Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (October 2006)
63 slides from Fulton Financial's investor presentation, Oct 31, 2006
Slide 1: Fulton Financial Corporation Investor Presentation
Fulton Financial Corporation Investor Presentation
Slide 2: Forward-Looking Statement
rward-Looking Statement lI 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, retu
Slide 3: Agenda
™ Corporate profile @ Relationship strategy ® Growth initiatives ™ Capital ™ Loan summary ™ Customer and employee satisfaction @ Financial performance Se Futon Financial Comoran mmm
Slide 4: Regional financial holding company
®@ Regional financial holding company (formed in 1982) ™15 community banks and 3 financial services affiliates in 5 states ™ 259 community banking offices Asset size: $14.9 billion @ Market capitalization: $2.8 billion ton Finanei i 4
Slide 5: Where are we located?
Where are we located? 3 The Bank 1 Detware Navona Bak FN Bank 1 Futon Bark 1 Hagerstown Trost 1 Lateyerce Ambassador Bane 1 Lebanon Valley Farmers Bank ‘The Peoples Bank of Eton 1B Premier Bank Resource Baishares Corporation Sigfanée Community Bank 1B Swinelord Navona! Bank @ Fst Washington State Ba
Slide 6: Median household income rankings by county
Median HH County National Ranking Ranking in State Ranking FFC Affiliate Fairfax, VA Eat M1 $100,803 Resource Bank Hunterdon, NJ #5 al 91,622 Skylands Bank Morris, NJ #9 #2 89,020 Skylands Bank Somerset, NJ #10 #3 88,665 Somerset Valley Howard, MD #11 al 86,586 Columbia Bank Montgomery, MD 13 #2 85,
Slide 7: Projected population and income change
Projected Projected HH Population Change MedianHH —_ Income Change County 2005-2010 Income 2005-2010 Chester 1 8.17% $81,043 27.48% Montgomery 2 2.96 75,725 24.30 Bucks 3 3.87 73,522 21.65 Delaware 4 3.06 62,297 23.15 Cumberland 5 4.10 56,532 19.27 Northampton 7 6.86 54,850 19.78 Berks 8 3.79 53,721
Slide 8: What have we accomplished?
What = we accomplished? sss ™ Proven business model = Consistent performance ™ 24 consecutive years of record earnings ™32 consecutive years of dividend increases ™ 10.2% compounded annual growth rate in dividends per share ™8.6% compounded annual growth rate in earnings per share (last 5 years = 5.
Slide 9: 10-year dividend history
10-year dividend history 03444 02544 0.2806 3088 o2to4 92312 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo
Slide 10: Select Dividend Index
Wie. U.S. Select Dividend [adem MS FFC added on June 1, 2006 ™ Reflected Dividend Performance of the 100 leading U.S. companies Criteria: ™ Non-negative five-year dividend-per-share growth rate ™ Five-year average dividend to earnings- per-share ratio of less than or equal to 60% | Three-months aver
Slide 11: Relationship strategy
For our : With Shareholders i People Employees Place Customers i Promotion Communities: Product : Price ae Futon Financial Comoran mmm oy
Slide 12: Long-term successful employees, customers, shareholders
SLong-term SLong-term SLong-term successful » successful » successful employees customers shareholders
Slide 13: Dividend reinvestment returns
@ WITHOUT dividend reinvestment: 14% compounded annual rate of return @ WITH dividend reinvestment: 18% compounded annual rate of return
Slide 14: The Columbia Bank
The Columbia Bank Acquired on February 1, 2006 Assets of $1.5 billion Headquartered in Columbia, MD 25 offices in Howard, Frederick, Montgomery, Prince George’s, Baltimore Counties and Baltimore City Since founding in 1987, focused on building a premier community banking franchise in the Baltimore /
Slide 15: Columbia Bank Footprint
Columbia Bank Footprint Batons City © Branch office + Headquarters office = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo 1s
Slide 16: Columbia Bank Demographics
© Columbia Bank Demographics | Vibrant and diverse Baltimore / Washington corridor economy providing excellent growth opportunities =| Affluent, well-educated retail customer base ™ Concentration of small and mid-sized businesses =| Large, stable government employment base © Attractive location for
Slide 17: Affiliate knows local markets best
Affiliate knows local markets best Maintains established local brand value "Geographic centralization @Prestigious jobs in local markets @Pricing autonomy ™ Performance goals Affiliate plan execution
Slide 18: Increased product and revenue diversification
| Increased product and revenue diversification | Continued local autonomy and decision-making | Increased lending capacity @ Additional capital | Proven merger/conversion expertise ™ Reduced expenses ton Finanei i 18
Slide 19: Acquisitive / Organic Balance
© Acauistive/ Organic Balance | Current pricing makes accretive acquisitions difficult ™ Numerous recent opportunities | Organic growth as acquisitive by-product MLPO to de-novo branch strategy effective = Growth initiatives in select markets ™ Household growth / net core account lift | Prospective
Slide 20: New Market Penetration / De-novo
™ New Market Penetration / De-novo @ Fulton Bank (Pa) + State College + Chester County ™@ The Bank (NJ) : Atlantic County + Burlington County + Camden County @ The Columbia Bank (MD) « Frederick County + Anne Arundel County ae Futon Financial Coporaion ms 2 mmm 2
Slide 21: Key Organic Growth Markets
Slide 22: Organic Growth Initiatives
"Organic Growth Initiatives @ Additional Cash Management product options to keep funds on balance sheet | Market Segmentation at affiliate level / targeted direct mail ™ Corporate-wide non-interest income sales program for all FFC team members ™ Remote deposit item capture — small business clients ™
Slide 23: Capital
Capital @3005) § Total Capital (GAAP): $1.5 billion ®& Total Regulatory Capital: $1.2 billion ® Ratios (estimated): * Total Risk-Based Capital 11.50% * Tier 1 Risk-Based Capital 9.60% - Leverage Capital 7.65% = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo B
Slide 24: Loan Diversification
Loan Diversification @3006 6% = Commercial Commercial Mortgage m@ Res Mtg and Home Equity = Construction m= Consumer and 30% other fo = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo
Slide 25: Commercial lending relationships
@ 43 relationships with commitments to lend of $20 million or more | Maximum individual commitment of $33 million ™ Average commercial lending relationship size is $361,000 ™ Loans and corresponding relationships are within Fulton’s geographic market area Se Futon Financial Coporation mm mm mmm Os
Slide 26: Loans by industry
Industry % Construction 28.2 RE - Investor - Owned 21.8 Services 12.8 Manufacturing Retail Health Care Agriculture Wholesale Other Financial Services Arts and Entertainment Transportation See nePpPpaan = =)
Slide 27: Credit Ratings
Credit Ratings Moody’s Investor Services Standard & Poors | Short-term rating P-1 @ Credit rating BBB+ ™ Long-term rating ™@ Outlook Stable Issuer A-2 Lead Bank Deposits A-1 @ Outlook Stable Fitch Ratings Dominion Bond Rating Service ™ Short-term rating F-A ™ Credit rating A | Long-term rating A ™@
Slide 28: Employee Retention
Employee Retention 100 m Exempt Non-exem pt m Overall 2001 2002 2003 2004 2005 = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo 2%
Slide 29: Employee survey categories
™ Quality and | Training and Improvement Development = Commitment ®@ Organizational Leadership = Immediate . | Supervisor Work Process = Communication : . . ae Satisfaction ™ Pay and Benefits Service Climate = Teamwork and = Company Image Collaboration (Survey administered by BAI Survey Services) a
Slide 30: Employee Opinion Survey
Employee Opinion Survey ™Conducted every three years mOver 3,000 employees surveyed (85%) Completed in June 2005 MFFC responses exceed BAI national averages in 10 of the 12 categories = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo 30
Slide 31: Customer satisfaction
@ ‘Retail: ° 90% extremely/very satisfied = Commercial: ° 90% extremely/very satisfied @ Fulton Financial Advisors: * 80+% very satisfied/satisfied | Fulton Mortgage Company: ° 99% of expectations met/exceeded ° 98% would recommend FMC to others *compared to national average of 62% Source: 2005 Amer
Slide 32: Third quarter 2006 highlights
™ $48.3 million ™$ 0.28 ™$ 0.1475 = 1.31% = 13.26% = 25.14% Net income (14.8% increase over 2005) Net income per share (12.0% increase over 2005) Cash dividends per share (6.9% increase over 2005) Return on assets Return on equity Return on tangible equity
Slide 33: Peer group banks
First Republic Bank Bank of Hawaii Corporation International Bancshares Corporation TCF Financial Corporation BOK Financial Corporation Colonial BancGroup, Inc. City National Corporation First Citizens BancShares, Inc. Whitney Holding Corporation Cullen/Frost Bankers, Inc. Associated Banc-Corp Comme
Slide 34: Income statement summary
2006 2005 $ % (dollars in thousands) Net Interest Income $ 363,820 $ 304,660 $ 59,160 19% Loan Loss Provision (2,430) (2,340) (90) 4% Other Income 104,000 104,700 (700) -1% Securities Gains 5,520 5,640 (120) -2% Other Expenses (274,240) (233,560) (37,680) 16% Income Taxes (60,750) (53,930) (6,820) 1
Slide 35: Loan growth (period-end)
2006 2005 $ % (dollars in millions) Commercial $ 2,770 $ 2,330 $ 440 19% Comm'l Mort 3,030 2,570 460 18% Resid Mort/HE 2,030 1,690 340 20% Construction 1,320 700 620 89% Cons./Other 600 560 40 7% Total Loans $ 9,750 $ 7,850 1,900 24% ae Futon Financial Coporaion ms mmm 35
Slide 36: Loan growth (internal)
2006 2005 $ % (dollars in millions) Commercial $ 2,450 $ 2,310 $ 140 6% Comm'l Mort 2,770 2,520 250 10% Resid Mort/HE 1,770 1,670 100 6% Construction 900 680 220 32% Cons./Other 600 560 40 7% Total Loans $ 8490 $ 7,740 750 10% 6
Slide 37: Loans: 3rd quarter vs 2nd quarter
3rd Q 06 2nd Q 06 $ % (dollars in millions) Commercial $ 2,930 $ 2,790 $ 140 5% Comm'l Mort 3,110 3,040 70 2% Resid Mort/HE 2,110 2,050 60 3% Construction 1,410 1,370 40 3% Cons./Other 610 600 10 2% Total Loans $ 10,170 $ 9,850 320 3% 7
Slide 38: Net interest margin vs peers
3.50 T HPPA PPK DIS F HGy Se Futon Financial operation om mm 3G —FFC -=- Peer -*- Top 50
Slide 39: Interest rate shocks
Interest rate “shocks” Rate Change NI Change (Annual) % Change +300 bp -$ 2.2 million - 0.45% +200 bp -$ 1.5 million - 0.31% +100 bp -$ 0.8 million - 0.17% - 100 bp -$ 8.5 million - 1.75% - 200 bp - $ 19.6 million - 4.05% - 300 bp - $ 35.9 million - 742% Se Futon Financial Coporaion 2 mmm 39
Slide 40: Treasury Yields at Different Rate Shocks
Treasury Yields at Different Rate Shocks Quarter Ending 9/30/06 9.00 2.00 7. 7.00 600 — == ee ee 200 te te “te i she 4.00 —=—_—.—_5 = 3.00 —#—__» 9 —— 2.00 —= ll 1.00 0.00 1 2 3 4 6 6 7 8
Slide 41: Loan Mix
Loan Mix @0/06) Adjustable 27% Fixed 34% Floating 39% = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo
Slide 42: Investment portfolio
ENDING = MODIFIED BALANCE DURATION CREDIT RATING (00's) Mortgage-backed securities $ 14440 2.82 AAA Municipal bonds 4644 4.04 AAA Collateralized mortgage obligations 5088 = -273 AAA USS. Treasuries and agencies 3307 © 256 AAA Corporate & trust preferred securities 688 10.01 various -5 yr call Bank s
Slide 43: minnie
minnie Pf Pw LP EDITS OE ae Futon Financial Coporion 2 mmm Gg OANWARAUANDO
Slide 44: Funding Sources
Funding Sources (0/06) 10% 1% = Deposits and Customer Repurchase Agreements 16% Borrowings = GAAP Capital = Other Liabilities 73% = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo “4
Slide 45: Deposit growth (period-end)
2006 2005 $ % (dollars in millions) Nonint DDA $ 1810 $ 1580 $ 230 15% Int DDA 1,680 1,520 160 11% Savings/MMDA 2,350 2,020 330 = 16% CD's 4,040 3,110 930 30% Cash Mgt 480 390 90 23% Total Deposits $ 10,360 $ 8620 $1740 20% Se Futon Financial Coporaion ms mmm gs
Slide 46: Deposit growth (internal)
2006 2005 $ % (dollars in millions) Nonint DDA $ 1520 $ 1,560 $ (40) -3% Int DDA 1,510 1,490 20 1% Savings/MMDA 2,070 1,970 100 5% CD's 3,440 3,060 380 = 12% Cash Mgt 340 390 (50) -13% Total Deposits $ 8880 $ 8470 $ 410 5% Oe Futon Financial Coporaion mmm gs
Slide 47: Deposits: 3rd quarter vs 2nd quarter
3rd Q06 2nd Q06 $ % (dollars in millions) Nonint DDA $ 1810 $ 1,850 $ (40) -2% Int DDA 1,690 1,670 20 1% Savings/MMDA 2,390 2,390 - 0% CD's 4,290 4,080 210 5% Cash Mgt 540 490 50. 10% Total Deposits $10,720 $ 10480 $ 240 2% ae Futon Financial Coporaion ms mmm
Slide 48: Asset quality vs peers
0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 $y or PPMP PH HS MP Hy SPP AAS |+-FFC -=- Peer —-Top 50 | Se Futon tinct Coporion oom mg
Slide 49: Asset quality vs peers
1.75 1.50 1.25 1.00 0.75 0.50 0.25 0.00 SPM PPL HP SAM HP KGS —*-FFC -=- Peer -*-Top 50 ae Futon Financial Coporaion ms 2 mmm
Slide 50: Ratio at 9/06
30.0% 4 96 97 98 99 00 01 02 03 04 05 9/06 Se Futon Financial Coporaion 2 mmm 5
Slide 51: Other Income Detail
Other Income Detail (9/30/06) 2006 2005 $ % (dollars in thousands) Invt Mgt & Trust $ 27,980 $ 26,720 $ 1,260 5% Mort. Sales Gains 15,440 19,530 (4,090) -21% Overdraft & NSF Fees 15,120 13,580 1,540 11% Service Charges 10,500 10,300 200 2% Cash Mgt Fees 6,860 5,900 960 16% Success Card Fees 5,490 4,
Slide 52: Other Income Internal Results
Internal Results (9/30/06) 2006 2005 $ % (dollars in thousands) Invt Mgt & Trust $ 27,420 $ 26,690 $ 730 3% Mort. Sales Gains 14,650 19,520 (4,870) -25% Overdraft & NSF Fees 14,470 13,530 940 7% Service Charges 9,400 10,250 (850) -8% Cash Mgt Fees 6,790 5,890 900 15% Success Card Fees 5,420 4,710 71
Slide 53: Other income: 3rd quarter vs 2nd quarter
3rd Q06 2nd Q06 $ % (dollars in thousands) Invt Mgt & Trust $ 8,890 $ 9,060 $ (170) -2% Mort. Sales Gains 5,480 5,190 290 6% Overdraft & NSF Fees 5,390 5,130 260 5% Service Charges 3,560 3,490 70 2% Cash Mgt Fees 2,390 2,270 120 5% Success Card Fees 1,880 1,890 (10) -1% Other 7,870 7,560 310 4% Tota
Slide 54: Efficiency ratio vs peers
PPP LIA LPP SD MPH LGOE -e-FFC -=- Peer -*- Top 50 ae Futon Financial Coporaion mmm gy
Slide 55: Affiliate mergers: Premier Bank and First Washington State Bank
| Premier Bank (Bucks and Montgomery Counties, PA) to merge with Fulton Bank as Fulton Division = To be finalized Q4/06 | First Washington State Bank (Mercer, Monmouth and Ocean Counties, NJ) to merge with The Bank and operate as The Bank = To be finalized Q1/07 a Fatton Financial Comporas 38
Slide 56: Other expenses
2006 2005 $ % (dollars in thousands) Salaries & Benefits $ 158,370 $ 136,290 $ 22,080 16% Occupancy & Equip. 37,650 30,670 6,980 23% DP/Software/Telecom 18,570 17,470 1,100 6% Amortization 5,880 3,860 2,020 52% Other Expenses 50,770 45,270 5,500 12% Total $ 271,240 $ 233,560 $ 37,680 16% Se Futon Fi
Slide 57: Other Expenses Internal Results
Internal Results (9/30/06) 2006 2005 § % (dollars in thousands) Salaries & Benefits $§ 138,830 $ 134,560 $ 4,270 3% Occupancy & Equip. 31,620 30,020 1,600 5% DP/Software/Telecom 16,460 17,100 (640) -4% Amortization 3,320 3,460 (140) -4% Other Expenses 43,330 44,690 (1,360) -3% Total $ 233,560 $ 229,
Slide 58: Expenses: 3rd quarter vs 2nd quarter
3rdQ06 2ndQ06 $ % (dollars in thousands) Salaries & Benefits $ 55,050 $ 53,390 $ 1,660 3% Occupancy & Equip. 12,960 12,500 460 4% DP/Software/Telecom 6,170 6,290 (120) -2% Amortization 2,020 2,010 10 0% Other Expenses 16,230 16,600 (370) -2% Total $ 92,430 $ 90,790 $ 1,640 2% Oe Futon Financial Copo
Slide 59: Looking Ahead
Looking Ahead Focus on: = Driving EPS growth ™Non-interest income ™ Core funding | Growing organically ™ Strong asset quality | Net interest margin expansion (volume) | Improved efficiency ™ Relentless pursuit of plan execution = 2 2 8 8 8 & & FoultonFinancial Coportion © 2 oo oo 50
Slide 60: Possible Future Expansion
Possible Future Expansion @ Current Markets Gi Future Expansion
Slide 61: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www. fult.com Se Futon Financial Coporaion mmm Gt
Slide 62: Where are we located?
Where are we located? The Bank 1 Dekware Navona Bank FN Bank 1 Fulton Bank @ Hagerstown Trost 1 Latsyerce Ambassador Bane 1 Lebanon Valley Farmers Bank The Peoples Bank of kxon 1 Premier Bank [Resource Bankshares Corporation 1 Siolands Community Ban 1B Swineord Nevonal Bank 1 Frat Washington State B
Slide 63: Possible Future Expansion
Possible Future Expansion @ Current Markets Gi Future Expansion
Fulton Financial — Investor Presentation (October 2006) on 6ix