FULTON FINANCIAL CORPORATION
2009 Annual Report
*((1
Fulton Financial Corporation Annual Report
“The 3,900 members of our team have been the key
to ensuring that this company continues to move
forward, and I am very grateful for their hard work
and support. Their efforts enabled us to retain
existing clients and attract new ones, and I am very
proud that we are part of the same team.”
- R. Scott Smith, Jr., Chairman & CEO
*((1
Fulton Financial Corporation Annual Report
Dear Shareholder:
As I write to you, I am encouraged by how different the
message and tone of this letter is from the one I wrote
to our shareholders a year ago. At that time, we had
ended the previous year with disappointing results, and
as I shared that news, I stated that we were managing
your company with one goal in mind: to position the
Corporation for the future so that we could emerge
faster and stronger as the economy improved.
Now, one year later, I am pleased to tell you that our
strategies are working, as seen in our 2009 performance.
Our fourth quarter 2009 earnings were relatively strong
as compared to what we, and much of our industry,
have experienced over the past two years. For the
year ended December 31, 2009, net income available to
common shareholders was $53.8 million, or 31 cents
per diluted share, compared to a net loss available to
common shareholders of $6.1 million, or 3 cents per
diluted share, for 2008. We expect continued earnings
improvement as the economy rebounds.
In 2009, we saw significant core deposit growth,
good growth in non-interest income, and continued
tight control of expenses. There were a number of
other bright spots during the past year as well. We
increased our deposit market share in 36 of the 53
counties we serve throughout our five-state footprint.
Our mortgage banking business contributed nicely
to our bottom line. New technology that has been
deployed throughout the company is helping us serve
our customers even more efficiently than before. Our
continued focus on the small business sector is enabling
us to grow our presence in this market segment. And
our enhanced rewards programs provide incentives for
customers to increase their banking relationships with us.
R. Scott Smith, Jr.
Chairman and Chief Executive Officer
E. Philip Wenger
President and Chief Operating Officer
*((1
Fulton Financial Corporation Annual Report
Through these efforts and others, along with the help of
a strengthening economy, we are focused on achieving
our goal of returning this company to being a strong
performer. We were pleased to see our stock price
increase in the fourth quarter of 2009, as the market
recognized our stronger financial performance.
As you know, the past 18-24 months have posed
economic challenges for our customers, our company,
our industry, our nation, and the world. During this
tumultuous period, our primary goal was to make sure
this company emerged successfully from a prolonged
economic downturn. To do so, we made some difficult
but necessary decisions. We continually and realistically
assessed our loan portfolio and worked to address our
credit issues quickly and decisively. We participated
in the Treasury’s Capital Purchase Program to ensure
that we maintained a strong balance sheet in case of a
prolonged recession. And we reduced the cash dividend
for the first time in our history. I will discuss each of
these actions briefly.
Loan quality has been a key priority for us and for our
industry. Credit issues were the major challenge for the
year, as we allocated additional reserves to cover loan
losses. We expensed $190 million, and charged off $113
million in loans. While the credit crisis has not affected
our company to the extent that it has affected a number
of our peers, our loan losses were still far greater than any
we had experienced in Fulton Financial’s 28-year history.
We worked to recognize credit quality problems early.
We decisively addressed them to get those issues behind
us and to position the company for better times ahead.
Knowing that commercial real estate loans have been an
industry-wide concern, we have managed this portfolio
carefully to ensure that it is well diversified, that the
Charles J. Nugent
Senior Executive Vice President/
Chief Financial Officer
*((1
Fulton Financial Corporation Annual Report
average loan size remains relatively small, and that a large
portion of these loans are for owner-occupied properties,
which helps to mitigate our risk.
Although we have paid careful attention to loan quality,
we have continued to make quality loans to credit-worthy
individuals and businesses. However, the demand for
loans decreased as customers postponed growth and
expansion plans in favor of more conservative financial
practices. As we begin to see increasingly encouraging
economic news, we believe that customers will feel more
comfortable in expanding their businesses, purchasing
homes, and pursuing the wide variety of lending options
we have to offer.
We participated in the U.S. Treasury Department’s Capital
Purchase Program. Some banks have repaid these funds
to the federal government, and I am often asked when
we will do the same. Our board of directors continually
evaluates our capital position relative to the economy and
to our earnings performance. We will repay these funds
when the board feels it is prudent to do so, and when
it can be done in as shareholder-friendly a manner as
possible.
Our quarterly cash dividend currently stands at three
cents per share, and I am sure you are wondering what
our plans are for increasing the dividend in the future.
We realize that the cash dividend is very important to
our shareholders. However, during periods of economic
challenge, it is important for a business to retain a greater
portion of its earnings to see it through the difficult times,
and that is what we have done. We are thankful that, even
through the prolonged economic downturn, we have
been able to continue to declare a dividend, although at a
reduced level, and we look forward to the time when we
can increase it. When the board of directors feels certain
James E. Shreiner
Senior Executive Vice President/
Administrative Services
Craig H. Hill
Senior Executive Vice President/
Human Resources
*((1
Fulton Financial Corporation Annual Report
25
20
15
10
5
0
18.16%
9.33%
2007 2008 2009
5.96%
0.75
0.50
0.25
0.00
$0.598
$0.600
2007 2008 2009
$0.120
1.5
1.0
0.5
0.0
$0.88
($0.03)
2007 2008 2009
$0.31
Return on Average Common Equity (tangible)*
Cash Dividends Per Common Share Net Income (Loss) Per Common Share (diluted)
*Net income (loss), adjusted for intangible amortization (net of tax) and goodwill impairment charges, divided by average common shareholders’ equity, net of goodwill and intangible assets.
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
that our capital base is sufficient relative to the
strength of the economy and our earnings are
at a level that supports increasing the dividend,
we will do so.
Many of our customers have seen and heard
troubling news items related to problems in
some areas of our nation’s financial services
industry. These articles have fostered a greater
awareness of the importance of “knowing
your banker.” As a result, our commitment
to local community banking is more important
than ever. At a time when customers were
unsure about the safety of their funds, we
were there to help them. Our employees
upheld our customer promise to “Care, Listen,
Understand and Deliver,” and they worked
hard to earn and maintain each and every
client’s trust. Time and time again, we heard
how grateful customers were for our team
members, who live in, work in and give back
to the communities they serve, and for the
strength of our local decision-making process
which, despite tough times, enabled families
to buy homes, businesses to obtain loans, and
helped hundreds of nonprofit and community
organizations to continue to help our friends
and neighbors in need.
Despite the economic downturn and our
efforts to reduce costs, we continued to
dedicate resources to strengthen our ability to
deliver on our customer promise. This focus
enabled us to maintain high employee morale
and helped our staff members to communicate
a stable and positive attitude to customers who
were concerned about the safety and soundness
of their financial partner. Our employees
realized that we were operating in largely
unprecedented times, and they met every
challenge enthusiastically and effectively.
*((1
Fulton Financial Corporation Annual Report
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
FINANCIAL HIGHLIGHTS
AS OF OR FOR THE YEAR ENDED DECEMBER 31
(Dollars in thousands, except per-share data) Percent Change
BALANCE SHEET DATA 2009 2008 2007 2009/2008 2008/2007
Total assets $16,636,000 $16,185,000 $15,923,000 2.8% 1.6%
Loans, net of unearned income 11,972,000 12,043,000 11,204,000 (0.6%) 7.5%
Deposits 12,098,000 10,552,000 10,105,000 14.7% 4.4%
Common shareholders’ equity 1,566,000 1,491,000 1,575,000 5.0% (5.3%)
PER COMMON SHARE DATA
Net income (loss) (diluted) $0.31 $(0.03) $0.88 N/M (103.4)
Common stock cash dividends 0.120 0.600 0.598 (80.0%) 0.3%
Shareholders’ equity (tangible) 5.75 5.33 5.30 7.9% 0.6%
N/M - Not meaningful
The 3,900 members of our team have been the
key to ensuring that this company continues to
move forward, and I am very grateful for their
hard work and support. Their efforts enabled us
to retain existing clients and attract new ones, and I
am very proud that we are part of the same team.
We believe our efforts to focus on activities
that will help us emerge from the economic
downturn more quickly than our peers are
working. The opportunity to acquire banks
at a reasonable cost has not presented itself for
several years. We are still interested in making
acquisitions that would benefit our shareholders.
However, in the absence of these opportunities,
our ongoing strategy is to focus on organic
growth. This means serving more individuals
and businesses, providing a greater number of
services to each of our customers, and increasing
our non-interest income – all of which will
strengthen the company’s bottom line. Despite
the challenges of the past year or two, we have
continued to carefully and strategically invest
in new branches in existing and new markets to
foster organic growth.
As I close this letter, I want to thank you, and
the more than 49,000 shareholders who have
invested in our company. We know that there
are sure to be some bumps along the road to
economic recovery, but we have seen some
encouraging news over the past few months.
We will continue to work to deliver the kind of
earnings performance that drives increases in
shareholder value.
Sincerely,
R. Scott Smith, Jr.
Chairman and Chief Executive Officer
*((1
Fulton Financial Corporation Annual Report
20
18
16
14
12
10
8
6
4
2
0
6.6
7.8
8.4
9.8
11.2
12.4
14.9
15.9
16.2
16.6
00 01 02 03 04 05 06 07 08 09
Total Assets
(in billions
of dollars)
100
80
60
40
20
0
44.3
54.0
60.1
66.8
77.3
88.5
100.9
103.5
104.6
21.1
00 01 02 03 04 05 06 07 08 09
Common Stock
Cash Dividends
(in millions
of dollars)
15
12
9
6
3
0
4.9
6.0
6.2
6.8
7.9
8.8
10.2
10.1
10.6
12.1
00 01 02 03 04 05 06 07 08 09
Deposits
(in billions
of dollars)
1,800
1,600
1,400
1,200
1,000
800
600
400
0
679
812
865
948
1,244
1,283
1,516
1,575
1,491
1,566
00 01 02 03 04 05 06 07 08 09
Common
Shareholders’
Equity
(in millions
of dollars)
12
11
10
9
8
7
6
5
4
3
2
1
0
4.9
5.4
5.3
6.1
7.5
8.4
10.4
11.2
12.0
12.0
00 01 02 03 04 05 06 07 08 09
Loans
(in billions
of dollars)
10 YEARS IN REVIEW
(2000-2009)
*((1
Fulton Financial Corporation Annual Report
INVESTOR INFORMATION
,19(6725,1)250$7,21
672&./,67,1*
Common shares of Fulton Financial Corporation
are traded under the symbol “FULT” and are listed
in the NASDAQ Global Select Market.
&$6+',9,'(1'6
The Fulton Financial Corporation Board of
Directors decides whether to declare a quarterly
cash dividend in the third month of each quarter
(i.e., March, June, September and December).
',9,'(1'5(,19(670(173/$1
$1'
',5(&7'(326,72)&$6+',9,'(1'6
Fulton Financial Corporation offers its
shareholders the convenience of a Dividend
Reinvestment and Stock Purchase Plan and direct
deposit of cash dividends.
Holders of stock may have their quarterly
dividends automatically reinvested in additional
shares of the Corporation’s common stock by
utilizing the Dividend Reinvestment Plan.
Shareholders participating in the Plan may also
make voluntary cash contributions not to exceed
$5,000 per month.
In addition, shareholders also have the option of
having their cash dividends sent directly to their
financial institution for deposit into their checking
or savings account.
Shareholders may receive information on either the
Dividend Reinvestment Plan and Stock Purchase Plan
or direct deposit of cash dividends by writing to:
Stock Transfer Department
Fulton Financial Advisors
P.O. Box 3215
Lancaster, PA 17604-3215
or by calling: (717) 291-2546 or toll-free:
1.800.626.0255.
,19(6725,1)250$7,21$1''2&80(176
A copy of the Corporation’s Annual Report, Form 10-K, 2010 Proxy
Statement and other documents filed with the Securities and Exchange
Commision can be viewed on the Corporation’s website at
www.fult.com. In addition, copies of the Form 10-K and 2010 Proxy
Statement may be obtained without charge to shareholders by writing to:
Corporate Secretary
Fulton Financial Corporation
P.O. Box 4887
Lancaster, PA 17604-4887
News, stock information, an events calendar, Corporate presentations
and other information can be found on the Corporation’s website at
www.fult.com.
The Annual Meeting of Shareholders of Fulton Financial
Corporation will be held on Friday, April 30, 2010 at 10:00 a.m. in the
Commonwealth Ballroom of the Lancaster Marriott at Penn Square
in downtown Lancaster. Please note that any shareholder who would
like to attend MUST HAVE A RESERVATION.
To make a reservation, please return the Annual Meeting Response
Card you received with your proxy statement. Your reservation will
help ensure that we have adequate seating for all shareholders who
plan to join us that day.
)8/721),1$1&,$/
&
25325$7,216(1,25
0
$1$*(0(17
R. Scott Smith, Jr.,
Chairman and
Chief Executive Officer
E. Philip Wenger,
President and
Chief Operating Officer
Charles J. Nugent,
Senior Executive
Vice President/
Chief Financial Officer
James E. Shreiner,
Senior Executive
Vice President/
Administrative Services
Craig H. Hill
Senior Executive
Vice President/
Human Resources
)8/721),1$1&,$/
&25325$7,21
%2$5'2)',5(&7256
Jeffrey G. Albertson, Esq.
John M. Bond, Jr.
Donald M. Bowman, Jr.
Dana A. Chryst
Craig A. Dally, Esq.
Patrick J. Freer
Rufus A. Fulton, Jr.
George W. Hodges
Willem Kooyker
Donald W. Lesher, Jr.
John O. Shirk, Esq.
R. Scott Smith, Jr.
Gary A. Stewart
E. Philip Wenger
68%6,',$5<%$1.
%2$5'62)',5(&7256
)8/721%$1.
Richard J. Ashby, Jr.
Larry D. Bashore
Dana A. Chryst
Carlos E. Graupera
James M. Herr
Curtis J. Myers
George A. Parmer
Harlowe R. Prindle
A. Richard Pugh
Craig A. Roda
John O. Shirk, Esq.
)8/721%$1.',9,6,21$/%2$5'6
%5$1'<:,1(',9,6,21
Kenneth M. Goddu, Chairman
Robert F. Adams, Esq.
Wilmer L. Hostetter
Dallas Krapf
James D. McLeod, Jr.
Michael J. O’Rourke
&$3,7$/',9,6,21
Robert S. Jones, Chairman
James C. Byerly
Samuel T. Cooper, III, Esq.
Thomas S. Davis, M.D.
Charles J.DeHart, III, Esq.
Steven S. Etter
Dolores Liptak
Barry E. Musser, C.P.A.
Beth A. Peiffer
Steven C. Wilds
'529(56',9,6,21
Vernon L. Bracey
Robert S. Freed
Jevon L. Holland
Gregory V. Saubel
William S. Shipley, III
Gary A. Stewart, Jr.
Delaine A. Toerper
Christine R. Wardrop
Constance L. Wolf
*5($79$//(<',9,6,21
Jeffrey R. Rush, Chairman
Marcelino Colon
Michael D. Fromm
Kathryn G. Goodman
Daniel M. Goodyear
William G. Koch, Sr., C.P.A.
Chris G. Kraras
/(%$1219$//(<',9,6,21
Barry E. Ansel, Chairman
Donald H. Dreibelbis
Randall I. Ebersole
Robert J. Funk
Robert P. Hoffman
Wendie DiMatteo Holsinger
Robert J. Longo
Albert B. Murry
M. Randolph Tice
35(0,(5',9,6,21
Joseph R. Feilmeier, Chairman
Barry R. Angely
Anthony D. Cino
Wallace Rosenthal
Ivy Silver
6287+(51',9,6,21
T.A. Grell, Jr., Chairman
T. Richard Litton, Jr.
Lloyd M. Poe
Timothy J. Stiffler
Elizabeth Addington Twohy
)8/721%$1.$'9,625<%2$5'6
1257+
Gerald L. Harding
Dean A. Hoover
Louis G. Hurst
Kent M. Martin
Michael L.Weinhold,C.P.A.
&(175$/
Ronald L. Miller, C.P.A.
Irel D. Buckwalter
Wilbur G. Rohrer
Paul W. Stauffer
1257+:(67
P. Larry Groff, Sr.
Peter J. Hondru
Kenneth L. Kreider
Jessica H. May
Peter B. McCracken
Robert W. Obetz, Jr.
Larry D. Sauder
David W. Sweigart, III
J. David Young, Jr., Esq.
Dennis M. Zubler
*((1
Fulton Financial Corporation Annual Report
SENIOR MANAGEMENT, DIRECTORS
& ADVISORY BOARD MEMBERS
($67
Galen Eby
R. Douglas Good, Esq.
Richard M. Hurst
Aldus R. King
Vernon R. Martin
John D. Yoder
6287+
Frank M. Abel, V.M.D.
John E. Chase
James W. Hostetter, Sr., C.P.A.
Dwight E. Wagner
67$7(&2//(*(
Allan Darr
Elizabeth A. Dupuis
Todd A. Erdley
John A. Rodgers
$*5,&8/785$/$'9,625<%2$5'
Harry H. Bachman
I. Hershey Bare
Dennis L. Grumbine
William Hostetter
Amos M. Hursh
Aldus R. King
Jay H. Kopp
Peter B. McCracken
6:,1()25'1$7,21$/%$1.
Arthur F. Bowen
Thomas C. Clark, Esq.
Michael N. O’Keefe
William D. Robinson
Michael R. Wimer
Gene D. Zartman
/$)$<(77($0%$66$'25%$1.
Gary A. Clewell
Craig A. Dally, Esq.
L. Anderson Daub
Sara (Sally) Jane Gammon
Thomas J. Maloney, Esq.
Alan B. McFall, Esq.
Jamie P. Musselman
Gerald A. Nau
Edith Ritter
John J. Simon
)1%%$1.1$
Robert O. Booth
Richard A. Grafmyre
James D. Hawkins
Wendy S. Tripoli
Joanne E. Wade
'(/$:$5(1$7,21$/%$1.
Dale R. Dukes
Jeffrey M. Fried
Amy A. Higgins
Mark E. Huntley
Greg N. Johnson
Terry A. Megee
Ronald T. Moore
Ralph W. Simpers
P. Randolph Taylor
David T. Wilgus
7+(%$1.
Joseph F. Adams, C.P.A.
Jeffrey G. Albertson, Esq.
Dennis N. DeSimone
Lawrence M. DiVietro, Jr.
Sandra J. Gubbine
James R. Johnson, Jr.
Scott H. Kintzing
Warner A. Knobe
Ross Levitsky, Esq.
Angela M. Snyder
Daniel G. Timms, D.D.S.
Paul J. Tully
7+(%$1.',9,6,21$/%2$5'
),567:$6+,1*721',9,6,21
James R. Johnson, Jr.
Timothy J. Losch
Stephen R. Miller
6.</$1'6&20081,7<%$1.
Norman S. Baron
Blanquita Bonifacio
John K. Kitchen
Joel A. Kobert
Stephen R. Miller
Raymond Nisivoccia, C.P.A.
Denis H. O’Rourke
Paul Pinizzotto
Anthony J. Santye, Jr.
Leslie E. Smith, Jr.
Mark F. Strauss, Esq.
Norman Worth
7+(&2/80%,$%$1.
Joe N. Ballard
John M. Bond, Jr.
Robert R. Bowie, Jr.
Donald M. Bowman, Jr.
Garnett Y. Clark, Jr.
Raymond A. Grahe
Donald R. Harsh, Jr.
James R. Moxley, III
John A. Scaldara, Jr.
Gregory Snook
David K. Williams, Jr.
Elizabeth M. Wright
7+(&2/80%,$%$1.
'
,9,6,21$/%2$5'6
+$*(5672:175867',9,6,21
Donald M. Bowman, Jr.
Paul N. Crampton, Jr.
Louis J. Giustini
Raymond A. Grahe
Donald R. Harsh, Jr.
Doris E. Lehman
Paul C. Mellott, Jr.
John A. Scaldara, Jr.
Gregory Snook
3(23/(6%$1.2)
(
/.721',9,6,21
Harry C. Brown
Donald S. Hicks
Robert O. Palsgrove
John A. Scaldara, Jr.
Nancy R. Simpers
David K. Williams, Jr.
*((1
Fulton Financial Corporation Annual Report
%$1.,1*68%6,',$5,(6
Fulton Bank, N.A.
Swineford National Bank
Lafayette Ambassador Bank
FNB Bank, N.A.
Delaware National Bank
The Bank
Skylands Community Bank
The Columbia Bank
Residential mortgage lending offered through:
Fulton Mortgage Company
Investment management and
planning services offered through:
Fulton Financial Advisors &
Clermont Wealth Strategies