Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Q3 2020 Earnings Presentation
21 slides from Fulton Financial's earnings presentation, Oct 21, 2020
Slide 1: 2020 Third Quarter Results
2020 THIRD QUARTER RESULTS NASDAQ: FULT Data as of September 30, 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: Income Statement Summary
INCOME STATEMENT SUMMARY Change From 3Q20 2Q20 3Q19 (dollars in thousands, except per-share data) Net Interest Income $ 154,116 $ 1,362 $ (7,144) Provision for Credit Losses 7,080 (12,490) 4,910 Non-Interest Income 63,246 10,329 7,925 Securities Gains 2 (3,003) (4,490) Non-Interest Expense 139,147 (
Slide 4: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields ($ IN BILLIONS) ($ IN MILLIONS) $25 8.00% $20 $4 $4 $3 $3 $3 6.00% $200 4.00% $18 $19 $15 $16 $17 $17 $180 4.00% 3.75% $10 4.25% 4.07% 3.97% $161 $159 $161 3.32% 3.13% $160 $154 $5 2.00%
Slide 5: Asset Quality
ASSET QUALITY ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans $50 $150 1.50% $44 $40 $145 0.81% 0.84% 0.82% 1.00% 0.75% 0.75% $30 $140 $141 $140 $140 $21 $20 0.50% $135 $142 $20 $136 $10 $7 $130 0.00% $2 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 NPL NP
Slide 6: Non-Interest Income
NON-INTEREST INCOME(1) Three months ended September 30, 2020 (percent of total non-interest income) 3Q20 2Q20 Change (dollars in thousands) 4% n Wealth Management $ 14,943 $ 13,407 $ 1,536 n Mortgage Banking 16,801 9,964 6,837 24% n Consumer Banking 10,423 9,138 1,285 n Commercial Banking 18,311 16,
Slide 7: Non-Interest Expense
NON-INTEREST EXPENSE Three months ended September 30, 2020 (percent of total non-interest expense) 3Q20 2Q20 Change 19% (dollars in thousands) n Salaries and Benefits $ 79,227 $ 81,012 $ (1,785) n Occupancy 13,221 13,144 77 n Data Processing and Software 12,285 12,193 92 5% n Other Outside Services
Slide 8: Cost Saving Initiatives
COST SAVING INITIATIVES Comprehensive review of expenses undertaken over the past 4 months resulting in the following cost savings initiatives: Anticipated Pre-Tax Charges $20.0 • Previously disclosed 21 financial centers expected Projected to be closed and consolidated in January 2021 $16-$17 • Fur
Slide 9: Capital Position Remains Strong
CAPITAL POSITION REMAINS STRONG (as of September 30, 2020) 17.5% 15.0% 13.9% 12.5% $648 10.0% 9.5% 9.5% $196 $485 7.4% 7.5% $601 5.0% 2.5% —% Tier 1 Leverage Tier 1 Risk Based CE Tier 1 Total Risk Based Regulatory Minimums Excess(2) Suspended share repurchases in Mid-March. Dividend remains at $0.13
Slide 10: Q4 2020 Outlook
Q4 2020 OUTLOOK All previous guidance for 2020 has been withdrawn due to the impact from COVID-19. At this time, select guidance for the fourth quarter of 2020 will be provided on the following areas in comparison to third quarter of 2020 actual results, except effective tax rate is the expected ran
Slide 11: 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 12: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended Sep 30 Jun 30 Sep 30 Efficiency ratio 2020 2020 2019 Non-interest expense $ 139,147 $ 143,006 $ 146,770 Less: Prepayment penalty of FHLB advances — (2,878) (4,326) Less: Amortization of tax credit investments (1,694) (1,450) (1,533) Less: Intangible amortiz
Slide 13: Appendix - Credit Disclosures
APPENDIX - CREDIT DISCLOSURES Additional detail on deferrals and select industries (data as of September 30, 2020; all industry classifications based on NAICS codes) 13
Slide 14: Deferrals Have Declined
Deferrals Have Declined (1) Based on regulatory classifications. (2) Represents the portion of the portfolio balance as of September 30, 2020 that consists of loans that had entered into COVID-19 pandemic-related payment deferral arrangements at any time, including loans for which the payment deferr
Slide 15: Selected Industries With Heightened Risk Due to COVID-19
Selected Industries With Heightened Risk Due to COVID-19 (1) Based on regulatory classifications. Commercial Portfolio consists of Commercial and Industrial, Commercial Mortgage, and Construction loans to commercial borrowers. Note: "Pass," "Special Mention" and "Substandard or Lower" are the Corpor
Slide 16: Complete Hotel Portfolio Reviewed With Updated Risk Ratings
Complete Hotel Portfolio Reviewed With Updated Risk Ratings • 60 hotel loans totaling $366 million or 2.6% of the portfolio. • Average loan size of $3.0 million. • Approximately 51% of the hotel loans are in a COVID-19 deferral. • Concentration in hotels that primarily rely on leisure segments in “d
Slide 17: Food Services/Restaurant Portfolio Reflects Diversity In Size, Type And Geography
Food Services/Restaurant Portfolio Reflects Diversity In Size, Type And Geography Food Services/Restaurants portfolio reflects diversity in size, type and 12% geography • Portfolio size of $106 million. 18% 42% • Diversified and granular portfolio with average loan size of $250 thousand. • Geographi
Slide 18: Arts and Entertainment: Portfolio Risk Assessment Shows Reasonable Ability To Perform
Arts and Entertainment: Portfolio Risk Assessment Shows Reasonable Ability To Perform Given Current Environment The Arts/Entertainment portfolio risk assessment 3% 3% shows reasonable ability to perform given current 4% environment 10% • Portfolio of $290 million. 37% • Diverse portfolio with averag
Slide 19: Healthcare: CCRC's Show Solid Occupancy, Performance And Continue To Have Waiting Lists
Healthcare: CCRC's Show Solid Occupancy, Performance And Continue To Have Waiting Lists CCRC's show solid occupancy, performance and 3% continue to have waiting lists 11% • Portfolio of $967 million. • Healthcare portfolio granular and diverse. 44% 20% • Largest exposure is Nursing and Continuing Ca
Slide 20: Retail Exposure Includes Significant Auto Dealership Portfolio That Has Rebounded Nicely
Retail Exposure Includes Significant Auto Dealership Portfolio That Has Rebounded Nicely Retail exposure includes significant auto dealership portfolio that has rebounded nicely 10% 5% 5% • Portfolio of $680 million. 14% • Approximately $457 million in Auto and Equipment 67% Dealership exposure. Ret
Slide 21: Energy Portfolio Detail: No Direct Exposure to Upstream or Midstream
Energy Portfolio Detail: No Direct Exposure to Upstream or Midstream; Downstream Comprised of Oil and Gasoline Retail Distribution • Upstream - Exploration and production sector. Includes searching for crude oil and natural gas fields, drilling of exploratory wells, and drilling and operating wells