Slide 1: Investor Presentation
Investor Presentation Data as of June 30, 2014 (unless otherwise noted)
Slide 2: 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 words such as “may,” “should
Slide 3: About Us
About Us Mid-Atlantic financial holding company 6 community banks / 5 states Fulton Financial Advisors Fulton Mortgage Company 253 community banking offices Asset size: $17.0 billion 3,800 team members (3,550 FTEs) Shares outstanding: 189.0 million Market capitalization: $ 2.3 bill
Slide 4: A Valuable Franchise
~ A Valuable Franchise FULTON FINANCIAL CORPORATION @ The Columbia Bank @ ENB Bank,N.A. @ Fulton Bank,N.A. IB Fulton Bank of New Jersey Gi Lafayette Ambassador Bank GB Swineford National Bank Delaware
Slide 5: Corporate Priorities
Enhance Compliance & Risk Management Infrastructure Earnings Per Share (EPS) Growth Quality Loan Growth Improve Asset Quality Core Deposit / Household Growth Spread Management / Net Interest Margin Expense Management Increase Return on Average Assets (ROA) Increase Return on Averag
Slide 6: Enhance Compliance & Risk Management Infrastructure
Enhance Compliance & Risk Management Infrastructure Over the past two years, significant time and resources have been devoted to strengthening the Corporation’s risk management and regulatory compliance infrastructures Although significant progress has been made, continuing deficiencies exist in
Slide 7: Priorities: Enhance Compliance & Risk Management Infrastructure
Priorities: Enhance Compliance & Risk Management Infrastructure 7 December 31, January 1, June 30, 2014 2012 2014 (estimated) Staffing level at period end 13 41 ~ 50 Approximate annualized salaries expense at period end $830,000 $3,600,000 ~ $4,200,000 Outside consulting services expenses# N/A $9,00
Slide 8: Priorities: EPS Growth
Priorities: EPS EPS Growth 2Q 2014 Diluted EPS : 21 cents 4.5% decrease from 1Q 2014 and equal compared to 2Q 2013 8
Slide 9: Diluted Earnings Per Share (Quarterly)
$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 0.16 0.16 0.17 0.18 0.20 0.18 0.19 0.20 0.21 0.20 0.20 0.21 0.21 0.22 0.22 0.21 Diluted Earnings Per Share (Quarterly) 9
Slide 10: Income Statement Summary (June 30th – Quarter)
Income Statement Summary (June 30th – Quarter) Net Interest Income Decreases From 1Q14: 6 bp net interest margin (NIM) decrease due primarily to decrease in earning asset yields and an increase in deposit rates; (also impacted by approximately $1 million increase due to an additional day in the
Slide 11: Priorities: Quality Loan Growth
Quality Loan Growth 2Q 2014 Average loans increased 0.3% compared to 1Q 2014 2Q 2014 Average loans increased 2.1% compared to 2Q 2013 Priorities: Quality Loan Growth 11
Slide 12: Average Loans & Yields
Average Loans & Yields (June 30th – Quarter) Balance Yield 1Q 14 2Q 13 1Q 14 2Q 13 Comm'l Mort. 5,139$ 4.36% 54$ 381$ (0.08%) (0.36%) Commercial 3,618 3.95% (19) (97) (0.08%) (0.18%) Home Equity 1,735 4.18% (20) 3 - (0.06%) Resid. Mort. 1,339 3.97% 3 30 (0.02%) (0.12%) Construction 588 4.17% 12 (29)
Slide 13: Peer Group
Private Bancorp, Inc. Prosperity Bancshares, Inc. Susquehanna Bancshares, Inc. TCF Financial Corporation Trustmark Corporation UMB Financial Corporation Umpqua Holdings Corporation Valley National Bancorp Webster Financial Corporation Wintrust Financial Corporation Associated Banc-Corp BancorpSouth,
Slide 14: Average Loan Growth
Average Loan Growth 14 Note: 2008 through 2013 represents December year-over-year change in average loans. YTD 6/30/14 represents six months ended June 30, 2014 average loans over six months ended June 30, 2013 average loans. * Comprised of the 50 largest publicly traded domestic banks/thrifts in as
Slide 15: Improve Asset Quality
Improve Asset Quality Priorities: Improve Asset Quality 15
Slide 16: Non-accrual Loans to Loans
1.01% 0.67% 0.70% 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 FULT Peer Top 50* Non-accrual Loans to Loans 16 * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size as of December 31,2013. Excludes credit card com
Slide 17: Allowance for Loan Losses to Loans
1.49% 1.14% 1.24% 0.80% 1.10% 1.40% 1.70% 2.00% 2.30% 2.60% Dec 31, 2009 Dec 31, 2010 Dec 31, 2011 Dec 31, 2012 Dec 31, 2013 Jun 30, 2014 FULT Peer Top 50* Allowance for Loan Losses to Loans 17 * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size as of December 31,2013
Slide 18: Provision for Credit Losses (Quarterly)
$0 $10 $20 $30 $40 $50 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 40.0 40.0 38.0 36.0 31.0 30.0 28.0 25.5 23.0 17.5 15.0 13.5 9.5 2.5 2.5 3.5 Provision for Credit Losses (Quarterly, in millions of dollars) 18
Slide 19: Core Deposit / Household Growth
Core Deposit / Household Growth Priorities: Core Deposit/Household Growth 19
Slide 20: Deposit Composition
26% 23% 17% 10% 24% 2nd Quarter Ended June 30, 2014 Non-Int DDA Int DDA Money Mkt Savings Time Deposit Composition 20 16% 16% 11% 9% 49% 2nd Quarter Ended June 30, 2009 Non-Int DDA Int DDA Money Mkt Savings Time Note: Deposit composition is based on quarterly average balances for the periods indicat
Slide 21: Average Customer Funding
Average Customer Funding (June 30th – Quarter) Balance Rate 1Q 14 2Q 13 1Q 14 2Q 13 Nonint DDA 3,322$ - % 79$ 205$ - % - % Int DDA 2,915 0.12% (30) 196 (0.01%) (0.01%) Savings/MMDA 3,356 0.12% 4 5 (0.01%) - % CD's 3,012 0.90% 79 (157) 0.08% (0.06%) Cash Mgt 298 0.09% 9 11 - % - % Total Customer Fund
Slide 22: Priorities: Margin
Priorities: Margin (June 30th – Quarter) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Net Interest Margin (1) 3.41% 3.47% 3.52% (0.06%) (0.11%) Yield on Earning Assets 3.92% 3.97% 4.07% (0.05%) (0.15%) Cost of Funds 0.55% 0.53% 0.58% 0.02% (0.03%) Fed Funds 0.25% 0.25% 0.25% - % - % Increase (Decrease) From 22 Spr
Slide 23: Net Interest Margin (Quarterly)
3.40% 3.54% 3.20% 3.00% 3.25% 3.50% 3.75% 4.00% 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 FULT Peer Top 50* Net Interest Margin (Quarterly) 23 Note: Fully-taxable equivalent * Comprised of the 50 largest publicly traded domestic banks/thrifts in
Slide 24: Interest Rate Shocks
Interest Rate Shocks (June 30, 2014) 24 1) A variety of interest rate scenarios are used to measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to the results obtained in a flat or unchanged interest rate scenario. Simulation of earn
Slide 25: Expense Management
Expense Management Priorities: Expense Management 25
Slide 26: Other Expenses
Other Expenses (June 30th – Quarter) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Salaries & Benefits 63,623$ 59,566$ 63,490$ 4,057$ 133$ Occupancy & Equipment 14,824 17,205 15,340 (2,381) (516) Data Proc. & Software 7,540 6,721 7,603 819 (63) Outside Services 7,240 3,812 5,315 3,428 1,925 Professional fees 3,559
Slide 27: Efficiency Ratio
64.6% 63.5% 64.0% 50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 2009 2010 2011 2012 2013 YTD 6/30 FULT Peer Top 50* Efficiency Ratio (1) 27 (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reco
Slide 28: Cost Savings Initiatives
In 2014, a number of cost savings initiatives, including the consolidation of branches, streamlining subsidiary bank management structure and other employee compensation and benefit reductions have been implemented. These initiatives are estimated to result in expense savings of $7 million in 2014
Slide 29: Priorities: ROA and ROE
ROA 2Q14: 0.94% 1Q14: 1.01% 2Q13: 0.97% Priorities: ROA and ROE 29 ROE (Tangible) (1) 2Q14: 10.30% 1Q14: 11.13% 2Q13: 10.75% Note: ROA is return an average assets determined by dividing net income for the period indicated by average assets (1) Non-GAAP based financial measure. Please refer to the ca
Slide 30: Return on Average Assets by Bank
Return on Average Assets and Average Assets, by Bank 30 Six Mos. Ended June 30, 2014 Return on Average Assets* Average Assets ($ Millions) 2014 2013 Fulton Bank, N.A. 9,332$ 1.22% 1.19% Lafayette Ambassador Bank 1,380 1.04% 1.30% FNB Bank, N.A. 342 1.01% 0.85% Swineford National Bank 290 0.89% 0.62%
Slide 31: Total Risk-Based Capital Ratio
Total Risk-Based Capital Ratio 31 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% Dec 31, 2004 Dec 31, 2005 Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Dec 31, 2009 Dec 31, 2010 Dec 31, 2011 Dec 31, 2012 Dec 31, 2013 Jun 30, 2014 11.8% 12.1% 11.7% 11.9% 14.3% 14.7% 14.2% 15.2% 15.6% 15.0% 14.9%
Slide 32: Capital Adequacy
Capital Adequacy (June 30, 2014) (1) Estimates – based on final rules. Application of the Basel III rules are also subject to further interpretation, which could result in changes to the estimates shown above. (2) Fully-phased in requirements, with 2.50% conservation buffer. Excess Above Well Capita
Slide 33: Tangible Book Value Per Share
$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 Sep 30, 2011 Dec 31, 2011 Mar 31, 2012 Jun 30, 2012 Sep 30, 2012 Dec 31, 2012 Mar 31, 2013 Jun 30, 2013 Sep 30, 2013 Dec 31, 2013 Mar 31, 2014 Jun 30, 2014 7.20 7.24 7.38 7.46 7.63 7.76 7.82 7.72 7.77 7.94 8.08 8.29 Tangible Book Value Per Share (1) 33 (1) Non-GA
Slide 34: Price to Tangible Book Value
1.49 1.75 0.00 0.50 1.00 1.50 2.00 2.50 M u lt ip le o f T a n g ib le B o o k V al u e Price to Tangible Book Value (1) FULT Peer Group Median Price Multiple vs. Peer Group 34 Notes: Peer Tangible Book Value as of June 30, 2014. Source: SNL Financial LC FULT Tangible Book Value as of June 30, 2014.
Slide 35: Price-to-LTM EPS
14.41 16.14 0.00 4.00 8.00 12.00 16.00 20.00 M u lt ip le o f L ast 12 M o n th s o f EP S Price-to-LTM EPS (1) FULT Peer Group Median Price Multiple vs. Peer Group 35 Notes: Peer Price-to-last twelve months diluted EPS as of June 30, 2014. Source: SNL Financial LC FULT Price-to-last twelve months d
Slide 36: Cash Dividend and Yield
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% $0.00 $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 $0.07 $0.08 $0.09 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 Cash Dividend Yield FULT – Cash Dividend and Yield (1) 36 (1) An
Slide 37: Stock Repurchase Programs
Stock Repurchase Programs 37 January 2013 October 2013 May 2014 Program Program Program Authorized Shares to Repurchase 8.0 million 4.0 million 4.0 million % of Outstanding Shares 4.0% 2.1% 2.1% Shares Repurchased 8.0 million (1) 4.0 million (2) 1.3 million (3) Remaining Shares available to repurcha
Slide 38: Investment Thesis
Investment Thesis Recent additions to senior management to add functional depth Operate in strongest markets in footprint Valuable geographic franchise Financial solutions / lasting relationships Consistently superior customer experience Diversified loan portfolio Solid credit metrics
Slide 39: Supplemental Information
FULTON FINANCIAL CORPORATION Supplemental Information
Slide 40: Other Income
Other Income (in millions) 40 $- $40 $80 $120 $160 $200 $240 2004 2005 2006 2007 2008 2009 2010 2011 2012 (2) 2013 2014 YTD Jun 30 YTD Dec 31 CAGR (1) = 4.5% (1) Compounded annual growth rate from year-ended December 31, 2004 to six months ended June 30, 2014. (2) Excludes $6.2 million gain on sale
Slide 41: Other Income (June 30th – Quarter)
Other Income (June 30th – Quarter) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Invt. Mgt. & Trust 11,339$ 10,958$ 10,601$ 381$ 738$ Overdraft & NSF Fees 5,542 5,297 7,624 245 (2,082) Mortgage Banking Income 5,741 3,605 10,997 2,136 (5,256) Merchant Fees 3,843 2,723 3,600 1,120 243 Service Charges 3,717 3,309 4,05
Slide 42: Average Interest-Bearing Liabilities and Yields
Average Interest-Bearing Liabilities and Yields Balance Yield Balance Yield Balance Yield Int-Bearing Demand Deposits 2,915$ 0.12% 2,945$ 0.13% 2,719$ 0.13% Savings 3,356 0.12% 3,352 0.13% 3,351 0.12% Time Deposits 3,012 0.90% 2,932 0.82% 3,169 0.96% Short-term Borrowings 1,048 0.21% 1,209 0.21% 1,3
Slide 43: Non-performing Loans
Non-performing Loans* (June 30, 2014) Comm'l Comm'l Mortgage Constr. Res. Mtg. Other Total (in thousands) Pennsylvania 24,313$ 18,219$ 11,200$ 10,713$ 8,292$ 72,737$ Maryland 3,061 2,373 3,505 2,125 2,244 13,308 New Jersey 9,199 21,038 4,305 6,345 6,410 47,297 Virginia 1,252 1,554 1,030 6,986 1,163
Slide 44: Net Charge-offs (Recoveries)
Net Charge-offs (Recoveries) (YTD June 2014) Comm'l Comm'l Mortgage Constr. Res. Mtg. Other Total (dollars in thousands) Pennsylvania 7,790$ 1,348$ 186$ 1,008$ 1,782$ 12,114$ Maryland 416 60 (44) 231 871 1,534 New Jersey 1,227 1,656 111 187 1,039 4,220 Virginia (311) - (197) 205 (141) (444) Delaware
Slide 45: Net Charge-Offs To Average Loans
0.27% 0.16% 0.19% 0.00% 0.50% 1.00% 1.50% 2009 2010 2011 2012 2013 YTD 6/30 (annualized) FULT Peer Top 50* Net Charge-Offs To Average Loans 45 * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size as of December 31,2012. Excludes credit card companies. Source: SNL Finan
Slide 46: Ending Loan Distribution by State
Ending Loan Distribution by State June 30, % of March 31, Variance to 3/31/14 2014 Total 2014 $ % Pe nsylvania 7,464,262$ 58.1% 7,425,762$ 38,500$ 0.5% New Jersey 2,502,078 19.5% 2,477,911 24,167 1.0% Maryland 1,368,329 10.7% 1,348,336 19,993 1.5% Virginia 997,435 7.8% 975,446 21,989 2.2% Delaware 5
Slide 47: Residential Mortgages
Residential Mortgages (June 30, 2014) Ending % of NPL Allowance Balance Total Balance (1) Allocations (2) (dollars in thousands) Pennsylvania 687,597$ 50.5% 10,713$ 10,114$ Virginia 264,235 19.4% 6,986 11,453 New Jersey 165,221 12.1% 6,345 5,738 Maryland 161,862 11.9% 2,125 3,475 Delaware 83,061 6.1
Slide 48: Fulton Mortgage Company
Fulton Mortgage Company New applications received during 2Q14 were $387 million compared to $288 million during 1Q14 Pipeline* $192 million at June 30, 2014 vs. $155 million at March 31, 2014 The approved loan pipeline at the end of Q2 2014 was $90 million Percentage of the pipeline that has
Slide 49: Commercial Loans
Commercial Loans (June 30, 2014) Ending % of NPL Allowance Balance Total Balance (1) Allocations (2) (dollars in thousands) Pen sylvania 2,571,153$ 71.4% 24,313$ 26,560$ New Jersey 531,916 14.8% 9,199 13,847 Maryland 268,455 7.5% 3,061 4,406 Virginia 157,097 4.4% 1,252 2,952 Delaware 73,100 2.0% 338
Slide 50: Commercial Mortgages
Commercial Mortgages (June 30, 2014) Ending % of NPL Allowance Balance Total Balance (1) Allocations (2) (dollars in thousands) Pennsylvania 2,580,972$ 50.3% 18,219$ 18,436$ New Jersey 1,357,197 26.5% 21,038 22,347 Maryland 571,732 11.1% 2,373 3,371 Virginia 411,189 8.0% 1,554 2,459 Delaware 207,644
Slide 51: Construction Loans
Construction Loans (June 30, 2014) Ending % of NPL Allowance Balance Total Balance (1) Allocations (2) (dollars in thousands) Pe nsylvania 320,221$ 50.5% 11,200$ 3,775$ Virginia 94,056 14.8% 1,030 981 New Jersey 91,905 14.5% 4,305 3,922 Maryland 85,614 13.5% 3,505 1,718 Delaware 42,222 6.7% 228 935
Slide 52: Accruing Troubled Debt Restructurings
Accruing Troubled Debt Restructurings June 30, March 31, 2014 2014 $ % Residential mortgage 31,184$ 30,363$ 821$ 3% Commercial mortgage 19,398 19,514 (116) -1% Construction 8,561 8,430 131 2% Commercial 6,953 6,755 198 3% Consumer and other 2,838 2,622 216 8% 68,934$ 67,684$ 1,250$ 2% Change (dollar
Slide 53: Investment Portfolio
Investment Portfolio (June 30, 2014) Weighted Ave. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Agency collateralized mortgage obligations 4.1 1,023$ (20)$ 1,003$ Agency mortgage-backed securities 4.9 918 12 931 Municipal bonds 5.5 262 8 270 Auction rate secur
Slide 54: Projected Investment Portfolio Cash Flows
Projected Investment Portfolio Cash Flows 54 (1) Investment Cash Flows – the amount of principal payments & maturities from the entire investment portfolio. (2) Cash Flow Yields – internal rate of return on all cash flows, which includes mortgage-backed securities’ prepayments. $112 $106 $97 $95 2.5
Slide 55: Investment MBS & CMO Cash Flows
Investment MBS & CMO Cash Flows 55 Book Price $101.47 (1) Principal Cash Flows – the amount of principal payments & maturities from mortgage-backed securities (MBS) & collateralized mortgage obligations (CMO). (2) Premium Amortization – any premium paid for a bond above its par value is amortized (e
Slide 56: Projected CD Maturities
Projected CD Maturities 56 W eig h ted A v e rage CD Ra te s o n M at u ritie s an d O rigi n ati o n s $659 $659 $569 $523 $461 $372 $301 0.72% 0.50% 0.50% 0.52% 0.68% 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00% $0 $100 $200 $300 $400 $500 $600 $700 2Q2014 3Q2014 4Q2014 1Q2015 2Q2015 CD M
Slide 57: Investment Portfolio – Transactions
Investment Portfolio – Transactions (2nd Quarter 2014) 57 (1) Yield to Maturity – the percentage rate of return paid if the security is held to its maturity date. It assumes that coupon interest paid over the life of the security is reinvested at the same rate. (2) Book Yield – the yield of a securi
Slide 58: Non-GAAP Reconciliation
Non-GAAP Reconciliation 58 Six M o nths Ended June 30, 2014 2013 2012 2011 2010 2009 Eff iciency rat io Non-interest expense 225,728$ 461,433$ 449,294$ 416,242$ 408,254$ 415,524$ Less: Intangible amortization (630) (2,438) (3,031) (4,257) (5,240) (5,747) Numerator 225,098$ 458,995$ 446,263$ 411,985$
Slide 59: Non-GAAP Reconciliation (con't)
Non-GAAP Reconciliation (con’t) 59 Q2 Q1 Q2 Jun 30, M ar 31, Jun 30, 2014 2014 2013 R eturn o n average shareho lders' equity ( tangible) Net income 39,596$ 41,783$ 40,582$ Plus: Intangible amortization, net of tax 204 204 349 Numerator 39,800$ 41,987$ 40,931$ Average shareholders' equity 2,081,898$
Slide 60: Non-GAAP Reconciliation (con't)
Non-GAAP Reconciliation (con’t) 60 Tang ib le B ook V alue Per Share Jun 3 0 , M ar 3 1, D ec 3 1, Sept 3 0 , Jun 3 0 , M ar 3 1, 2 0 14 2 0 14 2 0 13 2 0 13 2 0 13 2 0 13 Common shareholders' equity 2,099,800$ 2,058,719$ 2,063,187$ 2,028,964$ 2,028,732$ 2,061,763$ Less: Goodwill and intangible asse
Slide 61: Non-GAAP Reconciliation (con't)
Non-GAAP Reconciliation (con’t) 61 Price-to-Tangible Book Value Per Share Jun 30, 2014 Closing Price of FULT on June 30, 2014 (numerator) 12.39$ Shareholders' equity (tangible), per share (denominator) 8.29$ Price-to-Tangible Book Value Per Share 1.49 Price-to-Last Twelve Months (LTM) EPS Jun 30, 20
Slide 62: Fulton Financial Corporation contact
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com Version 2014-08-04