Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Q1 2017 Earnings Presentation
32 slides from Fulton Financial's earnings presentation, May 22, 2017
Slide 1: Investor Presentation
D A T A A S O F M A R C H 3 1 , 2 0 1 7 U N L E S S O T H E R W I S E N O T E D INVESTOR PRESENTATION
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 • Relationship Banking Strategy / Customer Experience • Quality Loan Growth / Solid Asset Quality • A
Slide 4: A Valuable Franchise
A VALUABLE FRANCHISE • 243 community banking offices across the Mid-Atlantic • Asset size: $19.2 billion • 3,700+ team members (3,520 FTEs (1)) • Market capitalization: $3.1 billion (2) 4 (1) Average full-time equivalent employees. (2) Based on shares outstanding and the closing price as of March 31
Slide 5: Strong Position in Attractive Markets
STRONG POSITION IN ATTRACTIVE MARKETS 5 Note: Data as of June 30, 2016 per Federal Deposit Insurance Corporation (FDIC) Summary of Deposits. Household Income Data as of June 30, 2016 per SNL Financial LC. (1) Median HH Income, 2017 – 2022 Projected Population Change and 2017 – 2022 Projected HH Inco
Slide 6: Deep Executive Management Team
Name Position Years at Fulton Years in Financial Services Prior Experience E. Philip Wenger Chairman, President & CEO 37 37 Various roles since joining in 1979 Craig Roda Senior EVP/ Community Banking 38 38 Various roles since joining in 1979 Philmer Rohrbaugh (1) Senior EVP/ COO and CFO 4 39 KPMG,
Slide 7: First Quarter Highlights
FIRST QUARTER HIGHLIGHTS Diluted Earnings Per Share: $0.25 in 1Q17, 4.2% increase from 4Q16 and 13.6% increase from 1Q16 Pre-Provision Net Revenue(1): $60.9 million, 9.0% increase from 4Q16 and 19.8% increase from 1Q16 Linked Quarter Loan and Core Deposit Growth: 2.6% increase in average loans, whil
Slide 8: Income Statement Summary
INCOME STATEMENT SUMMARY Net Income of $43.4 million; a 2.9% increase from 4Q16 and a 13.4% increase from 1Q16. Earnings per share increased 4.2% from 4Q16 and 13.6% from 1Q16. Net Interest Income From 4Q16: Increase of 4.0%, reflecting the impact of loan growth and an 11 basis point increase
Slide 9: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin ~ $730 million ~ $610 million $129.1 $128.9 $130.6 $132.2 $137.6 3.23% 3.20% 3.14% 3.15% 3.26% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 1Q16 2Q16 3Q16 4Q16 1Q1
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, 2012 to 2016, and quarter ended March 31, 2017. (1) Presented on a fully-taxable equivalent basis. $4.9 $5.1 $5.2 $5.6 $6.0 $3.7 $3.7 $3.9 $4.1 $4.2 $1.7 $1.7 $1.7 $1.
Slide 11: Deposit Portfolio Composition
DEPOSIT PORTFOLIO COMPOSITION 11 Note: Deposit composition is based on average balances for the periods indicated. Average demand and savings are up 7.1% compared to March 31, 2016; while total average deposits are up 4.8%. 18% 29% 25% 18% 10% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Thre
Slide 12: Interest Rate Sensitivity
1) A variety of interest rate scenarios are used to measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to the results obtained in a flat or unchanged interest rate scenario. Simulation of net interest income is used primarily to mea
Slide 13: Asset Quality
ASSET QUALITY ($ IN MILLIONS) 13 Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans 121.05% 129.26% 119.59% 130.15% 131.26% 1.20% 1.17% 1.15% 1.17% 1.15% 0.00% 1.00% 2.00% 3.00% 0.0% 25.0% 50.0% 75.0% 100.0% 125.0% 150.0% 1Q16 2Q16 3Q16 4Q16 1Q17 Allowance/NPLs Allowance/Loans N
Slide 14: Non-Interest Income – Quarter Comparison
NON-INTEREST INCOME – QUARTER COMPARISON ($ IN MILLIONS) Non-Interest Income, Excluding Securities Gains ~ $730 million ~ $610 million $42.2 $46.1 $48.1 $51.2 $45.6 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 1Q16 2Q16 3Q16 4Q16 1Q17 Mortgage Banking Income & Spreads Other Non-Interest Income 1.28% 1.71%
Slide 15: Non-Interest Expenses – Quarter Comparison
NON-INTEREST EXPENSES – QUARTER COMPARISON ($ IN MILLIONS) Non-Interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $120.4 $121.6 $119.8 $127.6 $122.3 68.3% 67.6% 65.2% 67.6% 64.8% 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 $140.0 1
Slide 16: Profitability & Capital
PROFITABILITY & CAPITAL 16 ROA(1) ROE (tangible)(2) Tangible Common Equity Ratio(2) Diluted Earnings Per Common Share 10.07% 10.26% 10.38% 10.47% 10.93% 0.00% 4.00% 8.00% 12.00% 1Q16 2Q16 3Q16 4Q16 1Q17 0.86% 0.88% 0.89% 0.89% 0.92% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1Q16 2Q16 3Q16 4Q16 1Q17
Slide 17: Stock Repurchase Programs
STOCK REPURCHASE PROGRAMS June 2012 to April 2017 Repurchase Programs (1) Shares Repurchased 31.88 million % of Outstanding Shares 15.9% (2) Amount Repurchased $375.1 million Average Purchase Price $11.77 demand and savings (1) Share repurchases completed from June 2012 through April 2017. (2) Total
Slide 18: Average Assets and ROA, by Bank
AVERAGE ASSETS AND ROA, BY BANK Three Months Ended Mar 31, 2017 Average Assets ($ Millions) 2017 2016 Fulton Bank, N.A. $10,697 1.09% 1.04% The Columbia Bank 2,319 1.03% 0.82% Lafayette Ambassador Bank 1,525 0.69% 0.95% Fulton Bank of New Jersey 3,817 0.85% 0.68% FNB Bank, N.A. 348 0.63% 0.60% Swine
Slide 19: 2017 Outlook
2017 OUTLOOK The following outlook remains unchanged from prior quarter: • Loans & Deposits: Annual average growth rate in the mid- to high-single digits • Asset Quality: Provision driven primarily by loan growth • Non-Interest Income (Excluding Securities Gains): Mid- to high-single digit growth ra
Slide 20: Appendix
APPENDIX
Slide 21: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS 21 Note: Yields presented on a fully taxable-equivalent basis, using a 35% federal tax rate and statutory interest expense disallowances. Average loan portfolio yield is for the three months ended March 31, 2017. Balance Yield 4Q 2016 1Q 2016 4Q 2016 1Q 2016 Comm'l
Slide 22: Average Customer Funding and Rates
AVERAGE CUSTOMER FUNDING AND RATES 22 Balance Rate 4Q 2016 1Q 2016 4Q 2016 1Q 2016 Nonint DDA 4,302$ - % (30)$ 334$ - % - % Int DDA 3,651 0.25% (63) 213 0.04% 0.08% Savings/MMDA 4,194 0.21% (22) 261 0.00% 0.03% CD's 2,739 1.09% (38) (129) 0.00% 0.05% Total Deposits 14,886 0.32% (153) 679 0.01% 0.02%
Slide 23: Ending Loan Distribution by State
ENDING LOAN DISTRIBUTION BY STATE MARCH 31, 2017 23 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 3,070,601$ 3,187,600$ 499,503$ 673,827$ 1,298,488$ 8,730,019$ New Jersey 527,703 1,447,594 151,448 251,524 383,192 2,761,461 Maryland 330,493 682,929 109,38
Slide 24: Non-Performing Loans
NON-PERFORMING LOANS(1) MARCH 31, 2017 24 Comm'l Consumer Ending Loans NPLs/Loans Comm'l Mortgage Constr. Res. Mtg. & Other Total NPLs by State by State Pennsylvania 23,272$ 13,839$ 9,227$ 8,572$ 6,827$ 61,737$ 8,730,019$ 0.71% New Jersey 6,520 13,709 371 6,520 4,761 31,881 2,761,461 1.15% Maryland
Slide 25: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) THREE MONTHS ENDED MARCH 31, 2017 25 Annualized Comm'l Consumer Average Loans Charge-Offs to Comm'l Mortgage Constr. Res. Mtg. & Other Total by State Average Loans Pennsylvania 1,513$ 337$ (238)$ (111)$ 1,114$ 2,615$ 8,704,369$ 0.12% New Jersey (19) 453 (11) 128 476 1,02
Slide 26: Investment Portfolio
INVESTMENT PORTFOLIO MARCH 31, 2017 26 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value (dollars in millions) Collateralized mortgage obligations 3.7 576$ (10)$ 566$ Mortgage-backed securities 5.4 1,322 (9) 1,313 State and municipal securities 8.2 40
Slide 27: Non-Interest Income (Excluding Securities Gains)
NON-INTEREST INCOME (EXCLUDING SECURITIES GAINS) 27 1Q 2017 4Q 2016 1Q 2016 4Q 2016 1Q 2016 Invt Mgt & Trust 11,808$ 11,610$ 10,988$ 198$ 820$ Overdraft & NSF Fees 5,469 5,749 5,272 (280) 197 Mortgage Banking Income 4,596 6,959 4,030 (2,363) 566 Merchant Fees 3,607 3,981 3,682 (374) (75) Cash Mgt Fe
Slide 28: Non-Interest Expense
NON-INTEREST EXPENSE 28 1Q 2017 4Q 2016 1Q 2016 4Q 2016 1Q 2016 Salaries & Benefits 69,236$ 73,256$ 69,372$ (4,020)$ (136)$ Occupancy & Equipment 16,022 15,206 15,591 816 431 Data Proc. & Software 8,979 9,442 9,321 (463) (342) Outside Services 5,546 6,536 6,056 (990) (510) Professional fees 2,737 2,
Slide 29: A Sustainable Payout
A SUSTAINABLE PAYOUT $0.30 $0.32 $0.34 $0.38 $0.41 $0.11 3.12% 2.44% 2.75% 2.92% 2.18% 2.50% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% $0.00 $0.04 $0.08 $0.12 $0.16 $0.20 $0.24 $0.28 $0.32 $0.36 $0.40 $0.44 2012 2013 2014 2015 2016 1Q 2017 Cash Dividend Yield(1) 29 (1) Annual dividend per sh
Slide 30: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Note: The Corporation has presented the following non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations and financia
Slide 31: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2016 2016 2016 2016 2017 Tangible Common Equity to Tangible Assets (TCE Ratio) Shareholders' equity 2,073,309$ 2,106,997$ 2,129,436$ 2,121,115$ 2,154,683$ Less: Intangible assets (531,556) (531,556) (531,556) (531,556) (531,556) T
Slide 32: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fult.com