Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (September 2008)
41 slides from Fulton Financial's investor presentation, Sep 16, 2008
Slide 1: Fulton Financial Corporation Investor Presentation
Fulton Financial Corporation Investor Presentation September 16, 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 Quarterly Comments Challenges / Responses Loan Summary Financial Performance
Slide 4: Fulton Financial Profile
Fulton Financial Profile Mid-Atlantic regional financial holding company A family of 10 community banks Fulton Financial Advisors Fulton Mortgage Company Serving strong /stable markets in 5 states 267 community banking offices Asset size: $16 billion Market capitalization: $ 2 billion Book value (6/
Slide 5: Accomplishments: consecutive years of dividend increases
Accomplishments 34 consecutive years of dividend increases (1973-2007) 9.8% compounded annual growth rate in dividends per share (1982 – 2007) 7.3% compounded annual growth rate in earnings per share (1982 – 2007) 25 bank acquisitions since 1982 Created a valuable geographic franchise
Slide 6: ozee2 9.4080
0.5400 0.4932 0.4524 ozee2 9.4080 O.2942 0.3280 il l | | 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 FULTON FINANCIAL ‘CORPORATION,
Slide 7: Quarterly Cash Dividend
Quarterly Cash Dividend 15 cents Dividend yield: approximately 5%
Slide 8: Capital (as of 06/30/08)
Capital (as of 06/30/08) Total Capital (GAAP): $1.59 billion Total Regulatory Capital: $1.46 billion Regulatory Capital Ratios: Total Risk-Based Capital 11.70% Tier 1 Risk-Based Capital 9.10% Leverage Capital 7.40%
Slide 9: Strategic Plan
Strategic Plan Superior Employee Satisfaction Superior Customer Experience Superior Operating Efficiency Superior Financial Results
Slide 10: Fulton's community banks
‘The Columbia Banke Delaware Nationa Bank FNB Bank Fulton Bank Hagerstown Trust Lafayette Ambassador Bank ‘The Peoples Bank of Eton Stytnds Community Bank Swinelord National Banke ‘CORPORATION
Slide 11: Q2/08 Quarterly Comments
Q2/08 Quarterly Comments Reported EPS of $0.15 Impact of three significant events: - Sale of credit card portfolio - Bank stock portfolio write-down - Auction rate certificates Excluding above events: EPS of $0.24 Strong capital position Q3/08 cash dividend declared at current level
Slide 12: Q2/08 Quarterly Comments
Q2/08 Quarterly Comments Solid results from core banking operations Net interest income growth Expansion of net interest margin Good loan growth New loan pipeline stable Strong growth in select non-interest income categories Revenue generation and cost-cutting initiatives producing meaningful result
Slide 13: Q2/08 Quarterly Comments
Q2/08 Quarterly Comments Asset quality deterioration Housing-related businesses continue to struggle Little evidence that economic conditions are improving Sluggish deposit growth Bank stock write-down
Slide 14: Two Greatest Challenges
Two Greatest Challenges Retail Funding Credit Quality
Slide 15: Retail Funding - Action Steps
Retail Funding - Action Steps Continued denovo expansion in existing and new markets DDA Switch Kit w/cash or gift incentives Targeted direct mail Superior customer experience Relationship banking incentives Team Advantage Banking (small business) Appointed Chief Deposit Officer
Slide 16: Credit Quality – Action Steps
Credit Quality – Action Steps Internal emphasis on loan review / workout Watching all loan portfolios very carefully, real estate in particular Early customer intervention / remediation as problems arise New loans underwritten to traditional conservative standards
Slide 17: Superior Customer Satisfaction
Superior Customer Satisfaction *Retail: 90% extremely/very satisfied Commercial: 90% extremely/very satisfied * Compared to national average of 63% Source: American Banker/Gallup Consumer Survey
Slide 18: Summary of Larger Loan Relationships
Summary of Larger Loans 46 relationships with commitments to lend of $20 million or more Maximum individual commitment of $33 million Average commercial lending relationship size is $ 417,538 Loans and corresponding relationships are within Fulton’s geographic market area
Slide 19: Loan Diversification (as of 06/30/08)
Loan Diversification (as of 06/30/08)
Slide 20: Commercial Loan Concentration By Industry
Commercial Loan Concentration By Industry (as of 06/30/08) Industry % Construction 25.9 RE - Investor - Owned 23.6 Services 14.2 Manufacturing 7.0 Retail 6.1 Health Care 5.4 Agriculture 5.0 Wholesale 4.5 Other 3.1 Financial Services 2.0 Arts and Entertainment 2.0 Transportation 1.2 100.0
Slide 21: Credit Ratings
Credit Ratings Long-term rating Issuer A-2 Lead Bank Deposits A-1 Outlook Negative Moody’s Investor Services Short-term rating F-1 Long-term rating A- Outlook Stable Fitch Ratings Dominion Bond Rating Service Credit rating A Outlook Negative
Slide 22: Financial Performance
‘FULTON FINANCIAL ‘CORPORATION
Slide 23: Quarter Ended June 30, 2008
Quarter Ended June 30, 2008 $25.7 million Net income $ 0.15 Net income per share $ 0.15 Cash dividends per share 0.85% Return on assets 8.40% Return on equity 14.65% Return on tangible equity
Slide 24: 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 25: Income Statement Summary (Six Months)
Income Statement Summary (Six Months Ended June 30 th ) $ % (dollars in thousands) Net Interest Income 257,790 $ 242,680 $ 15,110 $ 6% Loan Loss Provision (27,930) (3,660) (24,270) n/m Other Income 76,320 73,660 2,660 4% Credit Card Sale Gain 13,910 - 13,910 n/m Securities Gains (20,400) 2,410 (22,8
Slide 26: Income Statement Summary (Linked Quarter)
Income Statement Summary (Linked Quarter) 2nd Q 08 1st Q 08 $ % (dollars in thousands) Net Interest Income 131,890 $ 125,900 $ 5,990 $ 5% Loan Loss Provision (16,710) (11,220) (5,490) n/m Other Income 39,890 36,430 3,460 9% Credit Card Sale Gain 13,910 - 13,910 n/m Securities Gains (21,650) 1,250 (2
Slide 27: Average Loans (Six Months)
Average Loans (Six Months Ended June 30th) $ % (dollars in millions) Commercial 3,490 $ 3,100 $ $ 13% Comm'l Mort 3,620 3,260 11% Resid Mort 24% Home Equity 1,550 1,440 8% Construction 1,310 1,390 (80) -6% Cons./Other (90) -15% Total Loans 11,360 $ 10,500 $ 8%
Slide 28: Average Loans (Linked Quarter)
Average Loans (Linked Quarter) 2nd Q 08 1st Q 08 $ % (dollars in millions) Commercial 3,510 $ 3,470 $ $ 1% Comm'l Mort 3,700 3,550 4% Resid Mort 3% Home Equity 1,570 1,530 3% Construction 1,290 1,330 (40) -3% Cons./Other (100) -18% Total Loans 11,420 $ 11,300 $ 1%
Slide 29: Net Interest Margin (as of 06/30/08)
Net Interest Margin (as of 06/30/08)
Slide 30: Q106 Q206 Q306 Q406 Q107 Q207 GB07 Q407 Q108 Q208
3.80 3.70 3.60 3.50 Q106 Q206 Q306 Q406 Q107 Q207 GB07 Q407 Q108 Q208 ~~ Reported -# Core ‘CORPORATION ‘FULTON FINANCIAL
Slide 31: Interest Rate Shocks (as of 06/30/08)
Interest Rate Shocks (as of 06/30/08) 6 month cumulative gap – 0.97 Rate Change NII Change (Annual) % Change +300 bp + $ 12.1 million + 2.3% +200 bp + $ 9.4 million + 1.8% +100 bp + $ 5.4 million + 1.0% - 100 bp - $ 6.0 million - 1.1% - 200 bp - $ 14.3 million - 2.7%
Slide 32: Investment Portfolio (as of 06/30/08)
Investment Portfolio (as of 06/30/08) ENDING MODIFIED BALANCE DURATION CREDIT RATING (in millions) Mortgage-backed securities 1,238.4 $ 3.16 AAA Municipal bonds 511.3 4.28 AAA Collateralized mortgage obligations 402.1 3.73 AAA U.S. Treasuries and agencies 98.0 2.34 AAA Corporate & trust preferred se
Slide 33: Average Deposits (Six Months)
Average Deposits (Six Months Ended June 30th) $ % (dollars in millions) Nonint DDA 1,640 $ 1,740 $ (100) $ -6% Int DDA 1,700 1,670 2% Savings/MMDA 2,170 2,300 (130) -6% CD's 4,430 4,490 (60) -1% Cash Mgt 17% Total Deposits 10,640 $ 10,800 $ (160) $ -1%
Slide 34: Average Deposits Linked Quarter
Average Deposits Linked Quarter 2nd Q 08 1st Q 08 $ % (dollars in millions) Nonint DDA 1,660 $ 1,620 $ $ 2% Int DDA 1,710 1,690 1% Savings/MMDA 2,210 2,140 3% CD's 4,360 4,510 (150) -3% Cash Mgt (10) -1% Total Deposits 10,630 $ 10,660 $ (30) $ 0%
Slide 35: Net Charge-Offs To Loans (as of 06/30/08)
Net Charge-Offs To Loans (as of 06/30/08)
Slide 36: Other Income (Six Months)
Other Income (Six Months Ended June 30th) $ % (dollars in thousands) Invt Mgt & Trust 17,150 $ 20,080 $ (2,930) $ -15% Overdraft & NSF Fees 16,330 9,980 6,350 64% Cash Mgt Fees 6,560 5,560 1,000 18% Service Charges 6,390 6,310 1% Mort. Sales Gains 4,980 9,580 (4,600) -48% Success Card Fees 4,820 4,1
Slide 37: Other Income Linked Quarter
Other Income Linked Quarter 2nd Q 08 1st Q 08 $ % (dollars in thousands) Overdraft & NSF Fees 8,640 $ 7,690 $ $ 12% Invt Mgt & Trust 8,390 8,760 (370) -4% Service Charges 3,350 3,040 10% Cash Mgt Fees 3,330 3,230 3% Mort. Sales Gains 2,670 2,310 16% Success Card Fees 2,550 2,260 13% Merchant Fees 1,
Slide 38: Efficiency Ratio (as of 06/30/08)
Efficiency Ratio (as of 06/30/08)
Slide 39: Other Expense (Six Months)
Other Expense (Six Months Ended June 30 st ) $ % (dollars in thousands) Salaries & Benefits 109,480 $ 111,850 $ (2,370) $ -2% Occupancy & Equip. 27,610 27,300 1% Operating Risk Loss 15,630 10,120 5,510 54% Data Proc. & Software 9,140 8,790 4% Advertising 6,420 5,400 1,020 19% Supplies & Postage 5,80
Slide 40: Other Expense Linked Quarter
Other Expense Linked Quarter 2nd Q 08 1st Q 08 $ % (dollars in thousands) Salaries & Benefits 54,280 $ 55,200 $ (920) $ -2% Operating Risk Loss 14,390 1,240 13,150 n/m Occupancy & Equip. 13,640 13,970 (330) -2% Data Proc. & Software 4,480 4,660 (180) -4% Advertising 3,520 2,910 21% Supplies & Postag
Slide 41: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
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