Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Citigroup Financial Services Conference 2008
46 slides from Fulton Financial's conference presentation, Jan 30, 2008
Slide 1: Fulton Financial Corporation Investor Presentation
Fulton Financial Corporation Investor Presentation Citigroup Financial Services Conference January 29-30, 2008
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 Overview Growth Initiatives Challenges and responses Financial Performance
Slide 4: Fulton Financial Profile
Fulton Financial Profile Regional financial holding company (formed in 1982) 11 community banks and 3 financial services affiliates in 5 states 267 community banking offices Asset size: $15.9 billion Market capitalization: $2.0 billion
Slide 5: What have we accomplished? Consecutive years of dividend increases
What have we accomplished? 34 consecutive years of dividend increases 9.8% compounded annual growth rate in dividends per share 7.3% compounded annual growth rate in earnings per share 25 bank acquisitions Expanded into five states creating valuable geographic franchise
Slide 6: 10-year Dividend History
10-year Dividend History 0.2423 0.2672 0.3280 0.3662 0.4524 0.4932 0.5400 0.5810 0.2942 0.4050 0.5975
Slide 7: Quarterly Cash Dividend
Quarterly Cash Dividend 15 cents Dividend yield: approximately 5%
Slide 8: Capital (estimated 12/31/07)
Capital (estimated 12/31/07) Total Capital (GAAP): Total Regulatory Capital: Ratios (estimated): Total Risk-Based Capital Tier 1 Risk-Based Capital Leverage Capital $1.57 billion $1.41 billion 11.90% 9.30% 7.40%
Slide 9: Strategic Plan
Strategic Plan Superior Employee Satisfaction Superior Customer Satisfaction Superior Financial Performance Superior Operating Efficiency
Slide 10: Fulton Financial Corporation
‘FULTON FINANCIAL ‘CORPORATION
Slide 11: Virginia Organic Growth Initiatives
Virginia Organic Growth Initiatives Resource Bank to become division of Fulton Bank Transition RB from a nationwide mortgage lender into a strong community bank Core funding and lending activities New branches in strongest eastern Virginia markets Utilize Fulton critical mass
Slide 12: FFC Affiliates in Affluent Markets
FFC Affiliates in Affluent Markets* *Source: Bancology Vol. 24, September 2007 County National Ranking Ranking in State Median HH Ranking FFC Affiliate Hunterdon, NJ #2 #1 $95,981 Skylands Bank Loudoun, VA #3 #1 $93,034 Resource Bank Fairfax, VA #4 #2 $91,851 Resource Bank Morris, NJ #6 #2 $90,417 S
Slide 13: Serving PA's Strongest Markets
Serving PA’s Strongest Markets* *Source: SNL, Median HH Income, 2007 data County Rank Projected Population Change 2007-2012 (%) Median HH Income 2007 ($) Projected HH Income Change 2007-2012 (%) Chester, PA 9.02 85,956 22.09 Montgomery, PA 3.58 79,785 21.29 Bucks, PA 4.64 78,883 21.22 Delaware, PA 1
Slide 14: Q4/07 Highlights
Q4/07 Highlights Reported EPS of $0.22 ($0.03, or 15.8%, higher than Q3 07) Good commercial loan growth: 10% annualized Asset quality good - returning to more normal levels; Increased LLP $2.2 million Good growth in deposit account related income
Slide 15: Q4/07 Highlights Continued
Q4/07 Highlights Continued Significantly lower mortgage losses Good CD growth at reasonable rates Strong capital and liquidity No exposure to CDOs; only agency- guaranteed MBS
Slide 16: Funding
Funding Continued denovo expansion in existing and new markets DDA Switch Kit w/cash incentives Targeted direct mail Superior customer experience Relationship banking incentives Team Advantage Banking Appointed Chief Deposit Officer
Slide 17: Quality Loan Growth
Quality Loan Growth Additional revenue producing staff Current customers as referral source New fixed/floating consumer product Asset quality remains good Consistent lending philosophy
Slide 18: Other Income
Other Income Focus on FFA recurring fee base New overdraft management program Increased debit card utilization Expanded cash management base
Slide 19: Other Expense
Other Expense Workforce reduction Retirement plan realignment Product standardization to simplify customer choices and reduce costs Departmental centralization
Slide 20: Superior Customer Satisfaction
Superior Customer Satisfaction *Retail: Q4/07 90% extremely/very satisfied Commercial: Q4/07 90% extremely/very satisfied * Compared to national average of 63% Source: American Banker/Gallup Consumer Survey
Slide 21: Summary of Larger Loans (12/31/07)
Summary of Larger Loans (12/31/07) 47 relationships with commitments to lend of $20 million or more Maximum individual commitment of $33 million Average commercial lending relationship size is $ 405,526 Loans and corresponding relationships are within Fulton’s geographic market area
Slide 22: Loan Diversification (12/31/07)
Loan Diversification (12/31/07) 21% 12% 5% 31% 31% Commercial Commercial Mortgage Res Mtg and Home Equity Construction Consumer and other
Slide 23: Commercial Loan Concentration By Industry
Commercial Loan Concentration By Industry (as of 12/31/07) Industry % Construction 27.2 RE - Investor - Owned 22.9 Services 14.0 Manufacturing 7.2 Retail 6.1 Health Care 5.4 Agriculture 4.9 Wholesale 4.3 Other 2.8 Financial Services 2.0 Arts and Entertainment 1.9 Transportation 1.3 100.0
Slide 24: Credit Ratings
Credit Ratings Dominion Bond Rating Service Fitch Ratings Stable Outlook Stable Outlook A- Long-term rating A Credit rating F-1 Short-term rating Stable Outlook A-1 Lead Bank Deposits A-2 Issuer Stable Outlook Long-term rating BBB+ Credit rating P-1 Short-term rating Standards & Poors Moody’s Invest
Slide 25: Fulton Financial Corporation
‘FULTON FINANCIAL ‘CORPORATION
Slide 26: Quarter Ended December 31, 2007
Quarter Ended December 31, 2007 $38.2 million $ 0.22 $ 0.150 0.97% 9.72% 17.44% Net income (13.7% increase from 3rd Q 2007; 18.1% decrease from 2006) Net income per share (15.8% increase from 3rd Q 2007; 18.5% decrease from 2006) Cash dividends per share (1.7% increase over 2006) Return on assets Re
Slide 27: Peer Group
Peer Group International Bancshares Corporation Old National Bancorp South Financial Group, Inc. Susquehanna Bancshares, Inc. TCF Financial Corporation Trustmark Corporation UMB Financial Corporation United Bankshares, Inc. Valley National Bancorp Whitney Holding Corporation Wilmington Trust Corpora
Slide 28: Income Statement Summary (December Year to Date)
Income Statement Summary (December Year to Date) $ % (dollars in thousands) Net Interest Income 488,740 $ 485,560 $ 3,180 $ 1% Loan Loss Provision (15,060) (3,500) (11,560) 330% Other Income 146,280 142,440 3,840 3% Securities Gains 1,740 7,440 (5,700) -77% Other Expenses (405,450) (365,990) (39,460
Slide 29: Income Statement Summary (linked quarter)
Income Statement Summary (linked quarter) 4th Qtr 3rd Qtr $ % (dollars in thousands) Net Interest Income 123,650 $ 122,410 $ 1,240 $ 1% Loan Loss Provision (6,800) (4,610) (2,190) 48% Other Income 35,750 36,870 (1,120) -3% Securities Gains (540) (130) (410) N/M Other Expenses (98,450) (107,990) 9,54
Slide 30: Average Loans (December Year to Date)
Average Loans (December Year to Date) $ % (dollars in millions) Commercial 3,210 $ 2,810 $ $ 14% Comm'l Mort 3,340 3,070 9% Resid Mort 19% Home Equity 1,450 1,420 2% Construction 1,380 1,350 2% Cons./Other - 0% Total Loans 10,740 $ 9,890 $ 9%
Slide 31: Average Loans Linked Quarter
Average Loans Linked Quarter 4th Q 07 3rd Q 07 $ % (dollars in millions) Commercial 3,360 $ 3,280 $ $ 2% Comm'l Mort 3,440 3,380 2% Resid Mort 8% Home Equity 1,480 1,450 2% Construction 1,380 1,380 - 0% Cons./Other (10) -2% Total Loans 11,080 $ 10,860 $ 2%
Slide 32: Net Interest Margin (12/31/07)
Net Interest Margin (12/31/07) 3.66 3.62 3.46 3.25 3.50 3.75 4.00 4.25 4.50 4.75 FFC Peer Top 50
Slide 33: Net Interest Margin Trend
Net Interest Margin Trend 3.50 3.60 3.70 3.80 3.90 4.00 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Reported Core
Slide 34: Interest Rate Shocks (12/31/07)
Interest Rate Shocks (12/31/07) 6 month cumulative gap – 0.83 Rate Change NII Change (Annual) % Change +300 bp - $ 3.5 million - 0.7% +200 bp - $ 2.3 million - 0.5% +100 bp - $ 1.2 million - 0.2% - 100 bp - $ 0.6 million - 0.1% - 200 bp - $ 5.3 million - 1.0% - 300 bp - $ 11.2 million - - 2.2%
Slide 35: Investment Portfolio (12/31/2007)
Investment Portfolio (12/31/2007) No collateralized debt obligations (CDOs) All MBS agency – guaranteed ENDING MODIFIED BALANCE DURATION CREDIT RATING (000's) Mortgage-backed securities 1,462.9 $ 3.46 AAA Municipal bonds 511.0 4.24 AAA Collateralized mortgage obligations 588.8 3.82 AAA U.S. Treasuri
Slide 36: Average Deposits (Year to Date December)
Average Deposits (Year to Date December) $ % (dollars in millions) Nonint DDA 1,710 $ 1,810 $ (100) $ -6% Int DDA 1,700 1,670 2% Savings/MMDA 2,260 2,340 (80) -3% CD's 4,550 4,130 10% Cash Mgt 25% Total Deposits 10,870 $ 10,470 $ $ 4%
Slide 37: Average Deposits Linked Quarter
Average Deposits Linked Quarter 4th Q 07 3rd Q 07 $ % (dollars in millions) Nonint DDA 1,680 $ 1,700 $ (20) $ -1% Int DDA 1,720 1,730 (10) -1% Savings/MMDA 2,180 2,260 (80) -4% CD's 4,600 4,630 (30) -1% Cash Mgt 4% Total Deposits 10,900 $ 11,010 $ (110) $ -1%
Slide 38: Net Charge-Offs To Loans (12/31/07)
Net Charge-Offs To Loans (12/31/07) 0.09 0.18 0.23 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 FFC Peer Top 50
Slide 39: Other Income (Year to Date December)
Other Income (Year to Date December) $ % (dollars in thousands) Invt Mgt & Trust 38,670 $ 37,440 $ 1,230 $ 3% Overdraft & NSF Fees 22,350 20,530 1,820 9% Mort. Sales Gains 14,290 21,090 (6,800) -32% Service Charges 12,620 13,210 (590) -4% Cash Mgt Fees 11,530 10,040 1,490 15% Success Card Fees 8,720
Slide 40: Other Income Linked Quarter
Other Income Linked Quarter 4th Q 07 3rd Q 07 $ % (dollars in thousands) Invt Mgt & Trust 9,290 $ 9,290 $ - $ 0% Overdraft & NSF Fees 7,090 5,280 1,810 34% Service Charges 3,160 3,150 0% Cash Mgt Fees 3,100 2,870 8% Mort. Sales Gains 2,180 2,530 (350) -14% Success Card Fees 2,390 2,180 10% Other 8,5
Slide 41: Efficiency Ratio (12/31/07)
Efficiency Ratio (12/31/07) 61.2 57.3 59.6 59.3 50.0 52.0 54.0 56.0 58.0 60.0 62.0 64.0 FFC FFC (Excl RB Charge) Peer Top 50
Slide 42: Other Expense (Year to Date December)
Other Expense (Year to Date December) $ % (dollars in thousands) Salaries & Benefits 217,530 $ 213,910 $ 3,620 $ 2% Occupancy & Equip. 53,850 50,740 3,110 6% Operating Risk Loss 27,230 4,820 22,410 465% DP/Software/Telecom 25,860 24,780 1,080 4% Amortization 8,330 7,910 5% Other Expenses 72,650 63,8
Slide 43: Other Expense Linked Quarter
Other Expense Linked Quarter 4th Q 07 3rd Q 07 $ % (dollars in thousands) Salaries & Benefits 53,170 $ 52,510 $ $ 1% Occupancy & Equip. 13,300 13,250 0% Operating Risk Loss 16,340 (15,570) -95% DP/Software/Telecom 6,450 6,470 (20) 0% Amortization 2,160 2,000 8% Other Expenses 22,600 17,420 5,180 30%
Slide 44: Summary
Summary Healthy commercial loan pipeline Strong liquidity position Strong capital position Attractive dividend yield Good geographic markets Aggressive core deposit marketing High customer satisfaction
Slide 45: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Slide 46: Where are we located?
Where are we located? Pennsylvania “The Bank ‘The Columbia Bank Dedaware Nationa Bank FNB Bank Fulton Bank Hagerstown Trast Lasers Ambassador Bak sane Fromevr “The People Bank of Elkton Prive New lore Resource Bank Skylands Commonity Bank = Swineford Nationa! Bank = Delaware Ns ly. Bp FULTON FINANCI
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