Exhibit 99.1
Fulton Financial Corporation
Presentation to:
RBC Capital Markets
September 19, 2003
Fulton Financial Corporation | 1 |
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, efficiency ratio and capital ratio. Forward-looking statements are encouraged by the Private Securities Litigation Reform Act of 1995. |
¨ | Such forward-looking information is based upon certain underlying assumptions, risks and uncertainties. Because of the possibility of change in the underlying assumptions, actual results could differ materially from these forward-looking statements. Risks and uncertainties that may affect future results include: pricing pressures on loans and deposits, actions of bank and non-bank competitors, changes in local and national economic conditions, changes in regulatory requirements, actions of the Federal Reserve Board, the Corporation’s success in merger and acquisition integration, and customers’ acceptance of the Corporation’s products and services. |
Fulton Financial Corporation | 2 |
Presentation outline
R. Scott Smith, Jr. | President and COO | |
¨ Corporate profile | ||
¨ Strategic initiatives | ||
¨ Asset quality | ||
¨ Future direction |
Charles J. Nugent | Senior Exec. VP/CFO | |
¨ Financial performance |
Fulton Financial Corporation | 3 |
Fulton Financial profile
¨ | Regional financial holding company (formed in 1982) |
¨ | 11 bank subsidiaries; 3 financial services subsidiaries |
¨ | Asset size: $9.2 billion |
¨ | Second largest commercial bank headquartered in Third Federal Reserve District |
¨ | Fulton Bank founded in 1882 |
Fulton Financial Corporation | 4 |
Where are we located?
¨ The Bank | [GRAPHIC] | |
¨ 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 Corp. (Pending) | ||
¨ Skylands Community Bank | ||
¨ Swineford National Bank |
Fulton Financial Corporation | 5 |
Assets by affiliate
(as of 6/30/03, in thousands)
¨ Fulton Bank | $ | 3,800,000 | |
¨ Lafayette Ambassador Bank | 1,087,000 | ||
¨ The Bank | 1,050,000 | ||
¨ Lebanon Valley Farmers Bank | 779,000 | ||
¨ Premier Bank | 607,000 | ||
¨ Hagerstown Trust Company | 451,000 | ||
¨ Skylands Community Bank | 375,000 | ||
¨ Delaware National Bank | 338,000 | ||
¨ FNB Bank, N.A. | 306,000 | ||
¨ Swineford National Bank | 277,000 | ||
¨ The Peoples Bank of Elkton | 105,000 |
Fulton Financial Corporation | 6 |
Fulton Financial Advisors, N.A.
Includes Dearden Maguire Weaver and Barrett, LLC and Fulton Insurance Services Group
As of: (June 30, 2003)
$4.6 billion; $3.3 billion in assets under management
Products and Services
¨ Personal trust | ¨ Insurance | |
¨ Asset management | ¨ Corporate trust | |
¨ Retirement services | ¨ Cash management | |
¨ Brokerage | ¨ Private banking |
¨ Named Community-Based Bank Brokerage Program of the Year by Bank Insurance and Securities Association (BISA)
Fulton Financial Corporation | 7 |
Fulton Mortgage Company
¨ | Established April 2001 |
¨ | New entity to coordinate residential mortgage lending throughout FFC |
n | Expanded, competitive product line to customers of all affiliates |
n | In partnership with each affiliate, focused management team on residential mortgages |
n | Entry into new markets for FFC |
¨ | On target for record originations this year |
Fulton Financial Corporation | 8 |
Mission statement
¨ | We will increaseshareholder value and enrich thecommunities we serve by creating financial success together with ourcustomers and career success together with ouremployees. |
We will conduct all of our business with honesty and integrity.
Fulton Financial Corporation | 9 |
Corporate ethics
¨ | Longstanding written code of conduct |
¨ | No “gray” areas |
¨ | Expectations clearly outlined |
Fulton Financial Corporation | 10 |
What have we accomplished?
¨ | 9.3% compounded annual growth rate in earnings per share |
¨ | 21 consecutive years of record earnings |
¨ | 29 consecutive years of dividend increases |
¨ | 10.3% compounded annual growth rate in dividends per share |
¨ | Proven business model |
¨ | Consistently high performance |
Fulton Financial Corporation | 11 |
Five-year performance
1998 | 2002 | |||||||
Net income per share | $ | .88 | $ | 1.23 | ||||
Cash dividends per share | $ | .37 | $ | .56 | ||||
Return on assets | 1.60 | % | 1.68 | % | ||||
Return on equity | 15.06 | % | 15.86 | % | ||||
Efficiency ratio | 55.3 | % | 52.4 | % | ||||
Dividend payout | 41.6 | % | 45.4 | % |
All information is as originally reported
Fulton Financial Corporation | 12 |
Stock highlights (as of 8/31/03)
Average daily trading volume | 187,053 | |
Number of Market Makers | 36 | |
Number of Analysts | 11 | |
Number of shares outstanding | 109.4 million | |
Market Capitalization | $2.2 billion |
Fulton Financial Corporation | 13 |
Employee stock ownership
¨ | 70% of our employees collectively own more than 2 million shares of Fulton Financial Corporation stock. |
¨ | Stock options help us to retain long-term loyal employees |
Fulton Financial Corporation | 14 |
Stock performance (1982-6/30/03)
¨ | WITHOUT dividend reinvestment: |
15% | compounded annual rate of return |
¨ | WITH dividend reinvestment: |
19% | compounded annual rate of return |
Fulton Financial Corporation | 15 |
Employee retention
[GRAPHIC]
¨ Exempt
¨ Non-exempt
¨ Overall
Fulton Financial Corporation | 16 |
Employee opinion survey
¨ Customer service | ¨ Training and development | |
¨ Management team performance | ¨ Sales orientation | |
¨ Company image and mission | ¨ Work effectiveness | |
¨ Team orientation | ¨ Pay and benefits | |
¨ Technology and systems | ¨ Employee satisfaction |
Fulton Financial Corporation | 17 |
Retail customer satisfaction
¨ | 96% of customers are Extremely or Very Satisfied with their Fulton Financial affiliate bank |
Fulton Financial Corporation | 18 |
Deposit composition trends
June ‘03 | June ‘02 | |||
Non Interest-Bearing Demand | 19% | 17% | ||
Interest-Bearing Demand | 16% | 14% | ||
Money Market | 13% | 13% | ||
Savings | 11% | 11% | ||
Time Deposits | 36% | 40% | ||
Customer Repos | 5% | 5% | ||
Total Deposits | 100% | 100% |
Fulton Financial Corporation | 19 |
Funding sources
as of 6/30/03
[GRAPHIC]
Deposits and Customer Repurchase Agreements | 79% | |
Capital | 10% | |
Other Borrowings | 9% | |
Other Liabilities | 2% |
Fulton Financial Corporation | 20 |
Commercial customer satisfaction
¨ | 86% of commercial customers are satisfied or very satisfied – results compare favorably to industry benchmarks |
¨ | Top three rated attributes: |
n | Services offered |
n | Convenient bank locations |
n | Accurate communications |
¨ | Corporate customers state that what makes Fulton unique is the personal service they receive |
Fulton Financial Corporation | 21 |
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 |
Fulton Financial Corporation | 22 |
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 |
Fulton Financial Corporation | 23 |
Capital (At June 30, 2003)
¨ Total Capital (GAAP): | $ | 874 million | ||
¨ Total Risk-based Capital: | $ | 857 million | ||
¨ Ratios: | ||||
¨ Total RB Capital | 13.9 | % | ||
¨ Tier 1 RB Capital | 12.7 | % | ||
¨ Leverage Capital | 9.4 | % |
Fulton Financial Corporation | 24 |
Proforma Capital (At June 30, 2003)
¨ Total Risk-based Capital: | $ | 960 million | ||
¨ Ratios: | ||||
¨ Total RB Capital | 12.3 | % | ||
¨ Tier 1 RB Capital | 10.9 | % | ||
¨ Leverage Capital | 8.0 | % |
Fulton Financial Corporation | 25 |
Acquisitions
n Resource Bankshares (pending) | n Bank of Gloucester County | |
n Premier Bank | n Delaware National Bank | |
n Drovers & Mechanics Bank | n Central Pennsylvania Savings Association | |
n 18 Sovereign Bank Branches | n Hagerstown Trust Company | |
n Dearden, Maguire, Weaver and Barrett, Inc. | n Denver National Bank | |
n Skylands Community Bank | n Great Valley Savings Association | |
n Ambassador Bank of the Commonwealth | n First National Bank of Danville | |
n Lebanon Valley National Bank | n Second National Bank of Nazareth | |
n Peoples Bank of Elkton | n Lafayette Trust Bank | |
n Woodstown National Bank & Trust Company | n Pen Argyl National Bank | |
n Swineford National Bank | ||
n Farmers Trust Bank |
Fulton Financial Corporation | 26 |
Premier Bank
¨ | A $600 million state chartered bank headquartered in Doylestown, PA |
¨ | Eight full-service offices serving Montgomery, Bucks and Northampton counties |
¨ | Historical double-digit growth in deposits, loans, fee income and net income |
¨ | Strong asset quality |
¨ | Premier branches are contiguous to current affiliate bank markets |
Fulton Financial Corporation | 27 |
Resource Bankshares, Inc.
¨ | Assets of $860 million; headquartered in Virginia Beach, Virginia |
¨ | The only Virginia-based bank with offices in Virginia’s three major markets |
¨ | Market area accounts for over 73% of all deposits in state of Virginia |
¨ | Allows for expansion of Fulton Financial Advisors, retail and commercial banking |
¨ | Senior lenders average 24 years of industry experience |
Page 9
Fulton Financial Corporation | 28 |
What do we look for?
¨ | High growth areas |
¨ | Dynamic market demographics |
¨ | Strong performance |
¨ | Asset quality |
¨ | Talented and dedicated staff |
¨ | Compatible corporate culture |
Fulton Financial Corporation | 29 |
Acquisitions in new markets
What changes?
¨ | Replicate strong credit culture |
¨ | Loan review |
¨ | Investments |
¨ | Asset/liability management |
¨ | Compliance |
¨ | Common operating platform |
¨ | Audit |
Fulton Financial Corporation | 30 |
Acquisitions in new markets
What stays the same?
¨ | Bank name |
¨ | Board of Directors |
¨ | Management team |
¨ | Employees |
Fulton Financial Corporation | 31 |
Benefits to new affiliates
¨ | Additional capital |
¨ | Increased lending capacity |
¨ | Reduced expenses |
¨ | Management focus on growth, customer service and sales |
¨ | Proven merger/conversion expertise |
¨ | Increased non-interest income due to introduction of new products and services |
Fulton Financial Corporation | 32 |
Product availability
¨ Residential Mortgages | ¨ On-line banking | |
¨ Investment Management | ¨ Debit/Credit cards | |
¨ Brokerage Services | ¨ Cash management | |
¨ Insurance (whole life, term life, long-term care through Advisors) | ¨ Specialized lending (leasing and indirect)
¨ International Services | |
¨ Correspondent banking |
Fulton Financial Corporation | 33 |
Composition of total revenues
96 | 97 | 98 | 99 | 00 | 01 | 02 | 6/03 | |||||||
16.0% | 16.2% | 16.9% | 17.9% | 19.4% | 22.9% | 25.0% | 28.0% |
¨ Other Income | ¨ Net Interest Income |
Fulton Financial Corporation | 34 |
Other income (YTD June)
2003 | 2002 | $ | % | ||||||||||
(dollars in thousands) | |||||||||||||
Invt Mgt & Trust | $ | 17,152 | $ | 14,743 | $ | 2,409 | 16 | % | |||||
Mort. Sales & Serv. | 11,792 | 6,064 | 5,728 | 94 | % | ||||||||
Service Charges | 7,766 | 7,472 | 294 | 4 | % | ||||||||
Deposit-related fees | 7,323 | 6,995 | 328 | 5 | % | ||||||||
Cash Mgt Fees | 3,628 | 3,619 | 9 | 0 | % | ||||||||
Success Card Fees | 2,641 | 2,326 | 315 | 14 | % | ||||||||
Merchant Fees | 2,056 | 1,893 | 163 | 9 | % | ||||||||
Other | 6,842 | 6,888 | (330 | ) | -8 | % | |||||||
Total | $ | 59,200 | $ | 50,000 | $ | 9,246 | 18 | % |
Fulton Financial Corporation | 35 |
Investment management and trust services revenue
1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 6/03 | ||||||
13.2% | 22.1% | 26.8% | 18.0% | 31.6% | 7.4% | 11.0% |
Fulton Financial Corporation | 36 |
Growth in other income
95 | 96 | 97 | 98 | 99 | 00 | 01 | 02 | 6/03 | ||||||||||||||||
10.6% | 13.3 | % | 10.4 | % | 10.6 | % | 13.4 | % | 14.3 | % | 35.8 | % | 18.4 | % | 18.3 | % |
Note: In 2001, we acquired Dearden, Maguire, Weaver & Barrett, LLC
Fulton Financial Corporation | 37 |
Moody’s Investor Service
¨ Short-term rating | P-1 | |
¨ Long-term rating | A-1 |
Fitch Ratings
¨ Short-term rating | F-1 | |
¨ Long-term rating | A |
Fulton Financial Corporation | 38 |
Loan diversification
[CHART] | Consumer and Other | 11 | % | ||
Residential Mortgage | 10 | % | |||
Commercial Loans | 32 | % | |||
Home Equity | 14 | % | |||
Commercial Mortgage | 33 | % |
Fulton Financial Corporation | 39 |
Summary of larger loans
¨ | 21 relationships with commitments to lend of $20 million or more |
¨ | Maximum individual commitment of $30 million |
¨ | Average commercial loan commitment is $536,000 |
¨ | Loans and corresponding relationships are within Fulton’s geographical market area |
Fulton Financial Corporation | 40 |
Commercial loan concentration
by industry (as of 6/30/03)
Industry | % | |
Construction | 17.2 | |
R/E—Rental | 16.6 | |
Services | 11.9 | |
Manufacturing | 10.4 | |
Retail | 8.2 | |
Health Care | 7.7 | |
Other | 7.5 | |
Agriculture | 6.4 | |
Wholesale | 5.9 | |
Arts and Entertainment | 4.1 | |
Financial Services | 2.2 |
Fulton Financial Corporation | 41 |
Experience of our lenders
¨ | The officers who oversee all lending have each worked in this capacity at Fulton for more than 20 years. |
¨ | This consistency should enable Fulton Financial to maintain its high asset quality in the future. |
Fulton Financial Corporation | 42 |
Possible Future
Expansion
[GRAPHIC]
¨ | Current Markets |
¨ | Future Expansion |
Fulton Financial Corporation | 43 |
Looking ahead
¨ | Continue to build on our strengths |
¨ | Continue to rely on the expertise and skill of our employees |
¨ | Stick to banking basics while preparing for the future |
¨ | Enhance customer relationship management efforts |
Fulton Financial Corporation | 44 |
Board of Directors
¨ | Focused on maximizing shareholder value with an annual increase in earnings per share in the range of 10% |
Fulton Financial Corporation | 45 |
Financial Highlights
Performance Overview
Fulton Financial Corporation | 46 |
Six months ended June 30, 2003
¨ $0.64 | Net income per share | |
(6.7% increase over 2002) | ||
¨ $0.303 | Cash dividends per share | |
(11.4% increase over 2002) | ||
¨ 1.64% | Return on Assets | |
¨ 15.88% | Return on Equity | |
¨ 52.90% | Efficiency Ratio |
Fulton Financial Corporation | 47 |
Average Balances (YTD June)
2003 | 2002 | $ | % | ||||||||||
(dollars in millions) | |||||||||||||
Investments | $ | 2,427 | $ | 1,817 | $ | 610 | 34 | % | |||||
Loans | 5,366 | 5,421 | (55 | ) | -1 | % | |||||||
Deposits | 6,553 | 6,195 | 358 | 6 | % | ||||||||
Borrowings | 840 | 625 | 215 | 34 | % |
Fulton Financial Corporation | 48 |
Average Loan Growth (YTD June)
2003 | 2002 | $ | % | ||||||||||
(dollars in millions) | |||||||||||||
Commercial | $ | 1,706 | $ | 1,537 | $ | 169 | 11 | % | |||||
Comm’l Mort | 1,774 | 1,673 | 101 | 6 | % | ||||||||
Resid Mort | 558 | 821 | (263 | ) | -32 | % | |||||||
Cons./Other | 1,328 | 1,390 | (62 | ) | -4 | % | |||||||
Total Loans | $ | 5,366 | $ | 5,421 | (55 | ) | -1 | % | |||||
Fulton Financial Corporation | 49 |
Peer group
n Commerce Bancorp | n Provident Financial Group | |
n First Commonwealth Financial | n Riggs National Corp. | |
n First Financial Bancorp. | n Sky Financial Group Inc. | |
n FirstMerit Corp. | n Susquehanna Bancshares | |
n Fulton Financial Corp | n Trust Co. of New Jersey | |
n Hudson United Bancorp. | n TrustCo Bank Corp. of NY | |
n Mercantile Bankshares Corp. | n United Bankshares Inc. | |
n North Fork Bankcorp. | n Valley National Bancorp | |
n Provident Bankshares Corp. | n Wilmington Trust Co. |
Fulton Financial Corporation | 50 |
Net charge-offs to average loans
[GRAPH]
Top 50 | Peer | FFC | ||
Source: SNL Financial Datasource
Fulton Financial Corporation | 51 |
Non-performing assets to total assets
[GRAPHIC]
Top 50 | Peer | FFC | ||
Source: SNL Financial Datasource
Fulton Financial Corporation | 52 |
Net interest margin
[GRAPHIC]
Top 50 | Peer | FFC | ||
Source:SNL Financial Datasource
Fulton Financial Corporation | 53 |
Asset/Liability management
Interest rate “shocks” (as of 6/30/03)
¨ | Impact on Net Interest Income: |
Rate Change | NII Change (Annual) | % Change | ||
+300 bp | + $ 34.6 million | +12.2% | ||
+200 bp | + $ 26.5 million | + 9.4% | ||
+100 bp | + $ 16.7 million | + 5.9% | ||
- 100 bp | - $ 17.5 million | - 6.2% |
Source: FFC Asset/Liability Modeling
Fulton Financial Corporation | 54 |
Investment portfolio
Portfolio Components ( in millions) | Ending Bal. 6/30/03 | Average Life (yrs.) | Credit Rating | ||||
Mortgage-backed securities | $ | 1,951.4 | 2.3 | AAA—agency issued | |||
Treasuries and agencies | $ | 105.5 | 0.3 | AAA | |||
Municipals | $ | 269.2 | 3.5 | AAA—insured | |||
Bank-issued Trust preferred stock | $ | 20.6 | 24 | various/callable: 5 yrs | |||
Other/Short-term Inv. | $ | 40.6 | NA | AAA | |||
Bank Stocks | $ | 73.8 | NA | not rated | |||
FHLB Stock | $ | 47.9 | NA | AAA | |||
Unrealized Gain—Bank Stock | $ | 9.0 | |||||
Unrealized Gain—Bonds | $ | 30.8 | |||||
TOTAL INVESTMENTS | $ | 2,548.8 | 2.46 |
Fulton Financial Corporation | 55 |
Bank stock gains
(percent contribution to EPS)
[GRAPHIC]
Fulton Financial Corporation | 56 |
Efficiency ratio
[GRAPHIC]
Top 50 | Peer | FFC | ||
Source: SNL Financial Datasource
Fulton Financial Corporation | 57 |
Other Expenses (YTD June)
2003 | 2002 | $ | % | ||||||||||
(dollars in thousands) | |||||||||||||
Salaries & Benefits | $ | 67,814 | $ | 63,665 | $ | 4,149 | 7 | % | |||||
Occupancy & Equip. | 15,155 | 14,070 | 1,085 | 8 | % | ||||||||
Data Processing | 5,640 | 6,163 | (523 | ) | -8 | % | |||||||
Advertising | 3,019 | 3,653 | (634 | ) | -17 | % | |||||||
Telecommun. | 2,481 | 2,661 | (180 | ) | -7 | % | |||||||
State Tax | 2,204 | 2,728 | (524 | ) | -19 | % | |||||||
Stat. & Supplies | 2,146 | 2,439 | (293 | ) | -12 | % | |||||||
Postage | 2,006 | 2,012 | (6 | ) | 0 | % | |||||||
Operating Risk Loss | 1,138 | 1,182 | (44 | ) | -4 | % | |||||||
Amortization | 719 | 719 | — | 0 | % | ||||||||
Other Expenses | 11,578 | 12,108 | (530 | ) | -4 | % | |||||||
Total | $ | 113,900 | $ | 111,400 | $ | 2,500 | 2 | % | |||||
Fulton Financial Corporation | 58 |
Accounting/Auditing
¨ | Compliance with accounting standards |
¨ | Designated a financial expert |
¨ | Disclosure committee |
¨ | Enhanced Audit Committee role |
¨ | CFO certifications |
¨ | Audit Committee approvals of financial filings |
Fulton Financial Corporation | 59 |
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 |
Fulton Financial Corporation | 60 |
Overview
¨ | Long-term, consistent performance |
¨ | Talented and dedicated employees |
¨ | Attractive returns for shareholders |
¨ | Career success for employees |
¨ | Financial success for customers |
¨ | Prosperity for communities |
Fulton Financial Corporation | 61 |
Fulton Financial Corporation
One Penn Square
Lancaster, PA 17602
www.fult.com
Fulton Financial Corporation | 62 |