Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (February 2016)
38 slides from Fulton Financial's investor presentation, Feb 9, 2016
Slide 1: Investor Presentation
D A T A A S O F D E C E M B E R 3 1 , 2 0 1 5 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 Geographic Markets / Franchise Value • Strong Capital & Reserves • Commitment to Enhancing Shareholder Value • Relationship Banking Strategy / Customer Experience • Quality Loan Growth / Solid Asset Quality • A
Slide 4: A Valuable Franchise
A VALUABLE FRANCHISE • 243 community banking offices across the Mid-Atlantic • Asset size: $17.9 billion • 3,700+ team members (3,490 FTEs (1)) • Market capitalization: $2.3 billion (2) 4 (1) Full-time equivalent employees. (2) Based on shares outstanding and the closing price as of December 31, 201
Slide 5: Strong Position in Attractive Markets
STRONG POSITION IN ATTRACTIVE MARKETS 5 Note: Data as of June 30, 2015 per Federal Deposit Insurance Corporation (FDIC) Summary of Deposits. Household Income Data as of June 30, 2015 per SNL Financial LC. (1) Median HH Income, 2016 – 2021 Projected Population Change and 2016 – 2021 Projected HH Inco
Slide 6: Deep Executive Management Team
Name Position Years at Fulton Years in Financial Services Prior Experience E. Philip Wenger Chairman, President & CEO 36 36 Various roles since joining in 1979 Patrick Barrett (1) Senior EVP & CFO 2 23 SunTrust, JPMorgan, Deloitte Touche Tomatsu Craig Roda Senior EVP/ Community Banking 37 37 Various
Slide 7: 2015 Highlights
2015 HIGHLIGHTS Diluted Earnings Per Share • $0.22 diluted earnings per share in 4Q15, $0.85 YTD Loan and Core Deposit Growth • 3.5% increase in average loans and 8.9% increase in average core deposits • Ending loans increased 5.5% in 2015, with more than 75% of this growth occurring in the last six
Slide 8: Income Statement Summary – Annual Comparison
INCOME STATEMENT SUMMARY – ANNUAL COMPARISON 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 calculation and management’s reasons for using this measure on the slide titled “N
Slide 9: Income Statement Summary – Quarterly Comparison
INCOME STATEMENT SUMMARY – QUARTERLY COMPARISON Net Income of $38.5 million; a 12.5% increase from 3Q15 and a 1.5% increase from 4Q14 Net Interest Income From 3Q15: Increase of 1.7% due to a 1.5% increase in average earning assets and a 1 bp improvement in net interest margin (NIM) From 4Q14:
Slide 10: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN 10 Net Interest Income & Net Interest Margin (NIM (1)) ~ $730 million ~ $610 million $544.3 $527.2 $514.9 $500.0 3.76% 3.50% 3.39% 3.21% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 $500.0 $550.0 $600.0 2
Slide 11: Net Interest Income and Margin – Quarter Comparison
$13.3 $13.4 $13.5 $13.9 $14.2 $1.5 $1.4 $1.4 $1.3 $1.2 0.76% 0.80% 0.77% 0.72% 0.69% 0.5% 0.7% 0.9% $- $3.0 $6.0 $9.0 $12.0 $15.0 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Deposits Borrowings Cost of Interest-bearing Liabilit ies $2.9 $2.8 $2.8 $2.9 $2.8 $13.1 $13.1 $13.2 $13.4 $13.7 3.85% 3.83% 3.74%
Slide 12: Loan Portfolio Composition & Yield
LOAN PORTFOLIO COMPOSITION & YIELD 12 Note: Loan portfolio composition is based on average balances for the years ended December 31, 2011 to 2015. (1) Presented on a fully-taxable equivalent basis. $4.5 $4.6 $4.9 $5.1 $5.2 $3.7 $3.6 $3.7 $3.7 $3.9 $1.6 $1.6 $1.7 $1.7 $1.7 $1.0 $1.2 $1.3 $1.4 $1.4 $0
Slide 13: Deposit Portfolio Composition
DEPOSIT PORTFOLIO COMPOSITION 13 Note: Deposit composition is based on average balances for the periods indicated. 23% 27% 23% 17% 10% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Year Ended December 31, 2014 22% 28% 24% 17% 9% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Year Ended De
Slide 14: Interest Rate Sensitivity Simulation
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 net interest income is used primarily to mea
Slide 15: Asset Quality – Annual Comparison
$211.1 $154.3 $138.5 $144.8 1.74% 1.21% 1.06% 1.05% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% $- $50.0 $100.0 $150.0 $200.0 $250.0 2012 2013 2014 2015 NPLs NPLs/Loans ASSET QUALITY – ANNUAL COMPARISON ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans 106.82% 132
Slide 16: Non-Interest Income – Annual Comparison
$44.6 $30.6 $17.1 $18.2 1.85% 1.63% 1.19% 1.35% 0.0% 0.5% 1.0% 1.5% 2.0% $(5.0) $5.0 $15.0 $25.0 $35.0 $45.0 2012 2013 2014 2014 Gains on Sales Servicing Income Spread on Sales (2) NON-INTEREST INCOME – ANNUAL COMPARISON ($ IN MILLIONS) 16 Non-interest Income (Excluding Securities Gains) $207.2 $180
Slide 17: Non-Interest Income – Quarter Comparison
$- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Invt Mgmt & Trust Srvs Deposit Srv Chgs Oth Srv Chgs Other $37.5 $35.9 $38.7 $39.2 $40.7 $41.3 $40.6 $44.1 $43.0 $45.1 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 Q4 2014 Q1 2015 Q2 2015
Slide 18: Non-Interest Expense – Annual Comparison
$- $50.0 $100.0 $150.0 $200.0 $250.0 2012 2013 2014 2015(3) Occp & Equip Data Processing & Software Outside Srvs Other $205.4 $208.2 $208.2 $213.7 3,520 3,610 3,560 3,560 3,400 3,500 3,600 3,700 3,800 $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 2012 2013 2014 2015 Total Salaries Employee Benefits Av
Slide 19: Non-Interest Expenses – Quarter Comparison
$117.7 $118.5 $118.4 $119.3 $118.4 67.5% 70.2% 68.9% 68.8% 66.6% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Q4 2014 Q1 2015 Q2 2015 Q3 2015 (2) Q4 2015 NON-INTEREST EXPENSES – QUARTER COMPARISON ($ IN MILLIONS) Non-interest Expense & Efficien
Slide 20: Compliance & Risk Management
$1.8 $2.1 $3.2 $4.3 $4.6 $1.4 $8.2 $4.5 $0.4 $1.4 13 26 30 45 47 0 5 10 15 20 25 30 35 40 45 50 $- $3.0 $6.0 $9.0 $12.0 2011 2012 2013 2014 2015 Salaries & Benefits Expense Outside Consulting Services# Temporary Employee Expense Staffing $0.8$0.1 COMPLIANCE & RISK MANAGEMENT # Represents third-party
Slide 21: Profitability & Capital
10.73% 10.76% 10.31% 10.01% 0.00% 4.00% 8.00% 12.00% 2012 2013 2014 2015 PROFITABILITY & CAPITAL ROA ROE (tangible) (1) Regulatory Capital Ratios & TCE Ratio (1) Diluted Earnings Per Common Share $ 0.80 $ 0.83 $ 0.84 $0.85 $- $0.25 $0.50 $0.75 $1.00 2012 2013 2014 2015 15.6% 15.0% 14.5% 13.3% 13.4%
Slide 22: Stock Repurchase Programs
STOCK REPURCHASE PROGRAMS June 2012 to January 2016 Repurchase Programs (1) Shares Repurchased 30.9 million % of Outstanding Shares 15.4% (2) Amount Repurchased $363 million Average Purchase Price $11.74 22 demand and savings (1) Share repurchases completed from June 2012 through January 31, 2016. (
Slide 23: Average Assets and ROA, by Bank
AVERAGE ASSETS AND ROA, BY BANK Year Ended Dec 31, 2015 Return on Average Assets (1) Average Assets ($ Millions) 2015 2014 Fulton Bank, N.A. $9,685 1.06% 1.21% Lafayette Ambassador Bank 1,453 0.92% 1.00% The Columbia Bank 2,099 0.88% 0.79% Swineford National Bank 304 0.87% 0.81% Fulton Bank of New J
Slide 24: 2016 Outlook
2016 OUTLOOK • Loans & Deposits: Annual average growth rate in the mid- to high-single digits • Net Interest Margin: Stable on an annual basis, with modest volatility (+/- 0 to 3 basis points) on a quarterly basis • Asset Quality: Provision driven primarily by loan growth • Non-Interest Income (Excl
Slide 25: Appendix
APPENDIX
Slide 26: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS 26 Note: Yields presented on a fully taxable-equivalent basis, using a 35% federal tax rate and statutory interest expense disallowances. Balance Yield Q3 2015 Q4 2014 Q3 2015 Q4 2014 Comm'l Mort 5,366$ 4.05% 124$ 235$ (0.04%) (0.31%) Commercial 4,035 3.74% 148 312
Slide 27: Average Customer Funding and Rates
AVERAGE CUSTOMER FUNDING AND RATES 27 Balance Rate Q3 2015 Q4 2014 Q3 2015 Q4 2014 Nonint DDA 3,999$ - % 95$ 368$ - % - % Int DDA 3,412 0.13% 95 266 0.00% 0.00% Savings/MMDA 3,904 0.17% 190 356 0.02% 0.04% CD's 2,904 1.03% (60) (113) 0.00% 0.07% Total Deposits 14,219 0.29% 320 877 0.00% 0.01% Cash M
Slide 28: Ending Loan Distribution by State
ENDING LOAN DISTRIBUTION BY STATE DECEMBER 31, 2015 28 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 2,928,235$ 2,774,499$ 477,443$ 650,087$ 1,291,230$ 8,121,494$ New Jersey 563,554 1,401,844 156,487 240,679 366,130 2,728,694 Maryland 328,466 572,378 62,
Slide 29: Non-Performing Loans
NON-PERFORMING LOANS* DECEMBER 31, 2015 29 Comm'l Consumer Ending Loans NPLs/Loans Comm'l Mortgage Constr. Res. Mtg. & Other Total NPLs by State by State (dollars in thousands) Pennsylvania 27,961$ 15,282$ 9,033$ 10,483$ 7,723$ 70,482$ 8,121,494$ 0.87% Maryland 3,938 4,048 1,272 3,319 1,776 14,353 1
Slide 30: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) YEAR ENDED DECEMBER 31, 2015 30 Comm'l Consumer Average Loans Charge-Offs to Comm'l Mortgage Constr. Res. Mtg. & Other Total by State Average Loans (dollars in thousands) Pennsylvania 10,269$ 499$ (841)$ 1,704$ 3,920$ 15,551$ 7,807,732$ 0.20% Maryland (285) (100) (1,722)
Slide 31: Investment Portfolio
INVESTMENT PORTFOLIO DECEMBER 31, 2015 31 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Collateralized mortgage obligations 3.8 835$ (14)$ 821$ Mortgage-backed securities 5.0 1,155 4 1,159 State and municipal securities 5.1 257 6 263 Auction rate
Slide 32: A Sustainable Payout
A SUSTAINABLE PAYOUT $0.20 $0.30 $0.32 $0.34 $0.38 2.04% 3.12% 2.44% 2.75% 2.92% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% $0.00 $0.04 $0.08 $0.12 $0.16 $0.20 $0.24 $0.28 $0.32 $0.36 $0.40 2011 2012 2013 2014 2015 Cash Dividend Yield 32 (1) Annualized dividend rate per share divided by perio
Slide 33: Non-Interest Income (Excluding Securities Gains)
NON-INTEREST INCOME (EXCLUDING SECURITIES GAINS) 33 Q4 2015 Q3 2015 Q4 2014 Q3 2015 Q4 2014 Invt Mgt & Trust 10,919$ 11,237$ 11,188$ (318)$ (269)$ Overdraft & NSF Fees 5,694 5,652 5,500 42 194 Mortgage Banking Income 4,318 3,864 3,723 454 595 Service Charges 3,877 3,912 3,609 (35) 268 Merchant Fees
Slide 34: Non-Interest Expense
NON-INTEREST EXPENSE 34 Q4 2015 Q3 2015 Q4 2014 Q3 2015 Q4 2014 Salaries & Benefits 65,467$ 65,308$ 65,398$ 159$ 69$ Occupancy & Equipment 15,192 14,305 14,779 887 413 Data Proc. & Software 9,195 9,089 7,617 106 1,578 Outside Services 6,537 7,373 8,720 (836) (2,183) FDIC Insurance 2,896 2,867 2,772
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 36 Dec 31 Dec 31 Dec 31 Dec 31 2012 2013 2014 2015 Efficiency ratio Non-interest expense 449,294$ 461,433$ 459,246$ 480,160$ Less: Intangible amortization (3,031) (2,438) (1,259) (247) Less: Loss on redemption of TruPS - - - (5,626) Numerator 446,263$ 458,995$ 457,987$ 474,28
Slide 37: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 37 Dec 31 Dec 31 Dec 31 Dec 31 2012 2013 2014 2015 Shareholders' equity (tangible), per share Shareholders' equity 2,081,656$ 2,063,187$ 1,996,665$ 2,041,894$ Less: Intangible assets (535,563) (533,076) (531,803) (531,556) Tangible shareholders' equity (numerator) 1,5
Slide 38: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fult.com
Fulton Financial — Investor Presentation (February 2016) on 6ix