Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Ferris Baker Watts October 2005
61 slides from Fulton Financial's conference presentation, Oct 26, 2005
Slide 1: Fulton Financial Corporation, Ferris Baker Watts October 2005
Fulton Financial Corporation Ferris Baker Watts October 2005
Slide 2: Presentation Outline
Presentation Outline Corporate profile Strategic initiatives Capital Acquisition strategy Loan summary Relationship banking strategy Financial performance
Slide 3: Fulton Financial Profile
Fulton Financial Profile Regional financial holding company (formed in 1982) 14 community banks and 3 financial services affiliates in 5 states 232 community banking offices Asset size: $12.3 billion Market capitalization: $2.5 billion
Slide 4: Proven business model
Proven business model Consistent performance 8.8% compounded annual growth rate in earnings per share 23 consecutive years of record earnings 31 consecutive years of dividend increases 10.3% compounded annual growth rate in dividends per share What have we accomplished?
Slide 5: Where are we located
Where are we located Pennsylvania [Resource Bankshares Corporation 1M Skylans Comm Delaware 1 Columbia Bank ay FULTON FINANCIAL ‘CORPORATION 2 2 8 8 & & FoltonFinancial Copontion | © 2 oo
Slide 6: Current Markets and Possible Future Expansion
Possible —_ “oP a Future Expansion = _ - CS Current Markets if a
Slide 7: 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 8: Peer Group Five-Year Total Return
17 South Financial Group, Inc. (The) 18 First Midwest Bancorp, Inc. 19 Susquehanna Bancshares, Inc. 20 United Bankshares, Inc. 21 Sky Financial Group Inc. 22 Mercantile Bankshares Corporation 23 Citizens Banking Corporation 24 Valley National Bancorp 25 Wilmington Trust Corporation 26 BancorpSouth,
Slide 9: Stock Performance (1982 - 2004)
Stock Performance (1982 - 2004) WITHOUT dividend reinvestment: 15% compounded annual rate of return WITH dividend reinvestment: 19% compounded annual rate of return
Slide 10: Corporate Strategic Initiatives
Corporate Strategic Initiatives Expanding the franchise through our disciplined acquisition strategy Diversifying revenue stream by increasing the contribution of non-interest income Deploying capital Maintaining high asset quality Achieving consistent earnings growth Sound risk management
Slide 11: Recent Acquisitions
Recent Acquisitions First Washington State Bank - Windsor, NJ Acquired on 12/31/04 Assets of $598 million Somerset Valley Bank Acquired on 7/1/05 Assets of $540 million Headquartered in Somerville, NJ 12 branches in Somerset, Hunterdon and Middlesex counties
Slide 12: What do we look for?
Strong performance Asset quality High growth areas Dynamic market demographics Talented and dedicated staff Compatible corporate culture What do we look for?
Slide 13: Acquisitions In New Markets
Acquisitions In New Markets What changes? Loan review Investments Asset/liability management Compliance Common operating platform Audit Accounting What stays the same? Bank name Board of Directors Management team Employees
Slide 14: In-Market Consolidation
In-Market Consolidation 24 acquisitions since 1982 14 affiliate banks today Potential consolidation as market coverage increases Lehigh Valley - four prior acquisitions now comprise our second largest affiliate
Slide 15: Benefits To New Affiliates
Continued local autonomy and decision-making Increased lending capacity Additional capital Proven merger/conversion expertise Reduced expenses Increased income diversification due to introduction of new products and services Benefits To New Affiliates
Slide 16: 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 Product Availability
Slide 17: Other Income As a Percent of Total Income
Other Income As a Percent of Total Income (9/30/05)
Slide 18: Capital (9/30/05 - Estimates)
Capital (9/30/05 - Estimates) Total Capital (GAAP): $1.3 billion Total Regulatory Capital (est): $1.1 billion Ratios (est): Total Risk-Based Capital 12.00% Tier 1 Risk-Based Capital 9.90% Leverage Capital 7.60%
Slide 19: Stock Buyback
Stock Buyback Completed accelerated repurchase in May 2005 of 4.3 million share board-authorized program
Slide 20: Loan Diversification
Loan Diversification (9/30/05) Commercial Commercial Mortgage Residential Mortgage Construction Home Equity Consumer and other East 2376.6 2734.4 593.2 843.7 1183.6 594.2 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9
Slide 21: Summary of Larger Loans
27 relationships with commitments to lend of $20 million or more Maximum individual commitment of $30 million Average commercial loan size is $575,000 Loans and corresponding relationships are within Fulton's geographical market area Summary of Larger Loans
Slide 22: Commercial Loan Concentration By Industry
Commercial Loan Concentration By Industry (as of 9/30/05)
Slide 23: Credit Ratings
Short-term rating P-1 Long-term rating Issuer A-2 Lead Bank Deposits A-1 Outlook Stable Credit Ratings Moody's Investor Services Short-term rating F-1 Long-term rating A Outlook Stable Fitch Ratings Standard & Poors Credit rating BBB+ Outlook Stable Dominion Bond Rating Service Credit rating A Outlo
Slide 24: Our Relationship Strategy
Our Relationship Strategy Long-term successful employees Long-term successful customers Long-term successful shareholders
Slide 25: Employee Retention
Employee Retention 2000 2001 2002 2003 2004 Exempt 88 88.8 91.1 92.4 87.6 Non-exempt 75 77.3 78.8 78.4 73.5 Overall 78.7 79.7 81.2 82.6 78.2
Slide 26: Employee Stock Ownership
Employee Stock Ownership 80% of our employees collectively own approximately 4 million shares of Fulton Financial Corporation stock Stock options help us to retain key high-performing employees
Slide 27: Employee Opinion Survey
Employee Opinion Survey Quality and Improvement Commitment Immediate Supervisor Job Satisfaction Service Climate Company Image Training and Development Organizational Leadership Work Process Communication Pay and Benefits Teamwork and Collaboration (Survey administered by BAI Survey Services)
Slide 28: Employee Opinion Survey
Employee Opinion Survey Conducted every three years Over 3,000 employees surveyed (85%) Completed in June 2005 FFC responses exceed BAI national averages in 10 of the 12 categories
Slide 29: Customer Satisfaction
Customer Satisfaction *Retail: 90% extremely/very satisfied Commercial: 90% extremely/very satisfied Fulton Financial Advisors: 80+% very satisfied/satisfied Fulton Mortgage Company: 99% of expectations met/exceeded 98% would recommend FMC to others *Compared to national average of 62% Source: 2005
Slide 30: Quarter ended September 30, 2005
Quarter ended September 30, 2005 $42.1 million Net income (17.0% increase over restated 2004) (7.7% over originally reported 2004) $ 0.27 Net income per share (17.4% increase over restated 2004) (3.8% over originally reported 2004) $ 0.145 Cash dividends per share (9.8% increase over 2004) 1.37% Ret
Slide 31: Income Statement Summary
Income Statement Summary (9/30/05)
Slide 32: Average Loan Growth
Average Loan Growth (9/30/05)
Slide 33: Internal Loan Growth
Internal Loan Growth (9/30/05)
Slide 34: Funding Sources
Funding Sources (9/30/05) Deposits and Customer Repurchase Agreements Borrowings GAAP Capital Other Liabilities East 75 13 11 1 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9
Slide 35: Average Deposit Growth
Average Deposit Growth (9/30/05)
Slide 36: Internal Deposit Growth
Internal Deposit Growth (9/30/05)
Slide 37: Net Interest Margin (quarterly)
Net Interest Margin (quarterly) 3/02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 9/04 12/04 3/05 6/05 9/05 FFC 4.44 4.48 4.33 4.17 4.06 3.91 3.62 3.73 3.79 3.73 3.88 3.92 3.95 3.92 3.92
Slide 38: Net Interest Margin vs Peers
Net Interest Margin (9/30/05) 94 95 96 97 98 99 00 01 02 03 04 6/05 9/05 FFC 4.73 4.68 4.73 4.72 4.58 4.56 4.31 4.27 4.35 3.82 3.83 3.94 3.93 Peer 4.62 4.55 4.52 4.58 4.33 4.28 4.08 4.09 4.29 3.91 3.82 3.78 Top 50 4.54 4.46 4.36 4.36 4.11 4.02 3.86 4.03 4.23 3.8 3.68 3.67
Slide 39: Asset/Liability Management
Asset/Liability Management 9/30/05 Rate Change NII Change (Annual) % Change +300 bp + $ 22.9 million + 5.6% +200 bp + $ 15.5 million + 3.8% +100 bp + $ 8.2 million + 2.0% - 100 bp - $ 12.4 million - 3.0% - 200 bp - $ 24.4 million - 6.0% Interest rate "shocks"
Slide 40: Treasury Yields at Different Rate Shocks
Treasury Yields at Different Rate Shocks Quarter Ending 9/30/05 8.00 7.00 200 6.00 —_ = -100 — 8000 se rat 2400 ———~* —— e100 it = + a 3.00 — -=-200 2.00 300 41.00 0.00 N o = oa ~ 3s 8
Slide 41: Loan Mix
Loan Mix (9/30/05) Fixed Floating Adjustable FFC 32 41 27 West 30.6 38.6 34.6 North 45.9 46.9 45
Slide 42: Investment Portfolio
Investment Portfolio (9/30/05)
Slide 43: Bank Stock Gains
Bank Stock Gains (9/30/05 percent contribution to EPS) 94 95 96 97 98 99 00 01 02 03 04 YTD05 East 3.8 4.6 3.9 5.8 7.7 4.9 5.4 6 3.6 6.6 6.2 2.5
Slide 44: Net Charge-Offs To Loans
Net Charge-Offs To Loans (9/30/05) 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 6/05 9/05 FFC 0.15 0.17 0.16 0.18 0.08 0.11 0.06 0.17 0.14 0.19 0.19 0.2 0.22 0.17 0.06 0.02 0.02 Peer 0.49 0.51 0.57 0.24 0.16 0.18 0.2 0.22 0.23 0.24 0.27 0.34 0.32 0.26 0.2 0.18 Top 50 0.66 0.75 0.7 0.43 0.22 0.24 0.3
Slide 45: Nonperforming Assets To Assets
Nonperforming Assets To Assets (9/30/05) 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 6/05 9/05 FFC 0.62 0.55 0.65 0.65 0.73 0.62 0.57 0.58 0.54 0.46 0.42 0.44 0.47 0.33 0.3 0.27 0.39 Peer 1.14 1.39 1.07 0.95 0.64 0.56 0.53 0.47 0.44 0.42 0.45 0.53 0.54 0.46 0.39 0.33 Top 50 1.59 1.65 1.25 0.92 0.65
Slide 46: Other Income Detail
Other Income Detail (9/30/05)
Slide 47: Other Income Detail Table
2005 2004 $ (dollars in thousands) Invt Mgt & Trust $ 25,510 $ 25,620 $ (110) 0% Mort. Sales Gains 6,360 5,640 720 13% Overdraft Fees 12,650 12,250 400 3% Service Charges 10,230 11,410 (1,180) -10% Cash Mgt Fees 5,880 5,830 50 1% Success Card Fees 4,640 4,090 550 13% Other 17,700 14,210 3,490 25% To
Slide 48: Efficiency Ratio
Efficiency Ratio (9/30/05) 93 94 95 96 97 98 99 00 01 02 03 04 6/05 9/05 FFC 61.7 60.9 60.1 56.2 54 54.1 51.5 51.1 53.1 52.2 53.5 55.1 55.4 55.1 Peer 61.7 61.6 60.5 58.6 57.1 55.3 55.7 54.9 55.7 57.1 57.7 58.8 57.3 Top 50 60.7 61.2 59.8 58.1 57.9 57 56.2 56 55.2 54.7 57.9 58.6 57.3
Slide 49: Other Expense Detail
Other Expense Detail (9/30/05)
Slide 50: Other Expense Detail Table
2005 2004 $ % (dollars in thousands) Salaries & Benefits $ 115,720 $ 115,290 $ 430 0% Occupancy & Equip. 24,980 23,580 1,400 6% DPSoftware/Telecom 14,580 14,220 360 3% Amortization 2,680 3,330 (650) = -20% Other Expenses 35,210 34,600 610 2% Total $ 193170 $ 191,020 $ 2,150 1%
Slide 51: Looking Ahead
Looking Ahead Continued focus on: Strong asset quality Continued strong loan growth Growth in net interest margin Growth in non-interest income Core deposit growth Expansion of franchise geographically Consistent EPS growth
Slide 52: Columbia Bancorp, John M. Bond, Jr. Chairman and CEO
Columbia Bancorp John M. Bond, Jr. Chairman and CEO
Slide 53: Forward-looking statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements are based on Columbia Bancorp's current intent, belief and expectation
Slide 54: Company Overview
Company Overview $1.3 billion community bank holding company for The Columbia Bank, headquartered in Columbia, MD Consistently one of the fastest growing and most profitable de novo institutions since its founding in 1987 Focused entirely on building a premier community banking franchise in the Balt
Slide 55: Financial Performance (9/30/05)
Financial Performance (9/30/05) Assets: $1.31 billion Net income: $11.84 million / up 23.1% Earnings per share (diluted): Up 26.2% Return on equity: 17.32% Return on average assets: 1.27%
Slide 56: Asset Quality
Asset Quality Non-performing assets and past-due loans ..04% of total assets Ratio of non-performing assets to past due loans ..07% (9/30/04) to .06% (9/30/05)
Slide 57: Footprint
Footprint MARYLAND Home Market Areas Target Market Areas Branch office Headquarters office Washington D.C Full Service Retirement Branches Branches Baltimore County/City 3 3 Howard County 8 2 Montgomery County 3 -- Prince George's County 5 -- Total 19 5 Avg. customer funding $54,047 $10,809 per bran
Slide 58: Demographics
Demographics Vibrant and diverse Baltimore / Washington corridor economy providing excellent growth opportunities Affluent, well-educated retail customer base Concentration of small and mid-sized businesses Large, stable government employment base Attractive location for "new economy" firms Median h
Slide 59: Franchise Value: Core Market Share
Franchise Value: Core Market Share Howard County Deposits Market Share as of June 30, 2005: (dollars in millions)
Slide 60: Talented and dedicated staff, compatible culture
Talented and dedicated staff Compatible corporate culture People and relationships first Fulton and Columbia
Slide 61: Fulton Financial Corporation contact
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com