Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (January 2007)
57 slides from Fulton Financial's investor presentation, Jan 29, 2007
Slide 1: Fulton Financial Corporation Investor Presentation
Fulton Financial Corporation Investor Presentation January 2007
Slide 2: Forward-looking statements
| 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, eff
Slide 3: Agenda
| Corporate profile @ Relationship strategy © Growth initiatives ™ Capital ® Loan summary | Customer and employee satisfaction & Financial performance
Slide 4: Regional financial holding company
® Regional financial holding company (formed in 1982) ™14 community banks and 3 financial services affiliates in 5 states ® 263 community banking offices Asset size: $14.9 billion @ Market capitalization: $2.7 billion
Slide 5: Where are we located?
Where are we located? Where are we located?
Slide 6: Affiliate bank mergers completed and pending
Completed ¢ Premier Bank into Fulton Bank, PA =Pending ° First Washington State Bank into The Bank, NJ ° Somerset Valley Bank into Skylands Community Bank, NJ ¢ Lebanon Valley Farmers Bank into Fulton Bank, PA
Slide 7: National Ranking in Median HH Income
National Rankingin Median HH County Ranking _ State Ranking FFC Affiliate Fairfax, VA B #2 $101,762 Resource Bank Hunterdon, NJ HA #1 $100,485 Skylands Bank Morris, NJ #5 #2 $96,965 Skylands Bank Somerset, NJ #6 B $96,350 Somerset Valley Bank Howard, MD #7 #1 $92,433 Columbia Bank Montgomery, MD #17
Slide 8: County Rank
County Rank Chester, PA Montgomery, PA Bucks, PA Delaware, PA Cumberland, PA Northampton, PA Lancaster, PA York, PA Lehigh, PA Berks, PA Average Seeoonnen Average of all other (57) Projected Change 2006 - 2011 9.63% 3.05 4.06 0.17 437 8.45 462 6.18 5.46 5.62 4.66 1.20 Median HH Income 2006 $83,001 7
Slide 9: Proven business model
| Proven business model = Consistent performance ™ 25 consecutive years of record earnings ™32 consecutive years of dividend increases ™ 10.1% 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
Slide 10: 10-year dividend history
10-year dividend history 0.5810 0.5400 0.4932 0.4524 0.4050 o.g2g0 0.9662 0.2672 0.2942 0.2202 0:2428 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 =f 8 8 8 8 & & FultonFinancial Coportion | © 2 2 2 mo 10
Slide 11: FFC added to dividend index on June 1, 2006
MS FFC added on June 1, 2006 ® Reflected Dividend Performance of the 100 leading U.S. companies Criteria: ™ Non-negative five-year dividend-per-share growth rate ™ Five-year average dividend to earnings- per-share ratio of less than or equal to 60% | Three-months average daily trading volume of 200,
Slide 12: Relationship strategy
For our : With Shareholders: People Employees; Place Customers : Promotion Communities: Product : Price R
Slide 13: Long-term successful employees, customers, shareholders
SLong-term SLong-term SLong-term successful » successful » successful employees customers shareholders B
Slide 14: Returns with and without dividend reinvestment
2006) ® WITHOUT dividend reinvestment: 13% compounded annual rate of return ® WITH dividend reinvestment: 17% compounded annual rate of return 4
Slide 15: Affiliate knows local markets best
EB Affiliate knows local markets best Maintains established local brand value @Prestigious jobs in local markets ™Customer decision-making autonomy ™ Performance goals Affiliate plan execution 15
Slide 16: Acquisition benefits
| Increased product and revenue diversification | Continued local autonomy and decision-making | Increased lending capacity @ Additional capital | Proven merger/conversion expertise ™ Reduced expenses 16
Slide 17: Growth initiatives
| Current pricing makes accretive acquisitions difficult | Numerous recent opportunities ™ Organic growth as acquisitive by-product MLPO to de-novo branch strategy effective ™ Growth initiatives in select markets ™ Household growth / net core account lift | New market penetration cd
Slide 18: Organic growth markets by affiliate
@ Fulton Bank (Pa) * State College * Chester County ®@ The Bank (NJ) * Atlantic County * Burlington County » Camden County ® The Columbia Bank (MD) * Frederick County * Anne Arundel County @ Resource Bank (VA) ° Richmond 18
Slide 19: Key Organic Growth Markets
Key Organic Growth Markets FULTON FINANCIAL CORPORATION ee 8 6 Fle
Slide 20: Non-interest income initiatives
®@ Additional cash management product options to keep funds on balance sheet | Market segmentation at affiliate level / targeted direct mail | Corporate-wide non-interest income sales program for all FFC team members ™ Remote deposit item capture — business clients ™ Corporate credit card rewards pr
Slide 21: Capital
® Total Capital (GAAP): $1.5 billion & Total Regulatory Capital: $1.3 billion & Ratios (estimated): * Total Risk-Based Capital 11.30% * Tier 1 Risk-Based Capital 9.50% « Leverage Capital 7.70% 2
Slide 22: Share buyback program
™March 2006: 2.1 million share buyback ®Extended through June 30, 2007 ™Repurchased: 1.285 million ®Remaining under program: 815,000 * (as of 1/25/07) wy
Slide 23: Loan Diversification
Loan Diversification @231/05) 6% = Commercial 14% 28% Commercial Mortgage @ Res Mtg and Home Equity = Construction 21% = Consumer and other 31% =f 8 8 8 8 & & FultonFinancial Coportion | © 2 2 2 mo 2B
Slide 24: Large lending relationships
© 43 relationships with commitments to lend of $20 million or more ® Maximum individual commitment of $33 million @ Average commercial lending relationship size is $361,000 ™@ Loans and corresponding relationships are within Fulton’s geographic market area Mm
Slide 25: Commercial loans by industry
; Industry Construction RE - Investor - Owned Services Manufacturing Retail Health Care Agriculture Wholesale Other Financial Services Arts and Entertainment Transportation =N Nie = =) 9. 1. 3. 7. 6. 5. 4, 4, 3. 2. 1. 1. 0. DOOD DONWDMDAB2A2D B
Slide 26: Credit ratings
Moody’s Investor Services Standard & Poors ® Short-term rating P-41 © Credit rating BBB+ ® Long-term rating @ Outlook Stable Issuer A-2 Lead Bank Deposits A-1 1 Outlook Stable Fitch Ratings Dominion Bond Rating Service © Short-term rating F- © Credit rating A ® Long-term rating A @ Outlook Stable ™
Slide 27: Employee Retention
Employee Retention 100 = Exempt Non-exempt 1 r 30 1 uf Overall 2002 2003 2004 2005 2006 =f 8 8 8 8 & & FultonFinancial Coportion | © 2 2 2 mo Pa
Slide 28: Employee survey categories
™ Quality and | Training and Improvement Development = Commitment @ Organizational Leadership = Immediate Supervisor & Job Satisfaction ™ Service Climate ™ Work Process | Communication ™ Pay and Benefits | Teamwork and = Company Image Collaboration (Survey administered by BAl Survey Services) 2
Slide 29: Employee survey results
™Conducted every three years ™Over 3,000 employees surveyed (85%) Completed in June 2005 MFFC responses exceed BAI national averages in 10 of the 12 categories 2»
Slide 30: 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
Slide 31: Future Expansion
Future Expansion Wi Current Markets Gi Future Expansion FULTON FINANCIAL,
Slide 32: 2006 financial highlights
"$46.6 million Net income (13.9% increase over 2005) ™$ 0.27 Net income per share (8.0% increase over 2005) ™$ 0.1475 Cash dividends per share (6.9% increase over 2005) = 1.25% Return on assets = 12.29% Return on equity = 22.55% Return on tangible equity 2
Slide 33: 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 34: Income statement summary
2006 2005 $ % (dollars in thousands) Net Interest Income $ 485,560 $ 412,550 $ 73,010 18% Loan Loss Provision (3,500) (3,120) (380) 12% Other Income 142,440 135,470 6,970 5% Securities Gains 7,440 6,630 810 12% Deposit Sale Gains - 2,200 (2,200) na Other Expenses (365,990) (316,300) (49,690) 16% Inc
Slide 35: Period-end loans
2006 2005 $ % (dollars in millions) Commercial $ 2,810 $ 2,350 $ 460 20% Comm'l Mort 3,070 2,620 450 17% Resid Mort/HE 2,060 1,710 350 20% Construction 1,350 730 620 85% Cons./Other 600 570 30 5% Total Loans $ 9,890 $ 7,980 1,910 24% 8
Slide 36: Average loans
2006 2005 $ % (dollars in millions) Commercial $ 2,480 $ 2,310 $ 170 7% Comm'l Mort 2,810 2,550 260 10% Resid Mort/HE 1,800 1,680 120 7% Construction 910 720 190 26% Cons./Other 590 570 20 4% Total Loans $ 8590 $ 7,830 760 10% 6
Slide 37: Loans: 4th quarter vs 3rd quarter
4th Q 06 3rd Q06 $ % (dollars in millions) Commercial $ 2,930 $ 2,930 $ - 0% Comm'l Mort 3,190 3,110 80 3% Resid Mort/HE 2,150 2,110 40 2% Construction 1,430 1,410 20 1% Cons./Other 610 610 : 0% Total Loans $10,310 $ 10,170 140 1% 7
Slide 38: Net interest margin chart
4.75 4.50 4.25 4.00 3.75 3.50 8
Slide 39: Net interest margin reported vs core
4.00 3.90 3.80 3.70 3.60 3.50 i) & © &@ © & -* Reported -"- Core
Slide 40: Investment portfolio
ENDING MODIFIED BALANCE DURATION CREDIT RATING (000's) Mortgage-backed securities $ 1,380.2 2.85 AAA Municipal bonds 483.8 0 439 AAA Collateralized mortgage obligations 494.4 297 AAA U.S. Treasuries and agencies 306.9 2.36 AAA Corporate & trust preferred securities 666 = 6.10 various -5 yr call Bank
Slide 41: al
9 8 7 6 5 4 3 2 1 0 al
Slide 42: Funding Sources
Funding Sources 231/05) 12% kes = Deposits and Customer Repurchase Agreements Borrowings 14% = GAAP Capital @ Other Liabilities 73% =f 8 8 8 8 & & FultonFinancial Coportion | © 2 2 2 mo 2
Slide 43: Period-end deposits
2006 2005 $ % (dollars in millions) Nonint DDA $ 1810 $ 1,590 $ 220 14% Int DDA 1,670 1,550 120 8% Savings/MMDA 2,340 2,060 280 14% CD's 4,130 3,170 960 30% Cash Mgt 520 380 140 37% Total Deposits $ 10470 $ 8750 $ 1,720 20%
Slide 44: Average deposits
2006 2005 $ % (dollars in millions) Nonint DDA $ 1520 $ 1,550 $ (30) -2% Int DDA 1,510 1,490 20 1% Savings/MMDA 2,060 1,980 80 4% CD's 3,510 3,100 410 13% Cash Mgt 360 390 (30) -8% Total Deposits $ 8960 $ 8510 $ 450 5%
Slide 45: Deposits: 4th quarter vs 3rd quarter
4thQ06 3rd Q06 (dollars in millions) $ % Nonint DDA $ 1,780 $ 1,830 $ (50) -3% Int DDA 1,660 1,690 (30) -2% Savings/MMDA 2,340 2,370 (30) -1% CD's 4,410 4,290 120 3% Cash Mgt 600 540 60 11% Total Deposits $ 10,790 $ 10,720 $ 70 1%
Slide 46: Asset quality chart
0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00
Slide 47: Asset quality vs peers
1.75 1.50 1.25 1.00 0.75 0.50 | 0.25 0.00 LY HH PH? HS MP MGM HGP HE & —* FFC -© Peer —- Top 50 a
Slide 48: Other income
2006 2005 $ % (dollars in thousands) Invt Mgt & Trust $ 37,440 $ 35670 $ 1,770 5% Mort. Sales Gains 21,090 25,030 (3,940) -16% Overdraft & NSF Fees 20,530 18,490 2,040 11% Service Charges 13,210 13,700 (490) -4% Cash Mgt Fees 10,040 8,010 2,030 25% Success Card Fees 7,520 6,490 1,030 16% Other 32,61
Slide 49: Average other income
2006 2005 $ % (dollars in thousands) Invt Mgt & Trust $ 36,640 $ 35,550 $ 1,090 3% Mort. Sales Gains 20,000 25,000 (5,000) -20% Overdraft & NSF Fees 19,620 18,410 1,210 7% Service Charges 12,440 13,590 (1,180) -8% Cash Mgt Fees 9,200 7,990 1,210 15% Success Card Fees 7,420 6,470 950 15% Other 30,600
Slide 50: Other income: 4th quarter vs 3rd quarter
4th Q 06 3rd Q 06 $ % (dollars in thousands) Invt Mgt & Trust $ 9,470 $ 8,890 $ 580 7% Mort. Sales Gains 5,640 5,480 160 3% Overdraft & NSF Fees 5,410 5,390 20 0% Service Charges 3,230 3,370 (140) -4% Cash Mgt Fees 2,650 2,590 60 2% Success Card Fees 2,030 1,880 150 8% Other 10,010 7,860 2,150 27% T
Slide 51: Efficiency ratio vs peers
62.00 7 60.00 58.2 | 58.00 25 56.00 56.0 | 54.00 52.00 50.00 ™— PAP AA PPO KN MPP HSE S -*FFC -* Peer —- Top 50 31
Slide 52: Other expenses
2006 2005 % (dollars in thousands) Salaries & Benefits $ 213,910 $ 181,890 $ 32,020 Occupancy & Equip. DP/Software/Telecom 24,780 Amortization Other Expenses 9,530 1,700 2,600 3,840 50,740 41,210 23,080 5,310 64,810 7,910 68,650 18% 23% 7% 49% 6% Total $ 365,990 $ 316,300 $ 49,690 16%
Slide 53: Other expenses prior year
2006 2005 $ % (dollars in thousands) Salaries & Benefits $ 186,270 $ 178,410 $ 7,860 4% Occupancy & Equip. 42,460 39,860 2,600 7% DP/Software/Telecom 21,880 22,550 (670) -3% Amortization 4,420 4,600 (180) -4% Other Expenses 61,240 63,840 (2,600) -4% Total $ 316,270 $ 309,260 $ 7,010 2% 33
Slide 54: Focus on
Focus on: MEPS growth ® Organic loan and deposit growth | Continued strong asset quality | Non-interest income growth ™ Managing net interest margin compression | Improved efficiency ™ Plan execution 54
Slide 55: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www. fult.com 58
Slide 56: Where are we located?
Where are we located? Where are we located? 56
Slide 57: Future Expansion
Future Expansion Wi Current Markets Gi Future Expansion FULTON FINANCIAL,
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