Resource Bankshares 8-K Earnings per Share Up 50% from Prior Year Quarter

[LOGO OF RESOURCE BANKSHARES CORPORATION]

FOR IMMEDIATE RELEASE:

CONTACT:

Lu Ann Klevecz

Corporate Communications

757-463-2265

Resource Bankshares Doubles Net Income

in Third Quarter of 2003

Earnings per Share Up 50% from Prior Year Quarter

Virginia Beach, VA – October 21, 2003.Resource Bankshares Corporation (Nasdaq: RBKV) today announced net income of $3.3 million for the third quarter of 2003, a 100% increase over the $1.6 million reported for the same period of 2002. Diluted earnings per share increased 50% to $0.51 from $0.34 for the quarters ended September 30, 2003 and 2002, respectively. Net income for the nine months ended September 30, 2003 totaled $8.7 million, or $1.44 per diluted share, compared to $4.3 million, or $0.85 per diluted share, for the prior year period.

Return on average equity was 24.25% and return on average assets was 1.54% for the third quarter of 2003, compared to 21.95% and 1.05%, respectively, for the third quarter of 2002. For the first nine months of 2003, return on average equity was 24.05% and return on average assets was 1.47%, compared to 19.93% and 0.97%, respectively, for the same period of 2002. Book value per share on September 30, 2003 was $9.46.

Total assets at September 30, 2003 increased 32% to $851 million, over $647 million in 2002. This increase was driven by growth of total net loans to $532 million as of September 30, 2003, a 28% increase over the same period of 2002. The commercial lending team was responsible for $83 million, or 72%, of this growth. Net interest income totaled $6.5 million and $17.6 million, respectively, for the three and nine months ended September 30, 2003, compared to $4.3 million and $11.5 million for the same periods of 2002. For the nine month period ended September 30, 2003, the increase in net interest income was related to commercial loan growth, funds advanced for mortgage banking and an increase in the tax equivalent financial margin to 3.22% from 2.79% for the same nine month period in 2002.

“We are very pleased with our continued strong earnings and healthy growth for the first nine months of 2003,” stated T.A. Grell, Jr., President of Resource Bank and Resource Bankshares. “Our earnings have been driven by a 52% increase in net interest income, fueled by both the $115 million growth of core bank loans and the 43 basis point increase in our financial margin, as well as an excellent performance by Resource Mortgage.”

“Asset quality, our number one priority, continues to be excellent with non-accrual loans and OREO totaling only 0.11% of total loans and funds advanced.As of September 30, 2003, non-accrual loans, OREO, and loans 90 days past due and still accruing interest totaled only $1.2 million on our $532 million loan portfolio. Charge-offs year to date are a very impressive 0.03% (annualized).”

Resource Mortgage closed $971 million of residential loans in the first nine months of 2003 and had net income of $2.5 million, compared to $634 million of loan closings and $1.1 million net income for the first nine months of 2002. In spite of volatile interest rates and the negative impact of Hurricane Isabel on closings, the mortgage division still enjoyed a strong performance in the third quarter. This was partially due to continued strong housing starts and resales in the Company’s three major market areas. Net income from the residential mortgage division, as a percentage of the Company’s net income, was 23% for the third quarter of 2003, and 28% for the nine month period, which is consistent with the Company’s business plan.

Atlantic Mortgage and Investment Company (AMIC), the Company’s commercial mortgage division, also provided significantly improved profitability from its operations. AMIC’s net income for the nine months ended September 30, 2003 was $320 thousand, as a result of the material increase in its origination and sales of commercial mortgages.

Exclusive of its mortgage operations, the Bank’s efficiency ratio (which is computed by dividing non-interest expense by the sum of net interest income and non-interest income), was 51.48% and the net overhead ratio (which is computed by subtracting non-interest income from non-interest expense, divided by average total assets), was 1.47% for the first nine months of 2003.

During the third quarter of 2003, the average number of diluted shares was 6,404,911, which reflects the adjustment made as a result of the three-for-two share stock split on September 5, 2003. Shareholders equity increased $2.8 million and book value increased 4.3% to $9.46 in the third quarter. As of September 30, 2003, the Company’s trailing 12 months earnings per share is $1.86.

All per share figures have been adjusted to reflect a three-for-two stock split on September 5, 2003. Certain reclassifications have been made to prior year’s information to conform with the current year presentation.

Resource Bankshares Corporation (Nasdaq: RBKV) is the parent holding company of Resource Bank, a regional commercial bank with branches in Virginia Beach, Chesapeake, Newport News, Richmond and Northern Virginia, and additional mortgage loan offices in North Carolina, Maryland and Florida. Visit our investor relations web site atwww.resourcebankshares.com for a detailed overview of activities, financial information, and historical stock price data, and to register for email notification of company news, events, and stock activity.

In August, the Company announced that it will merge with Fulton Financial Corporation. Fulton is a $9.3 billion Lancaster, Pennsylvania-based financial holding company which operates 199 banking offices in Pennsylvania, Maryland, Delaware and New Jersey through the following affiliates: Fulton Bank, Lancaster, PA; Lebanon Valley Farmers Bank, Lebanon, PA; Swineford National Bank, Middleburg, PA; Lafayette Ambassador Bank, Easton, PA; FNB Bank, N.A., Danville, PA; Hagerstown Trust, Hagerstown, MD; Delaware National Bank, Georgetown, DE; The Bank, Woodbury, NJ; The Peoples Bank of Elkton, Elkton, MD, Skylands Community Bank, Hackettstown, NJ, and Premier Bank, Doylestown, PA.

Fulton’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, LLP, West Conshohocken, PA.

This press release includes forward looking statements. Investors are cautioned that all forward looking statements involve risks and uncertainties. Certain risk factors could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements include statements regarding profitability, liquidity, allowance for loan losses; interest rate sensitivity, market risk, and financial and other goals. Forward-looking statements often use words such as “believes,” “expects,” “plans,” “may,” “will,” “should,” “projects,” “contemplates,” “anticipates,” “forecasts,” “intends,” or other words of similar meaning. Forward looking statements do not relate strictly to historical or current facts and are subject to significant risks, assumptions and uncertainties, including, among other things, the following important factors that could affect the actual outcome of future events:

• fluctuations in market rates of interest and loan and deposit pricing, which could negatively affect net interest margin, asset valuations and expense projections;

• adverse changes in the economies of Resource’s market areas, which might affect business prospects and could cause credit-related losses and expenses;

• continuing the well-established and valued relationships Resource has built with customers;

• adverse developments in loan origination volume;

• competitive factors in the banking industry such as the trend towards consolidation in the markets in which Resource operates;

• an unfavorable resolution to the class action lawsuit to which Resource Bank is a party; and

• changes in banking legislation or the regulatory requirements of federal and state agencies applicable to bank holding companies and banks.

RESOURCE BANKSHARES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share data)

(Unaudited)

	September 30 2003		December 31 2002		September 30 2002
ASSETS
Cash and cash equivalents	$	50,187	$	13,399	$	6,081
Securities held to maturity		135,219		108,650		110,232
Securities available for sale		12,437		21,191		21,766
Funds advanced in settlement of mortgage loans		85,682		111,113		64,392
Loans receivable, net		532,193		427,735		416,716
Real estate owned		53		—		70
Other assets		35,665		33,079		28,104
Total assets	$	851,436	$	715,167	$	647,361
LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES:
Deposits	$	637,605	$	516,449	$	464,725
Federal funds purchased and securities sold under
agreements to repurchase		18,000		32,347		33,665
Advances from Federal Home Loan Bank		109,000		105,000		96,000
Capital Trust borrowings		16,200		16,200		13,200
Other liabilities		13,719		13,004		9,035
Total liabilities	$	794,524	$	683,000	$	616,625
STOCKHOLDERS’ EQUITY
Common stock, $1.50 par value, authorized 15,000,000 shares,
issued and outstanding: September 30, 2003—6,014,327;
December 31,2002—4,541,517; September 30, 2002—4,592,942	$	9,021	$	6,812	$	6,889
Additional paid in capital		28,114		11,959		12,681
Retained earnings		19,591		12,758		11,199
Accumulated other comprehensive income(loss)		186		638		(33	)
Total stockholders’ equity	$	56,912	$	32,167	$	30,736
Total liabilities and stockholders’ equity	$	851,436	$	715,167	$	647,361

RESOURCE BANKSHARES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except per share data)

(UNAUDITED)

	Three months ended September 30						Nine months ended September 30
	2003			2002			2003			2002
Interest income	$	11,028		$	9,130		$	31,035		$	26,160
Interest expense		4,536			4,832			13,476			14,631
Net interest income		6,492			4,298			17,559			11,529
Provision for loan losses		0			270			150			975
Noninterest income		9,152			6,046			25,583			17,043
Noninterest expense		10,899			7,717			30,479			21,439
Net income before income taxes		4,745			2,357			12,513			6,158
Income tax expense		1,449			711			3,807			1,817
Net income	$	3,296		$	1,646		$	8,706		$	4,341
Basic earnings per common share	$	0.55		$	0.36		$	1.53		$	0.93
Diluted earnings per common share	$	0.51		$	0.34		$	1.44		$	0.85
Book value per share							$	9.46		$	6.69
Return on average assets		1.54	%		1.05	%		1.47	%		0.97	%
Return on average equity		24.25	%		21.95	%		24.05	%		19.93	%
Average basic common shares outstanding		5,985,307			4,622,778			5,690,613			4,644,807
Average diluted shares outstanding		6,404,911			4,905,971			6,058,103			4,924,968
Dividends declared per common share	$	0.11		$	0.09		$	0.34		$	0.28
Non earning assets (non-accruals and other real estate owned)							$	688		$	496
Net overhead ratio		0.82	%		1.07	%		0.83	%		0.98	%
Financial Margin (TE)		3.28	%		2.93	%		3.22	%		2.79	%
Average earning assets	$	807,161		$	594,422		$	742,305		$	564,597

RESOURCE BANKSHARES CORPORATION

(Unaudited)

	Three Months Ended September 30,														Nine Months Ended September 30,
	2003							2002							2003							2002
	Average Balance(1)			Interest		Yield/ Rate(2)		Average Balance(1)			Interest		Yield/ Rate(2)		Average Balance(1)			Interest		Yield/ Rate(2)		Average Balance(1)			Interest		Yield/ Rate(2)
Assets
Interest-earning assets:
Securities (3)	$	146,648		$	2,351	6.41	%	$	134,316		$	2,227	6.63	%	$	143,727		$	6,928	6.43	%	$	129,248		$	6,565	6.77	%
Loans (4)		517,642			6,818	5.27	%		402,638			5,930	5.89	%		484,644			19,291	5.31	%		383,847			17,020	5.91	%
Interest-earning deposits		15,226			35	0.92	%		2,676			11	1.64	%		8,645			68	1.05	%		2,972			40	1.79	%
Other interest-earning assets (5)		127,645			1,950	6.11	%		54,792			1,060	7.74	%		105,289			5,096	6.45	%		48,530			2,824	7.76	%
Total interest-earning assets		807,161			11,154	5.53	%		594,422			9,228	6.21	%		742,305			31,383	5.64	%		564,597			26,449	6.25	%
Noninterest earning assets:
Cash and due from banks		17,900							7,731							17,258							8,226
Premises and equipment		10,155							9,945							10,238							9,631
Other assets		25,119							17,193							23,777							17,092
Less: Allowance for loan losses		(5,075	)						(4,361	)						(5,092	)						(3,955	)
Total noninterest earning assets		48,099							30,508							46,181							30,994
Total assets	$	855,260						$	624,930						$	788,486						$	595,591
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Demand/Money Market Accounts		71,637			242	1.35	%	$	64,088		$	315	1.97	%	$	64,384		$	700	1.45	%	$	73,078		$	1,040	1.90	%
Savings		4,137			8	0.77	%		5,013			21	1.68	%		3,991			33	1.10	%		4,799			50	1.39	%
Certificates of deposit		519,303			2,809	2.16	%		351,251			2,976	3.39	%		477,211			8,411	2.35	%		315,493			9,090	3.84	%
Total interest-bearing deposits		595,077			3,059	2.06	%		420,352			3,312	3.15	%		545,586			9,144	2.23	%		393,370			10,180	3.45	%
FHLB advances and other borrowings		135,087			1,190	3.52	%		131,170			1,253	3.82	%		128,858			3,464	3.58	%		129,728			3,608	3.71	%
Capital debt securities		16,200			287	7.09	%		13,841			267	7.72	%		16,200			868	7.14	%		14,079			843	7.98	%
Total interest-bearing liabilities		746,364			4,536	2.43	%		565,363			4,832	3.42	%		690,644			13,476	2.60	%		537,177			14,631	3.63	%
Noninterest-bearing liabilities:
Demand deposits		42,992							23,233							38,861							23,150
Other liabilities		11,532							6,338							10,713							6,217
Total noninterest-bearing liabilities		54,524							29,571							49,574							29,367
Stockholders’ equity		54,372							29,996							48,268							29,047
Total liabilities and stockholders’ equity	$	855,260						$	624,930						$	788,486						$	595,591
Interest spread (6)						3.10	%						2.79	%						3.04	%						2.61	%
Net interest income/net interest margin (7)				$	6,618	3.28	%				$	4,396	2.93	%				$	17,907	3.22	%				$	11,818	2.79	%

(1) Average balances are computed on daily balances and Management believes such balances are representative of the operations of the Company.

(2) Yield and rate percentages are all computed through the annualization of interest income and expenses versus the average balances of their respective accounts.

(3) Tax equivalent basis. The tax equivalent adjustment to net interest income was $348 thousand and $289 thousand for the nine months ended September 30, 2003 and 2002, respectively.

(4) Non-accrual loans are included in the average loan balances, and income on such loans is recognized on a cash basis.

(5) Consists of funds advanced in settlement of loans.

(6) Interest spread is the average yield earned on earning assets, less the average rate incurred on interest bearing liabilities.

(7) Net interest margin is net interest income expressed as a percentage of average earning assets.

RESOURCE BANKSHARES CORPORATION

(Unaudited)

	For the nine months ended
	September 30
	2003			2002
ASSET QUALITY
Non accrual loans	$	635,638		$	425,993
Loans 90 days past due and still accruing interest	$	522,914		$	405,444
Other real estate owned	$	52,730		$	70,300
Non accrual loans and OREO/loans and funds advanced		0.11	%		0.10	%
Net charge-offs	$	124,574		$	141,782
Net charge-off ratio (annualized)		0.03	%		0.05	%
Loan loss provision	$	150,000		$	975,000
Loan loss reserve	$	5,034,234		$	4,530,078
MORTGAGE SEGMENT
Residential loan closings	$	970,888,096		$	634,344,811
Residential mortgage banking income	$	22,280,634		$	14,007,658
Residential mortgage banking expense	$	18,779,288		$	12,380,693
Residential mortgage pre-tax income	$	3,501,346		$	1,626,964
Residential mortgage post-tax income	$	2,450,942		$	1,138,875
Residential number of employees		229			188
Commercial mortgage post-tax income	$	320,263		$	(33,490	)
Commercial number of employees		9			10
BANKING SEGMENT
Non interest income	$	2,133,915		$	2,478,415
Non interest expense	$	10,582,136		$	8,333,203
Efficiency ratio		51.48	%		56.13	%
Net overhead ratio		1.47	%		1.34	%
Financial margin (TE) with deferred fees/costs		3.38	%		2.99	%
Financial margin (TE) without deferred fees/costs		3.73	%		3.48	%
Number of employees		138			120
Bank and Mortgage Group
Efficiency ratio		68.35	%		72.48	%
Net overhead ratio		0.77	%		0.96	%
Number of employees		376			318