Fulton Financial Corporation (NASDAQ:FULT)
Annual Shareholders Meeting
April 30, 2012 10:00 am ET
R. Scott Smith - Chairman, Chief Executive Officer, Member of Executive Committee and Ex-officio Member of Risk Management Committee
Unknown Executive -
E. Philip Wenger - President, Chief Operating Officer, Director, Member of Executive Committee and Ex-officio Member of Risk Management Committee
R. Scott Smith
Good morning. Welcome to Fulton Financial Corporation's Annual Shareholders Meeting. I'm Scott Smith, Chairman and Chief Executive Officer of your company.
As Chairman of this meeting, and in accordance with the provisions of the bylaws, I hereby call the meeting to order and appoint George R. Barr as Secretary. The Secretary of the corporation has filed proof that proper notice of the meeting has been given and that a legal quorum is present. The meeting is now lawfully convened and ready to transact business.
The agenda for today's meeting is on the screen. I assume that those shareholders who are present will want their proxies voted -- to stand and to be voted as filed. However, if any shareholder has not voted or wishes to revoke his or her proxy and vote in person, he or she may obtain a ballot from the judge of election at this time. The polls will remain open for a few more minutes, and the judge of election will be available to help any shareholder, who wishes to vote in person.
The minutes of the 2011 annual meeting are available for inspection at the desk of the judge of election and may be examined by any shareholder during the meeting. We've asked Sally Robb [ph] to serve as judge of election. Ms. Robb [ph] has filed her oath with the Secretary of the meeting, and I hereby direct that it may be made part of the minutes.
On behalf of the Board of Directors, I hereby nominate each of the 13 nominees identified in the proxy statement for election to the Board of Directors for a one-year term. In accordance with the bylaws, I hereby declare the nominations to be closed.
I also move that we approve the 2 other resolutions outlined in our proxy statement. They are: a nonbinding say-on-pay resolution to approve the compensation of the named executive officers; and the ratification of the appointment of KPMG LLP as Fulton Financial's independent auditor for the fiscal year ending December 31, 2012.
Today's meeting is being carried via live webcast, which will be available for the next 30 days on our website at fult.com. Our company shareholders live in many different places and through the webcast, we are able to bring today's program to those who are not able to be with us in person.
At this time, I would like to make some brief introductions. After that, I will call on the judge of election for her report, and I will then end the business meeting. Then Phil Wenger, President and Chief Operating Officer, will discuss Fulton Financial's milestones and financial performance over the past year. Phil's formal remarks are finished -- when Phil's formal remarks are finished, we will open the floor for questions.
First, I will introduce the members of Fulton Financial Corporation's Board of Directors, most of whom are seated throughout the room. Jeff Albertson, partner, Albertson Law Office; Joe Ballard, Lieutenant General, U.S. Army, Retired, and President and CEO of The Ravens Group; John Bond, past Chairman, the Columbia Bank; Craig Dally, Judge, Third Judicial District of Pennsylvania, and Chair of our Nominating and Corporate Governance Committee; Pat Freer, President, Strickler Insurance Agency Incorporated and Chair of the Human Resources Committee; Rufus Fulton, Retired Chairman of Fulton Financial Corporation, and Chair of the Risk Management Committee; George Hodges, Retired Chairman, The Wolf Organization Inc. George chairs our Executive and Audit Committees and serves as our Lead Director. Willem Kooyker, Chairman and CEO of Blenheim Capital Management LLC; Don Lesher, Retired President, Lesher Mack Sales and Service; Al Morrison, Chairman of the Board, Retired Chief Executive Officer, Burnham Holdings Inc. and now is our newest director. He joined the Board in January of this year. Gary Stewart, partner, Stewart Associates; and Phil Wenger, President and Chief Operating Officer of Fulton Financial Corporation.
Sadly, last November, we marked the untimely passing of Director John Shirk. John was an attorney, served for more than 28 years on the Board of both Fulton Financial Corporation and Fulton Bank. John was a consummate Director. He was always prepared. He had a keen understanding of the important role a Director played in helping to guide a company. He did not hesitate to challenge management on important issues, and his motivation for doing so was always to do what was best for the organization and its constituencies. We are grateful for John's many years of service to our company.
In addition to Phil Wenger, whom I've already introduced, I'd like to introduce the other 4 members of the Fulton Financial Corporation senior management team, who are seated here on stage. Charlie Nugent, Senior Executive Vice President and Chief Financial Officer; Jim Shreiner, Senior Executive Vice President for Administrative Services; Craig Hill, Senior Executive Vice President for Human Resources; and our newest member of the senior management team, Craig Roda, Senior Executive Vice President for Community Banking. Craig was promoted to senior management last June, and he brings more than 30 years of banking experience to our management team.
I will now introduce the CEOs and Presidents from our affiliate banks and major business divisions. First, Jerry Nole [ph], Head of our Central and Northeastern Pennsylvania regions; Jill Carson, Fulton Mortgage Company; Rocco Del Vecchio, Lafayette Ambassador Bank; Dave Hanson, Fulton Financial Advisors and Clermont Wealth Strategies; Bryan Holmes, FNB Bank; Curt Meyers, Fulton Bank N.A.; John Scaldara, The Columbia Bank; Angela Snyder, Fulton Bank of New Jersey; and Mike Wimer, Swineford National Bank.
The polls are now closed, and I would like to call on Sally Robb [ph], the judge of election for her report.
Mr. Chairman, having inspected the proxies and counted the ballots, I am pleased to report that more than 84% of the shares outstanding have voted, that the 13 nominees listed in the proxy statement were elected to the Board of Directors for a term of one year, with an average of 94% of the votes cast voting for their election. More than 91% of the shares voted for the nonbinding say-on-pay resolution to approve the compensation for the named executive officers. More than 97% of the shareholders approved the proposal to appoint KPMG LLP as Fulton's independent auditor for 2012.
R. Scott Smith
Thank you for your report, Ms. Robb [ph], and as Chairman of this meeting, I hereby declare that the 13 nominees listed in the proxy statement are elected to the Board of Directors for a one-year term. In addition, the nonbinding say-on-pay resolution to approve compensation of the named executive officers has also been approved. And the ratification and appointment of KPMG LLP as Fulton Financial's independent auditor for the fiscal year ending December 31, 2012, was also approved. The business portion of our meeting is now concluded.
As you know, I announced that I will retire at the end of this year, and it's been a privilege to have spent the last 34 years here at Fulton. I've always believed that the success of any company is dependent on the employees at all levels. Our strategy has been that long-term loyal employees create long-term loyal customers, who create long-term loyal shareholders. I've strived to create a company culture where that strategy is pervasive.
Your Board of Directors has unanimously and enthusiastically supported Phil Wenger as my successor. In December, I will leave with complete confidence that Phil and his senior management team will lead Fulton Financial Corporation to even greater success in the years to come. Please join me in welcoming the next Chairman and CEO of Fulton Financial Corporation, Phil Wenger.
E. Philip Wenger
Thank you, Scott. As we noted in our Annual Report, 2011 was a year of significant progress and improvement for Fulton Financial Corporation. We were pleased to be able to achieve positive results in each of our management priorities. We increased earnings per share, improved our return on assets, strengthened our asset quality, experienced good core deposit growth, achieved margin expansion and maintained tight control over expenses. All of these accomplishments are helping to position us for the future success as the economy strengthens.
When evaluating our performance, we frequently compare ourselves to the top 50 banks in the country and also to a list of 17 peer banks which are listed here. The peer group was selected based on asset size, loan distribution, revenue composition, geographic focus, business model ownership and market capitalization. The charts and graphs I will share with you are for the period beginning January 1, 2011, and ending December 31, 2011, unless otherwise noted.
In terms of earnings growth in 2011, you can see, we ranked ninth in our peer group, with a 23.7% increase, which exceeded the peer group median of 20.6%. Although the value of our stock decreased from January 1, 2011, to December 31, 2011, as you can see here, this decrease was significantly less than most of our peers. In 2012, bank stocks continues to be somewhat volatile, and that volatility is primarily being driven by both international and national economic news.
Here you can see the recommendations on Fulton Financial from each of the 16 analysts, who follow our company. Fulton Financial Corporation ranks fourth in our peer groups in terms of the number of analysts who have us recommended as a buy.
Here you can see our 2011 return on average assets. On the graphs I share, Fulton Financial appears in blue, largest 50 banks in the country are shown in green, and our peer banks appear in red. As you can see, we exceeded the return on average assets achieved by both our peers and the largest 50 banks in 2011.
Our credit quality improved in 2011, and during the past year, we significantly enhanced our credit administration, policies and procedures. Net charge-offs increased slightly, but both nonperforming assets and also the provision for credit losses decreased. Overall, market conditions remain stable in all states we serve, except in New Jersey, where conditions remain challenging.
Here you can see our average core deposit growth for 2011. It was the same as our peers and also the largest 50 banks. Growing loans was a challenge for banks of all sizes, and as you can see, loan growth was essentially flat for everyone. In terms of our net interest margin of 3.9%, we exceeded the peer average of 3.63% and also the top 50 banks average of 3.55%.
Our employees contribute greatly to our expense control efforts. In past years, we've shared information with you about our lean process improvement program. In 2011, our employees identified and completed 334 lean initiatives, resulting in $4.5 million of savings to our company. Many of these initiatives do not simply produce onetime savings. Instead, the streamlined processes has continued to save us money each year.
As you can see here, Fulton Financial's efficiency ratio, which is how many cents it takes to generate $1 of revenue is $0.543 to $1. This number is considerably better than the $0.626 average of the largest 50 banks, and also the $0.653 average of our peer group.
There were a number of other milestones in 2011 as well. In October, 2 of our banks, The Bank and Skylands Community Bank merged to form Fulton Bank of New Jersey, which you can see on the screen in red. This merger enables their teams to focus on serving existing customers and acquiring new ones under the Fulton name. The merger has enhanced our branding efforts in the contiguous Pennsylvania, New Jersey and Delaware markets which we serve.
As you know, for the past few years, we have had a strong emphasis on creating a superior experience for each and every customer. We were pleased to learn that Greenwich Associates, a worldwide financial services strategic consulting and research firm, independently validated our efforts in this area by selecting Fulton Bank to receive 2 middle-market banking awards, one for overall satisfaction in banking and another for treasury management. To determine the award winners, Greenwich interviewed more than 11,500 national and regional businesses. Our focus on our customer promise, to care, listen, understand and deliver continues.
We now have 600 employees, who serve as experience champions or ambassadors, helping to lead the charge. In 2011, all of our employees had an opportunity to participate in a learning session that encouraged small-group dialogue that helped each employee to become more connected with the bigger picture at our company. We believe that this experience helped each employee understand that what they do in their job can have a significant impact on the company, on our customers and on our shareholders. You might wonder why we pay so much attention to our customer promise. The answer is that creating a strong customer experience and combining that experience with strong sales efforts produces results that can make your company more profitable.
In 2011, despite the lingering sluggishness of the economy, our sales efforts helped us to achieve -- to increase the number of retail households and commercial customers. They're also known as commercial households. All of this can have a positive effect on both profitability and shareholder return.
And now I'd like to take a few minutes to look ahead at our priorities for 2012. Before I continue, I would like to remind you that in my remarks or in the answers to any of your questions, we may make forward-looking statements, and these statements should be viewed as such. Future events could cause actual results to differ materially from what is said today. More information on events that could cause our results to be different can be found in our most recent 10-K report.
We have always been a strongly capitalized company and will remain so under the new global capital requirements, referred to as Basel III. All of our capital metrics are in excess of regulatory guidelines, and we continue to generate capital through profitable organic growth. Our strong capital position requires a balance between ensuring that we remain a safe-and-sound bank, while at the same time, providing a reasonable return on shareholder investment. As our capital position continues to strengthen, we will consider various options for deploying that capital, including increasing the dividend, buying back stock, making acquisitions and supporting organic growth. Dividends are important to many shareholders, and we were pleased to be able to increase the quarterly cash dividend in 4 of the last 5 quarters. Our dividend yield currently is approximately 2.7%. The Board of Directors evaluates the level of the dividend each and every quarter, and we look -- and we will look to increase it further as our earnings and the economy improve.
Regarding acquisitions, opportunities were limited in 2011, and we believe this will continue in 2012. Bank consolidations may increase as the economy continues to improve, and as the new capital requirements are finalized by bank regulators. When the time is right, we will consider strategic acquisitions that enhance shareholder value as a way to deploy any excess capital we may have.
Regulatory and compliance matters are an industry-wide issue. The 1,000-page Dodd-Frank Act was signed into law in 2010. It is the most comprehensive reform of our nation's financial system in decades. It was enacted, following the recent national financial crisis and requires financial institutions to comply with many new regulations, most of which still need to be implemented in areas such as retail, commercial and mortgage. All banks are having to devote an ever-increasing amount of their financial and human resources to comply with these new regulations. This trend will continue into the future and will present all banks with additional challenges in managing expenses.
In 2012 and into 2013, we will upgrade our company's core data processing system. When this process is finished, our branch staff will have access to all information about a customer's relationship with us, helping us to be even better at addressing our customer's financial needs. ATM and debit card ordering will be done at the branch, electronically, and back-office pass and paperwork will be reduced. Our sales officers will also have a more effectively sales tool to help them develop new customer relationships and manage existing ones. This project is a big undertaking for our company, so we have given it a name called the STAR Project. STAR stands for Superior Teamwork Achieves Results. And that's just what we intend to do, achieve results.
In 2012, we will also work to improve our return on assets, and we will continue to implement new strategies to help us manage our credit costs. Our team remains focused on growing loans, which should become more achievable as the economy and the confidence of both businesses and individuals improve. We will also use our ability to provide a superior customer experience, to leverage opportunities, to increase our market share in all the areas we serve.
As you can see here, we plan to open, relocate or improve 11 branches in 2012. These branches are located across our footprint in all of the states we serve. For the past year or so, we have been using a new design when building our branches, and you can see a photo of the interior design on the screen. This airy, eye-catching layout is welcoming our customers -- is welcoming to our customers, and the arrangement allows for more personal interactive time with our staff. These newer officers -- offices feature teller pods rather than a teller line. They have self-service, deposit box areas that can be accessed by scanning the palm print of a box owner. The branches feature kid's zone, hospitality areas, window graphics, digital merchandising and coin-counting machines. All of these features make it more inviting for the customer to come into the branch and spend time with members of our team. This, in turn, gives us the opportunity to live our customer promise, to care, listen, understand and deliver.
The 2012 priorities I've just discussed support our ultimate goal, which you can see here on the screen. We will increase shareholder value, enrich the communities we serve by creating financial success together with our customers and career success together with our employees.
Before I turn the program back over to Scott Smith, I want to take a minute to thank Scott for his 34 years of service to this company. I've had the privilege of working with him for 33 of those years, in fact, he was actually the person who hired me. I've seen him guide this company through good times and bad. Through the recent economic downturn, he exhibited wise judgment and balanced leadership, while helping us to adapt to the changing world of financial services. He has taught us all to be better bankers, better at serving our customers and better at helping our communities. Those lessons will stay with us for many years to come.
Thank you, Scott, for your leadership and service.
R. Scott Smith
Thank you, Phil, for those very kind words, and thank you for -- all, for your support. At this time, I'll open the floor up for questions. There are microphones at various points in the front of the room.
In respect to all our shareholders, I ask that you please keep your question brief and to the point, and that you not ask multiple questions until other shareholders have had an opportunity to ask their questions. Additional questions from the same shareholder can then be asked after that. Thank you for your understanding.
Now, if you have a question, please step to one of the microphones, and please share your name before posing your question. Are there any questions? There's one.
My name is Doug Thomas. I'm a longtime Fulton shareholder and a President of Jet Investment Research in Lancaster. I followed Fulton as an analyst for more than 20 years, for much of that time, recommending the company to my clients, family and friends. I came today to express my disappointment with not so much the company's recent performance as with the behavior of its Board of Directors and our CEO, whose actions have been arrogant, condescending and greedy and counter to the best interest of Fulton shareholders. When it happens at someone else's company, like Chesapeake Energy or Citigroup, we have all become somewhat immune to the selfish nature of corporate pay and benefits. But when it happens right here in my backyard, and at one of my favorite companies, I felt it necessary to say something. Specifically, I take issue with the decision of our Board of Directors to award Scott Smith with the $1.3 million cash bonus last September. The announcement was made similar to the way the Colts left Baltimore, sneakily and in the middle of the night. There was no press release, just an obligatory regulatory filing that you, the Board of Directors, had to figure most investors wouldn't know about, let alone read. The company didn't bother to wait for the proxy to come around, and the bonus wasn’t subject to shareholder approval. What was the hurry? Don't get me wrong. I like Scott a lot and think he's done an admirable job as CEO of Fulton under some tough circumstances. But he's been amply rewarded for his efforts, taking in total compensation, just last year, of more than $2.3 million of which over $840,000 was in cash. How much is enough? What was the need for the retention bonus? Was Scott going somewhere? Did he threaten he wouldn't hang around the extra year until Phil was scheduled to take the helm? Who gets million dollar retention bonuses for a year's worth of work? I never heard of such a deal. This payment flies in the face of everything Fulton has always stood for, especially good corporate governance, alignment with shareholders, and at-risk compensation tied to performance. Make no mistake. I'm a huge fan of pay for performance, and I don’t begrudge any of our corporate officers from doing well, extremely well, if they do well by shareholders. But shares of Fulton were $16.69, the day Scott took over as CEO, the first trading day of '06, that represents a loss through today of 37%. Additionally, the cash dividend per share at that time was $0.145, twice what it is today. If any of us turned in performance like that, we'd be out of work. We certainly wouldn't be rewarded with lavish cash bonuses to get us to stay. Where does the sense of entitlement come from? Where is the humility? No other corporation I'm aware of is doling out similar types of cash bonuses to executives for work they're already getting paid to do as part of their regular job. If Scott is underpaid, say so. Give him a raise. Do it honestly, ethically and above board, and tell us why he deserves it. And if you really want to align yourselves with performance, with all of us, the shareholders, then why wouldn't you pay Scott in shares of Fulton stock instead of cash? Fulton shareholders deserve better. I wouldn't have come here today if I didn't care for this company. This isn't easy for me, and believe me, it's not fun. I wish that you, the Fulton Board of Directors, would do the right thing, and make us feel proud, instead of embarrassed. It's what we're paying you for. Thank you.
R. Scott Smith
Well, let me try -- that's a statement, but I'll respond to it. If you read the proxy, there's a fairly, I think, detailed explanation about my salary and compensation, as well as all of management. And let me respond to the dead of the night. We -- when that contract was approved by the board, it was filed as -- with the appropriate -- the regulators, and it was public. It was covered in several media that I can think of, off the top of my head, and that included in Philadelphia, Harrisburg and Lancaster. So I think the accusation that the board did something in the dead of night, and unethical is inaccurate. Compensation is what it is. You're talking to a farm boy from Southern Lancaster County, I know these numbers are big. But if you look at any -- every salary, everybody's compensation in the company is based on the market. And the board, with very thorough analysis, with the help of independent outside consultants made the decision -- makes the decision, ongoing basis about management's compensation, including mine. As I mentioned, it's thoroughly discussed in the proxy. And you heard the vote, almost 92% of the shareholders believe that it was appropriate. That's all I can say. Any other questions?
Mr. Chairperson -- is this on again? My name is Dwight Edris. And I'm here today, of course, as a shareholder. I'm also the controller and part owner of Offset Impressions, a business located in Reading, employing about 54 people from our local community. Mr. Smith, when I read the news release announcing your retirement, I paid particular attention to a statement made by Mr. Wenger, concerning your leadership with Fulton. A statement which he repeated today. I quote, "He taught us to be better at banking, better at serving our customers and better at helping our community. And those are lessons that will stay with us for many years to come." It was because of those values that I was attracted to Fulton many years ago, when stock was selling a little bit higher, as an investor, and why over time, I moved all of Offset Impressions' banking, 401(k) and merchant service activities to Fulton. Offset Impressions is a commercial printer, and the downturn in the economy has presented some challenges for us and some years of losses. But during those years, we have been never late with the payment to the bank, related to obligations we had to the bank, and quite frankly, were never at risk to the bank. And after working hard to overcome the problems caused by the economic downturn, we end today, April 30, our fiscal year, with a profit. That wasn't easy, but we worked at it, we changed our business model, we got back on our feet and we're back in a profitable situation. And yet, on March 15, we were informed by Fulton Bank that we should make plans to move our banking relationship elsewhere. I can't begin to express how disappointed and hurt we are by that decision. And as a shareholder, I frankly don't understand why Fulton is willing to give up about $100,000 a year in interest and fees and a ripple effect that, that will have in our community when there has been and is not any risk to the bank. I do want to believe, as a shareholder, that the statement made by Mr. Wenger is still true, and that Fulton will continue to support the businesses that have been loyal to Fulton, and like Fulton, are showing improvement during what is still a difficult economic time. Thank you.
R. Scott Smith
Well, I don't think this meeting is the appropriate -- can I answer his question? May I answer that before you -- I don't think this meeting is the appropriate time for us to have a discussion about yours -- your or any individual company. Let me just say, if you have -- if you would like to discuss it further, I will make myself, and I'm sure, Phil will make ourselves available, if you have additional comments to make. I just -- Pardon?
R. Scott Smith
After the meeting?
I'll be here [ph].
R. Scott Smith
Okay. Go ahead.
I'm John Lambis [ph]. I've been a stockholder of Fulton stock for 61 years. My granddaughters, my son in Atlanta, one in Western North Carolina, all are Fulton stockholders. We get together at Thanksgiving and Christmas, we have a Fulton meeting. But I've been so fortunate to -- bought stock that many years ago, I've never sold a share. And thank goodness, after retirement, life -- it's nice to have the security that our money's been invested by Fulton Bank. So just keep it going.
R. Scott Smith
Thank you for your loyalty. We'll do our best. Any other questions?
My name is Martha Apeno [ph]. This question is probably very insignificant to anybody here, except for me, but -- and I think that there are some people who are older and a whole lot more people that are younger than I am. But I got my Fulton shares through inheritance. I am formerly from the Denver National Bank. And during the Great Depression, our family had the word that there were 2 banks in Lancaster County -- can you still hear me -- 2 banks in Lancaster County that survived the depression, for which the Denver National was one. Who is the other one? Was it Fulton? Was it some other bank? Do you know? Anybody?
R. Scott Smith
Well, we survived it. I don't...
What did you say?
R. Scott Smith
We survived the depression. I don't know if there were other banks that did. I...
R. Scott Smith
So my information was wrong that there were only 2?
R. Scott Smith
Oh, I think so. Yes. I -- help me, some of you. I don't know with others. What about Lancaster County Farmers or whatever they -- Ephrata National. Yes, there were several.
Phil, Scott, rest of you guys...
R. Scott Smith
Would you state your name for the rest of the shareholders?
Oh, yes. Herb Zimmerman [ph], shareholder -- somewhat disgruntled shareholder. I'm here again this year to provide a little balance as the prior gentleman did, I believe. Last year, I tended to cite management's pay packages, which seemed to be decidedly ahead of its performance, especially when evaluated against our company's peer group. Well, in 2011, that's actually improved a lot for management. In 2010, our top 4 managers enjoyed average gains in total compensation of about 24%, and they're combined total compensation packages increased by nearly $750,000 to $3.8 million. They were just getting started. In 2011, their combined total compensation packages increased by over $2 million to nearly $5.9 million, an average increase of over 54% from 2010. I shudder to think where we'll be in 2012, but maybe, just maybe, the negative say-on-pay decision with Citibank a week ago might trickle down to smaller banks as well. I doubt it will get this far though. We've already started out with the announcement on January 1 in the newspaper of a $1.3 million bonus to our CEO, just for sticking around for the whole year. Where did our HR Committee think he was going? But it worked, he didn't announce his retirement until mid-March. Well, how does our HR Committee and board justify those increases? For one thing, they set the compensation performance bar at a relatively accommodating levels off 2010's poor results. And they stuck with the so-called third-party independent consultant firm, but above all else, wants to retain its employment. It's like the consultant made me do it. Our HR Committee uses a variety of sophisticated measures to determine our management's annual performance, I'm a lot simpler. Mostly, I look at our dividend and our stock price, as I figure that's a pretty good indication of what investors, the owners, think of our company. In 2011, it wasn't much. In an overall upmarket, my stock declined 5% and is still, what, a good 40% or so below its level 4 or 5 years ago. Our dividend, though increased 3x, is still 1/3 of what it was 4 years ago. If we were a PGA TOUR-ing pro, we wouldn't make the 36-hole cut. Does that warrant record high employment packages? In our 2010 -- in 2010, our peer group continued its outperformance at Fulton in the marketplace, so with the aid of third-party consultant in 2011, we changed the composition of our peer group, and presto, we now outperformed our peer group. We dropped 8 banks and added 5. The average performance of the 5 banks added in 2011 was minus 24%. The worst of the deleted banks was minus 12%, and the group average was actually in the plus column, so much for transparency. And notwithstanding the difficult off-sided economic times yada, yada, yada, over the past couple of years, 4 of those dropped banks managed to get through those difficult times without a single dividend cut, not one. I think our HR Committee was snookered, but does anyone doubt that we'll retain that consulting firm. Enough, I don't really blame our management team for its pay levels. Of course, no management team is going to decline attractive pay packages, no matter how outrageous. It's our board and especially it's HR Committee that's allowed this to occur. In addition to overseeing long-term strategy, our board's primary interest should be in guarding shareholder interest. In this regard I think it has failed. I don't doubt for a moment that our management team is working diligently to restore our bank to its past levels of performance. And I truly wish it every success doing so. But I don’t think we should be paying our managers as if the goal has already been attained, let alone, exceeded. It goes to an old saying about putting the cart before the horse, way before. Thank you.
R. Scott Smith
Well, I think, you've heard my comment. I don't know what I can add to what I said before, so -- but here we are. Any other questions?
My name is Pete Stafas [ph] from Westchester [ph]. I just want to bring up the fact that compact fluorescents have mercury in them, and as a liability issue, you should recycle them. And for people at home, take them to Home Depot, because the EPA is going to come after us, eventually for breaking the -- any breakage in fluorescents have mercury in them. So as a liability issue, please -- and I came up here, so the people at home would go to recycle theirs at Home Depot, so that's one of the issues. And if you could put some of these -- like annual report or some sort of report at the bank, it -- that'll encourage people to buy stock at the new branches that you have. Thank you.
R. Scott Smith
Okay. We'll try to recycle that and much else as we can, as we work through trying to be as green as we can be as a company. Any other questions?
My name is Christopher De Grucci [ph]. I'm a stockholder, as well as customer. I -- my company -- I acquired this company back in 2009, and I just want to -- I do have a statement, but I also have a question, okay? The statement is that in 2009, I acquired a company, and I was able to get backing from Fulton Bank on this. And this was a time, as you all know, where the economy was down. The company wasn't doing very well. But they had believed in the turnaround of this company and myself and my partner in managing the company to bring this around. And we have done that. And I just want to say I appreciate your backing of us, and I know that we continue as a customer to do a good job, as far as paying our bills and all that. But this -- so my question has to do with small companies and what made United States what it is today, and that is small businesses in the country, generating the economy. That's -- and we have -- there's still an issue out there in the U.S. economy of growth and -- so my question is what direction is Fulton Bank going with spurring new business backing, so that -- to help the economy whether be in our area or wherever you impose it [ph].
R. Scott Smith
Question is what are we doing to try to help the economy grow, particularly in the small business? We've been very active, I think there's a -- on our website, for those of you in small business, there's some -- a lot of information that can help you understand how to start and prosper as a small-business person. There, we hold -- we have webinars that are -- have been very popular amongst small business. We do support, as you mentioned, in the lending function of small businesses, where we come to an agreement that the loan is bankable, if you will. And that's the bread-and-butter of our business. Most of our customers are small business customers. I think the average loan size in our commercial portfolio is about $500,000, so that's small business. We do some larger loans and that for some larger businesses, but our banks -- our community bank's located in the 5 states and small-business has been a very active part of it. If you recall Phil's numbers, you saw some very nice growth in numbers of small business customers that we achieved last year. We've gotten a nice market share growth from other customers. Unfortunately, for our bottom line, they're not borrowing as much as we'd like them to. And I think what I hear from small business customers is there's still some uncertainty about where we're going. And I think -- as I said to the analysts a couple of weeks ago, we've been fooled twice in May. Let's hope, this May, we have a real spring and that the economy continues to rebound and that small business gets a little more optimistic. The most recent numbers I've seen, just generally small businesses, more optimistic than they've been for some time. Let's hope that, that means their revenues will grow and that they'll start adding people and plant and equipment and make the economy stronger. So it's a critical part of our business line, we're in it every day, and we do everything we can to encourage those folks to grow and prosper. Other questions?
Hearing none, I'll entertain a motion to adjourn this meeting.
R. Scott Smith
Is there a second? All those in favor please signify by saying aye?
Opposed? The ayes have it, this meeting's adjourned. Thank you, all, for coming, and have a safe trip home.