Exhibit 99.1
Exhibit 99.1
Fulton Financial Corporation
Investor Presentation KBW Honor Roll
July 27, 2004
Fulton Financial Corporation
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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.
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Presentation outline
Corporate profile
Strategic initiatives
Asset quality
Future direction
Financial performance
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Fulton Financial profile
Regional financial holding company (formed in 1982)
12 bank subsidiaries and 3 financial services subsidiaries in 5 states
Asset size: $10.6 billion
Second largest commercial bank headquartered in Third Federal Reserve District
Fulton Bank founded in 1882
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Where are we located?
Fulton Financial Corporation
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Assets by affiliate
(as of 6/30/04, in thousands)
Fulton Bank $ 4,046,000
Lafayette Ambassador Bank 1,194,000
Resource Bank 1,060,000
The Bank 1,048,000
Lebanon Valley Farmers Bank 762,000
Premier Bank 525,000
Hagerstown Trust Company 454,000
Skylands Community Bank 441,000
Delaware National Bank 374,000
FNB Bank, N.A. 285,000
Swineford National Bank 264,000
The Peoples Bank of Elkton 108,000
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Fulton Financial Corporation
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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.
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Corporate ethics
Longstanding written code of conduct
No “gray” areas
Expectations clearly outlined
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What have we accomplished?
8.8% compounded annual growth rate in earnings per share
22 consecutive years of record earnings
30 consecutive years of dividend increases
10.3% compounded annual growth rate in dividends per share (current dividend yield: 3.23%)
Proven business model
Consistent performance
Fulton Financial Corporation
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Five-year performance
1998 2003
Net income per share $ .84 $ 1.22
Cash dividends per share $ .35 $ .59
Return on assets 1.60% 1.57%
Return on equity 15.06% 15.45%
Efficiency ratio 55.30% 53.80%
Dividend payout 41.60% 48.70%
Restated for 5% stock dividend paid in May 2004.
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Wall Street Journal (3/8/04)
Ranking of Banks by 5-Year Average Compound Annual Total Return*
62 banks listed
43 banks had a lower than Fulton,
including Wells Fargo, Bank of America, Marshall & Ilsley, Wilmington Trust, Mercantile, Synovus, Fifth Third, PNC, BB&T, Wachovia, J.P. Morgan Chase and Bank of New York
18 banks had a higher than Fulton, including Commerce, M&T, North Fork, and Valley National
*includes price changes and dividend reinvestment
Fulton Financial Corporation
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Five-year total return
(Peer analysis – 12/31/03)
Rank Peer Banks 5 Year Total Return
1 Commerce Bancorp Inc. 140.98
2 North Fork Bancorporation 97.50
3 Valley National Bancorp 87.87
4 FULTON FINANCIAL CORP. 80.85
5 Hudson United Bancorp 67.50
6 Provident Bankshares Corp. 63.60
7 First Commonwealth Financial Corp. 48.72
8 Susquehanna Bancshares Inc. 48.55
9 TrustCo Bank Corp. NY 47.28
10 Sky Financial Group Inc. 43.95
11 United Bankshares Inc. 40.38
12 Wilmington Trust Corp. 37.72
13 Mercantile Bankshares Corp. 37.15
14 FirstMerit Corp. 22.15
15 Riggs National Corp. -13.19
16 First Financial Bancorp -24.37
Average 51.67
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Stock highlights (as of 06/30/04)
Average daily trading volume 161,097
Number of analysts 12
Number of market makers 35
Number of shares outstanding 121.9 million
Market capitalization $2.5 billion
Annual meeting attendance 2,000 shareholders
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Employee stock ownership
80% of our employees collectively own more than 2 million shares of Fulton Financial Corporation stock
Stock options help us to retain key high-performing employees
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Stock performance (1982 - 2003)
WITHOUT dividend reinvestment:
15% compounded annual rate of return
WITH dividend reinvestment:
19% compounded annual rate of return
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Employee retention
100
90
80
70
60
50
40
30
20
10
0
1999 2000 2001 2002 2003
Exempt
Non-exempt
Overall
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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)
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Customer satisfaction
96% of our customers are Extremely or Very Satisfied with their Fulton Financial affiliate bank
86% of our commercial customers are Satisfied or Very Satisfied with us
Compared to national average of 55% of customers who are very satisfied with their financial institution*
*Source: 2003 American Banker/Gallup consumer survey
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Funding sources
as of 6/30/04
10%
15%
1%
74%
Deposits and Customer
Repurchase Agreements
Capital (GAAP)
Other Borrowings
Other Liabilities
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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
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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
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Capital (At June 30, 2004)
Total Capital (GAAP): $1.1 billion
Total Regulatory Capital (Est): $950 million
Ratios (Est):
Total Risk-based Capital 12.7%
Tier 1 Risk-based Capital 11.5%
Leverage Capital 8.4%
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Progress of Stock Buyback
2.4 million shares repurchased since January 1, 2004 •Average cost $20.08 per share
4 million share buyback announced June 15, 2004
340,000 shares repurchased as of July 23, 2004
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Acquisitions
First Washington State Bank (pending)
Resource Bank
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
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
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Resource Bankshares Corporation
Acquired on April 1, 2004
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 71% of all deposits in state of Virginia
Senior lenders average 24 years of industry experience
Allows for expansion of Fulton Financial Advisors, retail and commercial banking
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First Washington FinancialCorp
Assets of $483 million
Headquartered in Windsor, NJ
Banking subsidiary: First Washington State Bank
16 branches in Mercer, Monmouth and Ocean Counties in New Jersey
Enhances our existing northern and southern New Jersey franchise by extending our presence into the central part of the state
Transaction will be completed by April 15, 2005
FWFC has very strong asset quality and strong CAGR in EPS, deposits and loans
Market areas are robust with strong projected demographic trends
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First Washington Branch Locations
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What do we look for?
High growth areas
Dynamic market demographics
Strong performance
Asset quality
Talented and dedicated staff
Compatible corporate culture
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Acquisitions in new markets
What changes?
Loan review
Investments
Asset/liability management
Compliance
Common operating platform
Audit
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Acquisitions in new markets
What stays the same?
Bank name
Board of Directors
Management team
Employees
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Benefits to new affiliates
Increased non-interest income due to introduction of new products and services
Additional capital
Increased lending capacity
Reduced expenses
Proven merger/conversion expertise
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Product availability
Investment management
Brokerage services
Insurance (whole life, term life, long-term care through advisors)
Cash management
On-line banking
Debit/credit cards
Residential mortgages
Specialized lending (leasing and indirect)
International services
Correspondent banking
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Fulton Financial Advisors, N.A.
Includes Dearden Maguire Weaver and Barrett, LLC and Fulton Insurance Services Group As of June 30, 2004: $5.2 billion; $3.8 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 in 2003 by Bank Insurance and Securities Association (BISA)
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Fulton Mortgage Company
Coordinates residential mortgage lending throughout 11 affiliates
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
Record originations in 2003
Residential lending at Resource Bank provided through Resource Mortgage
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Other Income As a Percent of Total Income
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
16.0%
16.2%
16.9%
17.9%
19.4%
22.9%
25.0%
27.0%
24.8%
96 97 98 99 00 01 02 03 06/04
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Moody’s Investor Service
Short-term rating P-1
Long-term rating:
Issuer A-2
Lead Bank Deposits A-1
Outlook:
Positive
Fitch Ratings
Short-term rating F-1
Long-term rating A
Outlook:
Stable
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Loan diversification (6/30/04)
36%
9%
11%
30%
14%
Consumer and Other
Residential Mortgage
Commercial Loans
Home Equity
Commercial Mortgage
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Summary of larger loans
25 relationships with commitments to lend of $20 million or more
Maximum individual commitment of $30 million
Average commercial loan commitment is $550,000
Loans and corresponding relationships are within Fulton’s geographical market area
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Commercial loan concentration
by industry (as of 6/30/04)
Industry %
R/E—Rental 17.1
Construction 16.1
Services 10.6
Manufacturing 10.1
Retail 8.3
Health Care 8.3
Agriculture 8.3
Other 7.8
Wholesale 5.3
Arts and Entertainment 3.8
Transportation 2.5
Financial Services 1.8
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Six months ended June 30, 2004
$ 0.62 Net income per share (1.6% increase over 2003)
$ 0.317 Cash dividends per share (10.1% increase over 2003)
1.46% Return on assets
14.45% Return on equity
55.90% Efficiency ratio
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Average Loan Growth (YTD June)
2004 2003 $ %
(dollars in millions)
Commercial $ 2,030 $ 1,710 $ 320 19%
Comm’l Mort 2,400 1,770 630 36%
Resid Mort 620 560 60 11%
Consumer 1,520 1,330 190 14%
Total Loans $ 6,570 $ 5,370 1,200 22%
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Average Deposit Growth (YTD June)
2004 2003 $ %
(dollars in millions)
Nonint DDA $1,320 $1,120 $200 18%
Int DDA 1,310 1,070 240 22%
Savings/MMDA 1,810 1,570 240 15%
CD’s 2,640 2,490 150 6%
Cash Mgt 390 300 90 30%
Total Deposits $7,470 $6,550 $920 14%
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Deposit composition trends
As of June 30
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000 2001 2002 2003 2004
Non Int Bearing Demand
NOW, MMDA, Savings
Time Deposits
Customer Repos
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Peer group
Commerce Bancorp Inc.
First Commonwealth Financial
First Financial Bancorp
FirstMerit Corp.
Fulton Financial Corp.
Hudson United Bancorp
Mercantile Bankshares Corp.
North Fork Bankcorporation
Provident Bankshares Corp.
Riggs National Corp.
Sky Financial Group Inc.
Susquehanna Bancshares Inc.
TrustCo Bank Corp. NY
United Bankshares Inc.
Valley National Bancorp
Wilmington Trust Corp.
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Net charge-offs to average loans
0.90
0.60
0.30
-
0.33
0.24
0.05
90 91 92 93 94 95 96 97 98 99 00 01 02 03 6/04
Top 50
Peer
FFC
Source: SNL Financial Datasource
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Non-performing assets to total assets
1.80
1.40
1.00
0.60
0.20
0.47
0.39
0.31
90
92
94
96
98
00
02
6/04
Top 50
Peer
FFC
Source: SNL Financial Datasource
Fulton Financial Corporation
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Net interest margin
5.50
5.00
4.50
4.00
3.50
3.76
3.76
3.55
90
92
94 96
98
00 02
6/04
Top 50 Peer FFC
Source: SNL Financial Datasource
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Asset/Liability Management
Interest rate “shocks” (as of 06/30/04)
Rate Change NII Change (Annual) % Change
+300 bp + $ 19.2 million + 5.6%
+200 bp + $ 13.5 million + 3.9%
+100 bp + $ 8.7 million + 2.5%
-100 bp - $ 5.3 million - 18.2%
Source: FFC Asset/Liability Modeling
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Investment portfolio
Portfolio Components ( in millions) Ending Bal. 06/30/2004 Average Life (yrs.) Credit Rating
Mortgage-backed securities $ 1,876.9 3.4 AAA - agency issued
U.S. treasuries and agencies 114.7 0.2 AAA
Municipals bonds 268.5 4.1 AAA - insured
Corp & bank issued trust pfd 74.8 23.6 various — 5 yrs call
Bank stocks 71.6 NA not rated
Other/short-term Inv. 69.6 NA AAA
FHLB stock 48.4 NA AAA
Unrealized gain - bank stock 6.8
Unrealized gain - bonds -46.5
TOTAL INVESTMENTS $ 1,876.9 3.6
NOTE : DOES NOT INCLUDE RESOURCE BANK
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Loan Mix (6/30/04)
Floating rate loans = 45%
Fixed rate loans = 55%
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Bank stock gains
(percent contribution to EPS)
9 %
8 %
7 %
6 %
5 %
4 %
3 %
2 %
1 %
0 %
91 92 93 94 95 96 97 98 99 00 01 02 03 6/04
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Efficiency ratio
65.0
60.0
55.0
50.0
45.0
57.9
56.8
55.9
90 91 92 93 94 95 96 97 98 99 00 01 02 03 6/04
Top 50
Peer
FFC
Source: SNL Financial Datasource
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Other Expenses
(YTD June)
2004 2003 $ %
(dollars in thousands)
Salaries & Benefits $79,160 $67,800 $11,360 17%
Occupancy & Equip. 16,770 15,160 1,610 11%
Data Proc. & Software 7,240 6,770 470 7%
Supplies & Postage 4,800 4,160 640 15%
Advertising 3,440 3,020 420 14%
State Tax 2,810 2,200 610 28%
Telecommun. 2,720 2,480 240 10%
Amortization 2,350 720 1,630 226%
Travel & Entertain 2,010 1,590 420 26%
Operating Risk Loss 1,310 1,140 170 15%
Other Expenses 10,890 8,960 1,930 22%
Total $133,500 $114,000 $19,500 17%
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Corporate Governance
Internal controls over financial reporting process
SOX and NASDAQ listing standards
Financial expert designated
Independent directors determined
Executive sessions
Executive compensation and nominating committees
SOX compliant written Code of Conduct
Corporate disclosure committee and Audit committee—formal review process for relevant financial filings
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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
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Overview
Shareholders
maximize shareholder value
Customers
create financial success
Employees
create career success
Communities
create prosperity
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Fulton Financial Corporation
One Penn Square Lancaster, PA 17602
www.fult.com
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