Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (June 2003)
57 slides from Fulton Financial's investor presentation, Jun 11, 2003
Slide 1: Presentation to McDonald Investments
Presentation to: McDonald Investments June 11, 2003
Slide 2: 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 3: Fulton Financial profile
Fulton Financial profile n Regional financial holding company (formed in 1982) n 10 bank subsidiaries; 3 financial services subsidiaries n $8.4 billion in assets (Rank: 60th as of 3/31/03) n $1.9 billion in market cap (Rank: 47th as of 3/31/03) n 2nd largest commercial bank headquartered in Third Fe
Slide 4: Our top priorities
Our top priorities n Sustaining strong earnings growth n Maintaining high credit quality n Creating financial success with clients n Creating career success with our employees n Enriching the communities we serve n Growing non-interest income
Slide 5: What have we accomplished?
What have we accomplished? n 21 consecutive years of record earnings n 9.3% compounded annual growth rate in earnings per share n 29 consecutive years of dividend increases n 10.3% compounded annual growth rate in dividends per share n Proven business model n Consistent high performance
Slide 6: 2002 performance
2002 performance n $1.23* Net income per share (11.8% increase over 2001) n $0.558* Cash dividends per share (10.5% increase over 2001) n 1.68% Return on Assets (29th among publicly traded bank holding companies) n 15.86% Return on Equity n 52.40% Efficiency Ratio n 9.40% Leverage Capital Ratio * Re
Slide 7: Peer group
Peer group n Commerce Bancorp n Provident Financial Group n First Commonwealth Financial n Riggs National Corp. n First Financial Bancorp. n Sky Financial Group Inc. n FirstMerit Corp. n Susquehanna Bancshares n Fulton Financial Corp n Trust Co. of New Jersey n Hudson United Bancorp. n TrustCo Bank
Slide 8: Three months ended March 31, 2003
Three months ended March 31, 2003 n $0.32* Net income per share (6.7% increase over 2002) n 0.143 Cash dividends per share (10.0% increase over 2002) n 1.67% Return on Assets n 15.97% Return on Equity n 51.70% Efficiency Ratio n 9.40% Leverage Capital Ratio * Restated for 5% stock dividend declared
Slide 9: Stock performance (1982 – 2002)
Stock performance (1982 – 2002) n WITHOUT dividend reinvestment: 14% compounded annual rate of return n WITH dividend reinvestment: 18% compounded annual rate of return
Slide 10: Assets by affiliate
Assets by affiliate (as of 3/31/03, in thousands) n Fulton Bank $ 3,698,000 n Lafayette Ambassador Bank 1,094,000 n The Bank 1,029,000 n Lebanon Valley Farmers Bank 749,000 n Hagerstown Trust Company 453,000 n Skylands Community Bank 365,000 n Delaware National Bank 321,000 n FNB Bank, N.A. 300,000
Slide 11: Where are we located?
Where are we located? n The Bank n Delaware National Bank n FNB Bank n Fulton Bank n Hagerstown Trust n Lafayette Ambassador Bank n Lebanon Valley Farmers Bank n The Peoples Bank of Elkton n Skylands Financial Corporation n Swineford National Bank
Slide 12: Building on our key strengths
Building on our key strengths n Well-developed acquisition strategy n Independent network of community banks/ decentralized operating philosophy n Talented and dedicated employees n Sound risk management n Strong capital position n Coordinated product development process n Common technology/operatio
Slide 13: Building on our strengths
Building on our strengths n Well-developed acquisition strategy = n Continued growth and strong performance Fulton Financial Corporation
Slide 14: Acquisitions
Acquisitions n Premier Bancorp, Inc. (pending) n Bank of Gloucester County n Drovers & Mechanics Bank n Delaware National Bank n 18 Sovereign Bank Branches n Central Pennsylvania Savings Association n Dearden, Maguire, Weaver and Barrett, Inc. n Hagerstown Trust Company n Skylands Community Bank n D
Slide 15: 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 Year ended 12/31/02 • Return on Assets 0.81% • Return on Common Equity 18.74% • Effi
Slide 16: Premier Bancorp, Inc. — An excellent strategic fit
Premier Bancorp, Inc. — An excellent strategic fit n Historical double-digit growth in deposits, loans, fee income and net income n Strong asset quality n Premier branches are contiguous to current affiliate bank markets
Slide 17: What do we look for?
What do we look for? n High growth areas n Strong performance n Asset quality n Talented people
Slide 18: New acquisitions: What changes?
New acquisitions What changes? n Replicate strong credit culture n Loan review n Investments n Asset/liability management n Compliance n Common operating platform n Audit
Slide 19: New acquisitions: What stays the same?
New acquisitions What stays the same? n Bank name n Board of Directors n Management team n Employees
Slide 20: Benefits to new affiliates
Benefits to new affiliates n Increased non-interest income due to introduction of new products and services n Additional capital n Increased lending capacity n Reduced expenses n Management focus on growth, customer service and sales n Proven merger/conversion expertise
Slide 21: Building on our strengths
Building on our strengths n Independent community banks and decentralized operating philosophy = n Customer retention Fulton Financial Corporation
Slide 22: Survey results
Survey results n 96% of customers are Extremely or Very Satisfied with their Fulton Financial affiliate bank
Slide 23: Building on our strengths
Building on our strengths n Talented and dedicated people = n Outstanding customer service n Superior implementation of Strategic Plan Fulton Financial Corporation
Slide 24: Employee opinion survey (June 2002)
Employee opinion survey (June 2002) n Customer service n Training and development n Management team performance n Sales orientation n Company image and mission n Work effectiveness n Team orientation n Pay and benefits n Technology and systems n Employee Satisfaction (Survey administered by BAI Surv
Slide 25: Building on our strengths
Building on our strengths n Sound risk management = n Limited exposure to loss Fulton Financial Corporation
Slide 26: Net charge-offs to average loans
Net charge-offs to average loans [GRAPH] Source: SNL Financial Datasource
Slide 27: Non-performing assets to total assets
Non-performing assets to total assets [GRAPH]
Slide 28: Loan diversification
Loan diversification [PIE CHART] n Consumer and Other n Residential Mortgage n Commercial Loans n Home Equity n Commercial Mortgage Fulton Financial Corporation
Slide 29: Experience of our lenders
Experience of our lenders n The officers who oversee all lending have each worked in this capacity at Fulton for more than 20 years. n This consistency should enable Fulton Financial to maintain its high asset quality in the future.
Slide 30: Summary of larger loans
Summary of larger loans n Only 20 relationships with commitments to lend of $20 million or more n Maximum individual commitment of $30 million n Average commercial loan commitment is $550,000 n Loans and corresponding relationships are within Fulton’s geographical market area
Slide 31: Commercial loan concentration by industry
Commercial loan concentration by industry (as of 3/31/03) Industry % Services 16.0 R/E—Rental 13.8 Manufacturing 11.0 Construction 10.6 Retail 8.8 R/E—Subdividers 7.3 Wholesale 7.0 Health Care 7.0 Agriculture 6.2 Transportation 4.5 Other 3.9 R/E—Holding 2.7 Financial Services 1.2
Slide 32: Net interest margin
Net interest margin [CHART]
Slide 33: Interest rate shocks
Interest rate “shocks” (as of 3/31/03) n Impact on Net Interest Income: Rate Change NII Change (Annual) % Change +300 bp + $ 23.1 million + 8.1% +200 bp + $ 17.1 million + 5.9% +100 bp + $ 12.8 million + 4.4% -100 bp - $ 17.8 million - 6.2% 6 Month Cumulative Gap: 1.12 Source: FFC Asset/Liability Mo
Slide 34: Deposit composition trends
Deposit composition trends Mar. ‘03 Mar. ‘02 Non Interest-Bearing Demand % % Interest-Bearing Demand % % Money Market % % Savings % % Time Deposits % % Customer Repos % % Total Deposits % %
Slide 35: Funding sources
Funding sources as of 3/31/03 [CHART] n Deposits and Customer Repurchase Agreements n Capital n Other Borrowings n Other Liabilities
Slide 36: Building on our strengths
Building on our strengths n Strong Capital Position = n Capital for growth, acquisitions, share buyback programs Fulton Financial Corporation
Slide 37: Capital
Capital (At March 31, 2003) n Total Capital (GAAP): $864 million n Total Risk-based Capital: $848 million n Ratios: ® Total RB Capital 13.9% ® Tier 1 RB Capital 12.7% ® Leverage Capital 9.4%
Slide 38: Leverage capital
Leverage capital Optimal Minimums: n Total Capital $750 million n Leverage Ratio: 8.0% (approx.) n Excess Capital: $114 MILLION
Slide 39: Moody's and Fitch ratings
Moody’s Investor Service n Short-term rating P-1 n Long-term rating A-1 Fitch Ratings n Short-term rating F-1 n Long-term rating A
Slide 40: Building on our strengths
Building on our strengths n Coordinated product development = n Continued non-interest income growth Fulton Financial Corporation
Slide 41: Centralized products
Centralized products n Residential Mortgages n On-line banking n Investment Management n Debit/Credit cards n Brokerage Services n Cash management n Insurance (whole life, term life, long-term care through Advisors) n Specialized lending (leasing and indirect) n International Services n Corresponden
Slide 42: Composition of total revenues
Composition of total revenues [CHART]
Slide 43: Other income
Other Income (YTD March) $ % (dollars in thousands) Invt Mgt & Trust $ 8,343 $ 7,160 $ 1,183 % Mort. Sales & Serv. 5,951 3,282 2,669 % Service Charges 3,847 3,707 % Deposit-related fees 3,545 3,322 % Cash Mgt Fees 1,824 1,755 % Success Card Fees 1,229 1,118 % Merchant Fees 1,014 % Other 3,683 4,013
Slide 44: Fulton Mortgage Company
Fulton Mortgage Company n Established April 2001 n 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 45: Growth in other income
Growth in other income [CHART]
Slide 46: Fulton Financial Advisors, N.A.
Fulton Financial Advisors, N.A. 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 n Personal trust n Insuran
Slide 47: Investment management & trust services revenue
Investment management & trust services revenue 13.2% 22.1% 26.8% 18.0% 31.6% 7.4% 16.5% Fulton Financial Corporation
Slide 48: Fulton Financial Advisors
Fulton Financial Advisors n Named Community-Based Bank Brokerage Program of the Year In March 2003 by Bank Insurance and Securities Association (BISA) n Recognition of program excellence n Award criteria: · Productivity of registered representatives · Low employee turnover · Compliance · Customer sa
Slide 49: Building on our strengths
Building on our strengths n Bank stock portfolio = n Additional income source Fulton Financial Corporation
Slide 50: Bank stock gains
Bank stock gains (percent contribution to EPS) [CHART]
Slide 51: Building on our strengths
Building on our strengths n Common technology and operations = n Lower costs Fulton Financial Corporation
Slide 52: a ee
a ee ‘Source: SHL Financial Datasouree omporation
Slide 53: Efficiency of previous acquisitions
Efficiency of previous acquisitions Efficiency Ratio Bank Year Acquired Year Acquired Skylands Comm. Bank 55.7 46.5 Lebanon Valley Farmers 57.0 45.7 Hagerstown Trust 59.1 57.0 Fulton Financial Corporation
Slide 54: Possible future expansion
Possible future expansion n Current Markets n Future Expansion
Slide 55: Looking ahead
Looking ahead n Continue to build on our strengths n Continue to rely on the expertise and skill of our employees n Stick to banking basics while preparing for the future n Enhance customer relationship management efforts
Slide 56: Board of directors
Board of directors n Focused on maximizing shareholder value with at least a 10% annual increase in earnings per share
Slide 57: One Penn Square
One Penn Square Lancaster, PA 17602 www.fult.com