8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

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

Date of Report: October 21, 2008

(Date of earliest event reported): October 21, 2008

Commission File No. 0-10587

FULTON FINANCIAL CORPORATION

(Exact name of Registrant as specified in its Charter)

Pennsylvania (State or other jurisdiction of incorporation)	23-2195389 (IRS Employer Identification Number)
One Penn Square Lancaster, Pennsylvania (Address of principal executive offices)	17602 (Zip Code)

Registrant’s telephone number, including area code: 717-291-2411

Former name or former address, if changed since last Report: N/A

     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

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act

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

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

Item 2.02 — Results of Operations and Financial Condition

On October 21, 2008 Fulton Financial Corporation announced its results of operations for the third quarter ended September 30, 2008. 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

(d) Exhibits.

Exhibit No.	Description
99.1	Earnings Release dated October 21, 2008.
99.2	Supplemental financial information for the quarter ended September 30, 2008.

2

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.

Date: October 21, 2008	FULTON FINANCIAL CORPORATION
	By:	/s/ Charles J. Nugent
		Charles J. Nugent
		Senior Executive Vice President and Chief Financial Officer

3

EX-99.1

EXHIBIT 99.1

FOR IMMEDIATE RELEASE	Media Contact: Laura J. Wakeley
	717-291-2616

Fulton Financial reports third quarter earnings

     (October 21) — Lancaster, PA — 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 office 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

-MORE-

Page 2 . . . Fulton Financial reports third quarter earnings

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

Page 3 . . . Fulton Financial reports third quarter earnings

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 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

Page 4 . . . Fulton Financial reports third quarter earnings

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

Page 5 . . . Fulton Financial reports third quarter earnings

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

EX-99.2

EXHIBIT 99.2

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 September 30									Nine Months Ended 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

1

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

										% Change from
	September 30			September 30			June 30			September 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 Shareholders’ 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	%

2

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

	Quarter Ended									% Change from						Nine Months Ended
	September 30			September 30			June 30			September 30			June 30			September 30
	2008			2007			2008			2007			2008			2008			2007			% Change
Interest Income:
Interest Income	$	213,809		$	238,740		$	215,392			(10.4	%)		(0.7	%)	$	658,421		$	699,508			(5.9	%)
Interest Expense		79,791			116,330			83,502			(31.4	%)		(4.4	%)		266,614			334,415			(20.3	%)
Net Interest Income		134,018			122,410			131,890			9.5	%		1.6	%		391,807			365,093			7.3	%
Provision for Loan Losses		26,700			4,606			16,706			479.7	%		59.8	%		54,626			8,263			561.1	%
Net Interest Income after Provision		107,318			117,804			115,184			(8.9	%)		(6.8	%)		337,181			356,830			(5.5	%)
Other Income:
Service charges on deposit accounts		16,177			11,293			15,319			43.2	%		5.6	%		45,463			33,145			37.2	%
Other service charges and fees		9,598			8,530			9,131			12.5	%		5.1	%		27,320			23,746			15.1	%
Investment management and trust services		8,045			9,291			8,389			(13.4	%)		(4.1	%)		25,193			29,374			(14.2	%)
Gains on sale of mortgage loans		2,266			2,532			2,670			(10.5	%)		(15.1	%)		7,247			12,113			(40.2	%)
Investment securities (losses) gains		(9,501	)		(134	)		(21,647	)		N/M			56.1	%		(29,902	)		2,277			N/M
Gain on sale of credit card portfolio		—			—			13,910			N/A			N/A			13,910			—			N/A
Other		4,030			5,231			4,378			(23.0	%)		(7.9	%)		11,214			12,158			(7.8	%)
Total Other Income		30,615			36,743			32,150			(16.7	%)		(4.8	%)		100,445			112,813			(11.0	%)
Other Expenses:
Salaries and employee benefits		55,310			52,505			54,281			5.3	%		1.9	%		164,786			164,353			0.3	%
Net occupancy expense		10,237			9,813			10,238			4.3	%		—			30,999			29,963			3.5	%
Operating risk loss		3,480			16,345			14,385			(78.7	%)		(75.8	%)		19,108			26,462			(27.8	%)
Data processing		3,242			3,131			3,116			3.5	%		4.0	%		9,604			9,550			0.6	%
Advertising		3,097			2,470			3,519			25.4	%		(12.0	%)		9,521			7,869			21.0	%
Equipment expense		3,061			3,438			3,398			(11.0	%)		(9.9	%)		9,907			10,589			(6.4	%)
Intangible amortization		1,730			1,995			1,799			(13.3	%)		(3.8	%)		5,386			6,176			(12.8	%)
Other		18,998			18,299			19,000			3.8	%		—			56,240			52,046			8.1	%
Total Other Expenses		99,155			107,996			109,736			(8.2	%)		(9.6	%)		305,551			307,008			(0.5	%)
Income Before Income Taxes		38,778			46,551			37,598			(16.7	%)		3.1	%		132,075			162,635			(18.8	%)
Income Taxes		9,702			12,985			11,920			(25.3	%)		(18.6	%)		35,825			48,096			(25.5	%)
Net Income	$	29,076		$	33,566		$	25,678			(13.4	%)		13.2	%	$	96,250		$	114,539			(16.0	%)
SHARE AND PER-SHARE INFORMATION:
Net income:
Basic	$	0.17		$	0.19		$	0.15			(10.5	%)		13.3	%	$	0.55		$	0.66			(16.7	%)
Diluted		0.17			0.19			0.15			(10.5	%)		13.3	%		0.55			0.66			(16.7	%)
Cash dividends	$	0.15		$	0.15		$	0.15			—			—		$	0.450		$	0.448			0.4	%
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	%		174,017			173,254			0.4	%
Weighted average shares (diluted)		174,912			174,370			174,528			0.3	%		0.2	%		174,551			174,493			—
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	%								0.81	%		1.03	%
Return on average shareholders’ equity		7.25	%		8.67	%		6.33	%								8.02	%		10.07	%
Return on average shareholders’ equity (tangible)		12.72	%		15.76	%		11.03	%								14.00	%		18.42	%
Net interest margin		3.74	%		3.62	%		3.75	%								3.69	%		3.69	%
Efficiency ratio		54.69	%		65.17	%		56.93	%								56.21	%		61.97	%

N/M — Not meaningful

N/A — Not applicable

3

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

	Quarter Ended
	September 30, 2008									September 30, 2007									June 30, 2008
	Average						Yield/			Average						Yield/			Average						Yield/
	Balance			Interest (1)			Rate			Balance			Interest (1)			Rate			Balance			Interest (1)			Rate
ASSETS
Interest-earning assets:
Loans, net of unearned income	$	11,696,841		$	181,562			6.18	%	$	10,857,636		$	205,747			7.52	%	$	11,423,409		$	180,433			6.35	%
Taxable investment securities		2,117,207			26,025			4.70	%		2,116,123			24,583			4.65	%		2,304,391			28,528			4.90	%
Tax-exempt investment securities		509,994			6,944			5.45	%		499,389			6,377			5.11	%		509,784			6,911			5.42	%
Equity securities		168,690			1,614			3.82	%		188,490			2,269			4.80	%		196,981			1,729			3.52	%
Total Investment Securities		2,795,891			34,583			4.78	%		2,804,002			33,229			4.74	%		3,011,156			37,168			4.90	%
Loans held for sale		101,319			1,539			6.08	%		159,492			2,694			6.76	%		108,478			1,610			5.94	%
Other interest-earning assets		19,013			142			2.94	%		34,536			432			4.91	%		16,325			102			2.50	%
Total Interest-earning Assets		14,613,064			217,826			5.91	%		13,855,666			242,102			6.95	%		14,559,368			219,313			6.05	%
Noninterest-earning assets:
Cash and due from banks		322,550									338,862									323,223
Premises and equipment		197,895									190,175									196,990
Other assets		933,303									890,901									984,000
Less: allowance for loan losses		(123,865	)								(108,628	)								(115,936	)
Total Assets	$	15,942,947								$	15,166,976								$	15,947,645
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest-bearing liabilities:
Demand deposits	$	1,734,198		$	3,166			0.73	%	$	1,729,357		$	7,630			1.75	%	$	1,708,050		$	2,967			0.70	%
Savings deposits		2,192,747			6,633			1.20	%		2,259,231			13,680			2.40	%		2,207,699			6,600			1.20	%
Time deposits		4,308,903			37,393			3.45	%		4,626,160			55,093			4.72	%		4,361,280			41,562			3.83	%
Total Interest-bearing Deposits		8,235,848			47,192			2.28	%		8,614,748			76,403			3.52	%		8,277,029			51,129			2.48	%
Short-term borrowings		2,432,109			12,877			2.08	%		1,477,288			17,786			4.74	%		2,314,845			12,388			2.13	%
Federal Home Loan Bank advances and long-term debt		1,819,897			19,722			4.32	%		1,655,599			22,141			5.32	%		1,871,649			19,985			4.29	%
Total Interest-bearing Liabilities		12,487,854			79,791			2.54	%		11,747,635			116,330			3.93	%		12,463,523			83,502			2.69	%
Noninterest-bearing liabilities:
Demand deposits		1,669,908									1,703,137									1,662,266
Other		190,012									179,391									190,963
Total Liabilities		14,347,774									13,630,163									14,316,752
Shareholders’ equity		1,595,173									1,536,813									1,630,893
Total Liabilities and Shareholders’ Equity	$	15,942,947								$	15,166,976								$	15,947,645
Net interest income/net interest margin (fully taxable equivalent)					138,035			3.74	%					125,772			3.62	%					135,811			3.75	%
Tax equivalent adjustment					(4,017	)								(3,362	)								(3,921	)
Net interest income				$	134,018								$	122,410								$	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 30		September 30		June 30		September 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	%

4

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

	Nine Months Ended September 30
	2008									2007
	Average									Average
	Balance			Interest (1)			Yield/Rate			Balance			Interest (1)			Yield/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
Shareholders’ equity		1,603,679									1,521,491
Total Liabilities and Shareholders’ 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	%

5

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

	Quarter Ended									Nine Months Ended
	September 30			September 30			June 30			September 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	%

6