sharp focus, broad perspective. Fulton Financial Corporation | 2007 Annual Report focus on future growth Dear Shareholder, Looking back on 2007, we can see how our careful attention A year ago, we shared the message of “A Balanced Design for Growth.” The Corporation’s 2007 workforce management program and to the discipline of balance helped us navigate what was a difficult subsequent realignment of employee retirement plan benefits year for the banking industry, and for Fulton Financial as well. demonstrate our continuing commitment to controlling costs. The overheated residential real estate market began a significant We made significant progress in improving our technological correction that continues in 2008. This real estate issue, combined capabilities, growing our branch system, positioning our asset with industry headwinds that began in 2006, created the most and wealth management affiliate for enhanced client service, challenging operating environment that our company has augmenting our sales management capabilities, and continuing experienced in some time and, unquestionably, the most challenging our leadership development activities. of my 38-year banking career. Banking is a cyclical business. Our strategy is to work through This nationwide real estate correction affected the Corporation the current down-cycle and to position the company for in the form of charges to reserves for potential losses and also in optimum performance when the next upturn in economic reductions in our mortgage banking revenue. Nevertheless, we activity arrives and the housing market regains its equilibrium. faced our problems decisively – implementing changes not only Optimists project the cycle will turn in the second half of 2008; to reduce the risk associated with our ongoing mortgage banking others think it may be 2009 or beyond until we see better activities but also to provide for the losses we incurred. times for banks and the banking industry. We were encouraged that mortgage-related charges in the fourth The Corporation’s capital levels remain strong. Our investment quarter were relatively small. And despite the challenging portfolio holds no collateralized debt obligations and all of economic environment, in 2007, we achieved strong, quality our mortgage-backed securities are agency-guaranteed. commercial loan and commercial mortgage growth of 14% and 9%, respectively. Additionally, we experienced excellent growth in cash management revenue, certificates of deposit and in various fee income categories. This growth was accomplished while maintaining tight control on operating expenses. T h e B o a r d o f D i r e c t o r s h a s b e e n a c t i v e l y i n v o l v e d i n i t s governance role. Through effective use of our committee structure, we have been able to address the issues facing our company with our shareholders thoughtfully represented. pg. 1 The following is a brief overview of our committees and the Please know that your Board is active, involved and effective work of each of these groups: in all of its governance responsibilities and that management • The Executive Committee addresses governance issues, board appreciates their guidance. meeting content, management succession and other matters. The Chairman of the Executive Committee also serves as our We celebrated two significant milestones in 2007. Fulton lead director, and he meets with me frequently to ensure that board and management priorities for this company are clearly Financial Corporation marked its 25th year of operation and communicated and measured. From time to time, he also conducts Fulton Bank celebrated 125 years of providing outstanding executive sessions of the Board so that open and candid discussion can take place without management’s presence. banking service to its customers. • The Executive Compensation Committee continues to work with In 2008, Rick Ashby, a trusted advisor, an experienced resource an outside compensation consultant to ensure that management compensation is appropriately related to performance and that it is competitive in the marketplace. This committee also monitors directors’ compensation so that we continue to attract and retain high quality directors. for both commercial and trust customers, and a respected mentor, peer and manager to Fulton employees, will retire after 30 years of service. He will be missed by all of us, and we wish him well. • The Nominating Committee actively monitors the membership As I conclude this letter to you, I want you to know that the of your Board, reviewing and recommending changes. At one Board and Management are energetically and deliberately time we had 25 board members. We now have 15. This leaner size provides a very effective structure, combining conscientious working to move this company forward. We are preserving those representation of shareholder interests with efficient operation. qualities that are important to our success. At the same time, The most recent addition of Dana Chryst to the Board came after the Committee’s evaluation of her business acumen as head we are making changes to allow us to be more agile and nimble of a very successful company as well as the complementary skills in building for the future and improving our performance in and abilities she can add to existing Director expertise. both good times and bad. • The Audit Committee has actively led the company through all the changes required by the Sarbanes-Oxley legislation. This committee meets frequently to ensure our company’s financial statements and financial news releases accurately reflect the company’s financial picture. • Since people are our most important asset, it is critical that we maintain a culture that attracts and retains high-quality employees. We continue to evolve our compensation systems toward more personal accountability for results at all levels of the company. The Human Resources Committee oversees these activities. • The Trust Committee provides guidance to Fulton Financial Advisors and all its related asset management, wealth management and fiduciary activities. This Committee has been particularly help- ful as we have increased our focus on growing these business lines. We appreciate your investment in our company, and we thank you for your support. R. Scott Smith, Jr. Chairman, President and Chief Executive Officer pg. 2 improving efficiency, Focus on Reducing Costs As we focus internally on strengthening our company, considerable attention has been paid to operational areas, where we have worked to improve efficiency wherever possible. We’re practicing “lean” thinking: the same efficiency-driven approach that’s proven successful in a variety of other industries. It’s a systematic way of focusing on value while eliminating waste from the process of delivering that value. Without altering our conservative philosophy, we’re taking a nimbler, more creative, more flexible approach to how we do things. Procedures that don’t add value or convenience for our customers are being changed or eliminated. Without stepping away from our decentralized business model, we’re finding better, smarter ways to work. The result is less waste, more cost-saving efficiencies, and better value for our customers and shareholders. pg. 3 growing stronger pg. 4 stepping up pg. 5 the pace Investments in Technology In the spirit of innovation and providing world-class service, we’ve reevaluated our overall technology strategy. What was once a three-year plan to enhance our services through updated technology has been revised into an ambitious one-year mission. We’ve rolled out new bank websites with enhanced user-friendly features; successfully integrated new automated teller technology, along with employee training, through all bank branches in the Corporation; and acquired a new investment technology platform that will allow Fulton Financial Advisors to provide an unprecedented level of customized personal service. We will continue to implement vital changes quickly and efficiently, deploying state-of-the-art technology tools that streamline doing business with Fulton Financial and our affiliates while positioning us for success in the economies of tomorrow. pg. 6 a higher standard of Focus on our Customers of focusing on our customers. But we also know that the key to replicating our past success is to adopt a proactive, forward-looking At Fulton Financial Corporation, we’re proud of our tradition strategy. Building on our strong historical foundation, we are actively working to enhance each customer’s experience with our company. Looking at everything we do with a critical eye, we’re identifying layers of process that can be simplified or eliminated altogether. The result is a streamlined, more satisfying experience for our customers that makes it even easier for them to do business with us. We’re simplifying transactions, which is good for our customers. At the same time, we’re trimming costs, which is good for our shareholders. pg. 7 satisfaction and quality pg. 8 playing pg. 9 to our strengths New Branches, Community Banking and Small Business Growth Fulton Financial Corporation has a proven history of success in serving small businesses, individuals and families. By focusing even more closely on these areas of expertise, we’re leveraging our customer network to generate incremental growth. By providing superior service and results, we continue to garner word-of-mouth testimonials that help to build our business. We’ve also identified thriving geographic markets that are rich with potential, and we are opening new branches in those areas to bring our style of personalized professional banking to more people. Guided by our core values, we’re navigating this challenging banking environment by growing our business organically . . . with carefully considered, yet confident steps that build on the long-standing strengths of Fulton Financial. pg. 10 Seated (l. to r.) Scott Smith, Charlie Nugent | Standing (l. to r.) Jim Shreiner, Rick Ashby, Craig Hill, Phil Wenger Fulton Financial Corporation Senior Management R. Scott Smith, Jr. Chairman, Chief Executive Officer and President Richard J. Ashby, Jr. Senior Executive Vice President/Chairman of Fulton Financial Advisors Craig H. Hill Senior Executive Vice President/Human Resources Charles J. Nugent Senior Executive Vice President/Chief Financial Officer James R. Shreiner Senior Executive Vice President/Administrative Services Officer E. Philip Wenger Senior Executive Vice President/Community Banking Fulton Financial Corporation Board of Directors 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 Carolyn R. Holleran Willem Kooyker Donald W. Lesher, Jr. Abraham S. Opatut John O. Shirk, Esq. R. Scott Smith, Jr. Gary A. Stewart Subsidiary Bank Boards of Directors Fulton Bank Larry D. Bashore Dana A. Chryst Randall I. Ebersole Carlos E. Graupera James M. Herr George A. Parmer Harlowe R. Prindle A. Richard Pugh Craig A. Roda John O. Shirk, Esq. E. Philip Wenger James S. Wisotzkey Fulton Bank Divisional Boards Great Valley Division Brandywine Division Kenneth M. Goddu, Chairman Robert F. Adams, Esq. Wilmer L. Hostetter Dallas Krapf James D. McLeod, Jr. Michael J. O’Rourke Capital Division Gerald A. Nau, Chairman Marcelino Colon Michael D. Fromm Kathryn G. Goodman Daniel M. Goodyear Carolyn R. Holleran William G. Koch, Sr., C.P.A. Mark C. Powell Robert S. Jones, Chairman Lebanon Valley Division James C. Byerly Samuel T. Cooper, III, Esq. Steven S. Etter Dolores Liptak Barry E. Musser, C.P.A. Beth A. Peiffer Steven C. Wilds Andrew M. Marhevsky, Chairman Robert J. Funk Robert P. Hoffman Wendie DiMatteo Holsinger Robert J. Longo Albert B. Murry M. Randolph Tice Drovers Division Premier Division David W. Freeman, Chairman Joseph R. Feilmeier, Chairman Vernon L. Bracey Robert S. Freed Roger L. Holland Gregory V. Saubel William S. Shipley, III Gary A. Stewart, Jr. Delaine A. Toerper Constance L. Wolf Barry R. Angely Anthony D. Cino Wallace Rosenthal Ivy Silver Southern Division Mark E. Huntley, Chairman T.A. Grell, Jr. T. Richard Litton, Jr. Lloyd M. Poe Timothy J. Stiffler Elizabeth Addington Twohy pg. 11 Fulton Bank Advisory Boards New Holland Hagerstown Trust Skylands Community Bank Akron/Lincoln/Ephrata R. Douglas Good, Esq., Chairman Donald M. Bowman, Jr. Larry L. Loose, Chairman Galen Eby Richard A. Hess Louis G. Hurst Kent M. Martin Denver Michael L. Weinhold, C.P.A., Chairman Larry L. Gensemer Gerald L. Harding Ralph W. Roseboro East Petersburg William R. Gamber II P. Larry Groff, Sr. Kenneth L. Kreider Jessica H. May Elizabethtown Nancy Z. Garber David B. Mueller David W. Sweigart III Gap Aldus R. King, Chairman A. Charles Artinian Ruth D. Doutrich Hershey/Hummelstown Charles J. DeHart III, Esq., Chairman Jack B. Billmyer Thomas S. Davis, M.D. Joan E. Spire Daniel A. Verdelli Leola Joanne B. Ladley, Chairman Robert M. Bard Richard M. Hurst Lititz Ronald L. Miller, C.P.A., Chairman Irel D. Buckwalter Wilbur G. Rohrer Paul W. Stauffer Manheim Peter J. Hondru, Chairman Peter B. McCracken Robert W. Obetz, Jr. Larry D. Sauder J. David Young, Jr., Esq. Vernon R. Martin John D. Yoder Quarryville Dwight E. Wagner, Chairman Frank M. Abel, V.M.D. John E. Chase James W. Hostetter, Sr., C.P.A. State College Allan Darr Elizabeth Dupuis Todd A. Erdley John A. Rodgers Agricultural Advisory Board Harry H. Bachman Amos J. Balsbaugh I. Hershey Bare Henry M. Berger Richard E. Brandt Dennis L. Grumbine William Hostetter Amos M. Hursh Aldus R. King Jay H. Kopp Peter B. McCracken Swineford National Bank Thomas C. Clark, Esq. Richard F. Erdley Michael N. O’Keefe Michael R. Wimer Gene D. Zartman Lafayette Ambassador Bank 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 Edith Ritter Robert A. Rupel John J. Simon FNB Bank, N.A. Robert O. Booth Richard A. Grafmyre James D. Hawkins Wendy S. Tripoli Joanne E. Wade Paul N. Crampton, Jr. Louis J. Giustini Raymond A. Grahe Donald R. Harsh, Jr. Doris E. Lehman Bernard P. Lesky Paul C. Mellott, Jr. Gregory Snook Delaware National Bank 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 The Bank 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. Sarah (Sally) Love Abraham S. Opatut Angela M. Snyder Daniel G. Timms, D.D.S. Paul J. Tully Norman S. Baron Blanquita Bonifacio Robert P. Corcoran Michael Halpin John K. Kitchen Joel A. Kobert Raymond Nisivoccia, C.P.A. Denis H. O’Rourke Paul J. Pinizzotto Anthony J. Santye, Jr. Leslie E. Smith, Jr. Mark F. Strauss, Esq. Norman Worth Somerset Valley Division Bernard Bernstein Willem Kooyker Frank Orlando Gilbert Pittenger Frederick Quick Donald Sciaretta Herman Simonse Paul Stahlin Donald Tourville, Ph.D. The Columbia Bank Joe N. Ballard Anand S. Bhasin John M. Bond, Jr. Robert R. Bowie, Jr., Esq. Garnett Y. Clark, Jr. Hugh F. Cole, Jr. Winfield M. Kelly, Jr. Herschel L. Langenthal Raymond G. LaPlaca, Esq. James R. Moxley, III James R. Moxley, Jr. John A. Scaldara, Jr. First Washington Division Lawrence A. Shulman, Esq. James R. Johnson, Jr. Stephen R. Miller Abraham S. Opatut Maurice M. Simpkins Robert N. Smelkinson Theodore G, Venetoulis James J. Winn, Jr., Esq. The Peoples Bank of Elkton Elizabeth M. Wright Harry C. Brown Judy E. Hart Donald S. Hicks Mark E. Huntley Robert O. Palsgrove Nancy R. Simpers David K. Williams, Jr. pg. 12 Return on Average Equity (tangible)* Cash Dividends Per Share Net Income Per Share (diluted) *Net income, as adjusted for intangible amortization (net of tax) divided by average shareholders’ equity, net of goodwill and intangible assets. FINANCIAL HIGHLIGHTS AS OF OR FOR THE YEAR ENDED DECEMBER 31 (Dollars in thousands, except per-share data) BALANCE SHEET DATA Total assets Loans, net of unearned income Deposits Shareholders’ equity 2007 $15,923,000 11,204,000 10,105,000 1,575,000 2006 $14,919,000 10,374,000 10,232,000 1,516,000 2005 $12,402,000 8,425,000 8,805,000 1,283,000 PER-SHARE DATA Net income (diluted) Cash dividends Shareholders’ equity pg. 13 $0.88 0.598 9.08 $1.06 0.581 8.73 $1.00 0.540 7.78 Percent Change 2007/2006 2006/2005 6.7% 8.0% (1.2%) 3.9% (17.0%) 2.9% 4.0% 20.3% 23.1% 16.2% 18.2% 6.0% 7.6% 12.2% 10 YEARS IN REVIEW (1998-2007) Total Assets (in billions of dollars) Net Income (in millions of dollars) Dividends (in millions of dollars) Deposits (in billions of dollars) Shareholders’ Equity (in millions of dollars) Loans (in billions of dollars) pg. 14 Banking Subsidiaries: Fulton Bank Swineford National Bank Lafayette Ambassador Bank FNB Bank, N.A. Hagerstown Trust Delaware National Bank The Bank The Peoples Bank of Elkton Skylands Community Bank The Columbia Bank Financial Services Subsidiaries: Fulton Financial Advisors, N.A. Dearden, Maguire, Weaver and Barrett, LLC Fulton Insurance Services Group Residential mortgage lending offered through: Fulton Mortgage Company Investor Information Stock Listing Common shares of Fulton Financial Corporation are traded under the symbol “FULT” and are listed in the National Market System of NASDAQ. Cash Dividends Cash dividends on Fulton Financial Corporation’s common stock are customarily paid on or about the 15th of January, April, July and October. Dividend Reinvestment Plan and Direct Deposit of Cash Dividends 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, N.A. P. O. Box 3215 Lancaster, PA 17604-3215 or by calling: (717) 291-2546 or toll-free: 1-800-626-0255. Investor Information and Documents A copy of the Corporation’s Annual Report, Form 10-K, 2008 Proxy Statement and other documents filed with the Securities and Exchange Commission can be viewed on the Corporation’s website at www.fult.com. In addition, copies of the Form 10-K and 2008 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 and Luncheon of Shareholders of Fulton Financial Corporation will be held on Friday, April 25, 2008 at noon in the Great American Hall of the Hershey Lodge and Convention Center, West Chocolate Avenue and University Drive, Hershey, PA. 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. Fulton Financial Corporation|One Penn Square|P.O. Box 4887 Lancaster, PA 17604|1.800.FULTON.4|www.fult.com