Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (May 2020)
38 slides from Fulton Financial's investor presentation, May 29, 2020
Slide 1: Investor Presentation
INVESTOR PRESENTATION z Data as of March 31, 2020 - Unless otherwise noted.
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements with respect to the 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 words such as "m
Slide 3: Why Fulton?
Why Fulton? ▪ Deep Executive Bench with Continuity ▪ Valuable Franchise in Attractive Markets ▪ Relationship Banking Strategy Focused on the Customer Experience ▪ Granular, Well-Diversified Loan Portfolio ▪ Attractive Core Deposit Profile ▪ Solid Asset Quality and Reserves ▪ Prudent Expense Manageme
Slide 4: Deep Executive Bench With Continuity
Deep Executive Bench With Continuity Years in Financial Prior Name Position Years at Fulton Services Experience Phil Wenger Chairman/CEO 41 41 Various roles since joining in 1979 Curt Myers President/COO 30 30 Various roles since joining in 1990 PwC, Banking and Investment Banking; Joined Mark McCol
Slide 5: A Valuable Franchise
A Valuable Franchise ▪ ~230 financial centers throughout the Mid-Atlantic ▪ Asset size of $22.9 billion ▪ 3,600+ team members (3,480 FTEs (1)) ▪ Market capitalization of ~ $1.9 billion (2) ▪ Opportunity to meaningfully grow our market share(3) o ~16.5% deposit market share across the 15 counties whe
Slide 6: Strong Position In Attractive & Stable Markets
Strong Position In Attractive & Stable Markets Fulton Fulton Financial Fulton Financial Market Median Projected Fulton Financial Market Total Projected Financial Corporation Corporation Total Market Total Household Market Metropolitan Statistical Area (MSA) Corporation Total Active Branches Househol
Slide 7: Extending Footprint Into Fast Growing Urban Markets
Extending Footprint Into Fast Growing Urban Markets Philadelphia, PA County Deposit Market Share – Top 20 Commentary Total Deposit Total Deposit Regulatory Total Active Total Deposits 2019 Parent Company Name Market Share ▪ Philadelphia is a natural extension of our current Rank 2019 Industry Branch
Slide 8: Strategic Initiatives Support Our Relationship Banking Strategy
Strategic Initiatives Support Our Relationship Banking Strategy Purpose We Change Lives for the Better OPERATIONAL EXCELLENCE GROWTH STRATEGIES Strategic Filter • Advancing business line structure Outcomes • Investing in talent for growth and charter consolidation. in targeted markets and • Focus on
Slide 9: Fulton Has Made Significant Investments To Enhance Its Digital Capabilities
Fulton Has Made Significant Investments To Enhance Its Digital Capabilities Commercial Online Commercial Loan Mortgage Loan NewPurchaseBanking Website Platform Origination System Origination System 2017 2019 2020 ▪ Best-in-class online platform for ▪ Streamlines commercial ▪ Cloud-based loan origina
Slide 10: Website Recently Recognized As An Innovation Leader
Website Recently Recognized As An Innovation Leader Our redesigned customer website allows users to have a cohesive and personalized experience as they explore all of our products, services and capabilities in one place ▪ Leverages data and customer insights to deliver personalized content to custom
Slide 11: Optimizing Our Branch Network
Optimizing Our Branch Network Optimizing our financial center network has: ▪ Moved us towards multiple financial center types vs. a one-size-fits-all model ▪ Given us greater ability to re-invest in people & digital transactions ▪ Oriented the financial center as a primary touchpoint enabling higher
Slide 12: Granular, Well-Diversified Loan Portfolio
Granular, Well-Diversified Loan Portfolio ▪ Average Loans YTD 3/2020 are up 4.1% compared to YTD 3/2019 ▪ Yields had risen for several years, but declined in Q1 2020. $18.0 4.70% $16.9 $16.4 $15.8 $0.8 $16.0 $0.7 $15.2 4.50% $0.6 4.55% $0.9 $0.5 $0.9 $14.1 $1.0 $0.9 $14.0 $0.4 4.38% $2.4 $2.7 Total
Slide 13: Attractive Core Deposit Profile
Attractive Core Deposit Profile ▪ Steady growth in core deposits ▪ Average Deposits for YTD 3/2020 are up 5.2% compared to YTD 3/2019 0.79% $18.0 0.80% $17.1 $16.8 $15.8 $ $1.5 $16.0 $15.5 $1.5 0.70% $14.6 $0.1 $- $1.4 $- $1.5 $14.0 $1.4 0.62% 0.60% $3.0 $3.5 $3.6 $3.0 $12.0 $2.7 0.55% 0.50% Deposit
Slide 14: Adoption of CECL
Adoption of CECL1) Three Months Ended March 31, 2020 (in thousands) Allowance for Credit Losses Rollforward (1) Balance at beginning of period, December 31, 2019 $ 166,209 Impact of adopting ASU 2016-13 58,349 Loans charged-off (14,003) Recoveries of loans previously charged off 2,887 Net loans char
Slide 15: Solid Asset Quality And Reserves
Solid Asset Quality And Reserves Commentary Non-Performing Loans (NPLs) & Allowance/Loans ▪ Overall asset quality continued to be relatively 1.75% stable through Q1 2020 $139.7 $141.2 $139.9 $150.0 $131.6 $134.8 ▪ 1.50% We are mindful of where we are in the $125.0 economic cycle, including considera
Slide 16: COVID-19 Impact on Business Sectors
COVID-19 Impact on Business Sectors Limited exposure to some of the asset classes that were hit hardest initially from COVID-19, such as hotels, restaurants, energy and entertainment. Most of the loans are secured by real estate or other forms of collateral, which should help mitigate losses in the
Slide 17: Prudent Expense Management With Opportunities To Improve
Prudent Expense Management With Opportunities To Improve Commentary Efficiency Ratio (FTE) 71.00% ▪ Low rate environment and continued buildout of our 69.00% compliance, risk and technology infrastructures were the 67.00% 65.00% primary drivers of the increase in the efficiency ratio in 63.00% 2015
Slide 18: Strong Capital Position
Strong Capital Position COMMENTARY CAPITAL RATIOS(1) ▪ Capital remains strong 13.8% 14.00% ▪ Suspended share repurchases in Mid- 12.00% $630 March 10.00% 9.4% 9.4% $170 7.9% ▪ Dividend elected to remain at $0.13 8.00% $450 quarterly $650 6.00% 4.00% ▪ Raised $375 million of subordinated debt in Q1 2
Slide 19: Strong and Diverse Liquidity Position
Strong and Diverse Liquidity Position COMMENTARY AVAILABLE LIQUIDITY ▪ Liquidity remains strong and diverse As of March 31, 2020 (in thousands) Cash On-Hand $272,501 ▪ Continue efforts to increase capacity with the FHLB and Federal Reserve Federal Reserve Capacity 465,000 ▪ Sitting on excess cash re
Slide 20: Recent Financial Performance & Highlights
RECENT FINANCIAL PERFORMANCE & HIGHLIGHTS
Slide 21: It's Personal
It’s Personal Some of the COVID-19 assistance programs offered to our customers: CONSUMER COMMERCIAL • Temporary forbearance up to six months on • SBA Paycheck Protection Program (PPP) residential mortgage loans and closed-end consumer loans secured by real estate • Small Business Unsecured Line of
Slide 22: Paycheck Protection Program (PPP)
Paycheck Protection Program (PPP) PPP RESULTS AS OF May 21, 2020 • Over 500 Fulton team members re-deployed to help support this effort • Focus has been initially on existing Fulton customers • Results to date (through May 21, 2020): o Applications confirmed: ~ 10,000 o Dollars confirmed: ~$2.0 bill
Slide 23: Income Statement Summary
Income Statement Summary Change from 1Q20 4Q19 1Q19 (dollars in thousands, except per-share data) Net Interest Income $ 160,746 $ 1,476 $ (2,569) Provision for Credit Losses 44,030 23,500 38,930 Non-Interest Income 54,598 (683) 7,912 Securities Gains 46 46 (19) Non-Interest Expense 142,552 3,578 4,7
Slide 24: Net Interest Income And Margin
Net Interest Income And Margin AVERAGE INTEREST-EARNING ASSETS & YIELDS NET INTEREST INCOME & NET INTEREST MARGIN(1) ($ IN BILLIONS) ($ IN MILLIONS) $20 5.00% 4.00% $15 4.35% 4.37% $180.0 4.00% 4.25% 4.07% 3.97% 3.00% $10 $16 $16 $16 $17 $17 3.75% 2.00% $163 $165 $5 ~ $730 1.00% $161 $161 $159 $3 mi
Slide 25: Asset Quality
Asset Quality ($ IN MILLIONS) PROVISION FOR CREDIT LOSSES NON-PERFORMING LOANS (NPLS) & NPLS TO LOANS $160.0 $147.7 2.00% $50.0 $141.2 $44.0 $138.7 $136.0 $139.9 $40.0 $120.0 1.50% $30.0 $80.0 1.00% $20.5 $20.0 0.90% 0.85% 0.81% 0.84% 0.82% $40.0 0.50% $10.0 $5.1 $5.0 $2.2 $- $0.0 0.00% 1Q19 2Q19 3Q
Slide 26: Non-Interest Income
Non-Interest Income(1) 1Q20 4Q19 Change (in thousands) n Wealth management $ 15,055 $ 14,419 $ 636 n Mortgage banking 6,234 5,076 1,158 n Consumer banking 11,239 12,429 (1,190) n Commercial banking 18,419 20,140 (1,721) n Other 3,651 3,217 434 $ 54,598 $ 55,281 (683) Non-interest income(1) decreased
Slide 27: Non-Interest Expense
Non-Interest Expense Three months ended March 31, 2020 (percent of total non-interest expense) <a Three months ended December 31, 2019 (percent of totalnon-interest expense) 7] 10920 4Q19 Change (in thousands) ® Salaries and benefits $ 80,228 $ 76,975 $ 3,253 ™ Occupancy 13,486 13,080 406 ® Data Pro
Slide 28: Profitability & Capital
Profitability & Capital ROA(1) ROE AND ROE (TANGIBLE)(2) 1.40% 16.00% 1.15% 14.03% 1.20% 1.11% 1.14% 13.28% 13.60% 1.00% 12.00% 10.42% 10.64% 10.52% 0.87% 10.15% 0.80% 8.10% 8.00% 5.84% 0.60% 0.47% 4.48% 0.40% 4.00% 0.20% 0.00% 0.00% 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 ROE ROE (tangibl
Slide 29: Q2 2020 Outlook
Q2 2020 Outlook All previous guidance for 2020 has been withdrawn due to the impact from COVID-19. At this time, select guidance will be provided on the following areas as it relates to the second quarter of 2020: • Loans: Current approved PPP applications ~ $1.7 billion. For other loan categories,
Slide 30: Appendix
APPENDIX
Slide 31: Average Loan Portfolio And Yields
Average Loan Portfolio And Yields Change in 1Q 2020 Balance From Yield From Balance Yield 4Q 2019 1Q 2019 4Q 2019 1Q 2019 (dollars in millions) Real estate - commercial mortgage $ 6,747 4.20% $ 186 $ 369 (0.14%) (0.49%) Commercial & industrial 4,447 4.21% (128) (16) (0.03%) (0.45%) Real estate - res
Slide 32: Average Customer Funding And Rates
Average Customer Funding And Rates Change In 1Q 2020 Balance From Rate From Balance Rate 4Q 2019 1Q 2019 4Q 2019 1Q 2019 (dollars in millions) Non-interest bearing demand $ 4,307 - % $ (18) $ 84 - % - % Interest-bearing demand 4,650 0.49% (49) 496 (0.22%) (0.24%) Savings and money market 5,128 0.56%
Slide 33: Non-Interest Income
Non-Interest Income(1) $ Change from Q1 2020 Q4 2019 Q1 2019 Q4 2019 Q1 2019 Actual Actual Actual Actual Actual (in thousands) Wealth management $ 15,055 $ 14,419 $ 13,239 636 1,816 Mortgage banking 6,234 5,076 4,772 1,158 1,462 Consumer banking: Card 4,685 4,991 4,686 (306) (1) Overdraft 4,058 4,75
Slide 34: Non-Interest Expense
Non-Interest Expense $ Change from Q1 2020 Q4 2019 Q1 2019 Q4 2019 Q1 2019 Actual Actual Actual Actual Actual (in thousands) Salaries and employee benefits $ 80,228 $ 76,975 $ 77,757 $ 3,253 $ 2,471 Net occupancy 13,486 13,080 12,909 406 577 Data processing and software 11,645 11,468 10,353 177 1,29
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation Note: The Corporation has presented the following non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations and financia
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation Years Ended Three Months Ended Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2014 2015 2016 2017 2018 2019 2019 2019 2019 2019 2020 Efficiency ratio Non-interest expense $ 459,246 $ 480,160 $ 489,519 $ 525,579 $ 546,104 $ 567,736 $ 137,824 $ 144,168 $ 146,770 $ 138,974 $ 142,552 Less: I
Slide 37: Peer Group
Peer Group ▪ Atlantic Union Bankshares Corporation ▪ Provident Financial Services, Inc. ▪ BancorpSouth Bank ▪ Trustmark Corporation ▪ Commerce Bancshares, Inc. ▪ UMB Financial Corporation ▪ First Midwest Bancorp, Inc. ▪ Umpqua Holdings Corporation ▪ F.N.B. Corporation ▪ United Bankshares, Inc. ▪ Han
Slide 38: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION FULTON FINANCIAL www.fult.com ‘CORPORATION