Slide 1: Fulton Financial Corporation
Fulton Financial Corporation
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 a $7.9 billion in assets (Rank: 60th as of 6/30/02) @ $2.0 billion in market cap (Rank: 50th as of 6/30/02) g 3rd largest commercial bank headquartered in Pennsylv
Slide 4: Our top priorities
Our top priorities g Sustaining strong earnings growth = Maintaining high credit quality = Creating financial success with clients = Creating career success with our employees = Enriching the communities we serve = Growing non-interest income Fulton Financiel Corporation
Slide 5: What have we accomplished?
What have we accomplished? m 20 consecutive years of record earnings m 9.2% compounded annual growth rate in earnings per share m@ 28 consecutive years of dividend increases 10.3% compounded annual growth rate in dividends per share a Proven business model mg Consistent high performance Fulton Finan
Slide 6: 2001 performance
2001 performance $1.15** $0.530** 1.60% 15.40% 52.90% 9.60% Operating earnings per share* (9.5% increase over 2000) Cash dividends per share (11.8% increase over 2000) Return on assets* (Rank: 16th) Return on equity* (Rank: 43rd) Efficiency ratio* (Rank: 33rd) Leverage capital ratio (Rank: 13th) * E
Slide 7: Six months ended June 30, 2002
Six months ended June 30, 2002 m $0.63* Net income per share (12.5% increase over 2001) m $0.286* Cash dividends per share (10.9% increase over 2001) m 1.69% Return on assets mw 15.93% Return on equity mw 52.80% Efficiency ratio me 9.87% Leverage capital ratio * Restated for 5.for-4 stock split paid
Slide 8: Peer group
Peer group Commerce Bancorp rst Commonwealth Financial First Financial Bancorp. FirstMerit Corp. Fulton Financial Corp Hudson United Bancorp. Mercantile Bankshares Corp. North Fork Bankcorp. Provident Bankshares Corp. Sky Financial Group Inc. Susquehanna Bancshares Trust Co. of New Jersey TrustCo Ba
Slide 9: Stock performance (1982 - 2001)
Stock performance (1982 - 2001) m WITHOUT dividend reinvestment: 15% compounded annual rate of return mw WITH dividend reinvestment: 19% compounded annual rate of return Fulton Financiel Corporation
Slide 10: Wall Street Journal
Wall Street Journal = Fulton Financial tied for 16th a 5-year total return: 17.8% = 10-year total return 18.5%
Slide 11: Assets by affiliate
Assets by affiliate (as of 6/30/02, in thousands) Fulton Bank Lafayette Ambassador Bank Lebanon Valley Farmers Bank The Bank Woodstown National Bank Hagerstown Trust Company Skylands Community Bank Delaware National Bank FNB Bank, N.A. Swineford National Bank The Peoples Bank of Elkton $ 3,468,000 9
Slide 12: Where are we located?
Where are we located? p i The Bank ‘ennsylvania © Deaware Hatt Bank, FRB Bank Futon Bank Hagerstoun Trust 5 Lafayette Ambassador Bank = Lebanon Valey Farmers Bank = The Peoples Bank f Elton = Shfants Finn dal Corportvon © Swrneord National Bank = Woodstown Rational Bank Delaware
Slide 13: Our market position
Our market position mg 1st, 2nd or 3rd in 10 of 30 counties w Hold 19.1% of potential market in the top 10 counties mu Average market share in the top 10 counties: 23.7% Source: FDIC Fulton Financiel Corporation
Slide 14: 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 15: County population growth
County population growth 1990 to 2000 a] | Source: Federal Reserve Bank, Third District Above 20% 10-20% 0-10% Below 0%
Slide 16: Building on our key strengths
Building on our key strengths m Sound risk management m Strong capital position a Independent network of community banks/ decentralized operating philosophy m Coordinated product development process a Bank stock portfolio. m= Common technology/operations platform and investment/trust services platfo
Slide 17: Building on our strengths
Building on our strengths = Sound risk == = Limited management = exposure to loss Fulton Financiel Corporation 7
Slide 18: Fulton Financial Corporation
ullonFinanciel Corporation Source: SHL Financial Datasource
Slide 19: poration
poration
Slide 20: Loan diversification
Loan diversification | @ Consumer and Other | @ Residential Mortgage | @ Commercial Loans | @ Commercial Mortgage 14% Fulton Financiel Corporation
Slide 21: Experience of our lending staff
Experience of our lending staff ug 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.
Slide 22: Credit approval process
Credit approval process Centralized corporate credit policy Conservative credit culture Committee approval process Low individual lending authorities Local boards involved Fulton Bank board provides added experience Affiliate lender participation Active participation of Loan Review personnel in the
Slide 23: Summary of larger loans
Summary of larger loans g@ Only 20 relationships with commitments to lend greater than $20 million = Maximum individual commitment of $30 million m Average commercial loan commitment is $550,000 mu Loans and corresponding relationships are within Fulton’s geographical market area Fulton Financiel Co
Slide 24: Commercial loan concentration by industry
Commercial loan concentration by industry — @sorsso0n Industry %o Services 15.8 R/E - Rental 15.2 Construction 11.8 Manufacturing 411.0 Retail 9.5 Wholesale 8.0 Agriculture 69 Health Care 63 R/E - Subdividers 5.3 Transportation 40 R/E - Holding 3.4 Other 24 Financial Services 1.0
Slide 25: Top 50 / Peer / FFC comparison
Top 50 Peer ~- FFC "Source: SH Financial Drtsource
Slide 26: Interest rate shocks
Interest rate “shocks” 016300 mpact on Net Interest Income: Rate Change Nil Change (Annual) © % Change +300 bp +$ 9.7 million + 3.0% +200 bp +$ 63 ion + 2.0% +100 bp +$ 5.6 million + 1.8% -100 bp - $12.6 million - 3.9% -200 bp -$ 24.1 million - 15% -300 bp - $39.2 million -12.3% 6 Month Cumulative G
Slide 27: Deposit composition trends
Deposit composition trends June ‘02 June ‘01 Non Interest-Bearing Demand 17% 15% Interest-Bearing Demand 14% 12% Money Market 13% 11% Savings 11% 10% Time Deposits 40% 47% Customer Repos 5% 5% Total Deposits 100% 100%
Slide 28: Funding sources
Funding sources as of 6/30/02 6% 4% 10% 80% Fulton Financial Corporation
Slide 29: Building on our strengths
Building on our strengths a Strong == = Capital for Capital = growth, Position acquisitions, share buyback programs Fulton Financiel Corporation
Slide 30: Capital
Capital Geiareseiso) a Total Capital (GAAP): $861 million a Total Risk-based Capital: $845 million w Ratios: > Total RB Capital 14.3% > Tier 1 RB Capital 13.0% > Leverage Capital 9.9% Fulton Financiel Corporation 30
Slide 31: Leverage capital
Leverage capital Optimal Minimums: = Total Capital $730 million mu Leverage Ratio: 8.0% (approx.) mw Excess Capital: $130 MILLION Fulton Financiel Corporation
Slide 32: Moody's Investor Service
Moody’s Investor Service mg Short-term deposits: P-1 mu Long-term deposits A-1
Slide 33: Building on our strengths
Building on our strengths = Independent = Customer community _ retention banks and decentralized operating philosophy Fulton Financiel Corporation
Slide 34: Survey results
Survey results ™96% of customers were Extremely or Very Satisfied with their Fulton Financial affiliate bank
Slide 35: Building on our strengths
Building on our strengths = Coordinated = Continued product = non-interest development income growth Fulton Financiel Corporation
Slide 36: Centralized products
Centralized products w Investment g On-line banking management through the = Brokerage Internet services = Debit/credit cards a Non-property and mu Cash management casualty insurance » Specialized (whole life, term life, long- lending (leasing term care) ng | = International Ebi lel ice, services u
Slide 37: Composition of total revenues
Composition of total revenues Fulton Financiel Corporation
Slide 38: Other income (YTD 6/30/02)
Other income (YTD 6/30/02) 2002 2001 $ % (@oliarsin thousands) Invt Mgt & Trust $ 14743 $ 13,272 $ 1,471 11% Service Charges 7144 6,798 346 5% Overdraft Fees 6,367 4948 1,419 29% Mort. Sales & Serv. 6,056 $342 714 13% Cash Mgt Fees 3,602 2,837 765 27% Debit Card Fees 2324 1,872 452 24% Merchant Fees
Slide 39: Other income of selected affiliates
Other income of selected affiliates* (6 Months 2002 vs. 2001) BANK 2002 2001 Increase (én thousands) Delaware $ 824 $ 672 22.6% Woodstown 1,497 1,221 22.6 The Bank 1,904 1,563 21.8 Swineford 1,235 1,030 19.9 Skylands 833 703 18.5 “Bxciudes mortgage safe gains and impact of 6/01 branch acquisition. F
Slide 40: Investment management & trust services
Investment management & trust services 2000 ©2001 Fulton Financiel Corporation
Slide 41: Fulton Financial Advisors, n.a.
Fulton Financial Advisors, n.a. When formed: (may 4, 2000) $3.0 billion; $1.7 billion in assets under management Currently: $4.6 billion; $3.5 billion in assets under management (includes assets of Dearden, Maguire, Weaver and Barrett) Products and Services @ Personal trust @ Insurance @ Asset manag
Slide 42: Building on our strengths
Building on our strengths a Bank stock — = Additional portfolio = income source Fulton Financiel Corporation
Slide 43: Bank stock gains
Bank stock gains (percent contribution to EPS) Fulton Financiel Corporation
Slide 44: Building on our strengths
Building on our strengths a Common m= = Lower costs technology and operations Fulton Financiel Corporation
Slide 45: Efficiency ratio
Slide 46: Efficiency of previous acquisitions
Efficiency of previous acquisitions Bank Acquired Skylands Comm. Bank 2000 55.7 49.9 Lebanon Valley Farmers 1998 57.0 45.5 Delaware National Bank 1995, 69.1 62.5 Hagerstown Trust 1994 59.1 55.6 Futton Financal Corporation
Slide 47: Building on our strengths
Building on our strengths = Well-developed soa ia Continued acquisition — growth strategy and strong performance Fulton Financiel Corporation
Slide 48: Acquisitions
Acquisitions @ Drovers & Mechanics Bank = 18 Sovereign Bank Branches @ Dearden, Maguire, Weaver and Barrett, Ine. @ Skylands Community Bank = Ambassador Bank of the Commonwealth = Lebanon Valley National Bank m Peoples Bank of Elkton = Woodstown National Bank & Trust Company = Bank of Gloucester Cou
Slide 49: What do we look for?
What do we look for? = High growth areas uw Strong performance a Asset quality Talented people Fulton Financiel Corporation
Slide 50: New acquisitions: what changes?
New acquisitions What changes? mw Audit m Loan review a Investments = Asset/liability management = Operational platform Fulton Financiel Corporation
Slide 51: New acquisitions: what stays the same?
New acquisitions What stays the same? = Bank name = Board of Directors mu Management team a Employees Fulton Financiel Corporation
Slide 52: Benefits to new affiliates
Benefits to new affiliates mg Increased non-interest income due to introduction of new products and services a Additional capital uw Increased lending capacity m Reduced expenses mu Management focus on growth and customer service mw Proven merger/conversion expertise Fulton Financiel Corporation
Slide 53: Building on our strengths
Building on our strengths = Talented and = Outstanding dedicated — customer people service = Superior implementation of Strategic Plan elements Fulton Financiel Corporation
Slide 54: Employee opinion survey
Employee opinion survey g 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 55: Possible future expansion
Possible future expansion Pennsylvania =i d current Markets PP Maryland I Future Expansion LES Delaware
Slide 56: Looking ahead
Looking ahead = Continue to build on our strengths = Continue to rely on the expertise and skill of our employees a Stick to banking basics while preparing for the future u Implement more active capital management Fulton Financiel Corporation
Slide 57: Board of directors
Board of directors mu Focused on maximizing shareholder value with at least a 10% annual increase in earnings per share Fulton Financiel Corporation
Slide 58: Fulton Financial Corporation
Fulton Financial Corporation Rufus A. Fulton, Jr. Chairman and Chief Executive Officer R. Scott Smith, Jr. President and Chief Operating Officer Charles J. Nugent Sr. Executive Vice PresidentiCFO Richard J. Ashby, Jr. Executive Vice President Fulton Financial Corporation ‘One Penn Square Lancaster,