Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (May 2012)
75 slides from Fulton Financial's investor presentation, May 22, 2012
Slide 1: Investor Presentation
Investor Presentation Data as of March 31, 2012 Ticker Symbol: FULT (NASDAQ)
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: Presentation Outline
Presentation Outline § About Us § Our Strategy § Q1/12 Overview § Capital § Growth § Financial Performance § Supplemental Information
Slide 4: About Us (as of 3/31/12)
About Us (as of 3/31/12) § Mid-Atlantic financial holding company § 6 community banks / 5 states § Fulton Financial Advisors § Fulton Mortgage Company § 265 community banking offices § Asset size: $16.5 billion § 3,800 team members § Market capitalization: $ 2.1 billion § Book value per common share
Slide 5: A Valuable Geographic Franchise
A Valuable Geographic Franchise
Slide 6: Superior Customer Experience
Superior Customer Experience WE WILL CARE, LISTEN, UNDERSTAND, AND DELIVER
Slide 7: Listening is Just The Beginning
“Listening is Just The Beginning” COMMUNITY BANKING SMALL BUSINESS HIGH NET WORTH RETAIL BANKING
Slide 8: Top Box Satisfaction: 84%
§ Top 3 Box Satisfaction: 84% § Delivery on our Promise Top 3 Box 85% *Survey Sample Size: 4,897 customers Retail Customer Satisfaction*
Slide 9: 2011 Excellence Awards in Middle Market Banking
§ 2011 Excellence Awards in Middle Market Banking § Fulton Bank (2 categories) § Overall Satisfaction in Banking § Treasury Management § National and Regional Winner § Criteria: $10 - 500 million in sales § Nearly 11,500 Business Interviews Greenwich Associates
Slide 10: Corporate Culture
§ Corporate Culture § Customer Commitment § Team-Based Relationship Management § Branch Manager Empowerment § Reputation § Brand Key Resources
Slide 11: 2011: A Year of Progress
§ Diluted EPS increased 24% § Improved ROA § Decreasing Provision § Core Household Growth § Net Interest Margin Expansion § Steady Growth in Other Income § Good Expense Control § Rising Cash Dividend 2011: A Year of Progress
Slide 12: 2012: Off To A Good Start
§ Diluted EPS of 19 cents / up 5.6% LQ and up 11.8% over Q1/11 § Improved ROA § Non-interest income up due to strong residential mortgage business § Expanded net interest margin § Growth in new households § Dividend yield of approximately 2.7% 2012 : Off To A Good Start
Slide 13: Basel III capital ratios
03/31/2012 FULT Basel II (1) Total Risk-Based Capital Ratio 15.50% 10.50% Tier 1 Risk-Based Capital Ratio (2) 13.00% 8.50% Leverage Capital Ratio 10.40% TBD Common Equity Ratio (3) 11.80% 7.00% Tangible Common Equity Ratio (4) 9.25% NA (1) Fully-phased in requirements, with 2.50% conservation buffer
Slide 14: Deploying Capital
Deploying Capital § Current Uses § Support organic growth § New branches § Increase our cash dividend § Potential Uses § Acquisitions with right opportunities § Stock repurchase
Slide 15: Deposit Growth
§ Striving to be the Bank of Choice for Small Businesses in our Markets § Branch Manager the “portal” for Team Expertise § Maintaining Appropriate Mix to Maximize Net Interest Margin Deposit Growth
Slide 16: 2011 Sales Results
§ Retail Households § Year-end 2010 households: 243,125 § Year-end 2011 households: 243,292 § Commercial Households § Year-end 2010 households: 64,832 § Year-end 2011 households: 67,382 § Net Household Lift: 2,717 2011 Sales Results
Slide 17: Loan Growth
§ Retention of Profitable Relationships a Priority § Manage and Mitigate Credit Risk § Prudent Underwriting § Leverage Market Opportunities for New Business § Leveling off of Construction Book Loan Growth
Slide 18: Construction Exposure
Construction Exposure ($ in millions) Construction Loans / Total Loans 10.5% 8.2% 6.7% 5.1% 5.4% (23%) (18%) (23%) 5%
Slide 19: Summary of Larger Loans (3/31/12)
§ 56 relationships with commitments to lend $20 million or more § Maximum individual commitment: $33 million § Maximum commitment to any builder/developer: $25 million § Maximum commitment to any one development project: $15 million § Average commercial lending relationship size is $468,600 § Loans
Slide 20: Commercial Loans by Industry (03/31/12)
Commercial Loans by Industry (03/31/12)
Slide 21: Non-Interest Income Growth
Non-Interest Income Growth § Fulton Mortgage Company § Significant Contributor to our Growth in Non-Interest Income § Expand Origination Staff § Leverage Our Reputation as a Mortgage Lender § Fulton Financial Advisors ($4.0 billion A.U.M.) § Brokerage Production Mix (non-recurring / recurring) § Ref
Slide 22: Expense Control
§ Current and Projected Lean Process Improvement Savings § In-Market Branch Consolidation § Appropriate Staffing Levels § Leverage Electronic Capabilities § Manage Higher Regulatory / Compliance Costs Expense Control
Slide 23: 2011 Lean Improvement Results
§ Completed 334 Lean initiatives § Result: $ 4.5 million in savings § Benefits seen 2012 and beyond 2011 Lean Improvement Results
Slide 24: Core Platform Upgrade
§ Continuation of Longstanding Fiserv Relationship § 360 Degree View of Customer Relationship § Improve Consultative Sales Process § Higher Household Penetration / Revenue § Implementation Over 2-Year Timeframe § Strategy Implementation / Care, Listen, Understand and Deliver Core Platform Upgrade
Slide 25: EPS Growth
§ Lower Provision § Relationship Protection and Enhancement § Earning Asset Growth § Core Household Growth § Expand Net Interest Margin § Growth in Non-Interest Income § Expense Control EPS Growth
Slide 26: Details of Financial Performance
Details of Financial Performance
Slide 27: Net Interest Income
Q1 2012 Q4 2011 $ % Net Interest Income Loan Loss Provision Other Income Securities Gains Other Expenses Income Taxes (dollars in thousands) $ 138,690 $ 138,460 $ 230 0% (28,000) (30,000) 2,000 -7% 50,430 45,290 5,140 11% 1,250 3,050 (1,800) -59% (110,710) (108,850) (1,860) 2% (13,530) (11,870) (1,6
Slide 28: Peer Group
International Bancshares Corp. People’s United Financial, Inc. Susquehanna Bancshares, Inc. Synovus Financial Corporation TCF Financial Corporation UMB Financial Corporation Valley National Bancorp Webster Financial Corporation *Fulton’s peer group as of March 31, 2012 Associated Banc-Corp BancorpSo
Slide 29: Net Interest Margin
Net Interest Margin * Comprised of the 50 largest publicly traded domestic banks/thrifts in asset size as of December 31, 2011. Excludes credit card companies. Source : SNL.com
Slide 30: Interest Rates (Q1 2012 vs. Q4 2011)
Interest Rates (Q1 2012 vs. Q4 2011)
Slide 31: Interest Rate Shocks (03/31/12)
6 month cumulative gap: 1.05 Interest Rate Shocks (03/31/12) Rate Change NII Change (Annual) % Change +400 bp + $ 62.3 million + 11.2% +300 bp + $ 42.2 million + 7.6% +200 bp + $ 22.9 million + 4.1% +100 bp + $ 5.2 million + 0.9% - 100 bp - $ 17.4 million - 3.1%
Slide 32: Average Loans (Q1 2012 vs. Q4 2011)
Average Loans (Q1 2012 vs. Q4 2011 ) Average Loan Growth (vs. prior year period)
Slide 33: Net Charge-Offs to Average Loans
Net Charge-Offs to Average Loans
Slide 34: Net charge-offs vs peers
2.00 1.50 1.00 0.50 a” 0.00 05 06 07 08 09 10 1 Q112 “FULT Peer Top 50 FULTON FINANCIAL CORPORATION
Slide 35: Non-performing assets vs peers
3.00 2.00 1.00 0.00 05 06 07 08 09 10 1 Mar-12 <@FULT Peer =t-Top 50 FULTON FINANCIAL CORPORATION
Slide 36: Allowance for Loan Losses to Loans
Allowance for Loan Losses to Loans
Slide 37: Allowance for Loan Losses to Non-accrual Loans
Allowance for Loan Losses to Non-accrual Loans Provision for Loan Losses (in millions)
Slide 38: Troubled Debt Restructurings
Troubled Debt Restructurings
Slide 39: Troubled Debt Restructurings (excl. non-accrual)
Note: Excludes non-accrual TDRs
Slide 40: Investment Portfolio (03-31-12)
Investment Portfolio (03-31-12) Book Yield (monthly) 3.49%
Slide 41: Investment MBS & CMO Cash Flows (2011-2012)
Investment MBS & CMO Cash Flows (2011-2012) Book Price $101.51 Book Price $101.87 Book Price $101.48 Book Price $101.56 Book Price $102.12
Slide 42: Average Deposits (Q1 2012 vs. Q4 2011)
Average Deposits (Q1 2012 vs. Q4 2011) Average Deposit Growth (vs. prior year period)
Slide 43: Average Core Deposit Growth
Average Core Deposit Growth (vs. prior year period)
Slide 44: Deposit growth vs peers
21.0 18.0 15.0 12.0 9.0 6.0 3.0 0.0 3.0) FULT -™Peer Top 50 FULTON FINANCIAL CORPORATION
Slide 45: Deposit chart (millions)
Millions 200.07 160.0, 120.071 80.0; 40.0, 0.0 : T : Es = $ & ¢ ee & @ YTD Mar O YTD Dec FULTON FINANCIAL CORPORATION
Slide 46: Other Income (Q1 2012 vs. Q4 2011)
Other Income (Q1 2012 vs. Q4 2011)
Slide 47: Other income vs peers
60.0 58.0 56.0 54.0 52.0 50.0 05 06 07 08 09 10 1 Q112 —-FULT ™Peer Top 50 FULTON FINANCIAL CORPORATION
Slide 48: Other Expense (Q1 2012 vs. Q4 2011)
Other Expense (Q1 2012 vs. Q4 2011)
Slide 49: Goals and Priorities
Goals and Priorities § EPS Growth § ROA Improvement § Spread Management / NIM § Leverage Market Opportunities § Improve Asset Quality § Deploy Capital Prudently § Profitable Organic / Acquisitive Growth
Slide 50: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Slide 51: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION
Slide 52: Net Charge-offs (YTD Mar 2012)
Net Charge-offs (YTD Mar 2012)
Slide 53: Non-performing Loans (as of 3/31/12)
Non-performing Loans* (as of 3/31/12)
Slide 54: Delinquency by loan type
March 31, 2012 December 31, 2011 290 Days Total 290 Days Total Commercial Mortgage 2.24% 2.67% 2.47% 3.03% Commercial Loans 2.36% 2.71% 2.23% 2.64% Construction Loans 9.25% 9.81% 9.87% 11.42% Residential Mortgage 1.96% 4.72% 1.49% 4.87% Home Equity 0.68% 1.42% 0.69% 1.41% Consumer, leasing and other
Slide 55: Loan Distribution by State (Q1 2012)
Loan Distribution by State (Q1 2012)
Slide 56: Residential Mtg by State (03/31/12)
Residential Mtg by State (03/31/12)
Slide 57: Fulton Mortgage Company
Fulton Mortgage Company § Applications up linked quarter: $812 million from $636 million § Pipeline $428 million vs. $325 million (Q1/12 vs. Q4/11) § 31% purchase / 69% refinancing (Q1/12) § Sales gains up linked quarter
Slide 58: Fulton Mortgage Company
Fulton Mortgage Company 78% Available for Sale GOS Spread 1.42% GOS Spread 1.30% GOS Spread 1.55% GOS Spread 1.58% 84% Available for Sale 83% Available for Sale 71% Available for Sale 69% Available for Sale ($ in thousands)
Slide 59: Residential Mortgage Repurchase Activity
Residential Mortgage Repurchase Activity First Quarter: § 2012 - Servicing Retained § Repurchased $ 1,502,235. § 2012 - Servicing Released § Repurchased $ 427,258.
Slide 60: C&I Loans by State (03/31/12)
C&I Loans by State (0 3/31/12)
Slide 61: CRE Loans by State (03/31/12)
CRE Loans by State (03/31/12)
Slide 62: Construction Loans by State (03/31/12)
Construction Loans by State (03/31/12)
Slide 63: Construction Loans by Type (3/31/12)
Construction Loans by Type (3/31/12)
Slide 64: Shared National Credits (03/31/12)
Shared National Credits (03/31/12)
Slide 65: Projected Investment Security Cash Flows
Projected Investment Security Cash Flows
Slide 66: Investment Portfolio - Transactions (1st Quarter 2012)
Investment Portfolio - Transactions (1 st Quarter 2012) ($ in Thousands)
Slide 67: $800 2.50% $700 2.25% 2.00% $600 175% qe $500 1.50% Ze $ B= $400
$800 2.50% $700 2.25% 2.00% $600 175% 3 qe $500 1.50% 6 Ze $ B= $400 1.25% gs 1.00% 8 : ‘e930 ‘ 6= 0.75% z $200 g 0.50% $100 0.25% $0 . 0.00% 202012 3Q2012 402012 102013 FULTON FINANCIAL CORPORATION
Slide 68: Projected FHLB Advance Maturities
Projected FHLB Advance Maturities
Slide 69: ROE and ROA
17.00 15.00 13.00 11.00 9.00 7.00 5.00 3.00 1.00 (1.00) 1.90 1.70 1.50 1.30 1.10 0.90 0.70 0.50 0.30 0.10 20022003 2004 2005-2006 2007 __—2t 2009 2010 _2011__@112| (9 49) -™ROE --ROA CORPORATION
Slide 70: Total Risk-Based Capital Ratio
Total Risk-Based Capital Ratio
Slide 71: Capital ratio vs peers
16 42 0.8 0.4 04 05 06 07 08 09 10 11 Q112 FULT Peer Top 50 FULTON FINANCIAL CORPORATION
Slide 72: Return on Average Assets, by Bank
Return on Average Assets, by Bank
Slide 73: Income Statement Summary (YTD December)
Income Statement Summary (YTD December)
Slide 74: Income Statement Summary (YTD December)
Income Statement Summary (YTD December)
Slide 75: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com Version 2012-05-22