Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (January 2004)
58 slides from Fulton Financial's investor presentation, Jan 27, 2004
Slide 1: Fulton Financial Corporation Analyst Presentation
Fulton Financial Corporation Analyst Presentation January 27, 2004 Fulton Financial Corporation1
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, ret
Slide 3: Presentation outline
Presentation outline Corporate profile Strategic initiatives Asset quality Future direction Financial performance Fulton Financial Corporation
Slide 4: Regional financial holding company
Regional financial holding company (formed in 1982) 11 bank subsidiaries; 3 financial services subsidiaries Asset size: $9.8 billion Second largest commercial bank headquartered in Third Federal Reserve District Fulton Bank founded in 1882
Slide 5: Pennsylvania
Pennsylvania ye located?
Slide 6: Fulton Bank and affiliate banks by assets
Fulton Bank $ 4,083,000 Lafayette Ambassador Bank 1,221,000 The Bank 1,064,000 Lebanon Valley Farmers Bank 780,000 Premier Bank 489,000 Hagerstown Trust Company 467,000 Skylands Community Bank 412,000 Delaware National Bank 367,000 FNB Bank, N.A. 293,000 Swineford National Bank 289,000 The Peoples B
Slide 7: Fulton Financial Advisors, N.A.
Fulton Financial Advisors, N.A. Includes Dearden Maguire Weaver and Barrett, LLC and Fulton Insurance Services Group As of December 31, 2003: $5.0 billion; $3.5 billion in assets under management Products and Services Personal trust Insurance Asset management Corporate trust Retirement services Cash
Slide 8: Fulton Mortgage Company
Fulton Mortgage Company Established April 2001 Coordinates 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 Record originat
Slide 9: 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 10: Corporate ethics
Corporate ethics Longstanding written code of conduct No “gray” areas Expectations clearly outlined
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 29 consecutive years of dividend increases 10.3% compounded annual growth rate in dividends per share Proven business model Consistently high performance
Slide 12: Five-year performance
Five-year performance 1998 2003 Net income per share $ .88 $1.28 Cash dividends per share $ .37 $.62 Return on assets 1.60% 1.57% Return on equity 15.06% 15.45% Efficiency ratio 55.3% 53.8% Dividend payout 41.6% 48.7% All information is as originally reported
Slide 13: Stock highlights
Stock highlights (as of 12/31/03) Average daily trading volume 126,533 Number of Analysts 10 Number of Market Makers 39 Number of shares outstanding 108.26 million Market Capitalization $2.37 billion
Slide 14: Employee stock ownership
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
Slide 15: Stock performance (2003)
Stock performance (2003) WITHOUT dividend reinvestment: 15% compounded annual rate of return WITH dividend reinvestment: 19% compounded annual rate of return
Slide 16: Employee retention
Employee retention = Exempt Non-exempt @ Overall | li 1999 2000 2001 2002 2003 ial Corpor some eee 16
Slide 17: Employee opinion survey
Employee opinion survey Customer service Training and Management team development performance Sales orientation Company image Work effectiveness and mission Pay and benefits Team orientation Employee Technology and satisfaction systems
Slide 18: 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 19: Deposit composition trends
Deposit composition trends Dec. ’03 Dec ‘02 Non Interest-Bearing Demand 18% 17% Interest-Bearing Demand 18% 16% Money Market 13% 13% Savings 11% 10% Time Deposits 34% 39% Customer Repos 6% 5% Total Deposits 100% 100%
Slide 20: Funding sources
Funding sources as of 12/31/03
Slide 21: 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 Fulton Financial Corporation
Slide 22: 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 23: Capital (At December 31, 2003)
Capital (At December 31, 2003) Total Capital (GAAP): $947 million Total Regulatory Capital (1): $895 million Ratios: Total Risk-based Capital (1) 12.9% Tier 1 Risk-based Capital (1) 11.7% Leverage Capital 8.7% (1) Estimated ? Fulton Financial Corporation
Slide 24: Acquisitions
Acquisitions Resource Bankshares (pending) Bank of Gloucester County Premier Bank Delaware National Bank Drovers & Mechanics Bank Central Pennsylvania 18 Sovereign Bank Branches Savings Association Dearden, Maguire, Weaver Hagerstown Trust Company and Barrett, Inc. Denver National Bank Skylands Comm
Slide 25: Premier Bank
Premier Bank Assets of $600 million Headquartered in Bucks County, PA Six branches in Montgomery and Bucks counties Historical double-digit growth in deposits, loans, fee income and net income Strong asset quality
Slide 26: Resource Bankshares Corporation
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, reta
Slide 27: 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 28: Acquisitions in new markets: what changes?
Acquisitions in new markets What changes? Replicate strong credit culture Loan review Investments Asset/liability management Compliance Common operating platform Audit
Slide 29: 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 30: 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
Slide 31: Product availability
Product availability Residential Mortgages On-line banking Investment Debit/Credit cards Management Cash management Brokerage Services Specialized lending Insurance (leasing and indirect) (whole life, term life, International Services long-term care Correspondent through Advisors) banking
Slide 32: Composition of total revenues
Composition of total revenues Other Income Net Interest Income
Slide 33: Growth in wealth management/trust services revenue
Growth in wealth management/ trust services revenue
Slide 34: Growth in other income
Growth in other income Note: In 2001, we acquired Dearden, Maguire, Weaver & Barrett, LLC
Slide 35: Credit ratings: Moody's and Fitch
Moody’s Investor Service Short-term rating P-1 Long-term rating: Issuer A-2 Lead Bank Deposits A-1 Fitch Ratings Short-term rating F-1 Long-term rating A
Slide 36: Loan diversification
Loan diversification (12/31/03)
Slide 37: Summary of larger loan relationships
Summary of larger loans 23 relationships with commitments to lend of $20 million or more Maximum individual commitment of $30 million Average commercial loan commitment is $526,000 Loans and corresponding relationships are within Fulton’s geographical market area
Slide 38: Commercial loan concentration by industry
Commercial loan concentration by industry (as of 12/31/03) Industry % R/E—Rental 17.2 Construction 16.1 Services 14.1 Manufacturing 10.6 Agriculture 8.8 Retail 8.1 Health Care 7.9 Wholesale 5.2 Other 4.7 Arts and Entertainment 3.3 Transportation 2.2 Financial Services 1.8
Slide 39: Possible future markets
Possible Future Pennsylvania New Jersey Maryland Virginia
Slide 40: Looking ahead
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
Slide 41: Board of Directors
Board of Directors Focused on maximizing shareholder value with an annual increase in earnings per share in the range of 10%
Slide 42: Year ended Dec. 31, 2003
Year ended Dec. 31, 2003 n $ 1.28 Net income per share (4.1% increase over 2002) n $ 0.623 Cash dividends per share (11.4% increase over 2002) n 1.57% Return on Assets n 15.45% Return on Equity n 53.80% Efficiency Ratio
Slide 43: Average Balances
Average Balances (YTD December) 2003 2002 $ % (dollars in millions) Investments $2,600 $ 1,980 $ 620 31% Loans 5,590 5,380 210 4% Deposits 6,860 6,350 510 8% Borrowings 950 610 340 56%
Slide 44: Average Loan Growth
Average Loan Growth (YTD Dec.) 2003 2002 $ % (dollars in millions) Commercial $ 1,720 $ 1,570 $ 150 10% Comm'l Mort 1,950 1,700 250 Resid Mort 540 750 (210) -28% Cons./Other 1,380 1,360 20 1% Total Loans $ 5,590 $ 5,380 210 4%
Slide 45: Peer group
Peer group Commerce Bancorp Provident Bankshares Corp. First Commonwealth Provident Financial Group Financial Riggs National Corp. First Financial Bancorp. Sky Financial Group Inc. FirstMerit Corp. Susquehanna Bancshares Fulton Financial Corp TrustCo Bank Corp. of NY Hudson United Bancorp. United Ba
Slide 46: SNL Financial Datasource
SNL Financial Datasource Source:
Slide 47: Non-performing assets to total assets
Non-performing assets to total assets
Slide 48: Peer comparison chart
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Slide 49: Interest rate shocks
Interest rate “shocks” (as of 12/31/03) 1.7% 2.1% 2.2% 5.9% % Change + + + - 5.4 million 6.7 million 6.9 million 18.5 million $ $ $ $ $ NII Change (Annual) + + + - Rate Change +300 bp +200 bp +100 bp -100 bp Source: FFC Asset/Liability Modeling
Slide 50: Investment portfolio
Investment portfolio Portfolio Components Ending Bal. Average Credit ( in millions) 12/31/03 Life (yrs.) Rating Mortgage-backed securities $ 2,295.4 3.3 AAA—agency issued Treasuries and agencies $ 82.2 0.1 AAA Municipals $ 286.9 4.2 AAA—insured Bank-issued Trust preferred stock $ 16.1 16.9 various/c
Slide 51: Other income
Other income (YTD December) 2003 2002 $ % (dollars in thousands) Invt Mgt & Trust $ 33,900 $ 29,110 $ 4,790 16% Mort. Sales & Serv. 21,480 17,150 4,330 25% Service Charges 15,870 15,220 650 4% Deposit-related fees 15,390 14,980 410 3% Cash Mgt Fees 7,250 7,310 (60) -1% Success Card Fees 5,110 4,990
Slide 52: Bank stock gains
Bank stock gains (percent contribution to EPS)
Slide 53: Efficiency ratio
Efficiency ratio Source: SNL Financial Datasource
Slide 54: Other Expenses
Other Expenses (YTD December) 2003 2002 $ % (dollars in thousands) Salaries & Benefits $ 138,620 $ 129,360 $ 9,260 7% Occupancy & Equip. 30,400 29,000 1,400 5% Data Processing 11,530 11,970 (440) -4% Advertising 6,040 6,520 (480) -7% Telecommun. 5,270 5,330 (60) -1% State Tax 4,140 5,470 (1,330) -24
Slide 55: Accounting/Auditing
Accounting/Auditing Accounting/Auditing Compliance with accounting standards Designated a financial expert Disclosure committee Enhanced Audit Committee role CEO and CFO certifications Audit Committee approvals of financial filings
Slide 56: Looking ahead
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
Slide 57: Overview
Overview Long-term, consistent performance Talented and dedicated employees Attractive returns for shareholders Career success for employees Financial success for customers Prosperity for communities
Slide 58: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Fulton Financial — Investor Presentation (January 2004) on 6ix