EX-99.1 2 exhibitppt.htm INVESTOR PRESENTATION






Fulton Financial Corporation

Investor Presentation

September 16, 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

Quarterly Comments

Challenges / Responses

Loan Summary

Financial Performance

3

Fulton Financial Profile

Mid-Atlantic regional financial holding company

A family of 10 community banks

Fulton Financial Advisors

Fulton Mortgage Company

Serving strong /stable markets in 5 states

267 community banking offices

Asset size:  $16 billion

Market capitalization:  $ 2 billion

Book value (6/30/08) : $9.15

Tangible book value (6/30/08): $5.41

4

34 consecutive years of dividend increases
(1973-2007)

9.8% compounded annual growth rate in
dividends per share (1982 – 2007)

7.3% compounded annual growth rate in
earnings per share (1982 – 2007)

25 bank acquisitions since 1982

Created a valuable geographic franchise

Accomplishments

5

10-year Dividend History

6

Quarterly Cash Dividend

15 cents

Dividend yield:  
approximately 5%

7

Capital (as of 06/30/08)

Total Capital (GAAP):                                        $1.59 billion

Total Regulatory Capital:                                          $1.46 billion

Regulatory Capital Ratios:    

Total Risk-Based Capital                                  11.70%

Tier 1 Risk-Based Capital                                 9.10%

Leverage Capital                  7.40%

8

Strategic Plan

Superior
Employee Satisfaction

Superior
Customer Experience

Superior
Operating Efficiency

Superior
Financial Results

9

Key organic growth markets

10

Q2/08 Quarterly Comments

Reported EPS of $0.15

Impact of three significant events:

            - Sale of credit card portfolio

            - Bank stock portfolio write-down

            - Auction rate certificates

Excluding above events: EPS of $0.24

Strong capital position

Q3/08 cash dividend declared at current
level

11

Q2/08 Quarterly Comments

Solid results from core banking operations

Net interest income growth

Expansion of net interest margin

Good loan growth

New loan pipeline stable

Strong growth in select non-interest
income categories

Revenue generation and cost-cutting
initiatives producing meaningful results

12

Q2/08 Quarterly Comments

Asset quality deterioration

Housing-related businesses continue
to struggle

Little evidence that economic
conditions are improving

Sluggish deposit growth

Bank stock write-down

13

         Two Greatest Challenges

Retail Funding

Credit Quality

14

Retail Funding - Action Steps

Continued denovo expansion in existing
and new markets

DDA Switch Kit w/cash or gift incentives

Targeted direct mail

Superior customer experience

Relationship banking incentives

Team Advantage Banking (small business)

Appointed Chief Deposit Officer

15

Credit Quality – Action Steps

Internal emphasis on loan review /
workout

Watching all loan portfolios very
carefully, real estate in particular

Early customer intervention /
remediation as problems arise

New loans underwritten to traditional
conservative standards

16

Superior Customer Satisfaction

*Retail:

90% extremely/very satisfied

Commercial:

90% extremely/very satisfied

  

*Compared to national average of 63%

  Source: American Banker/Gallup Consumer Survey

17

46 relationships with commitments to lend

            of $20 million or more

Maximum individual commitment of
$33 million

Average commercial lending relationship size is
$417,538

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

Summary of Larger Loans

18

Loan Diversification (as of 06/30/08)

19

             

Commercial Loan Concentration By Industry (as of
06/30/08)

Industry

%

Construction

25.9

   

RE - Investor - Owned

23.6

   

Services

14.2

   

Manufacturing

7.0

      

Retail

6.1

      

Health Care

5.4

      

Agriculture

5.0

      

Wholesale

4.5

      

Other

3.1

      

Financial Services

2.0

      

Arts and Entertainment

2.0

      

Transportation

1.2

      

100.0

  

20

Long-term rating   
                    Issuer                                         A-2
                    Lead Bank Deposits               A-1

Outlook                                Negative

Moody’s Investor Services

Short-term rating               F-1

Long-term rating                A-

Outlook                                  Stable

               Fitch Ratings

  Dominion Bond Rating Service

Credit rating                                             A

Outlook                               Negative

Credit Ratings

21

Financial Performance

22

Quarter Ended June 30, 2008

$25.7 million           Net income

$  0.15                 Net income per share

$  0.15                                    Cash dividends per share

    0.85%                                 Return on assets

    8.40%                                 Return on equity

  14.65%                                 Return on tangible equity

23

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

24

Income Statement Summary
(Six Months Ended June 30 th)

2008

2007

$

%

(dollars in thousands)

Net Interest Income

257,790

$

242,680

$

15,110

$     

6%

Loan Loss Provision

(27,930)

   

(3,660)

      

(24,270)

     

n/m

Other Income

76,320

      

73,660

      

2,660

        

4%

Credit Card Sale Gain

13,910

      

-

            

13,910

      

n/m

Securities Gains

(20,400)

   

2,410

        

(22,810)

     

n/m

Other Expenses

(206,390)

  

(199,010)

  

(7,380)

      

4%

Income Taxes

(26,130)

   

(35,110)

   

8,980

        

-26%

Net Income

67,170

$   

80,970

$   

(13,800)

$  

-17%

25

Income Statement Summary
(Linked Quarter)

2nd Q 08

1st Q 08

$

%

(dollars in thousands)

Net Interest Income

131,890

$

125,900

$

5,990

$      

5%

Loan Loss Provision

(16,710)

   

(11,220)

   

(5,490)

      

n/m

Other Income

39,890

      

36,430

      

3,460

        

9%

Credit Card Sale Gain

13,910

      

-

            

13,910

      

n/m

Securities Gains

(21,650)

   

1,250

        

(22,900)

     

n/m

Other Expenses

(109,740)

  

(96,660)

   

(13,080)

     

14%

Income Taxes

(11,910)

   

(14,200)

   

2,290

        

-16%

Net Income

25,680

$   

41,500

$   

(15,820)

$  

-38%

26

Average Loans
(Six Months Ended June 30th)

2008

2007

$

%

(dollars in millions)

Commercial

3,490

$     

3,100

$   

390

$   

13%

Comm'l Mort

3,620

      

3,260

     

360

     

11%

Resid Mort

880

           

710

        

170

     

24%

Home Equity

1,550

      

1,440

     

110

     

8%

Construction

1,310

      

1,390

     

(80)

     

-6%

Cons./Other

510

           

600

        

(90)

     

-15%

Total Loans

11,360

$   

10,500

$

860

     

8%

27

Average Loans
(Linked Quarter)

2nd Q 08

1st Q 08

$

%

(dollars in millions)

Commercial

3,510

$     

3,470

$   

40

$     

1%

Comm'l Mort

3,700

      

3,550

     

150

     

4%

Resid Mort

890

           

860

        

30

      

3%

Home Equity

1,570

      

1,530

     

40

      

3%

Construction

1,290

      

1,330

     

(40)

     

-3%

Cons./Other

460

           

560

        

(100)

   

-18%

Total Loans

11,420

$   

11,300

$

120

     

1%

28

Net Interest Margin
(as of 06/30/08)

29

Net Interest Margin Trend

30

6 month cumulative gap – 0.97

Interest Rate Shocks

(as of 06/30/08)

Rate Change      NII Change (Annual)       % Change

  

  +300 bp                + $  12.1 million                    +  2.3%

  +200 bp                + $    9.4 million                    +  1.8%

  +100 bp           + $    5.4 million                    +  1.0%

  - 100 bp                -  $    6.0 million                    -   1.1%

  - 200 bp                -  $  14.3 million                    -  2.7%

  

31

Investment Portfolio
(as of 06/30/08)

ENDING

MODIFIED

BALANCE

DURATION

CREDIT RATING

(in millions)

Mortgage-backed securities

1,238.4

$     

3.16

AAA

Municipal bonds

511.3

           

4.28

AAA

Collateralized mortgage obligations

402.1

           

3.73

AAA

U.S. Treasuries and agencies

98.0

            

2.34

AAA

Corporate & trust preferred securities

177.9

           

9.30

Various

Auction rate securities

125.1

           

5.71

AA- AAA

Bank stocks

62.3

            

NA

Not rated

FHLB stock

104.8

           

NA

AAA

Other investments*

21.1

            

NA

Unrealized gain - bank stock

(9.0)

              

Unrealized loss-bonds

(24.9)

            

Total Investments

2,706.9

$     

3.98

*Includes $324,900 in Freddie Mac preferred securities.  The Corporation holds no other common or preferred

equity shares in Fannie Mae or Freddie Mac.

32

Average Deposits
(Six Months Ended June 30th)

2008

2007

$

%

(dollars in millions)

Nonint DDA

1,640

$   

1,740

$   

(100)

$  

-6%

Int DDA

1,700

      

1,670

     

30

      

2%

Savings/MMDA

2,170

      

2,300

     

(130)

   

-6%

CD's

4,430

      

4,490

     

(60)

     

-1%

Cash Mgt

700

         

600

        

100

     

17%

Total Deposits

10,640

$

10,800

$

(160)

$  

-1%

33

Average Deposits
Linked Quarter

2nd Q 08

1st Q 08

$

%

(dollars in millions)

Nonint DDA

1,660

$   

1,620

$   

40

$     

2%

Int DDA

1,710

      

1,690

     

20

      

1%

Savings/MMDA

2,210

      

2,140

     

70

      

3%

CD's

4,360

      

4,510

     

(150)

   

-3%

Cash Mgt

690

         

700

        

(10)

     

-1%

Total Deposits

10,630

$

10,660

$

(30)

$   

0%

34

Net Charge-Offs To Loans
(as of 06/30/08)

35

Other Income
(Six Months Ended June 30th)

2008

2007

$

%

(dollars in thousands)

Invt Mgt & Trust

17,150

$  

20,080

$   

(2,930)

$  

-15%

Overdraft & NSF Fees

16,330

   

9,980

      

6,350

   

64%

Cash Mgt Fees

6,560

      

5,560

      

1,000

   

18%

Service Charges

6,390

      

6,310

      

80

         

1%

Mort. Sales Gains

4,980

      

9,580

      

(4,600)

   

-48%

Success Card Fees

4,820

      

4,140

      

680

      

16%

Merchant Fees

3,850

      

3,440

      

410

      

12%

Foreign Currency

3,320

      

1,840

      

1,480

   

80%

Letters of Credit

2,710

      

2,640

      

70

         

3%

Life Insurance (COLI)

1,760

      

1,960

      

(200)

      

-10%

ATM fees

1,410

      

1,480

      

(70)

        

-5%

Other Income

7,040

      

6,650

      

390

      

6%

Total

76,320

$  

73,660

$  

2,660

$  

4%

36

Other Income
Linked Quarter

2nd Q 08

1st Q 08

$

%

(dollars in thousands)

Overdraft & NSF Fees

8,640

$   

7,690

$     

950

$     

12%

Invt Mgt & Trust

8,390

      

8,760

      

(370)

      

-4%

Service Charges

3,350

      

3,040

      

310

      

10%

Cash Mgt Fees

3,330

      

3,230

      

100

      

3%

Mort. Sales Gains

2,670

      

2,310

      

360

      

16%

Success Card Fees

2,550

      

2,260

      

290

      

13%

Merchant Fees

1,900

      

1,950

      

(50)

        

-3%

Foreign Currency

1,750

      

1,570

      

180

      

11%

Letters of Credit

1,450

      

1,260

      

190

      

15%

Life Insurance (COLI)

980

         

780

         

200

      

26%

ATM fees

730

         

680

         

50

         

7%

Other Income

4,150

      

2,900

      

1,250

   

43%

Total

39,890

$  

36,430

$  

3,460

$  

9%

37

Efficiency Ratio
(as of 06/30/08)

38

Other Expense
(Six Months Ended June 30st)

2008

2007

$

%

(dollars in thousands)

Salaries & Benefits

109,480

$

111,850

$  

(2,370)

$  

-2%

Occupancy & Equip.

27,610

     

27,300

      

310

        

1%

Operating Risk Loss

15,630

     

10,120

      

5,510

     

54%

Data Proc. & Software

9,140

      

8,790

      

350

        

4%

Advertising

6,420

      

5,400

      

1,020

     

19%

Supplies & Postage

5,800

      

5,670

      

130

        

2%

Legal & Audit

4,140

      

2,580

      

1,560

     

60%

Telecommunications

3,960

      

4,170

      

(210)

      

-5%

Outside Services

3,960

      

3,010

      

950

        

32%

Amortization

3,660

      

4,180

      

(520)

      

-12%

Travel & Entertain.

2,990

      

3,120

      

(130)

      

-4%

State Tax

1,620

      

2,960

      

(1,340)

   

-45%

Other Expenses

11,980

     

9,860

      

2,120

     

22%

Total

206,390

$

199,010

$

7,380

$   

4%

39

Other Expense
Linked Quarter

2nd Q 08

1st Q 08

$

%

(dollars in thousands)

Salaries & Benefits

54,280

$   

55,200

$   

(920)

$     

-2%

Operating Risk Loss

14,390

     

1,240

      

13,150

   

n/m

Occupancy & Equip.

13,640

     

13,970

      

(330)

      

-2%

Data Proc. & Software

4,480

      

4,660

      

(180)

      

-4%

Advertising

3,520

      

2,910

      

610

        

21%

Supplies & Postage

2,980

      

2,810

      

170

        

6%

Outside Services

2,150

      

1,810

      

340

        

19%

Telecommunications

1,990

      

1,970

      

20

         

1%

Amortization

1,800

      

1,860

      

(60)

        

-3%

Legal & Audit

1,790

      

2,350

      

(560)

      

-24%

Travel & Entertain.

1,560

      

1,430

      

130

        

9%

State Tax

480

           

1,140

      

(660)

      

-58%

Other Expenses

6,680

      

5,310

      

1,370

     

26%

Total

109,740

$

96,660

$   

13,080

$

14%

40

Fulton Financial Corporation

One Penn Square

Lancaster, PA  17602

www.fult.com

41