Fulton Financial Corporation
Presentation to:
Exhibit 99.1
Janney Montgomery Scott
November 6, 2003
Fulton Financial Corporation
Presentation to:
Exhibit 99.1
Janney Montgomery Scott
November 6, 2003
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.
Presentation outline
Corporate profile
Strategic initiatives
Asset quality
Future direction
Financial performance
Fulton Financial profile
Regional financial holding
company
(formed in 1982)
11 bank
subsidiaries; 3 financial services
subsidiaries
Asset size: $9.3 billion
Second largest commercial bank
headquartered in Third Federal Reserve District
Fulton Bank founded in 1882
Assets by
affiliate
(as of 9/30/03, in thousands)
Fulton Bank
$ 3,869,000
Lafayette Ambassador Bank
1,070,000
The Bank
1,056,000
Lebanon Valley Farmers Bank
777,000
Premier Bank
659,000
Hagerstown Trust Company
467,000
Skylands Community Bank
386,000
Delaware National Bank
334,000
FNB Bank, N.A.
307,000
Swineford National Bank
272,000
The Peoples Bank of Elkton
102,000
Includes Dearden Maguire Weaver
and Barrett, LLC
and Fulton Insurance Services Group
As of September 30, 2003:
$4.8 billion; $3.4 billion in assets under
management
Products and Services
Personal trust
Asset management
Retirement services
Brokerage
Insurance
Corporate trust
Cash management
Private banking
Named Community-Based Bank Brokerage Program of the Year
by Bank Insurance and Securities Association (BISA)
Fulton Financial Advisors, N.A.
Fulton Mortgage Company
Established April 2001
New entity to coordinate residential
mortgage lending throughout FFC
Expanded,
competitive product line to customers
of all affiliates
In partnership with each affiliate, focused management
team on residential mortgages
Entry into new markets for FFC
On target for record originations this year
Mission statement
We will increase shareholder value and
enrich the communities we serve by
creating financial success together with
our customers and career success
together with our employees .
We will conduct all of our business with
honesty and
integrity.
Corporate ethics
Longstanding written code of conduct
No “gray” areas
Expectations clearly outlined
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
What have we accomplished?
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
Stock highlights (as of 9/30/03)
Average daily trading volume
188,566
Number of Market Makers
41
Number of Analysts
11
Number of shares outstanding
108.6 million
Market Capitalization
$2.2 billion
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
Stock performance (1982-9/30/03)
WITHOUT dividend
reinvestment:
15% compounded annual rate of return
WITH dividend reinvestment:
19% compounded annual rate of return
Employee retention
Employee opinion survey
Customer service
Management team
performance
Company image
and
mission
Team orientation
Technology and
systems
Training and
development
Sales orientation
Work effectiveness
Pay and benefits
Employee
satisfaction
(Survey administered by BAI Survey Services)
Retail customer satisfaction
96% of customers are
Extremely or Very Satisfied with their
Fulton Financial affiliate bank
Deposit composition trends
Sept. ’03
Sept. ‘02
Non Interest-Bearing Demand
17%
17%
Interest-Bearing Demand
18%
15%
Money Market
13%
13%
Savings
11%
10%
Time Deposits
35%
40%
Customer Repos
6%
5%
Total Deposits
100%
100%
Commercial customer satisfaction
86% of commercial
customers are
satisfied or very satisfied - results
compare favorably to industry
benchmarks
Top three rated attributes:
Services offered
Convenient bank locations
Accurate communications
Corporate customers state that what
makes Fulton unique is the personal
service they receive
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
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
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%
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%
Resource Bankshares (pending)
Premier Bank
Drovers & Mechanics Bank
18 Sovereign Bank Branches
Dearden, Maguire, Weaver
and Barrett, Inc.
Skylands Community Bank
Ambassador Bank
of the Commonwealth
Lebanon Valley
National Bank
Peoples Bank of Elkton
Woodstown National Bank
& Trust Company
Bank of Gloucester County
Delaware National Bank
Central Pennsylvania
Savings Association
Hagerstown Trust Company
Denver National Bank
Great Valley Savings Association
First National Bank of Danville
Second National Bank
of Nazareth
Lafayette Trust Bank
Pen Argyl National Bank
Swineford National Bank
Farmers Trust Bank
Acquisitions
Premier Bank
A $600 million state chartered bank
headquartered in Doylestown, PA
Six full-service
offices serving Montgomery and
Bucks 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
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
Resource Bankshares Corporation
High growth areas
Dynamic market demographics
Strong performance
Asset quality
Talented and dedicated staff
Compatible corporate culture
What do we look for?
Acquisitions in new markets
What changes?
Replicate strong credit culture
Loan review
Investments
Asset/liability management
Compliance
Common operating platform
Audit
What stays the same?
Bank name
Board of Directors
Management team
Employees
Acquisitions in new markets
Additional capital
Increased lending capacity
Reduced expenses
Proven merger/conversion expertise
Increased non-interest income due to
introduction of new
products and services
Benefits to new affiliates
Residential Mortgages
Investment
Management
Brokerage Services
Insurance
(whole life, term life,
long-term care
through Advisors)
On-line banking
Debit/Credit cards
Cash management
Specialized lending
(leasing and indirect)
International Services
Correspondent
banking
Product availability
Composition of total revenues
28.0%
25.0%
22.9%
19.4%
17.9%
16.9%
16.2%
16.0%
0%
20%
40%
60%
80%
100%
96
97
98
99
00
01
02
9/03
Other Income
Net Interest Income
Investment
management and
trust services revenue
19.6%
7.4%
13.2%
22.1%
26.8%
18.0%
31.6%
0.0
6.0
12.0
18.0
24.0
30.0
36.0
1997
1998
1999
2000
2001
2002
9/03
Growth in other income
Note: In 2001, we acquired Dearden, Maguire, Weaver & Barrett, LLC
0.0
20.0
40.0
60.0
80.0
100.0
120.0
95
96
97
98
99
00
01
02
9/03
Moody’s Investor Service
Fitch Ratings
Short-term rating
P-1
Long-term rating:
Issuer
A-2
Lead Bank Deposits
A-1
Short-term rating
F-1
Long-term rating
A
Loan diversification (9/30/03)
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
Summary of larger loans
Commercial loan concentration
by industry (as of 9/30/03)
Industry
%
Construction
16.7
R/E - Rental
16.5
Services
13.8
Manufacturing
11.9
Retail
8.3
Health Care
7.9
Other
7.4
Agriculture
6.5
Wholesale
5.3
Arts and Entertainment
3.7
Financial Services
2.0
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.
Experience of our lenders
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
Board of Directors
Focused on maximizing shareholder
value with an annual increase
in earnings per share in the range
of 10%
Nine months ended Sept. 30, 2003
$0.96
Net income per share
(5.5% increase over 2002)
$0.463
Cash dividends per share
(11.6% increase over 2002)
1.60%
Return on Assets
15.49%
Return on Equity
53.70%
Efficiency Ratio
Average Balances (YTD September)
2003
2002
$
%
Investments
2,510
$
1,890
$
620
$
33%
Loans
5,470
5,400
70
1%
Deposits
6,730
6,280
450
7%
Borrowings
860
600
260
43%
(dollars in millions)
Average Loan Growth (YTD Sept.)
2003
2002
$
%
Commercial
1,700
$
1,540
$
160
$
10%
Comm'l Mort
1,870
1,690
180
11%
Resid Mort
550
790
(240)
-30%
Cons./Other
1,350
1,390
(30)
-2%
Total Loans
5,470
$
5,400
$
70
1%
(dollars in millions)
Commerce Bancorp
First Commonwealth
Financial
First Financial Bancorp.
FirstMerit Corp.
Fulton Financial Corp
Hudson United Bancorp.
Mercantile Bankshares Corp.
North Fork Bankcorp.
Provident Bankshares Corp.
Provident Financial Group
Riggs National Corp.
Sky Financial Group Inc.
Susquehanna Bancshares
Trust Co. of New Jersey
TrustCo Bank Corp. of NY
United Bankshares Inc.
Valley National Bancorp
Wilmington Trust Co.
Peer group
Source: SNL Financial Datasource
Net charge-offs to average loans
0.47
0.26
0.17
-
0.30
0.60
0.90
90
91
92
93
94
95
96
97
98
99
00
01
02
6/03
9/03
Top 50
Peer
FFC
Source: SNL Financial Datasource
Non-performing assets to total assets
0.63
0.45
0.41
0.20
0.60
1.00
1.40
1.80
Top 50
Peer
FFC
Net interest margin
3.84
3.76
3.86
3.50
4.00
4.50
5.00
5.50
Top 50
Peer
FFC
Interest rate “shocks” (as of 9/30/03)
Asset/Liability management
Impact on Net Interest Income:
Rate Change
NII Change (Annual)
% Change
+300 bp
+ $ 15.8 million
+ 5.4%
+200 bp
+ $ 10.3 million
+ 3.5%
+100 bp
+ $
6.5 million
+ 2.2%
-100 bp
- $ 12.9 million
-
4.4%
Source: FFC Asset/Liability Modeling
Investment portfolio
Portfolio Components
Ending Bal.
Average
Credit
( in millions)
9/30/03
Life (yrs.)
Rating
Mortgage-backed securities
$2,069.2
2.6
AAA - agency issued
Treasuries and agencies
$110.0
0.3
AAA
Municipals
$300.6
4
AAA - insured
Bank-issued Trust preferred stock
$33.9
19.3
various/callable: 5 yrs
Other/Short-term Inv.
$62.4
NA
AAA
Bank Stocks
$75.8
NA
not rated
FHLB Stock
$46.6
NA
AAA
Unrealized Gain - Bank Stock
$10.2
Unrealized Gain - Bonds
-$3.2
TOTAL INVESTMENTS
$2,705.5
2.74
Other income (YTD September)
2003
2002
$
%
Invt Mgt & Trust
25,680
21,630
4,050
19%
Mort. Sales & Serv.
17,890
11,870
6,020
51%
Service Charges
11,780
11,200
580
5%
Deposit-related fees
11,300
10,910
390
4%
Cash Mgt Fees
5,440
5,480
(40)
-1%
Success Card Fees
3,900
3,570
330
9%
Merchant Fees
3,410
3,090
320
10%
Other
10,300
11,050
(750)
-7%
Total
89,700
78,800
10,900
14%
(dollars in thousands)
$
$
$
$
$
$
Bank stock
gains
(percent contribution to EPS)
0 %
1 %
2 %
3 %
4 %
5 %
6 %
7 %
8 %
9 %
91
92
93
94
95
96
97
98
99
00
01
02
9/03
Source: SNL Financial Datasource
Efficiency ratio
53.7
57.6
55.7
45.0
50.0
55.0
60.0
65.0
Top 50
Peer
FFC
Other Expenses (YTD September)
2003
2002
$
%
(dollars in thousands)
Salaries & Benefits
103,330
$
97,000
6,330
7%
Occupancy & Equip.
22,750
21,480
1,270
6%
Data Processing
8,500
9,180
(680)
-7%
Advertising
4,590
4,990
(400)
-8%
Telecommun.
3,910
3,920
(10)
0%
State Tax
3,370
4,100
(730)
-18%
Stat. & Supplies
3,310
3,630
(320)
-9%
Postage
2,970
2,930
40
1%
Operating Risk Loss
2,640
2,070
570
28%
Amortization
1,340
1,080
260
24%
Other Expenses
16,790
17,620
(830)
-5%
Total
173,500
$
168,000
$
5,500
3%
$
$
$
Accounting/Auditing
Compliance with accounting standards
Designated a financial expert
Disclosure committee
Enhanced Audit Committee role
CFO certifications
Audit Committee approvals of financial
filings
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
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
One Penn Square
Lancaster, PA 17602
www.fult.com