Slide 1: Investor Presentation November 2007
Investor Presentation November 2007 Fulton Financial Corporation
Slide 2: 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, return on average equity, effic
Slide 3: Presentation Outline
Corporate Overview Growth Initiatives Challenges Financial Performance Presentation Outline
Slide 4: Fulton Financial Profile
Regional financial holding company (formed in 1982) 11 community banks and 3 financial services affiliates in 5 states 267 community banking offices Asset size: $15.4 billion Market capitalization: $2.2 billion Fulton Financial Profile
Slide 5: What have we accomplished?
25 consecutive years of record earnings 34 consecutive years of dividend increases 9.8% compounded annual growth rate in dividends per share 8.5% compounded annual growth rate in earnings per share (last 5 years = 7.0%) 25 bank acquisitions What have we accomplished?
Slide 6: 10-year Dividend History
0.2423 0.2672 0.3280 0.3662 0.4524 0.4932 0.5400 0.5810 0.2942 0.4050 0.5975 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10-year Dividend History
Slide 7: Quarterly Cash Dividend
15 cents Dividend yield: approximately 4.7% Quarterly Cash Dividend
Slide 8: Capital (9/30/07 estimates)
Total Capital (GAAP): $1.55 billion Total Regulatory Capital: $1.42 billion Ratios (estimated): Total Risk-Based Capital 12.30% Tier 1 Risk-Based Capital 9.70% Leverage Capital 7.70% Capital (9/30/07 estimates)
Slide 9: Stock Repurchase
April 2007: Announced 1 million share buyback through 12/31/07 Long history of repurchasing our shares Stock Repurchase
Slide 10: Key Organic Growth Markets
Key Organic Growth Markets
Slide 11: Virginia Organic Growth Initiatives
Resource Bank to become division of Fulton Bank Transition from a nationwide mortgage lender into a strong community bank Core funding and lending activities Open new branches in strongest eastern Virginia markets Utilize Fulton critical mass Virginia Organic Growth Initiatives
Slide 12: FFC Affiliates in Affluent Markets
*Source: Bancology Vol. 24, September 2007 County National Ranking Ranking in State Median HH Ranking FFC Affiliate Hunterdon, NJ #2 #1 $95,981 Skylands Bank Loudoun, VA #3 #1 $93,034 Resource Bank Fairfax, VA #4 #2 $91,851 Resource Bank Morris, NJ #6 #2 $90,417 Skylands Bank Somerset, NJ #7 #3 $90,
Slide 13: Serving PA's Strongest Markets
*Source: SNL, Median HH Income, 2006 data County Rank Projected Change 2006 - 2011 Median HH Income 2006 Projected HH Income Change 2006 - 2011 Chester, PA 1 9.63% $83,001 25.46% Montgomery, PA 2 3.05 77,383 23.86 Bucks, PA 3 4.06 76,234 23.89 Delaware, PA 4 0.17 63,220 20.68 Cumberland, PA 5 4.37 5
Slide 14: Q3/07
Tough quarter - $16.0 million charge related to Resource Mortgage Reported EPS of .19 cents Good commercial loan growth: 12% annualized Asset quality good Cash Management fees strong Reviewing Resource Mortgage records Higher funding costs due to CD growth Loan loss provision increased Q3/07
Slide 15: Components of $16 Million Charge
9.9 million – 3.6 million – 2.2 million – potential borrower misrepresentation added to existing reserves (valuations) new and existing outstanding repurchase requests Components of $16 Million Charge
Slide 16: Continued Challenges
Loan loss provision returning to more normal levels Sluggish consumer sector Resource Mortgage issues Greater reliance on wholesale funding / margin pressure Continued Challenges
Slide 17: Consolidation, Standardization and Centralization
Consolidation, Standardization and Centralization
Slide 18: Benefits of Consolidation
15 banking affiliates reduced to 11 in seven months Marketing and branding efficiencies Leverage brand over wider market Larger affiliate provides strong leadership and management expertise Business model intact Fewer affiliates, faster standardization Benefits of Consolidation
Slide 19: Expense Reduction
Product standardization that simplifies customer choices Departmental centralization Workforce management savings Employee benefit plan consistency Ongoing review of expenses Expense Reduction
Slide 20: 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: American Banker/Gallup Co
Slide 21: Market Opportunities
In market M&A = opportunity to grow households faster Leverage our high customer satisfaction Increased targeted advertising and promotion “Local” = perceived value Customer retention is a key strength Market Opportunities
Slide 22: Summary of Larger Loans
41 relationships with commitments to lend of $20 million or more Maximum individual commitment of $33 million Average commercial lending relationship size is $401,728 Loans and corresponding relationships are within Fulton’s geographic market area Summary of Larger Loans
Slide 23: Loan Diversification (9/30/07)
21% 13% 5% 31% 30% Commercial Commercial Mortgage Res Mtg and Home Equity Construction Consumer and other Loan Diversification (9/30/07)
Slide 24: Commercial Loan Concentration By Industry
Industry % Construction 27.4 RE - Investor - Owned 22.2 Services 13.9 Manufacturing 7.3 Retail 6.1 Health Care 5.7 Agriculture 4.9 Wholesale 4.2 Other 3.1 Financial Services 2.1 Arts and Entertainment 1.9 Transportation 1.2 100.0 Commercial Loan Concentration By Industry (as of 9/30/07)
Slide 25: Credit Ratings
Moody’s Investor Services Short-term rating P-1 Long-term rating Issuer A-2 Lead Bank Deposits A-1 Outlook Stable Fitch Ratings Short-term rating F-1 Long-term rating A Outlook Stable Standard & Poors Credit rating BBB+ Outlook Stable Dominion Bond Rating Service Credit rating A Outlook Stable Credi
Slide 26: Financial Performance
Financial Performance
Slide 27: Quarter Ended September 30, 2007
$33.6 million $0.19 $0.150 0.88% 8.67% 15.76% Net income (30.6% decrease from 2006) Net income per share (32.1% decrease from 2006) Cash dividends per share (1.7% increase over 2006 Return on assets Return on equity Return on tangible equity Quarter Ended September 30, 2007
Slide 28: Peer Group
International Bancshares Corporation Old National Bancorp South Financial Group, Inc. Susquehanna Bancshares, Inc. TCF Financial Corporation Trustmark Corporation UMB Financial Corporation United Bankshares, Inc. Valley National Bancorp Whitney Holding Corporation Wilmington Trust Corporation Associ
Slide 29: Income Statement Summary (September Year to Date)
2007 2006 $ % Net Interest Income 365,090 $ 363,820 $ 1,270 $ 0% Loan Loss Provision (8,260) (2,430) (5,830) 240% Other Income 110,530 104,000 6,530 6% Securities Gains 2,280 5,520 (3,240) -59% Other Expenses (307,010) (271,240) (35,770) 13% Income Taxes (48,090) (60,750) 12,660 -21% Net Income 114,
Slide 30: Income Statement Summary (linked quarter)
3rd Qtr 2nd Qtr $ % Net Interest Income 122,410 $ 120,910 $ 1,500 $ 1% Loan Loss Provision (4,610) (2,700) (1,910) 71% Other Income 36,870 36,380 490 1% Securities Gains (130) 630 (760) N/M Other Expenses (107,990) (98,110) (9,880) 10% Income Taxes (12,980) (17,260) 4,280 -25% Net Income 33,570 $ 39
Slide 31: Average Loans (September Year to Date)
2007 2006 $ % (dollars in millions) Commercial 3,160 $ 2,780 $ 380 $ 14% Comm'l Mort 3,310 3,030 280 9% Resid Mort 730 620 110 18% Home Equity 1,440 1,400 40 3% Construction 1,390 1,320 70 5% Cons./Other 590 600 (10) -2% Total Loans 10,620 $ 9,750 $ 870 9% Average Loans (September Year to Date)
Slide 32: Average Loans Linked Quarter
3rd Q 07 2nd Q 07 $ % (dollars in millions) Commercial 3,280 $ 3,170 $ 110 $ 3% Comm'l Mort 3,380 3,290 90 3% Resid Mort 770 720 50 7% Home Equity 1,450 1,430 20 1% Construction 1,380 1,380 - 0% Cons./Other 600 590 10 2% Total Loans 10,860 $ 10,580 $ 280 3% Average Loans Linked Quarter
Slide 33: Net Interest Margin (9/30/07)
3.25 3.50 3.75 4.00 4.25 4.50 4.75 FFC Peer Top 50 Net Interest Margin (9/30/07) 3.69 3.61 3.47
Slide 34: Net Interest Margin Trend
3.50 3.60 3.70 3.80 3.90 4.00 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Reported Core Net Interest Margin Trend
Slide 35: Interest Rate Shocks (9/30/07)
+300 bp + $ 6.0 million + 1.2% +200 bp + $ 4.7 million + .9% +100 bp + $ 2.9 million + .6% - 100 bp - $ 4.3 million - .8% - 200 bp - $ 12.6 million - 2.4% - 300 bp - $ 22.6 million - 4.4% Interest Rate Shocks (9/30/07) Rate Change NII Change (Annual) % Change 6 month cumulative gap – 0.90
Slide 36: Investment Portfolio (9/30/2007)
ENDING MODIFIED BALANCE DURATION CREDIT RATING (000's) Mortgage-backed securities 1,334.6 $ 3.03 AAA Municipal bonds 496.0 4.04 AAA Collateralized mortgage obligations 543.6 3.57 AAA U.S. Treasuries and agencies 261.7 2.01 AAA Corporate & trust preferred securities 135.9 8.64 Various Bank stocks 92.
Slide 37: Average Deposits (Year to Date September)
2007 2006 $ % (dollars in millions) Nonint DDA 1,730 $ 1,820 $ (90) $ -5% Int DDA 1,690 1,680 10 1% Savings/MMDA 2,280 2,340 (60) -3% CD's 4,540 4,040 500 12% Cash Mgt 630 490 140 29% Total Deposits 10,870 $ 10,370 $ 500 $ 5% Average Deposits (Year to Date September)
Slide 38: Average Deposits Linked Quarter
3rd Q 07 2nd Q 07 $ % (dollars in millions) Nonint DDA 1,700 $ 1,760 $ (60) $ -3% Int DDA 1,730 1,680 50 3% Savings/MMDA 2,260 2,300 (40) -2% CD's 4,630 4,530 100 2% Cash Mgt 690 630 60 10% Total Deposits 11,010 $ 10,900 $ 110 $ 1% Average Deposits Linked Quarter
Slide 39: Net Charge-Offs To Loans (9/30/07)
0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 6/07 9/07 FFC Peer Top 50 Net Charge-Offs To Loans (9/30/07) 0.07 0.15 0.18
Slide 40: Other Income (Year to Date September)
2007 2006 $ % (dollars in thousands) Invt Mgt & Trust 29,370 $ 27,980 $ 1,390 $ 5% Overdraft & NSF Fees 15,260 15,120 140 1% Mort. Sales Gains 12,110 15,440 (3,330) -22% Service Charges 9,450 9,970 (520) -5% Cash Mgt Fees 8,430 7,390 1,040 14% Success Card Fees 6,320 5,490 830 15% Other 29,590 22,61
Slide 41: Other Income Linked Quarter
3rd Q 07 2nd Q 07 $ % (dollars in thousands) Invt Mgt & Trust 9,290 $ 10,270 $ (980) $ -10% Overdraft & NSF Fees 5,280 5,210 70 1% Service Charges 3,150 3,150 - 0% Cash Mgt Fees 2,870 2,860 10 0% Mort. Sales Gains 2,530 4,190 (1,660) -40% Success Card Fees 2,180 2,220 (40) -2% Other 11,570 8,480 3,0
Slide 42: Efficiency Ratio (9/30/07)
50.0 52.0 54.0 56.0 58.0 60.0 62.0 93 94 95 96 97 98 99 00 01 02 03 04 05 06 6/07 9/07 FFC Peer Top 50 Efficiency Ratio (9/30/07) 62.0 59.2 58.8
Slide 43: Other Expense (Year to Date September)
2007 2006 $ % (dollars in thousands) Salaries & Benefits 164,350 $ 158,370 $ 5,980 $ 4% Occupancy & Equip. 40,550 37,650 2,900 8% Operating Risk Loss 26,460 3,480 22,980 660% DP/Software/Telecom 19,420 18,570 850 5% Amortization 6,180 5,880 300 5% Other Expenses 50,050 47,290 2,760 6% Total 307,010
Slide 44: Other Expense Linked Quarter
3rd Q 07 2nd Q 07 $ % (dollars in thousands) Salaries & Benefits 52,510 $ 55,550 $ (3,040) $ -5% Occupancy & Equip. 13,250 13,390 (140) -1% Operating Risk Loss 16,340 4,200 12,140 289% DP/Software/Telecom 6,470 6,630 (160) -2% Amortization 2,000 2,200 (200) -9% Other Expenses 17,420 16,140 1,280 8%
Slide 45: Fulton Financial Corporation
One Penn Square Lancaster, PA 17602 www.fult.com Fulton Financial Corporation
Slide 46: Where are we located?
Where are we located? The Bank ‘The Columbia Bank Delaware National Bank FNB Bank Fulton Bank Hagerstown Trust Lafayette Ambassador Bank ‘The Peoples Bank of Elkton 1 Resource Bank I Skyfande Community Bank I Swineford National Bank Pennsylvania FULTON FINANCIAL ‘CORPORATION