Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — KBW Honor Roll (July 2004)
58 slides from Fulton Financial's conference presentation, Jul 27, 2004
Slide 1: Investor Presentation KBW Honor Roll
Exhibit 99.1 Investor Presentation KBW Honor Roll July 27, 2004
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 profile Strategic initiatives Asset quality Future direction Financial performance
Slide 4: Fulton Financial profile
Fulton Financial profile Regional financial holding company (formed in 1982) 12 bank subsidiaries and 3 financial services subsidiaries in 5 states Asset size: $10.6 billion Second largest commercial bank headquartered in Third Federal Reserve District Fulton Bank founded in 1882
Slide 5: Affiliate banks map
Delaware Nationa! Bank 1D FNB Bank 1 Futon Bank Bh Hagerscown Tro i Lafayette Arbasatdor Bank {Lebanon Valley Farmers Bank The Peoples Bank of Eton Resource Bankshares Corporation 1B Skylands Community Bene Fret Wsehington State Bank one Delaware
Slide 6: Assets by affiliate
Assets by affiliate (as of 6/30/04, in thousands) Fulton Bank $ 4,046,000 Lafayette Ambassador Bank 1,194,000 Resource Bank 1,060,000 The Bank 1,048,000 Lebanon Valley Farmers Bank 762,000 Premier Bank 525,000 Hagerstown Trust Company 454,000 Skylands Community Bank 441,000 Delaware National Bank 37
Slide 7: Fulton Financial Corporation
Fulton Financial Corporation
Slide 8: 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 9: Corporate ethics
Corporate ethics Longstanding written code of conduct No “gray” areas Expectations clearly outlined
Slide 10: What have we accomplished?
What have we accomplished? 8.8% compounded annual growth rate in earnings per share 22 consecutive years of record earnings 30 consecutive years of dividend increases 10.3% compounded annual growth rate in dividends per share (current dividend yield: 3.23%) Proven business model Consistent performan
Slide 11: Five-year performance
Five-year performance 1998 2003 Net income per share $ .84 $ 1.22 Cash dividends per share $ .35 $ .59 Return on assets 1.60% 1.57% Return on equity 15.06% 15.45% Efficiency ratio 55.30% 53.80% Dividend payout 41.60% 48.70% Restated for 5% stock dividend paid in May 2004.
Slide 12: Wall Street Journal bank return ranking
Wall Street Journal (3/8/04) Ranking of Banks by 5-Year Average Compound Annual Total Return* 62 banks listed 43 banks had a lower than Fulton, including Wells Fargo, Bank of America, Marshall & Ilsley, Wilmington Trust, Mercantile, Synovus, Fifth Third, PNC, BB&T, Wachovia, J.P. Morgan Chase and Ba
Slide 13: Five-year total return
Five-year total return (Peer analysis – 12/31/03) Rank Peer Banks 5 Year Total Return 1 Commerce Bancorp Inc. 140.98 2 North Fork Bancorporation 97.50 3 Valley National Bancorp 87.87 4 FULTON FINANCIAL CORP. 80.85 5 Hudson United Bancorp 67.50 6 Provident Bankshares Corp. 63.60 7 First Commonwealth
Slide 14: Stock highlights
Stock highlights (as of 06/30/04) Average daily trading volume 161,097 Number of analysts 12 Number of market makers 35 Number of shares outstanding 121.9 million Market capitalization $2.5 billion Annual meeting attendance 2,000 shareholders
Slide 15: Employee stock ownership
Employee stock ownership 80% of our employees collectively own more than 2 million shares of Fulton Financial Corporation stock Stock options help us to retain key high-performing employees
Slide 16: Stock performance
Stock performance (1982 - 2003) WITHOUT dividend reinvestment: 15% compounded annual rate of return WITH dividend reinvestment: 19% compounded annual rate of return
Slide 17: Employee retention
Employee retention 1999 2000 2001 2002 2003 Exempt Non-exempt Overall
Slide 18: Employee opinion survey
Employee opinion survey Customer service Management team performance Company image and mission Team orientation Technology and systems Training and development Sales orientation Work effectiveness Pay and benefits Employee satisfaction (Survey administered by BAI Survey Services)
Slide 19: Customer satisfaction
Customer satisfaction 96% of our customers are Extremely or Very Satisfied with their Fulton Financial affiliate bank 86% of our commercial customers are Satisfied or Very Satisfied with us Compared to national average of 55% of customers who are very satisfied with their financial institution* *Sou
Slide 20: Funding sources
Funding sources as of 6/30/04 10% 15% 1% 74% Deposits and Customer Repurchase Agreements Capital (GAAP) Other Borrowings Other Liabilities
Slide 21: Community involvement
Community involvement Employees are actively involved in their own communities The community benefits from this support The banks receive additional business as a result of the relationships and goodwill that are developed
Slide 22: Corporate strategic initiatives
Corporate strategic initiatives Achieving consistent earnings growth Maintaining high asset quality Expanding the franchise through our well-developed acquisition strategy Diversifying revenue stream by increasing the contribution of non-interest income Managing capital
Slide 23: Capital
Capital (At June 30, 2004) Total Capital (GAAP): $1.1 billion Total Regulatory Capital (Est): $950 million Ratios (Est): Total Risk-based Capital 12.7% Tier 1 Risk-based Capital 11.5% Leverage Capital 8.4%
Slide 24: Progress of stock buyback
Progress of Stock Buyback 2.4 million shares repurchased since January 1, 2004 •Average cost $20.08 per share 4 million share buyback announced June 15, 2004 340,000 shares repurchased as of July 23, 2004
Slide 25: Acquisitions
Acquisitions First Washington State Bank (pending) Resource Bank Premier Bank Drovers & Mechanics Bank 18 Sovereign Bank Branches Dearden, Maguire, Weaver and Barrett, Inc. Skylands Community Bank Ambassador Bank of the Commonwealth Lebanon Valley National Bank Peoples Bank of Elkton Woodstown Natio
Slide 26: Resource Bankshares Corporation
Resource Bankshares Corporation Acquired on April 1, 2004 Assets of $860 million; headquartered in Virginia Beach, Virginia The only Virginia-based bank with offices in Virginia’s three major markets Market area accounts for over 71% of all deposits in state of Virginia Senior lenders average 24 yea
Slide 27: First Washington FinancialCorp
First Washington FinancialCorp Assets of $483 million Headquartered in Windsor, NJ Banking subsidiary: First Washington State Bank 16 branches in Mercer, Monmouth and Ocean Counties in New Jersey Enhances our existing northern and southern New Jersey franchise by extending our presence into the cent
Slide 28: First Washington Branch Locations
First Washington Branch Locations
Slide 29: What do we look for?
What do we look for? High growth areas Dynamic market demographics Strong performance Asset quality Talented and dedicated staff Compatible corporate culture
Slide 30: Acquisitions in new markets: what changes?
Acquisitions in new markets What changes? Loan review Investments Asset/liability management Compliance Common operating platform Audit Fulton Financial Corporation
Slide 31: Acquisitions in new markets: what stays the same?
Acquisitions in new markets What stays the same? Bank name Board of Directors Management team Employees
Slide 32: Benefits to new affiliates
Benefits to new affiliates Increased non-interest income due to introduction of new products and services Additional capital Increased lending capacity Reduced expenses Proven merger/conversion expertise
Slide 33: Product availability
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
Slide 34: Fulton Financial Advisors, N.A.
Fulton Financial Advisors, N.A. Includes Dearden Maguire Weaver and Barrett, LLC and Fulton Insurance Services Group As of June 30, 2004: $5.2 billion; $3.8 billion in assets under management Products and Services Personal trust Asset management Retirement services Brokerage Insurance Corporate trus
Slide 35: Fulton Mortgage Company
Fulton Mortgage Company Coordinates residential mortgage lending throughout 11 affiliates Expanded, competitive product line to customers of all affiliates In partnership with each affiliate, focused management team on residential mortgages Entry into new markets for FFC Record originations in 2003
Slide 36: Other income as a percent of total income
Other Income As a Percent of Total Income 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 16.0% 16.2% 16.9% 17.9% 19.4% 22.9% 25.0% 27.0% 24.8% 96 97 98 99 00 01 02 03 06/04
Slide 37: Moody's and Fitch ratings
Moody’s Investor Service Short-term rating P-1 Long-term rating: Issuer A-2 Lead Bank Deposits A-1 Outlook: Positive Fitch Ratings Short-term rating F-1 Long-term rating A Outlook: Stable
Slide 38: Loan diversification
Loan diversification (6/30/04) 36% 9% 11% 30% 14% Consumer and Other Residential Mortgage Commercial Loans Home Equity Commercial Mortgage
Slide 39: Summary of larger loan relationships
Summary of larger loans 25 relationships with commitments to lend of $20 million or more Maximum individual commitment of $30 million Average commercial loan commitment is $550,000 Loans and corresponding relationships are within Fulton’s geographical market area
Slide 40: Commercial loan concentration by industry
Commercial loan concentration by industry (as of 6/30/04) Industry % R/E—Rental 17.1 Construction 16.1 Services 10.6 Manufacturing 10.1 Retail 8.3 Health Care 8.3 Agriculture 8.3 Other 7.8 Wholesale 5.3 Arts and Entertainment 3.8 Transportation 2.5 Financial Services 1.8
Slide 41: Six months ended June 30, 2004
Six months ended June 30, 2004 $ 0.62 Net income per share (1.6% increase over 2003) $ 0.317 Cash dividends per share (10.1% increase over 2003) 1.46% Return on assets 14.45% Return on equity 55.90% Efficiency ratio
Slide 42: Average loan growth
Average Loan Growth (YTD June) 2004 2003 $ % (dollars in millions) Commercial $ 2,030 $ 1,710 $ 320 19% Comm’l Mort 2,400 1,770 630 36% Resid Mort 620 560 60 11% Consumer 1,520 1,330 190 14% Total Loans $ 6,570 $ 5,370 1,200 22%
Slide 43: Average deposit growth
Average Deposit Growth (YTD June) 2004 2003 $ % (dollars in millions) Nonint DDA $1,320 $1,120 $200 18% Int DDA 1,310 1,070 240 22% Savings/MMDA 1,810 1,570 240 15% CD’s 2,640 2,490 150 6% Cash Mgt 390 300 90 30% Total Deposits $7,470 $6,550 $920 14%
Slide 44: Deposit composition trends
Deposit composition trends As of June 30 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 Non Int Bearing Demand NOW, MMDA, Savings Time Deposits Customer Repos
Slide 45: Peer group
Peer group Commerce Bancorp Inc. First Commonwealth Financial First Financial Bancorp FirstMerit Corp. Fulton Financial Corp. Hudson United Bancorp Mercantile Bankshares Corp. North Fork Bankcorporation Provident Bankshares Corp. Riggs National Corp. Sky Financial Group Inc. Susquehanna Bancshares I
Slide 46: Net charge-offs to average loans
Net charge-offs to average loans 0.90 0.60 0.30 - 0.33 0.24 0.05 90 91 92 93 94 95 96 97 98 99 00 01 02 03 6/04 Top 50 Peer FFC Source: SNL Financial Datasource
Slide 47: Non-performing assets to total assets
Non-performing assets to total assets 1.80 1.40 1.00 0.60 0.20 0.47 0.39 0.31 Top 50 Peer FFC Source: SNL Financial Datasource
Slide 48: Net interest margin
Net interest margin 5.50 5.00 4.50 4.00 3.50 3.76 3.76 3.55 94 96 00 02 Top 50 Peer FFC Source: SNL Financial Datasource
Slide 49: Asset/Liability Management
Asset/Liability Management Interest rate “shocks” (as of 06/30/04) Rate Change NII Change (Annual) % Change +300 bp + $ 19.2 million + 5.6% +200 bp + $ 13.5 million + 3.9% +100 bp + $ 8.7 million + 2.5% -100 bp - $ 5.3 million - 18.2% Source: FFC Asset/Liability Modeling
Slide 50: Investment portfolio
Investment portfolio Portfolio Components ( in millions) Ending Bal. 06/30/2004 Average Life (yrs.) Credit Rating Mortgage-backed securities $ 1,876.9 3.4 AAA - agency issued U.S. treasuries and agencies 114.7 0.2 AAA Municipals bonds 268.5 4.1 AAA - insured Corp & bank issued trust pfd 74.8 23.6 va
Slide 51: Loan Mix
Loan Mix (6/30/04) Floating rate loans = 45% Fixed rate loans = 55%
Slide 52: Bank stock gains
Bank stock gains (percent contribution to EPS) 9 % 8 % 7 % 6 % 5 % 4 % 3 % 2 % 1 % 0 % 91 92 93 94 95 96 97 98 99 00 01 02 03 6/04
Slide 53: Efficiency ratio
Efficiency ratio 65.0 60.0 55.0 50.0 45.0 57.9 56.8 55.9 90 91 92 93 94 95 96 97 98 99 00 01 02 03 6/04 Top 50 Peer FFC Source: SNL Financial Datasource
Slide 54: Other Expenses
Other Expenses (YTD June) 2004 2003 $ % (dollars in thousands) Salaries & Benefits $79,160 $67,800 $11,360 17% Occupancy & Equip. 16,770 15,160 1,610 11% Data Proc. & Software 7,240 6,770 470 7% Supplies & Postage 4,800 4,160 640 15% Advertising 3,440 3,020 420 14% State Tax 2,810 2,200 610 28% Tele
Slide 55: Corporate Governance
Corporate Governance Internal controls over financial reporting process SOX and NASDAQ listing standards Financial expert designated Independent directors determined Executive sessions Executive compensation and nominating committees SOX compliant written Code of Conduct Corporate disclosure committ
Slide 56: Looking ahead
Looking ahead Continued focus on: Strong asset quality Growth in non-interest income, particularly from Advisors Expansion of franchise geographically Increased loan activity Core deposit growth
Slide 57: Overview
Overview Shareholders maximize shareholder value Customers create financial success Employees create career success Communities create prosperity
Slide 58: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com