	Quarter Ended
	December 31						Variance
	2005			2004			$			%
	(in thousands, except per-share data)
Interest Income:
Loans, including fees	$	143,682		$	108,373		$	35,309			32.6	%
Investment securities:
Taxable		19,685			17,157			2,528			14.7	%
Tax-exempt		3,209			2,073			1,136			54.8	%
Dividends		1,200			1,044			156			14.9	%
Loans held for sale		3,967			2,041			1,926			94.4	%
Other interest income		520			48			472			983.3	%
Total Interest Income		172,263			130,736			41,527			31.8	%
Interest Expense:
Deposits		43,382			24,440			18,942			77.5	%
Short-term borrowings		11,021			4,880			6,141			125.8	%
Long-term debt		9,951			7,941			2,010			25.3	%
Total Interest Expense		64,354			37,261			27,093			72.7	%
Net Interest Income		107,909			93,475			14,434			15.4	%
Provision for Loan Losses		780			1,052			(272	)		-25.9	%
Net Interest Income after Provision		107,129			92,423			14,706			15.9	%
Other Income:
Investment management and trust services		8,954			8,885			69			0.8	%
Service charges on deposit accounts		10,418			9,835			583			5.9	%
Other service charges and fees		5,694			5,131			563			11.0	%
Gain on sale of mortgage loans		5,505			5,803			(298	)		-5.1	%
Investment securities gains		987			3,199			(2,212	)		-69.1	%
Other		2,390			2,317			73			3.2	%
Total Other Income		33,948			35,170			(1,222	)		-3.5	%
Other Expenses:
Salaries and employee benefits		45,595			41,489			4,106			9.9	%
Net occupancy expense		7,769			6,277			1,492			23.8	%
Equipment expense		2,777			2,674			103			3.9	%
Data processing		2,805			2,828			(23	)		-0.8	%
Advertising		2,579			1,870			709			37.9	%
Intangible amortization		1,454			1,146			308			26.9	%
Other		19,758			14,253			5,505			38.6	%
Total Other Expenses		82,737			70,537			12,200			17.3	%
Income Before Income Taxes		58,340			57,056			1,284			2.3	%
Income Taxes		17,434			17,035			399			2.3	%
Net Income	$	40,906		$	40,021		$	885			2.2	%
SHARE AND PER-SHARE INFORMATION:
Net income:
Basic	$	0.26		$	0.27		$	(0.01	)		-3.7	%
Diluted		0.26			0.26			—			0.0	%
Cash dividends	$	0.145		$	0.132		$	0.013			9.8	%
Book value		8.15			7.92			0.23			2.9	%
Tangible book value		5.30			5.44			(0.14	)		-2.6	%
Weighted average shares (basic)		156,978			150,502			6,476			4.3	%
Weighted average shares (diluted)		158,913			152,209			6,704			4.4	%
Shares outstanding, end of period		157,017			157,150			(133	)		-0.1	%
SELECTED FINANCIAL RATIOS:
Return on average assets		1.32	%		1.51	%
Return on average equity		12.65	%		14.20	%
Return on average equity (tangible)		19.89	%		19.71	%
Net interest margin		3.92	%		3.92	%
Efficiency ratio		56.7	%		54.4	%
Average equity to average assets		10.4	%		10.6	%

5

FULTON FINANCIAL CORPORATION
AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)

	Quarter Ended December 31
				2005									2004
	Balance			Interest			Rate (1)			Balance			Interest			Rate (1)
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loans and leases	$	8,379,369		$	144,486			6.84	%	$	7,304,717		$	109,252			5.97	%
Taxable investment securities		2,013,484			19,685			3.90	%		1,909,616			17,157			3.63	%
Tax-exempt investment securities		410,716			4,726			4.60	%		246,531			3,106			5.04	%
Equity securities		138,385			1,405			4.05	%		128,147			1,256			3.91	%
Total Investment Securities		2,562,585			25,816			4.02	%		2,284,294			21,519			3.80	%
Loans held for sale		237,854			3,967			6.67	%		115,348			2,041			6.19	%
Other interest-earning assets		54,070			520			3.81	%		7,680			48			2.46	%
Total Interest-earning Assets		11,233,878			174,789			6.19	%		9,712,039			132,860			5.46	%
Noninterest-earning assets:
Cash and due from banks		349,665									305,044
Premises and equipment		168,239									132,603
Other assets		633,664									481,598
Less: allowance for loan losses		(94,829	)								(87,204	)
Total Assets	$	12,290,617								$	10,544,080
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Demand deposits	$	1,623,138		$	4,921			1.20	%	$	1,428,307		$	2,349			0.65	%
Savings deposits		2,157,382			9,152			1.68	%		1,899,260			3,813			0.80	%
Time deposits		3,374,035			29,309			3.45	%		2,734,507			18,278			2.66	%
Total Interest-bearing Deposits		7,154,555			43,382			2.41	%		6,062,074			24,440			1.60	%
Short-term borrowings		1,211,397			11,021			3.57	%		1,117,620			4,880			1.74	%
Long-term debt		870,405			9,951			4.51	%		668,239			7,941			4.73	%
Total Interest-bearing Liabilities		9,236,357			64,354			2.76	%		7,847,933			37,261			1.89	%
Noninterest-bearing liabilities:
Demand deposits		1,626,565									1,446,225
Other		144,801									128,673
Total Liabilities		11,007,723									9,422,831
Shareholders’ equity		1,282,894									1,121,249
Total Liabilities and Shareholders’ Equity	$	12,290,617								$	10,544,080
Net interest income/net interest margin (fully taxable equivalent)					110,435			3.92	%					95,599			3.92	%
Tax equivalent adjustment					(2,526	)								(2,124	)
Net interest income				$	107,909								$	93,475

(1) Presented on a tax-equivalent basis using a 35% Federal tax rate.

AVERAGE LOANS AND DEPOSITS DETAIL:

	Quarter Ended
	December 31				Variance
	2005		2004		$		%
			(in thousands)
Loans, by type:
Commercial — industrial and financial	$	2,066,785	$	1,869,554	$	197,231		10.5	%
Commercial — agricultural		328,771		319,980		8,791		2.7	%
Real estate — commercial mortgage		2,778,906		2,311,265		467,641		20.2	%
Real estate — residential mortgage and home equity		1,764,143		1,612,001		152,142		9.4	%
Real estate — construction		842,987		611,295		231,692		37.9	%
Consumer		523,442		508,858		14,584		2.9	%
Leasing and other		74,335		71,764		2,571		3.6	%
Total Loans, net of unearned income	$	8,379,369	$	7,304,717	$	1,074,652		14.7	%
Deposits, by type:
Noninterest-bearing demand	$	1,626,565	$	1,446,225	$	180,340		12.5	%
Interest-bearing demand		1,623,138		1,428,307		194,831		13.6	%
Savings deposits		2,157,382		1,899,260		258,122		13.6	%
Time deposits		3,374,035		2,734,507		639,528		23.4	%
Total Deposits	$	8,781,120	$	7,508,299	$	1,272,821		17.0	%

6

FULTON FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENT (UNAUDITED)

	Year Ended
	December 31						Variance
	2005			2004			$			%
	(in thousands, except per-share data)
Interest Income:
Loans, including fees	$	519,711		$	396,731		$	122,980			31.0	%
Investment securities:
Taxable		75,150			76,792			(1,642	)		-2.1	%
Tax-exempt		12,114			9,553			2,561			26.8	%
Dividends		4,564			4,023			541			13.4	%
Loans held for sale		12,672			6,441			6,231			96.7	%
Other interest income		1,586			103			1,483			1439.8	%
Total Interest Income		625,797			493,643			132,154			26.8	%
Interest Expense:
Deposits		140,774			89,779			50,995			56.8	%
Short-term borrowings		34,414			15,182			19,232			126.7	%
Long-term debt		38,031			31,033			6,998			22.6	%
Total Interest Expense		213,219			135,994			77,225			56.8	%
Net Interest Income		412,578			357,649			54,929			15.4	%
Provision for Loan Losses		3,120			4,717			(1,597	)		-33.9	%
Net Interest Income after Provision		409,458			352,932			56,526			16.0	%
Other Income:
Investment management and trust services		35,669			34,817			852			2.4	%
Service charges on deposit accounts		40,198			39,451			747			1.9	%
Other service charges and fees		24,200			20,494			3,706			18.1	%
Gain on sale of mortgage loans		25,468			19,262			6,206			32.2	%
Investment securities gains		6,625			17,712			(11,087	)		-62.6	%
Other		12,108			7,128			4,980			69.9	%
Total Other Income		144,268			138,864			5,404			3.9	%
Other Expenses:
Salaries and employee benefits		181,889			166,026			15,863			9.6	%
Net occupancy expense		29,275			23,813			5,462			22.9	%
Equipment expense		11,938			10,769			1,169			10.9	%
Data processing		12,395			11,430			965			8.4	%
Advertising		8,823			6,943			1,880			27.1	%
Intangible amortization		5,311			4,726			585			12.4	%
Other		66,660			53,808			12,852			23.9	%
Total Other Expenses		316,291			277,515			38,776			14.0	%
Income Before Income Taxes		237,435			214,281			23,154			10.8	%
Income Taxes		71,361			64,673			6,688			10.3	%
Net Income	$	166,074		$	149,608		$	16,466			11.0	%
SHARE AND PER-SHARE INFORMATION:
Net income:
Basic	$	1.06		$	1.00		$	0.06			6.0	%
Diluted		1.05			0.99			0.06			6.1	%
Cash dividends	$	0.567		$	0.518		$	0.049			9.5	%
Book value		8.15			7.92			0.23			2.9	%
Tangible book value		5.30			5.44			(0.14	)		-2.6	%
Weighted average shares (basic)		156,413			149,294			7,119			4.8	%
Weighted average shares (diluted)		158,343			150,908			7,435			4.9	%
Shares outstanding, end of period		157,017			157,150			(133	)		-0.1	%
SELECTED FINANCIAL RATIOS:
Return on average assets		1.41	%		1.45	%
Return on average equity		13.26	%		13.98	%
Return on average equity (tangible)		20.32	%		18.58	%
Net interest margin		3.93	%		3.83	%
Efficiency ratio		55.5	%		55.9	%
Average equity to average assets		10.6	%		10.3	%

7

FULTON FINANCIAL CORPORATION 
AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)

	Year Ended December 31
	2005									2004
	Balance			Interest			Rate (1)			Balance			Interest			Rate (1)
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loans and leases	$	8,022,782		$	522,863			6.52	%	$	6,901,452		$	400,156			5.81	%
Taxable investment securities		1,994,740			75,150			3.76	%		2,161,195			76,792			3.55	%
Tax-exempt investment securities		368,845			17,971			4.87	%		264,578			14,353			5.43	%
Equity securities		132,564			5,333			4.02	%		133,870			4,974			3.72	%
Total Investment Securities		2,496,149			98,454			3.94	%		2,559,643			96,119			3.74	%
Loans held for sale		200,818			12,672			6.31	%		91,692			6,441			7.02	%
Other interest-earning assets		48,357			1,586			3.27	%		6,067			103			1.70	%
Total Interest-earning Assets		10,768,106			635,575			5.90	%		9,558,854			502,819			5.26	%
Noninterest-earning assets:
Cash and due from banks		346,535									316,170
Premises and equipment		158,526									128,902
Other assets		599,709									425,825
Less: allowance for loan losses		(92,780	)								(84,983	)
Total Assets	$	11,780,096								$	10,344,768
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Demand deposits	$	1,547,766		$	15,370			0.99	%	$	1,364,953		$	7,201			0.53	%
Savings deposits		2,055,503			27,116			1.32	%		1,846,503			11,928			0.65	%
Time deposits		3,174,757			98,288			3.10	%		2,693,414			70,650			2.62	%
Total Interest-bearing Deposits		6,778,026			140,774			2.08	%		5,904,870			89,779			1.52	%
Short-term borrowings		1,186,464			34,414			2.87	%		1,238,073			15,182			1.23	%
Long-term debt		837,305			38,031			4.51	%		637,654			31,033			4.87	%
Total Interest-bearing Liabilities		8,801,795			213,219			2.42	%		7,780,597			135,994			1.75	%
Noninterest-bearing liabilities:
Demand deposits		1,589,265									1,380,264
Other		136,416									114,003
Total Liabilities		10,527,476									9,274,864
Shareholders’ equity		1,252,620									1,069,904
Total Liabilities and Shareholders’ Equity	$	11,780,096								$	10,344,768
Net interest income/net interest margin (fully taxable equivalent)					422,356			3.93	%					366,825			3.83	%
Tax equivalent adjustment					(9,778	)								(9,176	)
Net interest income				$	412,578								$	357,649

(1) Presented on a tax-equivalent basis using a 35% Federal tax rate.

AVERAGE LOANS AND DEPOSITS DETAIL:-

	Year Ended
	December 31				Variance
	2005		2004		$			%
	(in thousands)
Loans, by type:
Commercial — industrial and financial	$	2,022,615	$	1,769,801	$	252,814			14.3	%
Commercial — agricultural		324,637		330,269		(5,632	)		-1.7	%
Real estate — commercial mortgage		2,621,730		2,205,025		416,705			18.9	%
Real estate — residential mortgage and home equity		1,713,442		1,498,047		215,395			14.4	%
Real estate — construction		763,687		510,426		253,261			49.6	%
Consumer		509,557		517,138		(7,581	)		-1.5	%
Leasing and other		67,114		70,746		(3,632	)		-5.1	%
Total Loans, net of unearned income	$	8,022,782	$	6,901,452	$	1,121,330			16.2	%
Deposits, by type:
Noninterest-bearing demand	$	1,589,265	$	1,380,264	$	209,001			15.1	%
Interest-bearing demand		1,547,766		1,364,953		182,813			13.4	%
Savings deposits		2,055,503		1,846,503		209,000			11.3	%
Time deposits		3,174,757		2,693,414		481,343			17.9	%
Total Deposits	$	8,367,291	$	7,285,134	$	1,082,157			14.9	%

8

FULTON FINANCIAL CORPORATION
CONSOLIDATED ENDING BALANCE SHEET (UNAUDITED)

	Quarter Ended						Variance
	December 31			September 30
	2005			2005			$			%
				(in thousands)
ASSETS
Cash and due from banks	$	368,043		$	403,032		$	(34,989	)		-8.7	%
Loans held for sale		243,378			233,977			9,401			4.0	%
Other interest-earning assets		31,932			95,472			(63,540	)		-66.6	%
Investment securities		2,562,145			2,489,575			72,570			2.9	%
Loans, net of unearned		8,424,728			8,325,683			99,045			1.2	%
Allowance for loan losses		(92,847	)		(93,936	)		1,089			-1.2	%
Net Loans		8,331,881			8,231,747			100,134			1.2	%
Premises and equipment		170,254			166,991			3,263			2.0	%
Accrued interest receivable		53,313			47,398			5,915			12.5	%
Goodwill and intangible assets		448,422			448,573			(151	)		0.0	%
Other assets		193,136			189,162			3,974			2.1	%
Total Assets	$	12,402,504		$	12,305,927		$	96,577			0.8	%
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits	$	8,810,765		$	8,816,021		$	(5,256	)		-0.1	%
Short-term borrowings		1,298,962			1,165,293			133,669			11.5	%
Long-term debt		860,345			897,944			(37,599	)		-4.2	%
Other liabilities		152,525			151,463			1,062			0.7	%
Total Liabilities		11,122,597			11,030,721			91,876			0.8	%
Shareholders’ equity		1,279,907			1,275,206			4,701			0.4	%
Total Liabilities and Shareholders’ Equity	$	12,402,504		$	12,305,927		$	96,577			0.8	%
LOANS AND DEPOSITS DETAIL:
Loans, by type:
Commercial — industrial and financial	$	2,044,010		$	2,049,330		$	(5,320	)		-0.3	%
Commercial — agricultural		331,659			327,249			4,410			1.3	%
Real estate — commercial mortgage		2,831,405			2,734,432			96,973			3.5	%
Real estate — residential mortgage and home equity		1,774,260			1,776,829			(2,569	)		-0.1	%
Real estate — construction		851,451			843,670			7,781			0.9	%
Consumer		519,094			529,409			(10,315	)		-1.9	%
Leasing and other		72,849			64,764			8,085			12.5	%
Total Loans, net of unearned income	$	8,424,728		$	8,325,683		$	99,045			1.2	%
Deposits, by type:
Noninterest-bearing demand	$	1,672,637		$	1,678,923		$	(6,286	)		-0.4	%
Interest-bearing demand		1,637,007			1,624,208			12,799			0.8	%
Savings deposits		2,125,475			2,152,771			(27,296	)		-1.3	%
Time deposits		3,375,646			3,360,119			15,527			0.5	%
Total Deposits	$	8,810,765		$	8,816,021		$	(5,256	)		-0.1	%

9

FULTON FINANCIAL CORPORATION
CONSOLIDATED INCOME STATEMENT (UNAUDITED)

	Quarter Ended						Variance
	December 31			September 30
	2005			2005			$			%
				(in thousands)
Interest Income:
Loans, including fees	$	143,682		$	136,092		$	7,590			5.6	%
Investment securities:
Taxable		19,685			18,947			738			3.9	%
Tax-exempt		3,209			3,213			(4	)		-0.1	%
Dividends		1,200			1,125			75			6.7	%
Loans held for sale		3,967			4,194			(227	)		-5.4	%
Other interest income		520			542			(22	)		-4.1	%
Total Interest Income		172,263			164,113			8,150			5.0	%
Interest Expense:
Deposits		43,382			38,480			4,902			12.7	%
Short-term borrowings		11,021			8,655			2,366			27.3	%
Long-term debt		9,951			10,482			(531	)		-5.1	%
Total Interest Expense		64,354			57,617			6,737			11.7	%
Net Interest Income		107,909			106,496			1,413			1.3	%
Provision for Loan Losses		780			815			(35	)		-4.3	%
Net Interest Income after Provision		107,129			105,681			1,448			1.4	%
Other Income:
Investment management and trust services		8,954			8,730			224			2.6	%
Service charges on deposit accounts		10,418			10,488			(70	)		-0.7	%
Other service charges and fees		5,694			5,808			(114	)		-2.0	%
Gain on sale of mortgage loans		5,505			7,624			(2,119	)		-27.8	%
Investment securities gains		987			905			82			9.1	%
Other		2,390			2,597			(207	)		-8.0	%
Total Other Income		33,948			36,152			(2,204	)		-6.1	%
Other Expenses:
Salaries and employee benefits		45,595			46,761			(1,166	)		-2.5	%
Net occupancy expense		7,769			7,459			310			4.2	%
Equipment expense		2,777			3,203			(426	)		-13.3	%
Data processing		2,805			3,100			(295	)		-9.5	%
Advertising		2,579			1,995			584			29.3	%
Intangible amortization		1,454			1,510			(56	)		-3.7	%
Other		19,758			17,509			2,249			12.8	%
Total Other Expenses		82,737			81,537			1,200			1.5	%
Income Before Income Taxes		58,340			60,296			(1,956	)		-3.2	%
Income Taxes		17,434			18,168			(734	)		-4.0	%
Net Income	$	40,906		$	42,128		$	(1,222	)		-2.9	%
SHARE AND PER-SHARE INFORMATION:
Net income:
Basic	$	0.26		$	0.27		$	(0.01	)		-3.7	%
Diluted		0.26			0.27			(0.01	)		-3.7	%
Cash dividends	$	0.145		$	0.145		$	—			—
Book value		8.15			8.12			0.03			0.4	%
Tangible book value		5.30			5.27			0.03			0.6	%
Weighted average shares (basic)		156,978			156,815			163			0.1	%
Weighted average shares (diluted)		158,913			158,677			236			0.1	%
Shares outstanding, end of period		157,017			156,953			64			0.0	%
SELECTED FINANCIAL RATIOS:
Return on average assets		1.32	%		1.37	%
Return on average equity		12.65	%		13.08	%
Return on average equity (tangible)		19.89	%		20.62	%
Net interest margin		3.92	%		3.92	%
Efficiency ratio		56.7	%		55.5	%
Average equity to average assets		10.4	%		10.5	%

10

FULTON FINANCIAL CORPORATION
AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED)

	Quarter Ended
	December 31, 2005									September 30, 2005
	Balance			Interest			Rate (1)			Balance			Interest			Rate (1)
	(dollars in thousands)
ASSETS
Interest-earning assets:
Loans and leases	$	8,379,369		$	144,486			6.84	%	$	8,234,531		$	136,915			6.60	%
Taxable investment securities		2,013,484			19,685			3.90	%		2,015,378			18,947			3.74	%
Tax-exempt investment securities		410,716			4,726			4.60	%		387,233			4,761			4.92	%
Equity securities		138,385			1,405			4.05	%		137,873			1,317			3.80	%
Total Investment Securities		2,562,585			25,816			4.02	%		2,540,484			25,025			3.92	%
Loans held for sale		237,854			3,967			6.67	%		266,588			4,194			6.29	%
Other interest-earning assets		54,070			520			3.81	%		62,406			542			3.43	%
Total Interest-earning Assets		11,233,878			174,789			6.19	%		11,104,009			166,676			5.97	%
Noninterest-earning assets:
Cash and due from banks		349,665									370,531
Premises and equipment		168,239									164,447
Other assets		633,664									638,195
Less: allowance for loan losses		(94,829	)								(94,527	)
Total Assets	$	12,290,617								$	12,182,655
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Demand deposits	$	1,623,138		$	4,921			1.20	%	$	1,586,338		$	4,169			1.04	%
Savings deposits		2,157,382			9,152			1.68	%		2,162,030			7,640			1.40	%
Time deposits		3,374,035			29,309			3.45	%		3,303,240			26,671			3.20	%
Total Interest-bearing Deposits		7,154,555			43,382			2.41	%		7,051,608			38,480			2.16	%
Short-term borrowings		1,211,397			11,021			3.57	%		1,115,122			8,655			3.05	%
Long-term debt		870,405			9,951			4.51	%		952,372			10,482			4.33	%
Total Interest-bearing Liabilities		9,236,357			64,354			2.76	%		9,119,102			57,617			2.50	%
Noninterest-bearing liabilities:
Demand deposits		1,626,565									1,651,787
Other		144,801									133,664
Total Liabilities		11,007,723									10,904,553
Shareholders’ equity		1,282,894									1,278,102
Total Liabilities and Shareholders’ Equity	$	12,290,617								$	12,182,655
Net interest income/net interest margin (fully taxable equivalent)					110,435			3.92	%					109,059			3.92	%
Tax equivalent adjustment					(2,526	)								(2,563	)
Net interest income				$	107,909								$	106,496

(1) Presented on a tax-equivalent basis using a 35% Federal tax rate.

AVERAGE LOANS AND DEPOSITS DETAIL:

	Quarter Ended				Variance
	December 31		September 30
	2005		2005		$			%
	(in thousands)
Loans, by type:
Commercial — industrial and financial	$	2,066,785	$	2,046,919	$	19,866			1.0	%
Commercial — agricultural		328,771		323,216		5,555			1.7	%
Real estate — commercial mortgage		2,778,906		2,725,748		53,158			2.0	%
Real estate — residential mortgage and home equity		1,764,143		1,755,055		9,088			0.5	%
Real estate — construction		842,987		803,659		39,328			4.9	%
Consumer		523,442		512,016		11,426			2.2	%
Leasing and other		74,335		67,918		6,417			9.4	%
Total Loans, net of unearned income	$	8,379,369	$	8,234,531	$	144,838			1.8	%
Deposits, by type:
Noninterest-bearing demand	$	1,626,565	$	1,651,787	$	(25,222	)		-1.5	%
Interest-bearing demand		1,623,138		1,586,338		36,800			2.3	%
Savings deposits		2,157,382		2,162,030		(4,648	)		-0.2	%
Time deposits		3,374,035		3,303,240		70,795			2.1	%
Total Deposits	$	8,781,120	$	8,703,395	$	77,725			0.9	%

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FULTON FINANCIAL CORPORATION
ASSET QUALITY INFORMATION (UNAUDITED)

	Quarter Ended						Year Ended
	December 31						December 31
	2005			2004			2005			2004
	(dollars in thousands)
ALLOWANCE FOR LOAN LOSSES:
Balance at beginning of period	$	93,936		$	86,827		$	89,627		$	77,700
Loans charged off		(3,100	)		(2,588	)		(8,204	)		(8,877	)
Recoveries of loans previously charged off		1,231			881			5,196			4,520
Net loans charged-off		(1,869	)		(1,707	)		(3,008	)		(4,357	)
Provision for loan losses		780			1,052			3,120			4,717
Allowance purchased		—			3,455			3,108			11,567
Balance at end of period	$	92,847		$	89,627		$	92,847		$	89,627
Net charge-offs to average loans (annualized)		0.09	%		0.09	%		0.04	%		0.06	%
NON-PERFORMING ASSETS:
Nonaccrual loans	$	36,560		$	22,574
Accruing loans 90+ days overdue		9,012			8,318
Other real estate owned		2,072			2,209
Total non-performing assets	$	47,644		$	33,101
ASSET QUALITY RATIOS:
Nonaccrual loans to total loans		0.43	%		0.30	%
Nonperforming assets to total loans and OREO		0.57	%		0.44	%
Nonperforming assets to total assets		0.38	%		0.30	%
Allowance for loan losses to loans outstanding		1.10	%		1.18	%
Allowance/nonperforming loans		204	%		290	%

	Quarter Ended
	December 31			September 30
	2005			2005
	(dollars in thousands)
ALLOWANCE FOR LOAN LOSSES:
Balance at beginning of period	$	93,936		$	90,402
Loans charged off		(3,100	)		(1,625	)
Recoveries of loans previously charged off		1,231			1,236
Net loans charged-off		(1,869	)		(389	)
Provision for loan losses		780			815
Allowance purchased		—			3,108
Balance at end of period	$	92,847		$	93,936
Net charge-offs to average loans (annualized)		0.09	%		0.02	%
NON-PERFORMING ASSETS:
Nonaccrual loans	$	36,560		$	30,669
Accruing loans 90+ days overdue		9,012			13,350
Other real estate owned		2,072			4,042
Total non-performing assets	$	47,644		$	48,061
ASSET QUALITY RATIOS:
Nonaccrual loans to total loans		0.43	%		0.37	%
Nonperforming assets to total loans and OREO		0.57	%		0.58	%
Nonperforming assets to total assets		0.38	%		0.39	%
Allowance for loan losses to loans outstanding		1.10	%		1.13	%
Allowance/nonperforming loans		204	%		213	%

12