Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Janney Montgomery Scott presentation (November 2003)
61 slides from Fulton Financial's conference presentation, Nov 5, 2003
Slide 1: Presentation to Janney Montgomery Scott
Presentation to: Exhibit 99.1 Janney Montgomery Scott November 6, 2003 Fulton Financial Corporation
Slide 2: 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, return on average equity, effic
Slide 3: Presentation outline
Corporate profile Strategic initiatives Asset quality Future direction Financial performance Presentation outline
Slide 4: Fulton Financial profile
Regional financial holding company (formed in 1982) 11 bank subsidiaries; 3 financial services subsidiaries Asset size: $9.3 billion Second largest commercial bank headquartered in Third Federal Reserve District Fulton Bank founded in 1882 Fulton Financial profile
Slide 5: Where are we located?
Pennsylvania Where are we located? The Bank 2. Delaware National Bank 1 FNB Bank Fulton Bank 1 Hagerstown Trust Lafayette Ambassador Bank Lebanon Valley Farmers Bank ET . . The Peoples Bank of Elkton scoule, Marviand Premier Bank _ im Resource Bankshares Corp. (Pend) Skylands Community Bank '@ Swine
Slide 6: Assets by affiliate
Fulton Bank $ 3,869,000 Lafayette Ambassador Bank 1,070,000 The Bank 1,056,000 Lebanon Valley Farmers Bank 777,000 Premier Bank 659,000 Hagerstown Trust Company 467,000 Skylands Community Bank 386,000 Delaware National Bank 334,000 FNB Bank, N.A. 307,000 Swineford National Bank 272,000 The Peoples B
Slide 7: Fulton Financial Advisors products and services
Includes Dearden Maguire Weaver and Barrett, LLC and Fulton Insurance Services Group $4.8 billion; $3.4 billion in assets under management Personal trust Asset management Retirement services Brokerage Insurance Corporate trust Cash management Private banking Named Community-Based Bank Brokerage Prog
Slide 8: 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 for FFC On target for record origi
Slide 9: Mission statement
We will increase value and enrich the we serve by creating financial success together with our and career success together with our . We will conduct all of our business with honesty and integrity. Mission statement shareholder communities customers employees
Slide 10: Corporate ethics
Longstanding written code of conduct No “gray” areas Expectations clearly outlined Corporate ethics
Slide 11: What have we accomplished?
9.3% compounded annual growth rate in earnings per share 21 consecutive years of record earnings 29 consecutive years of dividend increases 10.3% compounded annual growth rate in dividends per share Proven business model Consistently high performance What have we accomplished?
Slide 12: Five-year performance
Net income per share $.88 $1.23 Cash dividends per share $.37 $ .56 Return on assets 1.60% 1.68% Return on equity 15.06% 15.86% Efficiency ratio 55.3% 52.4% Dividend payout 41.6% 45.4% All information is as originally reported Five-year performance 1998 2002
Slide 13: Stock highlights
Average daily trading volume 188,566 Number of Market Makers 41 Number of Analysts 11 Number of shares outstanding 108.6 million Market Capitalization $2.2 billion Stock highlights (as of 9/30/03)
Slide 14: Employee stock ownership
70% of our employees collectively own more than 2 million shares of Fulton Financial Corporation stock. Stock options help us to retain long-term loyal employees Employee stock ownership
Slide 15: Stock performance (1982-9/30/03)
WITHOUT dividend reinvestment: compounded annual rate of return WITH dividend reinvestment: compounded annual rate of return Stock performance (1982-9/30/03) 15% 19%
Slide 16: = Exempt
100 = Exempt Non-exempt mw Overall | 1998 1999 2000 2001 2002 =f 8 8 8 8 & & FultonFinancial Coportion | © 2 2 2 mo 16
Slide 17: 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 Employee opinion survey (Survey administered by BAI Survey Services)
Slide 18: Retail customer satisfaction
96% of customers are Extremely or Very Satisfied with their Fulton Financial affiliate bank Retail customer satisfaction
Slide 19: Deposit composition trends
Non Interest-Bearing Demand 17% 17% Interest-Bearing Demand 18% 15% Money Market 13% 13% Savings 11% 10% Time Deposits 35% 40% Customer Repos 6% 5% Total Deposits 100% 100% Deposit composition trends Sept. ’03 Sept. ‘02
Slide 20: Deposits and customer repurchase agreements
tu Deposits and Customer Repurchase Agreements Capital 5 Other Borrowings (@ Other Liabilities 20
Slide 21: Commercial customer satisfaction
86% of commercial customers are satisfied or very satisfied - results compare favorably to industry benchmarks Top three rated attributes: Services offered Convenient bank locations Accurate communications Corporate customers state that what makes Fulton unique is the personal service they receive C
Slide 22: 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 Community involvement
Slide 23: 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 Corporate strategic initiatives
Slide 24: Capital (at June 30, 2003)
Total Capital (GAAP): $874 million Total Risk-based Capital: $857 million Ratios: Total RB Capital 13.9% Tier 1 RB Capital 12.7% Leverage Capital 9.4% Capital (At June 30, 2003)
Slide 25: Proforma capital (at June 30, 2003)
Total Risk-based Capital: $960 million Ratios: Total RB Capital 12.3% Tier 1 RB Capital 10.9% Leverage Capital 8.0% Proforma Capital (At June 30, 2003)
Slide 26: Acquisitions
Resource Bankshares (pending) 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 National Bank & Trust Company Bank of Gl
Slide 27: Premier Bank
A $600 million state chartered bank headquartered in Doylestown, PA Six full-service offices serving Montgomery and Bucks counties Historical double-digit growth in deposits, loans, fee income and net income Strong asset quality Premier branches are contiguous to current affiliate bank markets Premi
Slide 28: Resource Bankshares Corporation
Assets of $860 million; headquartered in Virginia Beach, Virginia The only Virginia-based bank with offices in Virginia’s three major markets Market area accounts for over 73% of all deposits in state of Virginia Allows for expansion of Fulton Financial Advisors, retail and commercial banking Senior
Slide 29: What do we look for?
High growth areas Dynamic market demographics Strong performance Asset quality Talented and dedicated staff Compatible corporate culture What do we look for?
Slide 30: Acquisitions in new markets: what changes?
What changes? Replicate strong credit culture Loan review Investments Asset/liability management Compliance Common operating platform Audit Acquisitions in new markets
Slide 31: Acquisitions in new markets: what stays the same?
What stays the same? Bank name Board of Directors Management team Employees Acquisitions in new markets
Slide 32: Benefits to new affiliates
Additional capital Increased lending capacity Reduced expenses Proven merger/conversion expertise Increased non-interest income due to introduction of new products and services Benefits to new affiliates
Slide 33: Product availability
Residential Mortgages Investment Management Brokerage Services Insurance (whole life, term life, long-term care through Advisors) On-line banking Debit/Credit cards Cash management Specialized lending (leasing and indirect) International Services Correspondent banking Product availability
Slide 34: Composition of total revenues
28.0% 25.0% 22.9% 19.4% 17.9% 16.9% 16.2% 16.0% 0% 20% 40% 60% 80% 100% 96 97 98 99 00 01 02 9/03 Other Income Net Interest Income Composition of total revenues
Slide 35: Investment management and trust services revenue
19.6% 7.4% 13.2% 22.1% 26.8% 18.0% 31.6% 0.0 6.0 12.0 18.0 24.0 30.0 36.0 1997 1998 1999 2000 2001 2002 9/03 Investment management and trust services revenue
Slide 36: Growth in other income
Note: In 2001, we acquired Dearden, Maguire, Weaver & Barrett, LLC 0.0 20.0 40.0 60.0 80.0 100.0 120.0 95 96 97 98 99 00 01 02 9/03 Growth in other income
Slide 37: Moody's and Fitch ratings
Short-term rating P-1 Long-term rating: Issuer A-2 Lead Bank Deposits A-1 Short-term rating F-1 Long-term rating A Moody’s Investor Service Fitch Ratings
Slide 38: Loan diversification (9/30/03)
Loan diversification (9/30/03)
Slide 39: Summary of larger loans
21 relationships with commitments to lend of $20 million or more Maximum individual commitment of $30 million Average commercial loan commitment is $536,000 Loans and corresponding relationships are within Fulton’s geographical market area Summary of larger loans
Slide 40: Commercial loan concentration by industry
Construction 16.7 R/E - Rental 16.5 Services 13.8 Manufacturing 11.9 Retail 8.3 Health Care 7.9 Other 7.4 Agriculture 6.5 Wholesale 5.3 Arts and Entertainment 3.7 Financial Services 2.0 Commercial loan concentration by industry (as of 9/30/03) Industry %
Slide 41: 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. Experience of our lenders
Slide 42: Possible future expansion
Possible Future Expansion Current Markets i Future Expansion seeeee eee Fulton Financial Corporation oo = 2 = = 2 = mom
Slide 43: Looking ahead
Continue to build on our strengths Continue to rely on the expertise and skill of our employees Stick to banking basics while preparing for the future Enhance customer relationship management efforts Looking ahead
Slide 44: Board of Directors
Focused on maximizing shareholder value with an annual increase in earnings per share in the range of 10% Board of Directors
Slide 45: Nine months ended Sept. 30, 2003
$0.96 Net income per share (5.5% increase over 2002) $0.463 Cash dividends per share (11.6% increase over 2002) 1.60% Return on Assets 15.49% Return on Equity 53.70% Efficiency Ratio Nine months ended Sept. 30, 2003
Slide 46: Average balances (YTD September)
2003 2002 $ % Investments 2,510 $ 1,890 $ 620 $ 33% Loans 5,470 5,400 70 1% Deposits 6,730 6,280 450 7% Borrowings 860 600 260 43% (dollars in millions) Average Balances (YTD September)
Slide 47: Average loan growth (YTD Sept.)
2003 2002 $ % Commercial 1,700 $ 1,540 $ 160 $ 10% Comm'l Mort 1,870 1,690 180 11% Resid Mort 550 790 (240) -30% Cons./Other 1,350 1,390 (30) -2% Total Loans 5,470 $ 5,400 $ 70 1% (dollars in millions) Average Loan Growth (YTD Sept.)
Slide 48: Peer group
Commerce Bancorp First Commonwealth Financial First Financial Bancorp. FirstMerit Corp. Fulton Financial Corp Hudson United Bancorp. Mercantile Bankshares Corp. North Fork Bankcorp. Provident Bankshares Corp. Provident Financial Group Riggs National Corp. Sky Financial Group Inc. Susquehanna Bancsha
Slide 49: Net charge-offs to average loans
Source: SNL Financial Datasource 0.47 0.26 0.17 - 0.30 0.60 0.90 90 91 92 93 94 95 96 97 98 99 00 01 02 6/03 9/03 Top 50 Peer FFC Net charge-offs to average loans
Slide 50: Non-performing assets to total assets
0.63 0.45 0.41 0.20 0.60 1.00 1.40 1.80 Top 50 Peer FFC Source: SNL Financial Datasource Non-performing assets to total assets
Slide 51: Net interest margin
3.50 4.00 4.50 5.00 5.50 Top 50 Peer FFC Net interest margin 3.84 3.76 3.86
Slide 52: Asset/Liability management
Interest rate “shocks” (as of 9/30/03) Impact on Net Interest Income: +300 bp + $ 15.8 million + 5.4% +200 bp + $ 10.3 million + 3.5% +100 bp + $ 6.5 million + 2.2% -100 bp - $ 12.9 million - 4.4% Source: FFC Asset/Liability Modeling Asset/Liability management Rate Change NII Change (Annual) % Chang
Slide 53: Investment portfolio
Mortgage-backed securities $2,069.2 2.6 AAA - agency issued Treasuries and agencies $110.0 0.3 AAA Municipals $300.6 4 AAA - insured Bank-issued Trust preferred stock $33.9 19.3 various/callable: 5 yrs Other/Short-term Inv. $62.4 NA AAA Bank Stocks $75.8 NA not rated FHLB Stock $46.6 NA AAA Unrealiz
Slide 54: Other income
(YTD September) 2003 2002 $ % Invt Mgt & Trust 25,680 21,630 4,050 19% Mort. Sales & Serv. 17,890 11,870 6,020 51% Service Charges 11,780 11,200 580 5% Deposit-related fees 11,300 10,910 390 4% Cash Mgt Fees 5,440 5,480 (40) -1% Success Card Fees 3,900 3,570 330 9% Merchant Fees 3,410 3,090 320 10%
Slide 55: Bank stock gains
0 % 1 % 2 % 3 % 4 % 5 % 6 % 7 % 8 % 9 % 91 92 93 94 95 96 97 98 99 00 01 02 9/03 Bank stock gains (percent contribution to EPS)
Slide 56: Efficiency ratio
Source: SNL Financial Datasource 53.7 57.6 55.7 45.0 50.0 55.0 60.0 65.0 Top 50 Peer FFC Efficiency ratio
Slide 57: Other expenses (YTD September)
2003 2002 $ % (dollars in thousands) Salaries & Benefits 103,330 $ 97,000 6,330 7% Occupancy & Equip. 22,750 21,480 1,270 6% Data Processing 8,500 9,180 (680) -7% Advertising 4,590 4,990 (400) -8% Telecommun. 3,910 3,920 (10) 0% State Tax 3,370 4,100 (730) -18% Stat. & Supplies 3,310 3,630 (320) -9%
Slide 58: Accounting/Auditing
Compliance with accounting standards Designated a financial expert Disclosure committee Enhanced Audit Committee role CFO certifications Audit Committee approvals of financial filings Accounting/Auditing
Slide 59: Looking ahead
Continued focus on: Strong asset quality Growth in non-interest income, particularly from Advisors Expansion of franchise geographically Increased loan activity Core deposit growth Looking ahead
Slide 60: Overview
Long-term, consistent performance Talented and dedicated employees Attractive returns for shareholders Career success for employees Financial success for customers Prosperity for communities Overview
Slide 61: Fulton Financial Corporation contact
One Penn Square Lancaster, PA 17602 www.fult.com Fulton Financial Corporation
Fulton Financial — Janney Montgomery Scott presentation (November 2003) on 6ix