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
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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
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