Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Q1 2015 Earnings Presentation
35 slides from Fulton Financial's earnings presentation, May 19, 2015
Slide 1: 2015 First Quarter Results
D A T A A S O F M A R C H 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 2015 FIRST QUARTER RESULTS NASDAQ: FULT
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 • Cash Dividends • Share Repurchase Programs • Relationship Banking Strategy / Customer Experience •
Slide 4: A Valuable Franchise
A VALUABLE FRANCHISE • 254 community banking offices across the Mid-Atlantic • Asset size: $17.4 billion • 3,700+ team members (3,480 FTEs (1)) • Market capitalization: $2.2 billion (2) 4 (1) Full-time equivalent employees. (2) Based on shares outstanding and the closing price as of March 31, 2015.
Slide 5: Strong Position in Attractive Markets
STRONG POSITION IN ATTRACTIVE MARKETS 5 Source: SNL Financial LC. Note: Data as of June 30, 2014 per Federal Deposit Insurance Corporation (FDIC) Summary of Deposits. (1) Median HH Income, 2015 – 2020 Projected Population Change and 2015 – 2020 Projected HH Income Change are weighted by deposits in
Slide 6: Deep Executive Management Team
Name Position Years at Fulton Years in Financial Services Prior Experience E. Philip Wenger Chairman, President & CEO 35 35 Various roles since joining in 1979 Patrick Barrett (1) Senior EVP & CFO 1 22 SunTrust, JPMorgan, Deloitte Touche Tomatsu Craig Roda Senior EVP/ Community Banking 36 36 Various
Slide 7: First Quarter Highlights
FIRST QUARTER HIGHLIGHTS • Diluted Earnings Per Share Growth • 4.8% increase compared to 4Q14 • Loans & Deposits • 0.3% increase in average loans compared to 4Q14, despite seasonal headwind; 2.6% increase compared to 1Q14 • 0.3% increase in average deposits compared to 4Q14, driven by an increase in
Slide 8: Income Statement Summary – Quarterly Comparison
INCOME STATEMENT SUMMARY – QUARTERLY COMPARISON 8 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 titl
Slide 9: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN 9 Net Interest Income & Net Interest Margin (1) ~ $730 million ~ $610 million $129.6 $127.9 $129.4 $128.0 $123.6 3.47% 3.41% 3.39% 3.31% 3.27% 3.36% 3.05% 2.0% 2.2% 2.4% 2.6% 2.8% 3.0% 3.2% 3.4% 3.6% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Q1 2014 Q2 2014 Q3 20
Slide 10: Loan Portfolio Composition & Yield
LOAN PORTFOLIO COMPOSITION & YIELD 10 Note: Loan portfolio composition is based on average balances for the years ended December 31, 2011 to 2014 and for the three months ended March 31, 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 $3.8 $1.6 $
Slide 11: Deposits Portfolio Composition
DEPOSITS PORTFOLIO COMPOSITION 11 Note: Deposit composition is based on average balances for the periods indicated. 24% 26% 23% 17% 10% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Three Months Ended March 31, 2014 23% 27% 23% 17% 10% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Three
Slide 12: 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 13: Asset Quality
ASSET QUALITY ($ IN MILLIONS) 13 Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans Net Charge-offs (NCOs) and NCOs to Average Loans Allowance for Credit Losses (Allowance) to NPLs & Loans $8.4 $9.1 $5.8 $8.2 $2.6 0.26% 0.28% 0.18% 0.25% 0.08% 0.10% 0.14% 0.00% 0.25% 0.50% $- $2
Slide 14: Non-Interest Income, Excluding Securities Gains
NON-INTEREST INCOME, EXCLUDING SECURITIES GAINS ($ IN MILLIONS) 14 Non-interest Income, Excluding Securities Gains ~ $730 million ~ $610 million $38.5 $43.8 $41.8 $41.3 $40.6 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Mortgage Banking Income & Spr
Slide 15: Non-Interest Expenses
NON-INTEREST EXPENSES ($ IN MILLIONS) 15 Non-interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $109.6 $116.2 $115.8 $117.7 $118.5 63.4% 65.9% 65.8% 67.5% 70.2% 64.9% 62.2% 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 Q1 2014 Q2 201
Slide 16: Compliance & Risk Management
COMPLIANCE & RISK MANAGEMENT $1.8 $2.1 $3.2 $4.1 $4.6 $1.4 $8.2 $3.8 13 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 (Projected) Salaries & Benefits Expense Outside Consulting Services# Staffing To tal N u m b e r o f Em p lo ye e s at p e rio d e n d $0.8 Q1
Slide 17: Cost Savings Initiatives
COST SAVINGS INITIATIVES 2014 Cost Savings Initiatives: Branch consolidations (13 total) Organizational streamlining Compensation and benefit reductions 17 Implementation Expense Implementation Expense Implementation Expense Implementation Expense Expenses (Gains) Reductions Expenses (Gains) Reducti
Slide 18: Profitability & Capital
PROFITABILITY & CAPITAL 18 ROA ROE Diluted Earnings Per Common Share 8.05% 7.96% 8.25% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 FULT Peer^ Top 50* 0.95% 0.90% 0.92% 0.75% 0.80% 0.85% 0.90% 0.95% 1.00% 1.05% 1.10% Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 FULT Peer^
Slide 19: Stock Repurchase Programs
STOCK REPURCHASE PROGRAMS June 2012 to April 2015 Repurchase Programs (1) Shares Repurchased 26.4 million % of Outstanding Shares 14.9% (2) Amount Repurchased $307 million Average Purchase Price $11.61 19 demand and savings (1) Share repurchase programs completed during from June 2012 to April 2015.
Slide 20: Average Assets and ROA, by Bank
AVERAGE ASSETS AND ROA, BY BANK Three Months Ended Mar 31, 2015 Return on Average Assets (1) Average Assets ($ Millions) 2015 2014 Fulton Bank, N.A. $9,517 1.16% 1.29% Lafayette Ambassador Bank 1,415 1.09% 1.06% FNB Bank, N.A. 339 0.82% 1.03% Swineford National Bank 302 2.03% 0.93% The Columbia Bank
Slide 21: 2015 Outlook
2015 OUTLOOK • Loans & Deposits: Annual average growth of 3%-7% • Net Interest Margin: Compression of 0-4 bps per quarter, on average, based on the current interest rate environment • Asset Quality: Continued modest provision; volatility may occur due to individual credits • Non-Interest Income: Mid
Slide 22: Appendix
APPENDIX
Slide 23: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS 23 Note: Yields presented on a fully taxable-equivalent basis, using a 35% federal tax rate and statutory interest expense disallowances. Balance Yield Q4 2104 Q1 2014 Q4 2104 Q1 2014 Comm'l Mort 5,164$ 4.22% 33$ 79$ (0.14%) (0.22%) Commercial 3,770 3.87% 47 133 0.0
Slide 24: Average Customer Funding and Rates
AVERAGE CUSTOMER FUNDING AND RATES 24 Balance Rate Q4 2014 Q1 2014 Q4 2014 Q1 2014 Nonint DDA 3,662$ - % 31$ 419$ - % - % Int DDA 3,136 0.13% (10) 191 0.00% 0.00% Savings/MMDA 3,517 0.13% (31) 165 0.00% 0.00% CD's 3,062 1.02% 45 130 0.06% 0.20% Total Deposits 13,377 0.30% 35 905 0.02% 0.04% Cash Mgt
Slide 25: Ending Loan Distribution by State
ENDING LOAN DISTRIBUTION BY STATE MARCH 31, 2015 25 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 2,682,881$ 2,618,898$ 388,735$ 686,031$ 1,276,886$ 7,653,431$ New Jersey 537,771 1,347,280 98,308 168,819 355,525 2,507,703 Maryland 298,709 606,192 46,084
Slide 26: Non-Performing Loans
NON-PERFORMING LOANS* MARCH 31, 2015 26 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 28,352$ 18,411$ 8,815$ 11,660$ 7,609$ 74,847$ Maryland 3,632 3,621 1,866 3,597 1,941 14,657 New Jersey 8,004 20,307 2,857 4,949 5,718 41,835 Virginia 2,937 1,954 382 7,
Slide 27: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) THREE MONTHS ENDED MARCH 31, 2015 27 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (dollars in thousands) Pennsylvania 795$ 302$ (200)$ 901$ 875$ 2,673$ Maryland (48) 65 (933) 30 257 (629) New Jersey 339 (87) (11) 264 102 607 Virginia (7) - - (65) 4 (68
Slide 28: Investment Portfolio
INVESTMENT PORTFOLIO MARCH 31, 2015 28 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Agency collateralized mortgage obligations 4.0 875$ (7) 868$ Agency mortgage-backed securities 4.7 911 19 930 Municipal bonds 5.1 217 7 224 Auction rate securitie
Slide 29: A Sustainable Payout
A SUSTAINABLE PAYOUT 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $0.00 $0.04 $0.08 $0.12 $0.16 $0.20 $0.24 $0.28 $0.32 $0.36 2011 2012 2013 2014 Q1 2015 Cash Dividend Yield 29 (1) Annualized dividend rate per share divided by period-end stock price. (2) Compounded annual growth rate from December 31, 20
Slide 30: Non-Interest Income (Excluding Securities Gains)
NON-INTEREST INCOME (EXCLUDING SECURITIES GAINS) QUARTER ENDED MARCH 31 30 Q1 2015 Q4 2014 Q1 2014 Q4 2014 Q1 2014 Invt Mgt & Trust 10,889$ 11,188$ 10,958$ (299)$ (69)$ Overdraft & NSF Fees 4,801 5,500 5,297 (699) (496) Mortgage Banking Income 4,688 3,723 3,605 965 1,083 Service Charges 3,551 3,609
Slide 31: Non-Interest Expense
NON-INTEREST EXPENSE QUARTER ENDED MARCH 31 31 Q1 2015 Q4 2014 Q1 2014 Q4 2014 Q1 2014 Salaries & Benefits 64,990$ 65,398$ 59,566$ (408)$ 5,424$ Occupancy & Equipment 17,650 14,779 17,205 2,871 445 Data Proc. & Software 8,086 7,617 6,721 469 1,365 Outside Services 5,750 8,720 3,812 (2,970) 1,938 Pro
Slide 32: 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 33: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 33 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2014 2014 2014 2014 2015 Tangible Common Equity to Tangible Assets (TCE Ratio) Shareholders' equity 2,058,719$ 2,099,800$ 2,078,006$ 1,996,665$ 2,031,513$ Less: Intangible assets (532,747) (532,432) (532,117) (531,803) (531,672) T
Slide 34: Peer Group
PEER GROUP* Associated Banc-Corp BancorpSouth, Inc. BOK Financial Corporation Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. FNB Corporation FirstMerit Corporation Hancock Holding Company IBERIABANK Corporation International Bancshares Corp. National Penn Bancshares, Inc. Private Bancorp, Inc.
Slide 35: V E R S I O N . . www.fult.com
V E R S I O N 5 . 1 8 . 2 0 1 5 www.fult.com