Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (May 2021)
36 slides from Fulton Financial's investor presentation, May 4, 2021
Slide 1: Investor Presentation
z INVESTOR PRESENTATION Data as of March 31, 2021 - 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: Deep Executive Bench With Continuity; Compelling Markets and Opportunities
Deep Executive Bench With Continuity; Compelling Markets and Opportunities 3 (1) Includes years of service in public accounting and investment banking as a financial services industry specialist. (2) Includes years of service in public accounting as a financial services industry specialist. Name Pos
Slide 4: A Valuable Franchise, Well Positioned with Strong Liquidity, Solid Capital and Disciplined Credit Culture
4 (1) As of March 31, 2021.; Average full-time equivalent employees at March 31, 2021. (2) Data as of June 30, 2020 per S&P Global Market Intelligence ; Map includes Fulton Financial counties with a financial center and/or a loan production office (“LPO”), and incorporated cities in MD and VA with a
Slide 5: Strong Position In Attractive & Stable Markets
Strong Position In Attractive & Stable Markets 5 Note: Data as of June 30, 2020 per S&P Global Market Intelligence. (1) Median HH Income, 2021 – 2026 Projected Population Change and Projected HH Income Change are weighted by deposits in each MSA. Metropolitan Statistical Area (MSA) Fulton Financial
Slide 6: Extending Footprint Into Fast Growing Urban Markets
Extending Footprint Into Fast Growing Urban Markets 6 Philadelphia is a natural extension of our current footprint o Opened 3 financial centers in 2019 o 1 financial center targeted to open in 4Q21 and 1 financial center targeted to open in 1Q22 Philadelphia Market: o The top 5 banks have ~80% o
Slide 7: Customer & Community Strategic Initiatives Support Our Relationship Banking Strategy
7 Customer & Community Strategic Initiatives Support Our Relationship Banking Strategy S I M P L I F Y O N T H E I N S I D E D I F F E R E N T I A T E O N T H E O U T S I D E E X E C U T E W I T H E X C E L L E N C E R I S K & C O M P L I A N C E O P E R A T I O N A L E X C E L L E N C E Strategic F
Slide 8: Fulton Has Made Significant Investments To Enhance Its Digital Capabilities
Fulton Has Made Significant Investments To Enhance Its Digital Capabilities 8 Purchase Streamlines commercial underwriting process to condense timeline from application to close Integrates with CRM platform to streamline processes and keep customers more informed Best-in-class online platform
Slide 9: Optimizing Our Financial Center Network
Optimizing Our Financial Center Network 9 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 ena
Slide 10: Granular, Well-Diversified Loan Portfolio
Granular, Well-Diversified Loan Portfolio 10 $6.2 $6.3 $6.5 $6.9 $7.1 $4.2 $4.3 $4.5 $5.5 $5.7 $1.6 $1.5 $1.4 $1.3 $1.2 $1.8 $2.1 $2.4 $2.9 $3.2 $0.9 $1.0 $0.9 $1.0 $1.1 $0.5 $0.6 $0.7 $0.7 $0.7 4.07% 4.38% 4.55% 3.63% 3.53% 3.00% 3.50% 4.00% 4.50% 5.00% $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0
Slide 11: Attractive Core Deposit Profile
Attractive Core Deposit Profile 11 Accelerated growth in core deposits Excess liquidity provides the ability to manage deposit costs lower Cost of deposits at historically low levels, with the possibility of remaining lower for longer $2.7 $2.7 $2.9 $2.5 $2.2 $4.4 $4.3 $4.2 $5.7 $6.7 $3.8 $4.0
Slide 12: Solid Asset Quality And Reserves
12 Solid Asset Quality And Reserves Commentary Non-Performing Loans (NPLs) & Allowance/Loans ($ IN MILLIONS) N o n -P e rf o rm in g L o a n s $134.8 $139.7 $141.2 $141.2 $152.4 1.17% 1.12% 0.97% 1.47% 1.40% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% $0.0 $25.0 $50.0 $75.0 $100.0 $125.0 $150.0 2017 2018 20
Slide 13: Prudent Expense Management With Opportunities To Realize Efficiencies
Prudent Expense Management With Opportunities To Realize Efficiencies 13 ~ $730 million ~ $610 million Low rate environment and continued buildout of our compliance, risk and technology infrastructures were the primary drivers of an elevated efficiency ratio in 2015 Positive operating leverage t
Slide 14: Strong Capital Position
14 Strong Capital Position Capital position remains strong Dividend increase to $0.14 in the first quarter of 2021 Raised $375 million of tier-2 qualifying subordinated debt in Q1 2020 and $200 million in tier-1 qualifying non-cumulative perpetual preferred stock in Q4 2020 In February 2021,
Slide 15: Credit Disclosures – Additional Detail on Deferrals and Select Industries
CREDIT DISCLOSURES – ADDITIONAL DETAIL ON DEFERRALS AND SELECT INDUSTRIES (DATA AS OF MARCH 31, 2021; ALL INDUSTRY CLASSIFICATIONS BASED ON NAICS CODES)
Slide 16: Active COVID Deferrals Continue to Decline
Active COVID Deferrals(1) Continue to Decline 16 As of March 31, 2021 Commercial • At March 31, 2020, active deferrals declined to ~$153 million, or 1.1% of the commercial portfolio(2) • Majority of active deferrals are in the hospitality, entertainment, and fitness industries • Continued focus to o
Slide 17: Selected Industries With Heightened Risk Due to COVID-19
17 Selected Industries With Heightened Risk Due to COVID-19 Commercial Portfolio – Selected Industries (1) (1) Commercial Portfolio consists of Commercial and Industrial, Commercial Mortgage, and Construction loans to commercial borrowers. Note: "Pass," "Special Mention" and "Substandard or Lower" a
Slide 18: Recent Financial Performance & Highlights
RECENT FINANCIAL PERFORMANCE & HIGHLIGHTS
Slide 19: Income Statement Summary
(1) ROA is return an average assets determined by dividing net income for the period indicated by average assets, annualized. (2) ROE is return on average shareholders’ equity determined by dividing net income for the period indicated by average shareholders’ equity, annualized. (3) Non-GAAP financi
Slide 20: Net Interest Income And Margin
Net Interest Income And Margin 20 NET INTEREST INCOME & NET INTEREST MARGIN(1) ~ $730 million ~ $610 million ($ IN MILLIONS) ($ IN BILLIONS) ($ IN BILLIONS) AVERAGE INTEREST-EARNING ASSETS & YIELDS AVERAGE LIABILITIES & RATES (1) Using a 21% federal tax rate and statutory interest expense disallowan
Slide 21: 2021 Balance Sheet Restructuring
2021 Balance Sheet Restructuring 21 Why: • Reduce exposure to interest rate risk • Opportunity to reduce interest expense What: • Sold Visa Class B restricted shares - $34 million pre-tax gain • Tendered for $75 million of 4.50% subordinated debt due 2024 • Tendered for $60 million of 3.60% senior n
Slide 22: Asset Quality
Asset Quality 22 NON-PERFORMING LOANS (NPLS) & NPLS TO LOANS NET CHARGE-OFFS (NCOS) AND NCOS TO AVERAGE LOANS PROVISION FOR CREDIT LOSSES ALLOWANCE FOR CREDIT LOSSES (ALLOWANCE)(1) TO NPLS & LOANS ($ IN MILLIONS) (1) The allowance for credit losses (“ACL”) relates specifically to "Loans, net of unea
Slide 23: Non-Interest Income
23 Non-Interest Income(1) (1) Excludes investment securities gains.
Slide 24: Non-interest Expense
Non-interest Expense Three months ended March 31, 2021 (percent of total non-interest expense) I Salaries and Benefits cupancy Data Processing and Software Other Outside Services Debt extinguishment Other 1921 4920 Change (dollars in thousands) ™ Salaries and Benefits $ 82,586 $ 83,929 $ (1,343) ™ O
Slide 25: Paycheck Protection Program (PPP) - Waves 1, 2 and 3
Paycheck Protection Program (“PPP”) - Waves 1, 2 and 3 25 • Wave 1 & 2 applications generated $1.9 billion in funded PPP loans • Waves 1 & 2 average processing fee was 3.0% • Wave 3 applications generated $685 million in funded PPP loans through March 31, 2021; total Wave 3 PPP loan originations exp
Slide 26: 2021 Outlook
2021 Outlook 26 Net interest income: $640 - $660 million Provision for credit losses: $20 - $40 million Non-interest income: $220 - $230 million Non-interest expense (1): $555 - $575 million (1) Excluding charges related to the 1Q 2021 balance sheet restructuring
Slide 27: Appendix
APPENDIX
Slide 28: Average Loan Portfolio And Yields
Average Loan Portfolio And Yields 28 Balance Yield 4Q 2020 1Q 2020 4Q 2020 1Q 2020 Real estate - commercial mortgage 7,129$ 3.15% 28$ 382$ (0.06%) (1.05%) Commercial & industrial 5,722 2.57% (133) 1,275 0.00% (1.64%) Real estate - residential mortgage 3,184 3.52% 96 514 (0.13%) (0.45%) Real estate -
Slide 29: Average Customer Funding And Rates
Average Customer Funding And Rates 29 Balance Rate 4Q 2020 1Q 2020 4Q 2020 1Q 2020 Noninterest bearing demand 6,673$ - % 196$ 2,366$ - % - % Interest-bearing demand 5,832 0.08% 70 1,182 (0.02%) (0.41%) Savings 6,137 0.10% 232 1,009 (0.03%) (0.46%) Brokered 324 0.49% (16) 49 (0.04%) (1.08%) Time 2,15
Slide 30: Non-Interest Income
Non-Interest Income(1) 30 (1) Excluding investment securities gains. Q1 2021 Q4 2020 Q1 2020 Q4 2020 Q1 2020 Wealth management 17,347$ 15,653$ 15,055$ 1,694 2,292 Mortgage banking 13,960 9,311 6,234 4,649 7,726 Consumer banking: Card 5,878 5,123 4,685 755 1,193 Overdraft 2,724 3,376 4,058 (652) (1,3
Slide 31: Non-Interest Expense
Non-Interest Expense 31 Q1 2021 Q4 2020 Q1 2020 Q4 2020 Q1 2020 Salaries and employee benefits 82,586$ 83,929$ 80,228$ (1,343)$ 2,358$ Net occupancy 13,982 13,161 13,486 821 496 Data processing and software 13,561 11,951 11,645 1,610 1,916 Other outside services 8,490 8,334 7,881 156 609 Professiona
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation 32 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 finan
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation 33 Mar 31 Dec 31 Mar 31 2015 2016 2017 2018 2019 2020 2020 2020 2021 Efficiency ratio Non-interes t expens e 480,160$ 489,519$ 525,579$ 546,104$ 567,736$ 579,440$ 142,552$ 154,737$ 178,384$ Les s: Amortization of tax credit investments - - (11,028) (11,449) (6,021) (6,126) (1
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation 34 Mar 31 Mar 31 Mar 31 Mar 31 Mar 31 Mar 31 2016 2017 2018 2019 2020 2021 Tangible book value per share Shareholders ' equity 2,073,309$ 2,154,683$ 2,235,493$ 2,301,019$ 2,285,748$ 2,629,655$ Less : Goodwi l l and i ntangibl e assets (531,556) (531,556) (531,556) (535,356) (
Slide 35: Non-GAAP Reconciliation
35 Non-GAAP Reconciliation Sep 30 Dec 31 Mar 31 2020 2020 2021 Asset Quality, excluding PPP ACL - loans to adjusted total loans ACL - loans (numerator) 266,825$ 277,567$ 265,986$ Loans, net of unea rned income 19,028,621$ 18,900,820$ 18,990,986$ Less : PPP Loans (1,960,165) (1,581,712) (1,688,394) T
Slide 36: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fult.com CORPORATION