Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (June 2004)
59 slides from Fulton Financial's investor presentation, Jun 2, 2004
Slide 1: Fulton Financial Corporation Investor Presentation
Exhibit 99.1 Fulton Financial Corporation Investor Presentation June 2004
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 Asset quality Future direction Financial performance
Slide 4: Fulton Financial profile
Fulton Financial profile Regional financial holding company (formed in 1982) 12 bank subsidiaries and 3 financial services subsidiaries in 5 states Asset size: $10.5 billion Second largest commercial bank headquartered in Third Federal Reserve District Fulton Bank founded in 1882
Slide 5: Where are we located?
ere are we located? 1B The Bank 1D Delaware National Bank FN Bank 1 Fatt Bark Hagerstown Trost Layer Ambassador Bank banon Valley Farmers Bank rhe Peoples Bank of Elkton 1 Premier Bank Resource Bane [ Shylnds Community Bank I Swinford Navonal Bark
Slide 6: Assets by affiliate
Assets by affiliate (as of 3/31/04, in thousands) Fulton Bank $ 4,052,000 Lafayette Ambassador Bank 1,202,000 The Bank 1,049,000 Resource Bank 886,000 Lebanon Valley Farmers Bank 772,000 Premier Bank 533,000 Hagerstown Trust Company 462,000 Skylands Community Bank 422,000 Delaware National Bank 361,
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 March 31, 2004: $5.3 billion; $3.8 billion in assets under management Products and Services Personal trust Asset management Retirement services Brokerage Insurance Corporate tru
Slide 8: Fulton Mortgage Company
Fulton Mortgage Company Coordinates residential mortgage lending throughout 11 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 Record originations in 2003
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 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 performance
Five-year performance 1998 2003 Net income per share $ .84 $ 1.22 Cash dividends per share $ .35 $ .59 Return on assets 1.60% 1.57% Return on equity 15.06% 15.45% Efficiency ratio 55.30% 53.80% Dividend payout 41.60% 48.70% Restated for 5% stock dividend declared in April, 2004.
Slide 13: Stock highlights
Stock highlights (as of 03/31/04) Average daily trading volume 116,730 Number of analysts 11 Number of market makers 35 Number of shares outstanding 117.2 million Market capitalization $2.59 billion Annual meeting attendance 2,000 shareholders
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 high-performing, long-term employees
Slide 15: Stock performance
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
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
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 Mar. ‘04 Mar. ‘03 Non Interest-Bearing Demand 18% 19% Interest-Bearing Demand 18% 16% Money Market 13% 13% Savings 11% 10% Time Deposits 34% 37% Customer Repos 6% 5% Total Deposits 100% 100%
Slide 20: Funding sources
Funding sources as of 3/31/04 1% 14% 10% 75% Deposits and Customer Repurchase Agreements Capital (GAAP) Other Borrowings Other Liabilities
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
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 March 31, 2004)
Capital (At March 31, 2004) Total Capital (GAAP): $968 million Total Regulatory Capital: $908 million Ratios: Total Risk-based Capital 13.0% Tier 1 Risk-based Capital 11.8% Leverage Capital 8.7%
Slide 24: Acquisitions
Acquisitions 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 Elkton Woodstown National Bank & Trust Company Bank of Glouc
Slide 25: Premier Bank
Premier Bank Acquired on August 1, 2003 Assets of $600 million Headquartered in Bucks County, PA Six branches in Montgomery and Bucks counties, the second and third wealthiest counties in Pennsylvania Historical double-digit growth in deposits, loans, fee income and net income Strong asset quality
Slide 26: Resource Bankshares Corporation
Resource Bankshares Corporation Acquired on April 1, 2004 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 71% of all deposits in state of Virginia Allows for expansion of Fulto
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 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 32: Other income as a percent of total income
Other Income As a Percent of Total Income 16.0% 16.2% 16.9% 17.9% 19.4% 22.9% 25.0% 27.0% 24.0% 96 97 98 99 00 01 02 03 3/04
Slide 33: Growth in wealth management/trust services revenue
Growth in wealth management/ trust services revenue $0.0 $6.0 $12.0 $18.0 $24.0 $30.0 $36.0 Dollars in millions
Slide 34: Other income
Other income $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 Dollars in millions Note: In 2001, we acquired Dearden, Maguire, Weaver & Barrett, LLC
Slide 35: Other income (YTD March)
Other income (YTD March) 2004 2003 $ % (dollars in thousands) Invt Mgt & Trust $ 8,640 $ 8,340 $ 300 4% Deposit-related Revenue 3,800 3,540 260 7% Service Charges 3,760 3,750 10 0% Mort. Sales & Serv. 2,060 5,950 (3,890) -65% Cash Mgt Revenue 1,940 1,920 20 1% Success Card Revenue 1,240 1,230 10 1%
Slide 36: 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 37: Loan diversification
Loan diversification (3/31/04) Consumer and Other Residential Mortgage Commercial Loans Home Equity Commercial Mortgage
Slide 38: Summary of larger loan relationships
Summary of larger loans 25 relationships with commitments to lend of $20 million or more Maximum individual commitment of $30 million Average commercial loan commitment is $546,000 Loans and corresponding relationships are within Fulton’s geographical market area
Slide 39: Commercial loan concentration by industry
Commercial loan concentration by industry (as of 3/31/04) Industry % R/E—Rental 17.4 Construction 16.4 Services 14.1 Manufacturing 10.8 Retail 8.5 Health Care 8.2 Agriculture 6.9 Wholesale 5.3 Other 4.6 Arts and Entertainment 3.7 Transportation 2.2 Financial Services 1.9
Slide 40: Pennsylvania: Current Markets, Future Expansion
Pennsylvania @ Current Markets Future Expansion
Slide 41: Quarter ended March 31, 2004
Quarter ended March 31, 2004 $ 0.31 Net income per share (3.3% increase over 2003) $ 0.152 Cash dividends per share (11.8% increase over 2003) 1.49% Return on assets 15.18% Return on equity 55.00% Efficiency ratio Restated for 5% stock dividend declared in April, 2004.
Slide 42: Average Balances (YTD March)
Average Balances (YTD March) 2004 2003 $ % (dollars in millions) Investments $ 2,830 $ 2,390 $ 440 18% Loans 6,190 5,350 840 16% Deposits 7,110 6,470 640 10% Borrowings 1,500 850 650 76%
Slide 43: Average Loan Growth (YTD March)
Average Loan Growth (YTD March) 2004 2003 $ % (dollars in millions) Commercial $ 1,960 $ 1,690 $ 270 16% Comm’l Mort 2,270 1,760 510 29% Resid Mort 490 580 (90) -16% Cons./Other 1,470 1,320 150 11% Total Loans $ 6,190 $ 5,350 840 16%
Slide 44: Peer group
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. Riggs National Corp. Sky Financial Group Inc. Susquehanna Bancshares TrustCo Ban
Slide 45: Net charge-offs to average loans
Net charge-offs to average loans 90 91 92 93 94 95 96 97 98 99 00 01 02 03 3/04 Top 50 Peer FFC Source: SNL Financial Datasource
Slide 46: Non-performing assets to total assets
Non-performing assets to total assets Top 50 Peer FFC
Slide 47: Net interest margin
90 91 92 93 94 95 96 97 98 99 00 01 02 03 3/04 Net interest margin Top 50 Peer FFC
Slide 48: Asset/Liability Management
Asset/Liability Management Interest rate “shocks” (as of 03/31/04) Rate Change NII Change (Annual) % Change +300 bp + $ 23.1 million + 7.6% +200 bp + $ 16.9 million + 5.5% +100 bp + $ 13.3 million + 4.4% -100 bp - $ 18.6 million - 6.1% Source: FFC Asset/Liability Modeling
Slide 49: Investment portfolio
Investment portfolio Portfolio Components Ending Bal. Average Credit ( in millions) 03/31/2004 Life (yrs.) Rating Mortgage-backed securities $ 2,132.7 3.2 AAA—agency issued Treasuries and agencies $ 82.6 0.5 AAA Municipals $ 267.0 4.2 AAA—insured Bank-issued trust preferred stock $ 16.1 16.7 various
Slide 50: Bank stock gains
Bank stock gains (percent contribution to EPS) 91 92 93 94 95 96 97 98 99 00 01 02 03 3/04
Slide 51: Efficiency ratio
Efficiency ratio 90 91 92 93 94 95 96 97 98 99 00 01 02 03 3/04 Top 50 Peer FFC Source: SNL Financial Datasource
Slide 52: Other Expenses (YTD March)
Other Expenses (YTD March) 2004 2003 $ % (dollars in thousands) Salaries & Benefits $ 36,960 $ 33,320 $ 3,640 11% Occupancy & Equip. 8,160 7,760 400 5% Data Processing 2,820 2,860 (40) -1% Advertising 1,530 1,230 300 24% Telecommun. 1,260 1,230 30 2% State Tax 1,360 1,290 70 5% Stat. & Supplies 1,22
Slide 53: Corporate Governance
Corporate Governance Internal controls over financial reporting process SOX and NASDAQ listing standards Independent directors determined Executive sessions Executive compensation and nominating committees SOX compliant written Code of Conduct Corporate disclosure committee and Audit committee -form
Slide 54: 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 55: 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 56: Overview
Overview Shareholders maximize shareholder value Customers create financial success Employees create career success Communities create prosperity
Slide 57: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Slide 58: Where are we located?
ere are we located? 1B The Bank 1D Delaware National Bank FN Bank 1 Fatt Bark Hagerstown Trost Layer Ambassador Bank banon Valley Farmers Bank rhe Peoples Bank of Elkton 1 Premier Bank Resource Bane [ Shylnds Community Bank I Swinford Navonal Bark
Slide 59: Pennsylvania: Current Markets, Future Expansion
Pennsylvania @ Current Markets Future Expansion