Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2012)
78 slides from Fulton Financial's investor presentation, Nov 9, 2012
Slide 1: Investor Presentation
Investor Presentation Data as of September 30, 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: About Us
About Us Mid-Atlantic financial holding company 6 community banks / 5 states Fulton Financial Advisors Fulton Mortgage Company 270 community banking offices Asset size: $16.3 billion 3,800 team members Market capitalization: $ 2.0 billion Book value per common share: $ 10.36 Tangible book value per
Slide 4: Corporate Goals and Priorities
1. EPS Growth 2. ROA Improvement 3. Spread Management /Net Interest Margin 4. Improve Asset Quality 5. Deploy Capital Prudently 6. Leverage Market Opportunities 7. Profitable Organic / Acquisitive Growth Corporate Goals and Priorities *
Slide 5: Goals and Priorities: 1. Earnings per Share Growth
Goals and Priorities 1. Earnings per Share Growth Q3/12 Diluted EPS: 21 cents Up 5.0% linked quarter (20 cents) Up 5.0% year over year (20 cents) *
Slide 6: Income Statement Summary
Income Statement Summary Q3 2012 Q2 2012 $ % (dollars in thousands, except per-share data) Net Interest Income $ 135,881 ¢$ 137,530 $ (1,649) -1% Loan Loss Provision (23,000) (25,500) 2,500 -10% Non-Interest Income 51,962 51,826 136 0% Securities Gains 42 1,538 (1,496) -97% Non-Interest Expenses (11
Slide 7: Income Statement Summary (Nine Months Ended September 30th)
Income Statement Summary (Nine Months Ended September 30th) *
Slide 8: Ending Loans
Ending Loans Q3 2012 Q3 2011 $ % (dollars in millions) Comm'! Mort $ 4633 $ 4,491 $ 142 3% Commercial 3,508 3,690 (182) -5% Home Equity 1,603 1,631 (28) -2% Resid Mort 1,214 1,041 173 17% Construction 597 648 (51) -8% Consumer/ Other 378 394 (16) -4% Total Loans $ 11,933. $ 11,895 $ 38 0% FULTON FIN
Slide 9: Diluted EPS
Diluted EPS $0.25 $0.20 $0.15 $0.10 $0.05 CTA QI Q2 Q3 Q4 QI Q2 QB Q4 QI Q2 QB Q4 QI QZ Q3 09 09 09 09 10 10 10 10 11 Af 11 Uf 12 12 12 $0.00 FULTON FINANCIAL CORPORATION
Slide 10: Non-Interest Income
Non-Interest Income (in millions) * CAGR = 6.4% (2002-2011)
Slide 11: Non-Interest Income
Non-Interest Income Q3. 2012 Q2 2012 $ % (dollars in thousands) Mort. Banking Income $ 10,594 $ 11,143 $ (549) -5% Invt Mgt & Trust 9,429 9,822 (393) -4% Overdraft & NSF Fees 8,552 8,095 457 6% Service Charges 4,340 4,456 (116) -3% Merchant Fees 3,128 3,376 (248) -7% Cash Mgt Fees 2,759 2,816 (57) -
Slide 12: Non-Interest Income (Nine Months Ended September 30th)
* Non-Interest Income (Nine Months Ended September 30th)
Slide 13: Non-Interest Income Growth
Non-Interest Income Growth Fulton Mortgage Company Significant Contributor to Non-interest Income Steady Pipeline with Low Rate Environment Leverage our Market Reputation and Brand Expanded Origination Staff Fulton Financial Advisors ($4.0 billion A.U.M.) Brokerage Production Mix (non-recurring / re
Slide 14: Fulton Mortgage Company
Fulton Mortgage Company Applications up linked quarter: $850 million from $824 million Pipeline $535 million vs. $520 million (End Q3/12 vs. end Q2/12) 40% purchase / 60% refinancing (Q3/12) Sales gains up linked quarter offset by decreased MSR income *
Slide 15: Non-Interest Expenses
Non-Interest Expenses Q3 2012 Q2 2012 $ % (dollars in thousands) Salaries & Benefits $ 62,162 $ 60,091 ¢$ 2,071 3% Occupancy & Equip. 14,977 14,390 587 4% Data Proc. & Software 6,287 6,031 256 4% Outside Services 4,996 4,476 520 12% FDIC Insurance 3,029 3,002 27 1% Professional Fees 2,729 2,984 (255
Slide 16: Priority Resource Commitments
Asset Quality Improvement Core Platform Conversion Enterprise-wide Risk Management and Compliance Priority Resource Commitments *
Slide 17: 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 September 30, 2012 Associated Banc-Corp Banco
Slide 18: More Efficient Than Peers
More Efficient Than Peers * * 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 19: 2. Improve Our Return on Assets
2. Improve Our Return on Assets Q3/12: 1.02% YTD 9/30/12: 0.98% Goals and Priorities *
Slide 20: ROA Growth
ROA Growth 1.60 1.20 0.80 0.40 0.00 2005 2006 = 2007S 2008 = 2009S 2010S 2011 ~32S ss YTD 09/12 040 =eFULT Peer tTop 50 FULTON FINANCIAL CORPORATION
Slide 21: ROA and Assets, by Bank
ROA and Assets, by Bank Return on Average Assets 9Months 09/30/12 Lafayette Ambassador Bank FNB Bank, NA Fulton Bank, NA Swineford National Bank The Columbia Bank Fulton Bank of New Jersey Fulton Financial Corporation $ Assets ($ Millions) 1,406 371 9,041 287 2,025 3,334 16,273 1.56% 1.24% 1.29% 1.2
Slide 22: 3. Spread Management / Net Interest Margin
3. Spread Management / Net Interest Margin Q3/12: 3.74% Cost of interest bearing liabilities: 0.90% Yield on earning assets: 4.42% Goals and Priorities *
Slide 23: Net Interest Margin
Net Interest Margin 4.00 3.75 3.50 3.25 3.00 es Q109 Q209 Q309 Q409 QL1O Q210 Q310 Q4IO QUIT QZ QI QsIt QUIZ Q312 FULT Peer Top 50 FULTON FINANCIAL CORPORATION
Slide 24: Interest Rate Shocks
6 month cumulative gap: 1.15 Interest Rate Shocks (9/30/12) Rate Change NII Change (Annual) % Change +400 bp + $ 80.4 million + 15.3% +300 bp + $ 57.4 million + 11.0 % +200 bp + $ 34.5 million + 6.6% +100 bp + $ 11.9 million + 2.3% - 100 bp - $ 20.5 million - 3.9% *
Slide 25: Deposit Composition
Deposit Composition Qi 2009 @Non-Int DDA aint DDA Money Mkt Savings uTime (s Q3.2012 wNon-Int DDA aint DDA Money Mkt Savings Time FULTON FINANCIAL CORPORATION
Slide 26: 4. Improve Asset Quality
4. Improve Asset Quality Goals and Priorities *
Slide 27: Non-accrual Loans to Loans
Non-accrual Loans to Loans 3.00 2.00 1.00 0.00 _/ 2005 2006 2007 2008 2009 2010 2011 Q3 12 <©FULT -®Peer =Top 50 FULTON FINANCIAL CORPORATION
Slide 28: Allowance for Loan Losses to Loans
Allowance for Loan Losses to Loans *
Slide 29: Non-performing Loans
Non-performing Loans* (9/30/12) *
Slide 30: Loan Delinquency
Loan Delinquency September 30, 2012 June 30, 2012 290 Days Total 290 Days Total Commercial Mortgage 1.39% 1.85% 1.78% 2.19% Commercial Loans 2.11% 2.56% 1.91% 2.57% Construction Loans 5.48% 6.43% 6.96% 7.91% Residential Mortgage 2.05% 4.71% 2.15% 5.09% Home Equity 0.78% 1.63% 0.71% 1.54% Consumer, l
Slide 31: Construction Exposure
Construction Exposure Construction Loans / Total Loans 10.5% 8.2% 6.7% 5.1% 5.0% *
Slide 32: Provision for Credit Losses
* Provision for Credit Losses
Slide 33: 5. Deploy Capital Prudently
5. Deploy Capital Prudently Goals and Priorities *
Slide 34: Total Risk-Based Capital Ratio
Total Risk-Based Capital Ratio *
Slide 35: Capital Adequacy (9/30/12 - estimate)
Capital Adequacy (9/30/12 - estimate) *
Slide 36: Capital Adequacy vs. Basel III
Capital Adequacy vs. Basel III *
Slide 37: Tangible Book Value Per Share
Tangible Book Value Per Share * CAGR = 10.8%
Slide 38: Price Multiple vs. Peer Group
Price Multiple vs. Peer Group * Note: Peer Tangible Book Value and LTM EPS data as of 6/30/2012 . FULT Tangible Book Value and LTM EPS data as of 9/30/2012 .
Slide 39: Deploying Capital
Deploying Capital Current Uses Support organic growth Increase our cash dividend Stock repurchase Potential Uses Acquisitions with right opportunities *
Slide 40: FULT – Cash Dividend and Yield
FULT – Cash Dividend and Yield * CAGR (cash dividend) = 32.3%
Slide 41: Stock Repurchase Program
Program authorized: June 2012 Purchase of up to 5 million shares through 12/31/12 About 2.5% of outstanding shares Shares repurchased as of September 30, 2012: 2,115,000 Average purchase price: $ 9.63 Stock Repurchase Program *
Slide 42: 6. Leverage Market Opportunities
6. Leverage Market Opportunities Goals and Priorities *
Slide 43: Superior Customer Experience
Superior Customer Experience CARE, LISTEN, UNDERSTAND and DELIVER *
Slide 44: Retail Customer Satisfaction
Top 3 Box Satisfaction: 84% Delivery on our Promise: Top 3 Box 85% *Survey Sample Size: 4,897 customers Retail Customer Satisfaction* *
Slide 45: New Household Growth YTD
Commercial Households: Up 1.9% YTD (2.5% annualized) Retail Households Up 1.7% YTD (2.3% annualized) Net Household Lift: Up 1.7% YTD (2.3% annualized) New Household Growth YTD *
Slide 46: Top County Market Share
Counties ranked #1 in deposit market share Lebanon, PA (Fulton Bank 30.2%) Salem, NJ (Fulton Bank of New Jersey 26.0%) Counties ranked #2 in deposit market share Lancaster, PA (Fulton Bank 24.3%) Montour, PA (FNB Bank 27.7%) Gloucester, NJ (Fulton Bank of New Jersey 13.4%) Snyder, PA (Swineford Nati
Slide 47: 7. Profitable Organic / Acquisitive Growth
7. Profitable Organic / Acquisitive Growth Goals and Priorities *
Slide 48: A Valuable Franchise
A Valuable Franchise Pennsylvania @ The Columbia Bank @ FNB Bank @ Fulton Bank i Fulton Bank of New Jersey i Lafayette Ambassador Bank @ Swineford National Bank FULTON FINANCIAL CORPORATION
Slide 49: 2012 Branch Expansion
2012 Branch Expansion FULTON FINANCIAL CORPORATION
Slide 50: Acquisitive Growth
Optimal asset size: $ 300 million to $2.5 billion (102 banks in footprint) Good fit geographically Earnings accretive /reasonable tangible book dilution Culturally compatible Acceptable risk profile Meaningful existing market share Acquisitive Growth *
Slide 51: Fulton Financial Corporation contact
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com Version 2012-11-09
Slide 52: Supplemental Information
Supplemental Information FULTON FINANCIAL CORPORATION
Slide 53: Average Deposits
Average Deposits Q3 2012 Q2 2012 $ % (dollars in millions) Nonint DDA $ 2,836 $ 2,669 $ 167 6% Int DDA 2,608 2,485 123 5% Savings/MMDA 3,364 3,293 71 2% Total Core Deposits 8,808 8,447 361 4% CD's 3,658 3,791 (133) 4% Cash Management 338 372 (34) -9% Total Deposits $ 12,804 $ 12,610 $ 194 2% FULTON
Slide 54: Interest Rates
Interest Rates Q3 2012 Q22012 Change % Net Interest Margin Yield on Earning Assets Cost of Funds Fed Funds 3.74% 4.42% 0.72% 0.25% 3.78% 4.48% 0.75% 0.25% -0.04% -1% -0.06% -1% -0.03% -4% FULTON FINANCIAL CORPORATION
Slide 55: Projected CD Maturities
Projected CD Maturities 800 2.00% $ $726 $700 1.75% $600 1.50% 3 $500 1.25% z 2 2 5 $400 1.00% & i 8 = $300 0.75% & is) 2 $200 0.50% 8 $100 0.25% a) 0.00% 4Q2012 192013 202013 3Q2013 FULTON FINANCIAL CORPORATION
Slide 56: Average Loans
Average Loans Q3 2012 Q2 2012 $ % (dollars in millions) Comm'l Mort $ 4603 $ 4,634 $ (31) -1% Commercial 3,530 3,530 - 0% Home Equity 1,597 1,600 (3) 0% Resid Mort 1,201 1,180 21 2% Construction 606 640 (34) -5% Consumer/ Other 383 382 1 0% _ Total Loans $ 11,920 $ 11,966 $ (46) 0%. FULTON FINANCIAL
Slide 57: Summary of Larger Loans
56 relationships with commitments to lend $20 million or more Maximum individual commitment: $39 million Maximum commitment to any builder/developer: $28 million Maximum commitment to any one development project: $15 million Average commercial lending relationship size is $469,332 Loans and correspo
Slide 58: Average Loan Growth (vs. prior year period)
Average Loan Growth (vs. prior year period) *
Slide 59: Net Charge-offs (YTD September 2012)
Net Charge-offs (YTD September 2012) *
Slide 60: Net Charge-Offs To Average Loans
Net Charge-Offs To Average Loans *
Slide 61: Allowance for Loan Losses to Non-accrual Loans
Allowance for Loan Losses to Non-accrual Loans *
Slide 62: Commercial Loans by Industry
Commercial Loans by Industry *
Slide 63: Loan Distribution by State
Loan Distribution by State (9/30/12) *
Slide 64: Residential Mortgages
Residential Mortgages (9/30/12) *
Slide 65: Fulton Mortgage Company
Fulton Mortgage Company 73% Available for Sale GOS Spread 1.30% GOS Spread 1.55% GOS Spread 1.58% % GOS Spread 1.87% 76% Available for Sale 69% Available for Sale 70% Available for Sale 88% Available for Sale GOS Spread 1.66% 86% Available for Sale ($ in thousands) *
Slide 66: Residential Mortgage Repurchase Activity
Residential Mortgage Repurchase Activity Year to date through Q3 2012: 2012 – Servicing Retained Repurchased $ 3,550,000. 2012 – Servicing Released Repurchased $ 610,000. *
Slide 67: C&I Loans
C&I Loans Ending Balance % of Total (9/30/12) NPL Allowance Balance Allocations (dollars in thousands) Pennsylvania $2,497,526 71.2% 14.5% 8.4% 4.7% 1.2% $ 50,294 $ 34,332 14,147 24,361 4,845 5,066 4,553 3,221 40 894 New Jersey 508,297 Maryland 296,225 Virginia 165,220 Delaware 40,578 $3,507,846 $ 7
Slide 68: Commercial Real Estate Loans
Commercial Real Estate Loans (9/30/12) *
Slide 69: Construction Loans
Construction Loans (9/30/12) *
Slide 70: Construction Loans by Type
Construction Loans by Type (9/30/12) *
Slide 71: Shared National Credits
Shared National Credits (9/30/12) *
Slide 72: Troubled Debt Restructurings
Troubled Debt Restructurings * Note: Excludes non-accrual TDRs
Slide 73: Investment Portfolio
Investment Portfolio (09-30-12) * Book Yield (monthly) 3.49%
Slide 74: Projected Investment Security Cash Flows
Projected Investment Security Cash Flows *
Slide 75: Investment MBS & CMO Cash Flows
Investment MBS & CMO Cash Flows (2011-2012) * Book Price $101.51 Book Price $101.87 Book Price $102.12
Slide 76: Investment Portfolio – Transactions
Investment Portfolio – Transactions (3RD Quarter 2012) ($ in Thousands) *
Slide 77: Projected FHLB Advance Maturities
Projected FHLB Advance Maturities *
Slide 78: Fulton Financial Corporation contact
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com Version 2012-11-09
Fulton Financial — Investor Presentation (November 2012) on 6ix