EX-99 2 presentation2008.htm PPT

Fulton Financial Corporation

Investor Presentation

Citigroup Financial

Services Conference

January 29-30, 2008

1

 

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.

Forward-Looking Statement

2

 

Presentation Outline

Corporate Overview

Growth Initiatives

Challenges and responses

Financial Performance

3

 

Fulton Financial Profile

Regional financial holding company
(formed in 1982)

11 community banks and 3 financial
services affiliates in 5 states

267 community banking offices

Asset size:  $15.9 billion

Market capitalization:   $2.0 billion

4

 

34 consecutive years of dividend increases

9.8% compounded annual growth rate in
dividends per share

7.3% compounded annual growth rate in
earnings per share

25 bank acquisitions

Expanded into five states creating valuable
geographic franchise

What have we accomplished?

5

 

10-year Dividend History

0.2423

0.2672

0.3280

0.3662

0.4524

0.4932

0.5400

0.5810

0.2942

0.4050

0.5975

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

6

 

Quarterly Cash Dividend

15 cents

Dividend yield:  
approximately 5%

7

 

Capital (estimated 12/31/07)

Total Capital (GAAP):

Total Regulatory Capital:

Ratios (estimated):

Total Risk-Based Capital

Tier 1 Risk-Based Capital

Leverage Capital         

$1.57 billion

$1.41 billion

11.90%

9.30%

7.40%

8

 

Strategic Plan

Superior Employee Satisfaction

Superior Customer Satisfaction

Superior Financial Performance

Superior Operating Efficiency

9

 

Key Organic Growth Markets

10

 

Virginia Organic Growth Initiatives

Resource Bank to become division of
Fulton Bank

Transition RB from a nationwide
mortgage lender into a strong
community bank

Core funding and lending activities

New branches in strongest eastern
Virginia markets

Utilize Fulton critical mass

11

 

FFC Affiliates in Affluent Markets*

*Source: Bancology Vol. 24, September 2007

County

National

Ranking

Ranking in

State

Median HH

Ranking

FFC Affiliate

Hunterdon, NJ

#2

#1

$95,981

Skylands Bank

Loudoun, VA

#3

#1

$93,034

Resource Bank

Fairfax, VA

#4

#2

$91,851

Resource Bank

Morris, NJ

#6

#2

$90,417

Skylands Bank

Somerset, NJ

#7

#3

$90,411

Skylands Bank

Howard, MD

#9

#1

$86,370

Columbia Bank

12

 

*Source: SNL, Median HH Income, 2007 data

Serving PA’s Strongest Markets*

County

Rank

Projected Population

Change 2007-2012 (%)

Median HH

Income 2007 ($)

Projected HH

Income Change

2007-2012 (%)

Chester, PA

1

9.02

85,956

22.09

Montgomery, PA

2

3.58

79,785

21.29

Bucks, PA

3

4.64

78,883

21.22

Delaware, PA

4

1.20

65,392

19.82

Cumberland, PA

5

5.15

59,921

18.76

Northampton, PA

6

7.77

58,306

18.27

Lancaster, PA

8

4.78

57,258

15.49

York, PA

9

7.43

56,775

15.13

Lehigh, PA

10

5.61

56,725

19.15

Berks, PA

11

5.88

56,332

16.44

Average

5.51

65,533

18.77

Average of all other (58)

2.65

43,673

15.89

13

 

Q4/07 Highlights

Reported EPS of $0.22 ($0.03, or 15.8%,
higher than Q3 07)

Good commercial loan growth: 10%
annualized

Asset quality good - returning to more
normal levels; Increased LLP $2.2 million

Good growth in deposit account related
income

14

 

Q4/07 Highlights Continued

Significantly lower mortgage losses

Good CD growth at reasonable rates

Strong capital and liquidity

No exposure to CDOs; only agency-
guaranteed MBS

15

 

Funding

Continued denovo expansion in
existing and new markets

DDA Switch Kit w/cash incentives

Targeted direct mail

Superior customer experience

Relationship banking incentives

Team Advantage Banking

Appointed Chief Deposit Officer

16

 

Quality Loan Growth

Additional revenue producing staff

Current customers as referral source

New fixed/floating consumer product

Asset quality remains good

Consistent lending philosophy

17

 

Other Income

Focus on FFA recurring fee base

New overdraft management program

Increased debit card utilization

Expanded cash management base

18

 

Other Expense

Workforce reduction

Retirement plan realignment

Product standardization to simplify
customer choices and reduce costs

Departmental centralization

19

 

Superior Customer Satisfaction

*Retail: Q4/07

90% extremely/very satisfied

Commercial: Q4/07

90% extremely/very satisfied

*Compared to national average of 63%

  Source: American Banker/Gallup Consumer Survey

20

 

47 relationships with commitments to lend

            of $20 million or more

Maximum individual commitment of
$33 million

Average commercial lending relationship size is
$405,526

Loans and corresponding relationships are within
Fulton’s geographic market area                                                

Summary of Larger Loans (12/31/07)

21

 

Loan Diversification (12/31/07)

21%

12%

5%

31%

31%

Commercial

Commercial

Mortgage

Res Mtg and

Home Equity

Construction

Consumer and

other

22

 

             

Commercial Loan Concentration By Industry (as of 12/31/07)

Industry

%

Construction

27.2

   

RE - Investor - Owned

22.9

   

Services

14.0

   

Manufacturing

7.2

      

Retail

6.1

      

Health Care

5.4

      

Agriculture

4.9

      

Wholesale

4.3

      

Other

2.8

      

Financial Services

2.0

      

Arts and Entertainment

1.9

      

Transportation

1.3

      

100.0

  

23

 

Credit Ratings

Dominion Bond Rating Service

Fitch Ratings

Stable

Outlook

Stable

Outlook

A-

Long-term rating

A

Credit rating

F-1

Short-term rating

Stable

Outlook

A-1

      Lead Bank Deposits

A-2

      Issuer

Stable

Outlook

Long-term rating

BBB+

Credit rating

P-1

Short-term rating

Standards & Poors

Moody’s Investor Services

24

 

Financial Performance

25

 

Quarter Ended December 31, 2007

$38.2 million

$  0.22

$  0.150

0.97%

9.72%

17.44%

Net income

      (13.7% increase from 3rd Q 2007;

            18.1% decrease from 2006)

Net income per share

            (15.8% increase from 3rd Q 2007;

            18.5% decrease from 2006)

Cash dividends per share
(1.7% increase over 2006)

Return on assets

Return on equity

Return on tangible equity

26

 

International Bancshares Corporation

Old National Bancorp

South Financial Group, Inc.                       

Susquehanna Bancshares, Inc.

TCF Financial Corporation

Trustmark Corporation

UMB Financial Corporation                         

United Bankshares, Inc.     

Valley National Bancorp

Whitney Holding Corporation                

Wilmington Trust Corporation

Associated Banc-Corp

BancorpSouth, Inc.

Bank of Hawaii Corporation

BOK Financial Corporation                         

Citizens Republic Bancorp                         

City National Corporation

Colonial BancGroup, Inc.

Commerce Bancshares, Inc.                     

Cullen/Frost Bankers, Inc.                             

First Citizens BancShares, Inc.

First Midwest Bancorp, Inc.                        

First Merit Corporation        

                                

Peer Group

27

 

Income Statement Summary
(December Year to Date)

2007

2006

$

%

(dollars in thousands)

Net Interest Income

488,740

$  

485,560

$  

3,180

$     

1%

Loan Loss Provision

(15,060)

   

(3,500)

      

(11,560)

   

330%

Other Income

146,280

   

142,440

   

3,840

      

3%

Securities Gains

1,740

      

7,440

      

(5,700)

      

-77%

Other Expenses

(405,450)

  

(365,990)

  

(39,460)

   

11%

Income Taxes

(63,530)

   

(80,420)

   

16,890

     

-21%

Net Income

152,720

$  

185,530

$  

(32,810)

$  

-18%

Earnings Per Share

0.88

$      

1.06

$      

-$0.18

-17%

28

 

Income Statement Summary
(linked quarter)

4th Qtr

3rd Qtr

$

%

(dollars in thousands)

Net Interest Income

123,650

$  

122,410

$  

1,240

$     

1%

Loan Loss Provision

(6,800)

      

(4,610)

      

(2,190)

      

48%

Other Income

35,750

     

36,870

     

(1,120)

      

-3%

Securities Gains

(540)

         

(130)

         

(410)

         

N/M

Other Expenses

(98,450)

   

(107,990)

  

9,540

      

-9%

Income Taxes

(15,430)

   

(12,990)

   

(2,440)

      

19%

Net Income

38,180

$   

33,560

$   

4,620

$     

14%

Earnings Per Share

0.22

$      

0.19

$      

$0.03

16%

29

 

Average Loans
(December Year to Date)

2007

2006

$

%

(dollars in millions)

Commercial

3,210

$      

2,810

$   

400

$   

14%

Comm'l Mort

3,340

         

3,070

      

270

      

9%

Resid Mort

760

            

640

         

120

      

19%

Home Equity

1,450

         

1,420

      

30

        

2%

Construction

1,380

         

1,350

      

30

        

2%

Cons./Other

600

            

600

         

-

      

0%

Total Loans

10,740

$   

9,890

$   

850

      

9%

30

 

Average Loans
Linked Quarter

4th Q 07

3rd Q 07

$

%

(dollars in millions)

Commercial

3,360

$      

3,280

$   

80

$      

2%

Comm'l Mort

3,440

         

3,380

      

60

        

2%

Resid Mort

830

            

770

         

60

        

8%

Home Equity

1,480

         

1,450

      

30

        

2%

Construction

1,380

         

1,380

      

-

      

0%

Cons./Other

590

            

600

         

(10)

      

-2%

Total Loans

11,080

$   

10,860

$  

220

      

2%

31

 

Net Interest Margin
(12/31/07)

3.66

3.62

3.46

3.25

3.50

3.75

4.00

4.25

4.50

4.75

FFC

Peer

Top 50

32

 

Net Interest Margin Trend

3.50

3.60

3.70

3.80

3.90

4.00

Q1 06

Q2 06

Q3 06

Q4 06

Q1 07

Q2 07

Q3 07

Q4 07

Reported

Core

33

 

6 month cumulative gap – 0.83

Interest Rate Shocks

(12/31/07)

Rate Change      NII Change (Annual)       % Change

  

  +300 bp                - $   3.5 million                           -  0.7%

  +200 bp                - $   2.3 million                           -  0.5%

  +100 bp           - $   1.2 million                          -  0.2%

  - 100 bp                -  $  0.6 million                           -  0.1%

  - 200 bp                -  $  5.3 million                           -  1.0%

  - 300 bp                -  $ 11.2 million                       -  2.2%

34

 

Investment Portfolio
(12/31/2007)

No collateralized debt obligations (CDOs)

All MBS agency – guaranteed

ENDING

MODIFIED

BALANCE

DURATION

CREDIT RATING

(000's)

Mortgage-backed securities

1,462.9

$     

3.46

AAA

Municipal bonds

511.0

           

4.24

AAA

Collateralized mortgage obligations

588.8

           

3.82

AAA

U.S. Treasuries and agencies

214.1

           

1.79

AAA

Corporate & trust preferred securities

169.9

           

8.50

Various

Bank stocks

92.7

            

NA

Not rated

FHLB stock

122.4

           

NA

AAA

Other investments

21.5

            

NA

Unrealized gain - bank stock

(23.3)

            

Unrealized loss-bonds

(6.7)

              

Total Investments

3,153.6

$     

3.84

35

 

Average Deposits
(Year to Date December)

2007

2006

$

%

(dollars in millions)

Nonint DDA

1,710

$     

1,810

$   

(100)

$  

-6%

Int DDA

1,700

      

1,670

      

30

        

2%

Savings/MMDA

2,260

      

2,340

      

(80)

      

-3%

CD's

4,550

      

4,130

      

420

      

10%

Cash Mgt

650

         

520

         

130

      

25%

Total Deposits

10,870

$  

10,470

$  

400

$   

4%

36

 

Average Deposits
Linked Quarter

4th Q 07

3rd Q 07

$

%

(dollars in millions)

Nonint DDA

1,680

$     

1,700

$   

(20)

$   

-1%

Int DDA

1,720

      

1,730

      

(10)

      

-1%

Savings/MMDA

2,180

      

2,260

      

(80)

      

-4%

CD's

4,600

      

4,630

      

(30)

      

-1%

Cash Mgt

720

         

690

         

30

        

4%

Total Deposits

10,900

$  

11,010

$  

(110)

$  

-1%

37

 

Net Charge-Offs To Loans
(12/31/07)

0.09

0.18

0.23

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

9/07

12/07

FFC

Peer

Top 50

38

 

Other Income
(Year to Date December)

2007

2006

$

%

(dollars in thousands)

Invt Mgt & Trust

38,670

$     

37,440

$     

1,230

$      

3%

Overdraft & NSF Fees

22,350

      

20,530

      

1,820

        

9%

Mort. Sales Gains

14,290

      

21,090

      

(6,800)

      

-32%

Service Charges

12,620

      

13,210

      

(590)

         

-4%

Cash Mgt Fees

11,530

      

10,040

      

1,490

        

15%

Success Card Fees

8,720

         

7,520

         

1,200

        

16%

Other

38,100

      

32,610

      

5,490

        

17%

Total

146,280

$   

142,440

$   

3,840

$      

3%

39

 

Other Income
Linked Quarter

4th Q 07

3rd Q 07

$

%

(dollars in thousands)

Invt Mgt & Trust

9,290

$      

9,290

$      

-

$         

0%

Overdraft & NSF Fees

7,090

         

5,280

         

1,810

        

34%

Service Charges

3,160

         

3,150

         

10

            

0%

Cash Mgt Fees

3,100

         

2,870

         

230

           

8%

Mort. Sales Gains

2,180

         

2,530

         

(350)

         

-14%

Success Card Fees

2,390

         

2,180

         

210

           

10%

Other

8,540

         

11,570

      

(3,030)

      

-26%

Total

35,750

$     

36,870

$     

(1,120)

$     

-3%

40

 

Efficiency Ratio
(12/31/07)

61.2

57.3

59.6

59.3

50.0

52.0

54.0

56.0

58.0

60.0

62.0

64.0

93

94

95

96

97

98

99

00

01

02

03

04

05

06

9/07

12/07

FFC

FFC (Excl RB Charge)

Peer

Top 50

41

 

Other Expense
(Year to Date December)

2007

2006

$

%

(dollars in thousands)

Salaries & Benefits

217,530

$  

213,910

$  

3,620

$   

2%

Occupancy & Equip.

53,850

      

50,740

      

3,110

      

6%

Operating Risk Loss

27,230

      

4,820

         

22,410

   

465%

DP/Software/Telecom

25,860

      

24,780

      

1,080

      

4%

Amortization

8,330

         

7,910

         

420

         

5%

Other Expenses

72,650

      

63,830

      

8,820

      

14%

Total

405,450

$  

365,990

$  

39,460

$  

11%

42

 

Other Expense
Linked Quarter

4th Q 07

3rd Q 07

$

%

(dollars in thousands)

Salaries & Benefits

53,170

$   

52,510

$   

660

$      

1%

Occupancy & Equip.

13,300

      

13,250

      

50

            

0%

Operating Risk Loss

770

            

16,340

      

(15,570)

   

-95%

DP/Software/Telecom

6,450

         

6,470

         

(20)

         

0%

Amortization

2,160

         

2,000

         

160

         

8%

Other Expenses

22,600

      

17,420

      

5,180

      

30%

Total

98,450

$   

107,990

$  

(9,540)

$   

-9%

43

 

Summary

Healthy commercial loan pipeline

Strong liquidity position

Strong capital position

Attractive dividend yield

Good geographic markets

Aggressive core deposit marketing

High customer satisfaction

44

 

Fulton Financial Corporation

One Penn Square

Lancaster, PA  17602

www.fult.com

45

 

46