Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Keefe, Bruyette & Woods conference (March 2007)
47 slides from Fulton Financial's conference presentation, Mar 1, 2007
Slide 1: Fulton Financial Corporation
Fulton Financial Corporation Keefe, Bruyette & Woods March 1, 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 and strategy & Growth initiatives ® Capital ® Loan summary | Customer and employee satisfaction @ Financial performance @ Opportunities ™ Questions
Slide 4: Regional financial holding company
® Regional financial holding company (formed in 1982) ™13 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? The Bank 1D Delaware Nasional Bak GB FNB Bank 1 Futon Ban 1 Hagerstown Trust 1 Latsyere Ambassador Bank Lebanon Valley Farmers Bank 1H The Peoples Bank f Elkton {Resource Bankshares Corporation 1 Shands Community Bank 1 Swineford National Bank 1 SomersetValeyBank 1 Columbia Ban
Slide 6: Completed and pending bank mergers
Completed ¢ Premier Bank into Fulton Bank, PA (12/06) ° First Washington State Bank into The Bank, NJ (2/07) @Pending ° Somerset Valley Bank into Skylands Community Bank, NJ (5/07) ¢ Lebanon Valley Farmers Bank into Fulton Bank, PA (7/07)
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: Median HH Income
County Rank Chester, PA Montgomery, PA Bucks, PA Delaware, PA Cumberland, PA Northampton, PA Lancaster, PA York, PA Lehigh, PA Berks, PA Average Sseooanane Average of all other (67) Projected Change 2006 - 2011 963% 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: 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 10
Slide 11: 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 TT
Slide 12: Long-term successful employees, customers, shareholders
SLong-term SLong-term SLong-term successful » successful » successful employees customers shareholders R
Slide 13: Growth markets by affiliate bank
® 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 B
Slide 14: Organic growth
ey organic ( olen 4
Slide 15: Organic growth initiatives
® Additional cash management product options to keep funds on balance sheet ® Market segmentation / targeted direct mail ™ Corporate-wide sales / incentive programs ™ Remote deposit item capture / business clients ™ Corporate credit card rewards program = Small business segment Affiliate CEO scoreca
Slide 16: Total capital and ratios
® Total Capital (GAAP): $1.5 billion & Total Regulatory Capital: $1.3 billion @ Ratios: * Total Risk-Based Capital 11.70% * Tier 1 Risk-Based Capital 9.85% « Leverage Capital 7.65% 16
Slide 17: Share buyback program
™March 2006: 2.1 million share buyback MExtended through June 30, 2007 ®Repurchased: 1.683 million ®Remaining under program: 417,000* =Bought 20.5 million shares back since 2002 * as of 2/15/07 cd
Slide 18: 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 18
Slide 19: 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 oT)
Slide 20: 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 20
Slide 21: 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 22: 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 2
Slide 23: 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 24: 2006 financial highlights
™ $46.6 million ™$ 0.27 ™$ 0.1475 = 1.25% = 12.29% = 22.55% Net income (13.9% increase over 2005) Net income per share (8.0% increase over 2005) Cash dividends per share (6.9% increase over 2005) Return on assets Return on equity Return on tangible equity aes Mm
Slide 25: 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 26: Income statement 2006 vs 2005
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 27: Loan growth, period end
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% H
Slide 28: Loan growth, average balances
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% 2
Slide 29: 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% 2»
Slide 30: Net interest margin vs peers
4,75 4.50 4.25 4.00 3.75 3.50 94 95 96 97 98 99 00 01 02 03 04 05 06 —* FFC -* Peer -* Top 50 30
Slide 31: Interest rate sensitivity
Rate Change Nil Change (Annual) % Change +300 bp +$ 7.5 million + 1.6% +200 bp +$ 5.1 million + 1.1% +100 bp +$ 2.7 million + 0.6% - 100 bp - § 4.4 million - 0.9% - 200 bp - $11.8 million - 2.4% - 300 bp - $21.2 million - 44% 6 month cumulative gap - 0.91 3
Slide 32: Investment portfolio
ENDING MODIFIED BALANCE DURATION CREDIT RATING (000's) Mortgage-backed securities $ 1,380.2 2.85 ABA Municipal bonds 483.8 © 4.39 ABA Collateralized mortgage obligations 494.4 2.97 ABA U.S. Treasuries and agencies 306.9 © 2.36 ABA Corporate & trust preferred securities 666 6.10 various - 5 yr call B
Slide 33: B
9 8 7 6 5 4 3 2 1 0 B
Slide 34: Funding sources
Funding Sources 231/05) 1% 12% = Deposits and Customer Repurchase Agreements Borrowings 14% = GAAP Capital @ Other Liabilities 73% =f 8 8 8 8 & & FultonFinancial Coportion | © 2 2 2 mo 34
Slide 35: Deposits, period end
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% 8
Slide 36: Deposits, average balances
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% 6
Slide 37: 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% 7
Slide 38: Asset quality vs peers
0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 [078] LAMP PAP LA PPHD AHO GSS —*FFC -* Peer — Top 50 8
Slide 39: Asset quality vs peers
1.75 1.50 1.25 1.00 0.75 0.50 | 0.25 0.00 LN FP oP 9 HS HPHDA MP HOS —* FFC -© Peer —- Top 50 39
Slide 40: Other income 2006 vs 2005
2006 2005 $ % (dollars in thousands) Invt Mgt & Trust $ 37,440 $ 35,670 $ 1,770 5% Mort. Sales Gains 21,090 Overdraft & NSF Fees 20,530 Service Charges 13,210 Cash Mgt Fees 10,040 Success Card Fees 7,520 Other 32,610 25,030 18,490 13,700 8,010 6,490 30,280 (3,940) -16% 2,040 11% (490) -4% 2,030 25%
Slide 41: Other income, average
2006 2005 $ % Invt Mgt & Trust Mort. Sales Gains Overdraft & NSF Fees 19,620 18,410 Service Charges Cash Mgt Fees Success Card Fees Other (dollars in thousands) $ 36,640 $ 35,550 $ 20,000 25,000 12,440 13,590 9,200 7,990 7,420 6,470 30,600 29,910 1,090 3% (6,000) -20% 1,210 7% (1,150) -8% 1,210 15%
Slide 42: Other income 4th quarter vs 3rd quarter
4thQ06 3rd Q 06 $ i) (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% To
Slide 43: Efficiency ratio vs peers
62.00 7 60.00 58.00 56.00 54.00 52.00 50.00 +——.—. 1 ot 93 94 95 96 97 98 99 00 01 02 03 04 05 06 —* FFC -= Peer — Top 50
Slide 44: Other expenses 2006 vs 2005
2006 2005 $ % (dollars in thousands) Salaries & Benefits} 213,9105 181,890 32,020 18% Occupancy & Equip. 50,740 41,210 9,530 23% DP/Software/Telecom24,780 23,080 1,700 7% Amortization 7,910 5,310 2,600 49% Other Expenses 68,650 64810 3,840 6% Total $ 365,990$ 316,300$ 49,690 16%
Slide 45: Other expenses, prior year comparison
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%
Slide 46: Opportunities
®Organic growth in all markets ™Market segmentation / direct mail capabilities =Small business segment MNew products / remote capture / HSA Cash management growth =Non - interest income growth ™Strategy to execution / accountability
Slide 47: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www. fult.com a
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