Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2001)
59 slides from Fulton Financial's investor presentation, Nov 30, 2001
Slide 1: Fulton Financial Corporation
Fulton Financial Corporation Charles J. Nugent Senior Executive Vice President/ Chief Financial Officer
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 a Regional financial holding company (formed in 1982) @ 11 bank subsidiaries; 3 financial services subsidiaries = $7.7 billion in assets (Rank: 58th) = $1.8 billion in market cap (Rank: 51st) ug 3rd largest commercial bank headquartered in Pennsylvania u Lead bank founded in
Slide 4: What have we accomplished?
What have we accomplished? m 19 consecutive years of record earnings m 9.4% compounded annual growth rate in earnings per share 27 consecutive years of dividend increases m 10.2% compounded annual growth rate in dividends per share -—- July 2001 cash dividend payment was 11.6% higher than April 2001
Slide 5: How have we performed?
How have we performed? (2000) = 1.66% Return on Assets Rank: 16th > 1.60% (nine months ended 9/30/01) mu 16.6% Return on Equity Rank: 39th » 15.5% (nine months ended 9/30/01) m= 10.0% Leverage Capital Ratio Rank: 8th > 9.3% (at 9/30/01) Rankings vs. Top 100 Banks for 2000 ‘Souree: SHL Financial Dato
Slide 6: Our top priorities
Our top priorities g Sustaining strong earnings growth = Maintaining high credit quality = Creating financial success with clients u Creating career success with our employees = Enriching the communities we serve u Growing non-interest income Fulton Financiel Corporation
Slide 7: Stock Performance (1982 - 9/30/01)
Stock Performance (1982 - 9/30/01) mg WITHOUT dividend reinvestment: 15% compounded annual rate of return m WITH dividend reinvestment: 19% compounded annual rate of return Fulton Financiel Corporation
Slide 8: Assets by Affiliate
Assets by Affiliate (as of 9/30/01, in thousands) Fulton Bank $ 3,416,000 Lafayette Ambassador Bank 949,000 Lebanon Valley Farmers Bank 677,000 Woodstown National Bank 508,000 Hagerstown Trust 431,000 The Bank of Gloucester County 431,000 FNB Bank, N.A. 311,000 Skylands Community Bank 292,000 Delawa
Slide 9: Where are we located?
Where are we located?
Slide 10: Drovers Bancshares Corporation
Drovers Bancshares Corporation Drovers & Mechanics Bank $820 million in assets Based in York, PA 10.8% market share in York County 16 branches in three counties Resulting in: m Broader geographic coverage of south central PA m Operating efficiencies mg Enhanced revenue growth
Slide 11: Sovereign branches
Sovereign branches g Fulton Financial purchased 18 branches in Delaware, New Jersey and Pennsylvania mu Deposits: $300 million m Loans: $ 50 million mu Enabled us to extend franchise into Wilmington market
Slide 12: Our market position
Our market position mg 1st, 2nd or 3rd in 11 of 30 counties mw Hold 17.5% of potential market in the top 11 counties mu Average market share in the top 11 counties: 22% Source: FDIC Fulton Financiel Corporation
Slide 13: Market Demographics
Market Demographics For the counties in which Fulton Financial has a banking presence: g In New Jersey, Delaware and Maryland, the anticipated average population growth of these counties exceeds that of each of these states as a whole. a In Pennsylvania, these counties, on average, exceed the state
Slide 14: County Population Growth
County Population Growth 1990 to 2000 1 Reserve Bank, Third District Above 20% 10-20% 0-10% Below 0% OBEO
Slide 15: Building on our key strengths
Building on our key strengths m@ Sound risk management m Strong capital position m Independent network of community banks/ decentralized operating philosophy = Coordinated product development process a Bank stock portfolio m= Common technology/operations platform and investment/trust services platfo
Slide 16: Building on our strengths: Sound risk management
Building on our strengths = Sound risk == = Limited management == exposure to loss
Slide 17: Net Charge-Offs to Average Loans
Slide 18: Non-Performing Assets to Total Assets
Non-Performing Assets to Total Assets Source: SHL Financial Dtasource Fulton Financiel Corporation ey
Slide 19: Loan Diversification
Loan Diversification @ Consumer Loans Residential Mortgage Commercial Loans Commercial Mortgage Fulton Financiel Corporation 19
Slide 20: Experience of our Lenders
Experience of our Lenders a The officers who oversee all lending have each worked in this capacity at Fulton for more than 20 years. ug This consistency should enable Fulton Financial to maintain its high asset quality in the future. Fulton Financial Corporation 20
Slide 21: Credit Approval Process
Credit Approval Process m Conservative credit culture m= Committee approval process a Low individual lending authorities w Local boards involved g Fulton Bank board provides added experience g Affiliate lender participation @ Active participation of Loan Review personnel in the risk rating process m
Slide 22: Summary of Larger Loans
Summary of Larger Loans g Only 22 relationships with commitments to lend greater than $20 million = Maximum individual commitment of $30 million m Average commercial loan commitment is $550,000 u No nationally syndicated credits mu Loans and corresponding relationships are within Fulton’s geographic
Slide 23: Commercial Loan Concentration by Industry
Commercial Loan Concentration by Industry — esorsio0 Industry % Services 15.5 R/E - Rental 14.6 Manufacturing 41.2 Construction 11.4 Retail 9.6 Wholesale 7.9 Health Care 71 Agriculture 6.5 R/E-Subdividers 5.3 R/E - Holding 44 Transportation 35 Other 2.2 Financial Services 1.1
Slide 24: Fulton vs Peer and Top 50
Futon — Peer —Top 50 Rg
Slide 25: Interest Rate "Shocks"
Interest Rate “Shocks” a Impact on Net Interest Income: Rate Change Nil Change (Annual) % Change +300 bp -$ 6.5 million - 2.0% +200 bp -$ 6.5 million - 20% +100 bp -$ 0.5 million - 0.2% 100 bp -$ 6.5 million - 2.0% -200 bp - $10.9 million - 34% -300 bp -$ 21.9 million - 6.9% 6 Month Cumulative Gap:
Slide 26: Building on our Strengths: Strong Capital Position
Building on our Strengths a Strong == = Capital for Capital — growth, Position acquisitions, share buyback programs Fulton Financiel Corporation
Slide 27: Capital (At September 30, 2001)
Cap ital (At September 30, 2001) a Total Capital (GAAP): $806 million = Total Risk-based Capital: $777 million wg Ratios: > Total RB Capital 13.7% > Tier 1 RB Capital 12.5% > Leverage Capital 9.3% Fulton Financiel Corporation
Slide 28: Leverage Capital
Leverage Capital Optimal Minimums: = Total Capital $700 million mu Leverage Ratio: 8.0% (approx.) mw Excess Capital: $100 MILLION Fulton Financiel Corporation
Slide 29: Building on our strengths: Independent community banks
Building on our strengths a Independent = Customer community = retention banks and decentralized operating philosophy Fulton Financiel Corporation
Slide 30: Survey Results
Survey Results = 96% of customers were Extremely or Very Satisfied with their Fulton Financial affiliate bank
Slide 31: Building on our strengths: Coordinated product development
Building on our strengths = Coordinated = Continued product = non-interest development income growth Fulton Financiel Corporation
Slide 32: Centralized products
Centralized products a Residential a On-line banking Mortgages through the = Investment Internet Management u Debit/Credit cards a Brokerage mg Cash management Services = Specialized m Non-property and lending (leasing casualty insurance and indirect) hole life, term life, long- i pti erm ive, long”
Slide 33: Other Income (YTD 9/30/01)
Other Income (YTD 9/30/01) 2001 2000 $ % (dallas inthousards) Inv Mgt & Trust $ 20405 $ 15,934 $ 4471 28% Service Charges 10,457 9.245 1,212 13% Overdraft Fees 8316 6,168 2,148 35% Mot. Sales & Serv. 8108 2617 5491 210% Cash Mgt Fees 4428 3,723 705 19% Success Card Fees 2,876 2426 450 19% Merchant F
Slide 34: Other Income of Selected Affiliates
Other Income of Selected Affiliates Nine Mos. Ended 9/30 BANK 2001 2000 Increase Delaware $1,424 $ 939 51.7% Lafayette Ambassador 5,147 4,045 27.2 Gloucester 2,455 1,960 25.3 Skylands 1,094 884 23.8 Hagerstown 3,156 2,609 21.0 Woodstown 2,118 1,796 17.9 “Bxciudes mortgage safe gains. Futton Financal
Slide 35: Growth in Other Income
Growth in Other Income (1 to september; Actual Budget for 2001 * Restated for Drovers Baneshates Fulton Financiel Corporation
Slide 36: Investment Management & Trust Services
Investment Management & Trust Services 1997 1998 1999 2000* 2001* (1 to september; Actual Budget for 2001 * Restated for Drovers Bancshares
Slide 37: Fulton Financial Advisors, N.A.
Fulton Financial Advisors, na. a Established May 1, 2000 = Consolidated investment and trust business of all affiliate banks Resulting in: a Consistent sales and relationship management philosophy m Centralized product development and marketing m Focus on fee revenues u Added ability to cross-sell p
Slide 38: Fulton Financial Advisors, N.A.
Fulton Financial Advisors, na. When formed: (may 1, 2000) $3.0 billion; $1.7 billion in assets under management Currently: (September 30, 2001) $4.5 billion; $3.2 billion in assets under management (includes assets of Dearden, Maguire, Weaver and Barrett) Products and Services @ Trusts @ Insurance @
Slide 39: Dearden, Maguire, Weaver and Barrett, Inc.
Dearden, Maguire, Weaver and Barrett, Inc. = Acquired in January 2001 = Based in Montgomery County, PA; offices in West Conshohocken and Pottstown, PA; Haddonfield, NJ Provides Fulton with: = Expanded investment reach in southeastern PA and southern NJ = Additional distribution channel for products
Slide 40: Fulton Mortgage Company
Fulton Mortgage Company g Established April 2001 u 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 41: Building on our strengths: Bank stock portfolio
Building on our strengths = Bank stock — = Additional portfolio — income source
Slide 42: Securities Gains (percent contribution to EPS)
Slide 43: Building on our strengths: Common technology and operations
Building on our strengths = Common == = Lower costs technology = and operations
Slide 44: Efficiency Ratio
Efficiency Ratio
Slide 45: Efficiency of Previous Acquisitions
Efficiency of Previous Acquisitions Eff ncy Ratio Year Year Nine Mes. Bank Acquired Acquired — 980/01 Skylands Comm. Bank 2000 55.7 50.7 Lebanon Valley Farmers 1998 57.0 46.1 Delaware National Bank 1995 69.1 61.1 Hagerstown Trust 1994 59.1 55.8 Futton Financal Corporation
Slide 46: Building on our strengths: Acquisition strategy
Building on our strengths = Well-developed aan Continued acquisition Lal growth strategy and strong performance Fulton Financiel Corporation
Slide 47: Acquisitions
Acquisitions m Drovers & Mechanics Bank = 18 Sovereign Bank Branches m Dearden, Maguire, Weaver and Barrett, Ine. @ Skylands Community Bank = Ambassador Bank of the Commonwealth = Lebanon Valley National Bank = Peoples Bank of Elkton = Woodstown National Bank & Trust Company = Bank of Gloucester Cou
Slide 48: What do we look for?
What do we look for? = High growth areas u Strong performance = Asset quality = Talented people Fulton Financiel Corporation
Slide 49: New acquisitions: What changes?
New acquisitions What changes? = Audit m Loan review a Investments = Asset/liability management = Operational platform Fulton Financiel Corporation
Slide 50: New acquisitions: What stays the same?
New acquisitions What stays the same? = Bank name a Board of Directors = Management team a Employees Fulton Financiel Corporation
Slide 51: Benefits to new affiliates
Benefits to new affiliates g Increased additional non-interest income due to introduction of new products and services = Additional capital a Increased lending capacity m Reduced expenses mu Management focus on growth and customer service mu Proven merger/conversion expertise Fulton Financiel Corpor
Slide 52: Building on our strengths: Talented and dedicated people
Building on our strengths = Talented and = Outstanding dedicated = customer people service = Superior implementation of Strategic Plan elements Fulton Financiel Corporation
Slide 53: Employee Opinion Survey
Employee Opinion Survey mg Supervisors g Sales Orientation Performance m Quality Customer m Performance Service Management m Team Orientation = Organizational m Pay and Benefits Leadership = Communication Fulton Financiel Corporation
Slide 54: 2001 Performance
2001 Performance (Nine Months Ended September 30, 2001) um $1.07 Operating earnings per share* (8.1% increase over 2000) m $0.492 Cash dividend per share (11.8% increase over 2000) m 1.60% ROA* m 15.47% ROE* mw 53.10% Efficiency Ratio* * Excludes merger-related expenses of $6.4 million (net of tax).
Slide 55: Looking ahead
Looking ahead = Continue to build on our strengths = Continue to rely on the expertise and skill of our employees = Stick to banking basics while preparing for the future = Implement more active capital management mu Enhance customer relationship management efforts Fulton Financiel Corporation
Slide 56: Looking ahead
Looking ahead a Emphasize fee-driven products e Mortgage e Investment Management & Trust Services e Fee Income on deposit accounts e Insurance = Continue to acquire banks that are strong performers in growth areas = Continue to increase functionality of website for retention of customers = Continue
Slide 57: Board of Directors
Board of Directors mu Focused on maximizing shareholder value with at least a 10% to 12% annual increase in earnings per share Fulton Financiel Corporation
Slide 58: Where would we like to be?
Where would we like to be? Il Current Markets Il Possible Future Expansion Maryland
Slide 59: Fulton Financial Corporation
Fulton Financial Corporation Rufus A. Fulton, Jr. Chairman and CEO R. Scott Smith, Jr. President and COO Charles J. Nugent Sr. Executive Vice President/CFO Fulton Financial Corporation ‘One Penn Square Lancaster, PA 17602 717) 291.2411 www.fult.com
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