LANCASTER, PA -- (MARKET WIRE) -- 12/10/08 --
Fulton Financial Corporation (NASDAQ: FULT)
today announced that it has received preliminary approval to participate in
the U.S. Treasury Department's Capital Purchase Program.
Through this program, the U.S. Treasury will invest approximately $375
million in Fulton Financial Corporation through the purchase of senior
preferred stock that will pay a non-tax-deductible dividend of 5% for the
first 5 years and 9% thereafter. The Treasury will also receive warrants
to purchase approximately 5.5 million shares of the company's common stock,
based on the average of the closing prices of Fulton Financial's common
stock on the 20 trading days prior to the company's receipt of preliminary
approval of its application from the Treasury. Final approval and closing
on this transaction are subject to the Treasury's standard terms and
conditions. More information on the program and its terms and conditions
are available on the Treasury web site at
http://www.treas.gov/initiatives/eesa.
On October 14, the Treasury Department announced plans to purchase up to
$250 billion of non-voting, senior preferred shares in U.S. financial
institutions. This program, which is part of the Emergency Economic
Stabilization Act of 2008, was developed to attract broad participation by
strong financial institutions, to stabilize the financial system and
increase lending to benefit the national economy and citizens of the United
States.
"Fulton Financial is a well capitalized financial institution," said R.
Scott Smith, Jr., chairman, chief executive officer and president. "The
Treasury's program is designed specifically for healthy financial
institutions. The Treasury is not 'giving' us funds; they are 'investing'
those funds in our company, and the government will receive a return on its
investment in the form of dividends and potential future appreciation of
the value of the warrants. We believe that participating in this program
will enhance Fulton's role in the economic stabilization process and also
increase our capacity to meet our customers' borrowing needs."
Fulton Financial's current total risk-based capital ratio exceeds the
regulatory requirement of 10% for a
well-capitalized institution. With the new capital the company would
receive through the Treasury program, Fulton's total risk-based capital
ratio, which was 11.85% at September 30, 2008, would increase to
approximately 14.80%.
Fulton Financial Corporation is a Lancaster, Pennsylvania-based financial
holding company which has nearly 3,900 employees and operates 268 banking
offices in Pennsylvania, Maryland, Delaware, New Jersey and Virginia
through the following banking affiliates: Fulton Bank, Lancaster, PA;
Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton,
PA; FNB Bank, N.A., Danville, PA; Hagerstown Trust Company, Hagerstown, MD;
Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; The Peoples
Bank of Elkton, Elkton, MD; Skylands Community Bank, Hackettstown, NJand
The Columbia Bank, Columbia, MD.
The Corporation's financial services affiliates include: Fulton Financial
Advisors, N.A., Lancaster, PA; Fulton Insurance Services Group, Inc.,
Lancaster, PA; and Dearden, Maguire, Weaver and Barrett, LLC, West
Conshohocken, PA. Residential mortgage lending is offered by all banks
through Fulton Mortgage Company.
Additional information on Fulton Financial Corporation is available on the
Internet at www.fult.com.
Safe Harbor Statement:
This news release may contain forward-looking statements with respect to
our financial condition, results of operations and business.
Forward-looking statements are encouraged by the Private Securities
Litigation Reform Act of 1995. When words such as "believes," "expects,"
"anticipates" or similar expressions are used in this release, the
Corporation is making forward-looking statements.
Such forward-looking statements reflect the Corporation's current views and
expectations based largely on information currently available to its
management, and on its current expectations, assumptions, plan, estimates,
judgments, and projections about its business and its industry, and they
involve inherent risks, contingencies, uncertainties and other factors.
Although the Corporation believes that these forward-looking statements are
based on reasonable estimates and assumptions, the Corporation is unable to
provide any assurance that its expectations will, in fact, occur or that
its estimates or assumptions will be correct and actual results could
differ materially from those expressed or implied by such forward-looking
statements and such statements are not guarantees of future performance.
The Corporation undertakes no obligation to update or revise any
forward-looking statements. Accordingly, investors and others are cautioned
not to place undue reliance on such forward-looking statements.
Many factors could affect future financial results including, without
limitation, acquisition and growth strategies; market risk; changes or
adverse developments in economic, political or regulatory conditions; a
continuation or worsening of the current disruption in credit and other
markets, including the lack of or reduced access to, and the abnormal
functioning of markets for mortgage and other asset-backed securities and
for commercial paper and other short-term borrowings; the effect of
competition and interest rates on net interest margin and net interest
income; investment strategy and income growth; investment securities gains;
declines in the value of securities which may result in charges to
earnings; changes in rates of deposit and loan growth; asset quality and
the impact on assets from adverse changes in the economy and in credit and
other markets and resulting effects on credit risk and asset values;
balances of risk-sensitive assets to risk-sensitive liabilities; salaries
and employee benefits and other expenses; amortization of intangible
assets; goodwill impairment; capital and liquidity strategies; and other
financial and business matters for future periods.
For a more complete discussion of certain risks and uncertainties affecting
the Corporation, please see the sections entitled "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" set forth in the Corporation's filings with the Securities and
Exchange Commission.
2008
CONTACT:
Laura J. Wakeley
Office: 717-291-2616