2003 Audit Charter: FULT

Fulton Financial Corporation's Audit Committee Charter


The primary function of the Audit Committee is to assist the Board of Directors
("Board") in fulfilling its oversight role in regard to the internal control
structure, accounting policies, and the overall financial reporting processes of
Fulton Financial Corporation (FFC) and its affiliates.


The Audit Committee shall consist of a minimum of five outside directors of FFC
who are considered independent. Independence would be considered impaired under
the following scenarios:

. The director is or has been an employee of FFC or its subsidiaries
during the prior three years.

. The director accepts any compensation from FFC or any of its
subsidiaries in excess of $60,000 during the previous fiscal year,
other than compensation for board service, benefits under a
tax-qualified retirement plan, or non-discretionary compensation.

. The director is a partner in, or a controlling shareholder or an
executive officer of, any for-profit business organization to which
FFC or any of its subsidiaries made, or from which FFC or any of its
subsidiaries received, payments (other than those arising solely from
investments in FFC's securities) that exceed 5% of FFC's or the
business organization's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years.

. The director is an immediate family member of an individual who has
been an executive officer of FFC or its subsidiaries during the past
three years. (Family member is defined as a person's spouse, parent,
child, sibling, mother-in-law, father-in-law, sister-in-law,
brother-in-law or anyone who resides in such person's house.)

. The director is employed as an executive of another company where any
of the executives of FFC or its subsidiaries serve on that company's
compensation committee.

A director satisfying any of the above impairment conditions may, however, serve
if the FFC Board determines membership on the Audit Committee is required by the
best interests of FFC and its stockholders and the relationship does not
interfere with the director's exercise of independent judgment, considering the
materiality of the relationship with FFC and its subsidiaries or to the
director. Only one director whose independence is considered impaired may be
appointed to the Audit Committee. This director may not be a current employee or
an immediate family member of a current employee.

All members of the Audit Committee must be able to read and understand
fundamental financial statements (including a company's balance sheet, income
statement and cash flow statement) or become able to do so within a reasonable
period of time. At least one member shall have accounting or related financial
management experience that results in the individual's financial sophistication,
including being or having been a chief executive officer, chief financial
officer, or other senior officer with financial oversight responsibilities.



The Chief Financial Officer and the Chief Auditor of FFC shall be permanent
invitees for all meetings. Other officers of FFC and its subsidiaries shall
attend meetings by invitation for specific presentations only.


Regular meetings of the Audit Committee shall be scheduled for the months of
January, March, April, June, July, September, October and December. Meetings may
be rescheduled or cancelled at the discretion of the Audit Committee Chair.
Under no circumstances shall meetings be held less than four times annually.


The scope of the Audit Committee's oversight duties includes, but is not limited
to, the areas of internal auditing, financial reporting, loan administration,
external auditing, regulatory matters, and any other areas so delegated by the

Within each of the defined areas, it shall be the duty of the Audit Committee

Internal Audit

. Review the organizational structure of FFC to ensure the propriety of
independence with regard to the Chief Auditor and Internal Audit Services;

. Review, on a periodic basis, staffing levels and staff qualifications of
Internal Audit Services to ensure objective and competent internal audit

. Review and approve the annual audit plan to ensure sufficient audit
coverage of the system of internal controls, compliance with laws and
regulations, and detection of management override regarding the internal
control system or management's compromise of the internal control

. Review internal audit results to ensure the adequacy and timeliness of
management's corrective actions relative to reported deficiencies;

. Meet with the Chief Auditor in executive session on an annual basis, or
more frequently as deemed necessary by the Committee; and

. Review and concur with any performance evaluation regarding the Chief

Financial Reporting

. Review all significant changes in accounting policies;

. Review accounting treatments for all material transactions; and

. Review material fluctuations/trends in financial statement balances.

Loan Administration

. Review the rationale used by management in determining the adequacy of the
allowance for loan and lease losses (ALLL);



. Review management's assertion regarding the adequacy of the ALLL
"reviewable record;"

. Review key performance ratios related to the ALLL; and

. Review and approve management's annual loan review plan.

Independent Public Accountants

. Take appropriate action to oversee the independence of the independent
public accountant (IPA), ensuring the IPA's ultimate accountability to the
FFC Board through its Audit Committee;

. Recommend to the FFC Board the selection, retention or termination of the

. Ensure receipt from the IPA of a formal written statement delineating all
relationships between the IPA and FFC and its subsidiaries and take
appropriate action for any disclosed relationships to ensure the IPA's
objectivity and independence;

. Review the IPA's management letter of FFC and management's response

. Review the IPA's report on FFC's annual financial statements, including the
IPA's judgments regarding the quality of FFC's accounting principles
applied in its financial reporting;

. Review and approve requests exceeding $100,000 for any management
consulting engagement to be performed by the IPA and be advised of any
other study undertaken at the request of management that is beyond the
scope of the audit engagement letter;

. Review any adjustments to FFC's financial statements recommended by the

. Meet with the IPA in executive session on an annual basis, or more
frequently as deemed necessary by the Committee; and

FDIC Improvement Act (FDICIA) Requirements

. Review management's assertion regarding the effectiveness of internal
controls over financial reporting;

. Review management's assertion regarding compliance with designated laws and
regulations; and

. Review the IPA's attestation on management's assertions regarding internal
controls over financial reporting.

Regulatory Matters

. Review regulatory examination reports of FFC, including examination reports
of FFC affiliates, as appropriate, and approve management's responses
thereto; and

. Review the Chief Auditor's opinion letter regarding the adequacy of
management's response to any regulatory report of an affiliate of FFC.



Other Matters

. Review and approve all revisions to Internal Audit Services' Audit Charter,
the document delineating the authority and responsibilities of Internal
Audit Services;

. Review and reassess the adequacy of the Audit Committee Charter on an
annual basis;

. Review all changes to the FFC Code of Conduct; and

. Maintain minutes and other relevant records of Audit Committee meetings and


In order to ensure that FFC shareholders are informed about the functioning of
the Audit Committee, it shall be the responsibility of management to

. Disclose in the proxy statement for the FFC annual meeting a report from
the Audit Committee stating:

. The Audit Committee has reviewed and discussed the audited financial
statements with management;
. The Audit Committee has discussed with the IPA the matters required to
be discussed by SAS 61;
. The Audit Committee has received the written disclosures and the
letter from the IPA required by ISB Standard No. 1 and has discussed
with the auditors the auditors' independence; and
. The Audit Committee recommended to the FFC Board that the financial
statements be included in the Annual Report on Form 10-K for the last
fiscal year filed.

. Disclose in the proxy statement any Audit Committee member who was
determined to lack independence and the reasons for such determination;

. Disclose in the proxy statement that the Audit Committee is governed by a
written charter; and

. Include the Audit Committee Charter in the proxy statement once every three