Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2004)
64 slides from Fulton Financial's investor presentation, Nov 19, 2004
Slide 1: Fulton Financial Corporation Investor Presentation
Fulton Financial Corporation Investor Presentation November 2004 Fulton Financial Corporation
Slide 2: Forward-looking statement
Forward-looking statement The following presentation may contain forward-looking statements about Fulton Financial Corporation’s growth and acquisition strategies, new products and services, and future financial performance, including earnings and dividends per share, return on average assets, retur
Slide 3: Presentation outline
Presentation outline Corporate profile Strategic initiatives Financial performance Asset quality Future direction
Slide 4: Fulton financial profile
Fulton Financial profile Regional financial holding company (formed in 1982) 12 community banks and 3 financial services affiliates in 5 states Asset size: $10.6 billion Second largest commercial bank headquartered in Third Federal Reserve District Fulton Bank founded in 1882
Slide 5: Where are we located?
Where are we located? The Bank Delaware National Bank FNB Bank Hagerstown Trust Lafayette Ambassador Bank Lebanon Valley Farmers Bank The Peoples Bank of Elkton Premier Bank Resource Bankshares Corporation Skylands Community Bank Swineford National Bank First Washington State Bank (Pending)
Slide 6: Assets by affiliate
Assets by affiliate (as of 9/30/04, in thousands) Fulton Bank $4,020,000 Lafayette Ambassador Bank 1,191,000 Resource Bank 1,117,000 The Bank 1,064,000 Lebanon Valley Farmers Bank 766,000 Premier Bank 521,000 Hagerstown Trust Company 458,000 Skylands Community Bank 426,000 Delaware National Bank 382
Slide 7: Possible future expansion
Possible future expansion Current markets Pending acquisitions Future expansion Pennsylvania Maryland New jersey Delaware Virginia North carolina
Slide 8: Mission statement
Mission statement We will increase shareholder value and enrich the communities we serve by creating financial success together with our customers and career success together with our employees. We will conduct all of our business with honesty and integrity.
Slide 9: Corporate ethics
Corporate ethics Longstanding written code of conduct No “gray” areas Expectations clearly outlined
Slide 10: Corporate Governance
Corporate Governance Internal controls over financial reporting process SOX and NASDAQ listing standards Financial expert designated Independent directors determined Executive sessions Executive compensation and nominating committees SOX compliant written Code of Conduct Corporate disclosure committ
Slide 11: What have we accomplished?
What have we accomplished? 8.8% compounded annual growth rate in earnings per share 22 consecutive years of record earnings 30 consecutive years of dividend increases 10.3% compounded annual growth rate in dividends per share (approximate dividend yield: 3.01%) Proven business model Consistent perfo
Slide 12: Five-year performance
Five-year performance 1998 2003 Net income per share $.84 $1.22 Cash dividends per share $.35 $.59 Return on assets 1.60% 1.57% Return on equity 15.06% 15.45% Efficiency ratio 55.30% 53.80% Dividend payout 41.60% 48.70% Restated for 5% stock dividend paid in June 2004.
Slide 13: Wall Street Journal ranking of banks by total return
Wall Street Journal (3/8/04) Ranking of Banks by 5-Year Average Compound Annual Total Return* 62 banks listed 43 banks had a lower total return than Fulton, including Wells Fargo, Bank of America, Marshall & Ilsley, Wilmington Trust, Mercantile, Synovus, Fifth Third, PNC, BB&T, Wachovia, J.P. Morgan
Slide 14: Five-year total return
Five-year total return Peer analysis - 12/31/03 1 INTERNATIONAL BANCSHARES CORP 220.60 2 TCF FINANCIAL CORP 142.46 3 SOUTHWEST BANCORPORATION OF TX 117.92 4 FIRST REPUBLIC BANK 115.89 5 BANK OF HAWAII CORP 102.83 6 WHITNEY HOLDING CORP 96.03 7 ASSOCIATED BANC-CORP 91.25 8 VALLEY NATIONAL 88.61 9 GRE
Slide 15: Stock highlights
Stock highlights (as of 09/30/04) Average daily trading volume 139,500 shares Number of analysts 12 Number of market makers 42 Number of shares outstanding 121.0 million Market capitalization $2.6 billion Annual meeting attendance 2,000 shareholders
Slide 16: Employee stock ownership
Employee stock ownership 80% of our employees collectively own more than 2 million shares of Fulton Financial Corporation stock Stock options help us to retain key high-performing employees
Slide 17: Stock performance (1982 - 2003)
Stock performance (1982 - 2003) WITHOUT dividend reinvestment: 15% compounded annual rate of return WITH dividend reinvestment: 19% compounded annual rate of return
Slide 18: Employee retention
Employee retention 100 90 80 70 60 50 40 30 20 10 0 1999 2000 2001 2002 2003 Exempt Non-exempt Overall
Slide 19: Employee opinion survey
Employee opinion survey Customer service Management team performance Company image and mission Team orientation Technology and systems Training and development Sales orientation Work effectiveness Pay and benefits Employee satisfaction (Survey administered by BAI Survey Services)
Slide 20: Customer satisfaction
Customer satisfaction 96% of our customers are Extremely or Very Satisfied with their Fulton Financial affiliate bank 86% of our commercial customers are Satisfied or Very Satisfied with us Compared to national average of 55% of customers who are very satisfied with their financial institution* * So
Slide 21: Funding sources
Funding sources as of 9/30/04 10% 14% 1% 75% Deposits and Customer Repurchase Agreements Capital (GAAP) Other Borrowings Other Liabilities
Slide 22: Community involvement
Community involvement Employees are actively involved in their own communities The community benefits from this support The banks receive additional business as a result of the relationships and goodwill that are developed
Slide 23: Corporate strategic initiatives
Corporate strategic initiatives Achieving consistent earnings growth Maintaining high asset quality Expanding the franchise through our well-developed acquisition strategy Diversifying revenue stream by increasing the contribution of non-interest income Managing capital
Slide 24: Capital (At September 30, 2004)
Capital (At September 30, 2004) Total Capital (GAAP): $1.1 billion Total Regulatory Capital: $945 million Ratios: Total Risk-based Capital 11.92% Tier 1 Risk-based Capital 10.79% Leverage Capital 8.35%
Slide 25: Progress of Stock Buyback
Progress of Stock Buyback 3.7 million shares repurchased since January 1, 2004 4 million share buyback announced June 15, 2004 2.4 million shares repurchased as of November 12, 2004
Slide 26: Acquisitions
Acquisitions First Washington State Bank (pending) Resource Bank Premier Bank Drovers & Mechanics Bank 18 Sovereign Bank Branches Dearden, Maguire, Weaver and Barrett, Inc. Skylands Community Bank Ambassador Bank of the Commonwealth Lebanon Valley National Bank Peoples Bank of Elkton Woodstown Natio
Slide 27: Resource Bankshares Corporation
Resource Bankshares Corporation Acquired on April 1, 2004 Current assets of $1.1 billion; headquartered in Virginia Beach, Virginia The only Virginia-based bank with offices in Virginia’s three major markets Market area accounts for over 71% of all deposits in state of Virginia Senior lenders averag
Slide 28: First Washington FinancialCorp
First Washington FinancialCorp Assets of $486 million Headquartered in Windsor, NJ Banking subsidiary: First Washington State Bank 16 branches in Mercer, Monmouth and Ocean Counties in New Jersey Enhances our existing northern and southern New Jersey franchise by extending our presence into the cent
Slide 29: First Washington Branch Locations
First Washington Branch Locations First Washington Branches Fulton Financial Branches
Slide 30: What do we look for?
What do we look for? High growth areas Dynamic market demographics Strong performance Asset quality Talented and dedicated staff Compatible corporate culture
Slide 31: Acquisitions in new markets: what changes?
Acquisitions in new markets What changes? Loan review Investments Asset/liability management Compliance Common operating platform Audit
Slide 32: Acquisitions in new markets: what stays the same?
Acquisitions in new markets What stays the same? Bank name Board of Directors Management team Employees
Slide 33: Benefits to new affiliates
Benefits to new affiliates Increased non-interest income due to introduction of new products and services Additional capital Increased lending capacity Reduced expenses Proven merger/conversion expertise Continued local autonomy and decision-making
Slide 34: Product availability
Product availability Investment management Brokerage services Insurance (whole life, term life, long-term care through advisors) Cash management On-line banking Debit/credit cards Residential mortgages Specialized lending (leasing and indirect) International services Correspondent banking
Slide 35: Fulton Financial Advisors, N.A.
Fulton Financial Advisors, N.A. Includes Dearden Maguire Weaver and Barrett, LLC and Fulton Insurance Services Group As of September 30, 2004: $5.3 billion; $3.9 billion in assets under management Products and Services Personal trust Asset management Retirement services Brokerage Insurance Corporate
Slide 36: Fulton Mortgage Company
Fulton Mortgage Company Coordinates residential mortgage lending throughout 11 affiliates Expanded, competitive product line to customers of all affiliates In partnership with each affiliate, focused management team on residential mortgages Entry into new markets for FFC Record originations in 2003
Slide 37: Other Income as a Percent of Total Income
Other Income As a Percent of Total Income 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 16.0% 16.2% 16.9% 17.9% 19.4% 22.9% 25.0% 27.0% 24.9% 96 97 98 99 00 01 02 03 9/04
Slide 38: Moody's and Fitch ratings
Moody’s Investor Service Short-term rating P-1 Long-term rating: Issuer A-2 Lead Bank Deposits A-1 Outlook: Positive Fitch Ratings Short-term rating F-1 Long-term rating A Outlook: Stable
Slide 39: Loan diversification
Loan diversification (9/30/04) 36% 8% 11% 30% 15% Consumer and Other Residential Mortgage Commercial Loans Home Equity Commercial Mortgage
Slide 40: Larger loan relationships
Summary of larger loans 26 relationships with commitments to lend of $20 million or more Maximum individual commitment of $30 million Average commercial loan commitment is $550,000 Loans and corresponding relationships are within Fulton’s geographical market area
Slide 41: Commercial loan concentration by industry
Commercial loan concentration by industry (as of 9/30/04) Industry % R/E - Rental 18.4 Construction 15.6 Services 13.4 Manufacturing 9.6 Health Care 8.3 Retail 8.1 Agriculture 8.1 Wholesale 5.4 Other 4.3 Arts and Entertainment 3.6 Financial Services 2.7 Transportation 2.5
Slide 42: Quarter ended September 30, 2004
Quarter ended September 30, 2004 $0.32 Net income per share (6.7% increase over 2003) $0.165 Cash dividends per share (8.6% increase over 2003) 1.48% Return on assets 14.21% Return on equity 19.37% Return on tangible equity
Slide 43: Peer group
Peer group Associated Banc-Corp BancorpSouth, Inc. Bank of Hawaii Corporation BOK Financial Corporation Citizens Banking Corporation City National Corporation Colonial BancGroup, Inc. Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. First Citizens BancShares, Inc. First Midwest Bancorp, Inc. Fir
Slide 44: Net interest margin
Net interest margin 4.90 4.70 4.50 4.30 4.10 3.90 3.70 3.50 94 95 00 01 6/04 9/04 FFC Peer Top 50 Source: SNL Financial Datasource
Slide 45: Yield and cost trend
Yield and cost trend 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 94 94 96 97 98 99 00 01 02 03 YTD04 FFC-Cost Peer-Cost FFC-Yield Peer-Yield
Slide 46: Net interest margin (quarterly)
Net interest margin (quarterly) 4.70 4.50 4.30 4.10 3.90 3.70 3.50 3/02 6/02 12/02 3/03 12/03 3/04 FFC Source: SNL Financial Datasource
Slide 47: Asset/liability management
Asset/liability management Interest rate “shocks” (as of 09/30/04) Rate Change NII Change (Annual) % Change +300 bp + $22.0 million + 6.2% +200 bp + $15.3 million + 4.3% +100 bp + $9.6 million + 2.7% - 100 bp - $19.2 million - 5.4% Source: FFC Asset/Liability Modeling
Slide 48: Investments/total assets
Investments/total assets 35 30 25 20 15 10 95 96 97 FFC 99 Peer 00 Top 50 02 03 3/04 6/04 9/04
Slide 49: Investment portfolio
Investment portfolio Portfolio Components (in millions) Ending Bal. 9/30/2004 Average Life (yrs.) Credit Rating Mortgage-backed securities $1,754.8 3.4 AAA - agency issued U.S. treasuries and agencies 85.1 1.3 AAA Municipal bonds 258.4 3.5 AAA - insured Corp & bank issued trust pfd 75.1 21.5 various
Slide 50: Average loan growth (3rd Quarter)
Average loan growth (3rd Quarter) 2004 2003 $ % (dollars in millions) Commercial $2,150 $1,700 $450 26% Comm’l Mortgage 2,600 2,050 550 27% Resid Mortgage 790 550 240 44% Home Equity 1,030 780 250 32% Other Consumer 590 600 (10) -2% Total Loans $7,160 $5,680 $1,480 26%
Slide 51: Internal loan growth (3rd Quarter)
Internal loan growth (3rd Quarter) 2004 2003 $ % (dollars in millions) Commercial $1,840 $1,660 $180 11% Comm’l Mortgage 2,080 1,850 230 12% Resid Mortgage 510 540 (30) -6% Home Equity 1,010 780 230 29% Other Consumer 520 540 (20) -4% Total Loans $5,960 $5,370 $590 11% Excludes balances of Premier,
Slide 52: Loan mix
Loan mix (9/30/04) Adjustable 20% Fixed 35% Floating 45%
Slide 53: Average deposit growth (3rd Quarter)
Average deposit growth (3rd Quarter) 2004 2003 $ % (dollars in millions) Nonint DDA $1,430 $1,260 $170 13% Int DDA 1,400 1,210 190 16% Savings/MMDA 1,870 1,710 160 9% CD’s 2,760 2,520 240 10% Cash Mgt 420 410 10 2% Total Deposits $7,880 $7,110 $770 11%
Slide 54: Internal deposit growth (3rd Quarter)
Internal deposit growth (3rd Quarter) 2004 2003 $ % (dollars in millions) Nonint DDA $1,350 $1,230 $120 10% Int DDA 1,260 1,130 130 12% Savings/MMDA 1,750 1,650 100 6% CD’s 2,210 2,390 (180) -8% Cash Mgt 420 410 10 2% Total Deposits $6,990 $6,810 $180 3% Excludes balances of Premier and Resource.
Slide 55: Deposit composition trends
Deposit composition trends As of September 30 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 Non Int Bearing Demand NOW, MMDA, Savings Time Deposits Customer Repos
Slide 56: Net charge-offs to loans
Net charge-offs to loans 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 91 92 93 94 95 96 97 98 99 00 01 3/04 03 6/04 9/04 FFC Peer Top 50
Slide 57: Nonperforming assets to loans
Nonperforming assets to loans 1.50 1.25 1.00 0.75 0.50 0.25 90 91 92 94 95 96 97 98 99 00 01 02 03 3/04 6/04 9/04 FFC Peer Top 50
Slide 58: Bank stock gains
Bank stock gains (percent contribution to EPS) 10 9 8 7 6 5 4 3 2 1 0 94 95 96 97 98 99 00 01 02 03 3/04 6/04 9/04
Slide 59: Efficiency ratio
Efficiency ratio 62.50 60.00 57.50 55.00 52.50 50.00 93 94 95 96 97 98 99 00 03 3/04 6/04 FFC Peer Top 50 Source: SNL Financial Datasource
Slide 60: Other expenses (3rd Quarter)
Other expenses (3rd Quarter) 2004 2003 $ % (dollars in thousands) Salaries & Benefits $42,460 $35,520 $6,940 20% Occupancy & Equip. 8,870 7,600 1,270 17% Other Expenses 19,350 16,430 2,920 18%* Total $70,680 $59,550 $11,130 19% * NOTE: The increase in total expenses excluding the impact of the Resou
Slide 61: Other income (3rd Quarter)
Other income (3rd Quarter) 2004 2003 $ % (dollars in thousands) Trust $8,650 $8,530 $120 1% Service Charges 10,180 9,810 370 4% Mortgage Banking 6,090 6,100 (10) 0% Other Income 7,090 6,080 1,010 17% * Total $32,010 $30,520 $1,490 5% * NOTE: Total other income shows a decrease of $3.9 million or 12.
Slide 62: Looking ahead
Looking ahead Continued focus on: Strong asset quality Growth in net interest margin Growth in non-interest income Expansion of franchise geographically Increased loan activity Core deposit growth
Slide 63: Overview
Overview Shareholders maximize shareholder value Customers create financial success Employees create career success Communities create prosperity
Slide 64: Fulton Financial Corporation contact
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Fulton Financial — Investor Presentation (November 2004) on 6ix