Fulton Financial Corporation 1 Fulton Financial Corporation Fulton Financial Corporation Investor Presentation Exhibit 99.1 |
Fulton Financial Corporation 2 Forward-Looking Statement 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 3 Presentation Outline Presentation Outline Corporate profile Relationship banking strategy Strategic initiatives Acquisition strategy Capital Loan summary Customer and employee satisfaction Financial performance |
Fulton Financial Corporation 4 Fulton Financial Profile Fulton Financial Profile Regional financial holding company (formed in 1982) 15 community banks and 3 financial services affiliates in 5 states 256 community banking offices Asset size: $14.6 billion Market capitalization: $2.8 billion |
Fulton Financial Corporation 5 Where are we located? Where are we located? |
Fulton Financial Corporation 6 FFC Affiliates in Affluent Markets* FFC Affiliates in Affluent Markets* County National Ranking Ranking in State Median HH Ranking FFC Affiliate Fairfax, VA #1 #1 $100,803 Resource Bank Hunterdon, NJ #5 #1 91,622 Skylands Bank Morris, NJ #9 #2 89,020 Skylands Bank Somerset, NJ #10 #3 88,665 Somerset Valley Howard, MD #11 #1 86,586 Columbia Bank Montgomery, MD #13 #2 85,763 Columbia Bank Chester, PA #25 #1 81,043 Fulton Bank *Source: SNL, Median HH Income 2005 |
Fulton Financial Corporation 7 Serving PA’s Strongest Growth Markets* Serving PA’s Strongest Growth Markets* County Rank Projected Population Change 2005-2010 Median HH Income Projected HH Income Change 2005-2010 Chester 1 8.17% $81,043 27.48% Montgomery 2 2.96 75,725 24.30 Bucks 3 3.87 73,522 21.65 Delaware 4 3.06 62,297 23.15 Cumberland 5 4.10 56,532 19.27 Northampton 7 6.86 54,850 19.78 Berks 8 3.79 53,721 18.98 Lancaster 9 4.67 53,682 17.25 Lehigh 10 5.59 53,351 21.49 York 11 4.92 53,254 17.16 Average 4.80% $61,800 21.05% 17.11% Average all other (57) PA Counties 0.26% $41,177 *Source: SNL, Median HH Income 2005 |
Fulton Financial Corporation 8 Possible Future Expansion Possible Future Expansion |
Fulton Financial Corporation 9 Proven business model Consistent performance 24 consecutive years of record earnings 32 consecutive years of dividend increases 10.2% compounded annual growth rate in dividends per share 8.6% compounded annual growth rate in earnings per share (last 5 years = 5.5%) 25 bank acquisitions What have we accomplished? What have we accomplished? |
Fulton Financial Corporation 10 10-year dividend history 10-year dividend history 0.2104 0.2312 0.2806 0.3089 0.3845 0.4253 0.4750 0.5179 0.2544 0.3444 0.5670 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 |
Fulton Financial Corporation 11 Dow Jones U.S. Select Dividend Index Dow Jones U.S. Select Dividend Index 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 200,000 shares Index represents approximately 95% of U.S. Market Capitalization |
Fulton Financial Corporation 12 Creating Value Creating Value For our Shareholders Employees Customers Communities With People Place Promotion Product Price |
Fulton Financial Corporation 13 Our Relationship Strategy Our Relationship Strategy Long-term successful employees Long-term successful customers Long-term successful shareholders |
Fulton Financial Corporation 14 Stock Performance (1982 - 2005) Stock Performance (1982 - 2005) WITHOUT dividend reinvestment: 14% compounded annual rate of return WITH dividend reinvestment: 18% compounded annual rate of return |
Fulton Financial Corporation 15 Corporate Strategic Priorities Corporate Strategic Priorities Producing above average long term shareholder returns Driving EPS growth organically and acquisitively Creating financial success together with our customers Creating career success together with our employees Enriching the communities we serve Managing risk comprehensively Deploying capital prudently |
Fulton Financial Corporation 16 Most Recent Acquisition Most Recent Acquisition The Columbia Bank •Acquired on 2/1/06 Assets of $1.3 billion •Headquartered in Columbia, MD •25 offices in Howard, Frederick, Montgomery, Prince George’s, Baltimore Counties and Baltimore City |
Fulton Financial Corporation 17 Columbia Bank Overview Columbia Bank Overview Consistently one of the fastest growing and most profitable de novo institutions since its founding in 1987 Focused on building a premier community banking franchise in the Baltimore / Washington corridor Prior to acquisition 4th largest independent commercial banking company in Central Maryland |
Fulton Financial Corporation 18 Columbia Bank Footprint Columbia Bank Footprint MARYLAND Branch office Headquarters office Washington D.C Full Service Retirement Branches Branches Baltimore County/City 3 3 Howard County 9 2 Montgomery County 3 -- Prince George’s County 5 -- Total 20 5 Baltimore Howard Montgomery Prince George’s Harford Carroll Frederick Anne Arundel Baltimore City |
Fulton Financial Corporation 19 Columbia Bank Demographics Columbia Bank Demographics Vibrant and diverse Baltimore / Washington corridor economy providing excellent growth opportunities Affluent, well-educated retail customer base Concentration of small and mid-sized businesses Large, stable government employment base Attractive location for “new economy” firms Median household income in Howard and Montgomery Counties = 1st and 2nd in Maryland Bank market share in Howard County = 16.7% on 6/30/05 |
Fulton Financial Corporation 20 Strong performance Asset quality High growth areas Dynamic market demographics Talented and dedicated staff Compatible corporate culture What do we look for? What do we look for? |
Fulton Financial Corporation 21 Acquisitions In New Markets Acquisitions In New Markets What changes? Loan review Investments Asset/liability management Compliance Audit / Accounting What stays the same? Bank name Board of Directors Management team Employees Community involvement and support |
Fulton Financial Corporation 22 Our Business Model Our Business Model Affiliate knows local markets best Maintains established local brand value Proprietary retail expertise and strategy Prestigious jobs in local markets Pricing autonomy Performance goals Affiliate plan execution |
Fulton Financial Corporation 23 Increased income diversification due to introduction of new products and services Continued local autonomy and decision-making Increased lending capacity Additional capital Proven merger/conversion expertise Reduced expenses Benefits To New Affiliates Benefits To New Affiliates |
Fulton Financial Corporation 24 Investment management Brokerage services Insurance (whole life, term life, long-term care through Advisors) Cash management Health Savings Accounts Debit/credit cards Residential mortgages Specialized lending (leasing and indirect) International services Correspondent banking On-line banking Affiliate New Product Availability Affiliate New Product Availability |
Fulton Financial Corporation 25 Other Income As a Percent of Total Income Other Income As a Percent of Total Income 22.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 96 97 98 99 00 01 02 03 04 05 6/06 |
Fulton Financial Corporation 26 Capital (6/30/06) Total Capital (GAAP): $1.4 billion Total Regulatory Capital: $1.2 billion Ratios: • Total Risk-Based Capital 11.55% • Tier 1 Risk-Based Capital 9.63% • Leverage Capital 7.67% |
Fulton Financial Corporation 27 Loan Diversification (6/30/06) Loan Diversification (6/30/06) 29% 30% 21% 14% 6% Commercial Commercial Mortgage Res Mtg and Home Equity Construction Consumer and other |
Fulton Financial Corporation 28 38 relationships with commitments to lend of $20 million or more Maximum individual commitment of $33 million Average commercial loan size is $215,000 Loans and corresponding relationships are within Fulton’s geographic market area Summary of Larger Loans Summary of Larger Loans |
Fulton Financial Corporation 29 Commercial Loan Concentration By Industry (as of 6/30/06) Commercial Loan Concentration By Industry (as of 6/30/06) Industry % Construction 26.1 RE - Investor - Owned 21.2 Services 15.3 Manufacturing 6.9 Retail 6.2 Health Care 6.1 Agriculture 5.1 Wholesale 4.7 Other 2.9 Financial Services 2.1 Arts and Entertainment 1.9 Transportation 1.5 100.0 |
Fulton Financial Corporation 30 Short-term rating P-1 Long-term rating Issuer A-2 Lead Bank Deposits A-1 Outlook Stable Credit Ratings Credit Ratings Moody’s Investor Services Short-term rating F-1 Long-term rating A Outlook Stable Fitch Ratings Standard & Poors Credit rating BBB+ Outlook Stable Dominion Bond Rating Service Credit rating A Outlook Stable |
Fulton Financial Corporation 31 Employee Retention Employee Retention 0 10 20 30 40 50 60 70 80 90 100 2001 2002 2003 2004 2005 Exempt Non-exempt Overall |
Fulton Financial Corporation 32 Employee Opinion Survey Employee Opinion Survey Quality and Improvement Commitment Immediate Supervisor Job Satisfaction Service Climate Company Image Training and Development Organizational Leadership Work Process Communication Pay and Benefits Teamwork and Collaboration (Survey administered by BAI Survey Services) |
Fulton Financial Corporation 33 Employee Opinion Survey Employee Opinion Survey Conducted every three years Over 3,000 employees surveyed (85%) Completed in June 2005 FFC responses exceed BAI national averages in 10 of the 12 categories |
Fulton Financial Corporation 34 Customer Satisfaction (Fall 2005) Customer Satisfaction (Fall 2005) *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: 2005 American Banker/Gallup Consumer Survey |
Fulton Financial Corporation 35 Quarter ended June 30, 2006 Quarter ended June 30, 2006 $46.7 million Net income (12.3% increase over 2005) $ 0.27 Net income per share (8.0% increase over 2005) $ 0.1475 Cash dividends per share (6.8% increase over 2005) 1.32% Return on assets 13.01% Return on equity 24.87% Return on tangible equity |
Fulton Financial Corporation 36 South Financial Group, Inc. (The) First Midwest Bancorp, Inc. Susquehanna Bancshares, Inc. United Bankshares, Inc. Sky Financial Group Inc. Mercantile Bankshares Corporation Citizens Banking Corporation Valley National Bancorp Wilmington Trust Corporation BancorpSouth, Inc. UMB Financial Corporation Trustmark Corporation FirstMerit Corporation Peer Group Peer Group First Republic Bank Bank of Hawaii Corporation International Bancshares Corporation TCF Financial Corporation BOK Financial Corporation Colonial BancGroup, Inc. City National Corporation First Citizens BancShares, Inc. Whitney Holding Corporation Cullen/Frost Bankers, Inc. Associated Banc-Corp Commerce Bancshares, Inc. Old National Bancorp Greater Bay Bancorp |
Fulton Financial Corporation 37 Income Statement Summary (6/30/06) Income Statement Summary (6/30/06) 2006 2005 $ % Net Interest Income 237,890 $ 198,170 $ 39,720 $ 20% Loan Loss Provision (1,880) (1,530) (350) 23% Other Income 68,540 69,440 (900) -1% Securities Gains 4,070 4,730 (660) -14% Other Expenses (178,800) (152,010) (26,790) 18% Income Taxes (39,240) (35,760) (3,480) 10% Net Income 90,580 $ 83,040 $ 7,540 $ 9% (dollars in thousands) |
Fulton Financial Corporation 38 Average Loan Growth (6/30/06) Average Loan Growth (6/30/06) 2006 2005 $ % Commercial 2,700 $ 2,310 $ 390 $ 17% Comm'l Mort 2,990 2,490 500 20% Resid Mort/HE 1,990 1,670 320 19% Construction 1,270 670 600 90% Cons./Other 590 540 50 9% Total Loans 9,540 $ 7,680 $ 1,860 24% (dollars in millions) |
Fulton Financial Corporation 39 Organic Loan Growth (6/30/06) Organic Loan Growth (6/30/06) 2006 2005 $ % Commercial 2,400 $ 2,310 $ 90 $ 4% Comm'l Mort 2,740 2,490 250 10% Resid Mort/HE 1,750 1,670 80 5% Construction 880 670 210 31% Cons./Other 580 540 40 7% Total Loans 8,350 $ 7,680 $ 670 9% (dollars in millions) |
Fulton Financial Corporation 40 Net Interest Margin (6/30/06) Net Interest Margin (6/30/06) 3.81 3.62 3.89 3.50 3.75 4.00 4.25 4.50 4.75 FFC Peer Top 50 |
Fulton Financial Corporation 41 Asset/Liability Management 6/30/06 Asset/Liability Management 6/30/06 Interest rate “shocks” Rate Change NII Change (Annual) % Change +300 bp + $ 10.7 million + 2.2% +200 bp + $ 7.1 million + 1.5% +100 bp + $ 3.6 million + 0.7% - 100 bp - $ 10.0 million - 2.1% - 200 bp - $ 22.4 million - 4.6% - 300 bp - $ 38.7 million - 8.0% |
Fulton Financial Corporation 42 Yield Curve - Rate Shocks Yield Curve - Rate Shocks Treasury Yields at Different Rate Shocks Quarter Ending 6/30/06 0.00 2.00 4.00 6.00 8.00 10.00 1 2 3 4 5 6 7 8 Year -300 -200 -100 Flat 100 200 300 |
Fulton Financial Corporation 43 Loan Mix (6/30/06) Loan Mix (6/30/06) Fixed 33% Floating 40% Adjustable 27% |
Fulton Financial Corporation 44 Investment Portfolio (6/30/2006) Investment Portfolio (6/30/2006) ENDING MODIFIED BALANCE DURATION CREDIT RATING (000's) Mortgage-backed securities 1,399.1 $ 2.54 AAA Municipal bonds 452.4 3.80 AAA Collateralized mortgage obligations 398.5 2.32 AAA U.S. Treasuries and agencies 348.5 2.55 AAA Corporate & trust preferred securities 69.5 10.01 various - 5 yr call FHLB stock 75.6 na AAA Bank stock 76.0 na Not rated Other investments 21.7 na AAA Unrealized gain - bank stock (1.9) Unrealized loss-bonds (95.6) Total Investments 2,743.8 $ 2.89 |
Fulton Financial Corporation 45 Bank Stock Gains (percent contribution to EPS) Bank Stock Gains (percent contribution to EPS) 0 1 2 3 4 5 6 7 8 9 |
Fulton Financial Corporation 46 Funding Sources (6/30/06) Funding Sources (6/30/06) 73% 16% 10% 1% Deposits and Customer Repurchase Agreements Borrowings GAAP Capital Other Liabilities |
Fulton Financial Corporation 47 Average Deposit Growth (6/30/06) Average Deposit Growth (6/30/06) 2006 2005 $ % Nonint DDA 1,810 $ 1,540 $ 270 $ 18% Int DDA 1,670 1,490 180 12% Savings/MMDA 2,330 1,950 380 19% CD's 3,910 3,000 910 30% Cash Mgt 460 390 70 18% Total Deposits 10,180 $ 8,370 $ 1,810 $ 22% (dollars in millions) |
Fulton Financial Corporation 48 Organic Deposit Growth (6/30/06) Organic Deposit Growth (6/30/06) 2006 2005 $ % (dollars in millions) Nonint DDA 1,540 $ 1,540 $ - $ 0% Int DDA 1,500 1,490 10 1% Savings/MMDA 2,060 1,950 110 6% CD's 3,360 3,000 360 12% Cash Mgt 330 390 (60) -15% Total Deposits 8,790 $ 8,370 $ 420 $ 5% |
Fulton Financial Corporation 49 Net Charge-Offs To Loans (6/30/06) Net Charge-Offs To Loans (6/30/06) 0.14 0.14 0.02 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 FFC Peer Top 50 |
Fulton Financial Corporation 50 Nonperforming Assets To Assets (6/30/06) Nonperforming Assets To Assets (6/30/06) 0.37 0.31 0.29 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 FFC Peer Top 50 |
Fulton Financial Corporation 51 Other Income Detail (6/30/06) Other Income Detail (6/30/06) 2006 2005 $ % (dollars in thousands) Invt Mgt & Trust 19,090 $ 17,980 $ 1,110 $ 6% Mort. Sales Gains 9,960 11,950 (1,990) -17% Overdraft Fees 9,430 8,370 1,060 13% Service Charges 7,240 7,090 150 2% Cash Mgt Fees 4,470 3,830 640 17% Success Card Fees 3,610 3,080 530 17% Other 14,740 17,140 (2,400) -14% Total 68,540 $ 69,440 $ (900) $ -1% |
Fulton Financial Corporation 52 Internal Results (6/30/06) Internal Results (6/30/06) 2006 2005 $ % (dollars in thousands) Invt Mgt & Trust 18,660 $ 17,980 $ 680 $ 4% Mort. Sales Gains 9,470 11,950 (2,480) -21% Overdraft Fees 9,040 8,370 670 8% Service Charges 6,540 7,090 (550) -8% Cash Mgt Fees 4,430 3,830 600 16% Success Card Fees 3,560 3,080 480 16% Other 13,870 17,140 (3,270) -19% Total 65,570 $ 69,440 $ (3,870) $ -6% |
Fulton Financial Corporation 53 Efficiency Ratio (6/30/06) Efficiency Ratio (6/30/06) 55.7 58.7 56.1 50.00 52.00 54.00 56.00 58.00 60.00 62.00 FFC Peer Top 50 |
Fulton Financial Corporation 54 Other Expense Detail (6/30/06) Other Expense Detail (6/30/06) 2006 2005 $ % (dollars in thousands) Salaries & Benefits 103,320 $ 89,530 $ 13,790 $ 15% Occupancy & Equip. 24,680 20,000 4,680 23% DP/Software/Telecom 12,400 11,610 790 7% Amortization 3,860 2,350 1,510 64% Other Expenses 34,540 28,520 6,020 21% Total 178,800 $ 152,010 $ 26,790 $ 18% |
Fulton Financial Corporation 55 Internal Results (6/30/06) Internal Results (6/30/06) 2006 2005 $ % (dollars in thousands) Salaries & Benefits 91,040 $ 89,530 $ 1,510 $ 2% Occupancy & Equip. 20,880 20,000 880 4% DP/Software/Telecom 11,110 11,610 (500) -4% Amortization 2,210 2,350 (140) -6% Other Expenses 29,710 28,520 1,190 4% Total 154,950 $ 152,010 $ 2,940 $ 2% |
Fulton Financial Corporation 56 Looking Ahead Looking Ahead Focus on: EPS growth Non-interest income Organic growth Strong asset quality Value-creating acquisitions Net interest margin expansion Improved efficiency |
Fulton Financial Corporation 57 Planned In-Market Consolidation Planned In-Market Consolidation Premier Bank (Bucks and Montgomery Counties, PA) to merge with Fulton Bank as Fulton Division First Washington State Bank (Mercer, Monmouth and Ocean Counties, NJ) to merge with The Bank and operate as The Bank To be finalized Q4/06 or Q1/07 |
Fulton Financial Corporation 58 Fulton Financial Corporation Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com |
Fulton Financial Corporation 59 Where are we located? Where are we located? |
Fulton Financial Corporation 60 Possible Future Expansion Possible Future Expansion |