Investor Presentation
Data as of March 31, 2012
Ticker Symbol: FULT (NASDAQ)
§ This presentation may contain forward-looking statements with respect to Fulton Financial Corporation’s financial
condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking
statements can be identified by the use of words such as “may,” “should,” “will,” “could,” “estimates,” “predicts,”
“potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future,” “intends” and similar expressions which are
intended to identify forward-looking statements.
condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking
statements can be identified by the use of words such as “may,” “should,” “will,” “could,” “estimates,” “predicts,”
“potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future,” “intends” and similar expressions which are
intended to identify forward-looking statements.
§ Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some
of which are beyond the Corporation’s control and ability to predict, that could cause actual results to differ materially
from those expressed in the forward-looking statements. The Corporation undertakes no obligation, other than as
required by law, to update or revise any forward-looking statements whether as a result of new information, future
events or otherwise.
of which are beyond the Corporation’s control and ability to predict, that could cause actual results to differ materially
from those expressed in the forward-looking statements. The Corporation undertakes no obligation, other than as
required by law, to update or revise any forward-looking statements whether as a result of new information, future
events or otherwise.
§ Many factors could affect future financial results including, without limitation: the impact of adverse changes in the
economy and real estate markets; increases in non-performing assets which may reduce the level of earning assets
and require the Corporation to increase the allowance for credit losses, charge-off loans and incur elevated collection
and carrying costs related to such non-performing assets; acquisition and growth strategies; market risk; changes or
adverse developments in political or regulatory conditions; a disruption in, or abnormal functioning of, credit and other
markets, including the lack of or reduced access to markets for mortgages and other asset-backed securities and for
commercial paper and other short-term borrowings; changes in the levels of, or methodology for determining, FDIC
deposit insurance premiums and assessments; the effect of competition and interest rates on net interest margin and
net interest income; investment strategy and other income growth; investment securities gains and losses; declines in
the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth or a decline
in loans originated; relative balances of risk-sensitive assets to risk-sensitive liabilities; salaries and employee benefits
and other expenses; amortization of intangible assets; goodwill impairment; capital and liquidity strategies; and other
financial and business matters for future periods.
economy and real estate markets; increases in non-performing assets which may reduce the level of earning assets
and require the Corporation to increase the allowance for credit losses, charge-off loans and incur elevated collection
and carrying costs related to such non-performing assets; acquisition and growth strategies; market risk; changes or
adverse developments in political or regulatory conditions; a disruption in, or abnormal functioning of, credit and other
markets, including the lack of or reduced access to markets for mortgages and other asset-backed securities and for
commercial paper and other short-term borrowings; changes in the levels of, or methodology for determining, FDIC
deposit insurance premiums and assessments; the effect of competition and interest rates on net interest margin and
net interest income; investment strategy and other income growth; investment securities gains and losses; declines in
the value of securities which may result in charges to earnings; changes in rates of deposit and loan growth or a decline
in loans originated; relative balances of risk-sensitive assets to risk-sensitive liabilities; salaries and employee benefits
and other expenses; amortization of intangible assets; goodwill impairment; capital and liquidity strategies; and other
financial and business matters for future periods.
§ For a more complete discussion of certain risks and uncertainties affecting the Corporation, please see the sections
entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
set forth in the Corporation’s filings with the Securities and Exchange Commission.
entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
set forth in the Corporation’s filings with the Securities and Exchange Commission.
Forward-Looking Statements
2
Presentation Outline
§ About Us
§ Our Strategy
§ Q1/12 Overview
§ Capital
§ Growth
§ Financial Performance
§ Supplemental Information
3
About Us (as of 3/31/12)
§ Mid-Atlantic financial holding company
§ 6 community banks / 5 states
§ Fulton Financial Advisors
§ Fulton Mortgage Company
§ 265 community banking offices
§ Asset size: $16.5 billion
§ 3,800 team members
§ Market capitalization: $ 2.1 billion
§ Book value per common share: $ 10.10
§ Tangible book value per common share: $ 7.38
§ Shares outstanding: 200.4 million
4
A Valuable Geographic Franchise
5
Superior Customer Experience
WE WILL CARE, LISTEN,
UNDERSTAND, AND DELIVER
UNDERSTAND, AND DELIVER
6
“Listening is Just The Beginning”
COMMUNITY BANKING
SMALL BUSINESS
HIGH NET WORTH
RETAIL BANKING
7
§ Top 3 Box Satisfaction: 84%
§ Delivery on our Promise
Top 3 Box 85%
*Survey Sample Size: 4,897 customers
Retail Customer Satisfaction*
8
§ 2011 Excellence Awards in Middle
Market Banking
Market Banking
§ Fulton Bank (2 categories)
§ Overall Satisfaction in Banking
§ Treasury Management
§ National and Regional Winner
§ Criteria: $10 - 500 million in sales
§ Nearly 11,500 Business Interviews
Greenwich Associates
9
§ Corporate Culture
§ Customer Commitment
§ Team-Based Relationship
Management
Management
§ Branch Manager Empowerment
§ Reputation
§ Brand
Key Resources
10
§ Diluted EPS increased 24%
§ Improved ROA
§ Decreasing Provision
§ Core Household Growth
§ Net Interest Margin Expansion
§ Steady Growth in Other Income
§ Good Expense Control
§ Rising Cash Dividend
2011: A Year of Progress
11
§ Diluted EPS of 19 cents / up 5.6% LQ and
up 11.8% over Q1/11
up 11.8% over Q1/11
§ Improved ROA
§ Non-interest income up due to strong
residential mortgage business
residential mortgage business
§ Expanded net interest margin
§ Growth in new households
§ Dividend yield of approximately 2.7%
2012 : Off To A Good Start
12
Capital Adequacy (3/31/12)
13
Deploying Capital
§ Current Uses
§ Support organic growth
§ New branches
§ Increase our cash dividend
§ Potential Uses
§ Acquisitions with right opportunities
§ Stock repurchase
14
§ Striving to be the Bank of Choice for Small
Businesses in our Markets
Businesses in our Markets
§ Branch Manager the “portal” for Team
Expertise
Expertise
§ Maintaining Appropriate Mix to Maximize
Net Interest Margin
Net Interest Margin
Deposit Growth
15
§ Retail Households
§ Year-end 2010 households: 243,125
§ Year-end 2011 households: 243,292
§ Commercial Households
§ Year-end 2010 households: 64,832
§ Year-end 2011 households: 67,382
§ Net Household Lift: 2,717
2011 Sales Results
16
§Retention of Profitable Relationships a
Priority
Priority
§Manage and Mitigate Credit Risk
§Prudent Underwriting
§Leverage Market Opportunities for New
Business
Business
§Leveling off of Construction Book
Loan Growth
17
Construction Exposure
($ in millions)
Construction Loans /
Total Loans
Total Loans
10.5%
8.2%
6.7%
5.1%
5.4%
18
(23%)
(18%)
(23%)
5%
§ 56 relationships with commitments to lend $20
million or more
million or more
§ Maximum individual commitment: $33 million
§ Maximum commitment to any builder/developer:
$25 million
$25 million
§ Maximum commitment to any one development project:
$15 million
$15 million
§ Average commercial lending relationship size is
$468,600
$468,600
§ Loans and corresponding relationships are within
Fulton’s geographic market area
Fulton’s geographic market area
Summary of Larger Loans (3/31/12)
19
Commercial Loans by Industry (03/31/12)
20
Non-Interest Income Growth
§ Fulton Mortgage Company
§ Significant Contributor to our Growth in Non-Interest
Income
Income
§ Expand Origination Staff
§ Leverage Our Reputation as a Mortgage Lender
§ Fulton Financial Advisors ($4.0 billion A.U.M.)
§ Brokerage Production Mix (non-recurring / recurring)
§ Referrals from Commercial Bank
§ Team Market Development
21
§ Current and Projected Lean Process
Improvement Savings
Improvement Savings
§ In-Market Branch Consolidation
§ Appropriate Staffing Levels
§ Leverage Electronic Capabilities
§ Manage Higher Regulatory /
Compliance Costs
Compliance Costs
Expense Control
22
§ Completed 334 Lean initiatives
§ Result: $ 4.5 million in savings
§ Benefits seen 2012 and beyond
2011 Lean Improvement Results
23
§ Continuation of Longstanding Fiserv
Relationship
Relationship
§ 360 Degree View of Customer Relationship
§ Improve Consultative Sales Process
§ Higher Household Penetration / Revenue
§ Implementation Over 2-Year Timeframe
§ Strategy Implementation / Care, Listen,
Understand and Deliver
Understand and Deliver
Core Platform Upgrade
24
§ Lower Provision
§ Relationship Protection and Enhancement
§ Earning Asset Growth
§ Core Household Growth
§ Expand Net Interest Margin
§ Growth in Non-Interest Income
§ Expense Control
EPS Growth
25
Details of Financial
Performance
Performance
Income Statement Summary
27
International Bancshares Corp.
People’s United Financial, Inc.
Susquehanna Bancshares, Inc.
Synovus Financial Corporation
TCF Financial Corporation
UMB Financial Corporation
Valley National Bancorp
Webster Financial Corporation
*Fulton’s peer group as of March 31, 2012
Associated Banc-Corp
BancorpSouth, Inc.
BOK Financial Corporation
City National Corporation
Commerce Bancshares, Inc.
Cullen / Frost Bankers, Inc.
First Horizon National
Corporation
Corporation
FirstMerit Corporation
First Niagara Financial Group, Inc.
Peer Group*
28
Net Interest Margin
29
* Comprised of the 50 largest publicly traded domestic banks/thrifts in asset size as of December 31, 2011. Excludes credit card companies. Source : SNL.com
Interest Rates (Q1 2012 vs. Q4 2011)
30
6 month cumulative gap: 1.05
Interest Rate Shocks (03/31/12)
Rate Change NII Change (Annual) % Change
+400 bp + $ 62.3 million + 11.2%
+300 bp + $ 42.2 million + 7.6%
+200 bp + $ 22.9 million + 4.1%
+100 bp + $ 5.2 million + 0.9%
- 100 bp - $ 17.4 million - 3.1%
31
Average Loans (Q1 2012 vs. Q4 2011)
32
Average Loan Growth
(vs. prior year period)
33
Net Charge-Offs to Average Loans
34
Non-accrual Loans to Loans
35
Allowance for Loan Losses to Loans
36
Allowance for Loan Losses to Non-accrual Loans
37
Provision for Loan Losses (in millions)
38
Troubled Debt Restructurings
39
Note: Excludes non-accrual TDRs
Investment Portfolio (03-31-12)
40
Book Yield (monthly) 3.49%
Investment MBS & CMO Cash Flows (2011-2012)
41
Book Price
$101.51
$101.51
Book Price
$101.87
$101.87
Book Price
$101.48
$101.48
Book Price
$101.56
$101.56
Book Price
$102.12
$102.12
Average Deposits (Q1 2012 vs. Q4 2011)
42
Average Deposit Growth
(vs. prior year period)
43
Average Core Deposit Growth
(vs. prior year period)
44
Other Income
45
Other Income (Q1 2012 vs. Q4 2011)
46
More Efficient Than Peers
47
Other Expense (Q1 2012 vs. Q4 2011)
48
Goals and Priorities
§ EPS Growth
§ ROA Improvement
§ Spread Management / NIM
§ Leverage Market Opportunities
§ Improve Asset Quality
§ Deploy Capital Prudently
§ Profitable Organic / Acquisitive Growth
49
Fulton Financial Corporation
One Penn Square
Lancaster, PA 17602
www.fult.com
Supplemental Information
Net Charge-offs (YTD Mar 2012)
52
Non-performing Loans* (as of 3/31/12)
53
Loan Delinquency
54
Loan Distribution by State (Q1 2012)
55
Residential Mtg by State (03/31/12)
56
Fulton Mortgage Company
§ Applications up linked quarter: $812
million from $636 million
million from $636 million
§ Pipeline $428 million vs. $325 million
(Q1/12 vs. Q4/11)
(Q1/12 vs. Q4/11)
§ 31% purchase / 69% refinancing
(Q1/12)
(Q1/12)
§ Sales gains up linked quarter
57
Fulton Mortgage Company
78%
Available for
Sale
Available for
Sale
GOS
Spread
Spread
1.42%
GOS
Spread
Spread
1.30%
GOS
Spread
Spread
1.55%
GOS
Spread
Spread
1.58%
84%
Available for
Sale
Available for
Sale
83%
Available for
Sale
Available for
Sale
71%
Available for
Sale
Available for
Sale
69%
Available for
Sale
Available for
Sale
58
($ in thousands)
Residential Mortgage Repurchase Activity
First Quarter:
§2012 - Servicing Retained
§ Repurchased $ 1,502,235.
§2012 - Servicing Released
§ Repurchased $ 427,258.
59
C&I Loans by State (03/31/12)
60
CRE Loans by State (03/31/12)
61
Construction Loans by State (03/31/12)
62
Construction Loans by Type (3/31/12)
63
Shared National Credits (03/31/12)
64
Projected Investment Security Cash Flows
65
Investment Portfolio - Transactions (1st Quarter 2012)
($ in Thousands)
66
Projected CD Maturities
67
Projected FHLB Advance Maturities
68
Return on Equity and Assets
69
Total Risk-Based Capital Ratio
70
Return on Average Assets
71
Return on Average Assets, by Bank
72
Income Statement Summary (YTD December)
73
Income Statement Summary (YTD December)
74
Fulton Financial Corporation
One Penn Square
Lancaster, PA 17602
www.fult.com
Version 2012-05-22