Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (February 2003)
59 slides from Fulton Financial's investor presentation, Feb 4, 2003
Slide 1: Safe Harbor statement
Safe Harbor 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, return
Slide 2: Fulton Financial profile
Fulton Financial profile = Regional financial holding company (formed in 1982) = 11 bank subsidiaries; 3 financial services subsidiaries = $8.4 billion in assets (Rank: 58th as of 9/30/02) = $1.9 billion in market cap (Rank: 46th as of 9/30/02) a 3rd largest commercial bank headquartered in Pennsylv
Slide 3: Our top priorities
Our top priorities = Sustaining strong earnings growth = Maintaining high credit quality = Creating financial success with clients =u Creating career success with our employees = Enriching the communities we serve = Growing non-interest income Fulton Financial Corporation
Slide 4: What have we accomplished?
What have we accomplished? = 21 consecutive years of record earnings m= 9.3% compounded annual growth rate in earnings per share m 29 consecutive years of dividend increases = 10.3% compounded annual growth rate in dividends per share = Proven business model = Consistent high performance Fulton Fina
Slide 5: 2002 Performance
2002 Performance m $1.29 Net income per share (12.2% increase over 2001) m $0.586 Cash dividends per share (10.6% increase over 2001) = 1.68% Return on Assets m 15.86% Return on Equity m 52.40% Efficiency Ratio = 9.70%* Leverage Capital Ratio * As of September 30, 2002 Fulton Financial Corporation
Slide 6: Peer group
Peer group = Commerce Bancorp Provident Financial Group Riggs National Corp. Sky Financial Group Inc. Susquehanna Bancshares Trust Co. of New Jersey TrustCo Bank Corp. of NY United Bankshares Inc. Valley National Bancorp Wilmington Trust Co. = First Financial Bancorp. = FirstMerit Corp. = Fulton Fin
Slide 7: Stock performance (1982 - 2002)
Stock performance (1982 - 2002) mg WITHOUT dividend reinvestment: 14% compounded annual rate of return m WITH dividend reinvestment: 18% compounded annual rate of return Fulton Financial Corporation
Slide 8: Wall Street Journal
Wall Street Journal = Fulton Financial tied for 16th = 5-year total return: 17.8% = 10-year total return 18.5%
Slide 9: Assets by Affiliate
Assets by Affiliate (as of 12/31/02, in thousands) Fulton Bank $ 3,635,000 Lafayette Ambassador Bank 1,062,000 Lebanon Valley Farmers Bank 755,000 The Bank 515,000 Woodstown National Bank 507,000 Hagerstown Trust Company 467,000 Skylands Community Bank 359,000 Delaware National Bank 312,000 FNB Bank
Slide 10: Where are we located?
Where are we located? = The Bank "© Delavtare National Bank FNB Bank Fulton Bank Hagerstown Trust ™ Lafayette Ambassador Bank ™ Lebanon Valley Farmers Bank = The Peoples Bank of Elkton © Skyfands Finan ial Corporation ineford National Bank = Woodstown National Bank f New Jersey Delaware
Slide 11: Our Market Position
Our Market Position mg 1st, 2nd or 3rd in 10 of 30 counties = Hold 17.4% of potential market in the top 10 counties m Average market share in the top 10 counties: 22.3% Source: FDIC Fulton Financial Corporation 12
Slide 12: Market demographics
Market demographics For the counties in which Fulton Financial has a banking presence: mu In New Jersey, Delaware and Maryland, the anticipated average population growth of these counties exceeds that of each of these states as a whole. a In Pennsylvania, these counties, on average, exceed the state
Slide 13: County population growth 1990 to 2000
County population growth 1990 to 2000 Source: Federal Reserve Bank, Third District [Above 20% HB 10-20% HB o-10% [1 Below o% 14
Slide 14: Building on our key strengths
Building on our key strengths m= Sound risk management m Strong capital position u Independent network of community banks/ decentralized operating philosophy = Coordinated product development process m Common technology/operations platform and investment/trust services platform m Well-developed acqu
Slide 15: Building on our strengths: sound risk management
Building on our strengths = Sound risk management ==: = Limited exposure to loss Fulton Financial Corporation 16
Slide 16: Asset quality charts
Source: SNL orporation
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Slide 18: Loan diversification
Loan diversification 32% 13% 12% 11% ™@ Consumer and Other @ Residential Mortgage 1 Commercial Loans Home Equity C1. Commercial Mortgage 32% Fulton Financial Corporation
Slide 19: Experience of our Lenders
Experience of our Lenders = The officers who oversee all lending have each worked in this capacity at Fulton for more than 20 years. = This consistency should enable Fulton Financial to maintain its high asset quality in the future. 20
Slide 20: Summary of Larger loans
Summary of Larger loans mg Only 16 relationships with commitments to lend of $20 million or more = Maximum individual commitment of $30 million m Average commercial loan commitment is $550,000 m Loans and corresponding relationships are within Fulton’s geographical market area Fulton Financial Corpo
Slide 21: Commercial Loan Concentration
Commercial Loan Concentration by Industry (as of 12/31/02) Industry Services R/E - Rental Construction Manufacturing Retail Wholesale Agriculture Health Care R/E - Subdividers Transportation R/E - Holding Other Financial Services % 16.3 15.3 11.4 11.3 9.2 7.5 6.8 6.2 5.2 Az 28 2.0 1.3 2
Slide 22: Credit quality charts
0 ‘Source: SHL Financial Datasource
Slide 23: Interest Rate Shocks
Interest Rate “Shocks” (as of 12/3102) mpact on Net Interest Income: Rate Change _ Nil Change (Annual) % Change +300 bp +$ 26.7 million + 8.8% +200 bp +$ 18.7 ion + 6.1% +100 bp +$ 11.6 million + 3.8% -100 bp -$ 16.0 million = 5.3% 6 Month Cumulative Gap: 1.08 ‘Source: FFC AssetiLiability Modeling 4
Slide 24: Deposit composition trends
Deposit composition trends Dec. ‘02 Dec. ‘01 Non Interest-Bearing Demand 17% 17% Interest-Bearing Demand 16% 13% Money Market 13% 13% Savings 10% 10% Time Deposits 39% 42% Customer Repos 5% 5% Total Deposits 100% 100% 8
Slide 25: Funding sources
Funding sources as of 12/31/02 9) 10% Ze 10% Fulton Financial Corporation 26
Slide 26: Building on our strengths: strong capital position
Building on our strengths = Strong — = Capital for Capital — growth, Position acquisitions, share buyback programs Fulton Financial Corporation un
Slide 27: Capital (At September 30, 2002)
C ap it al (At September 30, 2002) = Total Capital (GAAP): $853 million = Total Risk-based Capital: $835 million a Ratios: > Total RB Capital 14.1% > Tier 1 RB Capital 12.8% > Leverage Capital 9.7% Fulton Financial Corporation 28
Slide 28: Leverage capital
Leverage capital Optimal Minimums: = Total Capital $723 million mu Leverage Ratio: 8.0% (approx.) mw Excess Capital: $130 MILLION Fulton Financial Corporation 20
Slide 29: Moody's Investor Service
Moody’s Investor Service = Short-term deposits P-1 = Long-term deposits A-1 Fitch Ratings = Short-term deposits F-1 mu Long-term deposits A 30
Slide 30: Building on our strengths: community banks
Building on our strengths = Independent community banks and decentralized operating philosophy = Customer = retention Fulton Financial Corporation a1
Slide 31: Survey results
Survey results 096% of customers are Extremely or Very Satisfied with their Fulton Financial affiliate bank 2
Slide 32: Building on our strengths: coordinated product development
Building on our strengths = Coordinated product development = Continued non-interest income growth Fulton Financial Corporation 3
Slide 33: Centralized products
Centralized products = On-line banking through the = Residential Mortgages Internet Investment i 5 Management a Debit/Credit cards = Brokerage = Cash management Services m= Specialized = Non-property and lending (leasing casualty insurance and indirect) (whole life, term life, long- m International
Slide 34: Composition of Total Revenues
Composition of Total Revenues Fulton Financial Corporation 35
Slide 35: Other Income
Other Income (YTD 12/31/02) 2002 2001 $ % {dollars in thousands) Invt Mgt & Trust $ 29114 $ 27,138 $ 1,976 T% Mort Sales & Serv. 17,154 11,782 5,372 46% Service Charges 15,217 14,203 1,014 7% Overdraft Fees 14,979 12,036 2,943 24% Other Special Fees 14,004 11,191 2,813 25% Cash Mgt Fees 7,306 6,149
Slide 36: Fulton Mortgage Company
Fulton Mortgage Company = Established April 2001 = New entity to coordinate residential mortgage lending throughout FFC » Expanded, competitive product line to customers of all affiliates > In partnership with each affiliate, focused management team on residential mortgages » Entry into new markets
Slide 37: Other Income of Selected Affiliates
Other Income of Selected A ffiliates* (2002 vs. 2001) BANK 2002 Delaware $1,824 Woodstown 3,298 Lafayette Ambassador 7,877 Skylands 1,828 The Bank 3,853, “Excludes mortgage sale gains. 2001 $ 1,385 2,566 6,266 1,524 3,233 Fulton Financial Corporation Increase 31.7% 28.5 25.7 19.9 19.2 38
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Slide 39: Fulton Financial Advisors
Fulton Financial Advisors, ».s. When formed: (May 1, 2000) $3.0 billion; $1.7 billion in assets under management As of: (December 31, 2002) $4.7 billion; $3.3 billion in assets under management (includes assets of Dearden, Maguire, Weaver and Barrett) Products and Services @ Personal trust @ Insuran
Slide 40: Investment Management & Trust Services
Investment Management & Trust Services 1997 1998 1999 Fulton Financial Corporation 41
Slide 41: Building on our strengths: bank stock portfolio
Building on our strengths = Bank stock portfolio = = Additional — income source Fulton Financial Corporation 42
Slide 42: Bank stock gains
Bank stock gains (percent contribution to EPS) Fulton Financial Corporation 43
Slide 43: Building on our strengths: common technology
Building on our strengths « Common technology and operations == = Lower costs — Fulton Financial Corporation 44
Slide 44: Efficiency ratio comparison
a om a ‘Source: SNL Financial Datasource
Slide 45: Efficiency ratio by acquired bank
Year Year Bank Acquired Acquired — 2002 Skylands Comm. Bank 2000 55.7 46.5 Lebanon Valley Farmers 1998 57.0 45.7 Hagerstown Trust 1994 59.1 57.0 Fulton Financial Corporation 0
Slide 46: Building on our strengths: acquisition strategy
Building on our strengths = Well-developed acquisition strategy —_" Continued — growth and strong performance Fulton Financial Corporation 7
Slide 47: Acquisitions
Acquisitions Premier Bancorp, Inc. (pencina) Drovers & Mechanics Bank 18 Sovereign Bank Branches Dearden, Maguire, Weaver and Barrett, Inc. = Skylands Community Bank m= Ambassador Bank of the Commonwealth = Lebanon Valley National Bank = Peoples Bank of Elkton m= Woodstown National Bank & Trust Comp
Slide 48: Premier Bancorp, Inc.
Premier Bancorp, Inc. *Lead banking subsidiary - Premier Bank, a $600 million state chartered bank headquartered in Doylestown, PA *Seven full-service offices serving Montgomery, Bucks and Northampton counties For 9 months ended 09/30/02 «Return on Assets 0.82% ¢Return on Common Equity 18.49% Effici
Slide 49: Premier Bancorp, Inc.
Premier Bancorp, Inc. -- An excellent strategic fit = Historical double-digit growth in deposits, loans, fee income and net income mu Strong asset quality m= Premier branches are contiguous to and within current affiliate bank markets 50
Slide 50: What do we look for?
What do we look for? = High growth areas = Strong performance = Asset quality = Talented people Fulton Financial Corporation 51
Slide 51: New acquisitions: what changes?
New acquisitions What changes? u Replicate strong credit culture = Loan review a Investments = Asset/liability management = Compliance = Common operating platform m Audit Fulton Financial Corporation 52
Slide 52: New acquisitions: what stays the same?
New acquisitions What stays the same? = Bank name = Board of Directors m= Management team = Employees Fulton Financial Corporation 53
Slide 53: Benefits to new affiliates
Benefits to new affiliates a Increased non-interest income due to introduction of new products and services = Additional capital a Increased lending capacity m Reduced expenses m= Management focus on growth and customer service mu Proven merger/conversion expertise Fulton Financial Corporation 54
Slide 54: Building on our strengths: talented people
Building on our strengths = Talented and = Outstanding dedicated —| customer people service = Superior implementation of Strategic Plan elements Fulton Financial Corporation 55
Slide 55: Employee opinion survey
Employee opinion survey cme202 m= Customer service sm Training and = Management team development performance = Sales orientation = Company image a Work effectiveness and mission u Pay and benefits = Team orientation = Employee = Technology and satisfaction systems (Survey administered by BAI Survey
Slide 56: Possible future expansion
Possible future expansion Pennsylvania ae Current Markets Maryland Wi Future Expansion Delaware Virginia
Slide 57: Looking ahead
Looking ahead = Continue to build on our strengths = Continue to rely on the expertise and skill of our employees u Stick to banking basics while preparing for the future m= Enhance customer relationship management efforts Fulton Financial Corporation 58
Slide 58: Board of directors
Board of directors = Focused on maximizing shareholder value with at least a 10% annual increase in earnings per share Fulton Financial Corporation 50
Slide 59: Rufus A. Fulton, Jr.
Fulton Financial Corporation Rufus A. Fulton, Jr. Chairman and Chief Executive Officer R. Scott Smith, Jr. President and Chief Operating Officer Charles J. Nugent Sr. Executive Vice President/CFO Richard J. Ashby, Jr. Executive Vice President Fulton Financial Corporation ‘One Penn Square Lancaster,
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