THE MARKET AND ECONOMY IN

2017:MID YEAR UPDATE

Keith P. Aleardi, CFA

Chief Investment Officer

717-834-8473

kaleardi@fult.com

2

-6%

4%

14%

24%

34%

44%

54%

0 8 16 24 32 400

25

50

75

100

125

1900 1912 1921 1933 1949 1961 1980 2001

Source: BEA, NBER, J.P. Morgan Asset Management. *Chart assumes current expansion started in July 2009 and continued through June 2017, lasting 96 months so far. Data for length of economic expansions and recessions obtained from the National Bureau of Economic Research (NBER). These data can be found at www.nber.org/cycles/ and reflect information through June 2017.Guide to the Markets – U.S. Data are as of June 30, 2017.

Length of economic expansions and recessions Strength of economic expansionsCumulative real GDP growth since prior peak, percent

Prior expansion peak

— 4Q48 — 1Q80

— 2Q53 — 3Q81

— 3Q57 — 3Q90

— 2Q60 — 1Q01

— 4Q69 — 4Q07

— 4Q73

Expansions: 47 months

Recessions: 15 months

Average length (months):

96

months*

Eco

no

my

Number of quarters

ECONOMIC EXPANSION

3

Economic growth and the composition of GDP

-$1

$1

$3

$5

$7

$9

$11

$13

$15

$17

$19

$21Real GDP

Source: BEA, FactSet, J.P. Morgan Asset Management.Values may not sum to 100% due to rounding. Quarter-over-quarter percent changes are at an annualized rate. Average represents the annualized growth rate for the full period. Expansion average refers to the period starting in the second quarter of 2009.Guide to the Markets – U.S. Data are as of June 30, 2017.

Real GDPYear-over-year % change

1Q17

YoY % chg: 2.1%

Components of GDP1Q17 nominal GDP, USD trillions

12.6% Investment ex-housing

69.0% Consumption

17.5% Gov’t spending

3.9% Housing

- 3.0% Net exports

Average:

2.8%

QoQ % chg: 1.4%

Expansion

average:

2.1%

Eco

no

my

US GDP AND ITS COMPONENTS

4

Cyclical sectors

$45

$50

$55

$60

$65

$70

$75

$80

'97 '99 '01 '03 '05 '07 '09 '11 '13 '15

Source: J.P. Morgan Asset Management; (Top left) BEA; (Top and bottom right, bottom left) Census Bureau, FactSet.Capital goods orders deflated using the producer price index for capital goods with a base year of 2009. *May figure is based on May 2017 Advance Report.SA – seasonally adjusted. Guide to the Markets – U.S. Data are as of June 30, 2017.

Light vehicle salesMillions, seasonally adjusted annual rate

Average: 15.6

May 2017:

16.6

May 2017:

1,092

Housing startsThousands, seasonally adjusted annual rate

Average: 1,310

Real capital goods ordersNon-defense capital goods orders ex-aircraft, USD billions, SA

Average: 62.5

May 2017*:

57.8

Manufacturing and trade inventoriesDays of sales, seasonally adjusted

Apr. 2017:

41.7

Eco

no

my

HEALTHY ECONOMY

5

|

0%

1%

2%

3%

4%

5%

6%

'55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15

1.1%

0.6%0.8%

0.3%0.04%

0.2%

0.4%

0.6%

0.3%

0.25%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

'77-'86 '87-'96 '97-'06 '07-'16 '17-'26

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

'57-'66 '67-'76 '77-'86 '87-'96 '97-'06 '07-'16

Source: J.P. Morgan Asset Management; (Top left) Census Bureau, DOD, DOJ; (Top left and right) BLS; (Right and bottom left) BEA.GDP drivers are calculated as the average annualized growth between 4Q of the first and last year. Future working age population is calculated as the total estimated number of Americans from the Census Bureau, controlled for military enrollment, growth in institutionalized population and demographic trends. Growth in working age population does not include illegal immigration; DOD Troop Readiness reports used to estimate percent of population enlisted. *J.P. Morgan Asset Management estimate.Guide to the Markets – U.S. Data are as of June 30, 2017.

Growth in workers

+ Growth in real output per worker

Growth in real GDP

Census

forecast

2016: 1.6%*

1.4%

2.0%

2.1%

1.5%

1.3%

0.4%

2.8% 1.0% 1.2% 1.6% 1.9% 0.9%

4.2%

3.0%

3.3%

3.1%3.2%

1.3%

Growth in working-age populationPercent increase in civilian non-institutional population ages 16-64

Drivers of GDP growthAverage year-over-year percent change

Growth in private non-residential capital stockNon-residential fixed assets, year-over-year % change

Eco

no

my

Immigrant Native born

1.3%

1.0%

1.4%

0.6%

0.3%

STUCK IN THE MIDDLE

6

• Tax Reform vs. Tax Cut

• Failure of health care bill suggests wholesale reform of the tax code will face steep odds

• Infrastructure Program

• Proposed $550 billion investment

• Democrats have signaled unwillingness to work with Trump, regardless of issue at hand

• Increase in Defense Spending

• Eliminate defense spending cuts under sequestration, amounting to $40 billion/year increase

6

Source: Goldman Sachs Global Investment Research, FFA

Investment Management

FISCAL POLICY - PROPOSED LEGISLATION

7

7

Source: Tax Foundation, FFA Investment Management

GROWTH IMPACT

8

Unemployment and wages

Source: BLS, FactSet, J.P. Morgan Asset Management.Guide to the Markets – U.S. Data are as of June 30, 2017.

Civilian unemployment rate and year-over-year growth in wages of production and non-supervisory workersSeasonally adjusted, percent

50-yr. average: 4.2%

May 2017: 4.3%

Oct. 2009:

10.0%

May 2017:

2.4%

50-yr. average: 6.2%

Wage growth

Unemployment rate

Eco

no

my

NORMALIZED EMPLOYMENT

9

Inflation

Source: BLS, FactSet, J.P. Morgan Asset Management.CPI used is CPI-U and values shown are % change vs. one year ago. Core CPI is defined as CPI excluding food and energy prices. The Personal Consumption Expenditure (PCE) deflator employs an evolving chain-weighted basket of consumer expenditures instead of the fixed-weight basket used in CPI calculations.Guide to the Markets – U.S. Data are as of June 30, 2017.

CPI and core CPI% change vs. prior year, seasonally adjusted

Econo

my

50-yr. avg. May 2017

Headline CPI 4.1% 1.9%

Core CPI 4.1% 1.7%

Food CPI 4.1% 0.9%

Energy CPI 4.3% 5.4%

Headline PCE deflator 3.6% 1.4%

Core PCE deflator 3.5% 1.4%

INFLATION – STILL AN ISSUE

10

S&P 500 Index at inflection points

Characteristic Mar. 2000 Oct. 2007 Jun. 2017

Index level 1,527 1,565 2,423

P/E ratio (fwd.) 27.2x 15.7x 17.5x

Dividend yield 1.1% 1.8% 2.1%

10-yr. Treasury 6.2% 4.7% 2.3%

-49%

Oct. 9, 2002

P/E (fwd.) = 14.1x

777

Mar. 24, 2000

P/E (fwd.) = 27.2x

1,527

Dec. 31, 1996

P/E (fwd.) = 16.0x

741

Jun. 30, 2017

P/E (fwd.) = 17.5x

2,423

+101%

Oct. 9, 2007

P/E (fwd.) = 15.7x

1,565

-57%

Mar. 9, 2009

P/E (fwd.) = 10.3x

677

+258%

+106%

S&P 500 Price Index

Eq

uitie

s

MARKET INFLECTION POINT

11

S&P 500 valuation measures

Source: FactSet, FRB, IBES, Robert Shiller, Standard & Poor’s, J.P. Morgan Asset Management. Price to earnings is price divided by consensus analyst estimates of earnings per share for the next 12 months as provided by IBES since December 1989, and FactSet for June 30, 2017. Average P/E and standard deviations are calculated using 25 years of FactSet history. Shiller’s P/E uses trailing 10-years of inflation-adjusted earnings as reported by companies. Dividend yield is calculated as the next 12-month consensus dividend divided by most recent price. Price to book ratio is the price divided by book value per share. Price to cash flow is price divided by NTM cash flow. EY minus Baa yield is the forward earnings yield (consensus analyst estimates of EPS over the next 12 months divided by price) minus the Moody’s Baa seasoned corporate bond yield. Std. dev. over-/under-valued is calculated using the average and standard deviation over 25 years for each measure. *P/CF is a 20-year average due to cash flow data availability.Guide to the Markets – U.S. Data are as of June 30, 2017.

S&P 500 Index: Forward P/E ratio

Eq

uiti

es

Current:

17.5x

Valuation

measure Description Latest

25-year

avg.*

Std. dev.

Over-/under-

valued

P/E Forward P/E 17.5x 16.0x 0.5

CAPE Shiller’s P/E 30.1 26.2 0.6

Div. Yield Dividend yield 2.1% 2.0% -0.2

P/B Price to book 2.9 2.9 0.0

P/CF Price to cash flow 12.2 10.6 0.8

EY Spread EY minus Baa yield 1.3% -0.3% -0.8

25-year average: 16.0x

+1 Std. dev.: 19.2x

-1 Std. dev.: 12.8x

US EQUITIES EXPENSIVE BUT NOT OVERVALUED

12

Corporate profits

-5%

-1%

3%

7%

11%

15%

19%

23%

'12 '13 '14 '15 '16 '17 '18

-$3.0

-$1.0

$1.0

$3.0

$5.0

'12 '13 '14 '15 '16 '17 '18-$1

$3

$7

$11

$15

$19

$23

$27

$31

$35

'02 '05 '08 '11 '14 '17

Source: Compustat, FactSet, Standard & Poor’s, J.P. Morgan Asset Management; (Top right) Federal Reserve, S&P 500 individual company 10k filings,S&P Index Alert.EPS levels are based on operating earnings per share. Earnings estimates are Standard & Poor’s consensus analyst expectations. Past performance is not indicative of future returns. Currencies in the Trade Weighted U.S. Dollar Major Currencies Index are: British pound, euro, Swedish krona, Australian dollar, Canadian dollar, Japanese yen and Swiss franc. *1Q17 earnings are calculated using actual earnings for 98.6% of S&P 500 market cap and earnings estimates for the remaining companies. **Year-over-year change is calculated using the quarterly average for each period. USD forecast assumes no change in the U.S. dollar from its June 30, 2017 level. Guide to the Markets – U.S. Data are as of June 30, 2017.

S&P 500 earnings per shareIndex quarterly operating earnings

Energy sector earningsEnergy sector contribution to S&P 500 EPS, quarterly

U.S. dollarYear-over-year % change**, quarterly, USD major currencies index

2Q17:

3.92%

S&P 500 revenues

U.S. 56%

International 44%Eq

uiti

es

Forecast

assumes

no change

in USD

1Q17*:

$28.81

S&P consensus analyst estimates

1Q17*:

$1.17

EARNINGS ON THE RISE AGAIN

13

Source: MSCI, Standard & Poor’s, FactSet, J.P. Morgan Asset Management.Forward price to earnings ratio is a bottom-up calculation based on the most recent index price, divided by consensus estimates for earnings in the next twelve months (NTM), and is provided by FactSet Market Aggregates. Returns are cumulative and based on price movement only, and do not include the reinvestment of dividends. Past performance is not indicative of future returns. Dividend yield is calculated as consensus estimates of dividends for the next twelve months, divided by most recent price, as provided by FactSet Market Aggregates.Guide to the Markets – U.S. Data are as of June 30, 2017.

MSCI All Country World ex-U.S. and S&P 500 IndexDec. 1996 = 100, U.S. dollar, price return

+106%

+258%

Inte

rnation

al

-62%

-57%

+216%

+101%

-52%

-49%

+48%

+106%

Jun. 30, 2017

P/E (fwd.) = 14.1x

Jun. 30, 2017

P/E (fwd.) = 17.5x

P/E 20 yr. avg. Div. Yield 20 yr. avg.

S&P 500 17.5x 16.0x 2.1% 2.0%

ACWI ex-U.S. 14.1x 14.7x 3.2% 2.9%

INTERNATIONAL OFFERS OPPORTUNITY

14

The Fed and interest rates

1.38%

2.13%

2.94% 3.00%

1.13%1.24%

1.48%1.66%

0%

1%

2%

3%

4%

5%

6%

7%

'99 '02 '05 '08 '11 '14 '17 '20

FOMC June 2017 forecasts

Percent

2017 2018 2019Long

run

Change in real GDP, 4Q to 4Q 2.2 2.1 1.9 1.8

Unemployment rate, 4Q 4.3 4.2 4.2 4.6

PCE inflation, 4Q to 4Q 1.6 2.0 2.0 2.0

Source: FactSet, Federal Reserve, J.P. Morgan Asset Management.Market expectations are the federal funds rates priced into the fed futures market as of the date of the June 2017 FOMC meeting. Guide to the Markets – U.S. Data are as of June 30, 2017.

Federal funds rate expectationsFOMC and market expectations for the fed funds rate

Federal funds rate

FOMC long-run projection

FOMC year-end estimates

Market expectations on 6/14/17

Long

run

Fix

ed

in

co

me

INTEREST RATES ON THE RISE

15

The Federal Reserve balance sheet

$0

$1

$2

$3

$4

$5

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21

Source: Federal Reserve, FactSet, J.P. Morgan Asset Management.*Balance sheet reduction assumes reduction from current level, beginning October 2017 and lasting four years, concluding in October 2021. Reduction of Treasuries and MBS is per FOMC guidelines from the June 2017 meeting minutes: Treasury securities will be reduced $6 billion per month initially and reduction rate will increase in steps of $6 billion at three-month intervals over 12 months until reaching $30 billion per month; MBS will be reduced $4 billion per month initially and reduction rate will increase in steps of $4 billion at three-month intervals over 12 months until reaching $20 billion per month; Other assets are reduced in proportion. Forecasts do not take into account months where maturing assets do not exceed the stated cap nor do they consider the reinvestment of principal or interest repayment in excess of the stated cap.Guide to the Markets – U.S. Data are as of June 30, 2017.

The Federal Reserve balance sheetUSD trillions

Balance sheet reduction scenario

(current balance sheet = $4.460 trillion)

Beginning

balance ($ trillion)

End balance

($ trillion)

Treasuries $2.465 $1.170

MBS $1.770 $0.929

Treasuries

MBS

Other

Dec. 2008:

QE1 begins

Jun. 2010:

End of QE1;

balance sheet

stands at $2.1T

Oct. 2014:

End of QE3;

balance sheet

stands at $4.5T

Nov. 2010:

QE2 begins

Jun. 2011:

End of QE2;

balance sheet

stands at $2.8T

Sep. 2012:

QE3 begins

Jan. 2014:

Tapering of

purchases begins

Fix

ed

inco

me

Forecasted reduction*

FED FOCUSED LONG TERM

16

Annual returns and intra-year declines

26

-10

1517

1

26

15

2

12

27

-7

26

47

-2

34

20

31

27

20

-10-13

-23

26

9

3

14

4

-38

23

13

0

13

30

11

-1

10 8

-17-18

-17

-7

-13

-8-9

-34

-8 -8

-20

-6 -6 -5

-9

-3

-8

-11

-19

-12

-17

-30

-34

-14

-8 -7 -8-10

-49

-28

-16

-19

-10

-6-7

-12-11

-3

-60%

-50%

-40%

-30%

-20%

-10%

%

10%

20%

30%

40%

'80 '85 '90 '95 '00 '05 '10 '15

Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management.Returns are based on price index only and do not include dividends. Intra-year drops refers to the largest market drops from a peak to a trough during the year. For illustrative purposes only. Returns shown are calendar year returns from 1980 to 2016, over which time period the average annual return was 8.5%. The 2017 bar represents the year-to-date return and is not included in the average annual return calculation.Guide to the Markets – U.S. Data are as of June 30, 2017.

S&P 500 intra-year declines vs. calendar year returnsDespite average intra-year drops of 14.1%, annual returns positive in 28 of 37 years

Eq

uitie

s

YTD

MARKETS CAN BE VOLATILE

DIVERSIFICATION STILL BEST APPROACH 17

• Questions have recently surfaced about the benefits of diversification and active management.

• Over the past few years, diversified portfolios have posted only modest results as they struggled to keep pace with the more narrowly focused but high profile large cap domestic equities.

• History has shown that over shorter time periods, different asset classes will outperform as other lags.

• In three-year rolling periods of 2001- 2003 and 2005-2007 international stocks outperformed the S&P 500.

• Recently, with increased volatility, several asset classes that struggled the past few years have finally shown life, leadingmarkets higher.

• Even though diversification may not always benefit portfolios over short term, it is a much more prudent strategy than relying on market timing to rotate in and out of asset classes.

• Over a 20 period, the average investor return has been about 2% where a balanced diversified portfolio has returned over 7%.

• Mitigating risks by employing a systematic rebalancing process has historically added an additional .5% annually to portfolioreturns.

Source: FFA Investment Management, Envestnet PMC, JP Morgan

18

Asset class returns

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD Ann. Vol.

Comdty.EM

EquityREITs

EM

EquityREITs

EM

Equity

Fixe d

Inc ome

EM

EquityREITs REITs REITs

Sma ll

Ca pREITs REITs

Sma ll

Ca p

EM

EquityREITs

EM

Equity

2 5 .9 % 5 6 .3 % 3 1.6 % 3 4 .5 % 3 5 .1% 3 9 .8 % 5 .2 % 7 9 .0 % 2 7 .9 % 8 .3 % 19 .7 % 3 8 .8 % 2 8 .0 % 2 .8 % 2 1.3 % 18 .6 % 10 .8 % 2 3 .8 %

Fixe d

Inc ome

Sma ll

Ca p

EM

EquityComdty.

EM

EquityComdty. Ca sh

High

Y ie ld

Sma ll

Ca p

Fixe d

Inc ome

High

Y ie ld

La rge

Ca p

La rge

Ca p

La rge

Ca p

High

Y ie ld

DM

Equity

EM

EquityREITs

10 .3 % 4 7 .3 % 2 6 .0 % 2 1.4 % 3 2 .6 % 16 .2 % 1.8 % 5 9 .4 % 2 6 .9 % 7 .8 % 19 .6 % 3 2 .4 % 13 .7 % 1.4 % 14 .3 % 14 .2 % 9 .8 % 2 2 .6 %

High

Y ie ld

DM

Equity

DM

Equity

DM

Equity

DM

Equity

DM

Equity

Asse t

Alloc .

DM

Equity

EM

Equity

High

Y ie ld

EM

Equity

DM

Equity

Fixe d

Inc ome

Fixe d

Inc ome

La rge

Ca p

La rge

Ca p

High

Y ie ld

Sma ll

Ca p

4 .1% 3 9 .2 % 2 0 .7 % 14 .0 % 2 6 .9 % 11.6 % - 2 5 .4 % 3 2 .5 % 19 .2 % 3 .1% 18 .6 % 2 3 .3 % 6 .0 % 0 .5 % 12 .0 % 9 .3 % 9 .2 % 2 0 .1%

REITs REITsSma ll

Ca pREITs

Sma ll

Ca p

Asse t

Alloc .

High

Y ie ldREITs Comdty.

La rge

Ca p

DM

Equity

Asse t

Alloc .

Asse t

Alloc .Ca sh Comdty.

Asse t

Alloc .

Sma ll

Ca p

DM

Equity

3 .8 % 3 7 .1% 18 .3 % 12 .2 % 18 .4 % 7 .1% - 2 6 .9 % 2 8 .0 % 16 .8 % 2 .1% 17 .9 % 14 .9 % 5 .2 % 0 .0 % 11.8 % 6 .8 % 8 .5 % 19 .2 %

Ca shHigh

Y ie ld

High

Y ie ld

Asse t

Alloc .

La rge

Ca p

Fixe d

Inc ome

Sma ll

Ca p

Sma ll

Ca p

La rge

Ca pCa sh

Sma ll

Ca p

High

Y ie ld

Sma ll

Ca p

DM

Equity

EM

Equity

High

Y ie ld

Asse t

Alloc .Comdty.

1.7 % 3 2 .4 % 13 .2 % 8 .1% 15 .8 % 7 .0 % - 3 3 .8 % 2 7 .2 % 15 .1% 0 .1% 16 .3 % 7 .3 % 4 .9 % - 0 .4 % 11.6 % 6 .5 % 6 .9 % 19 .0 %

Asse t

Alloc .

La rge

Ca p

Asse t

Alloc .

La rge

Ca p

Asse t

Alloc .

La rge

Ca pComdty.

La rge

Ca p

High

Y ie ld

Asse t

Alloc .

La rge

Ca pREITs Ca sh

Asse t

Alloc .REITs

Sma ll

Ca p

La rge

Ca p

La rge

Ca p

- 5 .9 % 2 8 .7 % 12 .8 % 4 .9 % 15 .3 % 5 .5 % - 3 5 .6 % 2 6 .5 % 14 .8 % - 0 .7 % 16 .0 % 2 .9 % 0 .0 % - 2 .0 % 8 .6 % 5 .0 % 6 .7 % 15 .9 %

EM

Equity

Asse t

Alloc .

La rge

Ca p

Sma ll

Ca p

High

Y ie ldCa sh

La rge

Ca p

Asse t

Alloc .

Asse t

Alloc .

Sma ll

Ca p

Asse t

Alloc .Ca sh

High

Y ie ld

High

Y ie ld

Asse t

Alloc .REITs

DM

Equity

High

Y ie ld

- 6 .0 % 2 6 .3 % 10 .9 % 4 .6 % 13 .7 % 4 .8 % - 3 7 .0 % 2 5 .0 % 13 .3 % - 4 .2 % 12 .2 % 0 .0 % 0 .0 % - 2 .7 % 8 .3 % 4 .9 % 5 .7 % 11.7 %

DM

EquityComdty. Comdty.

High

Y ie ldCa sh

High

Y ie ldREITs Comdty.

DM

Equity

DM

Equity

Fixe d

Inc ome

Fixe d

Inc ome

EM

Equity

Sma ll

Ca p

Fixe d

Inc ome

Fixe d

Inc ome

Fixe d

Inc ome

Asse t

Alloc .

- 15 .7 % 2 3 .9 % 9 .1% 3 .6 % 4 .8 % 3 .2 % - 3 7 .7 % 18 .9 % 8 .2 % - 11.7 % 4 .2 % - 2 .0 % - 1.8 % - 4 .4 % 2 .6 % 2 .3 % 4 .6 % 11.0 %

Sma ll

Ca p

Fixe d

Inc ome

Fixe d

Inc omeCa sh

Fixe d

Inc ome

Sma ll

Ca p

DM

Equity

Fixe d

Inc ome

Fixe d

Inc omeComdty. Ca sh

EM

Equity

DM

Equity

EM

Equity

DM

EquityCa sh Ca sh

Fixe d

Inc ome

- 2 0 .5 % 4 .1% 4 .3 % 3 .0 % 4 .3 % - 1.6 % - 4 3 .1% 5 .9 % 6 .5 % - 13 .3 % 0 .1% - 2 .3 % - 4 .5 % - 14 .6 % 1.5 % 0 .3 % 1.3 % 3 .5 %

La rge

Ca pCa sh Ca sh

Fixe d

Inc omeComdty. REITs

EM

EquityCa sh Ca sh

EM

EquityComdty. Comdty. Comdty. Comdty. Ca sh Comdty. Comdty. Ca sh

- 2 2 .1% 1.0 % 1.2 % 2 .4 % 2 .1% - 15 .7 % - 5 3 .2 % 0 .1% 0 .1% - 18 .2 % - 1.1% - 9 .5 % - 17 .0 % - 2 4 .7 % 0 .3 % - 5 .3 % 1.2 % 0 .8 %

2002 - 2016

Source: Barclays, Bloomberg, FactSet, MSCI, NAREIT, Russell, Standard & Poor’s, J.P. Morgan Asset Management. Large cap: S&P 500, Small cap: Russell 2000, EM Equity: MSCI EME, DM Equity: MSCI EAFE, Comdty: Bloomberg Commodity Index, High Yield: Barclays Global HY Index, Fixed Income: Barclays US Aggregate, REITs: NAREIT Equity REIT Index. The “Asset Allocation” portfolio assumes the following weights: 25% in the S&P 500, 10% in the Russell 2000, 15% in the MSCI EAFE, 5% in the MSCI EME, 25% in the Barclays US Aggregate, 5% in the Barclays 1-3m Treasury, 5% in the Barclays Global High Yield Index, 5% in the Bloomberg Commodity Index and 5% in the NAREIT Equity REIT Index. Balanced portfolio assumes annual rebalancing. Annualized (Ann.) return and volatility (Vol.) represents period of 12/31/01 – 12/31/16. Please see disclosure page at end for index definitions. All data represents total return for stated period. Past performance is not indicative of future returns. Guide to the Markets – U.S. Data are as of June 30, 2017.

Inve

stin

g

prin

cip

les

DIVERSIFICATION IS KEY

19

The importance of staying invested and limiting losses

2.0%10%

49%

3.0%

16%

81%

6.5%

37%

252%

0%

50%

100%

150%

200%

250%

300%

1 year 5 years 20 years

Source: J.P. Morgan Asset Management.*Asset class growth rates are based on synthetic returns using J.P. Morgan’s Long Term Capital Markets Assumptions; projected Bond return is based on assumption for U.S. aggregate bonds; projected Stock return is based on an approximation of the average return assumption among small, medium and large cap U.S. stocks.Guide to the Markets – U.S. Data are as of June 30, 2017.

Gain required to fully recover from a lossLoss and subsequent gain necessary for full recovery of value

Investing

princip

les

1%5% 11%

25%

43%

67%

100%

150%

233%

-1%-5%

-10%-20%

-30%-40%

-50%

-60%-70%

-100%

-50%

0%

50%

100%

150%

200%

250%

Loss

Required gainCash

The power of compoundingCumulative return by holding period*

Bonds

Stocks

STAY THE COURSE

A FIDUCIARY INVESTMENT PROCESS 20

• Deliver 8 specialty managed funds

• Social Screening provided on each fund

• Each fund is valued monthly

• Provides professional management to every size relationship

• Lower Expenses

• Allows for greater diversification

• Unified client base with similar investment objective than a public fund

• Thoughtful consideration and application of each of the investment factors which fiduciary investors are required to consider

Fulton Financial Advisors and Clermont Wealth Strategies operate through Fulton Bank, N.A. and other subsidiaries of Fulton Financial Corporation. Fulton Financial Advisors and Clermont Wealth Strategies offer a broad

array of financial products and trust and retirement services

The information and material in this report is being provided for informational purposes only, and is not intended as an offer or solicitation for the purchase or sale of any financial instrument or to adopt a particular

investment strategy.

Information has been obtained from sources believed to be reliable but Fulton Financial Advisors and Clermont Wealth Strategies or its affiliates and/or subsidiaries (collectively “Fulton”) do not warrant its completeness,

timeliness or accuracy, except with respect to any disclosures relative to Fulton. The information contained herein is as of the date referenced above, and Fulton does not undertake any obligation to update such

information. Fulton affiliates may issue reports or have opinions that are inconsistent with, or reach different conclusions from, this report.

All charts and graphs are shown for illustrative purposes only. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject

to change without notice.

Any opinions and recommendations expressed herein do not take into account an investor's financial circumstances, investment objectives or financial needs, and are not intended as advice regarding, or recommendations

of, particular investments and/or trading strategies, including investments that reference a particular derivative index or other benchmark.

The investments described herein may be complex, involve significant risk and volatility, and may only be appropriate for highly sophisticated investors who are capable of understanding and assuming the risks involved.

The investments discussed may fluctuate in price or value and could be adversely affected by changes in interest rates, exchange rates or other factors.

Past performance is not indicative of future results. The value or income associated with a security may fluctuate, and investors could lose their entire investment. Asset allocation and diversification do not assure or

guarantee better performance, and cannot eliminate the risk of investment losses.

Investors must make their own decisions regarding any securities or financial instruments mentioned herein, and must not rely upon this report in evaluating the merits of investing in any instruments or pursuing investment

strategies described herein. You should consult with your own advisors as to the suitability of such securities or other financial instruments for your particular circumstances. In no event shall Fulton be liable for any use by

any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein.

Fulton makes no representations as to the legal, tax, credit, or accounting treatment of any transactions or strategies mentioned herein, or any other effects such transactions may have on investors. You should review any

planned financial transactions that may have tax or legal implications with a tax or legal advisor.

Recipients of this report will not be treated as customers of Fulton by virtue of having received this report. No part of this report may be redistributed to others or replicated in any form without prior consent of Fulton.

Equity Index Returns: All data represents total return including the reinvestment of dividends for stated period. S&P 500: Standard and Poor’s 500 largest market cap companies; DJIA: Dow Jones Industrial Average;

MSCI-EAFE: Morgan Stanley Capital International-Europe, Australia & Far East; MSCI-EMEA: Morgan Stanley Capital International-Emerging Markets. All data obtained from Morningstar Direct.

Equity Index Values: Reflects closing price level for each index as of stated date. All data obtained from Bloomberg LP.

Fixed Income Index Returns: BarCap: Barclays Capital. All data obtained from Morningstar Direct.

Alternatives/Liquid Real Assets: All data represents total return including the reinvestment of dividends for stated period. DJ UBS Commodities: Dow Jones UBS Securities Commodity; Alerian MLP: Alerian Master

Limited Partnership; FTSE NAREIT Equity: FTSE National Real Estate Equity. All data obtained from Morningstar Direct.

S O U R C E S A N D C A L C U L A T I O N S

Securities and Insurance Products:

•Not FDIC-Insured •Not Insured by any Federal Government Agency • No Financial Institution Guarantee •Subject to Risk • May Lose Value •Not a Deposit 21 of 3