10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20459

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011, or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File No. 0-10587

FULTON FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

PENNSYLVANIA	23-2195389
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
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)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Common Stock, $2.50 Par Value – 199,795,000 shares outstanding as of July 29, 2011.

FULTON FINANCIAL CORPORATION

FORM 10-Q FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011

INDEX

Description		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited):
(a)	Consolidated Balance Sheets - June 30, 2011 and December 31, 2010		3
(b)	Consolidated Statements of Income - Three and Six months ended June 30, 2011 and 2010		4
(c)	Consolidated Statements of Shareholders’ Equity and Comprehensive Income - Six months ended June 30, 2011 and 2010		5
(d)	Consolidated Statements of Cash Flows - Six months ended June 30, 2011 and 2010		6
(e)	Notes to Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			34
Item 3. Quantitative and Qualitative Disclosures about Market Risk			58
Item 4. Controls and Procedures			65
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			66
Item 1A. Risk Factors			66
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			66
Item 3. Defaults Upon Senior Securities			66
Item 4. Removed and Reserved			66
Item 5. Other Information			66
Item 6. Exhibits			66
Signatures			67
Exhibit Index			68
Certifications			69

2

Item 1. Financial Statements

FULTON FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per-share data)

	June  30 2011 (unaudited)			December 31 2010
ASSETS
Cash and due from banks	$	284,691		$	198,954
Interest-bearing deposits with other banks		124,967			33,297
Loans held for sale		47,133			83,940
Investment securities:
Held to maturity (estimated fair value of $7,038 in 2011 and $7,818 in 2010)		6,990			7,751
Available for sale		2,656,054			2,853,733
Loans, net of unearned income		11,852,491			11,933,307
Less: Allowance for loan losses		(266,683	)		(274,271	)
Net Loans		11,585,808			11,659,036
Premises and equipment		207,177			208,016
Accrued interest receivable		51,387			53,841
Goodwill		535,798			535,518
Intangible assets		10,111			12,461
Other assets		457,004			628,707
Total Assets	$	15,967,120		$	16,275,254
LIABILITIES
Deposits:
Noninterest-bearing	$	2,445,008		$	2,194,988
Interest-bearing		9,817,887			10,193,593
Total Deposits		12,262,895			12,388,581
Short-term borrowings:
Federal funds purchased		166,179			267,844
Other short-term borrowings		380,402			406,233
Total Short-Term Borrowings		546,581			674,077
Accrued interest payable		29,444			33,333
Other liabilities		149,354			179,424
Federal Home Loan Bank advances and long-term debt		1,025,537			1,119,450
Total Liabilities		14,013,811			14,394,865
SHAREHOLDERS’ EQUITY
Common stock, $2.50 par value, 600 million shares authorized, 215.6 million shares issued in 2011 and 215.4 million shares issued in 2010		538,923			538,492
Additional paid-in capital		1,421,626			1,420,127
Retained earnings		210,671			158,453
Accumulated other comprehensive income:
Unrealized gains on investment securities not other-than-temporarily impaired		37,227			22,354
Unrealized non-credit related losses on other-than-temporarily impaired debt securities		(747	)		(2,355	)
Unrecognized pension and postretirement plan costs		(4,438	)		(4,414	)
Unamortized effective portions of losses on forward-starting interest rate swaps		(3,022	)		(3,090	)
Accumulated Other Comprehensive Income		29,020			12,495
Treasury stock, 16.2 million shares in 2011 and 16.3 million shares in 2010, at cost		(246,931	)		(249,178	)
Total Shareholders’ Equity		1,953,309			1,880,389
Total Liabilities and Shareholders’ Equity	$	15,967,120		$	16,275,254

See Notes to Consolidated Financial Statements

3

FULTON FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(in thousands, except per-share data)

	Three Months Ended June  30						Six Months Ended June  30
	2011			2010			2011			2010
INTEREST INCOME
Loans, including fees	$	149,751		$	157,628		$	299,247		$	315,162
Investment securities:
Taxable		20,749			25,146			42,556			53,295
Tax-exempt		3,146			3,348			6,321			6,943
Dividends		696			660			1,379			1,389
Loans held for sale		492			667			992			1,223
Other interest income		101			231			134			256
Total Interest Income		174,935			187,680			350,629			378,268
INTEREST EXPENSE
Deposits		21,775			31,819			45,061			65,557
Short-term borrowings		168			390			422			939
Long-term debt		12,347			16,313			24,938			34,105
Total Interest Expense		34,290			48,522			70,421			100,601
Net Interest Income		140,645			139,158			280,208			277,667
Provision for credit losses		36,000			40,000			74,000			80,000
Net Interest Income After Provision for Credit Losses		104,645			99,158			206,208			197,667
OTHER INCOME
Service charges on deposit accounts		14,332			15,482			27,637			29,749
Other service charges and fees		12,709			11,469			24,191			21,634
Investment management and trust services		9,638			8,655			18,842			16,743
Mortgage banking income		6,049			3,899			11,512			8,048
Other		4,979			4,503			9,400			8,317
Total other-than-temporary impairment losses		(71	)		(4,334	)		(1,092	)		(9,585	)
Less: Portion of (gain) loss recognized in other comprehensive income (before taxes)		(322	)		836			(592	)		1,110
Net other-than-temporary impairment losses		(393	)		(3,498	)		(1,684	)		(8,475	)
Net gains on sale of investment securities		58			4,402			3,634			7,156
Net investment securities gains (losses)		(335	)		904			1,950			(1,319	)
Total Other Income		47,372			44,912			93,532			83,172
OTHER EXPENSES
Salaries and employee benefits		56,070			54,654			110,378			106,999
Net occupancy expense		10,874			10,519			22,240			22,169
Equipment expense		3,377			2,663			6,509			5,754
FDIC insurance expense		3,264			5,136			8,018			10,090
Data processing		3,214			3,311			6,586			6,728
Professional fees		3,102			3,035			5,951			5,581
Other real estate owned and repossession expense		2,575			1,876			4,545			4,556
Software		1,972			1,706			4,004			3,320
Marketing		1,863			2,271			4,699			4,101
Intangible amortization		1,172			1,341			2,350			2,655
Other		14,995			14,593			28,761			29,174
Total Other Expenses		102,478			101,105			204,041			201,127
Income Before Income Taxes		49,539			42,965			95,699			79,712
Income taxes		13,154			11,283			25,529			20,550
Net Income		36,385			31,682			70,170			59,162
Preferred stock dividends and discount accretion		0			(5,066	)		0			(10,131	)
Net Income Available to Common Shareholders	$	36,385		$	26,616		$	70,170		$	49,031
PER COMMON SHARE:
Net income (basic)	$	0.18		$	0.14		$	0.35		$	0.27
Net income (diluted)		0.18			0.14			0.35			0.27
Cash dividends		0.05			0.03			0.09			0.06

See Notes to Consolidated Financial Statements

4

FULTON FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (UNAUDITED)

SIX MONTHS ENDED JUNE 30, 2011 AND 2010

			Common Stock				Additional		Retained Earnings			Accumulated Other		Treasury Stock			Total
	Preferred Stock		Shares Outstanding		Amount		Paid-in Capital					Comprehensive Income
	(in thousands)
Balance at December 31, 2010	$	0		199,050	$	538,492	$	1,420,127	$	158,453		$	12,495	$	(249,178	)	$	1,880,389
Comprehensive income:
Net income										70,170								70,170
Other comprehensive income													16,525					16,525
Total comprehensive income																		86,695
Stock issued, including related tax benefits				320		431		398							2,247			3,076
Stock-based compensation awards								1,101										1,101
Common stock cash dividends - $0.09 per share										(17,952	)							(17,952	)
Balance at June 30, 2011	$	0		199,370	$	538,923	$	1,421,626	$	210,671		$	29,020	$	(246,931	)	$	1,953,309
Balance at December 31, 2009	$	370,290		176,364	$	482,491	$	1,257,730	$	71,999		$	7,458	$	(253,486	)	$	1,936,482
Comprehensive income:
Net income										59,162								59,162
Other comprehensive income													27,104					27,104
Total comprehensive income																		86,266
Stock issued, including related tax benefits				22,099		54,879		171,929							2,199			229,007
Stock-based compensation awards								611										611
Preferred stock discount accretion		719								(719	)							0
Preferred stock cash dividends										(9,412	)							(9,412	)
Common stock cash dividends - $0.06 per share										(11,743	)							(11,743	)
Balance at June 30, 2010	$	371,009		198,463	$	537,370	$	1,430,270	$	109,287		$	34,562	$	(251,287	)	$	2,231,211

See Notes to Consolidated Financial Statements

5

FULTON FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Six Months Ended June  30
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	70,170		$	59,162
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses		74,000			80,000
Depreciation and amortization of premises and equipment		10,462			10,261
Net amortization of investment securities premiums		1,999			1,187
Investment securities (gains) losses		(1,950	)		1,319
Net decrease (increase) in loans held for sale		36,807			(8,120	)
Amortization of intangible assets		2,350			2,655
Stock-based compensation		1,101			611
Decrease in accrued interest receivable		2,454			3,752
Decrease (increase) in other assets		22,955			(256	)
Decrease in accrued interest payable		(3,889	)		(3,304	)
(Decrease) increase in other liabilities		(11,566	)		3,236
Total adjustments		134,723			91,341
Net cash provided by operating activities		204,893			150,503
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale		416,480			276,691
Proceeds from maturities of securities held to maturity		160			227
Proceeds from maturities of securities available for sale		279,841			388,152
Purchase of securities held to maturity		(14	)		(122	)
Purchase of securities available for sale		(356,323	)		(245,875	)
Increase in short-term investments		(91,670	)		(417,096	)
Net increase in loans		(49	)		(28,136	)
Net purchases of premises and equipment		(9,623	)		(11,357	)
Net cash provided by (used in) investing activities		238,802			(37,516	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand and savings deposits		229,071			523,628
Net decrease in time deposits		(354,757	)		(276,070	)
Decrease in short-term borrowings		(127,496	)		(410,606	)
Additions to long-term debt		0			45,000
Repayments of long-term debt		(93,913	)		(220,085	)
Net proceeds from issuance of stock		3,076			229,007
Dividends paid		(13,939	)		(19,998	)
Net cash used in financing activities		(357,958	)		(129,124	)
Net Increase (Decrease) in Cash and Due From Banks		85,737			(16,137	)
Cash and Due From Banks at Beginning of Period		198,954			284,508
Cash and Due From Banks at End of Period	$	284,691		$	268,371
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	74,310		$	103,905
Income taxes		7,469			24,039

See Notes to Consolidated Financial Statements

6

FULTON FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A – Basis of Presentation

The accompanying unaudited consolidated financial statements of Fulton Financial Corporation (the Corporation) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as of the date of the financial statements as well as revenues and expenses during the period. Actual results could differ from those estimates. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission (SEC).

NOTE B – Net Income Per Common Share and Other Comprehensive Income

The Corporation’s basic net income per common share is calculated as net income available to common shareholders divided by the weighted average number of common shares outstanding. Net income available to common shareholders is calculated as net income less accrued dividends and discount accretion related to preferred stock.

For diluted net income per common share, net income available to common shareholders is divided by the weighted average number of common shares outstanding plus the incremental number of shares added as a result of converting common stock equivalents, calculated using the treasury stock method. The Corporation’s common stock equivalents consist of outstanding stock options, restricted stock and common stock warrants. As of June 30, 2011, there were no outstanding common stock warrants.

A reconciliation of weighted average common shares outstanding used to calculate basic net income per common share and diluted net income per common share follows.

	Three months ended June 30				Six months ended June 30
	2011		2010		2011		2010
			(in thousands)
Weighted average shares outstanding (basic)		198,772		190,221		198,686		183,236
Effect of dilutive securities		755		606		721		557
Weighted average shares outstanding (diluted)		199,527		190,827		199,407		183,793

For the three and six months ended June 30, 2011, 4.6 million stock options were excluded from the diluted net income per share computation as their effect would have been anti-dilutive. For the three and six months ended June 30, 2010, 4.9 million and 5.2 million stock options, respectively, were excluded from the diluted net income per share computation as their effects would have been anti-dilutive.

7

The following table presents the components of other comprehensive income:

	Six months ended June 30
	2011			2010
	(in thousands)
Unrealized gain on securities (net of a $9.2 million and $15.2 million tax effect in 2011 and 2010, respectively)	$	17,019		$	28,277
Non-credit related unrealized gain (loss) on other-than-temporarily impaired debt securities (net of a $392,000 and $1.2 million tax effect in 2011 and 2010, respectively)		729			(2,137	)
Unrealized gain on derivative financial instruments (net of a $36,000 tax effect in 2011 and 2010) (1)		68			68
(Accretion)/amortization of net unrecognized pension and postretirement items (net of a $12,000 and $20,000 tax effect in 2011 and 2010, respectively)		(24	)		38
Reclassification adjustment for securities (gains) losses included in net income (net of $682,000 tax expense in 2011 and $461,000 tax benefit in 2010)		(1,267	)		858
Other comprehensive income	$	16,525		$	27,104

(1) Amounts represent the amortization of the effective portions of losses on forward-starting interest rate swaps, designated as cash flow hedges and entered into in prior years in connection with the issuance of fixed-rate debt. The total amount recorded as a reduction to accumulated other comprehensive income upon settlement of these derivatives is being amortized to interest expense over the life of the related securities using the effective interest method. The amount of net losses in accumulated other comprehensive income that will be reclassified into earnings during the next twelve months is expected to be approximately $135,000.

NOTE C – Investment Securities

The following tables present the amortized cost and estimated fair values of investment securities:

Held to Maturity at June 30, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
U.S. Government sponsored agency securities	$	6,014	$	0	$	(7	)	$	6,007
State and municipal securities		346		0		0			346
Mortgage-backed securities		630		55		0			685
	$	6,990	$	55	$	(7	)	$	7,038
Available for Sale at June 30, 2011
Equity securities	$	126,841	$	3,761	$	(1,641	)	$	128,961
U.S. Government securities		1,324		0		0			1,324
U.S. Government sponsored agency securities		4,858		135		(1	)		4,992
State and municipal securities		345,942		9,939		(255	)		355,626
Corporate debt securities		131,535		5,689		(8,969	)		128,255
Collateralized mortgage obligations		968,785		25,370		(173	)		993,982
Mortgage-backed securities		753,353		35,163		(744	)		787,772
Auction rate securities		267,339		708		(12,905	)		255,142
	$	2,599,977	$	80,765	$	(24,688	)	$	2,656,054

8

Held to Maturity at December 31, 2010	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
U.S. Government sponsored agency securities	$	6,339	$	0	$	(1	)	$	6,338
State and municipal securities		346		0		0			346
Mortgage-backed securities		1,066		68		0			1,134
	$	7,751	$	68	$	(1	)	$	7,818
Available for Sale at December 31, 2010
Equity securities	$	133,570	$	3,872	$	(974	)	$	136,468
U.S. Government securities		1,649		0		0			1,649
U.S. Government sponsored agency securities		4,888		172		(2	)		5,058
State and municipal securities		345,053		6,003		(1,493	)		349,563
Corporate debt securities		137,101		3,808		(16,123	)		124,786
Collateralized mortgage obligations		1,085,613		23,457		(5,012	)		1,104,058
Mortgage-backed securities		843,446		31,080		(3,054	)		871,472
Auction rate securities		271,645		892		(11,858	)		260,679
	$	2,822,965	$	69,284	$	(38,516	)	$	2,853,733

Available for sale equity securities include restricted investment securities issued by the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank totaling $88.6 million and $96.4 million as of June 30, 2011 and December 31, 2010, respectively.

The amortized cost and estimated fair values of debt securities as of June 30, 2011, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held to Maturity				Available for Sale
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	6,181	$	6,174	$	80,963	$	81,194
Due from one year to five years		179		179		49,609		51,521
Due from five years to ten years		0		0		136,802		143,210
Due after ten years		0		0		483,624		469,414
		6,360		6,353		750,998		745,339
Collateralized mortgage obligations		0		0		968,785		993,982
Mortgage-backed securities		630		685		753,353		787,772
	$	6,990	$	7,038	$	2,473,136	$	2,527,093

9

The following table presents information related to the Corporation’s gains and losses on the sales of equity and debt securities, and losses recognized for the other-than-temporary impairment of investments:

	Gross Realized Gains		Gross Realized Losses			Other-than- temporary Impairment Losses			Net Gains (Losses)
	(in thousands)
Three months ended June 30, 2011:
Equity securities	$	43	$	0		$	(34	)	$	9
Debt securities		16		(1	)		(359	)		(344	)
Total	$	59	$	(1	)	$	(393	)	$	(335	)
Three months ended June 30, 2010:
Equity securities	$	14	$	0		$	(509	)	$	(495	)
Debt securities		4,401		(13	)		(2,989	)		1,399
Total	$	4,415	$	(13	)	$	(3,498	)	$	904
Six months ended June 30, 2011:
Equity securities	$	48	$	0		$	(331	)	$	(283	)
Debt securities		3,605		(19	)		(1,353	)		2,233
Total	$	3,653	$	(19	)	$	(1,684	)	$	1,950
Six months ended June 30, 2010:
Equity securities	$	850	$	0		$	(1,333	)	$	(483	)
Debt securities		6,324		(18	)		(7,142	)		(836	)
Total	$	7,174	$	(18	)	$	(8,475	)	$	(1,319	)

The other-than-temporary impairment charges for equity securities during the three and six months ended June 30, 2011 and 2010, respectively, were for investments in stocks of financial institutions. Other-than-temporary impairment charges related to financial institution stocks were due to the severity and duration of the declines in fair values of certain bank stock holdings, in conjunction with management’s assessment of the near-term prospects of each specific issuer. As of June 30, 2011, after other-than-temporary impairment charges, the financial institutions stock portfolio had a cost basis of $31.2 million and a fair value of $33.3 million.

The credit related other-than-temporary impairment charges for debt securities during the three and six months ended June 30, 2011 and 2010, were for investments in pooled trust preferred securities issued by financial institutions. Other-than-temporary impairment charges related to pooled trust preferred securities were determined based on an expected cash flows model.

10

The following table presents a summary of the cumulative credit related other-than-temporary impairment charges, recognized as components of earnings, for pooled trust preferred securities still held by the Corporation:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Balance of cumulative credit losses on pooled trust preferred securities, beginning of period	$	(28,517	)	$	(19,765	)	$	(27,560	)	$	(15,612	)
Additions for credit losses recorded which were not previously recognized as components of earnings		(359	)		(2,989	)		(1,353	)		(7,142	)
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security		0			0			37			0
Balance of cumulative credit losses on pooled trust preferred securities, end of period	$	(28,876	)	$	(22,754	)	$	(28,876	)	$	(22,754	)

The following table presents the gross unrealized losses and estimated fair values of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2011:

	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(in thousands)
U.S. Government sponsored agency securities	$	5,377	$	(7	)	$	187	$	(1	)	$	5,564	$	(8	)
State and municipal securities		31,090		(254	)		401		(1	)		31,491		(255	)
Corporate debt securities		4,900		(105	)		46,505		(8,864	)		51,405		(8,969	)
Collateralized mortgage obligations		102,430		(173	)		0		0			102,430		(173	)
Mortgage-backed securities		66,829		(744	)		0		0			66,829		(744	)
Auction rate securities		56,746		(1,550	)		175,166		(11,355	)		231,912		(12,905	)
Total debt securities		267,372		(2,833	)		222,259		(20,221	)		489,631		(23,054	)
Equity securities		11,584		(1,138	)		1,690		(503	)		13,274		(1,641	)
	$	278,956	$	(3,971	)	$	223,949	$	(20,724	)	$	502,905	$	(24,695	)

For its investments in equity securities, most notably its investments in stocks of financial institutions, management evaluates the near-term prospects of the issuers in relation to the severity and duration of the impairment. Based on that evaluation and the Corporation’s ability and intent to hold those investments for a reasonable period of time sufficient for a recovery of fair value, the Corporation does not consider those investments with unrealized holding losses as of June 30, 2011 to be other-than-temporarily impaired.

The unrealized holding losses on investments in student loan auction rate securities, also known as auction rate certificates (ARCs), are attributable to liquidity issues resulting from the failure of periodic auctions. Fulton Financial Advisors (FFA), the investment management and trust division of the Corporation’s Fulton Bank, N.A. subsidiary, held ARCs for some of its customers’ accounts. FFA had previously sold ARCs to customers as short-term investments with fair values that could be derived based on periodic auctions under normal market conditions. During 2008 and 2009, the Corporation purchased ARCs from customers due to the failure of these periodic auctions, which made these previously short-term investments illiquid.

11

As of June 30, 2011, approximately $205 million, or 80%, of the ARCs were rated above investment grade, with approximately $156 million, or 61%, AAA rated. Approximately $50 million, or 20%, of ARCs were rated below investment grade by at least one ratings agency or not rated. Of this amount, approximately $29 million, or 59%, of the student loans underlying the ARCs have principal payments which are guaranteed by the Federal government. In total, approximately $225 million, or 89%, of the student loans underlying the ARCs have principal payments which are guaranteed by the Federal government. As of June 30, 2011, all ARCs were current and making scheduled interest payments. Because the Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, the Corporation does not consider these investments to be other-than-temporarily impaired as of June 30, 2011.

The Corporation’s collateralized mortgage obligations and mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the decline in market value of these securities is attributable to changes in interest rates and not credit quality, and because the Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, the Corporation does not consider these investments to be other-than-temporarily impaired as of June 30, 2011.

The following table presents the amortized cost and estimated fair values of corporate debt securities:

	June 30, 2011				December 31, 2010
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
	(in thousands)
Single-issuer trust preferred securities	$	87,338	$	82,785	$	91,257	$	81,789
Subordinated debt		35,051		37,527		34,995		35,915
Pooled trust preferred securities		6,636		5,433		8,295		4,528
Corporate debt securities issued by financial institutions		129,025		125,745		134,547		122,232
Other corporate debt securities		2,510		2,510		2,554		2,554
Available for sale corporate debt securities	$	131,535	$	128,255	$	137,101	$	124,786

The Corporation’s investments in single-issuer trust preferred securities had an unrealized loss of $4.6 million at June 30, 2011. The Corporation did not record any other-than-temporary impairment charges for single-issuer trust preferred securities during the three or six months ended June 30, 2011 or 2010, respectively. The Corporation held 13 single-issuer trust preferred securities that were rated below investment grade by at least one ratings agency, with an amortized cost of $40.1 million and an estimated fair value of $39.8 million at June 30, 2011. The majority of the single-issuer trust preferred securities rated below investment grade were rated BB or Baa. Single-issuer trust preferred securities with an amortized cost of $11.8 million and an estimated fair value of $10.3 million at June 30, 2011 were not rated by any ratings agency.

The Corporation holds ten pooled trust preferred securities. As of June 30, 2011, nine of these securities, with an amortized cost of $6.0 million and an estimated fair value of $4.9 million, were rated below investment grade by at least one ratings agency, with ratings ranging from C to Ca. For each of the nine pooled trust preferred securities rated below investment grade, the class of securities held by the Corporation is below the most senior tranche, with the Corporation’s interests being subordinate to other investors in the pool. The Corporation determines the fair value of pooled trust preferred securities based on quotes provided by third-party brokers.

The amortized cost of pooled trust preferred securities is the purchase price of the securities, net of cumulative credit related other-than-temporary impairment charges, determined using an expected cash flows model. The most significant input to the expected cash flows model was the expected payment deferral rate for each pooled trust preferred security. The Corporation evaluates the financial metrics, such as capital ratios

12

and non-performing asset ratios, of the individual financial institution issuers that comprise each pooled trust preferred security to estimate its expected deferral rate. The actual weighted average cumulative defaults and deferrals as a percentage of original collateral were approximately 38% as of June 30, 2011. The discounted cash flow modeling for pooled trust preferred securities held by the Corporation as of June 30, 2011 assumed, on average, an additional 19% expected deferral rate.

Based on management’s evaluations, corporate debt securities with a fair value of $128.3 million were not subject to any additional other-than-temporary impairment charges as of June 30, 2011. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be maturity.

NOTE D – Loans and Allowance for Credit Losses

Loans, Net of Unearned Income

Loans, net of unearned income are summarized as follows:

	June 30, 2011			December 31, 2010
	(in thousands)
Real-estate – commercial mortgage	$	4,443,025		$	4,375,980
Commercial – industrial, financial and agricultural		3,678,858			3,704,384
Real-estate – home equity		1,626,545			1,641,777
Real-estate – residential mortgage		1,023,646			995,990
Real-estate – construction		681,588			801,185
Consumer		330,965			350,161
Leasing and other		58,591			61,017
Overdrafts		15,657			10,011
		11,858,875			11,940,505
Unearned income		(6,384	)		(7,198	)
	$	11,852,491		$	11,933,307

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheet. The allowance for credit losses is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries.

The Corporation’s established methodology for evaluating the adequacy of the allowance for loan losses considers both components of the allowance: (1) specific allowances allocated to loans evaluated individually for impairment under the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Section 310-10-35, and (2) allowances calculated for pools of loans evaluated collectively for impairment under FASB ASC Subtopic 450-20.

Effective April 1, 2011, the Corporation revised and enhanced its allowance for credit loss methodology. The significant revisions to the methodology were as follows:

• Change in the identification of loans evaluated individually for impairment. – The population of loans evaluated individually for impairment was revised to include only loans on non-accrual status and impaired troubled debt restructurings (Impaired TDRs). Impaired TDRs represent TDRs that: (1) were modified via a change in the interest rate that, at the time of restructuring, was favorable in comparison to rates offered for loans with similar risk characteristics; or (2) were 90 days or more past due according to their modified terms; or (3) were modified in the current year.

13

Under the Corporation’s prior methodology, loans evaluated individually for impairment included accruing and non-accrual commercial loans, commercial mortgages and construction loans with risk ratings of substandard or worse and Impaired TDRs.

As of April 1, 2011, the balance of loans evaluated individually for impairment decreased from $525.6 million under the Corporation’s prior methodology to $335.6 million under the new methodology. The allowance allocations for loans evaluated individually for impairment decreased from $106.0 million under the Corporation’s prior methodology to $88.0 million under the new methodology.

• Quarterly evaluations of impaired loans – Due to the reduction in loans evaluated individually for impairment noted above, all loans evaluated individually for impairment are now measured for losses on a quarterly basis. Measurement may be more frequent basis if there is a significant change in the amount or timing of an impaired loan’s expected future cash flows, if actual cash flows are significantly different from the cash flows previously projected, or if the fair value of an impaired loan’s collateral significantly changes. In addition, the Corporation implemented a new appraisal policy which requires that impaired loans secured predominately by real estate have updated certified third-party appraisals, generally every 12 months.

Under the Corporation’s prior methodology, impaired loans were individually evaluated for impairment every 12 months or, if necessary, on a more frequent basis based on significant changes in expected future cash flows or significant changes collateral values. For impaired loans secured predominately by real estate, decisions regarding whether an updated certified appraisal was necessary were made on a loan-by-loan basis.

As of June 30, 2011, approximately 85% of impaired loans with principal balances greater than $1.0 million, whose primary collateral is real estate, were measured at estimated fair value using certified third-party appraisals that had been updated within the preceding 12 months. In comparison, as of March 31, 2011 and December 31, 2010, approximately 57% and 52%, respectively, of impaired loans with principal balances greater than $1 million, whose primary collateral is real estate, were measured at estimated fair value using certified third-party appraisals that had been updated within the preceding 12 months.

• Change in the determination of allocation needs on loans evaluated collectively for impairment. – Under its new methodology, the Corporation revised and further disaggregated its pools of loans evaluated collectively for impairment. Similar to the prior methodology, pools are segmented by general loan types, and further segmented by collateral types, where appropriate. However, under the new methodology, pools are further disaggregated by internal credit risk ratings for commercial loans, commercial mortgages and construction loans and by delinquency status for residential mortgages, consumer loans and all other loan types.

Allowance allocations for each pool are determined through a regression analysis based on historical losses for the most recent four years. The analysis computes loss rates based on a probability of default (PD) and loss given default (LGD). While the previous methodology utilized the same historical loss period, allowance allocations were computed based on weighted average charge-off rates as opposed to the use of a regression analysis, which computes PDs and LGDs based on historical losses as loans migrate through the various risk rating or delinquency categories.

Under both the current and previous methodologies, loss rates are adjusted to consider qualitative factors such as economic conditions and trends, among others. However, under its new methodology, the Corporation applies a more detailed analysis of qualitative factors that are formally assessed on a quarterly basis by a committee comprised of lending and credit administration personnel.

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As of April 1, 2011, total allocations on $11.5 billion of loans evaluated collectively for impairment under the new methodology were $182.2 million. In comparison, under the Corporation’s previous methodology, total allocations on $11.3 billion of loans evaluated collectively for impairment were $164.2 million.

The Corporation’s conclusion as of March 31, 2011 that its total allowance for credit losses of $271.2 million was sufficient to cover losses inherent in the loan portfolio did not change as a result of its new allowance for credit loss methodology. As noted above, the change in methodology expanded the number of loans evaluated collectively for impairment and reduced the number of loans evaluated individually for impairment. In addition, the change in methodology resulted in shifts in allocations by loan type, as detailed within the tabular information below.

Effective December 31, 2010, the Corporation adopted the provisions of the Financial Accounting Standards FASB ASC Update 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses” (ASC Update 2010-20), for period end disclosures related to the credit quality of loans. In 2011, the Corporation adopted certain additional disclosure requirements of ASC Update 2010-20 related to credit quality activity during a reporting period, or for the three and six months ended June 30, 2011.

The development of the Corporation’s allowance for loan losses is based first on a segmentation of its loan portfolio by general loan type, or “portfolio segments,” as presented in the table under the heading, “Loans, Net of Unearned Income,” above. Certain portfolio segments are further disaggregated and evaluated collectively for impairment based on “class segments,” which are largely based on the type of collateral underlying each loan. For commercial loans, class segments include loans secured by collateral and unsecured loans. Construction loan class segments include loans secured by commercial real estate and loans secured by residential real estate. Consumer loan class segments are based on collateral types and include direct consumer installment loans and indirect automobile loans.

The following table presents the components of the allowance for credit losses:

	June 30, 2011		December 31, 2010
	(in thousands)
Allowance for loan losses	$	266,683	$	274,271
Reserve for unfunded lending commitments		1,950		1,227
Allowance for credit losses	$	268,633	$	275,498

The following table presents the activity in the allowance for credit losses for the three and six months ended June 30:

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
	(in thousands)
Balance at beginning of period	$	271,156		$	269,254		$	275,498		$	257,553
Loans charged off		(40,675	)		(31,532	)		(86,204	)		(61,524	)
Recoveries of loans previously charged off		2,152			2,655			5,339			4,348
Net loans charged off		(38,523	)		(28,877	)		(80,865	)		(57,176	)
Provision for credit losses		36,000			40,000			74,000			80,000
Balance at end of period	$	268,633		$	280,377		$	268,633		$	280,377

15

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2011:

	Real Estate - Commercial Mortgage			Commercial - Industrial, Financial and Agricultural			Real Estate - Home Equity			Real Estate - Residential Mortgage			Real Estate - Construction			Consumer			Leasing and other and Overdrafts			Unallocated			Total
	(in thousands)
Three months ended June 30, 2011
Balance at April 1, 2011	$	48,558		$	100,180		$	5,656		$	19,575		$	55,491		$	4,736		$	2,576		$	33,500		$	270,272
Loans charged off		(7,074	)		(15,406	)		(1,650	)		(7,707	)		(7,468	)		(681	)		(689	)		0			(40,675	)
Recoveries of loans previously charged off		191			1,003			2			190			79			433			254			0			2,152
Net loans charged off		(6,883	)		(14,403	)		(1,648	)		(7,517	)		(7,389	)		(248	)		(435	)		0			(38,523	)
Provision for loan losses		9,040			10,224			1,862			11,958			7,239			343			590			(6,322	)		34,934
Impact of change in allowance methodology		22,883			(13,388	)		3,690			7,896			(24,771	)		(3,076	)		(944	)		7,710			0
Provision for loan losses, including impact of change in allowance methodology (1)		31,923			(3,164	)		5,552			19,854			(17,532	)		(2,733	)		(354	)		1,388			34,934
Balance at June 30, 2011	$	73,598		$	82,613		$	9,560		$	31,912		$	30,570		$	1,755		$	1,787		$	34,888		$	266,683
Six months ended June 30, 2011
Balance at January 1, 2011	$	40,831		$	101,436		$	6,454		$	17,425		$	58,117		$	4,669		$	3,840		$	41,499		$	274,271
Loans charged off		(17,121	)		(28,742	)		(3,118	)		(12,703	)		(21,362	)		(1,972	)		(1,186	)		0			(86,204	)
Recoveries of loans previously charged off		1,726			1,394			3			234			642			742			598			0			5,339
Net loans charged off		(15,395	)		(27,348	)		(3,115	)		(12,469	)		(20,720	)		(1,230	)		(588	)		0			(80,865	)
Provision for loan losses		25,279			21,913			2,531			19,060			17,944			1,392			(521	)		(14,321	)		73,277
Impact of change in allowance methodology		22,883			(13,388	)		3,690			7,896			(24,771	)		(3,076	)		(944	)		7,710			0
Provision for loan losses, including impact of change in allowance methodology (1)		48,162			8,525			6,221			26,956			(6,827	)		(1,684	)		(1,465	)		(6,611	)		73,277
Balance at June 30, 2011	$	73,598		$	82,613		$	9,560		$	31,912		$	30,570		$	1,755		$	1,787		$	34,888		$	266,683

(1) Provision for loan losses is net of a $1.1 million and $723,000 increase in provision applied to unfunded commitments for the three and six months ended June 30, 2011, respectively. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $36.0 million and $74.0 million for the three and six months ended June 30, 2011, respectively.

The following tables present loans, net of unearned income and their related allowance for loan losses, by portfolio segment, as of June 30, 2011 and December 31, 2010:

	Real Estate - Commercial Mortgage		Commercial - Industrial, Financial and Agricultural		Real Estate - Home Equity		Real Estate - Residential Mortgage		Real Estate - Construction		Consumer		Leasing and other and Overdrafts		Unallocated (1)		Total
	(in thousands)
Allowance for loan losses at June 30, 2011:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	44,600	$	53,373	$	9,560	$	5,953	$	18,794	$	1,597	$	1,727	$	34,888	$	170,492
Evaluated individually for impairment under FASB ASC Section 310-10-35		28,998		29,240		0		25,959		11,776		158		60		N/A		96,191
	$	73,598	$	82,613	$	9,560	$	31,912	$	30,570	$	1,755	$	1,787	$	34,888	$	266,683
Loans, net of unearned income at June 30, 2011:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	4,329,750	$	3,587,702	$	1,626,545	$	955,863	$	623,734	$	330,754	$	67,773		N/A	$	11,522,121
Evaluated individually for impairment under FASB ASC Section 310-10-35		113,275		91,156		0		67,783		57,854		211		91		N/A		330,370
Total	$	4,443,025	$	3,678,858	$	1,626,545	$	1,023,646	$	681,588	$	330,965	$	67,864		N/A	$	11,852,491
Allowance for loan losses at December 31, 2010:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	22,836	$	32,323	$	6,454	$	11,475	$	35,247	$	4,669	$	3,840	$	41,499	$	158,343
Evaluated individually for impairment under FASB ASC Section 310-10-35		17,995		69,113		0		5,950		22,870		0		0		N/A		115,928
	$	40,831	$	101,436	$	6,454	$	17,425	$	58,117	$	4,669	$	3,840	$	41,499	$	274,271
Loans, net of unearned income at December 31, 2010:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	4,217,660	$	3,469,775	$	1,641,777	$	956,260	$	660,238	$	350,161	$	63,830		N/A	$	11,359,701
Evaluated individually for impairment under FASB ASC Section 310-10-35		158,320		234,609		0		39,730		140,947		0		0		N/A		573,606
Total	$	4,375,980	$	3,704,384	$	1,641,777	$	995,990	$	801,185	$	350,161	$	63,830		N/A	$	11,933,307

(1) The Corporation’s unallocated allowance, which was approximately 13% and 15% as of June 30, 2011 and December 31, 2010, respectively, was reasonable and appropriate as the estimates used in the allocation process are inherently imprecise.

N/A – Not applicable

16

Impaired Loans

A loan is considered to be impaired if the Corporation believes it is probable that all amounts will not be collected according to the contractual terms of the loan agreement.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. Impaired loans with balances greater than $1.0 million are evaluated individually for impairment. As of June 30, 2011 and December 31, 2010, substantially all of the Corporation’s individually evaluated impaired loans were measured based on the estimated fair value of each loan’s collateral. Collateral could be in the form of real estate in the case of impaired commercial mortgages, construction loans and residential mortgages, or business assets, such as accounts receivable or inventory, in the case of commercial loans. Commercial loans may also be secured by real property.

Impaired loans with balances less than $1.0 million are measured collectively based on a statistical model which applies PDs and LGDs based on historical losses as loans migrate through the various risk rating or delinquency categories.

The following table presents total impaired loans by class segment:

	June 30, 2011						Three months ended June 30, 2011				Six months ended June 30, 2011				December 31, 2010
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized		Unpaid Principal Balance		Recorded Investment		Related Allowance
	(in thousands)
With no related allowance recorded:
Real estate - commercial mortgage	$	49,335	$	41,764		N/A	$	41,139	$	87	$	45,510	$	490	$	68,583	$	54,251		N/A
Commercial - secured		37,660		35,613		N/A		32,313		15		30,790		161		38,366		27,745		N/A
Commercial - unsecured		0		0		N/A		0		0		196		3		710		587		N/A
Real estate - residential mortgage (2)		0		0		N/A		0		0		7,071		43		21,598		21,212		N/A
Construction - commercial residential		33,882		17,439		N/A		20,322		6		24,333		184		69,624		32,354		N/A
Construction - commercial		5,605		3,486		N/A		3,601		1		3,109		21		5,637		2,125		N/A
		126,482		98,302				97,375		109		111,009		902		204,518		138,274
With a related allowance recorded:
Real estate - commercial mortgage		92,006		71,511	$	28,998		70,441		150		81,650		989		111,190		104,069	$	17,995
Commercial - secured		63,700		52,623		26,752		47,747		22		97,723		1,199		202,824		197,674		64,922
Commercial - unsecured		3,102		2,920		2,488		3,193		2		4,996		33		8,681		8,603		4,191
Real estate - residential mortgage (2)		67,783		67,783		25,959		71,807		487		54,044		577		18,518		18,518		5,950
Construction - commercial residential		61,888		34,513		10,530		40,219		13		61,421		448		110,465		103,826		22,155
Construction - commercial		303		303		158		313		0		1,089		17		2,642		2,642		715
Construction - other		2,113		2,113		1,088		1,687		0		1,124		0		0		0		0
Consumer - direct		211		211		158		150		2		100		2		0		0		0
Leasing and other and overdrafts		91		91		60		77		0		51		0		0		0		0
		291,197		232,068		96,191		235,634		676		302,198		3,265		454,320		435,332		115,928
Total	$	417,679	$	330,370	$	96,191	$	333,009	$	785	$	413,207	$	4,167	$	658,838	$	573,606	$	115,928

(1) Effective April 1, 2011, all impaired loans, excluding certain accruing Impaired TDRs, were non-accrual loans. Interest income recognized for the three months ended June 30, 2011 represents amounts earned on accruing TDRs.

(2) Impaired residential mortgages include accruing TDRs that were modified in the current calendar year and/or not performing according to their modified terms.

N/A – Not applicable.

As of June 30, 2011 and December 31, 2010, there were $98.3 million and $138.3 million, respectively, of impaired loans that did not have a related allowance for loan loss. The estimated fair values of the collateral for these loans exceeded the carrying amount of the loans and, accordingly, no specific valuation allowance was considered to be necessary.

For 2010, the total average recorded investment in impaired loans was approximately $772.3 million. The Corporation generally applies all payments received on non-accruing impaired loans to principal until such time as the principal is paid off, after which time any additional payments received are recognized as interest income. For 2010, the Corporation recognized interest income of approximately $27.4 million on impaired loans.

17

Credit Quality Indicators and Non-performing Assets

The following table presents a summary of delinquency and non-performing status by portfolio segment and class segment:

	June 30, 2011
	Performing		Delinquent (1)		Non- performing (2)		Total
	(in thousands)
Real estate - commercial mortgage	$	4,314,764	$	25,537	$	102,724	$	4,443,025
Commercial - secured		3,333,421		18,699		91,640		3,443,760
Commercial -unsecured		230,570		1,313		3,215		235,098
Total Commercial - industrial, financial and agricultural		3,563,991		20,012		94,855		3,678,858
Real estate - home equity		1,605,004		12,101		9,440		1,626,545
Real estate - residential mortgage		945,952		34,494		43,200		1,023,646
Construction - commercial residential		348,197		2,022		52,413		402,632
Construction - commercial		223,510		8		3,789		227,307
Construction - other		47,305		2,165		2,179		51,649
Total Real estate - construction		619,012		4,195		58,381		681,588
Consumer - direct		37,161		496		77		37,734
Consumer - indirect		158,988		1,798		89		160,875
Consumer - other		128,220		2,212		1,924		132,356
Total Consumer		324,369		4,506		2,090		330,965
Leasing and other and overdrafts		67,344		368		152		67,864
	$	11,440,436	$	101,213	$	310,842	$	11,852,491
	December 31, 2010
Real estate - commercial mortgage	$	4,257,871	$	24,389	$	93,720	$	4,375,980
Commercial - secured		3,373,651		12,111		85,536		3,471,298
Commercial -unsecured		229,985		1,182		1,919		233,086
Total Commercial - industrial, financial and agricultural		3,603,636		13,293		87,455		3,704,384
Real estate - home equity		1,619,684		11,905		10,188		1,641,777
Real estate - residential mortgage		909,247		36,331		50,412		995,990
Construction - commercial residential		409,190		7,273		76,436		492,899
Construction - commercial		239,150		0		5,287		244,437
Construction - other		60,956		0		2,893		63,849
Total Real estate - construction		709,296		7,273		84,616		801,185
Consumer - direct		45,942		935		212		47,089
Consumer - indirect		166,531		2,275		290		169,096
Consumer - other		129,911		2,413		1,652		133,976
Total Consumer		342,384		5,623		2,154		350,161
Leasing and other and overdrafts		63,087		516		227		63,830
	$	11,505,205	$	99,330	$	328,772	$	11,933,307

(1) Includes all accruing loans 30 days to 89 days past due.

(2) Includes all accruing loans 90 days or more past due and all non-accrual loans.

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The following table presents non-performing assets:

	June 30, 2011		December 31, 2010
	(in thousands)
Non-accrual loans	$	274,973	$	280,688
Accruing loans greater than 90 days past due		35,869		48,084
Total non-performing loans		310,842		328,772
Other real estate owned (OREO)		37,493		32,959
Total non-performing assets	$	348,335	$	361,731

The following table presents TDRs, by loan type:

	June 30, 2011		December 31, 2010
	(in thousands)
Real-estate – residential mortgage	$	37,006	$	37,826
Real-estate – commercial mortgage		30,735		18,778
Real-estate – construction		5,589		5,440
Commercial – industrial, financial and agricultural		3,055		5,502
Consumer and home equity		258		263
Total accruing TDRs		76,643		67,809
Non-accrual TDRs (1)		44,659		51,175
Total TDRs	$	121,302	$	118,984

(1) Included within non-accrual loans in table detailing non-performing assets above.

As of June 30, 2011 and December 31, 2010, there were $1.8 million and $1.6 million, respectively, of commitments to lend additional funds to borrowers whose loans were modified under TDRs.

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The following table presents past due status and non-accrual loans by portfolio segment and class segment:

	June 30, 2011
	31-59 Days Past Due		60-89 Days Past Due		³ 90 Days Past Due and Accruing		Non- accrual		Total ³ 90 Days		Total Past Due		Current		Total
	(in thousands)
Real estate - commercial mortgage	$	20,376	$	5,161	$	5,578	$	97,146	$	102,724	$	128,261	$	4,314,764	$	4,443,025
Commercial - secured		13,077		5,622		5,892		85,748		91,640		110,339		3,333,421		3,443,760
Commercial - unsecured		823		490		295		2,920		3,215		4,528		230,570		235,098
Total Commercial - industrial, financial and agricultural		13,900		6,112		6,187		88,668		94,855		114,867		3,563,991		3,678,858
Real estate - home equity		10,112		1,989		9,241		199		9,440		21,541		1,605,004		1,626,545
Real estate - residential mortgage		24,031		10,463		12,197		31,003		43,200		77,694		945,952		1,023,646
Construction - commercial residential		1,569		453		461		51,952		52,413		54,435		348,197		402,632
Construction - commercial		8		0		0		3,789		3,789		3,797		223,510		227,307
Construction - other		2,165		0		66		2,113		2,179		4,344		47,305		51,649
Total Real estate - construction		3,742		453		527		57,854		58,381		62,576		619,012		681,588
Consumer - direct		343		153		65		12		77		573		37,161		37,734
Consumer - indirect		1,489		309		89		0		89		1,887		158,988		160,875
Consumer - other		1,226		986		1,924		0		1,924		4,136		128,220		132,356
Total Consumer		3,058		1,448		2,078		12		2,090		6,596		324,369		330,965
Leasing and other and overdrafts		339		29		61		91		152		520		67,344		67,864
	$	75,558	$	25,655	$	35,869	$	274,973	$	310,842	$	412,055	$	11,440,436	$	11,852,491
	December 31, 2010
Real estate - commercial mortgage	$	15,898	$	8,491	$	6,744	$	86,976	$	93,720	$	118,109	$	4,257,871	$	4,375,980
Commercial - secured		5,274		6,837		13,374		72,162		85,536		97,647		3,373,651		3,471,298
Commercial - unsecured		629		553		731		1,188		1,919		3,101		229,985		233,086
Total Commercial - industrial, financial and agricultural		5,903		7,390		14,105		73,350		87,455		100,748		3,603,636		3,704,384
Real estate - home equity		8,138		3,767		10,024		164		10,188		22,093		1,619,684		1,641,777
Real estate - residential mortgage		24,237		12,094		13,346		37,066		50,412		86,743		909,247		995,990
Construction - commercial residential		3,872		3,401		884		75,552		76,436		83,709		409,190		492,899
Construction - commercial		0		0		195		5,092		5,287		5,287		239,150		244,437
Construction - other		0		0		491		2,402		2,893		2,893		60,956		63,849
Total Real estate - construction		3,872		3,401		1,570		83,046		84,616		91,889		709,296		801,185
Consumer - direct		707		228		212		0		212		1,147		45,942		47,089
Consumer - indirect		1,916		359		290		0		290		2,565		166,531		169,096
Consumer - other		1,751		662		1,638		14		1,652		4,065		129,911		133,976
Total Consumer		4,374		1,249		2,140		14		2,154		7,777		342,384		350,161
Leasing and other and overdrafts		473		43		155		72		227		743		63,087		63,830
	$	62,895	$	36,435	$	48,084	$	280,688	$	328,772	$	428,102	$	11,505,205	$	11,933,307

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NOTE E – Mortgage Servicing Rights

The following table summarizes the changes in mortgage servicing rights (MSRs), which are included in other assets on the consolidated balance sheets:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Amortized cost:
Balance at beginning of period	$	32,060		$	24,517		$	30,700		$	23,499
Originations of mortgage servicing rights		2,010			1,756			4,668			3,672
Amortization expense		(1,261	)		(946	)		(2,559	)		(1,844	)
Balance at end of period	$	32,809		$	25,327		$	32,809		$	25,327
Valuation allowance:
Balance at beginning of period	$	(1,550	)	$	(1,000	)	$	(1,550	)	$	(1,000	)
Additions		0			0			0			0
Balance at end of period	$	(1,550	)	$	(1,000	)	$	(1,550	)	$	(1,000	)
Net MSRs at end of period	$	31,259		$	24,327		$	31,259		$	24,327

MSRs represent the economic value of existing contractual rights to service mortgage loans that have been sold. Accordingly, actual and expected prepayments of the underlying mortgage loans can impact the value of MSRs.

The Corporation estimates the fair value of its MSRs by discounting the estimated cash flows from servicing income, net of expense, over the expected life of the underlying loans at a discount rate commensurate with the risk associated with these assets. Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections for mortgage-backed securities with rates and terms comparable to the loans underlying the MSRs.

The Corporation determined that the estimated fair value of MSRs was equal to their book value, net of the valuation allowance, at June 30, 2011. Therefore, no adjustment to the valuation allowance was necessary as of June 30, 2011.

NOTE F – Stock-Based Compensation

The fair value of equity awards granted to employees is recognized as compensation expense over the period during which employees are required to provide service in exchange for such awards. The Corporation grants equity awards to employees, consisting of stock options and restricted stock, under its 2004 Stock Option and Compensation Plan (Employee Option Plan). In addition, employees may purchase stock under the Corporation’s Employee Stock Purchase Plan.

The following table presents compensation expense and the related tax benefits for equity awards recognized in the consolidated statements of income:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Stock-based compensation expense	$	554		$	318		$	1,101		$	611
Tax benefit		(119	)		(66	)		(255	)		(128	)
Stock-based compensation expense, net of tax	$	435		$	252		$	846		$	483

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Stock option exercise prices are equal to the fair value of the Corporation’s stock on the date of grant, and carry terms of up to ten years. Restricted stock fair values are equal to the average trading price of the Corporation’s stock on the date of grant. Restricted stock awards earn dividends during the vesting period, which are forfeitable if the awards do not vest. Stock options and restricted stock are typically granted annually on July 1st and become fully vested over or after a three-year vesting period. Certain events, as defined in the Employee Option Plan, result in the acceleration of the vesting of both stock options and restricted stock. As of June 30, 2011, the Employee Option Plan had 13.0 million shares reserved for future grants through 2013. On July 1, 2011, the Corporation granted approximately 616,000 stock options and 267,000 shares of restricted stock under its Employee Option Plan.

On July 1, 2011, the Corporation also granted approximately 11,000 shares of restricted stock to non-employee directors of the holding company under its 2011 Directors’ Equity Participation Plan (Directors’ Plan) that become fully vested after one year. Under the Directors’ Plan, the Corporation can grant equity awards to non-employee holding company and affiliate directors in the form of stock options, restricted stock or common stock. As of June 30, 2011, the Directors’ Plan had 500,000 shares reserved for future grants through 2021.

NOTE G – Employee Benefit Plans

The Corporation maintains a defined benefit pension plan (Pension Plan) for certain employees. Contributions to the Pension Plan are actuarially determined and funded annually, if required. Pension Plan assets are invested in: money markets; fixed income securities, including corporate bonds, U.S. Treasury securities and common trust funds; and equity securities, including common stocks and common stock mutual funds. Effective January 1, 2008, the Pension Plan was curtailed.

The Corporation currently provides medical and life insurance benefits under a postretirement benefits plan (Postretirement Plan) to certain retired full-time employees who were employees of the Corporation prior to January 1, 1998. Certain full-time employees may become eligible for these discretionary benefits if they reach retirement age while working for the Corporation.

The Corporation recognizes the funded status of its Pension Plan and Postretirement Plan on the consolidated balance sheets and recognizes the changes in that funded status through other comprehensive income.

The net periodic benefit cost for the Corporation’s Pension Plan and Postretirement Plan, as determined by consulting actuaries, consisted of the following components for the three and six months ended June 30:

	Pension Plan
	Three months ended June  30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Service cost (1)	$	15		$	26		$	30		$	52
Interest cost		853			842			1,706			1,684
Expected return on plan assets		(837	)		(802	)		(1,674	)		(1,604	)
Net amortization and deferral		72			119			144			238
Net periodic benefit cost	$	103		$	185		$	206		$	370

(1) The Pension Plan service cost recorded for the three and six months ended June 30, 2011 and 2010, respectively, was related to administrative costs associated with the plan and not due to the accrual of additional participant benefits.

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	Postretirement Plan
	Three months ended June  30						Six months ended June  30
	2011			2010			2011			2010
	(in thousands)
Service cost	$	50		$	48		$	101		$	98
Interest cost		107			110			214			220
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Net accretion and deferral		(91	)		(91	)		(182	)		(182	)
Net periodic benefit cost	$	65		$	66		$	131		$	134

NOTE H – Derivative Financial Instruments

In connection with its mortgage banking activities, the Corporation enters into commitments to originate fixed-rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sale or purchase of mortgage-backed securities to or from third-party investors to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans at a fixed price on a future date. Both the interest rate locks and the forward commitments are accounted for as derivative financial instruments and are carried at fair value, determined as the amount that would be necessary to settle each derivative financial instrument at the balance sheet date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Gross derivative assets and liabilities are recorded within other assets and other liabilities, respectively, on the consolidated balance sheets.

The following table presents a summary of the notional amounts and fair values of derivative financial instruments recorded on the consolidated balance sheets, none of which have been designated as hedging instruments:

	June 30, 2011					December 31, 2010
	Notional Amount		Asset (Liability) Fair Value			Notional Amount		Asset (Liability) Fair Value
	(in thousands)
Interest Rate Locks with Customers:
Positive fair values	$	163,795	$	2,041		$	140,682	$	777
Negative fair values		3,736		(22	)		50,527		(760	)
Net Interest Rate Locks with Customers				2,019					17
Forward Commitments:
Positive fair values		49,369		131			558,861		8,479
Negative fair values		118,459		(975	)		0		0
Net Forward Commitments				(844	)				8,479
			$	1,175				$	8,496

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The following table presents a summary of the fair value gains and losses on derivative financial instruments for the three and six months ended June 30:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Interest rate locks with customers (1)	$	82		$	1,499		$	2,002		$	2,521
Forward commitments (1)		(38	)		(4,878	)		(9,323	)		(6,176	)
	$	44		$	(3,379	)	$	(7,321	)	$	(3,655	)

(1) Fair value gains and losses recorded as components of mortgage banking income on the consolidated statements of income.

Fair value gains and losses represent the changes in the fair values of derivative financial instruments during the period and are recognized on the consolidated statements of income as components of mortgage banking income. The other components of mortgage banking income are gains and losses on sales of mortgage loans, fair value adjustments on mortgage loans held for sale, gains and losses on the settlement of forward commitments, and net servicing income. Total mortgage banking income was $6.0 million and $11.5 million for the three and six months ended June 30, 2011, respectively. Total mortgage banking income was $3.9 million and $8.0 million for the three and six months ended June 30, 2010, respectively.

NOTE I – Commitments and Contingencies

Commitments

The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. Those financial instruments include commitments to extend credit and letters of credit, which involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized on the Corporation’s consolidated balance sheets. Exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the outstanding amount of those instruments.

The outstanding amounts of commitments to extend credit and letters of credit were as follows:

	June 30, 2011		December 31, 2010
	(in thousands)
Commitments to extend credit	$	3,847,362	$	3,780,824
Standby letters of credit		463,922		489,097
Commercial letters of credit		26,177		31,388

The Corporation records a reserve for unfunded lending commitments, which represents management’s estimate of losses associated with unused commitments to extend credit. See Note D, “Loans and Allowance for Credit Losses” for additional details.

Residential Lending

Residential mortgages are originated and sold by the Corporation through Fulton Mortgage Company, which operates as a division of each of the Corporation’s subsidiary banks. The loans originated and sold are predominantly “prime” loans that conform to published standards of government sponsored agencies. Prior to 2008, the Corporation’s former Resource Bank subsidiary operated a national wholesale mortgage lending operation which originated and sold non-prime loans from the time the Corporation acquired Resource Bank in 2004 through 2007.

24

Beginning in 2007, Resource Bank experienced an increase in requests from secondary market purchasers to repurchase non-prime loans sold to those investors. These repurchase requests resulted in the Corporation recording charges representing the write-downs that were necessary to reduce the loan balances to their estimated net realizable values, based on valuations of the underlying properties, as adjusted for market factors and other considerations. Many of the loans the Corporation repurchased were delinquent and were settled through foreclosure and sale of the underlying collateral.

As of June 30, 2011, the reserve for losses on the potential repurchase of loans was $1.4 million. As of December 31, 2010, the reserve for losses on the potential repurchase of loans was $3.3 million.

Management believes that the reserves recorded as of June 30, 2011 are adequate for the known potential repurchases. However, continued declines in collateral values or the identification of additional loans to be repurchased could necessitate additional reserves in the future.

Other Contingencies

The Corporation and its subsidiaries are involved in various legal proceedings in the ordinary course of the business of the Corporation. The Corporation periodically evaluates the possible impact of pending litigation matters based on, among other factors, the advice of counsel, available insurance coverage and recorded liabilities and reserves for probable legal liabilities and costs. As of the date of this report, the Corporation believes that any liabilities, individually or in the aggregate, which may result from the final outcomes of pending proceedings are not expected to have a material adverse effect on the financial position, the operating results and/or the liquidity of the Corporation. However, litigation is often unpredictable and the actual results of litigation cannot be determined with certainty and, therefore, the ultimate resolution of any matter and the possible range of liabilities associated with potential outcomes may need to be reevaluated in the future.

NOTE J – Fair Value Option

FASB ASC Subtopic 825-10 permits entities to measure many financial instruments and certain other items at fair value and requires certain disclosures for amounts for which the fair value option is applied. The Corporation has elected to measure mortgage loans held for sale at fair value to more accurately reflect the financial performance of its mortgage banking activities in its consolidated financial statements. Derivative financial instruments related to these activities are also recorded at fair value, as noted within Note H, “Derivative Financial Instruments.” The Corporation determines fair value for its mortgage loans held for sale based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Changes in fair value during the period are recorded as components of mortgage banking income on the consolidated statements of income. Interest income earned on mortgage loans held for sale is recorded within interest income on the consolidated statements of income.

The following table presents a summary of the Corporation’s mortgage loans held for sale:

	June 30, 2011		December 31, 2010
	(in thousands)
Cost	$	46,028	$	84,604
Fair value		47,133		83,940

During the three and six months ended June 30, 2011, the Corporation recorded gains related to changes in fair values of mortgage loans held for sale of $533,000 and $1.8 million, respectively. During the three and six months ended June 30, 2010, the Corporation recorded gains related to changes in fair values of mortgage loans held for sale of $2.0 million and $2.4 million, respectively.

25

NOTE K – Fair Value Measurements

FASB ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three categories (from highest to lowest priority):

• Level 1 – Inputs that represent quoted prices for identical instruments in active markets.

• Level 2 – Inputs that represent quoted prices for similar instruments in active markets, or quoted prices for identical instruments in non-active markets. Also includes valuation techniques whose inputs are derived principally from observable market data other than quoted prices, such as interest rates or other market-corroborated means.

• Level 3 – Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.

The Corporation has categorized all assets and liabilities measured at fair value on both a recurring and nonrecurring basis into the above three levels.

In January 2010, the FASB issued ASC Update No. 2010-06, “Improving Disclosures About Fair Value Measurements” (ASC Update 2010-06). Among other provisions which were adopted by the Corporation on March 31, 2010, ASC Update 2010-06 also requires companies to reconcile changes in Level 3 assets and liabilities by separately providing information about Level 3 purchases, sales, issuances and settlements on a gross basis. This provision of ASC Update 2010-06 was effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years, or March 31, 2011 for the Corporation. The adoption of this provision did not impact the Corporation’s fair value measurement disclosures.

Items Measured at Fair Value on a Recurring Basis

The Corporation’s assets and liabilities measured at fair value on a recurring basis and reported on the consolidated balance sheets were as follows:

	June 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	0	$	47,133	$	0	$	47,133
Available for sale investment securities:
Equity securities		40,326		0		0		40,326
U.S. Government securities		0		1,324		0		1,324
U.S. Government sponsored agency securities		0		4,992		0		4,992
State and municipal securities		0		355,626		0		355,626
Corporate debt securities		0		115,003		13,252		128,255
Collateralized mortgage obligations		0		993,982		0		993,982
Mortgage-backed securities		0		787,772		0		787,772
Auction rate securities		0		0		255,142		255,142
Total available for sale investments		40,326		2,258,699		268,394		2,567,419
Other financial assets		13,970		2,172		0		16,142
Total assets	$	54,296	$	2,308,004	$	268,394	$	2,630,694
Other financial liabilities	$	13,970	$	997	$	0	$	14,967

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	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	0	$	83,940	$	0	$	83,940
Available for sale investment securities:
Equity securities		40,070		0		0		40,070
U.S. Government securities		0		1,649		0		1,649
U.S. Government sponsored agency securities		0		5,058		0		5,058
State and municipal securities		0		349,563		0		349,563
Corporate debt securities		0		111,675		13,111		124,786
Collateralized mortgage obligations		0		1,104,058		0		1,104,058
Mortgage-backed securities		0		871,472		0		871,472
Auction rate securities		0		0		260,679		260,679
Total available for sale investments		40,070		2,443,475		273,790		2,757,335
Other financial assets		13,582		9,256		0		22,838
Total assets	$	53,652	$	2,536,671	$	273,790	$	2,864,113
Other financial liabilities	$	13,582	$	760	$	0	$	14,342

The valuation techniques used to measure fair value for the items in the tables above are as follows:

• Mortgage loans held for sale – This category consists of mortgage loans held for sale that the Corporation has elected to measure at fair value. Fair values as of June 30, 2011 and December 31, 2010 were measured as the price that secondary market investors were offering for loans with similar characteristics.

• Available for sale investment securities – Included within this asset category are both equity and debt securities:

• Equity securities – Equity securities consist of stocks of financial institutions ($33.3 million at June 30, 2011 and $33.1 million at December 31, 2010) and other equity investments ($7.0 million at June 30, 2011 and December 31, 2010). These Level 1 investments are measured at fair value based on quoted prices for identical securities in active markets. Restricted equity securities issued by the FHLB and Federal Reserve Bank ($88.6 million at June 30, 2011 and $96.4 million at December 31, 2010) have been excluded from the above table.

• U.S. Government securities/U.S. Government sponsored agency securities/State and municipal securities/Collateralized mortgage obligations/Mortgage-backed securities – These debt securities are classified as Level 2 investments. Fair values are determined by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. The pricing data and market quotes the Corporation obtains from outside sources are reviewed internally for reasonableness.

• Corporate debt securities – This category includes subordinated debt issued by financial institutions ($37.5 million at June 30, 2011 and $35.9 million at December 31, 2010), single-issuer trust preferred securities issued by financial institutions ($82.8 million at June 30, 2011 and $81.8 million at December 31, 2010), pooled trust preferred securities issued by financial institutions ($5.4 million at June 30, 2011 and $4.5 million at December 31, 2010) and other corporate debt issued by non-financial institutions ($2.5 million at June 30, 2011 and $2.6 million at December 31, 2010).

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Classified as Level 2 investments are the Corporation’s subordinated debt, other corporate debt issued by non-financial institutions and $75.0 million and $73.2 million of single-issuer trust preferred securities held at June 30, 2011 and December 31, 2010, respectively. These corporate debt securities are measured at fair value by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. As with the debt securities described above, an active market presently exists for securities similar to these corporate debt security holdings.

Classified as Level 3 assets are the Corporation’s investments in pooled trust preferred securities and certain single-issuer trust preferred securities ($7.8 million at June 30, 2011 and $8.6 million at December 31, 2010). The fair values of these securities were determined based on quotes provided by third-party brokers who determined fair values based predominantly on internal valuation models which were not indicative prices or binding offers. The Corporation’s third-party pricing service cannot derive fair values for these securities primarily due to inactive markets for similar investments.

• Auction rate securities – Due to their illiquidity, ARCs are classified as Level 3 investments and are valued through the use of an expected cash flows model prepared by a third-party valuation expert. The assumptions used in preparing the expected cash flows model include estimates for coupon rates, time to maturity and market rates of return. The expected cash flows model the Corporation obtains from the outside source is reviewed internally for reasonableness.

• Other financial assets – Included within this asset category are: Level 1 assets, consisting of mutual funds that are held in trust for employee deferred compensation plans and measured at fair value based on quoted prices for identical securities in active markets; and Level 2 assets, representing the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors. The fair value of the Corporation’s interest rate locks and forward commitments are determined as the amounts that would be required to settle the derivative financial instruments at the balance sheet date. See Note H, “Derivative Financial Instruments,” for additional information.

• Other financial liabilities – Included within this category are: Level 1 employee deferred compensation liabilities which represent amounts due to employees under the deferred compensation plans described under the heading “Other financial assets” above and Level 2 mortgage banking derivatives, described under the heading “Other financial assets” above.

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The following tables present the changes in the Corporation’s assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three and six months ended June 30, 2011 and 2010:

	Three months ended June 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, March 31, 2011	$	4,816		$	8,094		$	256,413
Realized adjustment to fair value (2)		(359	)		0			0
Unrealized adjustment to fair value (3)		1,122			(274	)		(2,260	)
Redemptions		(145	)		0			(24	)
(Premium amortization)/discount accretion (4)		(1	)		(1	)		1,013
Balance, June 30, 2011	$	5,433		$	7,819		$	255,142
	Three months ended June 30, 2010
Balance, March 31, 2010	$	4,900		$	7,136		$	288,133
Transfer to Level 3 from Level 2 (1)		0			650			0
Realized adjustment to fair value (2)		(2,989	)		0			0
Unrealized adjustment to fair value (3)		2,374			299			(2,376	)
Sales		0			0			(5,033	)
Redemptions		0			0			(5,281	)
(Premium amortization)/discount accretion (4)		(6	)		0			1,096
Balance, June 30, 2010	$	4,279		$	8,085		$	276,539

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	Six months ended June 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, December 31, 2010	$	4,528		$	8,583		$	260,679
Transfer from Level 3 to Level 2 (1)		0			(800	)		0
Realized adjustment to fair value (2)		(1,353	)		0			0
Unrealized adjustment to fair value (3)		2,552			38			(7,479	)
Redemptions		(292	)		0			(251	)
(Premium amortization)/discount accretion (4)		(2	)		(2	)		2,193
Balance, June 30, 2011	$	5,433		$	7,819		$	255,142
	Six months ended June 30, 2010
Balance, December 31, 2010	$	4,979		$	6,981		$	289,203
Transfer to Level 3 from Level 2 (1)		0			650			0
Realized adjustment to fair value (2)		(7,142	)		0			0
Unrealized adjustment to fair value (3)		6,453			453			(3,642	)
Sales		0			0			(5,033	)
Redemptions		0			0			(6,382	)
(Premium amortization)/discount accretion (4)		(11	)		1			2,393
Balance, June 30, 2010	$	4,279		$	8,085		$	276,539

(1) During the six months ended June 30, 2011, one single-issuer trust preferred security with a fair value of $800,000 as of December 31, 2010 was reclassified as a Level 2 asset. As of June 30, 2011, the fair value of this security was measured at fair value by a third-party pricing service using both quoted prices for similar assets and model-based valuation techniques that derived fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. As of December 31, 2010, the fair value of this security was determined based on quotes provided by third-party brokers who determined its fair value based predominantly on an internal valuation model.

(2) For pooled trust preferred securities, realized adjustments to fair value represent credit related other-than-temporary impairment charges that were recorded as a reduction to investment securities gains on the consolidated statements of income.

(3) Pooled trust preferred securities, single-issuer trust preferred securities and ARCs are classified as available for sale investment securities; as such, the unrealized adjustment to fair value was recorded as an unrealized holding gain (loss) and included as a component of available for sale investment securities on the consolidated balance sheet.

(4) Included as a component of net interest income on the consolidated statements of income.

Items Measured at Fair Value on a Nonrecurring Basis

Certain financial assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value measurement in certain circumstances, such as upon their acquisition or when there is evidence of impairment.

The Corporation’s assets measured at fair value on a nonrecurring basis and reported on the Corporation’s consolidated balance sheets were as follows:

	June 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	0	$	0	$	234,179	$	234,179
Other financial assets		0		0		68,752		68,752
Total assets	$	0	$	0	$	302,931	$	302,931
Reserve for unfunded commitments	$	0	$	0	$	1,950	$	1,950

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	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	0	$	0	$	457,678	$	457,678
Other financial assets		0		0		62,109		62,109
Total assets	$	0	$	0	$	519,787	$	519,787
Reserve for unfunded commitments	$	0	$	0	$	1,227	$	1,227

The valuation techniques used to measure fair value for the items in the tables above are as follows:

• Net loans – This category consists of loans that were evaluated for impairment under FASB ASC Section 310-10-35 and have been classified as Level 3 assets. The amount shown is the balance of impaired loans, net of the related allowance for loan losses. See Note D, “Loans and Allowance for Credit Losses,” for additional details.

• Other financial assets – This category includes OREO ($37.5 million at June 30, 2011 and $33.0 million at December 31, 2010) and mortgage servicing rights (MSRs), net of the MSR valuation reserve ($31.3 million at June 30, 2011 and $29.1 million at December 31, 2010), both classified as Level 3 assets.

Fair values for OREO were based on estimated selling prices less estimated selling costs for similar assets in active markets.

MSRs are initially recorded at fair value upon the sale of residential mortgage loans, which the Corporation continues to service, to secondary market investors. MSRs are amortized as a reduction to servicing income over the estimated lives of the underlying loans. MSRs are evaluated for impairment by comparing the carrying amount to estimated fair value. Fair value is determined at the end of each quarter through a discounted cash flows valuation. Significant inputs to the valuation include expected net servicing income, the discount rate and the expected life of the underlying loans.

• Reserve for unfunded commitments – This liability, included as a Level 3 liability above, represents management’s estimate of losses associated with unused commitments to extend credit. See Note D, “Loans and Allowance for Credit Losses,” for additional details.

As required by FASB ASC Section 825-10-50, the following table details the book values and estimated fair values of the Corporation’s financial instruments as of June 30, 2011 and December 31, 2010. In addition, a general description of the methods and assumptions used to estimate such fair values is also provided.

Fair values of financial instruments are significantly affected by assumptions used, principally the timing of future cash flows and discount rates. Because assumptions are inherently subjective in nature, the estimated fair values cannot be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. Further, certain financial instruments and all non-financial instruments not measured at fair value on the Corporation’s consolidated balance sheets are excluded. The aggregate fair value amounts presented do not necessarily represent management’s estimate of the underlying value of the Corporation.

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	June 30, 2011				December 31, 2010
FINANCIAL ASSETS	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
Cash and due from banks	$	284,691	$	284,691	$	198,954	$	198,954
Interest-bearing deposits with other banks		124,967		124,967		33,297		33,297
Loans held for sale (1)		47,133		47,133		83,940		83,940
Securities held to maturity		6,990		7,038		7,751		7,818
Securities available for sale (1)		2,656,054		2,656,054		2,853,733		2,853,733
Loans, net of unearned income (1)		11,852,491		11,848,458		11,933,307		11,909,539
Accrued interest receivable		51,387		51,387		53,841		53,841
Other financial assets (1)		133,787		133,787		230,044		230,044
FINANCIAL LIABILITIES
Demand and savings deposits	$	7,987,686	$	7,987,686	$	7,758,613	$	7,758,613
Time deposits		4,275,209		4,316,011		4,629,968		4,677,494
Short-term borrowings		546,581		546,581		674,077		674,077
Accrued interest payable		29,444		29,444		33,333		33,333
Other financial liabilities (1)		63,682		63,682		80,551		80,551
Federal Home Loan Bank advances and long-term debt		1,025,537		918,408		1,119,450		1,077,724

(1) Description of fair value determinations for these financial instruments, or certain financial instruments within these categories, measured at fair value on the Corporation’s consolidated balance sheets, are disclosed above.

For short-term financial instruments, defined as those with remaining maturities of 90 days or less and excluding those recorded at fair value on the Corporation’s consolidated balance sheets, book value was considered to be a reasonable estimate of fair value.

The following instruments are predominantly short-term:

Assets	Liabilities
Cash and due from banks	Demand and savings deposits
Interest bearing deposits	Short-term borrowings
Federal funds sold	Accrued interest payable
Accrued interest receivable	Other financial liabilities

For those financial instruments within the above-listed categories with remaining maturities greater than 90 days, fair values were determined by discounting contractual cash flows using rates which could be earned for assets with similar remaining maturities and, in the case of liabilities, rates at which the liabilities with similar remaining maturities could be issued as of the balance sheet date.

The estimated fair values of securities held to maturity as of June 30, 2011 and December 31, 2010 were based on quoted market prices, broker quotes or dealer quotes.

For short-term loans and variable rate loans that reprice within 90 days, the book value was considered to be a reasonable estimate of fair value. For other types of loans and time deposits, fair value was estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

The fair value of FHLB advances and long-term debt was estimated by discounting the remaining contractual cash flows using a rate at which the Corporation could issue debt with a similar remaining maturity as of the balance sheet date. The fair values of commitments to extend credit and standby letters of credit, included within other financial liabilities above, are estimated to equal their carrying amounts.

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NOTE L – New Accounting Standards

In April 2011, the FASB issued ASC Update 2011-02, “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring” (ASC Update 2011-02). ASC Update 2011-02 provides clarifying guidance for creditors when evaluating whether a restructuring constitutes a troubled debt restructuring. ASC Update 2011-02 provides additional guidance for when a creditor has granted a concession and whether a debtor is experiencing financial difficulty. This standards update is effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. For the Corporation, this standards update is effective in connection with its September 30, 2011 interim filing on Form 10-Q. The adoption of ASC Update 2011-02 is not expected to materially impact the Corporation’s financial statements.

In May 2011, the FASB issued ASC Update 2011-04, “Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs” (ASC Update 2011-04). ASC Update 2011-04 amends fair value measurement and disclosure requirements in U.S. GAAP for the purpose of improving the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards (IFRS). Among the amendments in ASC Update 2011-04 are expanded disclosure requirements that require companies to quantitatively disclose inputs used in Level 3 fair value measurements and to qualitatively disclose the sensitivity of fair value measurement to changes in unobservable inputs. This standards update is effective for the first interim or annual period beginning on or after December 15, 2011. For the Corporation, this standards update is effective in connection with its March 31, 2012 interim filing on Form 10-Q. The adoption of ASC Update 2011-04 is not expected to materially impact the Corporation’s financial statements.

In June 2011, the FASB issued ASC Update 2011-05, “Presentation of Other Comprehensive Income” (ASC Update 2011-05). ASC Update 2011-05 requires companies to present total comprehensive income, consisting of net income and other comprehensive income, in either one continuous statement of comprehensive income or in two separate but consecutive statements. Presently, the Corporation reports total comprehensive income within its Consolidated Statement of Shareholders’ Equity and Comprehensive Income. For publicly traded entities, this standards update is effective for fiscal years beginning after December 31, 2011. For the Corporation, this standards update is effective in connection with its March 31, 2012 interim filing on Form 10-Q.

NOTE M – Reclassifications

Certain amounts in the 2010 consolidated financial statements and notes have been reclassified to conform to the 2011 presentation.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (Management’s Discussion) relates to Fulton Financial Corporation (the Corporation), a financial holding company registered under the Bank Holding Company Act and incorporated under the laws of the Commonwealth of Pennsylvania in 1982, and its wholly owned subsidiaries. Management’s discussion should be read in conjunction with the consolidated financial statements and notes presented in this report.

FORWARD-LOOKING STATEMENTS

The Corporation has made, and may continue to make, certain forward-looking statements with respect to its financial condition and results of operations. Many factors could affect future financial results including, without limitation: the impact of adverse changes in the economy and real estate markets; increases in non-performing assets which may reduce the level of the earning assets and require the Corporation to increase the allowance for credit losses, charge-off loans and incur elevated collection and carrying costs related to such non-performing assets; acquisition and growth strategies; market risk; changes or adverse developments in political or regulatory conditions; a disruption in or abnormal functioning of credit and other markets, including the lack of or reduced access to markets for mortgages and other asset-backed securities and for commercial paper and other short-term borrowings; changes in the levels of, or methodology for determining, FDIC deposit insurance premiums and assessments; the effect of competition and interest rates on net interest margin and net interest income; investment strategy and other income growth; investment securities gains and losses; declines in the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth or a decline in loans originated; relative balances of rate-sensitive assets to rate-sensitive liabilities; salaries and employee benefits and other expenses; amortization of intangible assets; goodwill impairment; capital and liquidity strategies, and other financial and business matters for future periods. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as “may,” “should,” “will,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future,” “intends” and similar expressions which are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation’s control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

RESULTS OF OPERATIONS

Summary Financial Results

The Corporation generates the majority of its revenue through net interest income, or the difference between interest earned on loans and investments and interest paid on deposits and borrowings. Growth in net interest income is dependent upon balance sheet growth and/or maintaining or increasing the net interest margin, which is net interest income (fully taxable-equivalent, or FTE) as a percentage of average interest-earning assets. The Corporation also generates revenue through fees earned on the various services and products offered to its customers and through sales of assets, such as loans, investments or properties. Offsetting these revenue sources are provisions for credit losses on loans, operating expenses and income taxes.

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The following table presents a summary of the Corporation’s earnings and selected performance ratios:

	As of or for the Three months ended June 30						As of or for the Six months ended June 30
	2011			2010			2011			2010
Net income available to common shareholders (in thousands)	$	36,385		$	26,616		$	70,170		$	49,031
Income before income taxes (in thousands)	$	49,539		$	42,965		$	95,699		$	79,712
Diluted net income per share (1)	$	0.18		$	0.14		$	0.35		$	0.27
Return on average assets		0.91	%		0.77	%		0.88	%		0.72	%
Return on average common equity (2)		7.53	%		6.06	%		7.38	%		5.90	%
Return on average tangible common equity (3)		10.71	%		9.10	%		10.54	%		9.11	%
Net interest margin (4)		3.95	%		3.76	%		3.93	%		3.77	%
Non-performing assets to total assets		2.18	%		2.06	%		2.18	%		2.06	%
Net charge-offs to average loans (annualized)		1.30	%		0.97	%		1.36	%		0.96	%

(1) Net income available to common shareholders divided by diluted weighted average common shares outstanding.

(2) Net income available to common shareholders divided by average common shareholders’ equity.

(3) Net income available to common shareholders, as adjusted for intangible asset amortization (net of tax), divided by average common shareholders’ equity, net of goodwill and intangible assets.

(4) Presented on an FTE basis, using a 35% Federal tax rate and statutory interest expense disallowances. See also the “Net Interest Income” section of Management’s Discussion.

The Corporation’s income before income taxes for the second quarter of 2011 increased $6.6 million, or 15.3%, from the same period in 2010. Income before income taxes for the first half of 2011 increased $16.0 million, or 20.1%, in comparison to the first half of 2010. The increase was primarily due to the following significant items:

• Increase in other income, excluding investment securities gains (losses), of $3.7 million, or 8.4%, and $7.1 million, or 8.4%, for the three and six months ended June 30, 2011, respectively. During the three and six months ended June 30, 2011, the Corporation experienced growth in a number of other income categories, including mortgage banking income and investment management and trust services. The increase in mortgage banking income was due to an increase in the spread on loans sold, while the improvement in investment management and trust services income resulted from improved market conditions and the Corporation’s focus on increasing recurring revenues in the brokerage business. Also contributing to the growth in other income were increased debit card fees, merchant fees and foreign currency processing revenues, all resulting from higher transaction volumes.

The Corporation was able to achieve growth in other income while controlling discretionary spending. Other expenses increased $1.4 million, or 1.4%, and $2.9 million, or 1.4%, for the three and six months ended June 30, 2011, respectively.

• Decrease in the provision for credit losses of $4.0 million, or 10.0%, and $6.0 million, or 7.5%, for the three and six months ended June 30, 2011, respectively. Non-performing loans and overall delinquencies decreased as of June 30, 2011 in comparison to June 30, 2010, which are positive indicators of improving asset quality. Net charge-offs increased for both the quarter and first half of 2011 in comparison to the same periods in 2010. Charge-offs typically occur after losses are recognized through the provision for credit losses, which establish the appropriate allowance allocation levels.

• Increase in net interest income of $1.5 million, or 1.1%, and $2.5 million, or 0.9%, for the three and six months ended June 30, 2011, respectively. The increases in net interest income for the three and six months ended June 30, 2011 were a result of increase in the net interest margin. For the second quarter of 2011, the net interest margin increased 19 basis points, or 5.1%, in comparison to the second quarter of 2010. For the first half of 2011, the net interest margin increased 16 basis points, or 4.2%,

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in comparison to the first half of 2010. These increases in net interest margin were a result of decreased funding costs due to the repricing of time deposits and long-term debt, in addition to a change in the funding mix to lower cost demand and savings deposits. The increases in net interest margin were partially offset by decreases in average interest-earning assets.

Quarter Ended June 30, 2011 compared to the Quarter Ended June 30, 2010

Net Interest Income

FTE net interest income increased $1.6 million, or 1.1%, from $143.0 million in the second quarter of 2011 to $144.6 million in the second quarter of 2011. This increase was the net result of a $12.6 million decrease in FTE interest income and a $14.2 million decrease in interest expense.

Net interest margin increased 19 basis points, or 5.1%, from 3.76% for the second quarter of 2010 to 3.95% for the second quarter of 2011. The increase in net interest margin was a result of a 41 basis point, or 25.6%, decrease in funding costs, partially offset by a 15 basis point, or 3.0%, decrease in yields on interest-earning assets.

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The following table provides a comparative average balance sheet and net interest income analysis for the second quarter of 2011 as compared to the same period in 2010. Interest income and yields are presented on an FTE basis, using a 35% Federal tax rate and statutory interest expense disallowances. The discussion following this table is based on these FTE amounts. All dollar amounts are in thousands.

	Three months ended June 30
	2011									2010
ASSETS	Average Balance			Interest (1)			Yield/ Rate			Average Balance			Interest (1)			Yield/ Rate
Interest-earning assets:
Loans, net of unearned income (2)	$	11,883,019		$	151,974			5.13	%	$	11,959,176		$	159,632			5.35	%
Taxable investment securities (3)		2,141,307			20,749			3.88			2,386,695			25,146			4.22
Tax-exempt investment securities (3)		343,214			4,840			5.64			355,186			5,152			5.80
Equity securities (3)		128,258			775			2.42			140,271			733			2.09
Total investment securities		2,612,779			26,364			4.04			2,882,152			31,031			4.31
Loans held for sale		36,793			492			5.34			59,412			667			4.49
Other interest-earning assets		163,548			101			0.25			366,200			231			0.25
Total interest-earning assets		14,696,139			178,931			4.88	%		15,266,940			191,561			5.03	%
Noninterest-earning assets:
Cash and due from banks		278,393									261,576
Premises and equipment		207,141									203,928
Other assets		1,098,116									1,102,587
Less: Allowance for loan losses		(273,593	)								(275,209	)
Total Assets	$	16,006,196								$	16,559,822
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Demand deposits	$	2,352,961		$	1,371			0.23	%	$	2,019,605		$	1,840			0.37	%
Savings deposits		3,356,361			3,258			0.39			3,090,857			5,388			0.70
Time deposits		4,353,352			17,146			1.58			5,120,648			24,591			1.93
Total interest-bearing deposits		10,062,674			21,775			0.87			10,231,110			31,819			1.25
Short-term borrowings		455,831			168			0.15			512,583			390			0.30
FHLB advances and long-term debt		1,025,637			12,347			4.82			1,403,410			16,313			4.66
Total interest-bearing liabilities		11,544,142			34,290			1.19	%		12,147,103			48,522			1.60	%
Noninterest-bearing liabilities:
Demand deposits		2,362,614									2,079,674
Other		162,202									199,778
Total Liabilities		14,068,958									14,426,555
Shareholders’ equity		1,937,238									2,133,267
Total Liabilities and Shareholders’ Equity	$	16,006,196								$	16,559,822
Net interest income/net interest margin (FTE)					144,641			3.95	%					143,039			3.76	%
Tax equivalent adjustment					(3,996	)								(3,881	)
Net interest income				$	140,645								$	139,158

(1) Includes dividends earned on equity securities.

(2) Includes non-performing loans.

(3) Balances include amortized historical cost for available for sale securities; the related unrealized holding gains (losses) are included in other assets.

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The following table summarizes the changes in FTE interest income and interest expense due to changes in average balances (volume) and changes in rates:

	2011 vs. 2010 Increase (decrease) due to change in
	Volume			Rate			Net
	(in thousands)
Interest income on:
Loans, net of unearned income	$	(1,011	)	$	(6,647	)	$	(7,658	)
Taxable investment securities		(2,466	)		(1,931	)		(4,397	)
Tax-exempt investment securities		(171	)		(141	)		(312	)
Equity securities		(67	)		109			42
Loans held for sale		(285	)		110			(175	)
Other interest-earning assets		(125	)		(5	)		(130	)
Total interest income	$	(4,125	)	$	(8,505	)	$	(12,630	)
Interest expense on:
Demand deposits	$	269		$	(738	)	$	(469	)
Savings deposits		430			(2,560	)		(2,130	)
Time deposits		(3,384	)		(4,061	)		(7,445	)
Short-term borrowings		(41	)		(181	)		(222	)
FHLB advances and long-term debt		(4,499	)		533			(3,966	)
Total interest expense	$	(7,225	)	$	(7,007	)	$	(14,232	)

FTE interest income decreased $12.6 million, or 6.6%. A 15 basis point, or 3.0%, decrease in average yields resulted in an $8.5 million decrease in interest income. The remaining $4.1 million decrease was due to a $570.8 million, or 3.7%, decrease in average interest-earning assets.

Average loans, by type, are summarized in the following table:

	Three months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Real estate – commercial mortgage	$	4,430,046	$	4,319,540	$	110,506			2.6	%
Commercial – industrial, financial and agricultural		3,689,877		3,686,442		3,435			0.1
Real estate – home equity		1,623,438		1,638,260		(14,822	)		(0.9	)
Real estate – residential mortgage		1,023,471		972,129		51,342			5.3
Real estate – construction		712,638		909,836		(197,198	)		(21.7	)
Consumer		332,960		362,883		(29,923	)		(8.2	)
Leasing and other		70,589		70,086		503			0.7
Total	$	11,883,019	$	11,959,176	$	(76,157	)		(0.6	%)

Geographically, the $110.5 million, or 2.6%, increase in commercial mortgages was largely due to increases in the Corporation’s Pennsylvania market of $94.1 million, or 4.2%.

The $51.3 million, or 5.3%, increase in residential mortgages was a result of the Corporation’s retention in portfolio of certain 10 and 15 year fixed rate mortgages and certain adjustable rate mortgages to partially mitigate the impact of decreases in average interest-earning assets.

The $197.2 million, or 21.7%, decrease in construction loans was primarily due to efforts to reduce credit exposure in this portfolio as payoffs exceeded new loan originations in recent quarters. Geographically, the decline in construction loans was primarily in the Corporation’s Maryland ($80.8 million, or 38.7%), Virginia ($72.8 million, or 32.1%) and New Jersey ($47.4 million, or 29.0%) markets.

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The $29.9 million, or 8.2%, decrease in consumer loans occurred throughout all of the Corporation’s markets, with $19.7 million of the decrease related to direct consumer loans and $10.2 million of the decrease attributable to the indirect automobile loan portfolio.

The average yield on loans decreased 22 basis points, or 4.1%, from 5.35% in 2010 to 5.13% in 2011, despite the average prime rate remaining at 3.25% for the second quarters of both 2011 and 2010. The decrease in average yields on loans was attributable to repayments of higher-yielding loans and declining average rates on fixed and adjustable rate loans which, unlike floating rate loans, have a lagged repricing effect. In addition, approximately one-third of the floating rate portfolio is based on an index other than prime, such as the one-month London Interbank Offering Rate, or LIBOR, which decreased on average for the second quarter of 2011 in comparison the second quarter of 2010.

Average investments decreased $269.4 million, or 9.3%, due largely to sales and maturities of mortgage-backed securities and collateralized mortgage obligations. During the second quarter of 2011, proceeds from the sales and maturities of securities were not fully reinvested into the portfolio because current rates on many investment options were not attractive. The average yield on investments decreased 27 basis points, or 6.3%, from 4.31% in 2010 to 4.04% in 2011, as the reinvestment of cash flows and incremental purchases of taxable investment securities were at yields lower than the overall portfolio yield.

Other interest-earning assets, consisting of interest-bearing deposits with other banks, decreased $202.7 million, or 55.3%. During the second quarter of 2010, the Corporation invested $226.3 million of proceeds received in connection with a May 2010 common stock offering in short-term funds, prior to the redemption of its outstanding preferred stock in July 2010.

Interest expense decreased $14.2 million, or 29.3%, to $34.3 million in the second quarter of 2011 from $48.5 million in the second quarter of 2010. Interest expense decreased $7.2 million as a result of a $603.0 million, or 5.0%, decline in average interest-bearing liabilities. Interest expense decreased an additional $7.0 million as a result of a 41 basis point, or 25.6%, decrease in the average cost of interest-bearing liabilities.

Average deposits, by type, are summarized in the following table:

	Three months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Noninterest-bearing demand	$	2,362,614	$	2,079,674	$	282,940			13.6	%
Interest-bearing demand		2,352,961		2,019,605		333,356			16.5
Savings		3,356,361		3,090,857		265,504			8.6
Total demand and savings		8,071,936		7,190,136		881,800			12.3
Time deposits		4,353,352		5,120,648		(767,296	)		(15.0	)
Total deposits	$	12,425,288	$	12,310,784	$	114,504			0.9	%

Total demand and savings accounts increased $881.8 million, or 12.3%. The increase in noninterest-bearing account balances was primarily due to a $218.4 million, or 15.2%, increase in business account balances due, in part, to businesses maintaining higher balances to offset service fees, as well as a migration away from the Corporation’s cash management products due to low interest rates. The increase in interest-bearing demand and savings account balances was due to a $374.7 million, or 34.0%, increase in municipal account balances and a $266.4 million, or 8.6%, increase in personal account balances. The increase in municipal account balances was largely due to attractive interest rates for insured deposit products relative to alternatives. The increase in personal account balances was largely due to customers’ migration away from certificates of deposit, as well as the Corporation’s promotional efforts with a focus on building customer relationships.

39

The decrease in time deposits was almost entirely due to customer certificates of deposit, which decreased $761.6 million, or 14.9%, with the remaining $5.7 million decrease in brokered certificates of deposit. The decrease in customer certificates of deposit was in accounts with original maturity terms of less than two years ($759.9 million, or 23.3%) and jumbo certificates of deposit ($194.7 million, or 46.4%), partially offset by an increase in account balances with original maturity terms greater than two years ($193.0 million, or 13.5%). As noted above, the decrease in customer certificates of deposit was largely due to customers migrating funds to interest-bearing savings and demand accounts in the current low interest rate environment.

The average cost of interest-bearing deposits decreased 38 basis points, or 30.4%, from 1.25% in 2010 to 0.87% in 2011 due to a reduction in rates paid on all categories of deposits, and the repricing of time deposits. During the second quarter of 2011, approximately $906 million of time deposits matured at a weighted average rate of 1.47%, while approximately $825 million of time deposits were issued at a weighted average rate of 0.80%.

The following table summarizes changes in average short-term and long-term borrowings, by type:

	Three months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Short-term borrowings:
Customer repurchase agreements	$	217,657	$	263,533	$	(45,876	)		(17.4	%)
Customer short-term promissory notes		171,958		207,100		(35,142	)		(17.0	)
Total short-term customer funding		389,615		470,633		(81,018	)		(17.2	)
Federal funds purchased		66,216		41,950		24,266			57.8
Total short-term borrowings		455,831		512,583		(56,752	)		(11.1	)
Long-term debt:
FHLB advances		641,851		1,020,134		(378,283	)		(37.1	)
Other long-term debt		383,786		383,276		510			0.1
Total long-term debt		1,025,637		1,403,410		(377,773	)		(26.9	)
Total	$	1,481,468	$	1,915,993	$	(434,525	)		(22.7	%)

The $81.0 million, or 17.2%, decrease in short-term customer funding was primarily due to customers transferring funds from the cash management program to deposit products due to the low interest rate environment. The $378.3 million decrease in Federal Home Loan Bank (FHLB) advances was due to maturities, which were not replaced with new advances.

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Provision for Credit Losses and Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses:

	Three months ended June 30,
	2011			2010
	(dollars in thousands)
Loans, net of unearned income outstanding at end of period	$	11,852,491		$	11,943,384
Daily average balance of loans, net of unearned income	$	11,833,019		$	11,959,176
Balance of allowance for credit losses at beginning of period	$	271,156		$	269,254
Loans charged off:
Commercial – industrial, financial and agricultural		15,406			13,390
Real estate – residential mortgage		7,707			1,880
Real estate – construction		7,468			9,299
Real estate – commercial mortgage		7,074			3,915
Consumer and home equity		2,331			2,438
Leasing and other		689			610
Total loans charged off		40,675			31,532
Recoveries of loans previously charged off:
Commercial – industrial, financial and agricultural		1,003			1,157
Real estate – residential mortgage		190			3
Real estate – construction		79			581
Real estate – commercial mortgage		191			157
Consumer and home equity		435			488
Leasing and other		254			269
Total recoveries		2,152			2,655
Net loans charged off		38,523			28,877
Provision for credit losses		36,000			40,000
Balance of allowance for credit losses at end of period	$	268,633		$	280,377
Components of the Allowance for Credit Losses:
Allowance for loan losses	$	266,683		$	272,042
Reserve for unfunded lending commitments		1,950			8,335
Allowance for credit losses	$	268,633		$	280,377
Selected Ratios:
Net charge-offs to average loans (annualized)		1.30	%		0.97	%
Allowance for credit losses to loans outstanding		2.27	%		2.35	%

The provision for credit losses was $36.0 million for the second quarter of 2011, a decrease of $4.0 million, or 10.0%, from the second quarter of 2010. The decrease in the provision for credit losses was due to the continuing improvement in the Corporation’s credit quality metrics, including a reduction in the level of non-performing assets and overall delinquency.

Net charge-offs increased $9.6 million, or 33.4%, to $38.5 million for the second quarter of 2011 compared to $28.9 million for the second quarter of 2010. The increase in net charge-offs was primarily due to increases in residential mortgage net charge-offs ($5.6 million, or 300.5%), commercial mortgage net charge-offs ($3.1 million, or 83.2%) and commercial loan net charge-offs ($2.2 million, or 17.7%), partially offset by a decline in construction loan net charge-offs ($1.3 million, or 15.2%).

Of the $38.5 million of net charge-offs recorded in the second quarter of 2011, 38.0% were for loans originated by the Corporation’s banks in New Jersey, 28.9% in Pennsylvania, 19.3% in Virginia and 9.3% in Maryland. Charge-offs for the second quarter of 2011 included one $6.7 million commercial loan charge-off, with no additional individual charge-offs that exceeded $1.0 million.

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The following table summarizes the Corporation’s non-performing assets as of the indicated dates:

	June 30, 2011			June 30, 2010			December 31, 2010
	(dollars in thousands)
Non-accrual loans	$	274,973		$	263,227		$	280,688
Loans 90 days past due and accruing		35,869			53,707			48,084
Total non-performing loans		310,842			316,934			328,772
Other real estate owned (OREO)		37,493			25,681			32,959
Total non-performing assets	$	348,335		$	342,615		$	361,731
Non-accrual loans to total loans		2.32	%		2.20	%		2.35	%
Non-performing assets to total assets		2.18	%		2.06	%		2.22	%
Allowance for credit losses to non-performing loans		86.42	%		88.47	%		83.80	%
Non-performing assets to tangible common shareholders’ equity and allowance for credit losses		20.78	%		21.54	%		22.50	%

The following table summarizes the Corporation’s non-performing loans, by type, as of the indicated dates:

	June 30, 2011		June 30, 2010		December 31, 2010
	(in thousands)
Real estate – commercial mortgage	$	102,724	$	101,378	$	93,720
Commercial – industrial, financial and agricultural		94,855		77,587		87,455
Real estate – construction		58,381		79,122		84,616
Real estate – residential mortgage		43,200		45,639		50,412
Real estate – home equity		9,440		11,090		10,188
Consumer		2,090		2,025		2,154
Leasing		152		93		227
Total non-performing loans	$	310,842	$	316,934	$	328,772

Non-performing loans decreased to $310.8 million at June 30, 2011, from $316.9 million at June 30, 2010. The $6.1 million, or 1.9%, decrease was due to a $20.7 million, or 26.2%, decrease in non-performing construction loans and a $2.4 million, or 5.3%, decrease in non-performing residential mortgages, partially offset by a $17.3 million, or 22.3%, increase in non-performing commercial loans.

The $20.7 million decrease in non-performing construction loans was due to $57.9 million of charge-offs recorded since June 30, 2010, partially offset by additions to non-performing construction loans. Geographically, the decrease in non-performing construction loans was in the Corporation’s Maryland ($17.1 million, or 50.2%) and Pennsylvania ($7.2 million, or 58.8%) markets, partially offset by an increase in the Virginia ($3.7 million, or 20.1%) market.

The $17.3 million increase in non-performing commercial loans was primarily due to a $16.5 million, or 42.1%, increase in the Corporation’s Pennsylvania market, mostly due to the addition of two non-accrual accounts during the second quarter of 2011.

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The following table presents accruing loans whose terms have been modified under troubled debt restructurings (TDRs), by type, as of the indicated dates:

	June 30, 2011		June 30, 2010		December 31, 2010
	(in thousands)
Real estate – residential mortgage	$	37,006	$	32,009	$	37,826
Real estate – commercial mortgage		30,735		16,205		18,778
Real estate – construction		5,589		6,165		5,440
Commercial – industrial, financial and agricultural		3,055		4,314		5,502
Consumer and home equity		258		266		263
Total accruing TDRs	$	76,643	$	58,959	$	67,809

The following table summarizes the Corporation’s OREO, by property type, as of the indicated dates:

	June 30, 2011		June 30, 2010		December 31, 2010
	(in thousands)
Commercial properties	$	17,033	$	7,950	$	15,916
Residential properties		15,881		15,181		12,635
Undeveloped land		4,579		2,550		4,408
Total OREO	$	37,493	$	25,681	$	32,959

The following table summarizes loan delinquency rates, by type, as of June 30:

	2011									2010
	31-89 Days			³ 90 Days (1)			Total			31-89 Days			³ 90 Days (1)			Total
Real estate – commercial mortgage		0.57	%		2.32	%		2.89	%		0.81	%		2.34	%		3.15	%
Commercial – industrial, financial and agricultural		0.54			2.58			3.12			0.46			2.12			2.58
Real estate – construction		0.62			8.56			9.18			1.07			8.86			9.93
Real estate – residential mortgage		3.37			4.22			7.59			3.65			4.63			8.28
Real estate – home equity		0.74			0.58			1.32			0.83			0.68			1.51
Consumer, leasing and other		1.22			0.56			1.78			1.37			0.49			1.86
Total		0.85	%		2.63	%		3.48	%		0.98	%		2.65	%		3.63	%
Total dollars (in thousands)	$	101,213		$	310,842		$	412,055		$	116,772		$	316,934		$	433,706

(1) Includes non-accrual loans.

The decrease in delinquency rates since the second quarter of 2010 was primarily in loans 31-89 days past due across all loan types, partially offset by an increase in commercial loans greater than 90 days past due.

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The following table presents ending balances of loans outstanding, net of unearned income:

	June 30, 2011		June 30, 2010		December 31, 2010
	(in thousands)
Real-estate – commercial mortgage	$	4,443,025	$	4,330,630	$	4,375,980
Commercial – industrial, financial and agricultural		3,678,858		3,664,603		3,704,384
Real-estate – home equity		1,626,545		1,637,171		1,641,777
Real-estate – residential mortgage		1,023,646		985,345		995,990
Real-estate – construction		681,588		893,305		801,185
Consumer		330,965		368,631		350,161
Leasing and other		67,864		63,699		63,830
Loans, net of unearned income	$	11,852,491	$	11,943,384	$	11,933,307

Approximately $5.1 billion, or 43.2%, of the Corporation’s loan portfolio was in commercial mortgage and construction loans at June 30, 2011. The Corporation did not have a concentration of credit risk with any single borrower, industry or geographical location. However, the performance of real estate markets and general economic conditions adversely impacted the performance of these loans.

From 2008 to 2010, the Corporation experienced significant increases in non-performing construction loans and commercial mortgages as a result of weak economic conditions. In comparison to December 31, 2010, non-performing construction loans decreased $26.2 million, or 31.0%, to $58.4 million as of June 30, 2011 as charge-offs and paydowns of certain non-performing construction loans exceeded additions during the first half of 2011. The Corporation continues to reduce its exposure to residential housing development construction loans, most notably in its New Jersey, Virginia and Maryland markets. In comparison to December 31, 2010, non-performing commercial mortgages increased $9.0 million, or 9.6%, to $102.7 million as of June 30, 2011. During the first half of 2011, economic conditions, although slowly improving, continued to place stress on the credit quality of the commercial mortgage portfolio.

Commercial loans comprised 31.0% of the total loan portfolio. As with commercial mortgages, the credit quality of these loans has been impacted by general economic conditions, as businesses continued to struggle for growth as a result of reduced consumer spending.

Approximately $2.7 billion, or 22.4%, of the Corporation’s loan portfolio was in residential mortgage and home equity loans at June 30, 2011. The significant deterioration in residential real estate values in prior years, particularly in portions of New Jersey, Virginia and Maryland, and general economic conditions, resulted in increases in non-performing loans and negatively impacted the overall credit quality of the portfolio. However, as with the commercial loan portfolio, the Corporation experienced a slight decrease in non-performing asset levels during the second quarter of 2011.

Effective April 1, 2011, the Corporation changed its allowance for credit loss methodology. This change in allowance methodology did not impact the total allowance for credit losses. See Note D, “Loans and Allowance for Credit Losses” in the Notes to Consolidated Financial Statements for additional details. The Corporation believes that the allowance for credit losses of $268.6 million as of June 30, 2011 is sufficient to cover losses inherent in both the loan portfolio and the unfunded lending commitments as of that date and is appropriate based on applicable accounting standards.

44

Other Income

The following table presents the components of other income:

	Three months ended June 30					Increase (decrease)
	2011			2010		$			%
	(dollars in thousands)
Overdraft fees	$	8,029		$	9,618	$	(1,589	)		(16.5	)%
Cash management fees		2,677			2,514		163			6.5
Other		3,626			3,350		276			8.2
Service charges on deposit accounts		14,332			15,482		(1,150	)		(7.4	)
Debit card income		4,610			4,085		525			12.9
Merchant fees		2,516			2,123		393			18.5
Foreign currency processing income		2,374			1,964		410			20.9
Letter of credit fees		1,271			1,463		(192	)		(13.1	)
Other		1,938			1,834		104			5.7
Other service charges and fees		12,709			11,469		1,240			10.8
Investment management and trust services		9,638			8,655		983			11.4
Mortgage banking income		6,049			3,899		2,150			55.1
Credit card income		1,826			1,442		384			26.6
Gains on sales of OREO		1,593			762		831			109.1
Other		1,560			2,299		(739	)		(32.1	)
Total, excluding investment securities gains (losses)		47,707			44,008		3,699			8.4
Investment securities gains (losses)		(335	)		904		(1,239	)		N/M
Total	$	47,372		$	44,912	$	2,460			5.5	%

N/M – Not meaningful.

The $1.6 million, or 16.5%, decrease in overdraft fees was a result of changes in regulations that took effect in August 2010, which require customers to affirmatively consent to the payment of certain types of overdrafts.

Increases in debit card income ($525,000, or 12.9%), merchant fees ($393,000, or 18.5%), and foreign currency processing revenues ($410,000, or 20.9%) all resulted from higher transaction volumes.

The Federal Reserve recently issued revised pricing guidelines regarding interchange income on certain debit card transactions which must be implemented by October 2011, as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). These revised pricing guidelines are higher than those in the original proposal, but are significantly lower than current rates. Under the revised pricing guidelines, the $4.6 million of debit card income earned by the Corporation during the second quarter of 2011 would have been approximately $2.2 million less.

The $983,000, or 11.4%, increase in investment management and trust services income was due to a $509,000, or 15.7%, increase in brokerage revenue, due both to an improvement in the market values of assets under management and the Corporation’s expanded focus on generating recurring revenues in the brokerage business. Trust commissions increased $474,000, or 8.7%, primarily due to improved market conditions.

The $2.2 million, or 55.1%, increase in mortgage banking income was due to an improvement in the spreads on loans sold, partially offset by a $39.1 million, or 14.4%, decrease in the volume of loans sold.

45

The $384,000, or 26.6%, increase in credit card income was due to an increase in new card applications, higher average balances and an increase in the volume of transactions on credit cards previously originated, which generate fees under a joint marketing agreement with an independent third-party.

Gains on sales of OREO increased $831,000, or 109.1%. Combined with net losses on sales of OREO of $580,000, recorded within other expenses, net gains on sales were $1.0 million, compared to a net gain of $257,000 for the second quarter of 2010.

The $739,000, or 32.1%, decrease in other income was due to an increase in insurance claims experienced by the Corporation’s reinsurance subsidiary, which engages in the business of reinsuring credit life and accident and health insurance directly related to extensions of credit by the Corporation’s banking subsidiaries. Also contributing to the decrease was a $202,000 decrease in gains on sales of branch assets.

The $335,000 of investment securities losses for the second quarter of 2011 included $58,000 of net gains on the sales of securities, more than offset by $393,000 of other-than-temporary impairment charges. The Corporation recorded $359,000 million of other-than-temporary impairment charges for pooled trust preferred securities issued by financial institutions and $34,000 of other-than-temporary impairment charges related to stocks of financial institutions. See Note C, “Investment Securities,” in the Notes to Consolidated Financial Statements for additional details.

Investment securities gains of $904,000 for the second quarter of 2010 included $4.4 million of net gains on the sales of securities partially offset by $3.5 million of other-than-temporary impairment charges. During the second quarter of 2010, the Corporation recorded $3.0 million of other-than-temporary impairment charges for pooled trust preferred securities issued by financial institutions and $509,000 of other-than-temporary impairment charges for certain stocks of financial institutions.

Other Expenses

The following table presents the components of other expenses:

	Three months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Salaries and employee benefits	$	56,070	$	54,654	$	1,416			2.6	%
Net occupancy expense		10,874		10,519		355			3.4
Equipment expense		3,377		2,663		714			26.8
FDIC insurance expense		3,264		5,136		(1,872	)		(36.4	)
Data processing		3,214		3,311		(97	)		(2.9	)
Professional fees		3,102		3,035		67			2.2
OREO and repossession expense		2,575		1,876		699			37.3
Telecommunications		2,020		2,086		(66	)		(3.2	)
Software		1,972		1,706		266			15.6
Marketing		1,863		2,271		(408	)		(18.0	)
Supplies		1,416		1,369		47			3.4
Postage		1,288		1,455		(167	)		(11.5	)
Intangible amortization		1,172		1,341		(169	)		(12.6	)
Other		10,271		9,683		588			6.1
Total	$	102,478	$	101,105	$	1,373			1.4	%

Salaries and employee benefits increased $1.4 million, or 2.6%, with salaries increasing $1.8 million, or 4.1%, and employee benefits decreasing $395,000, or 3.9%. The increase in salaries was primarily due to a $521,000 increase in incentive compensation, a $236,000 increase in stock-based compensation expense and normal merit increases.

46

The decrease in employee benefits was primarily due to a decrease in healthcare costs, partially offset by an increase in severance costs.

The $714,000, or 26.8%, increase in equipment expense was due to higher depreciation expense, primarily related to the addition of assets supporting the Corporation’s technology infrastructure, and increased maintenance costs.

The $1.9 million, or 36.4%, decrease in FDIC insurance expense was due to a change in the assessment base, which, effective April 1, 2011 was based on total average assets minus average tangible equity, compared to average domestic deposits for the second quarter of 2010. This change accounted for approximately $1.5 million of the decrease, with the remaining decrease due to the Corporation opting out of the Transaction Account Guarantee program on July 1, 2010.

OREO and repossession expense increased $699,000, or 37.3%. OREO and repossession expense is expected to be volatile as the Corporation continues to work through repossessed real estate. The $408,000, or 18.0%, decrease in marketing expense was primarily due to the timing of promotional campaigns.

The $588,000, or 6.1%, increase in other expenses included a $315,000 increase in provisions for debit card rewards points earned, a $170,000 increase in state franchise taxes and an increase in information technology consulting costs. These increases in other expenses were partially offset by a $500,000 decrease in reserves associated with the potential repurchase of previously sold residential mortgage and home equity loans recorded during the second quarter of 2011 as the Corporation’s exposure to future repurchases was reduced as a result of entering into a settlement agreement with a secondary market investor.

Income Taxes

Income tax expense for the second quarter of 2011 was $13.2 million, a $1.9 million, or 16.6%, increase from $11.3 million for the second quarter of 2010. The increase was primarily due to the increase in income before income taxes.

The Corporation’s effective tax rate was 26.6% in 2011, as compared to 26.3% in 2010. The effective rate is generally lower than the Federal statutory rate of 35% due to investments in tax-free municipal securities and Federal tax credits earned from investments in low and moderate-income housing partnerships.

Six Months Ended June 30, 2011 compared to the Six Months Ended June 30, 2010

Net Interest Income

FTE net interest income increased $2.7 million, or 1.0%, from $285.5 million in the first half of 2010 to $288.2 million in the first half of 2011. This was the net result of a $27.5 million decrease in FTE interest income and a $30.2 million decrease in interest expense.

Net interest margin increased 16 basis points, or 4.2%, from 3.77% for the first half of 2010 to 3.93% for the first half of 2011. The increase in net interest margin was a result of a 44 basis point, or 26.7%, decrease in funding costs, partially offset by a 21 basis point, or 4.1%, decrease in yields on interest-earning assets.

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The following table provides a comparative average balance sheet and net interest income analysis for the first half of 2011 as compared to the same period in 2010. Interest income and yields are presented on an FTE basis, using a 35% Federal tax rate and statutory interest expense disallowances. The discussion following this table is based on these FTE amounts. All dollar amounts are in thousands.

	Six months ended June 30
	2011									2010
ASSETS	Average Balance			Interest (1)			Yield/ Rate			Average Balance			Interest (1)			Yield/ Rate
Interest-earning assets:
Loans, net of unearned income (2)	$	11,902,124		$	303,660			5.14	%	$	11,965,446		$	319,056			5.37	%
Taxable investment securities (3)		2,235,789			42,556			3.81			2,524,149			53,295			4.23
Tax-exempt investment securities (3)		343,832			9,725			5.66			371,488			10,683			5.75
Equity securities (3)		130,537			1,527			2.35			141,079			1,542			2.19
Total investment securities		2,710,158			53,808			3.97			3,036,716			65,520			4.32
Loans held for sale		41,082			992			4.83			51,220			1,223			4.77
Other interest-earning assets		115,233			134			0.23			189,479			256			0.27
Total interest-earning assets		14,768,597			358,594			4.89	%		15,242,861			386,055			5.10	%
Noninterest-earning assets:
Cash and due from banks		269,444									262,357
Premises and equipment		207,263									203,757
Other assets		1,100,319									1,094,653
Less: Allowance for loan losses		(277,782	)								(274,322	)
Total Assets	$	16,067,841								$	16,529,306
LIABILITIES AND EQUITY
Interest-bearing liabilities:
Demand deposits	$	2,337,615		$	2,807			0.24	%	$	2,000,734		$	3,680			0.37	%
Savings deposits		3,319,778			6,616			0.40			2,969,814			10,589			0.72
Time deposits		4,442,446			35,638			1.62			5,161,583			51,288			2.00
Total interest-bearing deposits		10,099,839			45,061			0.90			10,132,131			65,557			1.30
Short-term borrowings		538,786			422			0.16			691,289			939			0.27
FHLB advances and long-term debt		1,043,481			24,938			4.80			1,443,600			34,105			4.75
Total interest-bearing liabilities		11,682,106			70,421			1.21	%		12,267,020			100,601			1.65	%
Noninterest-bearing liabilities:
Demand deposits		2,300,750									2,026,705
Other		166,541									190,207
Total Liabilities		14,149,397									14,483,932
Shareholders’ equity		1,918,444									2,045,374
Total Liabilities and Shareholders’ Equity	$	16,067,841								$	16,529,306
Net interest income/net interest margin (FTE)					288,173			3.93	%					285,454			3.77	%
Tax equivalent adjustment					(7,965	)								(7,787	)
Net interest income				$	280,208								$	277,667

(1) Includes dividends earned on equity securities.

(2) Includes non-performing loans.

(3) Balances include amortized historical cost for available for sale securities. The related unrealized holding gains (losses) are included in other assets.

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The following table summarizes the changes in FTE interest income and expense for the first half of 2011 due to changes in average balances (volume) and changes in rates:

	2011 vs. 2010 Increase (decrease) due to change in
	Volume			Rate			Net
	(in thousands)
Interest income on:
Loans, net of unearned income	$	(1,744	)	$	(13,652	)	$	(15,396	)
Taxable investment securities		(5,748	)		(4,991	)		(10,739	)
Tax-exempt investment securities		(799	)		(159	)		(958	)
Equity securities		(119	)		103			(16	)
Loans held for sale		(247	)		16			(231	)
Other interest-earning assets		(90	)		(31	)		(121	)
Total interest income	$	(8,747	)	$	(18,714	)	$	(27,461	)
Interest expense on:
Demand deposits	$	550		$	(1,423	)	$	(873	)
Savings deposits		1,132			(5,105	)		(3,973	)
Time deposits		(6,569	)		(9,081	)		(15,650	)
Short-term borrowings		(178	)		(339	)		(517	)
FHLB advances and long-term debt		(9,489	)		322			(9,167	)
Total interest expense	$	(14,554	)	$	(15,626	)	$	(30,180	)

Interest income decreased $27.5 million, or 7.1%. A 21 basis point, or 4.1%, decrease in average yields resulted in an $18.7 million decrease in interest income. The remaining $8.7 million decrease was due to a $474.3 million, or 3.1%, decrease in average interest-earning assets.

Average loans, by type, are summarized in the following table:

	Six months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Real estate – commercial mortgage	$	4,407,683	$	4,312,942	$	94,741			2.2	%
Commercial – industrial, financial and agricultural		3,698,430		3,686,425		12,005			0.3
Real estate – home equity		1,625,980		1,639,579		(13,599	)		(0.8	)
Real estate – residential mortgage		1,020,471		956,478		63,993			6.7
Real estate – construction		745,912		935,861		(189,949	)		(20.3	)
Consumer		337,080		362,549		(25,469	)		(7.0	)
Leasing and other		66,568		71,612		(5,044	)		(7.0	)
Total	$	11,902,124	$	11,965,446	$	(63,322	)		(0.5	%)

Geographically, the $94.7 million, or 2.2%, increase in commercial mortgages was attributable to the Corporation’s Pennsylvania ($66.7 million, or 3.0%), New Jersey ($13.5 million, or 1.1%), Maryland ($7.5 million, or 1.9%) and Virginia ($4.1 million, or 1.2%) markets.

The $64.0 million, or 6.7%, increase in residential mortgages was largely due to the Corporation’s retention in portfolio of certain 10 and 15 year fixed rate mortgages and certain adjustable rate mortgages to partially mitigate the impact of decreases in average interest-earning assets.

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The $189.9 million, or 20.3%, decrease in construction loans was primarily due to efforts to decrease credit exposure in this portfolio. Geographically, the decline was attributable to the Maryland ($90.5 million, or 40.1%), Virginia ($70.2 million, or 30.1%) and New Jersey ($47.5 million, or 28.2%) markets, partially offset by an increase in the Pennsylvania ($12.6 million, or 4.3%) market.

The $25.5 million, or 7.0%, decrease in consumer loans occurred throughout most of the Corporation’s markets, with $15.6 million of the decrease related to direct consumer loans and $9.9 million of the decrease attributable to the indirect automobile loan portfolio.

The average yield on loans decreased 23 basis points, or 4.3%, from 5.37% in 2010 to 5.14% in 2011, despite the average prime rate remaining at 3.25% for the first half of both 2011 and 2010. The decrease in average yields on loans was attributable to repayments of higher-yielding loans and declining average rates on fixed and adjustable rate loans which, unlike floating rate loans, have a lagged repricing effect. In addition, approximately one-third of the floating rate portfolio is based on an index other than prime, such as the one-month LIBOR, which decreased on average for the first half of 2011 in comparison the first half of 2010.

Average investments decreased $326.6 million, or 10.8%, due largely to sales and maturities of mortgage-backed securities and collateralized mortgage obligations, in addition to maturities of other debt securities. During the first half of 2011, proceeds from the sales and maturities of securities were not fully reinvested into the portfolio because current rates on many investment options were not attractive. The average yield on investments decreased 35 basis points, or 8.1%, from 4.32% in 2010 to 3.97% in 2011, as the reinvestment of cash flows and incremental purchases of taxable investment securities were at yields lower than the overall portfolio yield.

Interest expense decreased $30.2 million, or 30.0%, to $70.4 million in the first half of 2011 from $100.6 million in the first half of 2010. Interest expense decreased $15.6 million as a result of a 44 basis point, or 26.7%, decrease in the average cost of interest-bearing liabilities. Interest expense decreased an additional $14.6 million as a result of a $584.9 million, or 4.8%, decline in average interest-bearing liabilities.

The following table summarizes the changes in average deposits, by type:

	Six months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Noninterest-bearing demand	$	2,300,750	$	2,026,705	$	274,045			13.5	%
Interest-bearing demand		2,337,615		2,000,734		336,881			16.8
Savings		3,319,778		2,969,814		349,964			11.8
Total demand and savings		7,958,143		6,997,253		960,890			13.7
Time deposits		4,442,446		5,161,583		(719,137	)		(13.9	)
Total deposits	$	12,400,589	$	12,158,836	$	241,753			2.0	%

The $274.0 million, or 13.5%, increase in noninterest-bearing accounts was primarily due to a $219.5 million, or 15.8%, increase in business account balances due, in part, to businesses maintaining higher balances to offset service fees, as well as a migration from the Corporation’s cash management products due to low interest rates. The $686.8 million, or 13.8%, increase in interest-bearing demand and savings accounts was due to a $392.7 million, or 37.4%, increase in municipal account balances and a $333.2 million, or 11.1%, increase in personal account balances. The increase in municipal account balances was largely due to attractive interest rates for insured deposit products relative to alternatives. The increase in personal accounts was largely due to a decrease in customer certificates of deposit as well as the Corporation’s promotional efforts with a focus on building customer relationships.

The decrease in time deposits was almost entirely due to customer certificates of deposit, which decreased $712.0 million, or 13.8%, with the remaining $7.1 million decrease in brokered certificates of deposit.

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The decrease in customer certificates of deposit was in accounts with original maturity terms of less than two years ($804.7 million, or 23.9%), and jumbo certificates of deposit ($175.5 million, or 42.9%), partially offset by an increase in account balances with original maturity terms greater than two years ($34.4 million, or 1.2%). As noted above, the decrease in customer certificates of deposit was largely due to customers migrating funds to interest-bearing savings and demand accounts in the current low rate environment.

The average cost of interest-bearing deposits decreased 40 basis points, or 30.8%, from 1.30% in 2010 to 0.90% in 2011 due to a reduction in rates paid on all categories of deposits and the repricing of certificates of deposit.

The following table summarizes changes in average short-term and long-term borrowings, by type:

	Six months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Short-term borrowings:
Customer repurchase agreements	$	215,307	$	256,298	$	(40,991	)		(16.0	%)
Customer short-term promissory notes		181,121		215,224		(34,103	)		(15.8	)
Total short-term customer funding		396,428		471,522		(75,094	)		(15.9	)
Federal funds purchased		142,358		219,767		(77,409	)		(35.2	)
Total short-term borrowings		538,786		691,289		(152,503	)		(22.1	)
Long-term debt:
FHLB advances		659,781		1,060,290		(400,509	)		(37.8	)
Other long-term debt		383,700		383,310		390			0.1
Total long-term debt		1,043,481		1,443,600		(400,119	)		(27.7	)
Total	$	1,582,267	$	2,134,889	$	(552,622	)		(25.9	%)

The $75.1 million decrease in short-term customer funding resulted from customers transferring funds from the cash management program to deposits due to the low interest rate environment. The decrease in Federal funds purchased was due to increases in non-interest and interest bearing demand and savings accounts, combined with the decreases in investments and loans, the result of which was a reduced funding need for the Corporation. The $400.5 million decrease in FHLB advances was due to maturities, which were generally not replaced with new advances.

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Provision for Loan Losses and Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses:

	Six months ended June 30
	2011			2010
	(dollars in thousands)
Loans, net of unearned income outstanding at end of period	$	11,852,491		$	11,943,384
Daily average balance of loans, net of unearned income	$	11,902,124		$	11,965,446
Balance of allowance for credit losses at beginning of period	$	275,498		$	257,553
Loans charged off:
Commercial – industrial, financial and agricultural		28,742			16,371
Real estate – construction		21,362			29,852
Real estate – commercial mortgage		17,121			6,259
Real estate – residential mortgage		12,703			3,271
Consumer and home equity		5,090			4,516
Leasing and other		1,186			1,255
Total loans charged off		86,204			61,524
Recoveries of loans previously charged off:
Commercial – industrial, agricultural and financial		1,394			1,593
Real estate – construction		642			896
Real estate – commercial mortgage		1,726			285
Real estate – residential mortgage		234			4
Consumer and home equity		745			1,040
Leasing and other		598			530
Total recoveries		5,339			4,348
Net loans charged off		80,865			57,176
Provision for loan losses		74,000			80,000
Balance of allowance for credit losses at end of period	$	268,633		$	280,377
Net charge-offs to average loans (annualized)		1.36	%		0.96	%

The provision for loan losses was $74.0 million for the first half of 2011, a decrease of $6.0 million, or 7.5%, over the same period in 2010. The decrease in the provision for credit losses was due to the continuing improvement in the Corporation’s credit quality metrics, including a reduction in the level of non-performing assets and overall delinquency.

Net charge-offs increased $23.7 million, or 41.4%, to $80.9 million for the first half of 2011 compared to $57.2 million for the first half of 2010. Annualized net charge-offs to average loans increased 40 basis points, or 41.7%, to 1.36% for the first half of 2011. The $23.7 million increase in net charge-offs was primarily due to increases in commercial loan net charge-offs ($12.6 million, or 85.1%), commercial mortgage net charge-offs ($9.4 million, or 157.7%) and residential mortgage net charge-offs ($9.2 million, 281.7%), partially offset by a decrease in construction loan net charge-offs ($8.2 million, or 28.4%).

Of the $80.9 million of net charge-offs recorded in the first half of 2011, 31.2% were in New Jersey, 24.8% in Virginia, 21.8% Pennsylvania and 19.8% in Maryland. During the first half of 2011, there were 13 individual charge-offs which exceeded $1.0 million, totaling $29.2 million, of which $16.1 million were commercial loans, $6.4 million were construction loans, $5.5 million were commercial mortgages and $1.3 million was for a residential mortgage.

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Other Income

The following table presents the components of other income:

	Six months ended June 30					Increase (decrease)
	2011		2010			$			%
	(dollars in thousands)
Overdraft fees	$	15,600	$	18,502		$	(2,902	)		(15.7	%)
Cash management fees		5,127		4,791			336			7.0
Other		6,910		6,456			454			7.0
Service charges on deposit accounts		27,637		29,749			(2,112	)		(7.1	)
Debit card income		8,814		7,619			1,195			15.7
Merchant fees		4,663		3,947			716			18.1
Foreign currency processing income		4,571		3,902			669			17.1
Letter of credit fees		2,526		2,702			(176	)		(6.5	)
Other		3,617		3,464			153			4.4
Other service charges and fees		24,191		21,634			2,557			11.8
Investment management and trust services		18,842		16,743			2,099			12.5
Mortgage banking income		11,512		8,048			3,464			43.0
Credit card income		3,422		2,893			529			18.3
Gains on sales of OREO		2,292		1,226			1,066			86.9
Other		3,686		4,198			(512	)		(12.2	)
Total, excluding investment securities gains (losses)		91,582		84,491			7,091			8.4
Investment securities gains (losses)		1,950		(1,319	)		3,269			N/M
Total	$	93,532	$	83,172		$	10,360			12.5	%

N/M – Not meaningful.

The $2.9 million, or 15.7%, decrease in overdraft fees was a result of changes in regulations that took effect in August 2010, which require customers to affirmatively consent to the payment of certain types of overdrafts.

Increases in debit card income ($1.2 million, or 15.7%), merchant fees ($716,000, or 18.1%), and foreign currency processing revenues ($669,000, or 17.1%) all resulted from higher transaction volumes.

The $2.1 million, or 12.5%, increase in investment management and trust services income was due to a $1.3 million, or 22.1%, increase in brokerage revenue and a $769,000, or 7.2%, increase in trust commissions. The increase in brokerage revenue resulted from both an improvement in the market values of assets under management and the Corporation’s expanded focus on generating recurring revenues in the brokerage business.

The $3.5 million, or 43.0%, increase in mortgage banking income was primarily due to an improvement in the spreads on loans sold and partially due to a $35.1 million, or 7.0%, increase in the volume of loans sold, which was driven by higher refinance activity in the first half of 2011 compared to the first half of 2010.

The $529,000, or 18.3%, increase in credit card income was due to an increase in new card applications, higher average balances and an increase in the volume of transactions on credit cards previously originated, which generate fees under a joint marketing agreement with an independent third-party.

Gains on sales of OREO increased $1.1 million, or 86.9%. Combined with net losses on sales of OREO of $744,000, recorded within other expenses, net gains on sales were $1.5 million, compared to a net gain of $219,000 for the first half of 2010.

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The $512,000, or 12.2%, decrease in other income was due to an increase in insurance claims experienced by the Corporation’s reinsurance subsidiary and a $178,000 decrease in gains on sales of branch assets.

Investment securities gains of $2.0 million for the first half of 2011 included $3.6 million of net gains on the sales of securities, offset by $1.7 million of other-than-temporary impairment charges. The Corporation recorded $1.4 million of other-than-temporary impairment charges for pooled trust preferred securities issued by financial institutions and $331,000 of other-than-temporary impairment charges for certain financial institution stocks.

The $1.3 million of investment securities losses for the first half of 2010 resulted from $7.2 million of net gains on the sales of securities, which were more than offset by $7.1 million of other-than-temporary impairment charges for debt securities issued by financial institutions and $1.3 million of other-than-temporary impairment charges for certain financial institution stocks. See Note C, “Investment Securities” in the Notes to Consolidated Financial Statements for additional details.

Other Expenses

The following table presents the components of other expenses:

	Six months ended June 30				Increase (decrease)
	2011		2010		$			%
	(dollars in thousands)
Salaries and employee benefits	$	110,378	$	106,999	$	3,379			3.2	%
Net occupancy expense		22,240		22,169		71			0.3
FDIC insurance expense		8,018		10,090		(2,072	)		(20.5	)
Data processing		6,586		6,728		(142	)		(2.1	)
Equipment expense		6,509		5,754		755			13.1
Professional fees		5,951		5,581		370			6.6
Marketing		4,699		4,101		598			14.6
OREO and repossession expense		4,545		4,556		(11	)		(0.2	)
Telecommunications		4,192		4,356		(164	)		(3.8	)
Software		4,004		3,320		684			20.6
Supplies		2,791		2,698		93			3.4
Postage		2,694		2,760		(66	)		(2.4	)
Intangible amortization		2,350		2,655		(305	)		(11.5	)
Other		19,084		19,360		(276	)		(1.4	)
Total	$	204,041	$	201,127	$	2,914			1.4	%

Salaries and employee benefits increased $3.4 million, or 3.2%, with salaries increasing $4.2 million, or 4.8%, and employee benefits decreasing $829,000, or 4.2%. The increase in salaries was due to the ending of a 12-month freeze on merit increases in March 2010, normal merit increases, a $1.2 million increase in incentive compensation and a $490,000 increase in stock-based compensation expense.

The $829,000 decrease in employee benefits was primarily due to a decrease in healthcare costs, partially offset by an increase in severance costs.

The $2.1 million, or 20.5%, decrease in FDIC insurance expense was due to a change in the assessment base, which, effective April 1, 2011 was based on total average assets minus average tangible equity, compared to average domestic deposits for the first half of 2010. This change accounted for $1.5 million of the decrease, with the remaining decrease mostly due to the Corporation opting out of the Transaction Account Guarantee program on July 1, 2010.

The $755,000, or 13.1%, increase in equipment expense was due to higher depreciation expense, primarily related to the addition of assets supporting the Corporation’s information technology infrastructure, and

54

increased maintenance costs. The $370,000, or 6.6%, increase in professional fees was primarily due to an increase in legal fees associated with the collection and workout efforts for non-performing loans. The $598,000, or 14.6%, increase in marketing expense was primarily due to the timing of promotional campaigns. The $305,000, or 11.5%, decrease in intangible amortization was primarily due to a decrease in core deposit intangibles amortization. The $684,000, or 20.6%, increase in software expense was due to increased maintenance costs, mainly due to desktop software upgrades for virtually all employees.

The $276,000, or 1.4%, decrease in other expenses was due to a $1.4 million decrease in reserves associated with the potential repurchase of previously sold residential mortgage and home equity loans recorded during the first half of 2011 as the Corporation’s exposure to future repurchases was reduced as a result of entering into settlement agreements with certain secondary market investors. This decrease was partially offset by a $695,000 increase in provisions for debit card rewards points earned and an increase in information technology consulting costs.

Income Taxes

Income tax expense for the first half of 2011 was $25.5 million, a $5.0 million, or 24.2%, increase from $20.6 million in 2010. The increase was primarily due to the increase in income before income taxes.

The Corporation’s effective tax rate was 26.7% in 2011, as compared to 25.8% in 2010. The effective rate is generally lower than the Federal statutory rate of 35% due to investments in tax-free municipal securities and Federal tax credits earned from investments in low and moderate-income housing partnerships. The effective rate for the first half of 2011 is higher than the same period in 2010 due to non-taxable income and tax credits having a smaller impact on the effective tax rate due to the higher level of income before income taxes.

FINANCIAL CONDITION

Total assets decreased $308.1 million, or 1.9%, to $16.0 billion at June 30, 2011 from $16.3 billion at December 31, 2010.

Investment securities decreased $198.4 million, or 6.9%. During the first half of 2011, proceeds from the sales and maturities of collateralized mortgage obligations and mortgage-backed securities were not fully reinvested in the investment portfolio due to few attractive investment options in the current rate environment.

The Corporation experienced an $80.8 million, or 0.7%, decrease in loans, net of unearned income. Construction loans decreased $119.6 million, or 14.9%, due to paydowns on existing loans exceeding new originations. Also contributing to the decrease in loans was a $25.5 million, or 0.7%, decrease in commercial loans, a $19.2 million, or 5.5%, decrease in consumer loans and a $15.2 million, or 0.9%, decrease in home equity loans, all a by-product of continued weak demand. Offsetting these decreases was a $67.0 million, or 1.5%, increase in commercial mortgages and a $27.7 million, or 2.8%, increase in residential mortgages. Commercial mortgage growth has been throughout the Corporation’s footprint. Residential mortgages increased as certain 10 and 15 year fixed rate mortgages and certain adjustable rate mortgages are being held in portfolio rather than sold in the secondary market.

Other assets decreased $171.7 million, or 27.3%, primarily due to $142.9 million of investment security sales that had not settled as of December 31, 2010 and a $20.2 million decrease in net deferred Federal taxes, mainly a result of an increase in unrealized gains on the Corporation’s investment portfolio.

Deposits decreased $125.7 million, or 1.0%, due to a decrease in time deposits of $354.8 million, or 7.7%, partially offset by an increase in demand and savings deposits of $229.1 million, or 3.0%. The increase in demand and saving accounts was due to a $200.9 million, or 8.3%, increase in business account balances and a $43.0 million, or 3.1%, increase in municipal account balances, partially offset by a $25.7 million, or 0.7%, decrease in personal account balances.

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Short-term borrowings decreased $127.5 million, or 18.9%, mainly in Federal funds purchased, which decreased $101.7 million, or 38.0%. The decrease in short-term borrowings largely resulted from the Corporation’s overall liquidity position, which was enhanced by a decrease in investments and loans. Long-term debt decreased $93.9 million, or 8.4%, as a result of FHLB advance maturities, which were not replaced.

Other liabilities decreased $30.1 million, or 16.8%, primarily due to $26.4 million of investment security purchases that had not settled as of December 31, 2010.

Capital Resources

Total shareholders’ equity increased $72.9 million, or 3.9%, during the first half of 2011. The increase was due to $70.2 million of net income and a $17.7 million increase in holding gains on available for sale investment securities, partially offset by $18.0 million of dividends on common shares outstanding.

As a result of the continued growth in earnings, the Corporation increased its dividend to common shareholders to $0.05 cents per share for the second quarter of 2011, a two cent, or 66.7%, increase in comparison to the second quarter of 2010. For the first half of 2011, the Corporation’s $0.09 cent dividend per common share represented a 50.0% increase in comparison to the $0.06 cent dividend per common share for the same period in 2010.

The Corporation and its subsidiary banks are subject to various regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can initiate certain actions by regulators that could have a material effect on the Corporation’s consolidated financial statements. The regulations require that banks maintain minimum amounts and ratios of total and Tier I capital (as defined in the regulations) to risk weighted assets (as defined), and Tier I capital to average assets (as defined). As of June 30, 2011, the Corporation and each of its bank subsidiaries met the minimum requirements. In addition, each of the Corporation’s bank subsidiaries’ capital ratios exceeded the amounts required to be considered “well capitalized” as defined in the regulations.

The following table summarizes the Corporation’s capital ratios in comparison to regulatory requirements, where applicable:

	June 30			December 31			Regulatory Minimum Capital
	2011			2010			Adequacy
Total Capital (to Risk-Weighted Assets)		14.8	%		14.2	%		8.0	%
Tier I Capital (to Risk-Weighted Assets)		12.3	%		11.6	%		4.0	%
Tier I Capital (to Average Assets)		9.9	%		9.4	%		4.0	%
Tangible common equity to tangible assets (1)		9.1	%		8.5	%		N/A
Tangible common equity to risk weighted assets (2)		11.3	%		10.5	%		N/A

(1) Ending common shareholders’ equity, net of goodwill and intangible assets, divided by ending assets, net of goodwill and intangible assets.

(2) Ending common shareholders’ equity, net of goodwill and intangible assets, divided by risk-weighted assets.

N/A – Not applicable.

The Basel Committee on Banking Supervision (Basel) is a committee of central banks and bank regulators from major industrialized countries that develops broad policy guidelines for use by each country’s regulators with the purpose of ensuring that financial institutions have adequate capital given the risk levels of assets and off-balance sheet financial instruments.

In December, 2010, Basel released a framework for strengthening international capital and liquidity regulation, referred to as Basel III. Basel III includes defined minimum capital ratios, which must be met

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when implementation occurs on January 1, 2013. An additional “capital conservation buffer” will be phased-in beginning January 1, 2016 and, when fully phased-in three years later, the minimum ratios will be 2.5% higher. Fully phased-in capital standards under Basel III will require banks to maintain more capital than the minimum levels required under current regulatory capital standards.

The U.S. banking regulators have not yet proposed regulations implementing Basel III, but are expected to do so in the near future. As of June 30, 2011, the Corporation met the fully phased-in minimum capital ratios required for each of the capital measures included in Basel III.

Liquidity

The Corporation must maintain a sufficient level of liquid assets to meet the cash needs of its customers, who, as depositors, may want to withdraw funds or who, as borrowers, need credit availability. Liquidity is provided on a continuous basis through scheduled and unscheduled principal and interest payments on outstanding loans and investments and through the availability of deposits and borrowings. The Corporation also maintains secondary sources that provide liquidity on a secured and unsecured basis to meet short-term needs. Liquidity must also be managed at the Fulton Financial Corporation parent company level. For safety and soundness reasons, banking regulations limit the amount of cash that can be transferred from subsidiary banks to the parent company in the form of loans and dividends. Generally, these limitations are based on the subsidiary banks’ regulatory capital levels and their net income. Management continues to monitor the liquidity and capital needs of the parent company and will implement appropriate strategies, as necessary, to remain adequately capitalized and to meet its cash needs.

The Corporation’s sources and uses of cash were discussed in general terms in the net interest income section of Management’s Discussion. The consolidated statements of cash flows provide additional information. The Corporation’s operating activities during the first half of 2011 generated $204.9 million of cash, mainly due to net income, as adjusted for non-cash expenses, most notably the provision for credit losses, and a decrease in loans held for sale and other assets. Cash flows provided by investing activities were $238.8 million, due mainly to proceeds from the maturities and sales of investment securities, partially offset by purchases of investment securities and a net increase in short-term investments. Net cash used in financing activities was $358.0 million as a net decrease in time deposits and repayments of short-term borrowings and long-term debt exceeded cash inflows from demand and savings deposits increases.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the exposure to economic loss that arises from changes in the values of certain financial instruments. The types of market risk exposures generally faced by financial institutions include interest rate risk, equity market price risk, debt security market price risk, foreign currency risk and commodity price risk. Due to the nature of its operations, only equity market price risk, debt security market price risk and interest rate risk are significant to the Corporation.

Equity Market Price Risk

Equity market price risk is the risk that changes in the values of equity investments could have a material impact on the financial position or results of operations of the Corporation. The Corporation’s equity investments consisted of $88.6 million of Federal Home Loan Bank (FHLB) and Federal Reserve Bank stock, $33.3 million of common stocks of publicly traded financial institutions, and $7.0 million of other equity investments. The equity investments most susceptible to equity market price risk are the financial institutions stocks, which had a cost basis of approximately $31.2 million and fair value of $33.3 million at June 30, 2011. Gross unrealized gains in this portfolio were $3.7 million, and gross unrealized losses were $1.6 million.

The Corporation has evaluated whether any unrealized losses on individual equity investments constituted other-than-temporary impairment, which would require a write-down through a charge to earnings. Based on the results of such evaluations, the Corporation recorded write-downs of $34,000 and $331,000 for specific financial institution stocks that were deemed to exhibit other-than-temporary impairment in value during the three and six months ended June 30, 2011, respectively. Additional impairment charges may be necessary in the future depending upon the performance of the equity markets in general and the performance of the individual investments held by the Corporation. See Note C, “Investment Securities” in the Notes to Consolidated Financial Statements for additional details.

Management continuously monitors the fair value of its equity investments and evaluates current market conditions and operating results of the issuers. Periodic sale and purchase decisions are made based on this monitoring process. None of the Corporation’s equity securities are classified as trading. Future cash flows from these investments are not provided in the table on page 62 as such investments do not have maturity dates.

Another source of equity market price risk is the investment in FHLB stock, which the Corporation is required to own in order to borrow funds from the FHLB. As of June 30, 2011, the Corporation’s investment in FHLB stock was $69.4 million. FHLBs obtain funding primarily through the issuance of consolidated obligations of the FHLB system. The U.S. government does not guarantee these obligations, and each of the FHLB banks is, generally, jointly and severally liable for repayment of each other’s debt. The FHLB system has experienced financial stress, and some of the regional banks within the FHLB system have suspended or reduced their dividends, or eliminated the ability of members to redeem capital stock. The Corporation’s FHLB stock and its ability to obtain FHLB funds could be adversely impacted if the financial health of the FHLB system worsens.

In addition to its equity portfolio, the Corporation’s investment management and trust services income may be impacted by fluctuations in the equity markets. A portion of this revenue is based on the value of the underlying investment portfolios, many of which include equity investments. If the values of those investment portfolios decrease, whether due to factors influencing U.S. equity markets in general or otherwise, the Corporation’s revenue would be negatively impacted. In addition, the Corporation’s ability to sell its brokerage services in the future will be dependent, in part, upon consumers’ level of confidence in the outlook for rising equity prices.

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Debt Security Market Price Risk

Debt security market price risk is the risk that changes in the values of debt securities could have a material impact on the financial position or results of operations of the Corporation. The Corporation’s debt security investments consist primarily of mortgage-backed securities and collateralized mortgage obligations whose principal payments are guaranteed by U.S. government sponsored agencies, state and municipal securities, U.S. government sponsored agency securities, U.S. government debt securities, auction rate certificates and corporate debt securities.

Municipal Securities

As of June 30, 2011, the Corporation had $355.6 million of municipal securities issued by various municipalities in its investment portfolio. Ongoing uncertainty with respect to the financial viability of municipal insurers places much greater emphasis on the underlying strength of issuers. Increasing pressure on local tax revenues of issuers due to adverse economic conditions could also have an adverse impact on the underlying credit quality of issuers. The Corporation evaluates existing and potential holdings primarily on the underlying credit worthiness of the issuing municipality and then, to a lesser extent, on the credit enhancement corresponding to the individual issuance. As of June 30, 2011, approximately 95% of municipal securities were supported by the general obligation of corresponding municipalities. In addition, approximately 71% of these securities were school district issuances that are supported by the general obligation of the corresponding municipalities.

Auction Rate Certificates

The Corporation’s debt securities include investments in student loan auction rate securities, also known as auction rate certificates (ARCs), with a cost basis of $267.3 million and a fair value of $255.1 million, or 1.6% of total assets, at June 30, 2011.

ARCs are long-term securities structured to allow their sale in periodic auctions, resulting in both the treatment of ARCs as short-term instruments in normal market conditions and fair values that could be derived based on periodic auction prices. However, beginning in 2008, market auctions for these securities began to fail due to an insufficient number of buyers, resulting in an illiquid market. This illiquidity has resulted in recent market prices that represent forced liquidations or distressed sales and do not provide an accurate basis for fair value. Therefore, at June 30, 2011, the fair values of the ARCs were derived using significant unobservable inputs based on an expected cash flow model which produced fair values that were materially different from those that would be expected from settlement of these investments in the illiquid market that presently exists. The expected cash flow model produced fair values which assumed a return to market liquidity sometime within the next three years.

The credit quality of the underlying debt associated with ARCs is also a factor in the determination of their estimated fair value. As of June 30, 2011, approximately $205 million, or 80%, of the ARCs were rated above investment grade, with approximately $156 million, or 61%, AAA rated. Approximately $50 million, or 20%, of ARCs were rated below investment grade by at least one ratings agency or not rated. Of this amount, approximately $29 million, or 59%, of the student loans underlying the ARCs have principal payments which are guaranteed by the Federal government. In total, approximately $225 million, or 89%, of the student loans underlying the ARCs have principal payments which are guaranteed by the Federal government. As of June 30, 2011, all ARCs were current and making scheduled interest payments.

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Corporate Debt Securities

The Corporation holds corporate debt securities in the form of pooled trust preferred securities, single-issuer trust preferred securities and subordinated debt issued by financial institutions, as presented in the following table:

	June 30, 2011
	Amortized cost		Estimated fair value
	(in thousands)
Single-issuer trust preferred securities	$	87,338	$	82,785
Subordinated debt		35,051		37,527
Pooled trust preferred securities		6,636		5,433
Total corporate debt securities issued by financial institutions		129,025		125,745

The fair values for pooled trust preferred securities and certain single-issuer trust preferred securities were based on quotes provided by third-party brokers who determined fair values based predominantly on internal valuation models which were not indicative prices or binding offers.

The Corporation’s investments in single-issuer trust preferred securities had an unrealized loss of $4.6 million at June 30, 2011. The Corporation did not record any other-than-temporary impairment charges for single-issuer trust preferred securities during the three or six months ended June 30, 2011 or 2010, respectively. The Corporation held 13 single-issuer trust preferred securities that were rated below investment grade by at least one ratings agency, with an amortized cost of $40.1 million and an estimated fair value of $39.8 million at June 30, 2011. The majority of the single-issuer trust preferred securities rated below investment grade were rated BB or Baa. Single-issuer trust preferred securities with an amortized cost of $11.8 million and an estimated fair value of $10.3 million at June 30, 2011 were not rated by any ratings agency.

The Corporation holds ten pooled trust preferred securities. As of June 30, 2011, nine of these securities, with an amortized cost of $6.0 million and an estimated fair value of $4.9 million, were rated below investment grade by at least one ratings agency, with ratings ranging from C to Ca. For each of the nine pooled trust preferred securities rated below investment grade, the class of securities held by the Corporation is below the most senior tranche, with the Corporation’s interests being subordinate to other investors in the pool. The Corporation determines the fair value of pooled trust preferred securities based on quotes provided by third-party brokers.

The amortized cost of pooled trust preferred securities is the purchase price of the securities, net of cumulative credit related other-than-temporary impairment charges, determined using an expected cash flows model. The most significant input to the expected cash flows model was the expected payment deferral rate for each pooled trust preferred security. The Corporation evaluates the financial metrics, such as capital ratios and non-performing asset ratios, of the individual financial institution issuers that comprise each pooled trust preferred security to estimate its expected deferral rate. The actual weighted average cumulative defaults and deferrals as a percentage of original collateral were approximately 38% as of June 30, 2011. The discounted cash flow modeling for pooled trust preferred securities held by the Corporation as of June 30, 2011 assumed, on average, an additional 19% expected deferral rate.

During the three and six months ended June 30, 2011, the Corporation recorded $359,000 and $1.4 million of other-than-temporary impairment losses for pooled trust preferred securities based on an expected cash flows model. Additional impairment charges for debt securities may be necessary in the future depending upon the performance of the individual investments held by the Corporation.

See Note C, “Investment Securities” in the Notes to Consolidated Financial Statements for further discussion related to the Corporation’s other-than-temporary impairment evaluations for debt securities and Note K, “Fair Value Measurements” in the Notes to Consolidated Financial Statements for further discussion related to debt securities’ fair values.

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Interest Rate Risk

Interest rate risk creates exposure in two primary areas. First, changes in rates have an impact on the Corporation’s liquidity position and could affect its ability to meet obligations and continue to grow. Second, movements in interest rates can create fluctuations in the Corporation’s net income and changes in the economic value of its equity.

The Corporation employs various management techniques to minimize its exposure to interest rate risk. An Asset/Liability Management Committee (ALCO), consisting of key financial and senior management personnel, meets on a periodic basis. The ALCO is responsible for reviewing the interest rate sensitivity position of the Corporation, approving asset and liability management policies, and overseeing the formulation and implementation of strategies regarding balance sheet positions and earnings.

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The following table provides information about the Corporation’s interest rate sensitive financial instruments. The table presents expected cash flows and weighted average rates for each significant interest rate sensitive financial instrument, by expected maturity period. None of the Corporation’s financial instruments are classified as trading. All dollar amounts are in thousands.

	Expected Maturity Period																					Estimated
	Year 1			Year 2			Year 3			Year 4			Year 5			Beyond			Total			Fair Value
Fixed rate loans (1)	$	1,027,433		$	474,141		$	364,080		$	283,097		$	263,787		$	618,480		$	3,031,018		$	3,105,088
Average rate		4.12	%		6.09	%		6.11	%		6.04	%		5.93	%		5.56	%		5.30	%
Floating rate loans (1) (2)		1,581,286			899,105			856,739			792,513			1,858,789			2,817,384			8,805,816			8,727,713
Average rate		4.52	%		4.79	%		4.67	%		4.71	%		4.29	%		5.27	%		4.77	%
Fixed rate investments (3)		527,357			354,926			238,722			187,117			150,485			691,347			2,149,954			2,222,490
Average rate		4.09	%		4.27	%		4.34	%		4.23	%		4.30	%		3.79	%		4.08	%
Floating rate investments (3)		0			0			267,402			155			4,895			57,721			330,173			311,594
Average rate		—	%		—	%		2.77	%		1.62	%		0.95	%		2.27	%		2.66	%
Other interest-earning assets		172,100			0			0			0			0			0			172,100			172,100
Average rate		2.26	%		—	%		—	%		—	%		—	%		—	%		2.26	%
Total	$	3,308,176		$	1,728,172		$	1,726,943		$	1,262,882		$	2,277,956		$	4,184,932		$	14,489,061		$	14,538,985
Average rate		4.21	%		5.04	%		4.63	%		4.93	%		4.48	%		5.03	%		4.70	%
Fixed rate deposits (4)	$	2,237,286		$	800,076		$	413,274		$	156,385		$	115,999		$	12,965		$	3,735,985		$	3,776,790
Average rate		1.18	%		2.31	%		2.36	%		2.61	%		2.50	%		2.28	%		1.66	%
Floating rate deposits (5)		4,231,013			517,596			433,006			413,915			323,674			162,698			6,081,902			6,081,902
Average rate		0.40	%		0.24	%		0.21	%		0.19	%		0.18	%		0.22	%		0.34	%
Fixed rate borrowings (6)		104,161			5,893			5,940			151,110			496			737,040			1,004,640			913,228
Average rate		4.02	%		2.91	%		5.51	%		4.57	%		4.51	%		4.97	%		4.80	%
Floating rate borrowings (7)		546,858			0			0			0			0			20,620			567,478			551,761
Average rate		0.16	%		—	%		—	%		—	%		—	%		2.62	%		0.25	%
Total	$	7,119,318		$	1,323,565		$	852,220		$	721,410		$	440,169		$	933,323		$	11,390,005		$	11,323,681
Average rate		0.68	%		1.50	%		1.29	%		1.64	%		0.80	%		4.05	%		1.16	%

(1) Amounts are based on contractual payments and maturities, adjusted for expected prepayments. Excludes $15.7 million of overdraft deposit balances.

(2) Line of credit amounts are based on historical cash flow assumptions, with an average life of approximately 5 years.

(3) Amounts are based on contractual maturities; adjusted for expected prepayments on mortgage-backed securities and collateralized mortgage obligations and expected calls on agency and municipal securities.

(4) Amounts are based on contractual maturities of time deposits.

(5) Estimated based on history of deposit flows.

(6) Amounts are based on contractual maturities of debt instruments, adjusted for possible calls. Amounts also include junior subordinated deferrable interest debentures.

(7) Amounts include Federal Funds purchased, short-term promissory notes and securities sold under agreements to repurchase, which mature in less than 90 days, in addition to junior subordinated deferrable interest debentures.

The preceding table and discussion addressed the liquidity implications of interest rate risk and focused on expected cash flows from financial instruments. Expected maturities, however, do not necessarily reflect the net interest impact of interest rate changes. Certain financial instruments, such as adjustable rate loans, have repricing periods that differ from expected cash flows periods.

Included within the $8.8 billion of floating rate loans above are $3.8 billion of loans, or 43.2% of the total, that float with the prime interest rate, $1.3 billion, or 14.8%, of loans that float with other interest rates, primarily LIBOR, and $3.7 billion, or 42.0%, of adjustable rate loans. The $3.7 billion of adjustable rate loans include loans that are fixed rate instruments for a certain period of time, and then convert to floating rates.

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The following table presents the percentage of adjustable rate loans, at June 30, 2011, stratified by the period until their next repricing:

	Percent of Total Adjustable Rate Loans
One year		23.0	%
Two years		23.1
Three years		18.8
Four years		15.6
Five years		13.5
Greater than five years		6.0

The Corporation uses three complementary methods to measure and manage interest rate risk. They are static gap analysis, simulation of earnings, and estimates of economic value of equity. Using these measurements in tandem provides a reasonably comprehensive summary of the magnitude of interest rate risk in the Corporation, level of risk as time evolves, and exposure to changes in interest rates.

As of June 30, 2011, approximately $5.1 billion of loans had interest rate floors, with approximately $3.0 billion priced at their interest rate floor. Of this total, approximately $2.7 billion have repricing dates during the third quarter of 2011. The weighted average interest rate increase that would be necessary for these loans to begin repricing to higher rates was approximately 0.84%.

Static gap provides a measurement of repricing risk in the Corporation’s balance sheet as of a point in time. This measurement is accomplished through stratification of the Corporation’s assets and liabilities into repricing periods. The sum of assets and liabilities in each of these periods are compared for mismatches within that maturity segment. Core deposits having no contractual maturities are placed into repricing periods based upon historical balance performance. Repricing for mortgage loans, mortgage-backed securities and collateralized mortgage obligations includes the effect of expected cash flows. Estimated prepayment effects are applied to these balances based upon industry projections for prepayment speeds. The Corporation’s policy limits the cumulative six-month ratio of rate sensitive assets to rate sensitive liabilities (RSA/RSL) to a range of 0.85 to 1.15. As of June 30, 2011, the cumulative six-month ratio of RSA/RSL was 1.14.

Simulation of net interest income and net income is performed for the next twelve-month period. A variety of interest rate scenarios are used to measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to the results obtained in a flat or unchanged interest rate scenario. Simulation of earnings is used primarily to measure the Corporation’s short-term earnings exposure to rate movements. The Corporation’s policy limits the potential exposure of net interest income to 10% of the base case net interest income for a 100 basis point shock in interest rates, 15% for a 200 basis point shock and 20% for a 300 basis point shock. A “shock’ is an immediate upward or downward movement of interest rates across the yield curve. The shocks do not take into account changes in customer behavior that could result in changes to mix and/or volumes in the balance sheet nor do they account for competitive pricing over the forward 12-month period.

The following table summarizes the expected impact of interest rate shocks on net interest income (due to the current level of interest rates, the 200 and 300 basis point downward shock scenarios are not shown):

Rate Shock	Annual change in net interest income	% Change
+300 bp	+ $ 57.8 million		+10.0	%
+200 bp	+ $ 33.2 million		+5.7	%
+100 bp	+ $10.3 million		+1.8	%
–100 bp (1)	– $ 8.0 million		–1.4	%

(1) Because certain current short-term interest rates are at or below 1.00%, the 100 basis point downward shock assumes that corresponding short-term interest rates approach an implied floor that, in effect, reflects a decrease of less than the full 100 basis points downward shock.

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Economic value of equity estimates the discounted present value of asset cash flows and liability cash flows. Discount rates are based upon market prices for like assets and liabilities. Upward and downward shocks of interest rates are used to determine the comparative effect of such interest rate movements relative to the unchanged environment. This measurement tool is used primarily to evaluate the longer-term repricing risks and options in the Corporation’s balance sheet. A policy limit of 10% of economic equity may be at risk for every 100 basis point shock movement in interest rates. As of June 30, 2011, the Corporation was within policy limits for every 100 basis point shock movement in interest rates.

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Item 4. Controls and Procedures

The Corporation carried out an evaluation, under the supervision and with the participation of the Corporation’s management, including the Corporation’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Corporation’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this quarterly report, the Corporation’s disclosure controls and procedures are effective. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in Corporation reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There have been no changes in the Corporation’s internal control over financial reporting during the fiscal quarter covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Corporation and its subsidiaries are involved in various legal proceedings in the ordinary course of the business of the Corporation. The Corporation periodically evaluates the possible impact of pending litigation matters based on, among other factors, the advice of counsel, available insurance coverage and recorded liabilities and reserves for probable legal liabilities and costs. As of the date of this report, the Corporation believes that any liabilities, individually or in the aggregate, which may result from the final outcomes of pending proceedings are not expected to have a material adverse effect on the financial position, the operating results and/or the liquidity of the Corporation. However, litigation is often unpredictable and the actual results of litigation cannot be determined with certainty and, therefore, the ultimate resolution of any matter and the possible range of liabilities associated with potential outcomes may need to be reevaluated in the future.

Item 1A. Risk Factors

There have been no material changes to the risk factors as previously disclosed in Part I, Item 1A of the Corporation’s Form 10-K for the year ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities and Use of Proceeds

Not applicable.

Item 4. Removed and Reserved

Item 5. Other Information

Not applicable.

Item 6. Exhibits

See Exhibit Index for a list of the exhibits required by Item 601 of Regulation S-K and filed as part of this report.

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FULTON FINANCIAL CORPORATION AND SUBSIDIARIES

SIGNATURES

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:	August 8, 2011	/s/ R. Scott Smith, Jr.
		R. Scott Smith, Jr.
		Chairman and Chief Executive Officer

Date:	August 8, 2011	/s/ Charles J. Nugent
		Charles J. Nugent
		Senior Executive Vice President and
		Chief Financial Officer

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EXHIBIT INDEX

Exhibits Required Pursuant

to Item 601 of Regulation S-K

3.1	Articles of Incorporation, as amended and restated, of Fulton Financial Corporation– Incorporated by reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report on Form 8-K dated June 24, 2011.
3.2	Bylaws of Fulton Financial Corporation as amended – Incorporated by reference to Exhibit 3.1 of the Fulton Financial Corporation Current Report on Form 8-K dated September 18, 2008.
10.1	Agreement between Fulton Financial Corporation and Fiserv Solutions, Inc. dated June 23, 2011* – filed herewith.
10.2	Form of Restricted Stock Agreement between Fulton Financial Corporation and Directors of the Corporation as of July 1, 2011 – filed herewith.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive data file containing the following financial statements formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at June 30, 2011 and December 31, 2010; (ii) the Consolidated Statements of Income for the three and six months ended June 30, 2011 and 2010; (iii) the Consolidated Statements of Shareholders’ Equity and Comprehensive Income for the three and six months ended June 30, 2011 and 2010; (iv) the Consolidated Statements of Cash Flows for the three and six months ended June 30, 2011 and 2010; and, (iv) the Notes to Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this interactive data file shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed “filed” or part of any registration statement or prospectus for purposes of Section 11 or 12 under the Securities Act of 1933, or otherwise subject to liability under those sections.

* Portions of this exhibit have been redacted and are subject to a confidential treatment request filed with the secretary of the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The redacted material was filed separately with the SEC.

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EX-10.1

Exhibit 10.1

[CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT. PORTIONS FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY [CONFIDENTIAL TREATMENT REQUESTED]. MATERIAL OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

MASTER AGREEMENT

MASTER AGREEMENT (“Agreement”) dated as of June 23, 2011 (“Effective Date”) between Fiserv Solutions, Inc., a Wisconsin corporation with offices located at 600 Colonial Center Parkway, Lake Mary, FL 32746 (“Fiserv”), and Fulton Financial Corporation a Pennsylvania corporation with offices located at One Penn Square, Lancaster, PA 17602 (“Client”).

Fiserv and Client hereby agree as follows:

1. Deliverables.

(a) General. Fiserv, itself and through its Affiliates (as defined herein), agrees to provide to Client and, Client agrees to obtain from Fiserv, the services (“Services”) and products (“Products” and, collectively with the Services, “Deliverables”) described in the Exhibits attached to this Agreement (“Exhibits”), subject to the terms, restrictions and obligations set forth in this Agreement and in the applicable Exhibit. References to an “Exhibit” shall include any Schedules (“Schedules”) attached to that Exhibit. The parties may add Deliverables to this Agreement by signing an appropriate new Exhibit or Schedule to this Agreement, as applicable. Each Exhibit will be deemed to incorporate all of the terms of this Agreement. Exhibits and Schedules attached as of the Effective Date are listed below. For purposes of this Agreement, “Affiliate” means an entity that controls, is controlled by, or is under common control with a party, where “control” means the possession, direct or indirect, of the power to cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise.

(i) ASP (Application Service Provider) Services Exhibit

(A) Signature Account Processing Services Schedule

(B) [CONFIDENTIAL TREATMENT REQUESTED] Services Schedule

(C) [CONFIDENTIAL TREATMENT REQUESTED] Services Schedule

(D) Checkfree RXP Bill Delivery and Payment Services Schedule

(E) [CONFIDENTIAL TREATMENT REQUESTED] Service Schedule

(F) Credit Processing Services Schedule

(G) EFT Solution Services Schedule

(H) Lending Solutions Software Schedule

(I) Network and Telecommunications Services Schedule

(J) PEP+ ACH Services Schedule

(K) SMS/ARP Services Schedule

(L) Xroads for Signature Services Schedule

(ii) Software Products Exhibit

(A) Signature Software Schedule

(B) EnAct Software Schedule

(C) Enterprise Content Management Software Schedule

(D) InformEnt Software Schedule

(E) IntelligEnt Software Schedule

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(F) Loan Origination Software Schedule

(G) [CONFIDENTIAL TREATMENT REQUESTED] Solutions Software Schedule

(iii) Professional and Development Services Exhibit

(A) Signature Services Schedule

(B) EnAct Services Schedule

(C) Enterprise Content Management Services Schedule

(D) InformEnt Services Schedule

(E) [CONFIDENTIAL TREATMENT REQUESTED] Services Schedule

(iv) Equipment Exhibit

(A) Enterprise Content Management Equipment

(b) Professional Services. Services: (i) to convert Client’s existing applicable data and/or information to the Deliverables, and/or (ii) to implement the Deliverables (collectively, “Implementation Services”) will be provided by Fiserv to the extent applicable to the Deliverables, for the Fees (as defined below), as set forth in the Schedules to the ASP Exhibit, Software Products Exhibit, or Professional and Development Services Exhibit to this Agreement. Client agrees to provide all reasonably necessary cooperation, information and assistance in connection with any professional services provided under this Agreement, including Implementation Services to facilitate conversion and/or implementation.

(c) Training Services. To the extent applicable to the Deliverables, Fiserv shall provide training, training aids, user manuals, and other documentation for Client’s use as Fiserv finds necessary to enable Client personnel to become familiar with Deliverables, for the Fees, if any, set forth in the Schedules to the ASP Exhibit, Software Products Exhibit, or Professional and Development Services Exhibit to this Agreement. If requested by Client, classroom training in the use and operation of Deliverables will be provided at a training facility mutually agreed upon by Fiserv and Client.

(d) Access to Client Location or Environments. To the extent applicable to the Deliverables, Client is responsible for providing Fiserv remote access to Client’s environments for the provision of Deliverables. While assigned to provide Deliverables at a Client location either via remote access or otherwise visiting Client’s facilities, Fiserv employees will: (i) comply with Client’s reasonable safety and security procedures and other reasonable Client rules applicable to Client personnel at those facilities (ii) comply with all reasonable requests of Client personnel, as applicable, pertaining to personal and professional conduct provided and to the extent such procedures and rules are (i) provided to Fiserv in writing and reasonably in advance of Fiserv personnel’s arrival at or required access to Client’s facility or environments, (ii) all such requirements are reasonable in nature and do not conflict with Fiserv’s policies and practices, and (iii) Client shall reimburse any costs incurred by Fiserv in complying with such Client requirements.

(e) Affiliate Use. When an Affiliate of Client is authorized to use a Deliverable, respectively, or is otherwise a party to an Exhibit or any Schedules to that Exhibit, then for the purposes of those Deliverables and that Exhibit or Schedule, references to “Client” in this Agreement will be deemed to include the applicable Client Affiliate, and Client shall ensure such Client Affiliate agrees to be bound by and comply with the terms of this Agreement.

(f) Authorized Users. References to the “use” of any Deliverable by Client or an authorized Client Affiliate shall also include use by those customers, employees or agents of Client or the Client Affiliate to whom Client is authorized to provide access to the given Deliverable (“Authorized Users”); provided that: (i) Client agrees to execute an agreement with its Authorized Users or otherwise subject such Authorized User to a written obligation or such Authorized User is subject to a professional obligation of confidentiality sufficient to require compliance with the terms of the Agreement relevant to the given Deliverable and otherwise sufficient to enable Client to comply with its representations, warranties and obligations under the Agreement and any relevant Exhibit or Schedule; (ii) Client shall remain responsible for its Authorized Users’ compliance with such terms and obligations; and (iii) Client shall complete all security and profile procedures and set up for its Authorized Users (and prospective Authorized Users) required by Fiserv.

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(g) Notwithstanding the foregoing, Authorized Users may not sublicense, sell, rent, lease, give, transfer, assign, convey, or otherwise dispose of the access to or use of the Deliverables except as expressly provided otherwise in this Agreement. For clarity, this restriction shall not apply to a change in the authorized party identified on the account of Client’s customer.

(h) Regulatory Requirements. Client shall comply with all regulatory requirements as applicable to Client’s receipt of the Deliverables and as required by regulatory authorities having jurisdiction over Client.

(i) Client Insurance. Client shall (i) obtain and maintain at Client’s own expense appropriate casualty and business interruption insurance coverage for loss of records from fire, disaster, or other peril as would reasonably be expected to be insured under a property-related insurance policy; and (ii) obtain and maintain at its own expense any appropriate crime or fidelity bond insurance coverage for loss of or damage to money, securities, and other property sustained by Client, or for which Client holds for others, as would reasonably be expected to be insured under a related insurance policy. Client shall be responsible for: (a) appropriate property insurance covering all Equipment at full replacement value, whether Client-owned or Fiserv-owned, within Client’s premises; and (b) commercial general liability insurance with combined limits of $1,000,000.00 per occurrence per location with $2,000,000.00 general aggregate coverage for bodily injury and property damage.

(j) Fiserv Insurance. Fiserv carries the following types of insurance policies:

(i) Commercial General Liability in an amount not less than $1 million per occurrence for claims arising out of bodily injury and property damage;

(ii) Commercial Crime covering employee dishonesty in an amount not less than $5 million;

(iii) All-risk property coverage including extra expense and business income coverage; and

(iv) Workers Compensation as mandated or allowed by the laws of the state in which the Services are being performed, including $1 million coverage for employer’s liability.

(k) Parties to the Agreement. References to a “party” or the “parties” means Fiserv, Client and their respective Affiliates, if applicable. Any other person or entity is considered a “third party”.

2. Fees for Deliverables.

(a) General. Client agrees to pay Fiserv: (i) estimated fees for Deliverables (including subscription fees) for the following month as described in this Agreement, including as specified in the Exhibits or associated Schedules, (ii) out-of-pocket and other additional charges pursuant to Section 2(c), (iii) License Fees, (iv) Maintenance Fees, (vi) Professional Services Fees, (collectively “Fees”) and (vii) Taxes as defined in Section 2(d). Fees may be increased as set forth in the Exhibits or as described in Section 2(m) below. If no Professional Services Fees are set forth for any Professional and Development Services (“P&D Services”), such P&D Services shall be at Fiserv’s Current Rates. “Current Rates” collectively means Fiserv’s then current hourly or daily rates, as further described in Section 2(i) below, as applicable, plus any materials fees and any Additional Charges as set forth in Section 2(c).

(b) Fiserv shall timely reconcile Fees paid by Client for the Services for the month and the fees and charges actually due Fiserv based on the greater of the monthly minimum fees or Client’s actual use of the Services for such month. Fiserv shall either issue a credit to Client or provide Client with an invoice for any additional fees or other charges owed.

(c) Additional Charges. Client shall pay travel and living expenses and other out-of-pocket expenses reasonably incurred by Fiserv in connection with the Deliverables whether or not set forth in a Schedule. As applicable, such out-of-pocket expenses shall be incurred in accordance with Fiserv’s then-current corporate travel and expense policy, which shall be provided by Fiserv to Client upon request. If an out-of-pocket expense is listed in an Exhibit, such expense may be changed to reflect charges issued by the applicable third party vendor.

(d) Taxes. Client is responsible for the payment of all sales, use, excise, value added, withholdings and other taxes and duties however designated that are levied by any taxing authority relating to the Deliverables, excluding taxes based on Fiserv’s net income (“Taxes”). All Fees or any other charges under any Exhibit are exclusive of Taxes. Client shall reimburse Fiserv for those Taxes that Fiserv is required to remit on behalf of Client.

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(e) Payment Terms. All invoices shall be sent electronically on or before the 15^th day of the current month to the kkeffer@fult.com or to such other address or person as designated by Client from time to time. Invoices are due and payable upon Client’s receipt of such invoice but in any event not later than the 30^th day of the month. Client shall pay Fiserv through the Automated Clearing House (“ACH”) unless otherwise set forth in the Exhibits or otherwise mutually agreed between the parties. If any invoiced amounts remain unpaid 30 days after Client’s receipt of invoice and until such invoice amount is paid in full, Client shall pay a monthly late charge based on the unpaid amounts equal to the lesser of 1.5% or the highest amount allowed by law. Client shall neither make nor assert any right of deduction or set-off from amounts invoiced except by application of Fiserv issued credit against such invoice. Fiserv’s failure to send an invoice shall not relieve Client of its obligation to pay any amounts due and owing.

(f) License Fee Payment Timetable. For each module of Software licensed hereunder, Client shall pay License Fees as follows:

(i) 30% of License Fees upon Agreement execution or Schedule adoption;

(ii) 30% of License Fees upon loading the Software on Client’s hardware, but in any event, not later than 30 days following the date for delivery of the Software to Client by Fiserv as set forth in the Project Plan (as defined in the Professional and Development Services Exhibit) unless such delay is caused by Fiserv;

(iii) 40% of License Fees upon Go Live, but in any event, not later than December 31, 2012. “Go Live” shall mean the date of Client’s first use of the applicable Software or in a production environment or the date Fiserv makes the applicable Service available in a production environment (“Go Live”),

(g) Maintenance Fee Payment Timetable. Maintenance Fees shall be payable annually in advance beginning 90 days following delivery of the applicable Software as identified in the applicable Schedule to the Software Products Exhibit to this Agreement (“Warranty Period”) ; , but in any event not later than Go Live. For Clarity, for any Software that Client previously licensed from Fiserv, Client shall continue to pay the annual maintenance Fee under this Agreement which shall be prorated to December 31, 2011. Thereafter, Client shall pay the annual Maintenance Fee annually in advance under this Agreement. The initial annual Maintenance Fee shall be prorated to December 31, 2011, and thereafter, Client shall pay the annual Maintenance Fee annually in advance for each 12 month period January 1 to December 31.For the avoidance of doubt, Client shall not be obligated to pay the Maintenance Fees for the same Software under this Agreement and under the Master Agreement between Fiserv and Client dated January 1, 2005 (“2005 Agreement”).

(h) Professional Services Fees. Client shall pay Fiserv Fees for each Project as set forth in each Schedule to the Professional and Development Services Exhibit (“Professional Services Fees”). Any estimates of Professional Services Fees and completion dates are referenced solely for the purpose of allowing Client to plan its budgets and schedules based upon information available at the time the Schedule is executed. Daily or hourly rates quoted in a Schedule, if any, will be valid for 3 months from the effective date of such Schedule. Thereafter, they will be subject to change by Fiserv on 30 days’ prior written notice to Client.

(i) The following Fiserv Standard Professional Services Rates, as discounted, shall apply, subject to Annual Increase (as defined below in Section 2(m)), and represent “Current Rates” for the initial term:

Resource Type	Rate per Person	Discount	Discounted Rate per Person
Senior Expertise Required	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
Program Management	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
Project Management / eBanking	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]

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Banking Analyst / Programmer/ Network specialist	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
Client Location (On-Site) Training	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
Fiserv Location Training	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]

(j) Professional Services Fees. Fees for any installation, conversion, or training services to be provided by Fiserv for a Project shall be specified in each Schedule. Unless otherwise set forth in a Schedule or unless during the initial implementation period, Client shall pay Professional Services Fees 50% upon execution of such Schedule and 50% upon Project completion. The “Initial Implementation Period” shall be the period beginning on the day work for conversion from Source One Account Processing Services to the Signature Account Processing Services began and ending on the day Client’s last bank completes conversion from Source One Account Processing Services to Signature Account Processing Services. Initial Implementation Period fees shall be paid as set forth in the Summary of Initial Implementation and Conversion Fees Schedule to the Professional and Development Services Exhibit.

(k) Special Maintenance Fees (as defined in the Software Products Exhibit) shall be paid annually in advance commencing 30 days following delivery of the applicable Modification.

(l) For Modifications (as defined in the Software Products Exhibit), Fiserv reserves the right to charge Client at Current Rates for any necessary retrofitting services when releases of the Software or Fiserv System(s) to which a Development Services Project relates are made generally available.

(m) Adjustments. Fiserv may increase the Fees (for all recurring, on-going and other such future Fees) annually effective each January 1 beginning in the year 2014 upon notice to Client; [CONFIDENTIAL TREATMENT REQUESTED] (“Annual Increase”). Notwithstanding the foregoing, Fiserv reserves the right to increase the Fees upon notice to Client if: (i) Client exceeds currently licensed volume of Software or if Client exceeds or falls below current tier pricing for ASP Services (including number of accounts, named users, workstations, etc.) of a given Deliverable compared to any limits or restrictions applicable to such Deliverable or as otherwise provided to or estimated by Fiserv during the discovery process to the agreed upon fees for the agreed upon tiers; (ii) Client’s use of the Services originally contracted is reduced by Client’s termination of certain services; or (iii) Fiserv implements any significant enhancements, including functionality changes that improve to a significant degree the function or performance of the Service, to its systems, networks or any Deliverables to comply with changes in law, government regulation, or industry practices or pursuant to Client’s request. Fiserv reserves the right to increase the Fees charged for third party products or services upon notice to Client if Fiserv’s third party providers increase their fees or charges by the amount of such increase from the third party. For clarity, Maintenance Fees in the Software Products Exhibit may also be subject to increase following delivery of new Software releases, Enhancements, or any other changes or additions to the Software provided by Fiserv as a result of Client-requested Software Professional Services. Notwithstanding this Section 2(m), Fiserv may increase its fees ([CONFIDENTIAL TREATMENT REQUESTED] set forth in the applicable Schedule(s) of this Agreement as increased by the Annual Increase) if Fiserv implements major system enhancements to comply with changes in law, government regulation, or industry practices, provided such increase is applied generally to Fiserv’s clients receiving similar services.

(n) In the event that Fiserv discontinues a product or service or outsources a product or service to a third party, the following provisions shall apply:

(i) If the product or service is included in the monthly minimum fee, [CONFIDENTIAL TREATMENT REQUESTED];

(ii) If the product or service is not part of the monthly minimum fee and Client determines there is additional value, Fiserv and Client will mutually agree upon a cost increase within the range of [CONFIDENTIAL TREATMENT REQUESTED].

(iii) If the product is a part of Software then Fiserv will provide a credit in the amount of the unamortized portion of the Software license fee paid by Client taken on a straight-line basis over a [CONFIDENTIAL TREATMENT REQUESTED] period for the Software being discontinued to be applied toward the license of the replacement Software.

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(o) Tiering. For purposes of any tiered fees set forth in a Schedule, the fees set forth shall apply only to the products or services in the respective tier, not to all products or services (e.g. if a service has pricing of $1.00 per transaction for 1-50 transactions and $2.00 per transaction for 51-100 transactions, the fee paid for 80 transactions would be $110.00, calculated as 50 x $1.00 + 30 x $2.00).

(p) Holdover. Upon any termination or expiration of the Agreement or an Exhibit, Services provided after the applicable termination date, expiration date, or final processing date specified by Client (“Holdover”) will be provided subject to Fiserv’s capacity and will be invoiced at then current fees under the applicable Schedule plus a holdover premium of [CONFIDENTIAL TREATMENT REQUESTED], unless such Holdover is due to Fiserv’s action or inaction.

(q) Deconversion Charges. Client agrees to pay Fiserv’s then current deconversion charges (see Appendix 1 to this Agreement) in connection with Client’s deconversion from the Fiserv System.

[CONFIDENTIAL TREATMENT REQUESTED]

3. Confidentiality and Ownership. The provisions of this Section 3 survive any termination or expiration of this Agreement.

(a) Definitions.

(i) “Client Information” means the following types of information of Client and its Affiliates obtained or accessed by Fiserv from or on behalf of Client or its Affiliates in connection with this Agreement or any discussions between the parties regarding new services or products to be added to this Agreement: (A) trade secrets and proprietary information; (B) customer lists, business plans, information security plans, business continuity plans, and proprietary software programs; (C) “non-public personal information” as defined in Title V of the Gramm-Leach-Bliley Act or the regulations issued thereunder (“GLB”) about Client’s customers and/or employees or any personally identifiable information, defined as information that can be identified to a particular person without unreasonable effort, such as the names and social security numbers of Client’s individual customers and/or employees, and Client customer account related information(“Client PII”); and (D) any other information received from or on behalf of Client or its Affiliates that Fiserv could reasonably be expected to know is confidential.

(ii) “Fiserv Information” means the following types of information of Fiserv and its Affiliates obtained or accessed by Client from or on behalf of Fiserv or its Affiliates in connection with this Agreement or any discussions between the parties regarding new services or products to be added to this Agreement: (A) trade secrets and proprietary information (including that of any Fiserv client, supplier, or licensor); (B) client lists, information security plans, business continuity plans, all information and documentation regarding the Deliverables, all software Products (including software modifications and documentation, databases, training aids, and all data, code, techniques, algorithms, methods, logic, architecture, and designs embodied or incorporated therein), and the terms and conditions of this Agreement; (C) any personally identifiable information, defined as information that can identified to a particular person without unreasonable effort, such as the names and social security numbers of Fiserv employees; and (D) any other information and data received from or on behalf of Fiserv or its Affiliates that Client could reasonably be expected to know is confidential.

(iii) “Information” means Client Information and/or Fiserv Information, as applicable. No obligation of confidentiality applies to any Information that: (A) the receiving entity (“Recipient”) develops independently without reference to Information of the disclosing entity (“Discloser”), or rightfully receives or possesses without obligation of confidentiality from a third party; or (B) is or becomes publicly available without Recipient’s breach of this Agreement.

(b) Obligations. Recipient agrees to hold as confidential all Information it receives from the Discloser. All Information shall remain the property of Discloser or its suppliers and licensors. Recipient will use the same care and discretion to avoid disclosure of Information as it uses with its own similar information that it does not wish disclosed,

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but in no event less than a reasonable standard of care and no less than is required by law. Recipient may only use Information for the lawful purposes contemplated by this Agreement, including in the case of Fiserv use of Client Information for fulfilling its obligations under this Agreement, performing, improving and enhancing the Deliverables, and developing data analytics models to produce analytics-based offerings. Client agrees that prior to providing Fiserv access to any Client PII, Client shall ensure that any necessary consent has been obtained that is required by law or regulation for Fiserv to access the information and to use it pursuant to the terms set forth in this Agreement. Fiserv specifically agrees not to use or disclose any Client PII in any manner prohibited by GLB as applicable to Fiserv. Notwithstanding the foregoing, (i) either party as Recipient may disclose Information to: (A) its officers, directors, and employees and employees of permitted subcontractors and Affiliates who have a need to know; (B) its attorneys and accountants as necessary in the ordinary course of its business; and (C) any other party with Discloser’s prior written consent. Before disclosure to any of the above parties, Recipient will have a written agreement with (or in the case of clause (B) a professional obligation of confidentiality from) such party sufficient to require that party to treat Information in accordance with the requirements of this Agreement, and Recipient will remain responsible for any breach of this Section 3 by any of the above parties; and (ii) Fiserv as Recipient may also disclose Client Information to third party vendors designated by Client. Recipient may disclose Information to the extent required by law or legal process, provided that: (A) Recipient gives Discloser prompt notice, if legally permissible, so that Discloser may seek a protective order; (B) Recipient reasonably cooperates with Discloser (at Discloser’s expense) in seeking such protective order; and (C) all Information shall remain subject to the terms of this Agreement in the event of such disclosure. Recipient will promptly provide Discloser with notice of any actual or threatened breach of the terms of this Section 3 or any other unauthorized disclosure of Discloser’s Information and any reasonably requested assistance. At Recipient’s option, Information will be returned to Discloser or destroyed (except as may be contained in back-up files created in the ordinary course of business that are recycled in the ordinary course of business over an approximate 30- to 90-day period or such longer period as required by applicable law or Client’s records management program) at the termination or expiration of this Agreement or the applicable Exhibit and, upon Discloser’s request, Recipient will certify to Discloser in writing that it has complied with the requirements of this sentence. Recipient acknowledges that any breach of this Section 3 may cause irreparable harm to Discloser for which monetary damages alone may be insufficient, and Recipient therefore acknowledges that Discloser shall have the right to seek injunctive or other equitable relief against such breach or threatened breach, in addition to all other remedies available to it at law or otherwise.

(c) Ownership. With the exception of Client Information, all information, reports, studies, object and source code (including without limitation the Products and all modifications, enhancements, additions, upgrades, or other works based thereon or related thereto created through P&D Services or otherwise), flow charts, diagrams, specifications, and other tangible or intangible material of any nature whatsoever produced by Fiserv or jointly with Client or by any of Fiserv’s or Client’s employees or agents, separately or together, through or as a result of or related to any of the Deliverables provided hereunder or development of any data analytics models hereunder, and all patents, copyrights, and other proprietary rights related to each of the foregoing, shall be the sole and exclusive property of Fiserv or its Affiliates. Client hereby irrevocably assigns and transfers to Fiserv all rights, title, and interest in any such works referenced in the foregoing sentence, including without limitation copyrights, patent rights, trade secrets, industrial property rights, and moral rights, and shall execute all documents reasonably requested by Fiserv to perfect such rights. Client shall be entitled to use such work product in accordance with the applicable terms and conditions of this Agreement.

(d) Restrictions. Without limiting any other obligation set forth in this Section 3, Client shall not use, transfer, distribute, interface, integrate, or dispose of any information or content contained in Deliverables in any manner that competes with the business of Fiserv. Except as expressly authorized in this Agreement or any Exhibit, Client shall not: (i) use or access the Deliverables to provide services to third parties; or (ii) disclose, reproduce, republish or offer any part of the Deliverables (or compilations based on any part of the Deliverables) for sale or distribution in any form, over or through any medium.

(e) Residuals. Nothing contained in the Agreement shall restrict either party from the use in its business of any ideas, concepts, know-how, or techniques contained in Information accessed by such party in connection with the Services that are related to its business activities and retained in the unaided memory of such party’s employees.

(f) Confidentiality of this Agreement. Fiserv and Client agree to keep confidential the prices, terms and conditions of this Agreement, except: (i) for valid business needs of either party where there is specific written permission from the other party; and (ii) as hereafter provided:

(i) Disclosure Requirements. Fiserv acknowledges that Client is required to comply with applicable law, including, without limitation, the regulations of the Securities and Exchange Commission (the “SEC”).

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Fiserv agrees that, if Client determines, after consulting outside securities legal counsel, that it is required to disclose the entry into the Agreement, the Agreement or its terms to comply with applicable law or regulation, then disclosure of the entry into the Agreement, the Agreement or its terms to the extent necessary to comply with applicable law (“Required Disclosure”) shall not constitute a breach or default of this Agreement on the part of Client, provided Client complies with the provisions of this Section 3(f).

(ii) Client Notice to Fiserv of Planned Disclosure. Client agrees to provide Fiserv with prior written notice (“Disclosure Notice”) of any planned Required Disclosure. Client shall identify in such Disclosure Notice: (1) the substance of such Required Disclosure; and (2) either the date on which Client intends to make such Required Disclosure or the event or occurrence which Client believes will trigger its obligation to make such Required Disclosure. In all cases, the Disclosure Notice shall be provided by Client as far in advance as is reasonably practicable to allow Client, if requested by Fiserv, to seek confidential treatment of the information that is proposed to be disclosed.

(iii) Fiserv Requests for Confidential Treatment. If Fiserv desires Client to file a confidential treatment request (a “CTR”) with respect to any proposed Required Disclosure, Fiserv shall, within two business days of receiving the Disclosure Notice, confirm such fact to Client in writing. In addition, within five business days after receiving the Disclosure Notice, Fiserv will, with respect to each portion of such Required Disclosure for which confidential treatment is to be requested by Client, identify to Client:

(A) the specific portions of the Required Disclosure as to which Fiserv desires confidential treatment (the “Fiserv Designated Material”);

(B) a specific statement of the grounds upon which Fiserv asserts that the Fiserv Designated Material is subject to confidential treatment, which grounds shall be consistent with those permitted or recognized under Rule 406 of the Securities Act of 1933 and Rule 24b-2 of the Securities Exchange Act of 1934;

(C) the duration for which confidential treatment shall be requested with respect to the Fiserv Designated Material; and

(D) in the case of any filing of the Agreement, a copy of the Agreement with any Fiserv Designated Material omitted, noting in each case, by means of an asterisk or other mark, the location in the Agreement where any provision has been redacted or omitted.

(iv) Client Submission of Request for Confidential Treatment. If requested by Fiserv in the manner set forth in this subsection, Client agrees to file a CTR with respect to the Fiserv Designated Material. Client agrees to provide Fiserv with a copy of the CTR at least five business days prior to the relevant filing, and to consider in good faith any comments which Fiserv shall have to such application prior to filing it with the SEC. In addition, Client agrees to employ its best efforts to provide Fiserv with a copy of the edgarized exhibit which it proposes to file at least one business day prior to filing the same with the SEC. Fiserv acknowledges that any regulatory decisions made regarding the CTR are beyond the reasonable control of Client.

(g) Survival. The provisions of this Section 3 shall survive any termination of expiration of this Agreement (or any part thereof).

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4. Information Security.

(a) General. Fiserv has implemented and shall maintain an information security program that is designed to meet the following objectives: (i) protect the security and confidentiality of customer information (as defined in GLB); (ii) protect against any reasonably foreseeable threats or hazards to the security or integrity of such information; (iii) protect against unauthorized access to or use of such information that could result in substantial harm or inconvenience to any customer; and (iv) ensure the proper disposal of “consumer information” (information obtained from “consumer reports” as defined in the Fair Credit Reporting Act). Fiserv agrees to use security safeguards for all personal information pertaining to Massachusetts residents in accordance with Massachusetts Regulation 201 CMR 17.00. Fiserv shall also take appropriate actions to address incidents of unauthorized access to Client’s “sensitive customer information” (as defined in GLB), including notification to Client as soon as possible of any such incident. As required by PCI-SSC or the applicable regulatory agency having jurisdiction over Client, Fiserv may disclose information regarding any such incident involving cardholder data to PCI-SSC and such agency. Fiserv also reserves the right to charge Client a fee derived from Client’s share of direct Fiserv costs of maintaining regulatory compliance and/or meeting relevant third party standards (such as the PCI-SSC).

(b) Fiserv Plan. Within 30 days of Client’s written request, Fiserv shall provide to Client a summary of Fiserv’s written information security plan for the applicable Services received by Client, and thereafter upon Client’s request will provide updates on the status of such information security plan.

(c) Data Encryption. As applicable to the Deliverables received by Client, Client and Fiserv agree to comply with Fiserv’s then-current data encryption policies and controls regarding transmission to and from Fiserv of tapes, images, and records maintained and produced by Fiserv for Client in connection with the Deliverables (“Client Files”), or other data in connection with the Deliverables (collectively, “Data”). If Client requests or requires Fiserv to send, transmit, or otherwise deliver Data to Client or any third party in a non-compliant format or manner, or Client (or third party on Client’s behalf) sends, transmits or otherwise delivers Data to Fiserv in a non-compliant format or manner, then, notwithstanding any other provision of this Agreement: (i) Client understands and accepts all risk of transmitting Data in an unencrypted or otherwise noncompliant format; and (ii) Client releases, discharges, and shall indemnify and hold harmless Fiserv and its employees, officers, directors, agents, and Affiliates from any and all liability, damage, or other loss under this Agreement or otherwise suffered by or through Client or suffered by any of the indemnified entities arising out of the transmission, destruction, or loss of such Data, including without limitation any information security or privacy breach related to such Data except for willful misconduct or gross negligence by Fiserv.

5. Hiring and Employment.

(a) Background Checks. Neither party shall knowingly permit any of its employees to have access to the premises, records or data of the other party when such employee: (i) uses drugs illegally; or (ii) has been convicted of a crime in connection with a dishonest act or a breach of trust, as set forth in Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. 1829(a). Consistent with Fiserv’s employment practices, newly hired Fiserv employees: (i) as from 1996, are required to pass a pre-employment criminal background check; and (ii) as from 1993, are required to pass a pre-employment drug screening, as permitted by law. Upon Client’s reasonable request and at its expense, Fiserv agrees to perform additional reasonable background checks on those of Fiserv’s employees who will have access to Client facilities or Client’s networks and computer systems located at Client facilities. The results of all such background checks shall be retained solely by Fiserv.

(b) Equal Employment. Each party agrees that it shall not discriminate against any employee or applicant for employment because of race, creed, color, age, sex, national origin, marital status, liability for service in the armed forces, disability due to veteran status, status as veteran of the Vietnam era, handicap or any other legally protected status, and each party shall comply with all applicable requirements of the Equal Opportunity Clause set forth in Executive Order 11246, as amended, and its implementing instructions, as well as the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974.

(c) Recruitment of Employees. Neither party shall, without the other party’s prior written consent, directly or indirectly, solicit for employment or hire any Restricted Employee while such person is employed by the other party and for the 6-month period starting on the earlier of: (i) termination of such Restricted Employee’s employment; or (ii) termination or expiration of the Agreement. “Restricted Employee” means any former or current employee of either party or its Affiliates of whom the other party became aware or came into contact during Fiserv’s performance of its obligations under this Agreement. This restriction shall not apply to persons replying to the internet or other such general advertisements not targeted at the employees of the other party.

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6. Warranties.

(a) By Fiserv. Fiserv warrants that: (i) no contractual obligations exist that would prevent Fiserv from entering into this Agreement; (ii) it has the requisite authority to execute, deliver, and perform its obligations under this Agreement; and (iii) it will comply with all regulatory requirements applicable to Fiserv as a general supplier of software and technology services and its operations relating thereto used in the performance of its obligations under this Agreement; provided that, for the avoidance of doubt

(i) Fiserv warrants that the Fiserv personnel performing the Services provided under the ASP Services Exhibit, the Maintenance Services provided under the Software Products Exhibit, and the Professional and Development Services provided under the Professional and Development Services Exhibit shall exercise due care. Client shall notify Fiserv in writing of any alleged warranty defect within 30 days of the date the defective Services were performed, and Fiserv shall correct such Services at no additional charge to Client.

(ii) Fiserv warrants that, during the Warranty Period, the Software will perform in all material respects without the occurrence of a “Non-conformity” (as defined in the Software Products Exhibit”) when operated on the Computer System and in compliance with the Documentation, the Software Products Exhibit, and this Agreement. Fiserv will provide replacements or corrections to the Software that does not so perform where such failure is material in terms of Client’s ability to accurately process transactions in the normal course of business, provided Fiserv is notified in writing of such failure during the Warranty Period. This warranty shall not apply if the Non-conformity results from: (i) use of the Software in combination with any materials or software not provided or expressly approved by Fiserv; (ii) changes to the Software made by Client or any Third Party; or (iii) by use of the Software other than in accordance with the Documentation, the Software Products Exhibit or this Agreement, including without limitation Use in violation of Section [3] of the Software Products Exhibit. Client acknowledges that all Software is designed to operate on the applicable Computer System and that the warranties given by Fiserv are conditional upon the procurement and maintenance by Client of the Computer System in accordance with the then current specified configuration.

(iii) If the Software has been delivered by Fiserv on physical media, Fiserv warrants the media to be free from material physical defects and the Software to include up-to-date security protections designed to prevent any virus or similar malicious code for a period of 90 days after delivery by Fiserv. Fiserv will replace the copy provided on defective media or deliver such Software via an alternate method selected by Fiserv, provided Fiserv is notified in writing of such defective media within such 90-day period.

(iv) Fiserv warrants that Client will acquire good and clear title to all Equipment free and clear of all liens and encumbrances. Fiserv assigns to Client all warranties Supplier has granted or hereafter grants to Fiserv with respect to Equipment as set forth in the Equipment Schedules. Client agrees to all of the terms and conditions applicable to those warranties and acknowledges that: (a) neither Supplier nor Fiserv warrants that use of Equipment will be uninterrupted or error free; and (b) Supplier’s warranties, and the assignment of such warranties by Fiserv to Client, shall not impose any liability on Fiserv due to the Installation Services or any other services or assistance provided to Client by Fiserv with respect thereto.

(v) NOTWITHSTANDING THE FOREGOING, UNLESS EXPRESSLY ASSUMED BY FISERV HEREIN OR IN THE EXHIBITS OR SCHEDULES HERETO, CLIENT ASSUMES ANY AND ALL RISK, INCLUDING WITHOUT LIMITATION ALL FINANCIAL RISK, ON ITS BEHALF AND ON BEHALF OF ITS CUSTOMERS FOR ANY ISSUES RELATING TO THE FUNDING OF A CUSTOMER’S ACCOUNT, INCLUDING WITHOUT LIMITATION INSUFFICIENT FUNDS IN ANY SUCH ACCOUNT BUT EXCLUDING ANY RISK ARISING FROM FISERV’S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.

(vi) NOTWITHSTANDING THE FOREGOING OR ANY OTHER PROVISIONS OF THE AGREEMENT, CLIENT ACKNOWLEDGES AND AGREES THAT ACCESS TO CERTAIN ASP SERVICES SHALL BE ACROSS PUBLIC AND PRIVATE LINES OUTSIDE OF FISERV’S CONTROL. SUCH ASP SERVICES MAY BE SUBJECT TO DELAYS OR UNAVAILABILITY DUE TO CONGESTION, OVERLOAD OR DOWNTIME ON PUBLIC CIRCUITS SUPPLIED BY THIRD PARTIES, AND FISERV MAKES NO REPRESENTATION OR WARRANTY ABOUT THE AVAILABILITY OF SUCH CIRCUITS. FISERV SHALL HAVE NO LIABILITY FOR ANY FAILURES, ACTS, OR OMISSIONS OF ANY SUCH THIRD PARTIES, INCLUDING WITHOUT LIMITATION ANY SUCH DELAYS OR UNAVAILABILITY OR ANY UNAUTHORIZED ACCESS TO, ALTERATION, THEFT OR DESTRUCTION OF CLIENT INFORMATION

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(vii) NOTWITHSTANDING THE FOREGOING AND IN ADDITION TO ANY OTHER DISCLAIMERS SET FORTH IN THE AGREEMENT, FISERV DOES NOT AND CANNOT MAKE ANY GUARANTEE OR REPRESENTATION THAT ANY FRAUD DETECTION-RELATED ASP SERVICES WILL IDENTIFY ALL OR EVERY POTENTIALLY FRAUDULENT TRANSACTION OR WILL NOT FALSELY IDENTIFY A TRANSACTION AS BEING POTENTIALLY FRAUDULENT. FISERV DISCLAIMS ANY AND ALL LIABILITY TO CLIENT AND ITS CUSTOMERS OR ANY OTHER THIRD PARTIES IN CONNECTION WITH ANY SUCH INCIDENTS, AND CLIENT EXPRESSLY ACKNOWLEDGES AND ACCEPTS SUCH RISKS ON BEHALF OF ITSELF AND ITS CUSTOMERS. Fiserv will only be expected to make reasonable efforts based on industry standards to identify potential fraud.

(viii) FISERV DOES NOT WARRANT THAT ALL NON-CONFORMITIES CAN BE CORRECTED. IN NO EVENT SHALL FISERV BE LIABLE FOR LOSS OF OR DAMAGE TO CLIENT’S DATA RESULTING FROM CLIENT’S USE OF THE SOFTWARE. Client acknowledges that it is responsible for the results obtained from use of the Software, including without limitation the completeness, accuracy and content of such results. Client acknowledges further that it is responsible for independent verification and testing of any such results prior to using them in its business. Notwithstanding any other provision of the Agreement, the corrective actions provided by Fiserv as set forth in this Section 6 shall be Fiserv’s entire liability and Client’s sole and exclusive remedy for Fiserv’s breach of any of the foregoing warranties.

(b) By Client. Client represents and warrants that: (i) no contractual obligations exist that would prevent Client from entering into this Agreement; (ii) it has the requisite authority to execute, deliver, and perform its obligations under this Agreement; and (iii) it and its Authorized Users will comply with the relevant terms of this Agreement as well as all laws, rules, regulatory requirements and industry standards applicable to the receipt and use of Deliverables, including without limitation providing any required notice, privacy policies and other such information to its Authorized Users using a given Deliverable.

(c) THE WARRANTIES STATED ABOVE AND IN THE EXHIBITS, IF ANY, ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES MADE BY THE PARTIES. FISERV DOES NOT REPRESENT THAT THE DELIVERABLES MEET CLIENT’S REQUIREMENTS OR THAT THE OPERATION OF THE DELIVERABLES WILL BE UNINTERRUPTED OR ERROR-FREE. CLIENT ACKNOWLEDGES THAT IT HAS INDEPENDENTLY EVALUATED THE DELIVERABLES AND THEIR APPLICATION TO CLIENT’S NEEDS. FISERV DISCLAIMS, AND CLIENT HEREBY EXPRESSLY WAIVES, ALL OTHER REPRESENTATIONS, CONDITIONS, OR WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING OR USAGE OR TRADE. NOTWITHSTANDING THE FOREGOING, UNLESS EXPRESSLY SET FORTH HEREIN, FISERV MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, ON BEHALF OF ANY THIRD PARTY PROVIDER. FURTHERMORE, CLIENT MAY NOT MAKE ANY WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, ON BEHALF OF FISERV OR ANY OF ITS THIRD PARTY PROVIDERS TO ANY OF CLIENT’S AFFILIATE, AUTHORIZED USERS OR ANY OTHER THIRD PARTY WITHOUT FISERV’S PRIOR WRITTEN CONSENT.

(d) The terms of this Section 6 shall survive termination of the Agreement or any parts thereof

7. Limitation of Liability. IN NO EVENT SHALL FISERV BE LIABLE FOR LOSS OF GOODWILL, LOST PROFITS, LOST REVENUE OR OPPORTUNITY, OR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY, OR TORT DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, REGARDLESS OF WHETHER SUCH CLAIM ARISES IN TORT, CONTRACT, OR OTHERWISE. EXCEPT FOR CLAIMS RELATED TO PROPRIETARY RIGHTS OR PAYMENT OBLIGATIONS, NEITHER PARTY MAY ASSERT ANY CLAIM AGAINST THE OTHER RELATED TO THIS AGREEMENT MORE THAN 2 YEARS AFTER SUCH CLAIM ACCRUED. FISERV’S AGGREGATE LIABILITY TO CLIENT AND ANY THIRD PARTY FOR ANY AND ALL CLAIMS OR OBLIGATIONS RELATING TO THIS AGREEMENT SHALL BE LIMITED TO THE TOTAL FEES PAID BY CLIENT TO FISERV UNDER THE SCHEDULE RESULTING IN SUCH LIABILITY IN THE [CONFIDENTIAL TREATMENT REQUESTED] PERIOD PRECEDING THE DATE THE CLAIM ACCRUED. [CONFIDENTIAL TREATMENT REQUESTED]

Notwithstanding the foregoing, Fiserv’s aggregate liability for a default relating to Third Party Software or Equipment shall be limited to the amount paid by Client to Fiserv for the applicable Third Party Software or Equipment.

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8. Term and Termination.

(a) Term. This Agreement and the Exhibits hereto shall be effective on the Effective Date and the Schedules to the Exhibits shall become effective on the following dates. Once in effect, this Agreement, including its Exhibits and Schedules shall remain in effect until the later of [CONFIDENTIAL TREATMENT REQUESTED], unless otherwise terminated as provided herein. Unless written notice of non-renewal is provided by either party at least 365 days prior to expiration of the initial term or any renewal term, the Services shall automatically renew for additional term(s) [CONFIDENTIAL TREATMENT REQUESTED].

(i) Signature Account Processing Services Schedule to the ASP Services Exhibit to this Agreement shall be effective upon conversion of Client’s last bank Affiliate identified in Section 11(q) of this Agreement from the Source One Account Processing Service to the Signature Account Processing Service (“Initial Conversion Completion”).

(ii) All other Schedules to the Exhibits of this Agreement shall be effective upon the Effective Date.

(b) The term for Deliverables may be set forth in the applicable Exhibit or Schedule. An Exhibit or Schedule that does not state a term will be effective from its last date of execution until terminated in accordance with this Agreement or the Exhibit.

(c) Termination.

(i) Either party may, upon written notice to the other, terminate: (A) any Schedule if the other party materially breaches its obligations under that Schedule or under this Agreement with respect to that Schedule; or (B) this Agreement if the other party materially breaches its obligations with respect to the non-breaching party’s Information or other intellectual property; and the breaching party fails to cure such material breach within 90 days as to a breach under clause (A) and 10 days as to a breach under clause (B) following its receipt of written notice stating, with particularity and in reasonable detail, the nature of the claimed breach.

(ii) If any invoice remains unpaid by Client 30 days after due, Fiserv may, upon 15 days prior written notice to Client’s President and Client’s Chief Information Officer, terminate: (A) the Schedule and/or Client’s access to and use of Deliverables to which the payment failure relates; or (B) this Agreement if the unpaid amounts constitute a material portion of annual charges due under this Agreement unless the parties otherwise mutually agree to alternative payment arrangements. Any invoice submitted by Fiserv shall be deemed correct unless Client provides written notice to Fiserv within 15 days of the invoice date specifying the nature of any disagreement.

(iii) If the continued provision of any Deliverable (or any portion thereof) becomes impossible, impractical or technologically infeasible due to a change in applicable federal, state or local laws or regulations or any judicial action or order, Fiserv reserves the right to cease providing the affected Deliverable within, or pertaining to persons residing within, the affected jurisdiction(s). Fiserv also reserves the right to cease providing any Deliverable(s) and terminate the relevant portions of the Agreement relating thereto (including but not limited to such associated fees) if Fiserv’s relationship with any third party provider necessary to provide such Deliverable(s) terminates.

(d) Consequence of Termination

(i) Convenience; Early Termination. If Client terminates the Agreement or reduces (other than through normal attrition) or terminates Services (as provided under the Exhibits and the Schedule thereto) for any reason other than pursuant to Section 8(c)(i) of this Agreement, Client shall pay a termination fee based on the remaining unused term of the Services. Such fee shall be determined by multiplying the average of the monthly invoices for each Service received by Client during the [CONFIDENTIAL TREATMENT REQUESTED] (or if no monthly invoice has been received, the estimated monthly billing for each Service to be received hereunder) [CONFIDENTIAL TREATMENT REQUESTED] the remaining months of the term, plus any unamortized conversion fees or third party costs existing on Fiserv’s books on the date of termination which amount shall be disclosed to Client upon request.

(ii) Defaults. If Client:

(A) fails to cure its material breach or fails to pay amounts due, each as set forth in the Agreement;

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(B) deconverts any data or information from the Fiserv System either without Fiserv’s prior written consent or in violation of the Agreement; or

(C) commits an act of bankruptcy or becomes the subject of any proceeding under the Bankruptcy Code or becomes insolvent or if any substantial part of Client’s property becomes subject to any levy, seizure, assignment, application, or sale for or by any creditor or governmental agency,

then Fiserv may, upon written notice, terminate the Agreement and be entitled to recover from Client as liquidated damages an amount equal to the present value [CONFIDENTIAL TREATMENT REQUESTED] for the remaining unused term of the Agreement or the applicable Exhibit. For purposes of the preceding sentence, present value shall be computed using the “prime” rate (as published in The Wall Street Journal) in effect at the date of termination and [CONFIDENTIAL TREATMENT REQUESTED].

(iii) License. The termination of this Agreement or the Software Products Exhibit or any individual Schedule thereto shall automatically, and without further action by Fiserv, terminate and extinguish the license(s) granted under the applicable Schedule and Fiserv’s obligation to provide the Maintenance Services with respect to such Software. Unless Client destroys all copies of the Software and provides written certification to Fiserv of said destruction within 10 days of receipt of written notice from Fiserv following termination of the applicable Schedule, Fiserv shall have the right to take immediate possession of the Software and all copies thereof wherever located without further notice or demand. In addition, upon termination for any reason other than Fiserv’s uncured material default pursuant to Section 8(b)(i) of the Agreement, all remaining Maintenance Fees through the end of the then current term of Maintenance Services shall be accelerated, and Client shall pay all such accelerated fees to Fiserv pursuant to the payment terms set forth in the Agreement.

(e) Liquidated Damages. Client understands and agrees that Fiserv losses incurred as a result of early termination of the Agreement would be difficult or impossible to calculate as of the effective date of termination since they will vary based on, among other things, the number of clients using the Fiserv System on the date the Agreement terminates. Accordingly, the amounts set forth in Sections 8(d)(i) and (ii) above represent Client’s agreement to pay and Fiserv’s agreement to accept as liquidated damages (and not as a penalty) such amount for any such termination.

(f) Return of Client Files. Upon expiration or termination of the Agreement or any Schedule to this Exhibit, Fiserv shall furnish to Client such copies of Client Files as Client may request in a Fiserv standard format, and shall provide such information and assistance as is reasonable and customary to enable Client to deconvert from the Fiserv System; provided, however, that Client authorizes Fiserv to retain Client Files until: (i) Fiserv is paid in full for all amounts due for all Services provided through the date such Client Files are returned to Client; (ii) Fiserv is paid its then standard rates for the services necessary to return such Client Files; (iii) if the Agreement or applicable Schedule is being terminated, Fiserv is paid any applicable termination fee pursuant to Section 8(d)(i) or Section 8(d)(ii) above; and (iv) Client has returned or destroyed all Fiserv Information in accordance with the Confidentiality Provisions of the Agreement. Unless directed by Client in writing to the contrary, Fiserv shall be permitted to destroy Client Files any time after 30 days from the final use of Client Files for processing. Upon Client request following destruction of Client Files, Fiserv shall provide to Client a certification of such destruction within a reasonable time of such request.

(g) Miscellaneous. Client is responsible for the deinstallation and return shipping of any Fiserv-owned equipment located on Client’s premises

(h) Remedies. Remedies contained in this Section 8 are cumulative and are in addition to the other rights and remedies available to Fiserv under this Agreement, by law or otherwise.

9. Dispute Resolution.

(a) Informal. Before initiating legal action against the other party relating to a dispute herein, the parties agree to work in good faith to resolve disputes and claims arising out of this Agreement. To this end, either party may request that each party designate an officer or other management employee with authority to bind such party to meet to resolve the dispute or claim. If the dispute is not resolved within 30 days of the commencement of informal efforts under this paragraph, either party may pursue formal legal action. This paragraph will not apply if expiration of the applicable time for bringing an action is imminent and will not prohibit a party from pursuing injunctive or other equitable relief to which it may be entitled.

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(b) Except with respect to disputes arising from a misappropriation or misuse of either party’s proprietary rights, any dispute or controversy arising out of this Agreement, or its interpretation, shall be submitted to and resolved exclusively by arbitration under the rules then prevailing of the American Arbitration Association, upon written notice of demand for arbitration by the party seeking arbitration, setting forth the specifics of the matter in controversy or the claim being made. The arbitration shall be heard before an arbitrator mutually agreeable to the parties; provided, that if the parties cannot agree on the choice of arbitrator within 10 days after the first party seeking arbitration has given written notice, then the arbitration shall be heard by 3 arbitrators, 1 chosen by each party, and the third chosen by those 2 arbitrators. The arbitrators will be selected from a panel of persons having experience with and knowledge of information technology and at least 1 of the arbitrators selected will be an attorney. Discovery shall not be permitted. A hearing on the merits of all claims for which arbitration is sought by either party shall be commenced not later than 60 days from the date demand for arbitration is made by the first party seeking arbitration. The arbitrator(s) must render a decision within 10 days after the conclusion of such hearing. Any award in such arbitration shall be final and binding upon the parties and the judgement thereon may be entered in any court of competent jurisdiction.

(c) Applicable Law. The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. Section 1 – 16 and the Federal Rules of Evidence. The arbitrators shall apply the substantive law of the State of Pennsylvania, without reference to provisions relating to conflict of laws. The arbitrators shall not have the power to alter, modify, amend, add to, or subtract from any term or provision of this Agreement, nor to rule upon or grant any extension, renewal, or continuance of this Agreement. The arbitrators shall have the authority to grant any legal remedy available had the parties submitted the dispute to a judicial proceeding.

(d) Situs. If arbitration is required to resolve any disputes between the parties, the proceedings to resolve first such dispute shall be held in Lancaster, Pennsylvania, the proceedings to resolve the second such dispute shall be held in Milwaukee, Wisconsin, and the proceedings to resolve any subsequent disputes shall alternate between Milwaukee, Wisconsin and Lancaster, Pennsylvania.

(e) Affiliate Claims. All claims and disputes of either party’s Affiliate against the other party arising out of or related to the Agreement shall be made exclusively by, through and in the name of Fiserv or Client, as applicable.

10. Audit.

(a) Fiserv Operations and Security. Fiserv is regulated by the Federal Financial Institutions Examination Council (FFIEC) and is subject to certain examinations by FFIEC regulators and agencies. Client acknowledges and agrees that during the term of this Agreement and for a period of 1 year thereafter, reports of such examination of Fiserv business units are available to Client directly from the relevant FFIEC agencies. Fiserv employs an internal auditor responsible for reviewing the integrity of its processing environments and internal controls. Except as set forth otherwise in the Agreement, no further audit rights regarding Fiserv’s operations or security controls are granted by this Agreement. In the event Fiserv is required to perform services associated with the above, Fiserv and Client shall mutually agree the scope and associated fees for such services.

(b) Billing Records. Upon Client’s reasonable request in writing no more frequently than once every 12 months, Fiserv shall provide Client with documentation supporting the amounts invoiced by Fiserv hereunder for the 12-month period preceding such Client request. If such documentation reveals the amounts paid to Fiserv exceed the amounts to which Fiserv is entitled and such amounts are independently verified, Fiserv shall promptly remit or otherwise credit to Client the amount of such overpayment. Conversely, if such documentation reveals the amounts paid to Fiserv are less than the amounts owed, Client shall promptly remit the amount of such underpayment. Invoices dated prior to the 12-month review period hereunder shall be deemed correct. Fiserv reserves the right to charge Client for any assistance required in connection with such an audit at Fiserv’s then-current rates, unless such audit reveals an overcharge of more than 10%, in which case such audit shall be at Fiserv’s expense.

(c) Operations Audits. Fiserv provides for periodic independent audits of its ASP Services operations. Fiserv shall provide Client with a copy of such independent audit report of the Fiserv service center(s) providing the Services within a reasonable time after its completion. Fiserv reserves the right to charge each client a fee for the annual SAS70 or SSAE-16 audit as estimated in the table below (“Annual Audit Fees”) [CONFIDENTIAL TREATMENT REQUESTED] for this as part of any regulatory and compliance charges passed on to Client under the Agreement. [CONFIDENTIAL TREATMENT REQUESTED] If material deficiencies affecting the Services are noted in such audit report, Fiserv will develop and implement an action plan to address and resolve any such deficiencies within a commercially reasonable time at Fiserv’s expense.

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[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]	[CONFIDENTIAL TREATMENT REQUESTED]

11. General.

(a) Binding Agreement; Assignment. This Agreement is binding upon the parties, their participating Affiliates, and their respective successors and permitted assigns. Neither this Agreement nor any part thereof or interest therein may be sold, assigned, transferred, novated, pledged, or otherwise disposed of by Client, whether pursuant to change of control (which includes without limitation a direct or indirect change in the controlling interest in Client, its parent company or its ultimate parent company or a sale of all or substantially all of Client’s assets), by operation of law or otherwise, without Fiserv’s prior written consent, which shall not be unreasonably withheld or unduly delayed. If the organization to which such a transfer is proposed derives more than 5% of its gross revenues from providing service bureau, time share, computer software consulting services, computer software licensing, or computer hardware sales, Fiserv shall be under no obligation to consent to such transfer.

(b) Subcontract. Client agrees that Fiserv may assign all or part of this Agreement and may subcontract any obligations to be performed hereunder; provided that any such subcontractors shall be required to comply with all applicable terms and conditions of this Agreement, and Fiserv shall remain primarily liable for the performance of any such subcontractors. Client will facilitate timely cooperation with Fiserv’s subcontractors, if any, in order for Fiserv to provide the Deliverables.

(c) Entire Agreement; Amendments. As of the Effective Date, except as herein provided, this Agreement supersedes and replaces the Product Use Agreement between Client and Sendero Corporation dated July 18, 1985,

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as amended, in its entirety, Product Use and Support Agreement between Client and Sendero Corporation dated December 28, 1995, as amended, in its entirety (“Sendero Agreements”) and the Summit Agreement (as defined in the Risk and Performance Software Schedule) in its entirety. Except as herein provided, this Agreement supersedes and replaces the 2005 Master in its entirety as of the date the last Exhibit under the 2005 Master is terminated or expires. While Client is receiving Fiserv Services (as defined in the 2005 Master) under the 2005 Master, such Fiserv Services are governed by the 2005 Master. While Client is receiving Deliverables under this Agreement, such Deliverables are governed by this Agreement. The 2005 Master will remain in effect with respect to:

[CONFIDENTIAL TREATMENT REQUESTED]

As each Exhibit under the 2005 Master is deleted, such deletion shall include all amendments or addenda to such Exhibit.

In any event, the 2005 Master and all of its Exhibits and Schedules, including all amendments or addenda thereto, shall expire on the later of December 31, 2012 or the day following the conversion of Client’s last bank to the Signature Account Processing Services unless otherwise earlier terminated in accordance with the provisions therein (“Master Expiration”) or unless otherwise mutually agreed in writing between the parties, subject, however, to any provision of the 2005 Master Agreement which provides any provision or obligation thereunder shall survive termination or expiration of the 2005 Master Agreement. For the avoidance of doubt, Fiserv shall not bill Client under this Agreement and the 2005 Master for the same Service. Following the Master Expiration, this Agreement, including its Exhibits and Schedules, which are expressly incorporated herein by reference, constitutes the complete and exclusive statement of the agreement between the parties as to the subject matter hereof and supersedes all previous agreements with respect thereto and the terms of all existing or future purchase orders and acknowledgments. Each party hereby acknowledges that it has not been induced to enter into this Agreement by virtue of, and is not relying on, any representation made by the other party not embodied herein, any term sheets or other correspondence preceding the execution of this Agreement, or any prior course of dealing between the parties, including without limitation any statements concerning product or service usage or the financial condition of the parties. The protections of this Agreement shall apply to actions of the parties performed in preparation for and anticipation of the execution of this Agreement. Changes to this Agreement must be in writing and signed by duly authorized representatives of the parties.

(d) Severability. If any provision of this Agreement is held to be unenforceable or invalid, the other provisions shall continue in full force and effect.

(e) Governing Law; Jury Trial Waiver. This Agreement will be governed by the substantive laws of the State of Pennsylvania, without reference to provisions relating to conflict of laws. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. Both parties agree to waive any right to have a jury participate in the resolution of any dispute or claim between the parties or any of their respective Affiliates arising under this Agreement.

(f) Force Majeure. With the exception of Client’s payment obligations, neither party shall be responsible for delays or failures in performance resulting from acts of God, acts of civil or military authority, fire, flood, strikes, war, epidemics, pandemics, shortage of power, telecommunications or Internet service interruptions or other acts or causes reasonably beyond the control of that party. The party experiencing the force majeure event agrees to give the other party notice promptly following the occurrence of a force majeure event, and to use diligent efforts to re-commence performance as promptly as commercially practicable.

(g) Notices. Any written notice required or permitted to be given hereunder shall be given by: (i) Registered or Certified Mail, Return Receipt Requested, postage prepaid; (ii) confirmed facsimile; or (iii) nationally recognized overnight courier service to the other party at the addresses listed on page 1 or to such other address or person as a party may designate in writing. Any notice to Fiserv shall also include a copy to the following address: Fiserv, 255 Fiserv Drive, Brookfield, Wisconsin, 53045, ATTN: General Counsel. All such notices shall be effective upon receipt. Any notice to Client shall also include a copy to the following address: 1695 State Street, East Petersburg, PA 17520, ATTN: Chief Information Officer. All such notices shall be effective upon receipt.

(h) No Waiver. The failure of either party to insist on strict performance of any of the provisions hereunder shall not be construed as the waiver of any subsequent default of a similar nature.

(i) Prevailing Party. The prevailing party in any arbitration, suit, or action brought by one party against the other party to enforce the terms of this Agreement or any rights or obligations hereunder, shall be entitled to receive its reasonable costs, expenses, and attorneys’ fees of bringing such arbitration, suit, or action.

Master Agreement Page 16 of 18

[CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT. PORTIONS FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY [CONFIDENTIAL TREATMENT REQUESTED]. MATERIAL OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

(j) Survival. All rights and obligations of the parties under this Agreement that, by their nature, do not terminate with the expiration or termination of this Agreement shall survive the expiration or termination of this Agreement.

(k) Publicity. Client and Fiserv shall have the right to make general references about each other and the type of Deliverables being provided hereunder to third parties, such as auditors, regulators, financial analysts, and prospective customers and clients, provided that in so doing Client or Fiserv does not breach Section 3 of this Agreement. The parties shall mutually agree to issue a press release regarding this Agreement, including its renewal and the addition of Deliverables. In conjunction with this, the party initiating such release shall give the other party a reasonable opportunity to review and comment on the content thereof prior to its release.

(l) Fiserv Marks. Except as authorized herein, Client will not use the name, trademark, service mark, logo or other identifying marks of Fiserv or any of its Affiliates in any sales, marketing, or publicity activities, materials, or Internet site display without the prior written consent of Fiserv. Any such authorized or approved use shall at all times comply with Fiserv’s Trademark Usage Guidelines (or similar terms) set forth on Fiserv’s corporate Internet site and other requirements issued by Fiserv.

(m) Client Marks. For those Deliverables which require Fiserv to brand or otherwise identify Client, including without limitation any ASP Services which involve the creation of a Web site to be used in connection with Client’s Web site, Client will provide to Fiserv any of Client’s trademarks, trade names, service marks, service names, Third Party links, information, specifications, materials, designs, logos, copy or other such works, marks or content (“Client Content”) that Client desires Fiserv to use in providing such ASP Services and Client hereby grants to Fiserv, and its Affiliates and/or third party providers, as applicable, a non-exclusive, non-assignable right to use during the term of this Agreement the Client Content in connection with the Deliverables or for the purposes otherwise specified in the Agreement.

(n) Independent Contractors. Client and Fiserv (and their Affiliates and any subcontractors) expressly agree they are acting as independent contractors and under no circumstances shall any of the employees of one party be deemed the employees of the other party (or their Affiliates or any subcontractors) for any purpose. Except as expressly authorized herein or in the Exhibits, this Agreement shall not be construed as authority for either party to act for the other party in any agency or other capacity, or to make commitments of any kind for the account of or on behalf of the other. Unless expressly set forth in an Exhibit, nothing in this Agreement shall establish or imply on the part of Fiserv or any of its Affiliates, employees, subcontractors or third party providers or subcontractors any fiduciary relationship with or any fiduciary duty to Client or any person or entity affiliated with Client, including without limitation any employees, Authorized Users, customers, prospective customers, agents, contractors or subcontractors of Client or its Affiliates.

(o) No Legal Advice. Client expressly acknowledges and agrees that any information or materials, written or oral, provided by Fiserv to Client or Client’s Affiliates, Authorized Users, employees, Customers or other agents, including without limitation any sample agreement terms, do not constitute legal advice and that such information and materials are provided solely in connection to assisting Client in understanding Fiserv’s expectations in complying with the relevant terms of the Agreement.

(p) No Third Party Beneficiaries. Except as expressly set forth in any Exhibit hereto, no third party shall be deemed to be an intended or unintended third party beneficiary of this Agreement.

(q) Exclusivity. Client agrees that Fiserv shall be the sole and exclusive provider of the Services (as identified in the Schedules thereto) that are the subject matter of this Agreement. For purposes of this foregoing, the term “Client” shall also consist of [CONFIDENTIAL TREATMENT REQUESTED] and Client agrees not to enter into an agreement with any other entity to provide these Services (or similar services) and not to perform these Services (or similar services) for itself, during the term of this Agreement without Fiserv’s prior written consent. If Client acquires another entity, the exclusivity provided to Fiserv hereunder shall take effect with respect to such acquired entity as soon as practicable after termination of such acquired entity’s previously existing arrangement for these services. If Client is acquired by another entity, the exclusivity provided to Fiserv hereunder shall apply with respect to the level or volume of services provided immediately prior to the signing of the definitive acquisition agreement relating to such acquisition and shall continue with respect to the level or volume of such services until any termination or expiration of this Agreement. Notwithstanding anything to the contrary in this Section 11(q)), Client may permit an affiliate acquired after the date of this Agreement to maintain an agreement in effect at the time of such acquisition with any other entity providing services that are subject matter of this Agreement.

(r) Conflicts. Unless the given term expressly states that it applies notwithstanding the terms of the Agreement or Exhibit, as applicable: (i) if the terms of any Exhibit or Schedule directly conflict with the terms of this Agreement,

Master Agreement Page 17 of 18

[CONFIDENTIAL TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT. PORTIONS FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY [CONFIDENTIAL TREATMENT REQUESTED]. MATERIAL OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

this Agreement shall control; and (ii) if the terms of any Schedule directly conflict with the terms of the related Exhibit, the Exhibit shall control.

(s) Counterparts. This Agreement and any Exhibits hereto may be executed in counterparts, each of which shall be deemed an original and which shall together constitute one instrument.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

For Client:		For Fiserv:
Fulton Financial Corporation		Fiserv Solutions, Inc.
By:	/s/ Angela M. Sargent	By:	/s/ Patrick Dempsey
Name:	Angela M. Sargent	Name:	Patrick Dempsey
Title:	EVP/CIO	Title:	Authorized Signatory

Master Agreement Page 18 of 18

EX-10.2

Exhibit 10.2

FULTON FINANCIAL CORPORATION

RESTRICTED STOCK AWARD AGREEMENT

[DATE]

[NON-EMPLOYEE DIRECTOR NAME]

[NON-EMPLOYEE DIRECTOR ADDRESS]

Dear :

Pursuant to the terms and conditions of the Fulton Financial Corporation 2011 Directors’ Equity Participation Plan (the ‘Plan’), you have been granted a Restricted Stock Award for                         shares (the ‘Award’) of stock as outlined below.

Award Granted To:
Award Grant Date:
Shares Granted:
Award Price per Share:	$
Vesting Schedule:

Very Truly Yours,

R. Scott Smith, Jr.

Chairman, Chief Executive Officer

and President

By my signature below, I hereby acknowledge receipt of this Award which has been granted to me on the date shown above, in accordance with the terms and conditions of the Plan. I further acknowledge having received a copy of the Prospectus for the Plan and agree to conform to all of the terms and conditions of the Prospectus and the Plan.

Signature:

Date:

EX-31.1

Exhibit 31.1 – Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, R. Scott Smith, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fulton Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2011
	/s/ R. Scott Smith, Jr.
	R. Scott Smith, Jr.
	Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2 – Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Charles J. Nugent, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fulton Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 8, 2011
	/s/ Charles J. Nugent
	Charles J. Nugent
	Senior Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1 - Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, R. Scott Smith, Jr., Chief Executive Officer of Fulton Financial Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, certify that:

The Form 10-Q of Fulton Financial Corporation, containing the consolidated financial statements for the quarter ended June 30, 2011, fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934. The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Fulton Financial Corporation.

Date:	August 8, 2011
	/s/ R. Scott Smith, Jr.
	R. Scott Smith, Jr.
	Chairman and Chief Executive Officer

EX-32.2

Exhibit 32.2 - Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Charles J. Nugent, Chief Financial Officer of Fulton Financial Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, certify that:

The Form 10-Q of Fulton Financial Corporation, containing the consolidated financial statements for the quarter ended June 30, 2011, fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934. The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Fulton Financial Corporation.

Date:	August 8, 2011
	/s/ Charles J. Nugent
	Charles J. Nugent
	Senior Executive Vice President and
	Chief Financial Officer

XML



Loans and Allowance for Credit Losses (Loans Modified Under Troubled Debt Restructurings) (Details) (USD $) In Thousands	Jun. 30, 2011		Dec. 31, 2010
Real-estate - residential mortgage	$ 1,023,646		$ 995,990
Real-estate - commercial mortgage	4,443,025		4,375,980
Real-estate - construction	681,588		801,185
Commercial - industrial, financial and agricultural	3,678,858		3,704,384
Consumer and home equity	330,965		350,161
Loans Modified Under Troubled Debt Restructurings [Member]
Real-estate - residential mortgage	37,006		37,826
Real-estate - commercial mortgage	30,735		18,778
Real-estate - construction	5,589		5,440
Commercial - industrial, financial and agricultural	3,055		5,502
Consumer and home equity	258		263
Total accruing troubled debt restructurings	76,643		67,809
Non-accrual troubled debt restructurings	44,659	[1]	51,175	[1]
Total troubled debt restructurings	$ 121,302		$ 118,984

[1] Included within non-accrual loans in table detailing non-performing assets above.

XML



Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Consolidated Balance Sheets
Held to maturity, estimated fair value	$ 7,038	$ 7,818
Common stock, par value	$ 2.5	$ 2.5
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	215,600,000	215,400,000
Treasury stock, shares	16,200,000	16,300,000

XML



Consolidated Statements of Income (USD $) In Thousands, except Per Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
INTEREST INCOME
Loans, including fees	$ 149,751	$ 157,628	$ 299,247	$ 315,162
Investment securities:
Taxable	20,749	25,146	42,556	53,295
Tax-exempt	3,146	3,348	6,321	6,943
Dividends	696	660	1,379	1,389
Loans held for sale	492	667	992	1,223
Other interest income	101	231	134	256
Total Interest Income	174,935	187,680	350,629	378,268
INTEREST EXPENSE
Deposits	21,775	31,819	45,061	65,557
Short-term borrowings	168	390	422	939
Long-term debt	12,347	16,313	24,938	34,105
Total Interest Expense	34,290	48,522	70,421	100,601
Net Interest Income	140,645	139,158	280,208	277,667
Provision for credit losses	36,000	40,000	74,000	80,000
Net Interest Income After Provision for Credit Losses	104,645	99,158	206,208	197,667
OTHER INCOME
Service charges on deposit accounts	14,332	15,482	27,637	29,749
Other service charges and fees	12,709	11,469	24,191	21,634
Investment management and trust services	9,638	8,655	18,842	16,743
Mortgage banking income	6,049	3,899	11,512	8,048
Other	4,979	4,503	9,400	8,317
Total other-than-temporary impairment losses	(71)	(4,334)	(1,092)	(9,585)
Less: Portion of (gain) loss recognized in other comprehensive income (before taxes)	(322)	836	(592)	1,110
Net other-than-temporary impairment losses	(393)	(3,498)	(1,684)	(8,475)
Net gains on sale of investment securities	58	4,402	3,634	7,156
Net investment securities gains (losses)	(335)	904	1,950	(1,319)
Total Other Income	47,372	44,912	93,532	83,172
OTHER EXPENSES
Salaries and employee benefits	56,070	54,654	110,378	106,999
Net occupancy expense	10,874	10,519	22,240	22,169
Equipment expense	3,377	2,663	6,509	5,754
FDIC insurance expense	3,264	5,136	8,018	10,090
Data processing	3,214	3,311	6,586	6,728
Professional fees	3,102	3,035	5,951	5,581
Other real estate owned and repossession expense	2,575	1,876	4,545	4,556
Software	1,972	1,706	4,004	3,320
Marketing	1,863	2,271	4,699	4,101
Intangible amortization	1,172	1,341	2,350	2,655
Other	14,995	14,593	28,761	29,174
Total Other Expenses	102,478	101,105	204,041	201,127
Income Before Income Taxes	49,539	42,965	95,699	79,712
Income taxes	13,154	11,283	25,529	20,550
Net Income	36,385	31,682	70,170	59,162
Preferred stock dividends and discount accretion	0	(5,066)	0	(10,131)
Net Income Available to Common Shareholders	$ 36,385	$ 26,616	$ 70,170	$ 49,031
PER COMMON SHARE:
Net income (basic)	$ 0.18	$ 0.14	$ 0.35	$ 0.27
Net income (diluted)	$ 0.18	$ 0.14	$ 0.35	$ 0.27
Cash dividends	$ 0.05	$ 0.03	$ 0.09	$ 0.06

XML



Stock-Based Compensation (Narrative) Details)	0 Months Ended	6 Months Ended
	Jul. 01, 2011	Jun. 30, 2011
Maximum contractual term of stock options in years		10
Stock options and restricted stock maximum vesting period in years		three
Restricted stock granted under the stock option and compensation plan	267,000
Shares reserved for future grants under the stock option and compensation plan		13,000,000
Stock options granted under the stock option and compensation plan	616,000
Directors' Plan [Member]
Stock options and restricted stock maximum vesting period in years		one
Shares reserved for future grants under the stock option and compensation plan		500,000
Stock options granted under the stock option and compensation plan	11,000

XML



Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2011

Loans and Allowance for Credit Losses

Summary of Gross Loans by Type

	June 30, 2011			December 31, 2010
	(in thousands)
Real-estate – commercial mortgage	$	4,443,025		$	4,375,980
Commercial – industrial, financial and agricultural		3,678,858			3,704,384
Real-estate – home equity		1,626,545			1,641,777
Real-estate – residential mortgage		1,023,646			995,990
Real-estate – construction		681,588			801,185
Consumer		330,965			350,161
Leasing and other		58,591			61,017
Overdrafts		15,657			10,011
		11,858,875			11,940,505
Unearned income		(6,384	)		(7,198	)
	$	11,852,491		$	11,933,307

Allowance for Credit Losses Components

	June 30, 2011		December 31, 2010
	(in thousands)
Allowance for loan losses	$	266,683	$	274,271
Reserve for unfunded lending commitments		1,950		1,227
Allowance for credit losses	$	268,633	$	275,498

Activity in the Allowance for Credit Losses

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
	(in thousands)
Balance at beginning of period	$	271,156		$	269,254		$	275,498		$	257,553
Loans charged off		(40,675	)		(31,532	)		(86,204	)		(61,524	)
Recoveries of loans previously charged off		2,152			2,655			5,339			4,348
Net loans charged off		(38,523	)		(28,877	)		(80,865	)		(57,176	)
Provision for credit losses		36,000			40,000			74,000			80,000
Balance at end of period	$	268,633		$	280,377		$	268,633		$	280,377

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2011:

	Real Estate - Commercial Mortgage			Commercial - Industrial, Financial and Agricultural			Real Estate - Home Equity			Real Estate - Residential Mortgage			Real Estate - Construction			Consumer			Leasing and other and Overdrafts			Unallocated			Total
	(in thousands)
Three months ended June 30, 2011
Balance at April 1, 2011	$	48,558		$	100,180		$	5,656		$	19,575		$	55,491		$	4,736		$	2,576		$	33,500		$	270,272
Loans charged off		(7,074	)		(15,406	)		(1,650	)		(7,707	)		(7,468	)		(681	)		(689	)		0			(40,675	)
Recoveries of loans previously charged off		191			1,003			2			190			79			433			254			0			2,152
Net loans charged off		(6,883	)		(14,403	)		(1,648	)		(7,517	)		(7,389	)		(248	)		(435	)		0			(38,523	)
Provision for loan losses		9,040			10,224			1,862			11,958			7,239			343			590			(6,322	)		34,934
Impact of change in allowance methodology		22,883			(13,388	)		3,690			7,896			(24,771	)		(3,076	)		(944	)		7,710			0
Provision for loan losses, including impact of change in allowance methodology (1)		31,923			(3,164	)		5,552			19,854			(17,532	)		(2,733	)		(354	)		1,388			34,934
Balance at June 30, 2011	$	73,598		$	82,613		$	9,560		$	31,912		$	30,570		$	1,755		$	1,787		$	34,888		$	266,683
Six months ended June 30, 2011
Balance at January 1, 2011	$	40,831		$	101,436		$	6,454		$	17,425		$	58,117		$	4,669		$	3,840		$	41,499		$	274,271
Loans charged off		(17,121	)		(28,742	)		(3,118	)		(12,703	)		(21,362	)		(1,972	)		(1,186	)		0			(86,204	)
Recoveries of loans previously charged off		1,726			1,394			3			234			642			742			598			0			5,339
Net loans charged off		(15,395	)		(27,348	)		(3,115	)		(12,469	)		(20,720	)		(1,230	)		(588	)		0			(80,865	)
Provision for loan losses		25,279			21,913			2,531			19,060			17,944			1,392			(521	)		(14,321	)		73,277
Impact of change in allowance methodology		22,883			(13,388	)		3,690			7,896			(24,771	)		(3,076	)		(944	)		7,710			0
Provision for loan losses, including impact of change in allowance methodology (1)		48,162			8,525			6,221			26,956			(6,827	)		(1,684	)		(1,465	)		(6,611	)		73,277
Balance at June 30, 2011	$	73,598		$	82,613		$	9,560		$	31,912		$	30,570		$	1,755		$	1,787		$	34,888		$	266,683

(1) Provision for loan losses is net of a $1.1 million and $723,000 increase in provision applied to unfunded commitments for the three and six months ended June 30, 2011, respectively. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $36.0 million and $74.0 million for the three and six months ended June 30, 2011, respectively.

 The following tables present loans, net of unearned income and their related allowance for loan losses, by portfolio segment, as of June 30, 2011 and December 31, 2010:

	Real Estate - Commercial Mortgage		Commercial - Industrial, Financial and Agricultural		Real Estate - Home Equity		Real Estate - Residential Mortgage		Real Estate - Construction		Consumer		Leasing and other and Overdrafts		Unallocated (1)		Total
	(in thousands)
Allowance for loan losses at June 30, 2011:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	44,600	$	53,373	$	9,560	$	5,953	$	18,794	$	1,597	$	1,727	$	34,888	$	170,492
Evaluated individually for impairment under FASB ASC Section 310-10-35		28,998		29,240		0		25,959		11,776		158		60		N/A		96,191
	$	73,598	$	82,613	$	9,560	$	31,912	$	30,570	$	1,755	$	1,787	$	34,888	$	266,683
Loans, net of unearned income at June 30, 2011:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	4,329,750	$	3,587,702	$	1,626,545	$	955,863	$	623,734	$	330,754	$	67,773		N/A	$	11,522,121
Evaluated individually for impairment under FASB ASC Section 310-10-35		113,275		91,156		0		67,783		57,854		211		91		N/A		330,370
Total	$	4,443,025	$	3,678,858	$	1,626,545	$	1,023,646	$	681,588	$	330,965	$	67,864		N/A	$	11,852,491
Allowance for loan losses at December 31, 2010:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	22,836	$	32,323	$	6,454	$	11,475	$	35,247	$	4,669	$	3,840	$	41,499	$	158,343
Evaluated individually for impairment under FASB ASC Section 310-10-35		17,995		69,113		0		5,950		22,870		0		0		N/A		115,928
	$	40,831	$	101,436	$	6,454	$	17,425	$	58,117	$	4,669	$	3,840	$	41,499	$	274,271
Loans, net of unearned income at December 31, 2010:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	4,217,660	$	3,469,775	$	1,641,777	$	956,260	$	660,238	$	350,161	$	63,830		N/A	$	11,359,701
Evaluated individually for impairment under FASB ASC Section 310-10-35		158,320		234,609		0		39,730		140,947		0		0		N/A		573,606
Total	$	4,375,980	$	3,704,384	$	1,641,777	$	995,990	$	801,185	$	350,161	$	63,830		N/A	$	11,933,307

(1) The Corporation's unallocated allowance, which was approximately 13% and 15% as of June 30, 2011 and December 31, 2010, respectively, was reasonable and appropriate as the estimates used in the allocation process are inherently imprecise.

N/A – Not applicable

Total Impaired Loans by Class Segment

	June 30, 2011						Three months ended June 30, 2011				Six months ended June 30, 2011				December 31, 2010
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized		Unpaid Principal Balance		Recorded Investment		Related Allowance
	(in thousands)
With no related allowance recorded:
Real estate - commercial mortgage	$	49,335	$	41,764		N/A	$	41,139	$	87	$	45,510	$	490	$	68,583	$	54,251		N/A
Commercial - secured		37,660		35,613		N/A		32,313		15		30,790		161		38,366		27,745		N/A
Commercial - unsecured		0		0		N/A		0		0		196		3		710		587		N/A
Real estate - residential mortgage (2)		0		0		N/A		0		0		7,071		43		21,598		21,212		N/A
Construction - commercial residential		33,882		17,439		N/A		20,322		6		24,333		184		69,624		32,354		N/A
Construction - commercial		5,605		3,486		N/A		3,601		1		3,109		21		5,637		2,125		N/A
		126,482		98,302				97,375		109		111,009		902		204,518		138,274
With a related allowance recorded:
Real estate - commercial mortgage		92,006		71,511	$	28,998		70,441		150		81,650		989		111,190		104,069	$	17,995
Commercial - secured		63,700		52,623		26,752		47,747		22		97,723		1,199		202,824		197,674		64,922
Commercial - unsecured		3,102		2,920		2,488		3,193		2		4,996		33		8,681		8,603		4,191
Real estate - residential mortgage (2)		67,783		67,783		25,959		71,807		487		54,044		577		18,518		18,518		5,950
Construction - commercial residential		61,888		34,513		10,530		40,219		13		61,421		448		110,465		103,826		22,155
Construction - commercial		303		303		158		313		0		1,089		17		2,642		2,642		715
Construction - other		2,113		2,113		1,088		1,687		0		1,124		0		0		0		0
Consumer - direct		211		211		158		150		2		100		2		0		0		0
Leasing and other and overdrafts		91		91		60		77		0		51		0		0		0		0
		291,197		232,068		96,191		235,634		676		302,198		3,265		454,320		435,332		115,928
Total	$	417,679	$	330,370	$	96,191	$	333,009	$	785	$	413,207	$	4,167	$	658,838	$	573,606	$	115,928

(1) Effective April 1, 2011, all impaired loans, excluding certain accruing Impaired TDRs, were non-accrual loans. Interest income recognized for the three months ended June 30, 2011 represents amounts earned on accruing TDRs.

(2) Impaired residential mortgages include accruing TDRs that were modified in the current calendar year and/or not performing according to their modified terms.

 N/A – Not applicable.

Summary of Delinquency and Non-Performing Status by Portfolio Segment

	June 30, 2011
	Performing		Delinquent (1)		Non- performing (2)		Total
	(in thousands)
Real estate - commercial mortgage	$	4,314,764	$	25,537	$	102,724	$	4,443,025
Commercial - secured		3,333,421		18,699		91,640		3,443,760
Commercial -unsecured		230,570		1,313		3,215		235,098
Total Commercial - industrial, financial and agricultural		3,563,991		20,012		94,855		3,678,858
Real estate - home equity		1,605,004		12,101		9,440		1,626,545
Real estate - residential mortgage		945,952		34,494		43,200		1,023,646
Construction - commercial residential		348,197		2,022		52,413		402,632
Construction - commercial		223,510		8		3,789		227,307
Construction - other		47,305		2,165		2,179		51,649
Total Real estate - construction		619,012		4,195		58,381		681,588
Consumer - direct		37,161		496		77		37,734
Consumer - indirect		158,988		1,798		89		160,875
Consumer - other		128,220		2,212		1,924		132,356
Total Consumer		324,369		4,506		2,090		330,965
Leasing and other and overdrafts		67,344		368		152		67,864
	$	11,440,436	$	101,213	$	310,842	$	11,852,491
	December 31, 2010
Real estate - commercial mortgage	$	4,257,871	$	24,389	$	93,720	$	4,375,980
Commercial - secured		3,373,651		12,111		85,536		3,471,298
Commercial -unsecured		229,985		1,182		1,919		233,086
Total Commercial - industrial, financial and agricultural		3,603,636		13,293		87,455		3,704,384
Real estate - home equity		1,619,684		11,905		10,188		1,641,777
Real estate - residential mortgage		909,247		36,331		50,412		995,990
Construction - commercial residential		409,190		7,273		76,436		492,899
Construction - commercial		239,150		0		5,287		244,437
Construction - other		60,956		0		2,893		63,849
Total Real estate - construction		709,296		7,273		84,616		801,185
Consumer - direct		45,942		935		212		47,089
Consumer - indirect		166,531		2,275		290		169,096
Consumer - other		129,911		2,413		1,652		133,976
Total Consumer		342,384		5,623		2,154		350,161
Leasing and other and overdrafts		63,087		516		227		63,830
	$	11,505,205	$	99,330	$	328,772	$	11,933,307

(1) Includes all accruing loans 30 days to 89 days past due.

(2) Includes all accruing loans 90 days or more past due and all non-accrual loans.

Non-Performing Assets

	June 30, 2011		December 31, 2010
	(in thousands)
Non-accrual loans	$	274,973	$	280,688
Accruing loans greater than 90 days past due		35,869		48,084
Total non-performing loans		310,842		328,772
Other real estate owned (OREO)		37,493		32,959
Total non-performing assets	$	348,335	$	361,731

Loan Terms Modified Under Troubled Debt Restructurings

	June 30, 2011		December 31, 2010
	(in thousands)
Real-estate – residential mortgage	$	37,006	$	37,826
Real-estate – commercial mortgage		30,735		18,778
Real-estate – construction		5,589		5,440
Commercial – industrial, financial and agricultural		3,055		5,502
Consumer and home equity		258		263
Total accruing TDRs		76,643		67,809
Non-accrual TDRs (1)		44,659		51,175
Total TDRs	$	121,302	$	118,984

(1) Included within non-accrual loans in table detailing non-performing assets above.

Past due Loan Status and Non-Accrual Loans by Portfolio Segment

	June 30, 2011
	31-59 Days Past Due		60-89 Days Past Due		³ 90 Days Past Due and Accruing		Non- accrual		Total ³ 90 Days		Total Past Due		Current		Total
	(in thousands)
Real estate - commercial mortgage	$	20,376	$	5,161	$	5,578	$	97,146	$	102,724	$	128,261	$	4,314,764	$	4,443,025
Commercial - secured		13,077		5,622		5,892		85,748		91,640		110,339		3,333,421		3,443,760
Commercial - unsecured		823		490		295		2,920		3,215		4,528		230,570		235,098
Total Commercial - industrial, financial and agricultural		13,900		6,112		6,187		88,668		94,855		114,867		3,563,991		3,678,858
Real estate - home equity		10,112		1,989		9,241		199		9,440		21,541		1,605,004		1,626,545
Real estate - residential mortgage		24,031		10,463		12,197		31,003		43,200		77,694		945,952		1,023,646
Construction - commercial residential		1,569		453		461		51,952		52,413		54,435		348,197		402,632
Construction - commercial		8		0		0		3,789		3,789		3,797		223,510		227,307
Construction - other		2,165		0		66		2,113		2,179		4,344		47,305		51,649
Total Real estate - construction		3,742		453		527		57,854		58,381		62,576		619,012		681,588
Consumer - direct		343		153		65		12		77		573		37,161		37,734
Consumer - indirect		1,489		309		89		0		89		1,887		158,988		160,875
Consumer - other		1,226		986		1,924		0		1,924		4,136		128,220		132,356
Total Consumer		3,058		1,448		2,078		12		2,090		6,596		324,369		330,965
Leasing and other and overdrafts		339		29		61		91		152		520		67,344		67,864
	$	75,558	$	25,655	$	35,869	$	274,973	$	310,842	$	412,055	$	11,440,436	$	11,852,491
	December 31, 2010
Real estate - commercial mortgage	$	15,898	$	8,491	$	6,744	$	86,976	$	93,720	$	118,109	$	4,257,871	$	4,375,980
Commercial - secured		5,274		6,837		13,374		72,162		85,536		97,647		3,373,651		3,471,298
Commercial - unsecured		629		553		731		1,188		1,919		3,101		229,985		233,086
Total Commercial - industrial, financial and agricultural		5,903		7,390		14,105		73,350		87,455		100,748		3,603,636		3,704,384
Real estate - home equity		8,138		3,767		10,024		164		10,188		22,093		1,619,684		1,641,777
Real estate - residential mortgage		24,237		12,094		13,346		37,066		50,412		86,743		909,247		995,990
Construction - commercial residential		3,872		3,401		884		75,552		76,436		83,709		409,190		492,899
Construction - commercial		0		0		195		5,092		5,287		5,287		239,150		244,437
Construction - other		0		0		491		2,402		2,893		2,893		60,956		63,849
Total Real estate - construction		3,872		3,401		1,570		83,046		84,616		91,889		709,296		801,185
Consumer - direct		707		228		212		0		212		1,147		45,942		47,089
Consumer - indirect		1,916		359		290		0		290		2,565		166,531		169,096
Consumer - other		1,751		662		1,638		14		1,652		4,065		129,911		133,976
Total Consumer		4,374		1,249		2,140		14		2,154		7,777		342,384		350,161
Leasing and other and overdrafts		473		43		155		72		227		743		63,087		63,830
	$	62,895	$	36,435	$	48,084	$	280,688	$	328,772	$	428,102	$	11,505,205	$	11,933,307

XML



Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Jul. 29, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Trading Symbol	fult
Entity Registrant Name	FULTON FINANCIAL CORP
Entity Central Index Key	0000700564
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		199,795,000

XML



Loans and Allowance for Credit Losses (Summary of Delinquency and Non-Performing Status by Portfolio Segment) (Details) (USD $) In Thousands	Jun. 30, 2011		Dec. 31, 2010
Performing	$ 11,440,436		$ 11,505,205
Delinquent	101,213	[1]	99,330	[1]
Non-performing	310,842	[2]	328,772	[2]
Total	11,852,491		11,933,307
Real Estate - Commercial Mortgage [Member]
Performing	4,314,764		4,257,871
Delinquent	25,537	[1]	24,389	[1]
Non-performing	102,724	[2]	93,720	[2]
Total	4,443,025		4,375,980
Commercial - Secured [Member]
Performing	3,333,421		3,373,651
Delinquent	18,699	[1]	12,111	[1]
Non-performing	91,640	[2]	85,536	[2]
Total	3,443,760		3,471,298
Commercial - Unsecured [Member]
Performing	230,570		229,985
Delinquent	1,313	[1]	1,182	[1]
Non-performing	3,215	[2]	1,919	[2]
Total	235,098		233,086
Commercial - Industrial, Financial and Agricultural [Member]
Performing	3,563,991		3,603,636
Delinquent	20,012	[1]	13,293	[1]
Non-performing	94,855	[2]	87,455	[2]
Total	3,678,858		3,704,384
Real Estate - Home Equity [Member]
Performing	1,605,004		1,619,684
Delinquent	12,101	[1]	11,905	[1]
Non-performing	9,440	[2]	10,188	[2]
Total	1,626,545		1,641,777
Real Estate - Residential Mortgage [Member]
Performing	945,952		909,247
Delinquent	34,494	[1]	36,331	[1]
Non-performing	43,200	[2]	50,412	[2]
Total	1,023,646		995,990
Construction - Commercial Residential [Member]
Performing	348,197		409,190
Delinquent	2,022	[1]	7,273	[1]
Non-performing	52,413	[2]	76,436	[2]
Total	402,632		492,899
Construction - Commercial [Member]
Performing	223,510		239,150
Delinquent	8	[1]	0	[1]
Non-performing	3,789	[2]	5,287	[2]
Total	227,307		244,437
Construction - Other [Member]
Performing	47,305		60,956
Delinquent	2,165	[1]	0	[1]
Non-performing	2,179	[2]	2,893	[2]
Total	51,649		63,849
Real Estate - Construction [Member]
Performing	619,012		709,296
Delinquent	4,195	[1]	7,273	[1]
Non-performing	58,381	[2]	84,616	[2]
Total	681,588		801,185
Consumer - Direct [Member]
Performing	37,161		45,942
Delinquent	496	[1]	935	[1]
Non-performing	77	[2]	212	[2]
Total	37,734		47,089
Consumer - Indirect [Member]
Performing	158,988		166,531
Delinquent	1,798	[1]	2,275	[1]
Non-performing	89	[2]	290	[2]
Total	160,875		169,096
Consumer - Other [Member]
Performing	128,220		129,911
Delinquent	2,212	[1]	2,413	[1]
Non-performing	1,924	[2]	1,652	[2]
Total	132,356		133,976
Consumer [Member]
Performing	324,369		342,384
Delinquent	4,506	[1]	5,623	[1]
Non-performing	2,090	[2]	2,154	[2]
Total	330,965		350,161
Leasing and Other and Overdrafts [Member]
Performing	67,344		63,087
Delinquent	368	[1]	516	[1]
Non-performing	152	[2]	227	[2]
Total	$ 67,864		$ 63,830

[1] Includes all accruing loans 30 days to 89 days past due.

[2] Includes all accruing loans 90 days or more past due and all non-accrual loans.

XML



Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2011

Employee Benefit Plans

Summary of Pension Plan and Postretirement Plan Net Periodic Benefit Cost

	Pension Plan
	Three months ended June  30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Service cost (1)	$	15		$	26		$	30		$	52
Interest cost		853			842			1,706			1,684
Expected return on plan assets		(837	)		(802	)		(1,674	)		(1,604	)
Net amortization and deferral		72			119			144			238
Net periodic benefit cost	$	103		$	185		$	206		$	370

(1) The Pension Plan service cost recorded for the three and six months ended June 30, 2011 and 2010, respectively, was related to administrative costs associated with the plan and not due to the accrual of additional participant benefits.

	Postretirement Plan
	Three months ended June  30						Six months ended June  30
	2011			2010			2011			2010
	(in thousands)
Service cost	$	50		$	48		$	101		$	98
Interest cost		107			110			214			220
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Net accretion and deferral		(91	)		(91	)		(182	)		(182	)
Net periodic benefit cost	$	65		$	66		$	131		$	134

XML



Loans and Allowance for Credit Losses (Total Impaired Loans by Class Segment) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2011		Jun. 30, 2011		Dec. 31, 2010
Unpaid Principal Balance	$ 417,679		$ 417,679		$ 658,838
Recorded Investment	330,370		330,370		573,606
Related Allowance	96,191		96,191		115,928
Average Recorded Investment	333,009		413,207
Interest income on impaired loans	785	[1]	4,167		27,400
Real Estate - Commercial Mortgage [Member] | With Related Allowance Recorded [Member]
Unpaid Principal Balance	92,006		92,006		111,190
Recorded Investment	71,511		71,511		104,069
Related Allowance	28,998		28,998		17,995
Average Recorded Investment	70,441		81,650
Interest income on impaired loans	150	[1]	989
Real Estate - Residential Mortgage [Member] | With Related Allowance Recorded [Member]
Unpaid Principal Balance	67,783	[2]	67,783	[2]	18,518	[2]
Recorded Investment	67,783	[2]	67,783	[2]	18,518	[2]
Related Allowance	25,959	[2]	25,959	[2]	5,950	[2]
Average Recorded Investment	71,807	[2]	54,044	[2]
Interest income on impaired loans	487	[1],[2]	577	[2]
Leasing and Other and Overdrafts [Member] | With Related Allowance Recorded [Member]
Unpaid Principal Balance	91		91		0
Recorded Investment	91		91		0
Related Allowance	60		60		0
Average Recorded Investment	77		51
Interest income on impaired loans	0	[1]	0
With Related Allowance Recorded [Member]
Unpaid Principal Balance	291,197		291,197		454,320
Recorded Investment	232,068		232,068		435,332
Related Allowance	96,191		96,191		115,928
Average Recorded Investment	235,634		302,198
Interest income on impaired loans	676	[1]	3,265
With Related Allowance Recorded [Member] | Commercial - Secured [Member]
Unpaid Principal Balance	63,700		63,700		202,824
Recorded Investment	52,623		52,623		197,674
Related Allowance	26,752		26,752		64,922
Average Recorded Investment	47,747		97,723
Interest income on impaired loans	22	[1]	1,199
With Related Allowance Recorded [Member] | Commercial - Unsecured [Member]
Unpaid Principal Balance	3,102		3,102		8,681
Recorded Investment	2,920		2,920		8,603
Related Allowance	2,488		2,488		4,191
Average Recorded Investment	3,193		4,996
Interest income on impaired loans	2	[1]	33
With Related Allowance Recorded [Member] | Construction - Commercial Residential [Member]
Unpaid Principal Balance	61,888		61,888		110,465
Recorded Investment	34,513		34,513		103,826
Related Allowance	10,530		10,530		22,155
Average Recorded Investment	40,219		61,421
Interest income on impaired loans	13	[1]	448
With Related Allowance Recorded [Member] | Construction - Commercial [Member]
Unpaid Principal Balance	303		303		2,642
Recorded Investment	303		303		2,642
Related Allowance	158		158		715
Average Recorded Investment	313		1,089
Interest income on impaired loans	0	[1]	17
With Related Allowance Recorded [Member] | Construction - Other [Member]
Unpaid Principal Balance	2,113		2,113		0
Recorded Investment	2,113		2,113		0
Related Allowance	1,088		1,088		0
Average Recorded Investment	1,687		1,124
Interest income on impaired loans	0	[1]	0
With Related Allowance Recorded [Member] | Consumer - Direct [Member]
Unpaid Principal Balance	211		211		0
Recorded Investment	211		211		0
Related Allowance	158		158		0
Average Recorded Investment	150		100
Interest income on impaired loans	2	[1]	2
Real Estate - Commercial Mortgage [Member] | With No Related Allowance Recorded [Member]
Unpaid Principal Balance	49,335		49,335		68,583
Recorded Investment	41,764		41,764		54,251
Average Recorded Investment	41,139		45,510
Interest income on impaired loans	87	[1]	490
Real Estate - Residential Mortgage [Member] | With No Related Allowance Recorded [Member]
Unpaid Principal Balance	0	[2]	0	[2]	21,598	[2]
Recorded Investment	0	[2]	0	[2]	21,212	[2]
Average Recorded Investment	0	[2]	7,071	[2]
Interest income on impaired loans	0	[1],[2]	43	[2]
With No Related Allowance Recorded [Member]
Unpaid Principal Balance	126,482		126,482		204,518
Recorded Investment	98,302		98,302		138,274
Average Recorded Investment	97,375		111,009
Interest income on impaired loans	109	[1]	902
With No Related Allowance Recorded [Member] | Commercial - Secured [Member]
Unpaid Principal Balance	37,660		37,660		38,366
Recorded Investment	35,613		35,613		27,745
Average Recorded Investment	32,313		30,790
Interest income on impaired loans	15	[1]	161
With No Related Allowance Recorded [Member] | Commercial - Unsecured [Member]
Unpaid Principal Balance	0		0		710
Recorded Investment	0		0		587
Average Recorded Investment	0		196
Interest income on impaired loans	0	[1]	3
With No Related Allowance Recorded [Member] | Construction - Commercial Residential [Member]
Unpaid Principal Balance	33,882		33,882		69,624
Recorded Investment	17,439		17,439		32,354
Average Recorded Investment	20,322		24,333
Interest income on impaired loans	6	[1]	184
With No Related Allowance Recorded [Member] | Construction - Commercial [Member]
Unpaid Principal Balance	5,605		5,605		5,637
Recorded Investment	3,486		3,486		2,125
Average Recorded Investment	3,601		3,109
Interest income on impaired loans	$ 1	[1]	$ 21

[1] Effective April 1, 2011, all impaired loans, excluding certain accruing Impaired TDRs, were non-accrual loans. Interest income recognized for the three months ended June 30, 2011 represents amounts earned on accruing TDRs.

[2] Impaired residential mortgages include accruing TDRs that were modified in the current calendar year and/or not performing according to their modified terms.

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Mortgage Servicing Rights

6 Months Ended

Jun. 30, 2011

Mortgage Servicing Rights

Mortgage Servicing Rights

NOTE E – Mortgage Servicing Rights

The following table summarizes the changes in mortgage servicing rights (MSRs), which are included in other assets on the consolidated balance sheets:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Amortized cost:
Balance at beginning of period	$	32,060		$	24,517		$	30,700		$	23,499
Originations of mortgage servicing rights		2,010			1,756			4,668			3,672
Amortization expense		(1,261	)		(946	)		(2,559	)		(1,844	)
Balance at end of period	$	32,809		$	25,327		$	32,809		$	25,327
Valuation allowance:
Balance at beginning of period	$	(1,550	)	$	(1,000	)	$	(1,550	)	$	(1,000	)
Additions		0			0			0			0
Balance at end of period	$	(1,550	)	$	(1,000	)	$	(1,550	)	$	(1,000	)
Net MSRs at end of period	$	31,259		$	24,327		$	31,259		$	24,327

MSRs represent the economic value of existing contractual rights to service mortgage loans that have been sold. Accordingly, actual and expected prepayments of the underlying mortgage loans can impact the value of MSRs.

The Corporation estimates the fair value of its MSRs by discounting the estimated cash flows from servicing income, net of expense, over the expected life of the underlying loans at a discount rate commensurate with the risk associated with these assets. Expected life is based on the contractual terms of the loans, as adjusted for prepayment projections for mortgage-backed securities with rates and terms comparable to the loans underlying the MSRs.

The Corporation determined that the estimated fair value of MSRs was equal to their book value, net of the valuation allowance, at June 30, 2011. Therefore, no adjustment to the valuation allowance was necessary as of June 30, 2011.

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments

Summary of Notional Amounts and Fair Values of Derivative Financial Instruments

	June 30, 2011					December 31, 2010
	Notional Amount		Asset (Liability) Fair Value			Notional Amount		Asset (Liability) Fair Value
	(in thousands)
Interest Rate Locks with Customers:
Positive fair values	$	163,795	$	2,041		$	140,682	$	777
Negative fair values		3,736		(22	)		50,527		(760	)
Net Interest Rate Locks with Customers				2,019					17
Forward Commitments:
Positive fair values		49,369		131			558,861		8,479
Negative fair values		118,459		(975	)		0		0
Net Forward Commitments				(844	)				8,479
			$	1,175				$	8,496

Summary of Fair Value Gains and Losses on Derivative Financial Instruments

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Interest rate locks with customers (1)	$	82		$	1,499		$	2,002		$	2,521
Forward commitments (1)		(38	)		(4,878	)		(9,323	)		(6,176	)
	$	44		$	(3,379	)	$	(7,321	)	$	(3,655	)

(1) Fair value gains and losses recorded as components of mortgage banking income on the consolidated statements of income.

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Loans and Allowance for Credit Losses (Allowance for Credit Losses) (Details) (USD $) In Thousands	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009
Loans and Allowance for Credit Losses
Allowance for loan losses	$ 266,683	$ 270,272	$ 274,271
Reserve for unfunded lending commitments	1,950		1,227
Allowance for credit losses	$ 268,633	$ 271,156	$ 275,498	$ 280,377	$ 269,254	$ 257,553

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Investment Securities (Summary of Cumulative Other-than-Temporary Impairment Charges Recognized in Earnings for Pooled Trust Preferred Securities Held) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Investment Securities
Balance of cumulative credit losses on pooled trust preferred securities, beginning of period	$ (28,517)	$ (19,765)	$ (27,560)	$ (15,612)
Additions for credit losses recorded which were not previously recognized as components of earnings	(359)	(2,989)	(1,353)	(7,142)
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security	0	0	37	0
Balance of cumulative credit losses on pooled trust preferred securities, end of period	$ (28,876)	$ (22,754)	$ (28,876)	$ (22,754)

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation

Summary of Compensation Expense and Related Tax Benefits

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Stock-based compensation expense	$	554		$	318		$	1,101		$	611
Tax benefit		(119	)		(66	)		(255	)		(128	)
Stock-based compensation expense, net of tax	$	435		$	252		$	846		$	483

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Fair Value Option

6 Months Ended

Jun. 30, 2011

Fair Value Option

Fair Value Option

NOTE J – Fair Value Option

FASB ASC Subtopic 825-10 permits entities to measure many financial instruments and certain other items at fair value and requires certain disclosures for amounts for which the fair value option is applied. The Corporation has elected to measure mortgage loans held for sale at fair value to more accurately reflect the financial performance of its mortgage banking activities in its consolidated financial statements. Derivative financial instruments related to these activities are also recorded at fair value, as noted within Note H, "Derivative Financial Instruments." The Corporation determines fair value for its mortgage loans held for sale based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Changes in fair value during the period are recorded as components of mortgage banking income on the consolidated statements of income. Interest income earned on mortgage loans held for sale is recorded within interest income on the consolidated statements of income.

The following table presents a summary of the Corporation's mortgage loans held for sale:

	June 30, 2011		December 31, 2010
	(in thousands)
Cost	$	46,028	$	84,604
Fair value		47,133		83,940

During the three and six months ended June 30, 2011, the Corporation recorded gains related to changes in fair values of mortgage loans held for sale of $533,000 and $1.8 million, respectively. During the three and six months ended June 30, 2010, the Corporation recorded gains related to changes in fair values of mortgage loans held for sale of $2.0 million and $2.4 million, respectively.

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Basis of Presentation

6 Months Ended

Jun. 30, 2011

Basis of Presentation

Basis of Presentation

NOTE A – Basis of Presentation

The accompanying unaudited consolidated financial statements of Fulton Financial Corporation (the Corporation) have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities as of the date of the financial statements as well as revenues and expenses during the period. Actual results could differ from those estimates. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission (SEC).

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Investment Securities (Schedule of Amortized Cost and Fair Values of Investment Securities) (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Gross Unrealized Losses	$ 24,695
Subordinated Debt [Member]
Amortized cost	35,051	34,995
Estimated Fair value		35,915
Equity Securities [Member]
Gross Unrealized Losses	1,641
Equity Securities [Member] | Available for Sale Securities [Member]
Amortized cost	126,841	133,570
Gross Unrealized Gains	3,761	3,872
Gross Unrealized Losses	(1,641)	(974)
Estimated Fair value	128,961	136,468
U.S. Government-Sponsored Agency Securities [Member]
Gross Unrealized Losses	8
U.S. Government-Sponsored Agency Securities [Member] | Held to Maturity Securities [Member]
Amortized cost	6,014	6,339
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(7)	(1)
Estimated Fair value	6,007	6,338
U.S. Government-Sponsored Agency Securities [Member] | Available for Sale Securities [Member]
Amortized cost	4,858	4,888
Gross Unrealized Gains	135	172
Gross Unrealized Losses	(1)	(2)
Estimated Fair value	4,992	5,058
U.S. Government Securities [Member] | Available for Sale Securities [Member]
Amortized cost	1,324	1,649
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair value	1,324	1,649
Corporate Debt Securities [Member]
Amortized cost	131,535	137,101
Gross Unrealized Losses	8,969
Estimated Fair value		124,786
Corporate Debt Securities [Member] | Available for Sale Securities [Member]
Amortized cost	131,535	137,101
Gross Unrealized Gains	5,689	3,808
Gross Unrealized Losses	(8,969)	(16,123)
Estimated Fair value	128,255	124,786
State and Municipal Securities [Member]
Gross Unrealized Losses	255
State and Municipal Securities [Member] | Held to Maturity Securities [Member]
Amortized cost	346	346
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair value	346	346
State and Municipal Securities [Member] | Available for Sale Securities [Member]
Amortized cost	345,942	345,053
Gross Unrealized Gains	9,939	6,003
Gross Unrealized Losses	(255)	(1,493)
Estimated Fair value	355,626	349,563
Auction Rate Securities [Member]
Gross Unrealized Losses	12,905
Auction Rate Securities [Member] | Available for Sale Securities [Member]
Amortized cost	267,339	271,645
Gross Unrealized Gains	708	892
Gross Unrealized Losses	(12,905)	(11,858)
Estimated Fair value	255,142	260,679
Mortgage-Backed Securities [Member]
Gross Unrealized Losses	744
Mortgage-Backed Securities [Member] | Held to Maturity Securities [Member]
Amortized cost	630	1,066
Gross Unrealized Gains	55	68
Gross Unrealized Losses	0	0
Estimated Fair value	685	1,134
Mortgage-Backed Securities [Member] | Available for Sale Securities [Member]
Amortized cost	753,353	843,446
Gross Unrealized Gains	35,163	31,080
Gross Unrealized Losses	(744)	(3,054)
Estimated Fair value	787,772	871,472
Collateralized Mortgage Obligations [Member]
Gross Unrealized Losses	173
Collateralized Mortgage Obligations [Member] | Available for Sale Securities [Member]
Amortized cost	968,785	1,085,613
Gross Unrealized Gains	25,370	23,457
Gross Unrealized Losses	(173)	(5,012)
Estimated Fair value	993,982	1,104,058
Held to Maturity Securities [Member]
Amortized cost	6,990	7,751
Gross Unrealized Gains	55	68
Gross Unrealized Losses	(7)	(1)
Estimated Fair value	7,038	7,818
Available for Sale Securities [Member]
Amortized cost	2,599,977	2,822,965
Gross Unrealized Gains	80,765	69,284
Gross Unrealized Losses	(24,688)	(38,516)
Estimated Fair value	$ 2,656,054	$ 2,853,733

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2011

Employee Benefit Plans

Employee Benefit Plans

NOTE G – Employee Benefit Plans

The Corporation maintains a defined benefit pension plan (Pension Plan) for certain employees. Contributions to the Pension Plan are actuarially determined and funded annually, if required. Pension Plan assets are invested in: money markets; fixed income securities, including corporate bonds, U.S. Treasury securities and common trust funds; and equity securities, including common stocks and common stock mutual funds. Effective January 1, 2008, the Pension Plan was curtailed.

The Corporation currently provides medical and life insurance benefits under a postretirement benefits plan (Postretirement Plan) to certain retired full-time employees who were employees of the Corporation prior to January 1, 1998. Certain full-time employees may become eligible for these discretionary benefits if they reach retirement age while working for the Corporation.

The Corporation recognizes the funded status of its Pension Plan and Postretirement Plan on the consolidated balance sheets and recognizes the changes in that funded status through other comprehensive income.

The net periodic benefit cost for the Corporation's Pension Plan and Postretirement Plan, as determined by consulting actuaries, consisted of the following components for the three and six months ended June 30:

	Pension Plan
	Three months ended June  30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Service cost (1)	$	15		$	26		$	30		$	52
Interest cost		853			842			1,706			1,684
Expected return on plan assets		(837	)		(802	)		(1,674	)		(1,604	)
Net amortization and deferral		72			119			144			238
Net periodic benefit cost	$	103		$	185		$	206		$	370

(1) The Pension Plan service cost recorded for the three and six months ended June 30, 2011 and 2010, respectively, was related to administrative costs associated with the plan and not due to the accrual of additional participant benefits.

	Postretirement Plan
	Three months ended June  30						Six months ended June  30
	2011			2010			2011			2010
	(in thousands)
Service cost	$	50		$	48		$	101		$	98
Interest cost		107			110			214			220
Expected return on plan assets		(1	)		(1	)		(2	)		(2	)
Net accretion and deferral		(91	)		(91	)		(182	)		(182	)
Net periodic benefit cost	$	65		$	66		$	131		$	134

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New Accounting Standards

6 Months Ended

Jun. 30, 2011

New Accounting Standards

New Accounting Standards

NOTE L – New Accounting Standards

In April 2011, the FASB issued ASC Update 2011-02, "A Creditor's Determination of Whether a Restructuring Is a Troubled Debt Restructuring" (ASC Update 2011-02). ASC Update 2011-02 provides clarifying guidance for creditors when evaluating whether a restructuring constitutes a troubled debt restructuring. ASC Update 2011-02 provides additional guidance for when a creditor has granted a concession and whether a debtor is experiencing financial difficulty. This standards update is effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. For the Corporation, this standards update is effective in connection with its September 30, 2011 interim filing on Form 10-Q. The adoption of ASC Update 2011-02 is not expected to materially impact the Corporation's financial statements.

In May 2011, the FASB issued ASC Update 2011-04, "Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs" (ASC Update 2011-04). ASC Update 2011-04 amends fair value measurement and disclosure requirements in U.S. GAAP for the purpose of improving the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. GAAP and International Financial Reporting Standards (IFRS). Among the amendments in ASC Update 2011-04 are expanded disclosure requirements that require companies to quantitatively disclose inputs used in Level 3 fair value measurements and to qualitatively disclose the sensitivity of fair value measurement to changes in unobservable inputs. This standards update is effective for the first interim or annual period beginning on or after December 15, 2011. For the Corporation, this standards update is effective in connection with its March 31, 2012 interim filing on Form 10-Q. The adoption of ASC Update 2011-04 is not expected to materially impact the Corporation's financial statements.

In June 2011, the FASB issued ASC Update 2011-05, "Presentation of Other Comprehensive Income" (ASC Update 2011-05). ASC Update 2011-05 requires companies to present total comprehensive income, consisting of net income and other comprehensive income, in either one continuous statement of comprehensive income or in two separate but consecutive statements. Presently, the Corporation reports total comprehensive income within its Consolidated Statement of Shareholders' Equity and Comprehensive Income. For publicly traded entities, this standards update is effective for fiscal years beginning after December 31, 2011. For the Corporation, this standards update is effective in connection with its March 31, 2012 interim filing on Form 10-Q.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments

Derivative Financial Instruments

NOTE H – Derivative Financial Instruments

In connection with its mortgage banking activities, the Corporation enters into commitments to originate fixed-rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, the Corporation enters into forward commitments for the future sale or purchase of mortgage-backed securities to or from third-party investors to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans at a fixed price on a future date. Both the interest rate locks and the forward commitments are accounted for as derivative financial instruments and are carried at fair value, determined as the amount that would be necessary to settle each derivative financial instrument at the balance sheet date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured. Gross derivative assets and liabilities are recorded within other assets and other liabilities, respectively, on the consolidated balance sheets.

The following table presents a summary of the notional amounts and fair values of derivative financial instruments recorded on the consolidated balance sheets, none of which have been designated as hedging instruments:

	June 30, 2011					December 31, 2010
	Notional Amount		Asset (Liability) Fair Value			Notional Amount		Asset (Liability) Fair Value
	(in thousands)
Interest Rate Locks with Customers:
Positive fair values	$	163,795	$	2,041		$	140,682	$	777
Negative fair values		3,736		(22	)		50,527		(760	)
Net Interest Rate Locks with Customers				2,019					17
Forward Commitments:
Positive fair values		49,369		131			558,861		8,479
Negative fair values		118,459		(975	)		0		0
Net Forward Commitments				(844	)				8,479
			$	1,175				$	8,496

The following table presents a summary of the fair value gains and losses on derivative financial instruments for the three and six months ended June 30:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Interest rate locks with customers (1)	$	82		$	1,499		$	2,002		$	2,521
Forward commitments (1)		(38	)		(4,878	)		(9,323	)		(6,176	)
	$	44		$	(3,379	)	$	(7,321	)	$	(3,655	)

(1) Fair value gains and losses recorded as components of mortgage banking income on the consolidated statements of income.

Fair value gains and losses represent the changes in the fair values of derivative financial instruments during the period and are recognized on the consolidated statements of income as components of mortgage banking income. The other components of mortgage banking income are gains and losses on sales of mortgage loans, fair value adjustments on mortgage loans held for sale, gains and losses on the settlement of forward commitments, and net servicing income. Total mortgage banking income was $6.0 million and $11.5 million for the three and six months ended June 30, 2011, respectively. Total mortgage banking income was $3.9 million and $8.0 million for the three and six months ended June 30, 2010, respectively.

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Net Income Per Common Share and Other Comprehensive Income (Reconciliation of Weighted Average Common Shares Outstanding) (Details) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Net Income Per Common Share and Other Comprehensive Income
Weighted average shares outstanding (basic)	198,772	190,221	198,686	183,236
Effect of dilutive securities	755	606	721	557
Weighted average shares outstanding (diluted)	199,527	190,827	199,407	183,793

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2011

Stock-Based Compensation

Stock-Based Compensation

NOTE F – Stock-Based Compensation

The fair value of equity awards granted to employees is recognized as compensation expense over the period during which employees are required to provide service in exchange for such awards. The Corporation grants equity awards to employees, consisting of stock options and restricted stock, under its 2004 Stock Option and Compensation Plan (Employee Option Plan). In addition, employees may purchase stock under the Corporation's Employee Stock Purchase Plan.

The following table presents compensation expense and the related tax benefits for equity awards recognized in the consolidated statements of income:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Stock-based compensation expense	$	554		$	318		$	1,101		$	611
Tax benefit		(119	)		(66	)		(255	)		(128	)
Stock-based compensation expense, net of tax	$	435		$	252		$	846		$	483

Stock option exercise prices are equal to the fair value of the Corporation's stock on the date of grant, and carry terms of up to ten years. Restricted stock fair values are equal to the average trading price of the Corporation's stock on the date of grant. Restricted stock awards earn dividends during the vesting period, which are forfeitable if the awards do not vest. Stock options and restricted stock are typically granted annually on July 1st and become fully vested over or after a three-year vesting period. Certain events, as defined in the Employee Option Plan, result in the acceleration of the vesting of both stock options and restricted stock. As of June 30, 2011, the Employee Option Plan had 13.0 million shares reserved for future grants through 2013. On July 1, 2011, the Corporation granted approximately 616,000 stock options and 267,000 shares of restricted stock under its Employee Option Plan.

On July 1, 2011, the Corporation also granted approximately 11,000 shares of restricted stock to non-employee directors of the holding company under its 2011 Directors' Equity Participation Plan (Directors' Plan) that become fully vested after one year. Under the Directors' Plan, the Corporation can grant equity awards to non-employee holding company and affiliate directors in the form of stock options, restricted stock or common stock. As of June 30, 2011, the Directors' Plan had 500,000 shares reserved for future grants through 2021.

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Mortgage Servicing Rights (Summary of Changes in Mortgage Servicing Rights) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Mortgage Servicing Rights
Balance at beginning of period	$ 32,060	$ 24,517	$ 30,700	$ 23,499
Originations of mortgage servicing rights	2,010	1,756	4,668	3,672
Amortization expense	(1,261)	(946)	(2,559)	(1,844)
Balance at end of period	32,809	25,327	32,809	25,327
Balance at beginning of period	(1,550)	(1,000)	(1,550)	(1,000)
Additions	0	0	0	0
Balance at end of period	(1,550)	(1,000)	(1,550)	(1,000)
Net MSRs at end of period	31,259	24,327	31,259	24,327
Valuation allowance			$ 0

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Consolidated Statements of Shareholders' Equity and Comprehensive Income (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Consolidated Statements of Shareholders' Equity and Comprehensive Income
Common stock cash dividends, per share	$ 0.05	$ 0.03	$ 0.09	$ 0.06

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Net Income Per Common Share and Other Comprehensive Income

6 Months Ended

Jun. 30, 2011

Net Income Per Common Share and Other Comprehensive Income

Net Income Per Common Share and Other Comprehensive Income

NOTE B – Net Income Per Common Share and Other Comprehensive Income

The Corporation's basic net income per common share is calculated as net income available to common shareholders divided by the weighted average number of common shares outstanding. Net income available to common shareholders is calculated as net income less accrued dividends and discount accretion related to preferred stock.

For diluted net income per common share, net income available to common shareholders is divided by the weighted average number of common shares outstanding plus the incremental number of shares added as a result of converting common stock equivalents, calculated using the treasury stock method. The Corporation's common stock equivalents consist of outstanding stock options, restricted stock and common stock warrants. As of June 30, 2011, there were no outstanding common stock warrants.

A reconciliation of weighted average common shares outstanding used to calculate basic net income per common share and diluted net income per common share follows.

	Three months ended June 30				Six months ended June 30
	2011		2010		2011		2010
			(in thousands)
Weighted average shares outstanding (basic)		198,772		190,221		198,686		183,236
Effect of dilutive securities		755		606		721		557
Weighted average shares outstanding (diluted)		199,527		190,827		199,407		183,793

For the three and six months ended June 30, 2011, 4.6 million stock options were excluded from the diluted net income per share computation as their effect would have been anti-dilutive. For the three and six months ended June 30, 2010, 4.9 million and 5.2 million stock options, respectively, were excluded from the diluted net income per share computation as their effects would have been anti-dilutive.

The following table presents the components of other comprehensive income:

	Six months ended June 30
	2011			2010
	(in thousands)
Unrealized gain on securities (net of a $9.2 million and $15.2 million tax effect in 2011 and 2010, respectively)	$	17,019		$	28,277
Non-credit related unrealized gain (loss) on other-than-temporarily impaired debt securities (net of a $392,000 and $1.2 million tax effect in 2011 and 2010, respectively)		729			(2,137	)
Unrealized gain on derivative financial instruments (net of a $36,000 tax effect in 2011 and 2010) (1)		68			68
(Accretion)/amortization of net unrecognized pension and postretirement items (net of a $12,000 and $20,000 tax effect in 2011 and 2010, respectively)		(24	)		38
Reclassification adjustment for securities (gains) losses included in net income (net of $682,000 tax expense in 2011 and $461,000 tax benefit in 2010)		(1,267	)		858
Other comprehensive income	$	16,525		$	27,104

(1) Amounts represent the amortization of the effective portions of losses on forward-starting interest rate swaps, designated as cash flow hedges and entered into in prior years in connection with the issuance of fixed-rate debt. The total amount recorded as a reduction to accumulated other comprehensive income upon settlement of these derivatives is being amortized to interest expense over the life of the related securities using the effective interest method. The amount of net losses in accumulated other comprehensive income that will be reclassified into earnings during the next twelve months is expected to be approximately $135,000.

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Investment Securities (Summary of Amortized Cost and Fair Values of Corporate Debt Securities) (Details) (USD $)	Jun. 30, 2011	Dec. 31, 2010	Sep. 30, 2010
Unrealized Losses, Total	$ (24,695,000)
Equity Securities [Member]
Unrealized Losses, Total	(1,641,000)
Corporate Debt Securities [Member]
Amortized cost	131,535,000	137,101,000
Estimated Fair value		124,786,000
Available-for-sale Securities, Debt Securities	128,255,000
Unrealized Losses, Total	(8,969,000)
U.S. Government-Sponsored Agency Securities [Member]
Unrealized Losses, Total	(8,000)
State and Municipal Securities [Member]
Unrealized Losses, Total	(255,000)
Auction Rate Securities [Member]
Unrealized Losses, Total	(12,905,000)
Mortgage-Backed Securities [Member]
Unrealized Losses, Total	(744,000)
Collateralized Mortgage Obligations [Member]
Unrealized Losses, Total	(173,000)
Single-issuer Trust Preferred Securities [Member]
Amortized cost	87,338,000	91,257,000
Estimated Fair value		81,789,000
Available-for-sale Securities, Debt Securities	82,785,000
Fair Value Corporate Debt Securities Below Investment Grade	39,800,000
Carrying Amount Corporate Debt Securities Below Investment Grade Amortized Cost	40,100,000
Corporate Debt Securities Not Rated, Fair Value	10,300,000
Corporate Debt Securities Not Rated, Amortized Cost	11,800,000
Unrealized Losses, Total	4,600,000
Pooled Trust Preferred Securities [Member]
Amortized cost	6,636,000	8,295,000
Estimated Fair value		4,528,000
Available-for-sale Securities, Debt Securities	5,433,000
Fair Value Corporate Debt Securities Below Investment Grade			4,900,000
Carrying Amount Corporate Debt Securities Below Investment Grade Amortized Cost			6,000,000
Subordinated Debt [Member]
Amortized cost	35,051,000	34,995,000
Estimated Fair value		35,915,000
Available-for-sale Securities, Debt Securities	37,527,000
Other Corporate Debt Securities [Member]
Amortized cost	2,510,000	2,554,000
Estimated Fair value		2,554,000
Available-for-sale Securities, Debt Securities	2,510,000
Corporate Debt Securities Issued by Financial Institutions [Member]
Amortized cost	129,025,000	134,547,000
Estimated Fair value		122,232,000
Available-for-sale Securities, Debt Securities	$ 125,745,000

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Net Income Per Common Share and Other Comprehensive Income (Narrative) (Details) (Stock Option [Member]) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Stock Option [Member]
Antidilutive securities excluded from computation of earnings per share	4.6	4.9	4.6	5.2

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Commitment and Contingencies (Outstanding Commitments to Extend Credit and Letters of Credit) (Details) (USD $)	Jun. 30, 2011	Dec. 31, 2010
Reserve for losses	$ 1,400,000	$ 3,300,000
Commitments to Extend Credit [Member]
Financial Instruments with Off Balance Sheet Risk	3,847,362,000	3,780,824,000
Standby Letters of Credit [Member]
Financial Instruments with Off Balance Sheet Risk	463,922,000	489,097,000
Commercial Letters of Credit [Member]
Financial Instruments with Off Balance Sheet Risk	$ 26,177,000	$ 31,388,000

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Fair Value Measurements (Narrative) (Details) (USD $)	6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010
Estimated fair value	$ 33,300,000	$ 33,100,000
Available for sale mutual funds and other equity investments held	7,000,000	7,000,000
Restricted equity securities issued by the Federal Home Loan Bank and Federal Reserve Bank	88,600,000	96,400,000
Corporate debt securities	128,255,000	124,786,000
Single-issuer trust preferred securities classified as Level 2 investments	75,000,000	73,200,000
Single-issuer trust preferred securities classified as Level 3 investments	7,800,000	8,600,000
Transfers to Level 3 from Level 2		800,000
Other real estate owned classified as Level 3 investments	37,493,000	32,959,000
Mortgage servicing rights classified as Level 3 assets	31,259,000		24,327,000
Financial instruments remaining maturities	greater than 90 days
Financial Institutions Subordinated Debt [Member]
Corporate debt securities	37,500,000	35,900,000
Single-issuer Trust Preferred Securities [Member]
Corporate debt securities	82,800,000	81,800,000
Pooled Trust Preferred Securities [Member]
Corporate debt securities	5,400,000	4,500,000
Other Corporate Debt [Member]
Corporate debt securities	$ 2,500,000	$ 2,600,000

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Loans and Allowance for Credit Losses (Past Due Loan Status and Non-Accrual Loans by Portfolio Segment) (Details) (USD $) In Thousands	Jun. 30, 2011		Dec. 31, 2010
31-59 Days Past Due	$ 75,558		$ 62,895
60-89 Days Past Due	25,655		36,435
>90 Days Past Due and Accruing	35,869		48,084
Non-accrual	274,973		280,688
Total >90 Days	310,842	[1]	328,772	[1]
Total Past Due	412,055		428,102
Current	11,440,436		11,505,205
Total	11,852,491		11,933,307
Construction - Commercial Residential [Member]
31-59 Days Past Due	1,569		3,872
60-89 Days Past Due	453		3,401
>90 Days Past Due and Accruing	461		884
Non-accrual	51,952		75,552
Total >90 Days	52,413		76,436
Total Past Due	54,435		83,709
Current	348,197		409,190
Total	402,632		492,899
Construction - Commercial [Member]
31-59 Days Past Due	8		0
60-89 Days Past Due	0		0
>90 Days Past Due and Accruing	0		195
Non-accrual	3,789		5,092
Total >90 Days	3,789		5,287
Total Past Due	3,797		5,287
Current	223,510		239,150
Total	227,307		244,437
Construction - Other [Member]
31-59 Days Past Due	2,165		0
60-89 Days Past Due	0		0
>90 Days Past Due and Accruing	66		491
Non-accrual	2,113		2,402
Total >90 Days	2,179		2,893
Total Past Due	4,344		2,893
Current	47,305		60,956
Total	51,649		63,849
Real Estate - Construction [Member]
31-59 Days Past Due	3,742		3,872
60-89 Days Past Due	453		3,401
>90 Days Past Due and Accruing	527		1,570
Non-accrual	57,854		83,046
Total >90 Days	58,381		84,616
Total Past Due	62,576		91,889
Current	619,012		709,296
Total	681,588		801,185
Real Estate - Commercial Mortgage [Member]
31-59 Days Past Due	20,376		15,898
60-89 Days Past Due	5,161		8,491
>90 Days Past Due and Accruing	5,578		6,744
Non-accrual	97,146		86,976
Total >90 Days	102,724		93,720
Total Past Due	128,261		118,109
Current	4,314,764		4,257,871
Total	4,443,025		4,375,980
Commercial - Secured [Member]
31-59 Days Past Due	13,077		5,274
60-89 Days Past Due	5,622		6,837
>90 Days Past Due and Accruing	5,892		13,374
Non-accrual	85,748		72,162
Total >90 Days	91,640		85,536
Total Past Due	110,339		97,647
Current	3,333,421		3,373,651
Total	3,443,760		3,471,298
Commercial - Unsecured [Member]
31-59 Days Past Due	823		629
60-89 Days Past Due	490		553
>90 Days Past Due and Accruing	295		731
Non-accrual	2,920		1,188
Total >90 Days	3,215		1,919
Total Past Due	4,528		3,101
Current	230,570		229,985
Total	235,098		233,086
Commercial - Industrial, Financial and Agricultural [Member]
31-59 Days Past Due	13,900		5,903
60-89 Days Past Due	6,112		7,390
>90 Days Past Due and Accruing	6,187		14,105
Non-accrual	88,668		73,350
Total >90 Days	94,855		87,455
Total Past Due	114,867		100,748
Current	3,563,991		3,603,636
Total	3,678,858		3,704,384
Real Estate - Home Equity [Member]
31-59 Days Past Due	10,112		8,138
60-89 Days Past Due	1,989		3,767
>90 Days Past Due and Accruing	9,241		10,024
Non-accrual	199		164
Total >90 Days	9,440		10,188
Total Past Due	21,541		22,093
Current	1,605,004		1,619,684
Total	1,626,545		1,641,777
Real Estate - Residential Mortgage [Member]
31-59 Days Past Due	24,031		24,237
60-89 Days Past Due	10,463		12,094
>90 Days Past Due and Accruing	12,197		13,346
Non-accrual	31,003		37,066
Total >90 Days	43,200		50,412
Total Past Due	77,694		86,743
Current	945,952		909,247
Total	1,023,646		995,990
Consumer - Direct [Member]
31-59 Days Past Due	343		707
60-89 Days Past Due	153		228
>90 Days Past Due and Accruing	65		212
Non-accrual	12		0
Total >90 Days	77	[1]	212	[1]
Total Past Due	573		1,147
Current	37,161		45,942
Total	37,734		47,089
Consumer - Indirect [Member]
31-59 Days Past Due	1,489		1,916
60-89 Days Past Due	309		359
>90 Days Past Due and Accruing	89		290
Non-accrual	0		0
Total >90 Days	89	[1]	290	[1]
Total Past Due	1,887		2,565
Current	158,988		166,531
Total	160,875		169,096
Consumer - Other [Member]
31-59 Days Past Due	1,226		1,751
60-89 Days Past Due	986		662
>90 Days Past Due and Accruing	1,924		1,638
Non-accrual	0		14
Total >90 Days	1,924	[1]	1,652	[1]
Total Past Due	4,136		4,065
Current	128,220		129,911
Total	132,356		133,976
Consumer [Member]
31-59 Days Past Due	3,058		4,374
60-89 Days Past Due	1,448		1,249
>90 Days Past Due and Accruing	2,078		2,140
Non-accrual	12		14
Total >90 Days	2,090	[1]	2,154	[1]
Total Past Due	6,596		7,777
Current	324,369		342,384
Total	330,965		350,161
Leasing and Other and Overdrafts [Member]
31-59 Days Past Due	339		473
60-89 Days Past Due	29		43
>90 Days Past Due and Accruing	61		155
Non-accrual	91		72
Total >90 Days	152	[1]	227	[1]
Total Past Due	520		743
Current	67,344		63,087
Total	$ 67,864		$ 63,830

[1] Includes all accruing loans 90 days or more past due and all non-accrual loans.

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Fair Value Measurements (Details of Book Value and Fair Value of Financial Instruments) (Details) (USD $) In Thousands	Jun. 30, 2011		Dec. 31, 2010		Jun. 30, 2010	Dec. 31, 2009
Cash and due from banks	$ 284,691		$ 198,954		$ 268,371	$ 284,508
Interest-bearing deposits with other banks	124,967		33,297
Loans held for sale	47,133		83,940
Securities held to maturity	6,990		7,751
Securities available for sale	2,656,054		2,853,733
Loans, net of unearned income	11,852,491		11,933,307
Accrued interest receivable	51,387		53,841
Short-term borrowings	546,581		674,077
Accrued interest payable	29,444		33,333
Federal Home Loan Bank advances and long-term debt	1,025,537		1,119,450
Book Value [Member]
Cash and due from banks	284,691		198,954
Interest-bearing deposits with other banks	124,967		33,297
Loans held for sale	47,133	[1]	83,940	[1]
Securities held to maturity	6,990		7,751
Securities available for sale	2,656,054	[1]	2,853,733	[1]
Loans, net of unearned income	11,852,491	[1]	11,933,307	[1]
Accrued interest receivable	51,387		53,841
Other financial assets	133,787	[1]	230,044	[1]
Demand and savings deposits	7,987,686		7,758,613
Time deposits	4,275,209		4,629,968
Short-term borrowings	546,581		674,077
Accrued interest payable	29,444		33,333
Other financial liabilities	63,682	[1]	80,551	[1]
Federal Home Loan Bank advances and long-term debt	1,025,537		1,119,450
Estimated Fair Value [Member]
Cash and due from banks	284,691		198,954
Interest-bearing deposits with other banks	124,967		33,297
Loans held for sale	47,133	[1]	83,940	[1]
Securities held to maturity	7,038		7,818
Securities available for sale	2,656,054	[1]	2,853,733	[1]
Loans, net of unearned income	11,848,458	[1]	11,909,539	[1]
Accrued interest receivable	51,387		53,841
Other financial assets	133,787	[1]	230,044	[1]
Demand and savings deposits	7,987,686		7,758,613
Time deposits	4,316,011		4,677,494
Short-term borrowings	546,581		674,077
Accrued interest payable	29,444		33,333
Other financial liabilities	63,682	[1]	80,551	[1]
Federal Home Loan Bank advances and long-term debt	$ 918,408		$ 1,077,724

[1] Description of fair value determinations for these financial instruments, or certain financial instruments within these categories, measured at fair value on the Corporation's consolidated balance sheets, are disclosed above.

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Investment Securities

6 Months Ended

Jun. 30, 2011

Investment Securities

Investment Securities

NOTE C – Investment Securities

The following tables present the amortized cost and estimated fair values of investment securities:

Held to Maturity at June 30, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
U.S. Government sponsored agency securities	$	6,014	$	0	$	(7	)	$	6,007
State and municipal securities		346		0		0			346
Mortgage-backed securities		630		55		0			685
	$	6,990	$	55	$	(7	)	$	7,038
Available for Sale at June 30, 2011
Equity securities	$	126,841	$	3,761	$	(1,641	)	$	128,961
U.S. Government securities		1,324		0		0			1,324
U.S. Government sponsored agency securities		4,858		135		(1	)		4,992
State and municipal securities		345,942		9,939		(255	)		355,626
Corporate debt securities		131,535		5,689		(8,969	)		128,255
Collateralized mortgage obligations		968,785		25,370		(173	)		993,982
Mortgage-backed securities		753,353		35,163		(744	)		787,772
Auction rate securities		267,339		708		(12,905	)		255,142
	$	2,599,977	$	80,765	$	(24,688	)	$	2,656,054

Held to Maturity at December 31, 2010	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
U.S. Government sponsored agency securities	$	6,339	$	0	$	(1	)	$	6,338
State and municipal securities		346		0		0			346
Mortgage-backed securities		1,066		68		0			1,134
	$	7,751	$	68	$	(1	)	$	7,818
Available for Sale at December 31, 2010
Equity securities	$	133,570	$	3,872	$	(974	)	$	136,468
U.S. Government securities		1,649		0		0			1,649
U.S. Government sponsored agency securities		4,888		172		(2	)		5,058
State and municipal securities		345,053		6,003		(1,493	)		349,563
Corporate debt securities		137,101		3,808		(16,123	)		124,786
Collateralized mortgage obligations		1,085,613		23,457		(5,012	)		1,104,058
Mortgage-backed securities		843,446		31,080		(3,054	)		871,472
Auction rate securities		271,645		892		(11,858	)		260,679
	$	2,822,965	$	69,284	$	(38,516	)	$	2,853,733

Available for sale equity securities include restricted investment securities issued by the Federal Home Loan Bank (FHLB) and the Federal Reserve Bank totaling $88.6 million and $96.4 million as of June 30, 2011 and December 31, 2010, respectively.

The amortized cost and estimated fair values of debt securities as of June 30, 2011, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Held to Maturity				Available for Sale
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	6,181	$	6,174	$	80,963	$	81,194
Due from one year to five years		179		179		49,609		51,521
Due from five years to ten years		0		0		136,802		143,210
Due after ten years		0		0		483,624		469,414
		6,360		6,353		750,998		745,339
Collateralized mortgage obligations		0		0		968,785		993,982
Mortgage-backed securities		630		685		753,353		787,772
	$	6,990	$	7,038	$	2,473,136	$	2,527,093

The following table presents information related to the Corporation's gains and losses on the sales of equity and debt securities, and losses recognized for the other-than-temporary impairment of investments:

	Gross Realized Gains		Gross Realized Losses			Other-than- temporary Impairment Losses			Net Gains (Losses)
	(in thousands)
Three months ended June 30, 2011:
Equity securities	$	43	$	0		$	(34	)	$	9
Debt securities		16		(1	)		(359	)		(344	)
Total	$	59	$	(1	)	$	(393	)	$	(335	)
Three months ended June 30, 2010:
Equity securities	$	14	$	0		$	(509	)	$	(495	)
Debt securities		4,401		(13	)		(2,989	)		1,399
Total	$	4,415	$	(13	)	$	(3,498	)	$	904
Six months ended June 30, 2011:
Equity securities	$	48	$	0		$	(331	)	$	(283	)
Debt securities		3,605		(19	)		(1,353	)		2,233
Total	$	3,653	$	(19	)	$	(1,684	)	$	1,950
Six months ended June 30, 2010:
Equity securities	$	850	$	0		$	(1,333	)	$	(483	)
Debt securities		6,324		(18	)		(7,142	)		(836	)
Total	$	7,174	$	(18	)	$	(8,475	)	$	(1,319	)

The other-than-temporary impairment charges for equity securities during the three and six months ended June 30, 2011 and 2010, respectively, were for investments in stocks of financial institutions. Other-than-temporary impairment charges related to financial institution stocks were due to the severity and duration of the declines in fair values of certain bank stock holdings, in conjunction with management's assessment of the near-term prospects of each specific issuer. As of June 30, 2011, after other-than-temporary impairment charges, the financial institutions stock portfolio had a cost basis of $31.2 million and a fair value of $33.3 million.

The credit related other-than-temporary impairment charges for debt securities during the three and six months ended June 30, 2011 and 2010, were for investments in pooled trust preferred securities issued by financial institutions. Other-than-temporary impairment charges related to pooled trust preferred securities were determined based on an expected cash flows model.

The following table presents a summary of the cumulative credit related other-than-temporary impairment charges, recognized as components of earnings, for pooled trust preferred securities still held by the Corporation:

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Balance of cumulative credit losses on pooled trust preferred securities, beginning of period	$	(28,517	)	$	(19,765	)	$	(27,560	)	$	(15,612	)
Additions for credit losses recorded which were not previously recognized as components of earnings		(359	)		(2,989	)		(1,353	)		(7,142	)
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security		0			0			37			0
Balance of cumulative credit losses on pooled trust preferred securities, end of period	$	(28,876	)	$	(22,754	)	$	(28,876	)	$	(22,754	)

The following table presents the gross unrealized losses and estimated fair values of investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at June 30, 2011:

	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(in thousands)
U.S. Government sponsored agency securities	$	5,377	$	(7	)	$	187	$	(1	)	$	5,564	$	(8	)
State and municipal securities		31,090		(254	)		401		(1	)		31,491		(255	)
Corporate debt securities		4,900		(105	)		46,505		(8,864	)		51,405		(8,969	)
Collateralized mortgage obligations		102,430		(173	)		0		0			102,430		(173	)
Mortgage-backed securities		66,829		(744	)		0		0			66,829		(744	)
Auction rate securities		56,746		(1,550	)		175,166		(11,355	)		231,912		(12,905	)
Total debt securities		267,372		(2,833	)		222,259		(20,221	)		489,631		(23,054	)
Equity securities		11,584		(1,138	)		1,690		(503	)		13,274		(1,641	)
	$	278,956	$	(3,971	)	$	223,949	$	(20,724	)	$	502,905	$	(24,695	)

For its investments in equity securities, most notably its investments in stocks of financial institutions, management evaluates the near-term prospects of the issuers in relation to the severity and duration of the impairment. Based on that evaluation and the Corporation's ability and intent to hold those investments for a reasonable period of time sufficient for a recovery of fair value, the Corporation does not consider those investments with unrealized holding losses as of June 30, 2011 to be other-than-temporarily impaired.

The unrealized holding losses on investments in student loan auction rate securities, also known as auction rate certificates (ARCs), are attributable to liquidity issues resulting from the failure of periodic auctions. Fulton Financial Advisors (FFA), the investment management and trust division of the Corporation's Fulton Bank, N.A. subsidiary, held ARCs for some of its customers' accounts. FFA had previously sold ARCs to customers as short-term investments with fair values that could be derived based on periodic auctions under normal market conditions. During 2008 and 2009, the Corporation purchased ARCs from customers due to the failure of these periodic auctions, which made these previously short-term investments illiquid.

As of June 30, 2011, approximately $205 million, or 80%, of the ARCs were rated above investment grade, with approximately $156 million, or 61%, AAA rated. Approximately $50 million, or 20%, of ARCs were rated below investment grade by at least one ratings agency or not rated. Of this amount, approximately $29 million, or 59%, of the student loans underlying the ARCs have principal payments which are guaranteed by the Federal government. In total, approximately $225 million, or 89%, of the student loans underlying the ARCs have principal payments which are guaranteed by the Federal government. As of June 30, 2011, all ARCs were current and making scheduled interest payments. Because the Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, the Corporation does not consider these investments to be other-than-temporarily impaired as of June 30, 2011.

The Corporation's collateralized mortgage obligations and mortgage-backed securities have contractual terms that generally do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because the decline in market value of these securities is attributable to changes in interest rates and not credit quality, and because the Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, the Corporation does not consider these investments to be other-than-temporarily impaired as of June 30, 2011.

The following table presents the amortized cost and estimated fair values of corporate debt securities:

	June 30, 2011				December 31, 2010
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
	(in thousands)
Single-issuer trust preferred securities	$	87,338	$	82,785	$	91,257	$	81,789
Subordinated debt		35,051		37,527		34,995		35,915
Pooled trust preferred securities		6,636		5,433		8,295		4,528
Corporate debt securities issued by financial institutions		129,025		125,745		134,547		122,232
Other corporate debt securities		2,510		2,510		2,554		2,554
Available for sale corporate debt securities	$	131,535	$	128,255	$	137,101	$	124,786

The Corporation's investments in single-issuer trust preferred securities had an unrealized loss of $4.6 million at June 30, 2011. The Corporation did not record any other-than-temporary impairment charges for single-issuer trust preferred securities during the three or six months ended June 30, 2011 or 2010, respectively. The Corporation held 13 single-issuer trust preferred securities that were rated below investment grade by at least one ratings agency, with an amortized cost of $40.1 million and an estimated fair value of $39.8 million at June 30, 2011. The majority of the single-issuer trust preferred securities rated below investment grade were rated BB or Baa. Single-issuer trust preferred securities with an amortized cost of $11.8 million and an estimated fair value of $10.3 million at June 30, 2011 were not rated by any ratings agency.

The Corporation holds ten pooled trust preferred securities. As of June 30, 2011, nine of these securities, with an amortized cost of $6.0 million and an estimated fair value of $4.9 million, were rated below investment grade by at least one ratings agency, with ratings ranging from C to Ca. For each of the nine pooled trust preferred securities rated below investment grade, the class of securities held by the Corporation is below the most senior tranche, with the Corporation's interests being subordinate to other investors in the pool. The Corporation determines the fair value of pooled trust preferred securities based on quotes provided by third-party brokers.

The amortized cost of pooled trust preferred securities is the purchase price of the securities, net of cumulative credit related other-than-temporary impairment charges, determined using an expected cash flows model. The most significant input to the expected cash flows model was the expected payment deferral rate for each pooled trust preferred security. The Corporation evaluates the financial metrics, such as capital ratios and non-performing asset ratios, of the individual financial institution issuers that comprise each pooled trust preferred security to estimate its expected deferral rate. The actual weighted average cumulative defaults and deferrals as a percentage of original collateral were approximately 38% as of June 30, 2011. The discounted cash flow modeling for pooled trust preferred securities held by the Corporation as of June 30, 2011 assumed, on average, an additional 19% expected deferral rate.

Based on management's evaluations, corporate debt securities with a fair value of $128.3 million were not subject to any additional other-than-temporary impairment charges as of June 30, 2011. The Corporation does not have the intent to sell and does not believe it will more likely than not be required to sell any of these securities prior to a recovery of their fair value to amortized cost, which may be maturity.

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Loans and Allowance for Credit Losses (Summary Of Gross Loans) (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Loans and Allowance for Credit Losses
Real-estate - commercial mortgage	$ 4,443,025	$ 4,375,980
Commercial - industrial, financial and agricultural	3,678,858	3,704,384
Real-estate - home equity	1,626,545	1,641,777
Real-estate - residential mortgage	1,023,646	995,990
Real-estate - construction	681,588	801,185
Consumer	330,965	350,161
Leasing and other	58,591	61,017
Overdrafts	15,657	10,011
Loans before unearned income	11,858,875	11,940,505
Unearned income	(6,384)	(7,198)
Loans, net of unearned income	$ 11,852,491	$ 11,933,307

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Summary of Outstanding Commitments to Extend Credit and Letters of Credit

	June 30, 2011		December 31, 2010
	(in thousands)
Commitments to extend credit	$	3,847,362	$	3,780,824
Standby letters of credit		463,922		489,097
Commercial letters of credit		26,177		31,388

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Fair Value Measurements (Changes in Assets and Liabilities Measured at Fair Value on a Recurring Basis Using Level 3 Inputs) (Details) (USD $)		3 Months Ended				6 Months Ended				3 Months Ended				6 Months Ended				3 Months Ended				6 Months Ended
	Dec. 31, 2010	Jun. 30, 2011 Pooled Trust Preferred Securities [Member]		Jun. 30, 2010 Pooled Trust Preferred Securities [Member]		Jun. 30, 2011 Pooled Trust Preferred Securities [Member]		Jun. 30, 2010 Pooled Trust Preferred Securities [Member]		Jun. 30, 2011 Single-issuer Trust Preferred Securities [Member]		Jun. 30, 2010 Single-issuer Trust Preferred Securities [Member]		Jun. 30, 2011 Single-issuer Trust Preferred Securities [Member]		Jun. 30, 2010 Single-issuer Trust Preferred Securities [Member]		Jun. 30, 2011 ARC Investments [Member]		Jun. 30, 2010 ARC Investments [Member]		Jun. 30, 2011 ARC Investments [Member]		Jun. 30, 2010 ARC Investments [Member]
Balance, beginning of period		$ 4,816,000		$ 4,900,000		$ 4,528,000		$ 4,979,000		$ 8,094,000		$ 7,136,000		$ 8,583,000		$ 6,981,000		$ 256,413,000		$ 288,133,000		$ 260,679,000		$ 289,203,000
Transfers to Level 3 from Level 2	800,000
Transfer to Level 3 from Level 2				0	[1]			0	[1]			650,000	[1]			650,000	[1]			0	[1]			0	[1]
Transfers from Level 3 to Level 2						0	[1]							(800,000)	[1]							0	[1]
Realized adjustment to fair value		(359,000)	[2]	(2,989,000)	[2]	(1,353,000)	[2]	(7,142,000)	[2]	0	[2]	0	[2]	0	[2]	0	[2]	0	[2]	0	[2]	0	[2]	0	[2]
Unrealized adjustment to fair value		1,122,000	[3]	2,374,000	[3]	2,552,000	[3]	6,453,000	[3]	(274,000)	[3]	299,000	[3]	38,000	[3]	453,000	[3]	(2,260,000)	[3]	(2,376,000)	[3]	(7,479,000)	[3]	(3,642,000)	[3]
Sales				0				0				0				0				(5,033,000)				(5,033,000)
Redemptions		(145,000)		0		(292,000)		0		0		0		0		0		(24,000)		(5,281,000)		(251,000)		(6,382,000)
(Premium amortization) discount accretion		(1,000)	[4]	(6,000)	[4]	(2,000)	[4]	(11,000)	[4]	(1,000)	[4]	0	[4]	(2,000)	[4]	1,000	[4]	1,013,000	[4]	1,096,000	[4]	2,193,000	[4]	2,393,000	[4]
Balance, end of period		$ 5,433,000		$ 4,279,000		$ 5,433,000		$ 4,279,000		$ 7,819,000		$ 8,085,000		$ 7,819,000		$ 8,085,000		$ 255,142,000		$ 276,539,000		$ 255,142,000		$ 276,539,000

[1] During the six months ended June 30, 2011, one single-issuer trust preferred security with a fair value of $800,000 as of December 31, 2010 was reclassified as a Level 2 asset. As of June 30, 2011, the fair value of this security was measured at fair value by a third-party pricing service using both quoted prices for similar assets and model-based valuation techniques that derived fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. As of December 31, 2010, the fair value of this security was determined based on quotes provided by third-party brokers who determined its fair value based predominantly on an internal valuation model.

[2] For pooled trust preferred securities, realized adjustments to fair value represent credit related other-than-temporary impairment charges that were recorded as a reduction to investment securities gains on the consolidated statements of income.

[3] Pooled trust preferred securities, single-issuer trust preferred securities and ARCs are classified as available for sale investment securities; as such, the unrealized adjustment to fair value was recorded as an unrealized holding gain (loss) and included as a component of available for sale investment securities on the consolidated balance sheet.

[4] Included as a component of net interest income on the consolidated statements of income.

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Net Income Per Common Share and Other Comprehensive Income (Components of Other Comprehensive Income) (Details) (USD $)	6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010
Net Income Per Common Share and Other Comprehensive Income
Unrealized gain on securities, net of tax	$ 17,019,000		$ 28,277,000
Unrealized gain on securities, tax	9,200,000		15,200,000
Non-credit related unrealized gain (loss) on other-than-temporarily impaired debt securities, net of tax	729,000		(2,137,000)
Non-credit related unrealized gain (loss) on other-than-temporarily impaired debt securities, tax	392,000		1,200,000
Unrealized gain on derivative financial instruments, net of tax	68,000	[1]	68,000	[1]
Unrealized gain on derivative financial instruments, tax	36,000		36,000
(Accretion)/amortization of net unrecognized pension and postretirement items, net of tax	(24,000)		38,000
Amortization of unrecognized pension and postretirement costs, tax	12,000		20,000
Reclassification adjustment for securities (gains) losses included in net income, net of tax	(1,267,000)		858,000
Reclassification adjustment for securities (gains) losses included in net income, tax	(682,000)		461,000
Other comprehensive income	16,525,000		27,104,000
Net losses in accumulated other comprehensive income reclassified into earnings during the next 12 months	$ 135,000

[1] Amounts represent the amortization of the effective portions of losses on forward-starting interest rate swaps, designated as cash flow hedges and entered into in prior years in connection with the issuance of fixed-rate debt. The total amount recorded as a reduction to accumulated other comprehensive income upon settlement of these derivatives is being amortized to interest expense over the life of the related securities using the effective interest method. The amount of net losses in accumulated other comprehensive income that will be reclassified into earnings during the next twelve months is expected to be approximately $135,000.

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Loans and Allowance for Credit Losses (Narrative) (Details) (USD $)	3 Months Ended			6 Months Ended	12 Months Ended
	Jun. 30, 2011		Mar. 31, 2011	Jun. 30, 2011	Dec. 31, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2009
Loans and Allowance for Credit Losses
Impaired Loans without related Allowance for Loan Loss				$ 98,300,000	$ 138,300,000
Average Investment in impaired loans					772,300,000
Impaired loans balances allocated reserves				1,000,000
Impaired loans with primary collateral as real estate			57.00%		52.00%
Interest income on impaired loans	785,000	[1]		4,167,000	27,400,000
Commitments to lend additional funds to borrowers	1,800,000			1,800,000	1,600,000
Period for which change in loans evaluated individually for impairment	90
Period for which change in loans evaluated individually for impairment quarterly	12
Initial balance of loans, individually evaluated for impairment			525,600,000
Loans, individually evaluated for impairment			335,600,000
Initial balance of loans, allowance for credit losses, individually evaluated for impairment			106,000,000
Loans, allowance for credit losses, individually evaluated for impairment			88,000,000
Period for which certified third-party give appraisals	12			12	12
Impaired loans with principal balances approximately in percentage				85.00%
Impaired loans balances, real estate as collateral	1,000,000			1,000,000	1,000,000
Initial balance of loans, collectively evaluated for impairment			11,500,000
loans, collectively evaluated for impairment			182,200,000
Initial balance of loans, financing receivable, allowance for credit losses, collectively evaluated for impairment			11,300,000
Financing receivable, allowance for credit losses, collectively evaluated for impairment			164,200,000
Allowance for credit losses	$ 268,633,000		$ 271,156,000	$ 268,633,000	$ 275,498,000	$ 280,377,000	$ 269,254,000	$ 257,553,000

[1] Effective April 1, 2011, all impaired loans, excluding certain accruing Impaired TDRs, were non-accrual loans. Interest income recognized for the three months ended June 30, 2011 represents amounts earned on accruing TDRs.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

	June 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	0	$	47,133	$	0	$	47,133
Available for sale investment securities:
Equity securities		40,326		0		0		40,326
U.S. Government securities		0		1,324		0		1,324
U.S. Government sponsored agency securities		0		4,992		0		4,992
State and municipal securities		0		355,626		0		355,626
Corporate debt securities		0		115,003		13,252		128,255
Collateralized mortgage obligations		0		993,982		0		993,982
Mortgage-backed securities		0		787,772		0		787,772
Auction rate securities		0		0		255,142		255,142
Total available for sale investments		40,326		2,258,699		268,394		2,567,419
Other financial assets		13,970		2,172		0		16,142
Total assets	$	54,296	$	2,308,004	$	268,394	$	2,630,694
Other financial liabilities	$	13,970	$	997	$	0	$	14,967

	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	0	$	83,940	$	0	$	83,940
Available for sale investment securities:
Equity securities		40,070		0		0		40,070
U.S. Government securities		0		1,649		0		1,649
U.S. Government sponsored agency securities		0		5,058		0		5,058
State and municipal securities		0		349,563		0		349,563
Corporate debt securities		0		111,675		13,111		124,786
Collateralized mortgage obligations		0		1,104,058		0		1,104,058
Mortgage-backed securities		0		871,472		0		871,472
Auction rate securities		0		0		260,679		260,679
Total available for sale investments		40,070		2,443,475		273,790		2,757,335
Other financial assets		13,582		9,256		0		22,838
Total assets	$	53,652	$	2,536,671	$	273,790	$	2,864,113
Other financial liabilities	$	13,582	$	760	$	0	$	14,342

Schedule of Changes in Assets and Liabilities Measured at Fair Value on a Recurring Basis using Level 3 Inputs

	Three months ended June 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, March 31, 2011	$	4,816		$	8,094		$	256,413
Realized adjustment to fair value (2)		(359	)		0			0
Unrealized adjustment to fair value (3)		1,122			(274	)		(2,260	)
Redemptions		(145	)		0			(24	)
(Premium amortization)/discount accretion (4)		(1	)		(1	)		1,013
Balance, June 30, 2011	$	5,433		$	7,819		$	255,142
	Three months ended June 30, 2010
Balance, March 31, 2010	$	4,900		$	7,136		$	288,133
Transfer to Level 3 from Level 2 (1)		0			650			0
Realized adjustment to fair value (2)		(2,989	)		0			0
Unrealized adjustment to fair value (3)		2,374			299			(2,376	)
Sales		0			0			(5,033	)
Redemptions		0			0			(5,281	)
(Premium amortization)/discount accretion (4)		(6	)		0			1,096
Balance, June 30, 2010	$	4,279		$	8,085		$	276,539

	Six months ended June 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, December 31, 2010	$	4,528		$	8,583		$	260,679
Transfer from Level 3 to Level 2 (1)		0			(800	)		0
Realized adjustment to fair value (2)		(1,353	)		0			0
Unrealized adjustment to fair value (3)		2,552			38			(7,479	)
Redemptions		(292	)		0			(251	)
(Premium amortization)/discount accretion (4)		(2	)		(2	)		2,193
Balance, June 30, 2011	$	5,433		$	7,819		$	255,142
	Six months ended June 30, 2010
Balance, December 31, 2010	$	4,979		$	6,981		$	289,203
Transfer to Level 3 from Level 2 (1)		0			650			0
Realized adjustment to fair value (2)		(7,142	)		0			0
Unrealized adjustment to fair value (3)		6,453			453			(3,642	)
Sales		0			0			(5,033	)
Redemptions		0			0			(6,382	)
(Premium amortization)/discount accretion (4)		(11	)		1			2,393
Balance, June 30, 2010	$	4,279		$	8,085		$	276,539

(1) During the six months ended June 30, 2011, one single-issuer trust preferred security with a fair value of $800,000 as of December 31, 2010 was reclassified as a Level 2 asset. As of June 30, 2011, the fair value of this security was measured at fair value by a third-party pricing service using both quoted prices for similar assets and model-based valuation techniques that derived fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. As of December 31, 2010, the fair value of this security was determined based on quotes provided by third-party brokers who determined its fair value based predominantly on an internal valuation model.

(2) For pooled trust preferred securities, realized adjustments to fair value represent credit related other-than-temporary impairment charges that were recorded as a reduction to investment securities gains on the consolidated statements of income.

(3) Pooled trust preferred securities, single-issuer trust preferred securities and ARCs are classified as available for sale investment securities; as such, the unrealized adjustment to fair value was recorded as an unrealized holding gain (loss) and included as a component of available for sale investment securities on the consolidated balance sheet.

(4) Included as a component of net interest income on the consolidated statements of income.

Schedule of Assets Measured at Fair Value on a Nonrecurring Basis

	June 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	0	$	0	$	234,179	$	234,179
Other financial assets		0		0		68,752		68,752
Total assets	$	0	$	0	$	302,931	$	302,931
Reserve for unfunded commitments	$	0	$	0	$	1,950	$	1,950

	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	0	$	0	$	457,678	$	457,678
Other financial assets		0		0		62,109		62,109
Total assets	$	0	$	0	$	519,787	$	519,787
Reserve for unfunded commitments	$	0	$	0	$	1,227	$	1,227

Details of Book Value and Fair Value of Financial Instruments

	June 30, 2011				December 31, 2010
FINANCIAL ASSETS	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
Cash and due from banks	$	284,691	$	284,691	$	198,954	$	198,954
Interest-bearing deposits with other banks		124,967		124,967		33,297		33,297
Loans held for sale (1)		47,133		47,133		83,940		83,940
Securities held to maturity		6,990		7,038		7,751		7,818
Securities available for sale (1)		2,656,054		2,656,054		2,853,733		2,853,733
Loans, net of unearned income (1)		11,852,491		11,848,458		11,933,307		11,909,539
Accrued interest receivable		51,387		51,387		53,841		53,841
Other financial assets (1)		133,787		133,787		230,044		230,044
FINANCIAL LIABILITIES
Demand and savings deposits	$	7,987,686	$	7,987,686	$	7,758,613	$	7,758,613
Time deposits		4,275,209		4,316,011		4,629,968		4,677,494
Short-term borrowings		546,581		546,581		674,077		674,077
Accrued interest payable		29,444		29,444		33,333		33,333
Other financial liabilities (1)		63,682		63,682		80,551		80,551
Federal Home Loan Bank advances and long-term debt		1,025,537		918,408		1,119,450		1,077,724

(1) Description of fair value determinations for these financial instruments, or certain financial instruments within these categories, measured at fair value on the Corporation's consolidated balance sheets, are disclosed above.

Schedule of Financial Instruments Classified as Predominantly Short-Term Instruments

Assets	Liabilities
Cash and due from banks	Demand and savings deposits
Interest bearing deposits	Short-term borrowings
Federal funds sold	Accrued interest payable
Accrued interest receivable	Other financial liabilities

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Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Fair Value Measurements

NOTE K – Fair Value Measurements

FASB ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into the following three categories (from highest to lowest priority):

• Level 1 – Inputs that represent quoted prices for identical instruments in active markets.

• Level 2 – Inputs that represent quoted prices for similar instruments in active markets, or quoted prices for identical instruments in non-active markets. Also includes valuation techniques whose inputs are derived principally from observable market data other than quoted prices, such as interest rates or other market-corroborated means.

• Level 3 – Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.

The Corporation has categorized all assets and liabilities measured at fair value on both a recurring and nonrecurring basis into the above three levels.

In January 2010, the FASB issued ASC Update No. 2010-06, "Improving Disclosures About Fair Value Measurements" (ASC Update 2010-06). Among other provisions which were adopted by the Corporation on March 31, 2010, ASC Update 2010-06 also requires companies to reconcile changes in Level 3 assets and liabilities by separately providing information about Level 3 purchases, sales, issuances and settlements on a gross basis. This provision of ASC Update 2010-06 was effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years, or March 31, 2011 for the Corporation. The adoption of this provision did not impact the Corporation's fair value measurement disclosures.

Items Measured at Fair Value on a Recurring Basis

The Corporation's assets and liabilities measured at fair value on a recurring basis and reported on the consolidated balance sheets were as follows:

	June 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	0	$	47,133	$	0	$	47,133
Available for sale investment securities:
Equity securities		40,326		0		0		40,326
U.S. Government securities		0		1,324		0		1,324
U.S. Government sponsored agency securities		0		4,992		0		4,992
State and municipal securities		0		355,626		0		355,626
Corporate debt securities		0		115,003		13,252		128,255
Collateralized mortgage obligations		0		993,982		0		993,982
Mortgage-backed securities		0		787,772		0		787,772
Auction rate securities		0		0		255,142		255,142
Total available for sale investments		40,326		2,258,699		268,394		2,567,419
Other financial assets		13,970		2,172		0		16,142
Total assets	$	54,296	$	2,308,004	$	268,394	$	2,630,694
Other financial liabilities	$	13,970	$	997	$	0	$	14,967

	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage loans held for sale	$	0	$	83,940	$	0	$	83,940
Available for sale investment securities:
Equity securities		40,070		0		0		40,070
U.S. Government securities		0		1,649		0		1,649
U.S. Government sponsored agency securities		0		5,058		0		5,058
State and municipal securities		0		349,563		0		349,563
Corporate debt securities		0		111,675		13,111		124,786
Collateralized mortgage obligations		0		1,104,058		0		1,104,058
Mortgage-backed securities		0		871,472		0		871,472
Auction rate securities		0		0		260,679		260,679
Total available for sale investments		40,070		2,443,475		273,790		2,757,335
Other financial assets		13,582		9,256		0		22,838
Total assets	$	53,652	$	2,536,671	$	273,790	$	2,864,113
Other financial liabilities	$	13,582	$	760	$	0	$	14,342

The valuation techniques used to measure fair value for the items in the tables above are as follows:

• Mortgage loans held for sale – This category consists of mortgage loans held for sale that the Corporation has elected to measure at fair value. Fair values as of June 30, 2011 and December 31, 2010 were measured as the price that secondary market investors were offering for loans with similar characteristics.

• Available for sale investment securities – Included within this asset category are both equity and debt securities:

• Equity securities – Equity securities consist of stocks of financial institutions ($33.3 million at June 30, 2011 and $33.1 million at December 31, 2010) and other equity investments ($7.0 million at June 30, 2011 and December 31, 2010). These Level 1 investments are measured at fair value based on quoted prices for identical securities in active markets. Restricted equity securities issued by the FHLB and Federal Reserve Bank ($88.6 million at June 30, 2011 and $96.4 million at December 31, 2010) have been excluded from the above table.

• U.S. Government securities/U.S. Government sponsored agency securities/State and municipal securities/Collateralized mortgage obligations/Mortgage-backed securities – These debt securities are classified as Level 2 investments. Fair values are determined by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. The pricing data and market quotes the Corporation obtains from outside sources are reviewed internally for reasonableness.

• Corporate debt securities – This category includes subordinated debt issued by financial institutions ($37.5 million at June 30, 2011 and $35.9 million at December 31, 2010), single-issuer trust preferred securities issued by financial institutions ($82.8 million at June 30, 2011 and $81.8 million at December 31, 2010), pooled trust preferred securities issued by financial institutions ($5.4 million at June 30, 2011 and $4.5 million at December 31, 2010) and other corporate debt issued by non-financial institutions ($2.5 million at June 30, 2011 and $2.6 million at December 31, 2010). Classified as Level 2 investments are the Corporation's subordinated debt, other corporate debt issued by non-financial institutions and $75.0 million and $73.2 million of single-issuer trust preferred securities held at June 30, 2011 and December 31, 2010, respectively. These corporate debt securities are measured at fair value by a third-party pricing service using both quoted prices for similar assets, when available, and model-based valuation techniques that derive fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. As with the debt securities described above, an active market presently exists for securities similar to these corporate debt security holdings.

Classified as Level 3 assets are the Corporation's investments in pooled trust preferred securities and certain single-issuer trust preferred securities ($7.8 million at June 30, 2011 and $8.6 million at December 31, 2010). The fair values of these securities were determined based on quotes provided by third-party brokers who determined fair values based predominantly on internal valuation models which were not indicative prices or binding offers. The Corporation's third-party pricing service cannot derive fair values for these securities primarily due to inactive markets for similar investments.

• Auction rate securities – Due to their illiquidity, ARCs are classified as Level 3 investments and are valued through the use of an expected cash flows model prepared by a third-party valuation expert. The assumptions used in preparing the expected cash flows model include estimates for coupon rates, time to maturity and market rates of return. The expected cash flows model the Corporation obtains from the outside source is reviewed internally for reasonableness.

• Other financial assets – Included within this asset category are: Level 1 assets, consisting of mutual funds that are held in trust for employee deferred compensation plans and measured at fair value based on quoted prices for identical securities in active markets; and Level 2 assets, representing the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors. The fair value of the Corporation's interest rate locks and forward commitments are determined as the amounts that would be required to settle the derivative financial instruments at the balance sheet date. See Note H, "Derivative Financial Instruments," for additional information.

• Other financial liabilities – Included within this category are: Level 1 employee deferred compensation liabilities which represent amounts due to employees under the deferred compensation plans described under the heading "Other financial assets" above and Level 2 mortgage banking derivatives, described under the heading "Other financial assets" above.

The following tables present the changes in the Corporation's assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three and six months ended June 30, 2011 and 2010:

	Three months ended June 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, March 31, 2011	$	4,816		$	8,094		$	256,413
Realized adjustment to fair value (2)		(359	)		0			0
Unrealized adjustment to fair value (3)		1,122			(274	)		(2,260	)
Redemptions		(145	)		0			(24	)
(Premium amortization)/discount accretion (4)		(1	)		(1	)		1,013
Balance, June 30, 2011	$	5,433		$	7,819		$	255,142
	Three months ended June 30, 2010
Balance, March 31, 2010	$	4,900		$	7,136		$	288,133
Transfer to Level 3 from Level 2 (1)		0			650			0
Realized adjustment to fair value (2)		(2,989	)		0			0
Unrealized adjustment to fair value (3)		2,374			299			(2,376	)
Sales		0			0			(5,033	)
Redemptions		0			0			(5,281	)
(Premium amortization)/discount accretion (4)		(6	)		0			1,096
Balance, June 30, 2010	$	4,279		$	8,085		$	276,539

	Six months ended June 30, 2011
	Available for Sale Investment Securities
	Pooled Trust Preferred Securities			Single-issuer Trust Preferred Securities			ARC Investments
	(in thousands)
Balance, December 31, 2010	$	4,528		$	8,583		$	260,679
Transfer from Level 3 to Level 2 (1)		0			(800	)		0
Realized adjustment to fair value (2)		(1,353	)		0			0
Unrealized adjustment to fair value (3)		2,552			38			(7,479	)
Redemptions		(292	)		0			(251	)
(Premium amortization)/discount accretion (4)		(2	)		(2	)		2,193
Balance, June 30, 2011	$	5,433		$	7,819		$	255,142
	Six months ended June 30, 2010
Balance, December 31, 2010	$	4,979		$	6,981		$	289,203
Transfer to Level 3 from Level 2 (1)		0			650			0
Realized adjustment to fair value (2)		(7,142	)		0			0
Unrealized adjustment to fair value (3)		6,453			453			(3,642	)
Sales		0			0			(5,033	)
Redemptions		0			0			(6,382	)
(Premium amortization)/discount accretion (4)		(11	)		1			2,393
Balance, June 30, 2010	$	4,279		$	8,085		$	276,539

(1) During the six months ended June 30, 2011, one single-issuer trust preferred security with a fair value of $800,000 as of December 31, 2010 was reclassified as a Level 2 asset. As of June 30, 2011, the fair value of this security was measured at fair value by a third-party pricing service using both quoted prices for similar assets and model-based valuation techniques that derived fair value based on market-corroborated data, such as instruments with similar prepayment speeds and default interest rates. As of December 31, 2010, the fair value of this security was determined based on quotes provided by third-party brokers who determined its fair value based predominantly on an internal valuation model.

(2) For pooled trust preferred securities, realized adjustments to fair value represent credit related other-than-temporary impairment charges that were recorded as a reduction to investment securities gains on the consolidated statements of income.

(3) Pooled trust preferred securities, single-issuer trust preferred securities and ARCs are classified as available for sale investment securities; as such, the unrealized adjustment to fair value was recorded as an unrealized holding gain (loss) and included as a component of available for sale investment securities on the consolidated balance sheet.

(4) Included as a component of net interest income on the consolidated statements of income.

Items Measured at Fair Value on a Nonrecurring Basis

Certain financial assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value measurement in certain circumstances, such as upon their acquisition or when there is evidence of impairment.

The Corporation's assets measured at fair value on a nonrecurring basis and reported on the Corporation's consolidated balance sheets were as follows:

	June 30, 2011
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	0	$	0	$	234,179	$	234,179
Other financial assets		0		0		68,752		68,752
Total assets	$	0	$	0	$	302,931	$	302,931
Reserve for unfunded commitments	$	0	$	0	$	1,950	$	1,950

	December 31, 2010
	Level 1		Level 2		Level 3		Total
	(in thousands)
Net loans	$	0	$	0	$	457,678	$	457,678
Other financial assets		0		0		62,109		62,109
Total assets	$	0	$	0	$	519,787	$	519,787
Reserve for unfunded commitments	$	0	$	0	$	1,227	$	1,227

The valuation techniques used to measure fair value for the items in the tables above are as follows:

• Net loans – This category consists of loans that were evaluated for impairment under FASB ASC Section 310-10-35 and have been classified as Level 3 assets. The amount shown is the balance of impaired loans, net of the related allowance for loan losses. See Note D, "Loans and Allowance for Credit Losses," for additional details.

• Other financial assets – This category includes OREO ($37.5 million at June 30, 2011 and $33.0 million at December 31, 2010) and mortgage servicing rights (MSRs), net of the MSR valuation reserve ($31.3 million at June 30, 2011 and $29.1 million at December 31, 2010), both classified as Level 3 assets.

Fair values for OREO were based on estimated selling prices less estimated selling costs for similar assets in active markets.

MSRs are initially recorded at fair value upon the sale of residential mortgage loans, which the Corporation continues to service, to secondary market investors. MSRs are amortized as a reduction to servicing income over the estimated lives of the underlying loans. MSRs are evaluated for impairment by comparing the carrying amount to estimated fair value. Fair value is determined at the end of each quarter through a discounted cash flows valuation. Significant inputs to the valuation include expected net servicing income, the discount rate and the expected life of the underlying loans.

• Reserve for unfunded commitments – This liability, included as a Level 3 liability above, represents management's estimate of losses associated with unused commitments to extend credit. See Note D, "Loans and Allowance for Credit Losses," for additional details.

As required by FASB ASC Section 825-10-50, the following table details the book values and estimated fair values of the Corporation's financial instruments as of June 30, 2011 and December 31, 2010. In addition, a general description of the methods and assumptions used to estimate such fair values is also provided.

Fair values of financial instruments are significantly affected by assumptions used, principally the timing of future cash flows and discount rates. Because assumptions are inherently subjective in nature, the estimated fair values cannot be substantiated by comparison to independent market quotes and, in many cases, the estimated fair values could not necessarily be realized in an immediate sale or settlement of the instrument. Further, certain financial instruments and all non-financial instruments not measured at fair value on the Corporation's consolidated balance sheets are excluded. The aggregate fair value amounts presented do not necessarily represent management's estimate of the underlying value of the Corporation.

	June 30, 2011				December 31, 2010
FINANCIAL ASSETS	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
	(in thousands)
Cash and due from banks	$	284,691	$	284,691	$	198,954	$	198,954
Interest-bearing deposits with other banks		124,967		124,967		33,297		33,297
Loans held for sale (1)		47,133		47,133		83,940		83,940
Securities held to maturity		6,990		7,038		7,751		7,818
Securities available for sale (1)		2,656,054		2,656,054		2,853,733		2,853,733
Loans, net of unearned income (1)		11,852,491		11,848,458		11,933,307		11,909,539
Accrued interest receivable		51,387		51,387		53,841		53,841
Other financial assets (1)		133,787		133,787		230,044		230,044
FINANCIAL LIABILITIES
Demand and savings deposits	$	7,987,686	$	7,987,686	$	7,758,613	$	7,758,613
Time deposits		4,275,209		4,316,011		4,629,968		4,677,494
Short-term borrowings		546,581		546,581		674,077		674,077
Accrued interest payable		29,444		29,444		33,333		33,333
Other financial liabilities (1)		63,682		63,682		80,551		80,551
Federal Home Loan Bank advances and long-term debt		1,025,537		918,408		1,119,450		1,077,724

(1) Description of fair value determinations for these financial instruments, or certain financial instruments within these categories, measured at fair value on the Corporation's consolidated balance sheets, are disclosed above.

For short-term financial instruments, defined as those with remaining maturities of 90 days or less and excluding those recorded at fair value on the Corporation's consolidated balance sheets, book value was considered to be a reasonable estimate of fair value.

The following instruments are predominantly short-term:

Assets	Liabilities
Cash and due from banks	Demand and savings deposits
Interest bearing deposits	Short-term borrowings
Federal funds sold	Accrued interest payable
Accrued interest receivable	Other financial liabilities

For those financial instruments within the above-listed categories with remaining maturities greater than 90 days, fair values were determined by discounting contractual cash flows using rates which could be earned for assets with similar remaining maturities and, in the case of liabilities, rates at which the liabilities with similar remaining maturities could be issued as of the balance sheet date.

The estimated fair values of securities held to maturity as of June 30, 2011 and December 31, 2010 were based on quoted market prices, broker quotes or dealer quotes.

For short-term loans and variable rate loans that reprice within 90 days, the book value was considered to be a reasonable estimate of fair value. For other types of loans and time deposits, fair value was estimated by discounting future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

The fair value of FHLB advances and long-term debt was estimated by discounting the remaining contractual cash flows using a rate at which the Corporation could issue debt with a similar remaining maturity as of the balance sheet date. The fair values of commitments to extend credit and standby letters of credit, included within other financial liabilities above, are estimated to equal their carrying amounts.

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Derivative Financial Instruments (Notional Amounts and Fair Values of Derivative Financial Instruments) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Asset (Liability) Fair Value	$ 1,175,000		$ 1,175,000		$ 8,496,000
Mortgage banking income, fair value adjustments on derivative financial instruments	6,000,000	3,900,000	11,500,000	8,000,000
Forward Commitments [Member] | Positive Fair Values [Member]
Notional Amount	49,369,000		49,369,000		558,861,000
Asset (Liability) Fair Value	131,000		131,000		8,479,000
Forward Commitments [Member] | Negative Fair Values [Member]
Notional Amount	118,459,000		118,459,000		0
Asset (Liability) Fair Value	(975,000)		(975,000)		0
Forward Commitments [Member] | Net Forward Commitments [Member]
Asset (Liability) Fair Value	(844,000)		(844,000)		8,479,000
Interest Rate Locks with Customers [Member] | Positive Fair Values [Member]
Notional Amount	163,795,000		163,795,000		140,682,000
Asset (Liability) Fair Value	2,041,000		2,041,000		777,000
Interest Rate Locks with Customers [Member] | Negative Fair Values [Member]
Notional Amount	3,736,000		3,736,000		50,527,000
Asset (Liability) Fair Value	(22,000)		(22,000)		(760,000)
Interest Rate Locks with Customers [Member] | Net Interest Rate Locks with Customers [Member]
Asset (Liability) Fair Value	$ 2,019,000		$ 2,019,000		$ 17,000

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Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Mortgage loans held for sale	$ 47,133	$ 83,940
Equity securities of financial institutions held	40,326	40,070
U.S. Government securities	1,324	1,649
U.S. Government sponsored agency securities	4,992	5,058
State and municipal securities	355,626	349,563
Corporate Debt Securities	128,255	124,786
Collateralized mortgage obligations	993,982	1,104,058
Mortgage-backed securities	787,772	871,472
Auction rate securities	255,142	260,679
Total available for sale investments	2,567,419	2,757,335
Other financial assets	16,142	22,838
Total assets	2,630,694	2,864,113
Other financial liabilities	14,967	14,342
Level 1 [Member]
Mortgage loans held for sale	0	0
Equity securities of financial institutions held	40,326	40,070
U.S. Government securities	0	0
U.S. Government sponsored agency securities	0	0
State and municipal securities	0	0
Corporate Debt Securities	0	0
Collateralized mortgage obligations	0	0
Mortgage-backed securities	0	0
Auction rate securities	0	0
Total available for sale investments	40,326	40,070
Other financial assets	13,970	13,582
Total assets	54,296	53,652
Other financial liabilities	13,970	13,582
Level 2 [Member]
Mortgage loans held for sale	47,133	83,940
Equity securities of financial institutions held	0	0
U.S. Government securities	1,324	1,649
U.S. Government sponsored agency securities	4,992	5,058
State and municipal securities	355,626	349,563
Corporate Debt Securities	115,003	111,675
Collateralized mortgage obligations	993,982	1,104,058
Mortgage-backed securities	787,772	871,472
Auction rate securities	0	0
Total available for sale investments	2,258,699	2,443,475
Other financial assets	2,172	9,256
Total assets	2,308,004	2,536,671
Other financial liabilities	997	760
Level 3 [Member]
Mortgage loans held for sale	0	0
Equity securities of financial institutions held	0	0
U.S. Government securities	0	0
U.S. Government sponsored agency securities	0	0
State and municipal securities	0	0
Corporate Debt Securities	13,252	13,111
Collateralized mortgage obligations	0	0
Mortgage-backed securities	0	0
Auction rate securities	255,142	260,679
Total available for sale investments	268,394	273,790
Other financial assets	0	0
Total assets	268,394	273,790
Other financial liabilities	$ 0	$ 0

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Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2011

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

NOTE D – Loans and Allowance for Credit Losses

Loans, Net of Unearned Income

Loans, net of unearned income are summarized as follows:

	June 30, 2011			December 31, 2010
	(in thousands)
Real-estate – commercial mortgage	$	4,443,025		$	4,375,980
Commercial – industrial, financial and agricultural		3,678,858			3,704,384
Real-estate – home equity		1,626,545			1,641,777
Real-estate – residential mortgage		1,023,646			995,990
Real-estate – construction		681,588			801,185
Consumer		330,965			350,161
Leasing and other		58,591			61,017
Overdrafts		15,657			10,011
		11,858,875			11,940,505
Unearned income		(6,384	)		(7,198	)
	$	11,852,491		$	11,933,307

Allowance for Credit Losses

The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management's estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management's estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheet. The allowance for credit losses is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries.

The Corporation's established methodology for evaluating the adequacy of the allowance for loan losses considers both components of the allowance: (1) specific allowances allocated to loans evaluated individually for impairment under the Financial Accounting Standards Board's (FASB) Accounting Standards Codification (ASC) Section 310-10-35, and (2) allowances calculated for pools of loans evaluated collectively for impairment under FASB ASC Subtopic 450-20.

Effective April 1, 2011, the Corporation revised and enhanced its allowance for credit loss methodology. The significant revisions to the methodology were as follows:

• Change in the identification of loans evaluated individually for impairment. – The population of loans evaluated individually for impairment was revised to include only loans on non-accrual status and impaired troubled debt restructurings (Impaired TDRs). Impaired TDRs represent TDRs that: (1) were modified via a change in the interest rate that, at the time of restructuring, was favorable in comparison to rates offered for loans with similar risk characteristics; or (2) were 90 days or more past due according to their modified terms; or (3) were modified in the current year.

Under the Corporation's prior methodology, loans evaluated individually for impairment included accruing and non-accrual commercial loans, commercial mortgages and construction loans with risk ratings of substandard or worse and Impaired TDRs.

As of April 1, 2011, the balance of loans evaluated individually for impairment decreased from $525.6 million under the Corporation's prior methodology to $335.6 million under the new methodology. The allowance allocations for loans evaluated individually for impairment decreased from $106.0 million under the Corporation's prior methodology to $88.0 million under the new methodology.

• Quarterly evaluations of impaired loans – Due to the reduction in loans evaluated individually for impairment noted above, all loans evaluated individually for impairment are now measured for losses on a quarterly basis. Measurement may be more frequent basis if there is a significant change in the amount or timing of an impaired loan's expected future cash flows, if actual cash flows are significantly different from the cash flows previously projected, or if the fair value of an impaired loan's collateral significantly changes. In addition, the Corporation implemented a new appraisal policy which requires that impaired loans secured predominately by real estate have updated certified third-party appraisals, generally every 12 months.

Under the Corporation's prior methodology, impaired loans were individually evaluated for impairment every 12 months or, if necessary, on a more frequent basis based on significant changes in expected future cash flows or significant changes collateral values. For impaired loans secured predominately by real estate, decisions regarding whether an updated certified appraisal was necessary were made on a loan-by-loan basis.

As of June 30, 2011, approximately 85% of impaired loans with principal balances greater than $1.0 million, whose primary collateral is real estate, were measured at estimated fair value using certified third-party appraisals that had been updated within the preceding 12 months. In comparison, as of March 31, 2011 and December 31, 2010, approximately 57% and 52%, respectively, of impaired loans with principal balances greater than $1 million, whose primary collateral is real estate, were measured at estimated fair value using certified third-party appraisals that had been updated within the preceding 12 months.

• Change in the determination of allocation needs on loans evaluated collectively for impairment. – Under its new methodology, the Corporation revised and further disaggregated its pools of loans evaluated collectively for impairment. Similar to the prior methodology, pools are segmented by general loan types, and further segmented by collateral types, where appropriate. However, under the new methodology, pools are further disaggregated by internal credit risk ratings for commercial loans, commercial mortgages and construction loans and by delinquency status for residential mortgages, consumer loans and all other loan types.

Allowance allocations for each pool are determined through a regression analysis based on historical losses for the most recent four years. The analysis computes loss rates based on a probability of default (PD) and loss given default (LGD). While the previous methodology utilized the same historical loss period, allowance allocations were computed based on weighted average charge-off rates as opposed to the use of a regression analysis, which computes PDs and LGDs based on historical losses as loans migrate through the various risk rating or delinquency categories.

Under both the current and previous methodologies, loss rates are adjusted to consider qualitative factors such as economic conditions and trends, among others. However, under its new methodology, the Corporation applies a more detailed analysis of qualitative factors that are formally assessed on a quarterly basis by a committee comprised of lending and credit administration personnel.

As of April 1, 2011, total allocations on $11.5 billion of loans evaluated collectively for impairment under the new methodology were $182.2 million. In comparison, under the Corporation's previous methodology, total allocations on $11.3 billion of loans evaluated collectively for impairment were $164.2 million.

The Corporation's conclusion as of March 31, 2011 that its total allowance for credit losses of $271.2 million was sufficient to cover losses inherent in the loan portfolio did not change as a result of its new allowance for credit loss methodology. As noted above, the change in methodology expanded the number of loans evaluated collectively for impairment and reduced the number of loans evaluated individually for impairment. In addition, the change in methodology resulted in shifts in allocations by loan type, as detailed within the tabular information below.

Effective December 31, 2010, the Corporation adopted the provisions of the Financial Accounting Standards FASB ASC Update 2010-20, "Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses" (ASC Update 2010-20), for period end disclosures related to the credit quality of loans. In 2011, the Corporation adopted certain additional disclosure requirements of ASC Update 2010-20 related to credit quality activity during a reporting period, or for the three and six months ended June 30, 2011.

The development of the Corporation's allowance for loan losses is based first on a segmentation of its loan portfolio by general loan type, or "portfolio segments," as presented in the table under the heading, "Loans, Net of Unearned Income," above. Certain portfolio segments are further disaggregated and evaluated collectively for impairment based on "class segments," which are largely based on the type of collateral underlying each loan. For commercial loans, class segments include loans secured by collateral and unsecured loans. Construction loan class segments include loans secured by commercial real estate and loans secured by residential real estate. Consumer loan class segments are based on collateral types and include direct consumer installment loans and indirect automobile loans.

The following table presents the components of the allowance for credit losses:

	June 30, 2011		December 31, 2010
	(in thousands)
Allowance for loan losses	$	266,683	$	274,271
Reserve for unfunded lending commitments		1,950		1,227
Allowance for credit losses	$	268,633	$	275,498

The following table presents the activity in the allowance for credit losses for the three and six months ended June 30:

	Three months ended June 30,						Six months ended June 30,
	2011			2010			2011			2010
	(in thousands)
Balance at beginning of period	$	271,156		$	269,254		$	275,498		$	257,553
Loans charged off		(40,675	)		(31,532	)		(86,204	)		(61,524	)
Recoveries of loans previously charged off		2,152			2,655			5,339			4,348
Net loans charged off		(38,523	)		(28,877	)		(80,865	)		(57,176	)
Provision for credit losses		36,000			40,000			74,000			80,000
Balance at end of period	$	268,633		$	280,377		$	268,633		$	280,377

The following tables present the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2011:

	Real Estate - Commercial Mortgage			Commercial - Industrial, Financial and Agricultural			Real Estate - Home Equity			Real Estate - Residential Mortgage			Real Estate - Construction			Consumer			Leasing and other and Overdrafts			Unallocated			Total
	(in thousands)
Three months ended June 30, 2011
Balance at April 1, 2011	$	48,558		$	100,180		$	5,656		$	19,575		$	55,491		$	4,736		$	2,576		$	33,500		$	270,272
Loans charged off		(7,074	)		(15,406	)		(1,650	)		(7,707	)		(7,468	)		(681	)		(689	)		0			(40,675	)
Recoveries of loans previously charged off		191			1,003			2			190			79			433			254			0			2,152
Net loans charged off		(6,883	)		(14,403	)		(1,648	)		(7,517	)		(7,389	)		(248	)		(435	)		0			(38,523	)
Provision for loan losses		9,040			10,224			1,862			11,958			7,239			343			590			(6,322	)		34,934
Impact of change in allowance methodology		22,883			(13,388	)		3,690			7,896			(24,771	)		(3,076	)		(944	)		7,710			0
Provision for loan losses, including impact of change in allowance methodology (1)		31,923			(3,164	)		5,552			19,854			(17,532	)		(2,733	)		(354	)		1,388			34,934
Balance at June 30, 2011	$	73,598		$	82,613		$	9,560		$	31,912		$	30,570		$	1,755		$	1,787		$	34,888		$	266,683
Six months ended June 30, 2011
Balance at January 1, 2011	$	40,831		$	101,436		$	6,454		$	17,425		$	58,117		$	4,669		$	3,840		$	41,499		$	274,271
Loans charged off		(17,121	)		(28,742	)		(3,118	)		(12,703	)		(21,362	)		(1,972	)		(1,186	)		0			(86,204	)
Recoveries of loans previously charged off		1,726			1,394			3			234			642			742			598			0			5,339
Net loans charged off		(15,395	)		(27,348	)		(3,115	)		(12,469	)		(20,720	)		(1,230	)		(588	)		0			(80,865	)
Provision for loan losses		25,279			21,913			2,531			19,060			17,944			1,392			(521	)		(14,321	)		73,277
Impact of change in allowance methodology		22,883			(13,388	)		3,690			7,896			(24,771	)		(3,076	)		(944	)		7,710			0
Provision for loan losses, including impact of change in allowance methodology (1)		48,162			8,525			6,221			26,956			(6,827	)		(1,684	)		(1,465	)		(6,611	)		73,277
Balance at June 30, 2011	$	73,598		$	82,613		$	9,560		$	31,912		$	30,570		$	1,755		$	1,787		$	34,888		$	266,683

(1) Provision for loan losses is net of a $1.1 million and $723,000 increase in provision applied to unfunded commitments for the three and six months ended June 30, 2011, respectively. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $36.0 million and $74.0 million for the three and six months ended June 30, 2011, respectively.

 The following tables present loans, net of unearned income and their related allowance for loan losses, by portfolio segment, as of June 30, 2011 and December 31, 2010:

	Real Estate - Commercial Mortgage		Commercial - Industrial, Financial and Agricultural		Real Estate - Home Equity		Real Estate - Residential Mortgage		Real Estate - Construction		Consumer		Leasing and other and Overdrafts		Unallocated (1)		Total
	(in thousands)
Allowance for loan losses at June 30, 2011:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	44,600	$	53,373	$	9,560	$	5,953	$	18,794	$	1,597	$	1,727	$	34,888	$	170,492
Evaluated individually for impairment under FASB ASC Section 310-10-35		28,998		29,240		0		25,959		11,776		158		60		N/A		96,191
	$	73,598	$	82,613	$	9,560	$	31,912	$	30,570	$	1,755	$	1,787	$	34,888	$	266,683
Loans, net of unearned income at June 30, 2011:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	4,329,750	$	3,587,702	$	1,626,545	$	955,863	$	623,734	$	330,754	$	67,773		N/A	$	11,522,121
Evaluated individually for impairment under FASB ASC Section 310-10-35		113,275		91,156		0		67,783		57,854		211		91		N/A		330,370
Total	$	4,443,025	$	3,678,858	$	1,626,545	$	1,023,646	$	681,588	$	330,965	$	67,864		N/A	$	11,852,491
Allowance for loan losses at December 31, 2010:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	22,836	$	32,323	$	6,454	$	11,475	$	35,247	$	4,669	$	3,840	$	41,499	$	158,343
Evaluated individually for impairment under FASB ASC Section 310-10-35		17,995		69,113		0		5,950		22,870		0		0		N/A		115,928
	$	40,831	$	101,436	$	6,454	$	17,425	$	58,117	$	4,669	$	3,840	$	41,499	$	274,271
Loans, net of unearned income at December 31, 2010:
Evaluated collectively for impairment under FASB ASC Subtopic 450-20	$	4,217,660	$	3,469,775	$	1,641,777	$	956,260	$	660,238	$	350,161	$	63,830		N/A	$	11,359,701
Evaluated individually for impairment under FASB ASC Section 310-10-35		158,320		234,609		0		39,730		140,947		0		0		N/A		573,606
Total	$	4,375,980	$	3,704,384	$	1,641,777	$	995,990	$	801,185	$	350,161	$	63,830		N/A	$	11,933,307

(1) The Corporation's unallocated allowance, which was approximately 13% and 15% as of June 30, 2011 and December 31, 2010, respectively, was reasonable and appropriate as the estimates used in the allocation process are inherently imprecise.

N/A – Not applicable

Impaired Loans

A loan is considered to be impaired if the Corporation believes it is probable that all amounts will not be collected according to the contractual terms of the loan agreement.

An allowance for loan losses is established for an impaired loan if its carrying value exceeds its estimated fair value. Impaired loans with balances greater than $1.0 million are evaluated individually for impairment. As of June 30, 2011 and December 31, 2010, substantially all of the Corporation's individually evaluated impaired loans were measured based on the estimated fair value of each loan's collateral. Collateral could be in the form of real estate in the case of impaired commercial mortgages, construction loans and residential mortgages, or business assets, such as accounts receivable or inventory, in the case of commercial loans. Commercial loans may also be secured by real property.

Impaired loans with balances less than $1.0 million are measured collectively based on a statistical model which applies PDs and LGDs based on historical losses as loans migrate through the various risk rating or delinquency categories.

The following table presents total impaired loans by class segment:  

	June 30, 2011						Three months ended June 30, 2011				Six months ended June 30, 2011				December 31, 2010
	Unpaid Principal Balance		Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized (1)		Average Recorded Investment		Interest Income Recognized		Unpaid Principal Balance		Recorded Investment		Related Allowance
	(in thousands)
With no related allowance recorded:
Real estate - commercial mortgage	$	49,335	$	41,764		N/A	$	41,139	$	87	$	45,510	$	490	$	68,583	$	54,251		N/A
Commercial - secured		37,660		35,613		N/A		32,313		15		30,790		161		38,366		27,745		N/A
Commercial - unsecured		0		0		N/A		0		0		196		3		710		587		N/A
Real estate - residential mortgage (2)		0		0		N/A		0		0		7,071		43		21,598		21,212		N/A
Construction - commercial residential		33,882		17,439		N/A		20,322		6		24,333		184		69,624		32,354		N/A
Construction - commercial		5,605		3,486		N/A		3,601		1		3,109		21		5,637		2,125		N/A
		126,482		98,302				97,375		109		111,009		902		204,518		138,274
With a related allowance recorded:
Real estate - commercial mortgage		92,006		71,511	$	28,998		70,441		150		81,650		989		111,190		104,069	$	17,995
Commercial - secured		63,700		52,623		26,752		47,747		22		97,723		1,199		202,824		197,674		64,922
Commercial - unsecured		3,102		2,920		2,488		3,193		2		4,996		33		8,681		8,603		4,191
Real estate - residential mortgage (2)		67,783		67,783		25,959		71,807		487		54,044		577		18,518		18,518		5,950
Construction - commercial residential		61,888		34,513		10,530		40,219		13		61,421		448		110,465		103,826		22,155
Construction - commercial		303		303		158		313		0		1,089		17		2,642		2,642		715
Construction - other		2,113		2,113		1,088		1,687		0		1,124		0		0		0		0
Consumer - direct		211		211		158		150		2		100		2		0		0		0
Leasing and other and overdrafts		91		91		60		77		0		51		0		0		0		0
		291,197		232,068		96,191		235,634		676		302,198		3,265		454,320		435,332		115,928
Total	$	417,679	$	330,370	$	96,191	$	333,009	$	785	$	413,207	$	4,167	$	658,838	$	573,606	$	115,928

(1) Effective April 1, 2011, all impaired loans, excluding certain accruing Impaired TDRs, were non-accrual loans. Interest income recognized for the three months ended June 30, 2011 represents amounts earned on accruing TDRs.

(2) Impaired residential mortgages include accruing TDRs that were modified in the current calendar year and/or not performing according to their modified terms.

 N/A – Not applicable.

As of June 30, 2011 and December 31, 2010, there were $98.3 million and $138.3 million, respectively, of impaired loans that did not have a related allowance for loan loss. The estimated fair values of the collateral for these loans exceeded the carrying amount of the loans and, accordingly, no specific valuation allowance was considered to be necessary.

For 2010, the total average recorded investment in impaired loans was approximately $772.3 million. The Corporation generally applies all payments received on non-accruing impaired loans to principal until such time as the principal is paid off, after which time any additional payments received are recognized as interest income. For 2010, the Corporation recognized interest income of approximately $27.4 million on impaired loans.

Credit Quality Indicators and Non-performing Assets

The following table presents a summary of delinquency and non-performing status by portfolio segment and class segment:

	June 30, 2011
	Performing		Delinquent (1)		Non- performing (2)		Total
	(in thousands)
Real estate - commercial mortgage	$	4,314,764	$	25,537	$	102,724	$	4,443,025
Commercial - secured		3,333,421		18,699		91,640		3,443,760
Commercial -unsecured		230,570		1,313		3,215		235,098
Total Commercial - industrial, financial and agricultural		3,563,991		20,012		94,855		3,678,858
Real estate - home equity		1,605,004		12,101		9,440		1,626,545
Real estate - residential mortgage		945,952		34,494		43,200		1,023,646
Construction - commercial residential		348,197		2,022		52,413		402,632
Construction - commercial		223,510		8		3,789		227,307
Construction - other		47,305		2,165		2,179		51,649
Total Real estate - construction		619,012		4,195		58,381		681,588
Consumer - direct		37,161		496		77		37,734
Consumer - indirect		158,988		1,798		89		160,875
Consumer - other		128,220		2,212		1,924		132,356
Total Consumer		324,369		4,506		2,090		330,965
Leasing and other and overdrafts		67,344		368		152		67,864
	$	11,440,436	$	101,213	$	310,842	$	11,852,491
	December 31, 2010
Real estate - commercial mortgage	$	4,257,871	$	24,389	$	93,720	$	4,375,980
Commercial - secured		3,373,651		12,111		85,536		3,471,298
Commercial -unsecured		229,985		1,182		1,919		233,086
Total Commercial - industrial, financial and agricultural		3,603,636		13,293		87,455		3,704,384
Real estate - home equity		1,619,684		11,905		10,188		1,641,777
Real estate - residential mortgage		909,247		36,331		50,412		995,990
Construction - commercial residential		409,190		7,273		76,436		492,899
Construction - commercial		239,150		0		5,287		244,437
Construction - other		60,956		0		2,893		63,849
Total Real estate - construction		709,296		7,273		84,616		801,185
Consumer - direct		45,942		935		212		47,089
Consumer - indirect		166,531		2,275		290		169,096
Consumer - other		129,911		2,413		1,652		133,976
Total Consumer		342,384		5,623		2,154		350,161
Leasing and other and overdrafts		63,087		516		227		63,830
	$	11,505,205	$	99,330	$	328,772	$	11,933,307

(1) Includes all accruing loans 30 days to 89 days past due.

(2) Includes all accruing loans 90 days or more past due and all non-accrual loans.

The following table presents non-performing assets:

	June 30, 2011		December 31, 2010
	(in thousands)
Non-accrual loans	$	274,973	$	280,688
Accruing loans greater than 90 days past due		35,869		48,084
Total non-performing loans		310,842		328,772
Other real estate owned (OREO)		37,493		32,959
Total non-performing assets	$	348,335	$	361,731

The following table presents TDRs, by loan type:

	June 30, 2011		December 31, 2010
	(in thousands)
Real-estate – residential mortgage	$	37,006	$	37,826
Real-estate – commercial mortgage		30,735		18,778
Real-estate – construction		5,589		5,440
Commercial – industrial, financial and agricultural		3,055		5,502
Consumer and home equity		258		263
Total accruing TDRs		76,643		67,809
Non-accrual TDRs (1)		44,659		51,175
Total TDRs	$	121,302	$	118,984

(1) Included within non-accrual loans in table detailing non-performing assets above.

As of June 30, 2011 and December 31, 2010, there were $1.8 million and $1.6 million, respectively, of commitments to lend additional funds to borrowers whose loans were modified under TDRs.

The following table presents past due status and non-accrual loans by portfolio segment and class segment:

	June 30, 2011
	31-59 Days Past Due		60-89 Days Past Due		³ 90 Days Past Due and Accruing		Non- accrual		Total ³ 90 Days		Total Past Due		Current		Total
	(in thousands)
Real estate - commercial mortgage	$	20,376	$	5,161	$	5,578	$	97,146	$	102,724	$	128,261	$	4,314,764	$	4,443,025
Commercial - secured		13,077		5,622		5,892		85,748		91,640		110,339		3,333,421		3,443,760
Commercial - unsecured		823		490		295		2,920		3,215		4,528		230,570		235,098
Total Commercial - industrial, financial and agricultural		13,900		6,112		6,187		88,668		94,855		114,867		3,563,991		3,678,858
Real estate - home equity		10,112		1,989		9,241		199		9,440		21,541		1,605,004		1,626,545
Real estate - residential mortgage		24,031		10,463		12,197		31,003		43,200		77,694		945,952		1,023,646
Construction - commercial residential		1,569		453		461		51,952		52,413		54,435		348,197		402,632
Construction - commercial		8		0		0		3,789		3,789		3,797		223,510		227,307
Construction - other		2,165		0		66		2,113		2,179		4,344		47,305		51,649
Total Real estate - construction		3,742		453		527		57,854		58,381		62,576		619,012		681,588
Consumer - direct		343		153		65		12		77		573		37,161		37,734
Consumer - indirect		1,489		309		89		0		89		1,887		158,988		160,875
Consumer - other		1,226		986		1,924		0		1,924		4,136		128,220		132,356
Total Consumer		3,058		1,448		2,078		12		2,090		6,596		324,369		330,965
Leasing and other and overdrafts		339		29		61		91		152		520		67,344		67,864
	$	75,558	$	25,655	$	35,869	$	274,973	$	310,842	$	412,055	$	11,440,436	$	11,852,491
	December 31, 2010
Real estate - commercial mortgage	$	15,898	$	8,491	$	6,744	$	86,976	$	93,720	$	118,109	$	4,257,871	$	4,375,980
Commercial - secured		5,274		6,837		13,374		72,162		85,536		97,647		3,373,651		3,471,298
Commercial - unsecured		629		553		731		1,188		1,919		3,101		229,985		233,086
Total Commercial - industrial, financial and agricultural		5,903		7,390		14,105		73,350		87,455		100,748		3,603,636		3,704,384
Real estate - home equity		8,138		3,767		10,024		164		10,188		22,093		1,619,684		1,641,777
Real estate - residential mortgage		24,237		12,094		13,346		37,066		50,412		86,743		909,247		995,990
Construction - commercial residential		3,872		3,401		884		75,552		76,436		83,709		409,190		492,899
Construction - commercial		0		0		195		5,092		5,287		5,287		239,150		244,437
Construction - other		0		0		491		2,402		2,893		2,893		60,956		63,849
Total Real estate - construction		3,872		3,401		1,570		83,046		84,616		91,889		709,296		801,185
Consumer - direct		707		228		212		0		212		1,147		45,942		47,089
Consumer - indirect		1,916		359		290		0		290		2,565		166,531		169,096
Consumer - other		1,751		662		1,638		14		1,652		4,065		129,911		133,976
Total Consumer		4,374		1,249		2,140		14		2,154		7,777		342,384		350,161
Leasing and other and overdrafts		473		43		155		72		227		743		63,087		63,830
	$	62,895	$	36,435	$	48,084	$	280,688	$	328,772	$	428,102	$	11,505,205	$	11,933,307

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Net Income Per Common Share and Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2011

Net Income Per Common Share and Other Comprehensive Income

Reconciliation of Weighted Average Common Shares Outstanding

	Three months ended June 30				Six months ended June 30
	2011		2010		2011		2010
			(in thousands)
Weighted average shares outstanding (basic)		198,772		190,221		198,686		183,236
Effect of dilutive securities		755		606		721		557
Weighted average shares outstanding (diluted)		199,527		190,827		199,407		183,793

Components of Other Comprehensive Income

	Six months ended June 30
	2011			2010
	(in thousands)
Unrealized gain on securities (net of a $9.2 million and $15.2 million tax effect in 2011 and 2010, respectively)	$	17,019		$	28,277
Non-credit related unrealized gain (loss) on other-than-temporarily impaired debt securities (net of a $392,000 and $1.2 million tax effect in 2011 and 2010, respectively)		729			(2,137	)
Unrealized gain on derivative financial instruments (net of a $36,000 tax effect in 2011 and 2010) (1)		68			68
(Accretion)/amortization of net unrecognized pension and postretirement items (net of a $12,000 and $20,000 tax effect in 2011 and 2010, respectively)		(24	)		38
Reclassification adjustment for securities (gains) losses included in net income (net of $682,000 tax expense in 2011 and $461,000 tax benefit in 2010)		(1,267	)		858
Other comprehensive income	$	16,525		$	27,104

(1) Amounts represent the amortization of the effective portions of losses on forward-starting interest rate swaps, designated as cash flow hedges and entered into in prior years in connection with the issuance of fixed-rate debt. The total amount recorded as a reduction to accumulated other comprehensive income upon settlement of these derivatives is being amortized to interest expense over the life of the related securities using the effective interest method. The amount of net losses in accumulated other comprehensive income that will be reclassified into earnings during the next twelve months is expected to be approximately $135,000.

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Fair Value Measurements (Assets Measured at Fair Value on a Nonrecurring Basis) (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Net loans	$ 234,179	$ 457,678
Other financial assets	68,752	62,109
Total assets	302,931	519,787
Reserve for unfunded commitments	1,950	1,227
Level 1 [Member]
Net loans	0	0
Other financial assets	0	0
Total assets	0	0
Reserve for unfunded commitments	0	0
Level 2 [Member]
Net loans	0	0
Other financial assets	0	0
Total assets	0	0
Reserve for unfunded commitments	0	0
Level 3 [Member]
Net loans	234,179	457,678
Other financial assets	68,752	62,109
Total assets	302,931	519,787
Reserve for unfunded commitments	$ 1,950	$ 1,227

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Investment Securities (Gross Unrealized Losses and Fair Values of Investments by Category and Length of Time in a Continuous Unrealized Loss Position) (Details) (USD $) In Thousands	Jun. 30, 2011
Estimated Fair Value, less than 12 months	$ 278,956
Unrealized Losses, less than 12 months	(3,971)
Estimated Fair Value, 12 months or longer	223,949
Unrealized Losses, 12 months or longer	(20,724)
Estimated Fair Value, Total	502,905
Unrealized Losses, Total	(24,695)
Equity Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	11,584
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(1,138)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1,690
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(503)
Estimated Fair Value, Total	13,274
Unrealized Losses, Total	(1,641)
Corporate Debt Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	4,900
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(105)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	46,505
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(8,864)
Estimated Fair Value, Total	51,405
Unrealized Losses, Total	(8,969)
U.S. Government-Sponsored Agency Securities [Member]
Estimated Fair Value, less than 12 months	5,377
Unrealized Losses, less than 12 months	(7)
Estimated Fair Value, 12 months or longer	187
Unrealized Losses, 12 months or longer	(1)
Estimated Fair Value, Total	5,564
Unrealized Losses, Total	(8)
State and Municipal Securities [Member]
Estimated Fair Value, less than 12 months	31,090
Unrealized Losses, less than 12 months	(254)
Estimated Fair Value, 12 months or longer	401
Unrealized Losses, 12 months or longer	(1)
Estimated Fair Value, Total	31,491
Unrealized Losses, Total	(255)
Auction Rate Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	56,746
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(1,550)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	175,166
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(11,355)
Estimated Fair Value, Total	231,912
Unrealized Losses, Total	(12,905)
Mortgage-Backed Securities [Member]
Estimated Fair Value, less than 12 months	66,829
Unrealized Losses, less than 12 months	(744)
Estimated Fair Value, 12 months or longer	0
Unrealized Losses, 12 months or longer	0
Estimated Fair Value, Total	66,829
Unrealized Losses, Total	(744)
Collateralized Mortgage Obligations [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	102,430
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(173)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	0
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	0
Estimated Fair Value, Total	102,430
Unrealized Losses, Total	(173)
Debt Securities [Member]
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	267,372
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Losses	(2,833)
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	222,259
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Aggregate Losses	(20,221)
Estimated Fair Value, Total	489,631
Unrealized Losses, Total	$ (23,054)

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Fair Value Option (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value Option

Summary of Corporation's Mortgage Loans Held for Sale

	June 30, 2011		December 31, 2010
	(in thousands)
Cost	$	46,028	$	84,604
Fair value		47,133		83,940

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Consolidated Statements of Shareholders' Equity and Comprehensive Income (USD $) In Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Total
Beginning Balance at Dec. 31, 2009	$ 370,290	$ 482,491	$ 1,257,730	$ 71,999	$ 7,458	$ (253,486)	$ 1,936,482
Beginning Balance (in shares) at Dec. 31, 2009		176,364
Comprehensive income:
Net income				59,162			59,162
Other comprehensive income					27,104		27,104
Total comprehensive income							86,266
Stock issued, including related tax benefits		54,879	171,929			2,199	229,007
Stock issued, including related tax benefits (in shares)		22,099
Stock-based compensation awards			611				611
Preferred stock discount accretion	719			(719)			0
Preferred stock cash dividends				(9,412)			(9,412)
Common stock cash dividends				(11,743)			(11,743)
Balance at Jun. 30, 2010	371,009	537,370	1,430,270	109,287	34,562	(251,287)	2,231,211
Ending Balance (in shares) at Jun. 30, 2010		198,463
Beginning Balance at Dec. 31, 2010	0	538,492	1,420,127	158,453	12,495	(249,178)	1,880,389
Beginning Balance (in shares) at Dec. 31, 2010		199,050
Comprehensive income:
Net income				70,170			70,170
Other comprehensive income					16,525		16,525
Total comprehensive income							86,695
Stock issued, including related tax benefits		431	398			2,247	3,076
Stock issued, including related tax benefits (in shares)		320
Stock-based compensation awards			1,101				1,101
Common stock cash dividends				(17,952)			(17,952)
Balance at Jun. 30, 2011	$ 0	$ 538,923	$ 1,421,626	$ 210,671	$ 29,020	$ (246,931)	$ 1,953,309
Ending Balance (in shares) at Jun. 30, 2011		199,370

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2011

Investment Securities

Schedule of Amortized Cost and Fair Values of Investment Securities

Held to Maturity at June 30, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
U.S. Government sponsored agency securities	$	6,014	$	0	$	(7	)	$	6,007
State and municipal securities		346		0		0			346
Mortgage-backed securities		630		55		0			685
	$	6,990	$	55	$	(7	)	$	7,038
Available for Sale at June 30, 2011
Equity securities	$	126,841	$	3,761	$	(1,641	)	$	128,961
U.S. Government securities		1,324		0		0			1,324
U.S. Government sponsored agency securities		4,858		135		(1	)		4,992
State and municipal securities		345,942		9,939		(255	)		355,626
Corporate debt securities		131,535		5,689		(8,969	)		128,255
Collateralized mortgage obligations		968,785		25,370		(173	)		993,982
Mortgage-backed securities		753,353		35,163		(744	)		787,772
Auction rate securities		267,339		708		(12,905	)		255,142
	$	2,599,977	$	80,765	$	(24,688	)	$	2,656,054

Held to Maturity at December 31, 2010	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)
U.S. Government sponsored agency securities	$	6,339	$	0	$	(1	)	$	6,338
State and municipal securities		346		0		0			346
Mortgage-backed securities		1,066		68		0			1,134
	$	7,751	$	68	$	(1	)	$	7,818
Available for Sale at December 31, 2010
Equity securities	$	133,570	$	3,872	$	(974	)	$	136,468
U.S. Government securities		1,649		0		0			1,649
U.S. Government sponsored agency securities		4,888		172		(2	)		5,058
State and municipal securities		345,053		6,003		(1,493	)		349,563
Corporate debt securities		137,101		3,808		(16,123	)		124,786
Collateralized mortgage obligations		1,085,613		23,457		(5,012	)		1,104,058
Mortgage-backed securities		843,446		31,080		(3,054	)		871,472
Auction rate securities		271,645		892		(11,858	)		260,679
	$	2,822,965	$	69,284	$	(38,516	)	$	2,853,733

Schedule of Amortized Cost and Fair Values of Debt Securities by Contractual Maturities

	Held to Maturity				Available for Sale
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(in thousands)
Due in one year or less	$	6,181	$	6,174	$	80,963	$	81,194
Due from one year to five years		179		179		49,609		51,521
Due from five years to ten years		0		0		136,802		143,210
Due after ten years		0		0		483,624		469,414
		6,360		6,353		750,998		745,339
Collateralized mortgage obligations		0		0		968,785		993,982
Mortgage-backed securities		630		685		753,353		787,772
	$	6,990	$	7,038	$	2,473,136	$	2,527,093

Summary of Gains and Losses from Equity and Debt Securities, and Losses Recognized from Other-than-Temporary Impairment

	Gross Realized Gains		Gross Realized Losses			Other-than- temporary Impairment Losses			Net Gains (Losses)
	(in thousands)
Three months ended June 30, 2011:
Equity securities	$	43	$	0		$	(34	)	$	9
Debt securities		16		(1	)		(359	)		(344	)
Total	$	59	$	(1	)	$	(393	)	$	(335	)
Three months ended June 30, 2010:
Equity securities	$	14	$	0		$	(509	)	$	(495	)
Debt securities		4,401		(13	)		(2,989	)		1,399
Total	$	4,415	$	(13	)	$	(3,498	)	$	904
Six months ended June 30, 2011:
Equity securities	$	48	$	0		$	(331	)	$	(283	)
Debt securities		3,605		(19	)		(1,353	)		2,233
Total	$	3,653	$	(19	)	$	(1,684	)	$	1,950
Six months ended June 30, 2010:
Equity securities	$	850	$	0		$	(1,333	)	$	(483	)
Debt securities		6,324		(18	)		(7,142	)		(836	)
Total	$	7,174	$	(18	)	$	(8,475	)	$	(1,319	)

Summary of Cumulative Other-than-Temporary Impairment Charges Recognized in Earnings for Pooled Trust Preferred Securities Held

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Balance of cumulative credit losses on pooled trust preferred securities, beginning of period	$	(28,517	)	$	(19,765	)	$	(27,560	)	$	(15,612	)
Additions for credit losses recorded which were not previously recognized as components of earnings		(359	)		(2,989	)		(1,353	)		(7,142	)
Reductions for increases in cash flows expected to be collected that are recognized over the remaining life of the security		0			0			37			0
Balance of cumulative credit losses on pooled trust preferred securities, end of period	$	(28,876	)	$	(22,754	)	$	(28,876	)	$	(22,754	)

Gross Unrealized Losses and Fair Values of Investments by Category and Length of Time in Continuous Unrealized Loss Position

	Less than 12 months					12 months or longer					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(in thousands)
U.S. Government sponsored agency securities	$	5,377	$	(7	)	$	187	$	(1	)	$	5,564	$	(8	)
State and municipal securities		31,090		(254	)		401		(1	)		31,491		(255	)
Corporate debt securities		4,900		(105	)		46,505		(8,864	)		51,405		(8,969	)
Collateralized mortgage obligations		102,430		(173	)		0		0			102,430		(173	)
Mortgage-backed securities		66,829		(744	)		0		0			66,829		(744	)
Auction rate securities		56,746		(1,550	)		175,166		(11,355	)		231,912		(12,905	)
Total debt securities		267,372		(2,833	)		222,259		(20,221	)		489,631		(23,054	)
Equity securities		11,584		(1,138	)		1,690		(503	)		13,274		(1,641	)
	$	278,956	$	(3,971	)	$	223,949	$	(20,724	)	$	502,905	$	(24,695	)

Summary of Amortized Cost and Fair Values of Corporate Debt Securities

	June 30, 2011				December 31, 2010
	Amortized cost		Estimated fair value		Amortized cost		Estimated fair value
	(in thousands)
Single-issuer trust preferred securities	$	87,338	$	82,785	$	91,257	$	81,789
Subordinated debt		35,051		37,527		34,995		35,915
Pooled trust preferred securities		6,636		5,433		8,295		4,528
Corporate debt securities issued by financial institutions		129,025		125,745		134,547		122,232
Other corporate debt securities		2,510		2,510		2,554		2,554
Available for sale corporate debt securities	$	131,535	$	128,255	$	137,101	$	124,786

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Loans and Allowance for Credit Losses (Activity in the Allowance for Credit Losses) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Loans and Allowance for Credit Losses
Loans and Leases Receivable, Allowance, Beginning Balance	$ 271,156	$ 269,254	$ 275,498	$ 257,553
Loans charged off	(40,675)	(31,532)	(86,204)	(61,524)
Recoveries of loans previously charged off	2,152	2,655	5,339	4,348
Net loans charged off	(38,523)	(28,877)	(80,865)	(57,176)
Provision for credit losses	36,000	40,000	74,000	80,000
Loans and Leases Receivable, Allowance, Ending Balance	$ 268,633	$ 280,377	$ 268,633	$ 280,377

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Mortgage Servicing Rights (Tables)

6 Months Ended

Jun. 30, 2011

Mortgage Servicing Rights

Summary of Changes in Mortgage Servicing Rights

	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
	(in thousands)
Amortized cost:
Balance at beginning of period	$	32,060		$	24,517		$	30,700		$	23,499
Originations of mortgage servicing rights		2,010			1,756			4,668			3,672
Amortization expense		(1,261	)		(946	)		(2,559	)		(1,844	)
Balance at end of period	$	32,809		$	25,327		$	32,809		$	25,327
Valuation allowance:
Balance at beginning of period	$	(1,550	)	$	(1,000	)	$	(1,550	)	$	(1,000	)
Additions		0			0			0			0
Balance at end of period	$	(1,550	)	$	(1,000	)	$	(1,550	)	$	(1,000	)
Net MSRs at end of period	$	31,259		$	24,327		$	31,259		$	24,327

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Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$ 70,170	$ 59,162
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	74,000	80,000
Depreciation and amortization of premises and equipment	10,462	10,261
Net amortization of investment securities premiums	1,999	1,187
Investment securities (gains) losses	(1,950)	1,319
Net decrease (increase) in loans held for sale	36,807	(8,120)
Amortization of intangible assets	2,350	2,655
Stock-based compensation	1,101	611
Decrease in accrued interest receivable	2,454	3,752
Decrease (increase) in other assets	22,955	(256)
Decrease in accrued interest payable	(3,889)	(3,304)
(Decrease) increase in other liabilities	(11,566)	3,236
Total adjustments	134,723	91,341
Net cash provided by operating activities	204,893	150,503
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale	416,480	276,691
Proceeds from maturities of securities held to maturity	160	227
Proceeds from maturities of securities available for sale	279,841	388,152
Purchase of securities held to maturity	(14)	(122)
Purchase of securities available for sale	(356,323)	(245,875)
Increase in short-term investments	(91,670)	(417,096)
Net increase in loans	(49)	(28,136)
Net purchases of premises and equipment	(9,623)	(11,357)
Net cash provided by (used in) investing activities	238,802	(37,516)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand and savings deposits	229,071	523,628
Net decrease in time deposits	(354,757)	(276,070)
Decrease in short-term borrowings	(127,496)	(410,606)
Additions to long-term debt	0	45,000
Repayments of long-term debt	(93,913)	(220,085)
Net proceeds from issuance of stock	3,076	229,007
Dividends paid	(13,939)	(19,998)
Net cash used in financing activities	(357,958)	(129,124)
Net Increase (Decrease) in Cash and Due From Banks	85,737	(16,137)
Cash and Due From Banks at Beginning of Period	198,954	284,508
Cash and Due From Banks at End of Period	284,691	268,371
Cash paid during the period for:
Interest	74,310	103,905
Income taxes	$ 7,469	$ 24,039

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Commitments and Contingencies

NOTE I – Commitments and Contingencies

Commitments

The Corporation is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. Those financial instruments include commitments to extend credit and letters of credit, which involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized on the Corporation's consolidated balance sheets. Exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and letters of credit is represented by the outstanding amount of those instruments.

The outstanding amounts of commitments to extend credit and letters of credit were as follows:

	June 30, 2011		December 31, 2010
	(in thousands)
Commitments to extend credit	$	3,847,362	$	3,780,824
Standby letters of credit		463,922		489,097
Commercial letters of credit		26,177		31,388

The Corporation records a reserve for unfunded lending commitments, which represents management's estimate of losses associated with unused commitments to extend credit. See Note D, "Loans and Allowance for Credit Losses" for additional details.

Residential Lending

Residential mortgages are originated and sold by the Corporation through Fulton Mortgage Company, which operates as a division of each of the Corporation's subsidiary banks. The loans originated and sold are predominantly "prime" loans that conform to published standards of government sponsored agencies. Prior to 2008, the Corporation's former Resource Bank subsidiary operated a national wholesale mortgage lending operation which originated and sold non-prime loans from the time the Corporation acquired Resource Bank in 2004 through 2007.

Beginning in 2007, Resource Bank experienced an increase in requests from secondary market purchasers to repurchase non-prime loans sold to those investors. These repurchase requests resulted in the Corporation recording charges representing the write-downs that were necessary to reduce the loan balances to their estimated net realizable values, based on valuations of the underlying properties, as adjusted for market factors and other considerations. Many of the loans the Corporation repurchased were delinquent and were settled through foreclosure and sale of the underlying collateral.

As of June 30, 2011, the reserve for losses on the potential repurchase of loans was $1.4 million. As of December 31, 2010, the reserve for losses on the potential repurchase of loans was $3.3 million.

Management believes that the reserves recorded as of June 30, 2011 are adequate for the known potential repurchases. However, continued declines in collateral values or the identification of additional loans to be repurchased could necessitate additional reserves in the future.

Other Contingencies

The Corporation and its subsidiaries are involved in various legal proceedings in the ordinary course of the business of the Corporation. The Corporation periodically evaluates the possible impact of pending litigation matters based on, among other factors, the advice of counsel, available insurance coverage and recorded liabilities and reserves for probable legal liabilities and costs. As of the date of this report, the Corporation believes that any liabilities, individually or in the aggregate, which may result from the final outcomes of pending proceedings are not expected to have a material adverse effect on the financial position, the operating results and/or the liquidity of the Corporation. However, litigation is often unpredictable and the actual results of litigation cannot be determined with certainty and, therefore, the ultimate resolution of any matter and the possible range of liabilities associated with potential outcomes may need to be reevaluated in the future.

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Employee Benefit Plans (Summary of Pension Plan and Postretirement Plan Net Periodic Benefit Cost) (Details) (USD $) In Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Pension Plan [Member]
Service cost	$ 15	[1]	$ 26	[1]	$ 30	[1]	$ 52	[1]
Interest cost	853		842		1,706		1,684
Expected return on plan assets	(837)		(802)		(1,674)		(1,604)
Net amortization and deferral	72		119		144		238
Net periodic benefit cost	103		185		206		370
Postretirement Plan [Member]
Service cost	50		48		101		98
Interest cost	107		110		214		220
Expected return on plan assets	(1)		(1)		(2)		(2)
Net accretion and deferral	(91)		(91)		(182)		(182)
Net periodic benefit cost	$ 65		$ 66		$ 131		$ 134

[1] The Pension Plan service cost recorded for the three and six months ended June 30, 2011 and 2010, respectively, was related to administrative costs associated with the plan and not due to the accrual of additional participant benefits.

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Fair Value Option (Summary of Corporation's Mortgage Loans Held for Sale) (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Fair Value Option
Cost	$ 46,028,000		$ 46,028,000		$ 84,604,000
Fair value	47,133,000		47,133,000		83,940,000
Gain in fair values of mortgage loans held for sale	$ 533,000	$ 2,000,000	$ 1,800,000	$ 2,400,000

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Investment Securities (Narrative) (Details) (USD $)	6 Months Ended
	Jun. 30, 2011	Dec. 31, 2010
Restricted equity securities issued by the Federal Home Loan Bank and Federal Reserve Bank	$ 88,600,000	$ 96,400,000
Estimated fair value	33,300,000	33,100,000
Guaranteed student loans below investment grade	29,000,000
Percentage student loans below investment grade	59.00%
Actual weighted average cumulative defaults	38.00%
Actual weighted average cumulative deferrals	19.00%
Corporate debt securities	128,255,000	124,786,000
Auction Rate Securities [Member]
Carrying value action rate securities above investment grade	205,000,000
Percentage action rate securities above investment grade	80.00%
Carrying value auction rate securities rated investment grade	156,000,000
Percentage auction rate securities investment grade	61.00%
Carrying value auction rate securities below investment grade	50,000,000
Percentage of auction rate certificates rated below investment grade	20.00%
Guaranteed student loan auction rate securities	225,000,000
Guaranteed student loan auction rate securities percentage	89.00%
Financial Institutions Stock Portfolio [Member]
Amortized cost	31,200,000
Estimated fair value	$ 33,300,000
Pooled Trust Preferred Securities [Member]
Number of Trust Preferred Securities Below Investment Grade	9
Single-issuer Trust Preferred Securities [Member]
Number of Trust Preferred Securities Below Investment Grade	13

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Reclassifications

6 Months Ended

Jun. 30, 2011

Reclassifications

Reclassifications

NOTE M – Reclassifications

Certain amounts in the 2010 consolidated financial statements and notes have been reclassified to conform to the 2011 presentation.

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Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash and due from banks	$ 284,691	$ 198,954
Interest-bearing deposits with other banks	124,967	33,297
Loans held for sale	47,133	83,940
Investment securities:
Held to maturity (estimated fair value of $7,038 in 2011 and $7,818 in 2010)	6,990	7,751
Available for sale	2,656,054	2,853,733
Loans, net of unearned income	11,852,491	11,933,307
Less: Allowance for loan losses	(266,683)	(274,271)
Net Loans	11,585,808	11,659,036
Premises and equipment	207,177	208,016
Accrued interest receivable	51,387	53,841
Goodwill	535,798	535,518
Intangible assets	10,111	12,461
Other assets	457,004	628,707
Total Assets	15,967,120	16,275,254
LIABILITIES
Noninterest-bearing	2,445,008	2,194,988
Interest-bearing	9,817,887	10,193,593
Total Deposits	12,262,895	12,388,581
Short-term borrowings:
Federal funds purchased	166,179	267,844
Other short-term borrowings	380,402	406,233
Total Short-Term Borrowings	546,581	674,077
Accrued interest payable	29,444	33,333
Other liabilities	149,354	179,424
Federal Home Loan Bank advances and long-term debt	1,025,537	1,119,450
Total Liabilities	14,013,811	14,394,865
SHAREHOLDERS' EQUITY
Common stock, $2.50 par value, 600 million shares authorized, 215.6 million shares issued in 2011 and 215.4 million shares issued in 2010	538,923	538,492
Additional paid-in capital	1,421,626	1,420,127
Retained earnings	210,671	158,453
Accumulated other comprehensive income:
Unrealized gains on investment securities not other-than-temporarily impaired	37,227	22,354
Unrealized non-credit related losses on other-than-temporarily impaired debt securities	(747)	(2,355)
Unrecognized pension and postretirement plan costs	(4,438)	(4,414)
Unamortized effective portions of losses on forward-starting interest rate swaps	(3,022)	(3,090)
Accumulated Other Comprehensive Income	29,020	12,495
Treasury stock, 16.2 million shares in 2011 and 16.3 million shares in 2010, at cost	(246,931)	(249,178)
Total Shareholders' Equity	1,953,309	1,880,389
Total Liabilities and Shareholders' Equity	$ 15,967,120	$ 16,275,254

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Investment Securities (Schedule of Amortized Cost and Fair Values of Debt Securities by Contractual Maturities) (Details) (USD $) In Thousands	Jun. 30, 2011
Mortgage-Backed Securities [Member] | Held to Maturity Securities [Member]
Held to Maturity Securities, Estimated Fair Value	$ 685
Held to Maturity Securities, Amortized Cost	630
Mortgage-Backed Securities [Member] | Available for Sale Securities [Member]
Available for Sale, Estimated Fair Value	787,772
Available for Sale, Amortized Cost	753,353
Collateralized Mortgage Obligations [Member] | Held to Maturity Securities [Member]
Held to Maturity Securities, Estimated Fair Value	0
Held to Maturity Securities, Amortized Cost	0
Collateralized Mortgage Obligations [Member] | Available for Sale Securities [Member]
Available for Sale, Estimated Fair Value	993,982
Available for Sale, Amortized Cost	968,785
Due in One Year or Less [Member]
Held to Maturity Securities, Estimated Fair Value	6,174
Held to Maturity Securities, Amortized Cost	6,181
Available for Sale, Estimated Fair Value	81,194
Available for Sale, Amortized Cost	80,963
Due from One Year to Five Years {Member]
Held to Maturity Securities, Estimated Fair Value	179
Held to Maturity Securities, Amortized Cost	179
Available for Sale, Estimated Fair Value	51,521
Available for Sale, Amortized Cost	49,609
Due from Five Years to Ten Years [Member]
Held to Maturity Securities, Estimated Fair Value	0
Held to Maturity Securities, Amortized Cost	0
Available for Sale, Estimated Fair Value	143,210
Available for Sale, Amortized Cost	136,802
Due after Ten Years [Member]
Held to Maturity Securities, Estimated Fair Value	0
Held to Maturity Securities, Amortized Cost	0
Available for Sale, Estimated Fair Value	469,414
Available for Sale, Amortized Cost	483,624
Subtotal [Member]
Held to Maturity Securities, Estimated Fair Value	6,353
Held to Maturity Securities, Amortized Cost	6,360
Available for Sale, Estimated Fair Value	745,339
Available for Sale, Amortized Cost	750,998
Securities by Contractual Maturities [Member]
Held to Maturity Securities, Estimated Fair Value	7,038
Held to Maturity Securities, Amortized Cost	6,990
Available for Sale, Estimated Fair Value	2,527,093
Available for Sale, Amortized Cost	$ 2,473,136

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Loans and Allowance for Credit Losses (Non-Performing Assets) (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Loans and Allowance for Credit Losses
Non-accrual loans	$ 274,973	$ 280,688
Accruing loans greater than 90 days past due	35,869	48,084
Total non-performing loans	310,842	328,772
Other real estate owned classified as Level 3 investments	37,493	32,959
Total non-performing assets	$ 348,335	$ 361,731

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Derivative Financial Instruments (Fair Value Gains and Losses on Derivative Financial Instruments) (Details) (USD $) In Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010		Jun. 30, 2011		Jun. 30, 2010
Fair value gains and losses on derivative financial instruments	$ 44		$ (3,379)		$ (7,321)		$ (3,655)
Interest Rate Locks with Customers [Member]
Fair value gains and losses on derivative financial instruments	82	[1]	1,499	[1]	2,002	[1]	2,521	[1]
Forward Commitments [Member]
Fair value gains and losses on derivative financial instruments	$ (38)	[1]	$ (4,878)	[1]	$ (9,323)	[1]	$ (6,176)	[1]

[1] Fair value gains and losses recorded as components of mortgage banking income on the consolidated statements of income.

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Loans and Allowance for Credit Losses (Allowance for Loan Losses by Portfolio Segment) (Details) (USD $)	3 Months Ended			6 Months Ended
	Jun. 30, 2011		Jun. 30, 2010	Jun. 30, 2011		Jun. 30, 2010
Loans and Leases Receivable, Allowance, Beginning Balance	$ 270,272,000			$ 274,271,000
Loans charged off	(40,675,000)		(31,532,000)	(86,204,000)		(61,524,000)
Recoveries of loans previously charged off	2,152,000		2,655,000	5,339,000		4,348,000
Net loans charged off	(38,523,000)		(28,877,000)	(80,865,000)		(57,176,000)
Provision for loan losses	34,934,000			73,277,000
Impact of change in allowance methodology	0			0
Provision for loan losses, including impact of change in allowance methodology	34,934,000	[1]		73,277,000	[1]
Loans and Leases Receivable, Allowance, Ending Balance	266,683,000			266,683,000
Provision for loan losses gross	1,100,000			723,000
Provision for loan losses	36,000,000		40,000,000	74,000,000		80,000,000
Real Estate - Commercial Mortgage [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	48,558,000			40,831,000
Loans charged off	(7,074,000)			(17,121,000)
Recoveries of loans previously charged off	191,000			1,726,000
Net loans charged off	(6,883,000)			(15,395,000)
Provision for loan losses	9,040,000			25,279,000
Impact of change in allowance methodology	22,883,000			22,883,000
Provision for loan losses, including impact of change in allowance methodology	31,923,000	[1]		48,162,000	[1]
Loans and Leases Receivable, Allowance, Ending Balance	73,598,000			73,598,000
Commercial - Industrial, Financial and Agricultural [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	100,180,000			101,436,000
Loans charged off	(15,406,000)			(28,742,000)
Recoveries of loans previously charged off	1,003,000			1,394,000
Net loans charged off	(14,403,000)			(27,348,000)
Provision for loan losses	10,224,000			21,913,000
Impact of change in allowance methodology	(13,388,000)			(13,388,000)
Provision for loan losses, including impact of change in allowance methodology	(3,164,000)	[1]		8,525,000	[1]
Loans and Leases Receivable, Allowance, Ending Balance	82,613,000			82,613,000
Real Estate - Home Equity [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	5,656,000			6,454,000
Loans charged off	(1,650,000)			(3,118,000)
Recoveries of loans previously charged off	2,000			3,000
Net loans charged off	(1,648,000)			(3,115,000)
Provision for loan losses	1,862,000			2,531,000
Impact of change in allowance methodology	3,690,000			3,690,000
Provision for loan losses, including impact of change in allowance methodology	5,552,000	[1]		6,221,000	[1]
Loans and Leases Receivable, Allowance, Ending Balance	9,560,000			9,560,000
Real Estate - Residential Mortgage [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	19,575,000			17,425,000
Loans charged off	(7,707,000)			(12,703,000)
Recoveries of loans previously charged off	190,000			234,000
Net loans charged off	(7,517,000)			(12,469,000)
Provision for loan losses	11,958,000			19,060,000
Impact of change in allowance methodology	7,896,000			7,896,000
Provision for loan losses, including impact of change in allowance methodology	19,854,000	[1]		26,956,000	[1]
Loans and Leases Receivable, Allowance, Ending Balance	31,912,000			31,912,000
Real Estate - Construction [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	55,491,000			58,117,000
Loans charged off	(7,468,000)			(21,362,000)
Recoveries of loans previously charged off	79,000			642,000
Net loans charged off	(7,389,000)			(20,720,000)
Provision for loan losses	7,239,000			17,944,000
Impact of change in allowance methodology	(24,771,000)			(24,771,000)
Provision for loan losses, including impact of change in allowance methodology	(17,532,000)	[1]		(6,827,000)	[1]
Loans and Leases Receivable, Allowance, Ending Balance	30,570,000			30,570,000
Consumer [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	4,736,000			4,669,000
Loans charged off	(681,000)			(1,972,000)
Recoveries of loans previously charged off	433,000			742,000
Net loans charged off	(248,000)			(1,230,000)
Provision for loan losses	343,000			1,392,000
Impact of change in allowance methodology	(3,076,000)			(3,076,000)
Provision for loan losses, including impact of change in allowance methodology	(2,733,000)	[1]		(1,684,000)	[1]
Loans and Leases Receivable, Allowance, Ending Balance	1,755,000			1,755,000
Leasing and Other and Overdrafts [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	2,576,000			3,840,000
Loans charged off	(689,000)			(1,186,000)
Recoveries of loans previously charged off	254,000			598,000
Net loans charged off	(435,000)			(588,000)
Provision for loan losses	590,000			(521,000)
Impact of change in allowance methodology	(944,000)			(944,000)
Provision for loan losses, including impact of change in allowance methodology	(354,000)	[1]		(1,465,000)	[1]
Loans and Leases Receivable, Allowance, Ending Balance	1,787,000			1,787,000
Unallocated [Member]
Loans and Leases Receivable, Allowance, Beginning Balance	33,500,000			41,499,000	[2]
Loans charged off	0			0
Recoveries of loans previously charged off	0			0
Net loans charged off	0			0
Provision for loan losses	(6,322,000)			(14,321,000)
Impact of change in allowance methodology	7,710,000			7,710,000
Provision for loan losses, including impact of change in allowance methodology	1,388,000	[1]		(6,611,000)	[1]
Loans and Leases Receivable, Allowance, Ending Balance	$ 34,888,000	[2]		$ 34,888,000	[2]

[1] Provision for loan losses is net of a $1.1 million and $723,000 increase in provision applied to unfunded commitments for the three and six months ended June 30, 2011, respectively. The total provision for credit losses, comprised of allocations for both funded and unfunded loans, was $36.0 million and $74.0 million for the three and six months ended June 30, 2011, respectively.

[2] The Corporation's unallocated allowance, which was approximately 13% and 15% as of June 30, 2011 and December 31, 2010, respectively, was reasonable and appropriate as the estimates used in the allocation process are inherently imprecise.

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Loans and Allowance for Credit Losses (Present Loans, Net of Unearned Income and Their Related Allowance for Loan Losses, by Portfolio Segment) (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2011		Dec. 31, 2010		Mar. 31, 2011
Allowance for loan losses	$ 266,683		$ 274,271		$ 270,272
Loans, net of unearned income	11,852,491		11,933,307
Unallocated allowance	13.00%		15.00%
Real Estate - Commercial Mortgage [Member]
Allowance for loan losses	73,598		40,831		48,558
Loans, net of unearned income	4,443,025		4,375,980
Real Estate - Commercial Mortgage [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	44,600		22,836
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	4,329,750		4,217,660
Real Estate - Commercial Mortgage [Member] | Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	28,998		17,995
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	113,275		158,320
Commercial - Industrial, Financial and Agricultural [Member]
Allowance for loan losses	82,613		101,436		100,180
Loans, net of unearned income	3,678,858		3,704,384
Commercial - Industrial, Financial and Agricultural [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	53,373		32,323
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	3,587,702		3,469,775
Commercial - Industrial, Financial and Agricultural [Member] | Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	29,240		69,113
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	91,156		234,609
Real Estate - Home Equity [Member]
Allowance for loan losses	9,560		6,454		5,656
Loans, net of unearned income	1,626,545		1,641,777
Real Estate - Home Equity [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	9,560		6,454
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	1,626,545		1,641,777
Real Estate - Home Equity [Member] | Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	0		0
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	0		0
Real Estate - Residential Mortgage [Member]
Allowance for loan losses	31,912		17,425		19,575
Loans, net of unearned income	1,023,646		995,990
Real Estate - Residential Mortgage [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	5,953		11,475
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	955,863		956,260
Real Estate - Residential Mortgage [Member] | Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	25,959		5,950
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	67,783		39,730
Real Estate - Construction [Member]
Allowance for loan losses	30,570		58,117		55,491
Loans, net of unearned income	681,588		801,185
Real Estate - Construction [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	18,794		35,247
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	623,734		660,238
Real Estate - Construction [Member] | Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	11,776		22,870
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	57,854		140,947
Consumer [Member]
Allowance for loan losses	1,755		4,669		4,736
Loans, net of unearned income	330,965		350,161
Consumer [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	1,597		4,669
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	330,754		350,161
Consumer [Member] | Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	158		0
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	211		0
Leasing and Other and Overdrafts [Member]
Allowance for loan losses	1,787		3,840		2,576
Loans, net of unearned income	67,864		63,830
Leasing and Other and Overdrafts [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	1,727		3,840
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	67,773		63,830
Leasing and Other and Overdrafts [Member] | Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	60		0
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	91		0
Unallocated [Member]
Allowance for loan losses	34,888	[1]	41,499	[1]	33,500
Loans, net of unearned income				[1]
Unallocated [Member] | Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	34,888	[1]	41,499	[1]
Evaluated Collectively for Impairment under FASB ASC Subtopic 450-20 [Member]
Allowance for loan losses, Evaluated Collectively for Impairment	170,492		158,343
Loans Receivable, net of unearned income, Evaluated Collectively for Impairment	11,522,121		11,359,701
Evaluated Individually for Impairment under FASB ASC Section 310-10-35 [Member]
Allowance for loan losses, Evaluated Individually for Impairment	96,191		115,928
Loans Receivable, net of unearned income, Evaluated Individually for Impairment	$ 330,370		$ 573,606

[1] The Corporation's unallocated allowance, which was approximately 13% and 15% as of June 30, 2011 and December 31, 2010, respectively, was reasonable and appropriate as the estimates used in the allocation process are inherently imprecise.

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Stock-Based Compensation (Compensation Expense and Related Tax Benefits) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Stock-Based Compensation
Stock-based compensation expense	$ 554	$ 318	$ 1,101	$ 611
Tax benefit	(119)	(66)	(255)	(128)
Stock-based compensation expense, net of tax	$ 435	$ 252	$ 846	$ 483

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Investment Securities (Summary of Gains and Losses from Equity and Debt Securities, and Losses from Other-than-Temporary Impairment) (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Gross Realized Gains	$ 59	$ 4,415	$ 3,653	$ 7,174
Gross Realized Losses	(1)	(13)	(19)	(18)
Other-than-temporary Impairment Losses	(393)	(3,498)	(1,684)	(8,475)
Net Gains (Losses)	(335)	904	1,950	(1,319)
Equity Securities [Member]
Gross Realized Gains	43	14	48	850
Gross Realized Losses	0	0	0	0
Other-than-temporary Impairment Losses	(34)	(509)	(331)	(1,333)
Net Gains (Losses)	9	(495)	(283)	(483)
Debt Securities [Member]
Gross Realized Gains	16	4,401	3,605	6,324
Gross Realized Losses	(1)	(13)	(19)	(18)
Other-than-temporary Impairment Losses	(359)	(2,989)	(1,353)	(7,142)
Net Gains (Losses)	$ (344)	$ 1,399	$ 2,233	$ (836)