Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (March 2005)
64 slides from Fulton Financial's investor presentation, Mar 2, 2005
Slide 1: Fulton Financial Corporation Investor Presentation March 2005
Fulton Financial Corporation Investor Presentation March 2005
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, retur
Slide 3: Presentation outline
Presentation outline Corporate profile Strategic initiatives Future direction Financial performance Asset quality
Slide 4: Fulton Financial profile
Fulton Financial profile Regional financial holding company (formed in 1982) 13 community banks and 3 financial services affiliates in 5 states Asset size: $11.2 billion Second largest commercial bank headquartered in Third Federal Reserve District Fulton Bank founded in 1882
Slide 5: Where are we located?
Where are we located? The Bank Delaware National Bank FNB Bank Fulton Bank Hagerstown Trust Lafayette Ambassador Bank Lebanon Valley Farmers Bank The Peoples Bank of Elkton Premier Bank Resource Bankshares Corporation Skylands Community Bank Swineford National Bank First Washington State Bank Somers
Slide 6: Assets by affiliate
Assets by affiliate (as of 12/31/04, in thousands) Fulton Bank $3,975,000 Lafayette Ambassador Bank 1,178,000 Resource Bank 1,161,000 The Bank 1,075,000 Lebanon Valley Farmers Bank 744,000 First Washington State Bank 585,000 Premier Bank 520,000 Hagerstown Trust Company 459,000 Skylands Community Ba
Slide 7: Possible Future Expansion
Possible Future Expansion Pennayivania W Current Markets Bi Pending Acquisitions Future Expansion FULTON FINANCIAL ‘CORPORATION
Slide 8: 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 9: Corporate ethics
Corporate ethics Longstanding written code of conduct No “gray” areas Expectations clearly outlined
Slide 10: Regulatory Update
Regulatory Update Sarbanes – Oxley Internal controls effective / Attestation by management No material weaknesses Bank Secrecy Act / Anti-Money Laundering Management priority throughout the company Accountability – BSA Director named Written policies and procedures in place Costs Associated with Com
Slide 11: What have we accomplished?
What have we accomplished? 8.8% compounded annual growth rate in earnings per share 23 consecutive years of record earnings 30 consecutive years of dividend increases 10.3% compounded annual growth rate in dividends per share Proven business model Consistent performance
Slide 12: Five-year total return (12-31-04)
Five-year total return (12-31-04) 1 First Republic Bank 2 Hibernia Corporation 3 Bank of Hawaii Corporation 4 International Bancshares Corporation 5 TCF Financial Corporation 6 BOK Financial Corporation 7 Colonial BancGroup, Inc. 8 Southwest Bancorporation of Texas, Inc. 9 City National Corporation
Slide 13: Stock highlights
Stock highlights (as of 12/31/04) Average daily trading volume 139,000 shares Number of analysts 13 Number of market makers 52 Number of shares outstanding 125.7 million Market capitalization $2.9 billion Annual meeting attendance 2,000 shareholders
Slide 14: Employee stock ownership
Employee stock ownership 80% of our employees collectively own more than 3 million shares of Fulton Financial Corporation stock Stock options help us to retain key high-performing employees
Slide 15: Stock performance (1982 - 2004)
Stock performance (1982 - 2004) WITHOUT dividend reinvestment: 15% compounded annual rate of return WITH dividend reinvestment: 19% compounded annual rate of return
Slide 16: Employee retention
Employee retention 100 90 80 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 Exempt Non-exempt Overall
Slide 17: Employee opinion survey
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 (Survey administered by BAI Survey Services)
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: Funding sources
Funding sources as of 12/31/04 1% 13% 11% 75% Deposits and Customer Repurchase Agreements Capital (GAAP) Other Borrowings Other Liabilities
Slide 20: 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
Slide 21: 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 22: Capital (At December 31, 2004)
Capital (At December 31, 2004) Total Capital (GAAP): $1.2 billion Total Regulatory Capital: $979 million Ratios: Total Risk-based Capital 11.74% Tier 1 Risk-based Capital 10.63% Leverage Capital 8.74%
Slide 23: Progress of Stock Buyback
Progress of Stock Buyback 2.5 million shares repurchased in 2004 Additional 4 million share repurchase program approved December 21, 2004 – program ends June 30, 2005
Slide 24: Acquisitions
Acquisitions Somerset Valley Bank (pending) First Washington State Bank Resource Bank 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 E
Slide 25: Resource Bankshares Corporation
Resource Bankshares Corporation Acquired on April 1, 2004 Current assets of $1.1 billion; headquartered in Virginia Beach, Virginia The only Virginia-based bank with offices in Virginia’s three major markets Market area accounts for over 71% of all deposits in state of Virginia Senior lenders averag
Slide 26: First Washington FinancialCorp
First Washington FinancialCorp Acquired on 12/31/04 Assets of $585 million Headquartered in Windsor, NJ Banking subsidiary: First Washington State Bank 16 branches in Mercer, Monmouth and Ocean Counties in New Jersey Enhances our existing northern and southern New Jersey franchise by extending our p
Slide 27: SVB Financial Services, Inc.
SVB Financial Services, Inc. Assets of $475 million Headquartered in Somerville, NJ Banking subsidiary: Somerset Valley Bank 11 branches in Somerset, Hunterdon and Middlesex counties Further enhances FFC’s expanding presence in New Jersey (4th New Jersey affiliate) After SVB we will serve 14 of 21 N
Slide 28: Somerset Valley Bank – Branch Locations
Somerset Valley Bank – Branch Locations Fulton Financial branches SVB Financial branches
Slide 29: 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 30: In-market consolidation
In-market consolidation 23 acquisitions since 1982 13 affiliates today Potential consolidation as market coverage increases Lehigh Valley – four prior acquisitions now comprise our second largest affiliate
Slide 31: Acquisitions in new markets: What changes?
Acquisitions in new markets What changes? Loan review Investments Asset/liability management Compliance Common operating platform Audit
Slide 32: 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 33: 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 Continued local autonomy and decision-making
Slide 34: Product availability
Product availability Investment management Brokerage services Insurance (whole life, term life, long-term care through advisors) Cash management On-line banking Debit/credit cards Residential mortgages Specialized lending (leasing and indirect) International services Correspondent banking
Slide 35: 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, 2004: $4.9 billion; $3.4 billion in assets under management Products and Services Personal trust Asset management Retirement services Brokerage Insurance Corporate
Slide 36: Fulton Mortgage Company
Fulton Mortgage Company Coordinates residential mortgage lending throughout 12 affiliates 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 Approximately $2 billion in
Slide 37: Other Income As a Percent of Total Income
Other Income As a Percent of Total Income (as of 12/31) 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 16.0% 16.2% 16.9% 17.9% 19.4% 22.9% 25.0% 27.0% 25.0% 96 97 98 99 00 01 02 03 04
Slide 38: Moody's and Fitch ratings
Moody’s Investor Service Short-term rating P-1 Long-term rating: Issuer A-2 Lead Bank Deposits A-1 Outlook: Positive Fitch Ratings Short-term rating F-1 Long-term rating A Outlook: Stable
Slide 39: Loan diversification (12/31/04)
Loan diversification (12/31/04) 37% 15% 30% 11% 7% Consumer and Other Residential Mortgage Commercial Loans Home Equity Commercial Mortgage
Slide 40: Summary of larger loan relationships
Summary of larger loans 26 relationships with commitments to lend of $20 million or more Maximum individual commitment of $30 million Average commercial loan size is $569,000 Loans and corresponding relationships are within Fulton’s geographical market area
Slide 41: Commercial loan concentration by industry
Commercial loan concentration by industry (as of 12/31/04) Industry % RE - Investor - Owned 18.8 Construction 15.7 Services 10.1 Manufacturing 10.1 Retail 8.3 Health Care 8.0 Agriculture 7.8 Other 7.6 Wholesale 5.4 Arts and Entertainment 3.4 Financial Services 2.5 Transportation 2.3
Slide 42: Quarter ended December 31, 2004
Quarter ended December 31, 2004 $40.1 million Net income (12.3% increase over 2003) $0.33 Net income per share (6.5% increase over 2003) $0.165 Cash dividends per share (8.6% increase over 2003) 1.51% Return on assets 14.25% Return on equity 19.42% Return on tangible equity
Slide 43: Peer group
Peer group Associated Banc-Corp BancorpSouth, Inc. Bank of Hawaii Corporation BOK Financial Corporation Citizens Banking Corporation City National Corporation Colonial BancGroup, Inc. Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. First Citizens BancShares, Inc. First Midwest Bancorp, Inc. Fir
Slide 44: Net interest margin (quarterly)
Net interest margin (quarterly) 4.70 4.50 4.30 4.10 3.90 3.70 3.50 3/02 6/02 3/03 6/03 9/03 12/ 03 3/04 6/04 9/04 12/ FFC
Slide 45: Net interest margin
Net interest margin 4.90 4.70 4.50 4.30 4.10 3.90 3.70 3.50 94 95 96 97 98 99 00 01 02 03 04 FFC Peer Top 50
Slide 46: Average loan growth
Average loan growth 2004 2003 $ % (dollars in millions) Commercial $2,100 $1,720 $380 22% Comm’l Mortgage 2,510 1,950 560 29% Resid Mortgage 720 540 180 33% Home Equity 990 770 220 29% Other Consumer 580 610 (30) -5% Total Loans $6,900 $5,590 $1,310 23%
Slide 47: Internal loan growth (Average)
Internal loan growth (Average) 2004 2003 $ % (dollars in millions) Commercial $1,960 $1,690 $270 16% Comm’l Mortgage 2,060 1,840 220 12% Resid Mortgage 500 540 (40) -7% Home Equity 980 770 210 27% Other Consumer 550 550 - 0% Total Loans $6,080 $5,450 $630 12% Excludes balances of Premier and Resourc
Slide 48: Loan mix (12/31/04)
Loan mix (12/31/04) Adjustable 20% Floating 45% Fixed 35%
Slide 49: Net charge-offs to loans
Net charge-offs to loans 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 FFC Peer Top 50
Slide 50: Nonperforming assets to loans
Nonperforming assets to loans 1.50 1.25 1.00 0.75 0.50 0.25 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 FFC Peer Top 50
Slide 51: Average deposit growth
Average deposit growth 2004 2003 $ % (dollars in millions) Nonint DDA $1,380 $1,200 $180 15% Int DDA 1,360 1,160 200 17% Savings/MMDA 1,850 1,650 200 12% CD’s 2,690 2,500 190 8% Cash Mgt 410 350 60 17% Total Deposits $7,690 $6,860 $830 12%
Slide 52: Internal deposit growth (Average)
Internal deposit growth (Average) 2004 2003 $ % (dollars in millions) Nonint DDA $1,320 $1,180 $140 12% Int DDA 1,240 1,120 120 11% Savings/MMDA 1,740 1,620 120 7% CD’s 2,220 2,420 (200) -8% Cash Mgt 390 340 50 15% Total Deposits $6,910 $6,680 $230 3% Excludes balances of Premier and Resource.
Slide 53: Asset/liability management
Asset/liability management Interest rate “shocks” (as of 12/31/04) Rate Change NII Change (Annual) % Change +300 bp + $26.4 million + 6.9% +200 bp + $17.6 million + 4.6% +100 bp + $12.6 million + 3.3% - 100 bp - $8.6 million - 2.2%
Slide 54: Yield Curve - Rate Shocks
Yield Curve - Rate Shocks 6.00 5.00 Percent 4.00 3.00 2.00 1.00 1 2 3 4 5 7 10 30 Year -100 Flat 100 200 300
Slide 55: Investment portfolio
Investment portfolio INVESTMENT TYPES ENDING BALANCE AVG LIFE (# YRS) CREDIT RATING (000’s) Mortgage-backed securities $1,764.6 3.4 AAA - agency insured Municipal bonds 330.5 3.4 AAA - insured U.S. Treasuries and agencies 123.4 1.9 AAA Trust preferred securities 73.1 21.4 VARIOUS — 5 yr call FHLB st
Slide 56: Efficiency ratio
Efficiency ratio 62.50 60.00 57.50 55.00 52.50 50.00 93 94 95 96 97 98 99 00 01 02 03 04 FFC Peer Top 50
Slide 57: Other Expense Detail
Other Expense Detail 2004 2003 $ % (dollars in thousands) Salaries & Benefits $162,130 $136,000 $26,130 19% Occupancy & Equip. 34,580 30,400 4,180 14% DP/Software/Telecom 20,340 19,220 1,120 6% Amortization 4,730 2,060 2,670 130% Other Expenses 51,820 43,880 7,940 18% Total $273,600 $231,560 $42,040
Slide 58: Internal Results
Internal Results 2004 2003 $ % (dollars in thousands) Salaries & Benefits $143,600 $133,890 $9,710 7% Occupancy & Equip. 30,230 29,880 350 1% DP/Software/Telecom 18,250 18,690 (440) -2% Amortization 3,220 1,490 1,730 116% Other Expenses 43,410 42,840 570 1% Total $238,710 $226,790 $11,920 5%
Slide 59: Other Income Detail
Other Income Detail 2004 2003 $ % (dollars in thousands) Invt Mgt & Trust $34,820 $33,900 $920 3% Mort. Sales & Serv. 19,650 18,870 780 4% Overdraft Fees 16,540 15,390 1,150 7% Service Charges 15,180 15,440 (260) - -2% Cash Mgt Fees 7,730 7,680 50 1% Success Card Fees 5,660 5,110 550 11% Merchant Fe
Slide 60: Internal Results
Internal Results 2004 2003 $ % (dollars in thousands) Invt Mgt & Trust $33,950 $33,890 $60 0% Mort. Sales & Serv. 8,360 18,770 (10,410) -55% Overdraft Fees 16,320 15,340 980 6% Service Charges 14,940 15,390 (450) -3% Cash Mgt Fees 7,720 7,680 40 1% Success Card Fees 5,590 5,090 500 10% Merchant Fees
Slide 61: Bank stock gains
Bank stock gains (percent contribution to EPS) 9 8 7 6 5 4 3 2 1 0 94 95 96 97 98 99 00 01 02 03 04
Slide 62: Looking ahead
Looking ahead Continued focus on: Strong asset quality Growth in net interest margin Growth in non-interest income Expansion of franchise geographically Increased loan activity Core deposit growth
Slide 63: Overview
Overview Shareholders maximize shareholder value Customers create financial success Employees create career success Communities create prosperity
Slide 64: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Fulton Financial — Investor Presentation (March 2005) on 6ix