Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2014)
36 slides from Fulton Financial's investor presentation, Nov 21, 2014
Slide 1: Investor Presentation
D A T A A S O F S E P T E M B E R 3 0 , 2 0 1 4 U N L E S S O T H E R W I S E N O T E D INVESTOR PRESENTATION
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements with respect to Fulton Financial Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of wor
Slide 3: Why Fulton?
WHY FULTON? • Risk Management Foundation • Management Depth and Experience • Stability of Markets / Franchise • Strong Capital & Reserves • Relationship Strategy • Quality Loan Growth / Solid Asset Quality • Attractive Core Deposit Profile • Expense Management • Balance Sheet Is Positioned for Risin
Slide 4: A Valuable Franchise
A VALUABLE FRANCHISE • 253 community banking offices across the Mid-Atlantic • Asset size: $17.2 billion • 3,800+ team members (3,550 FTEs) • Market capitalization: $2.2 billion (1) 4 ‘(1) Based on shares outstanding and the closing price as of November 18, 2014.
Slide 5: Strong Position in Attractive Markets
STRONG POSITION IN ATTRACTIVE MARKETS 5 Source: SNL Financial LC. Note: Data as of June 30, 2014 per FDIC Summary of Deposits. (1) Median HH Income, 2014 – 2019 Projected Population Change and 2014 – 2019 Projected HH Income Change are weighted by deposits in each MSA. Deposits Market Market Median
Slide 6: Deep Executive Management Team
Name Position Years at Fulton Years in Financial Services Prior Experience E. Philip Wenger Chairman, President & CEO 35 35 Various roles since joining in 1979 Patrick Barrett (1) Senior EVP & CFO 1 21 SunTrust, JPMorgan, Deloitte Touche Tomatsu James Shreiner Senior EVP/ Operations and Credit 39 39
Slide 7: Capital Strength
CAPITAL STRENGTH 15.6% 15.0% 14.5% 13.4% 13.1% 13.0% 11.0% 10.6% 10.6% 9.7% 9.3% 9.3% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% Dec 31, 2012 Dec 31, 2013 Sep 30, 2014 Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio Tier 1 Leverage Ratio TCE Ratio (4) 12.2% (5) 9.9% (5) 8.7%
Slide 8: Loan Portfolio Growth & Composition
LOAN PORTFOLIO GROWTH & COMPOSITION 8 Note: Loan portfolio composition is based on average balances for the periods indicated. (1) Fully taxable-equivalent $4.6 $4.9 $5.1 $3.6 $3.7 $3.6 $1.6 $1.7 $1.7 $1.2 $1.3 $1.3 $0.6 $0.6 $0.6 $0.4 $0.4 $0.5 4.81% 4.39% 4.23% 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7
Slide 9: Improving Asset Quality
IMPROVING ASSET QUALITY 0.00% 1.00% 2.00% 3.00% Dec 31, 2009 Dec 31, 2010 Dec 31, 2011 Dec 31, 2012 Dec 31, 2013 Jun 30, 2014 Sep 30, 2014 FULT Peer^ Top 50* 9 ˄ See “Appendix” for listing of Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size as of
Slide 10: Core Deposits - Improved Mix
CORE DEPOSITS - IMPROVED MIX 10 Note: Deposit composition is based on quarterly average balances for the periods indicated. 47% 16% 16% 13% 8% 3rd Quarter Ended September 30, 2009 Time Deposits Non-Int DDA Int DDA Money Mkt Savings 23% 27% 23% 17% 10% 3rd Quarter Ended September 30, 2014 Time Deposi
Slide 11: Net Interest Margin
NET INTEREST MARGIN (1) 3.42% 3.00% 3.25% 3.50% 3.75% 4.00% 2009 2010 2011 2012 2013 YTD Jun 30, 2014 YTD Sep 30, 2014FULT Peer^ Top 50* 11 (1) Fully –taxable equivalent. ˄ See “Appendix” for listing of Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets
Slide 12: Positioned for Rising Interest Rate Environment
(1) See note 2 on slide 34. (2) The actual impact of changes in interest rates on the Corporation’s net interest income may differ materially from the anticipated amounts presented above. Anticipated Rate Annual Change in % Change (1) Net Interest Income (2) Change +400 bps $ 83.4 mill ion 16.6% +30
Slide 13: Attractive Profitability
ATTRACTIVE PROFITABILITY 13 Source: 2013 10-K 2013 IP 2012 IP 2010 IP has inconsistency with 10-K 0.78% 0.90% 0.98% 0.96% 0.95% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 2010 2011 2012 2013 YTD 9/30/14 9.39% 10.54% 10.73% 10.76% 10.43% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2010 2011 2012
Slide 14: Capital Optimization Summary
CAPITAL OPTIMIZATION SUMMARY 14 Transactions (November 2014): 1) Issued $100 million of subordinated debt • 4.50% coupon; 4.85% effective rate (est.) 2) Authorized $100 million accelerated share repurchase program through Apr 2015 • 6.5 million share day-one benefit for EPS purposes(1) Benefits: • R
Slide 15: Stock Repurchase Programs
STOCK REPURCHASE PROGRAMS June 2012 to May 2014 November 2014 Repurchase Programs Accelerated Repurchase Shares Repurchased 18.1 million 6.5 million (1) % of Outstanding Shares 9.1% 4.4% (1)(2) Amount Repurchased $206 million $100 million Average Purchase Price $11.40 (1) 15 demand and savings (1) S
Slide 16: Average Assets and Return on Average Assets, by Bank
AVERAGE ASSETS AND RETURN ON AVERAGE ASSETS, BY BANK Nine Mos. Ended Sep 30, 2014 Return on Average Assets* Average Assets ($ Millions) 2014 2013 Fulton Bank, N.A. 9,363$ 1.21% 1.13% Lafayette Ambassador Bank 1,389 1.03% 1.27% FN Bank, N.A. 343 1.00% 0.93% The Columbia Bank 2,009 0.87% 0.81% Swinefo
Slide 17: Efficiency Ratio
50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 2009 2010 2011 2012 2013 YTD Jun 30, 2014 YTD Sep 30, 2014 FULT Peer^ Top 50* 63.2% EFFICIENCY RATIO (1) 17 (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled
Slide 18: Enhance Compliance & Risk Management Infrastructure
ENHANCE COMPLIANCE & RISK MANAGEMENT INFRASTRUCTURE • Strengthening the Corporation’s risk management and compliance infrastructures • Address deficiencies within BSA/AML compliance • Recent BSA/AML enforcement actions at the Corporation and four banking subsidiaries; actions at one or both of the o
Slide 19: BSA/AML Compliance Program Expenses and Staffing
BSA/AML COMPLIANCE PROGRAM EXPENSES AND STAFFING 0 10 20 30 40 50 60 $- $3.0 $6.0 $9.0 $12.0 $15.0 2011 2012 2013 YTD Sep 30, 2014 Full Year 2014 (estimated) Outside Consulting Services# Salaries Expense* Staffing To tal N u m b e r o f Em p lo ye e s at p e rio d e n d ~ $9 for 2014 ~ $3.4@ $2.1 $1
Slide 20: Cost Savings Initiatives
COST SAVINGS INITIATIVES Branch consolidations Organizational streamlining Compensation and benefit reductions 20 Estimated Expense Reductions for the Implementation Expense Fourth Quarter of Expenses (Gains) Reductions 2014 Br ch consolidations (13 branches) 2,080$ (1,600)$ (800)$ Subsidiary bank m
Slide 21: Appendix
APPENDIX
Slide 22: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS 22 Note: Yields presented on a fully taxable-equivalent basis, using a 35% federal tax rate and statutory interest expense disallowances. Balance Yield 2Q 14 3Q 13 2Q 14 3Q 13 Comm'l Mort 5,114$ 4.35% (25)$ 152$ (0.01%) (0.22%) Commercial 3,657 3.97% 39 (49) 0.02% (
Slide 23: Average Customer Funding and Rates
AVERAGE CUSTOMER FUNDING AND RATES 23 Balance Rate 2Q 14 3Q 13 2Q 14 3Q 13 Nonint DDA 3,514$ - % 192$ 292$ - % - % Int DDA 3,047 0.12% 132 152 0.00% (0.01%) Savings/MMDA 3,469 0.12% 113 109 0.00% 0.00% Total Demand and Savings 10,030 0.08% 437 553 0.00% 0.00% CD's 3,009 0.92% (3) (56) 0.02% 0.04% To
Slide 24: Ending Loan Distribution by State
ENDING LOAN DISTRIBUTION BY STATE SEPTEMBER 30, 2014 24 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 2,634,710$ 2,582,016$ 347,742$ 691,937$ 1,310,438$ 7,566,843$ New Jersey 561,944 1,357,703 111,078 168,123 355,730 2,554,578 Maryland 269,520 576,121 86
Slide 25: Non-Performing Loans
NON-PERFORMING LOANS* SEPTEMBER 30, 2014 25 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 18,610$ 19,233$ 10,826$ 10,918$ 8,269$ 67,856$ Maryland 2,761 4,034 3,929 2,155 1,974 14,853 New Jersey 8,062 19,232 4,496 6,268 5,810 43,868 Virginia 3,510 1,563 3
Slide 26: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) YTD SEPTEMBER 2014 26 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (dollars in thousands) Pennsylvania 8,277$ 1,265$ 224$ 1,171$ 2,723$ 13,660$ Maryland 2,873 (14) (291) 241 1,107 3,916 New Jersey 2,439 2,208 174 190 1,111 6,122 Virginia (311) - (205)
Slide 27: Investment Portfolio
INVESTMENT PORTFOLIO SEPTEMBER 30, 2014 27 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Agency collateralized mortgage obligations 4.0 976$ (21) 955$ Agency mortgage-backed securities 4.9 955 7 962 Municipal bonds 5.5 250 8 258 Auction rate secur
Slide 28: Income Statement Summary (Quarter)
INCOME STATEMENT SUMMARY (SEPTEMBER 30TH – QUARTER) 3Q14 Net Income of $38.6 million, down 2.6% from 2Q14 due to a decrease in other income, partially offset by higher net interest income, while expenses were flat Net Interest Income Net interest income down 2.4% from 3Q13, reflecting a lower in
Slide 29: Income Statement Summary (Year-to-Date)
INCOME STATEMENT SUMMARY (SEPTEMBER 30TH – YEAR-TO-DATE) Net Income of $119.9 million, flat compared to 2013 due to lower net interest income, decreases in other income and lower expenses, offset by lower loan loss provision Net Interest Income Net interest income down 1.9% due to margin compres
Slide 30: A Sustainable Payout
A SUSTAINABLE PAYOUT 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $0.00 $0.04 $0.08 $0.12 $0.16 $0.20 $0.24 $0.28 $0.32 $0.36 2009 2010 2011 2012 2013 YTD Sep 30, 2014 Cash Dividend Yield 30 (1) Annualized dividend rate per share divided by period-end stock price. (2) Compounded annual growth rate from D
Slide 31: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Six M o nths Ended Sep 30, June 30, Sep 30, June 30, Sep 30, Sep 30, 2014 2014 2013 2014 2014 2013 2013 2012 2011 2010 2009 Eff iciency rat io Non-interest expense 115,798$ 116,174$ 116,605$ 225,728$ 341,526$ 344,671$ 461,433$ 449,294$ 416,242$ 408,254$ 415,524$ Less: Intangi
Slide 32: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 32 Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, D ec 31 D ec 31 D ec 31 D ec 31 2014 2014 2013 2014 2013 2010 2011 2012 2013 R eturn o n A verage Shareho lders' Equity (T angible) Net income 38,566$ 39,596$ 39,948$ 119,945$ 119,757$ 112,029$ 145,573$ 159,845$ 161,840$ P lu
Slide 33: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 33 Sep 30, Sep 30, 2014 N o v 14 2014 D ec 31 D ec 31 (actual) A SR (1) (pro fo rma) 2013 2012 T angible C o mmo n Equity to T angible A ssets Shareholders' equity 2,078,006$ (100,000)$ 1,978,006$ 2,063,187$ 2,081,656$ Less: Intangible assets (532,117) - (532,117)$ (5
Slide 34: Notes
NOTES 34 1) On November 13, 2014, the Corporation entered into an accelerated share repurchase agreement (ASR) with Goldman, Sachs & Co. to repurchase $100 million of shares of the Corporation’s common stock. Under the terms of the ASR, the Corporation paid $100 million to Goldman Sachs on November
Slide 35: Peer Group
PEER GROUP* Associated Banc-Corp BancorpSouth, Inc. BOK Financial Corporation Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. FNB Corporation FirstMerit Corporation Hancock Holding Company IBERIABANK Corporation International Bancshares Corp. National Penn Bancshares, Inc. Private Bancorp, Inc.
Slide 36: V E R S I O N . . ONE PENN SQUARE LANCASTER, PA
V E R S I O N 1 1 . 2 1 . 2 0 1 4 ONE PENN SQUARE LANCASTER, PA 17602 www.fult.com
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