Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2004)
60 slides from Fulton Financial's investor presentation, Nov 4, 2004
Slide 1: Fulton Financial Corporation Investor Presentation
Fulton Financial Corporation Investor Presentation November 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 community banks and 3 financial services affiliates 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: Where are we located?
Where are we located? The Bank Delaware National Bank FNB Bank Fulton Bank Hagerstown Trust Lafayette Ambassador Bank Lebanon Valley Farmers Bank The Peoples Bank of Elkton Premier Bank Resource Bankshares Corporation Skylands Community Bank Swineford National Bank First Washington State Bank (Pendi
Slide 6: Assets by affiliate
Assets by affiliate (as of 9/30/04, in thousands) Fulton Bank $ 4,020,000 Lafayette Ambassador Bank 1,191,000 Resource Bank 1,117,000 The Bank 1,064,000 Lebanon Valley Farmers Bank 766,000 Premier Bank 521,000 Hagerstown Trust Company 458,000 Skylands Community Bank 426,000 Delaware National Bank 38
Slide 7: Possible Future Expansion
Possible Future Expansion Current Markets Pending Acquisitions Future Expansion Fulton Financial Corporation Pennsylvania Maryland New Jersey Delaware Virginia North Carolina
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?
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 (approximate dividend yield: 3.10%) Proven business model Consistent performance What have we accompl
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 June 2004.
Slide 12: Wall Street Journal ranking of banks by total return
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 total return than Fulton, including Wells Fargo, Bank of America, Marshall & Ilsley, Wilmington Trust, Mercantile, Synovus, Fifth Third, PNC, BB&T, Wachovia, J.P. Morgan
Slide 13: Five-year total return peer analysis
Five-year total return Peer analysis - 12/31/03 INTERNATIONAL BANCSHARES CORP 220.60 TCF FINANCIAL CORP 142.46 SOUTHWEST BANCORPORATION OF TX 117.92 FIRST REPUBLIC BANK 115.89 BANK OF HAWAII CORP 102.83 WHITNEY HOLDING CORP 96.03 ASSOCIATED BANC-CORP 91.25 VALLEY NATIONAL 88.61 GREATER BAY BANCORP 8
Slide 14: Stock highlights
Stock highlights (as of 09/30/04) Average daily trading volume 139,500 shares Number of analysts Number of market makers Number of shares outstanding 121.0 million Market capitalization $2.6 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 (1982-2003)
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 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 9/30/04 75% 10% 14% 1% 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 September 30, 2004) Total Capital (GAAP): $1.1 billion Total Regulatory Capital (Est): $945 million Ratios: Total Risk-based Capital (Est) 12.2% Tier 1 Risk-based Capital (Est) 11.0% Leverage Capital 8.4%
Slide 24: Progress of stock buyback
Progress of Stock Buyback 2.7 million shares repurchased since January 1, 2004 Average cost $20.58 per share 4 million share buyback announced June 15, 2004 1.4 million shares repurchased as of October 5, 2004
Slide 25: 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 National Bank Bank
Slide 26: Resource Bankshares Corporation
Resource Bankshares Corporation Acquired on April 1, 2004 Current assets of $1.1 billion; 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 averag
Slide 27: First Washington FinancialCorp
First Washington FinancialCorp Assets of $486 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 First Washington Branches Fulton Financial Branches
Slide 29: What do we look for?
High growth areas Dynamic market demographics Strong performance Asset quality Talented and dedicated staff Compatible corporate culture What do we look for?
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
Slide 31: What stays the same?
What stays the same? Bank name Board of Directors Management team Employees Acquisitions in new markets
Slide 32: 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 Continued local autonomy and decision-making Benefits to new affiliates
Slide 33: 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 34: Fulton Financial Advisors, N.A.
Includes Dearden Maguire Weaver and Barrett, LLC and Fulton Insurance Services Group As of September 30, 2004: $5.3 billion; $3.9 billion in assets under management Products and Services Personal trust Asset management Retirement services Brokerage Insurance Corporate trust Cash management Private b
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 24.9% 27.0% 25.0% 22.9% 19.4% 17.9% 16.0% 16.2% 16.9% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%
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 (9/30/04) 11% 30% 8% 15% 36% Consumer and Other Residential Mortgage Commercial Loans Home Equity Commercial Mortgage
Slide 39: Larger loan relationships
26 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 Summary of larger loans
Slide 40: Commercial loan concentration by industry
Commercial loan concentration by industry (as of 9/30/04) Industry % R/E - Rental 18.4 Construction 15.6 Services 13.4 Manufacturing 9.6 Health Care 8.3 Retail 8.1 Agriculture 8.1 Wholesale 5.4 Other 4.3 Arts and Entertainment 3.6 Financial Services 2.7 Transportation 2.5
Slide 41: Nine months ended Sept. 30, 2004
Nine months ended Sept. 30, 2004 $0.94 Net income per share (3.3% increase over 2003) $0.482 Cash dividends per share (9.3% increase over 2003) 1.47% Return on assets 14.34% Return on equity 18.38% Return on equity (tangible) 55.50% Efficiency ratio
Slide 42: Average loan growth
Average Loan Growth (YTD Sept) $ % Commercial $2,070 $1,700 $370 22% Comm’l Mort 2,460 1,870 32% Resid Mort 21% Consumer 1,560 1,340 16% Total Loans $6,770 $5,470 1,300 24% (dollars in millions)
Slide 43: Average deposit growth
Average Deposit Growth (YTD Sept) $ % Nonint DDA $1,360 $1,170 $190 16% Int DDA 1,340 1,120 20% Savings/MMDA 1,830 1,610 14% CD’s 2,680 2,500 7% Cash Mgt 21% Total Deposits $7,610 $6,730 $880 13% (dollars in millions)
Slide 44: Loan-to-deposit ratio
Loan-to-Deposit Ratio (avg) YTD04 FFC Peer Top 50
Slide 45: Deposit composition trends
Deposit composition trends As of September 30 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Non Int Bearing Demand NOW, MMDA, Savings Time Deposits Customer Repos
Slide 46: Peer group
Associated Banc-Corp BancorpSouth, Inc. Bank of Hawaii Corporation BOK Financial Corporation Citizens Banking Corporation City National Corporation Colonial BancGroup, Inc. Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. First Citizens BancShares, Inc. First Midwest Bancorp, Inc. First Republic
Slide 47: Net charge-offs to average loans
Source: SNL Financial Datasource Net charge-offs to average loans 0.26 0.20 0.05 - 0.30 0.60 0.90 Top 50 Peer FFC
Slide 48: Non-performing assets to total assets
Source: SNL Financial Datasource Non-performing assets to total assets 0.41 0.40 0.34 0.20 0.60 1.00 1.40 1.80 Top 50 Peer FFC
Slide 49: Net interest margin vs peers
Source: SNL Financial Datasource Net interest margin 3.65 3.77 3.80 3.50 4.00 4.50 5.00 5.50 Top 50 Peer FFC
Slide 50: Net interest margin
Net interest margin 3rd quarter 2003: 3.62% 2nd quarter 2004: 3.73% 3rd quarter 2004: 3.88%
Slide 51: Investments/total assets
Investments/Total Assets (avg.) YTD04 FFC Peer Top 50
Slide 52: Asset/Liability management
Asset/Liability Management Interest rate “shocks” (as of 09/30/04) Rate Change NII Change (Annual) % Change +300 bp + $22.0 million + 6.2% +200 bp + $15.3 million + 4.3% +100 bp + $9.6 million + 2.7% - 100 bp - $19.2 million - 5.4% Source: FFC Asset/Liability Modeling
Slide 53: Investment portfolio
Investment portfolio Portfolio Components Ending Bal. Average Credit Mortgage-backed securities $1,754.8 3.4 AAA - agency issued U.S. treasuries and agencies 85.1 1.3 AAA Municipals bonds 258.4 3.5 AAA—insured Corp & bank issued trust pfd 75.1 21.5 various — 5 yrs call Bank stocks 66.2 NA not rated
Slide 54: Loan mix
Loan Mix (9/30/04) Fixed rate loans = 34% Adjustable rate loans = 66%
Slide 55: Bank stock gains
Bank stock gains (percent contribution to EPS) 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Slide 56: Efficiency ratio
Source: SNL Financial Datasource Efficiency ratio 55.5 57.0 57.7 45.0 50.0 55.0 60.0 65.0 Top 50 Peer FFC
Slide 57: 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 58: 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 59: Overview
Overview Shareholders maximize shareholder value Customers create financial success Employees create career success Communities create prosperity
Slide 60: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Fulton Financial — Investor Presentation (November 2004) on 6ix