Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (September 2012)
78 slides from Fulton Financial's investor presentation, Sep 5, 2012
Slide 1: Investor Presentation
Investor Presentation Data as of June 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: $ 10.16 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: Earnings per Share Growth
Goals and Priorities 1. Earnings per Share Growth Q2/12 Diluted EPS: 20 cents Up 5.3% linked quarter (19 cents) Up 11.1% year over year (18 cents) *
Slide 6: Income Statement Summary Q2 vs Q1 2012
Q2 2012 Q1 2012 $ % (dollars in thousands, except per-share data) Net Interest Income $ 137,530 $ 138,690 $ (1,160) -1% Loan Loss Provision (25,500) (28,000) 2,500 -9% Non-Interest Income 51,830 50,430 1,400 3% Securities Gains 1,540 1,250 290 23% Non-Interest Expenses (112,150) (110,710) (1,440) 1%
Slide 7: Income Statement Summary (Six Months Ended June 30th)
Income Statement Summary (Six Months Ended June 30th) *
Slide 8: Loans by type Q2 2012 vs Q2 2011
Q2 2012 Q2 2011 $ % (dollars in millions) Comm'! Mort $ 4650 $ 4,440 $ 210 5% Commercial 3,540 3,680 (140) -4% Home Equity 1,600 1,625 (25) -2% Resid Mort 1,185 1,025 160 16% Construction 620 680 (60) -9% Consumer/ Other 390 400 (10) -3% Total Loans $ 11,985 $ 11,850 $ 135 1% FULTON FINANCIAL CORPOR
Slide 9: Quarterly earnings per share trend
$0.20 $0.15 $0.10 $0.05 $0.00 7 7 =F, ; ; ; Ql Q2 Q Q4 QI Q2 Qs QF QI Q2 Qz Q4 QI QZ 09 09 09 09 10 10 10 10 11 11 11 11 12 12 FULTON FINANCIAL CORPORATION
Slide 10: Non-Interest Income
Non-Interest Income (in millions) * CAGR = 6.7%
Slide 11: Non-interest income components
Q2 2012 Q1 2012 $ % (dollars in thousands) Mort. Banking Income $ 11,140 $ 10,050 1,090 11% Invt Mgt & Trust 9,820 9,380 $ 440 5% Overdraft & NSF Fees 8,090 7,970 120 2% Service Charges 4,460 4,260 200 5% Merchant Fees 3,380 2,860 520 18% Cash Mgt Fees 2,820 2,610 210 8% Debit Card Fees 2,210 2,100
Slide 12: Non-Interest Income (Six Months Ended June 30th)
* Non-Interest Income (Six Months Ended June 30th)
Slide 13: Non-Interest Income Growth
Non-Interest Income Growth Fulton Mortgage Company Significant Contributor to Non-interest Income Strong 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: $824 million from $812 million Pipeline $520 million vs. $428 million (Q2/12 vs. Q1/12) 39% purchase / 61% refinancing (Q2/12) Sales gains up linked quarter *
Slide 15: Non-interest expenses
Q2 2012 Q1 2012 $ % (dollars in thousands) Salaries & Benefits $ 60,090 $ 60,360 ¢$ (270) 0% Occupancy & Equip. 14,390 14,300 90 1% Data Proc. & Software 6,030 5,860 170 3% Outside Services 4,480 2,310 2,170 94% FDIC Insurance 3,000 3,020 (20) -1% Professional Fees 2,980 2,580 400 16% OREO & Repo Ex
Slide 16: Priority Resource Commitments
1. Enterprise-wide Risk Management and Compliance 2. Core Platform Conversion (Continuation of longstanding Fiserv Relationship) 3. Asset Quality Improvement 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 June 30, 2012 Associated Banc-Corp BancorpSou
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 Q2/12: 0.98% YTD 6/30/12: 0.96% Goals and Priorities *
Slide 20: Return on assets vs peers
1.60 120 0.80 0.40 0.00 2005 = 2006 = 2007S 2008 = 2009S 2010S 2011 32S YTD 06/12 040 <FULT “Peer “Top 50 FULTON FINANCIAL CORPORATION
Slide 21: Return on Average Assets by bank
Return on Average Assets 6 Months 06/30/12 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) $ $ 1,409 362 9,109 287 2,016 3,337 16,338 1.63% 1.25% 1.25% 1.21% 0.73% 0.36% 0.96%
Slide 22: 3. Spread Management / Net Interest Margin
3. Spread Management / Net Interest Margin Q2/12: 3.78% Cost of interest bearing liabilities: 0.93% Yield on earning assets: 4.48% Goals and Priorities *
Slide 23: Net interest margin vs peers
4.00 3.75 3.50 3.25 3.00 a Q109 Q209 Q309 Q409 QI1O QZ10 Q310 Q41O QUIT Q2ZIT QIIT Q4IT QUIZ Q2IZ “BE FULT —@Peer —#-Top 50 FULTON FINANCIAL CORPORATION
Slide 24: Interest Rate Shocks
6 month cumulative gap: 1.10 Interest Rate Shocks (6/30/12) Rate Change NII Change (Annual) % Change +400 bp + $ 70.5 million + 13.0% +300 bp + $ 49.6 million + 9.1% +200 bp + $ 28.2 million + 5.2% +100 bp + $ 8.2 million + 1.5% - 100 bp - $ 17.1 million - 3.1% *
Slide 25: Deposit mix
Qi 2009 @Non-Int DDA aint DDA Money Mkt Savings uTime Q2.2012 wNon-Int DDA aint DDA Money Mkt Savings uTime FULTON FINANCIAL CORPORATION
Slide 26: 4. Improve Asset Quality
4. Improve Asset Quality Goals and Priorities *
Slide 27: Asset quality vs peers
3.00 2.00 0.00 2005, 2006 2007 2008 2009 2010 2011 Q212 <@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* (6/30/12) *
Slide 30: Delinquency by loan type
June 30, 2012 March 31, 2012 290 Days Total 290 Days Total Commercial Mortgage 1.78% 2.19% 2.24% 2.67% Commercial Loans 1.91% 2.57% 2.36% 2.71% Construction Loans 6.96% 7.91% 9.25% 9.81% Residential Mortgage 2.15% 5.09% 1.96% 4.72% Home Equity 0.71% 1.54% 0.68% 1.42% Consumer, leasing and other 0.99
Slide 31: Construction Exposure
Construction Exposure Construction Loans / Total Loans 10.5% 8.2% 6.7% 5.1% 5.2% *
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
Capital Adequacy (6/30/12) *
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 = 10.9%
Slide 38: Price Multiple vs. Peer Group
Price Multiple vs. Peer Group * Note: As of 8/06/2012
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: Cash Dividend and Yield
FULT – Cash Dividend and Yield * CAGR (cash dividend) = 29.8%
Slide 41: Stock Repurchase Program
Program authorized: June 2012 Initial shares purchased: July 2012 Up to 5 million shares through 12/31/12 About 2.5% of outstanding shares Shares repurchased as of market close August 31, 2012: 1,818,627 Average purchase price: $ 9.59 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 2.9% YTD (5.8% annualized) Retail Households: Up 1.6% YTD (3.2% annualized) Net Household Lift: Up 1.7% YTD (3.4% annualized) New Household Growth YTD *
Slide 46: Top County Market Share
Counties ranked #1 in deposit market share Lebanon, PA (Fulton Bank 31.2%) Snyder, PA (Swineford National Bank 30.3%) Salem, NJ (Fulton Bank of New Jersey 27.2%) Counties ranked #2 in deposit market share Lancaster, PA (Fulton Bank 22.7%) Montour, PA (FNB Bank 29.5%) Gloucester, NJ (Fulton Bank of N
Slide 47: 7. Profitable Organic / Acquisitive Growth
7. Profitable Organic / Acquisitive Growth Goals and Priorities *
Slide 48: Bank footprint map
@ 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: Median household income by county
ington, Apr $71,820 ‘Manahawkin, Apr 56,052 Median Household County Income 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 2012-09-05
Slide 52: Supplemental Information
Supplemental Information FULTON FINANCIAL CORPORATION
Slide 53: Deposits Q2 vs Q1 2012
Q2 2012, = Q1 2012 $ % (dollars in millions) Nonint DDA $ 2,670 $ 2,570 $ 100 4% Int DDA 2,480 2,460 20 1% Savings/MMDA 3,290 3,340 (50) -1% Total Core Deposits 8,440 8,370 70 1% CD's 3,800 3,950 (150) 4% Cash Management 370 360 10 3% Total Deposits $ 12,610 $ 12,680 $ (70) -1% FULTON FINANCIAL CORP
Slide 54: Net interest margin and yields
Q2 2012 Q12012 Change % Net Interest Margin 3.78% 3.85% -0.07% -2% Yield on Earning Assets 4.48% 4.61% -0.13% -3% Cost of Funds 0.75% 0.81% -0.06% -7% Fed Funds 0.25% 0.25% = : FULTON FINANCIAL CORPORATION
Slide 55: Projected cash flows and rates
$800 2.50% $726 $700 $692. + 2.25% y 2.00% $600 | 1.75% > + 150% ® » 1.25% & Hy fa) 22 e300 ~ 100% 9 as 0.96 Fi o~ - 0.75% $200 a 0.50% $100 0.25% $o + * 0.00% 32012 402012 102013 202013 FULTON FINANCIAL CORPORATION
Slide 56: Average loans by type
Q2 2012 Qi 2012 $ % Comm'l Mort (dollars in millions) $ 4635 $ 4,620 $ 15 0% Commercial 3,530 3,585 (55) -2% Home Equity 1,600 1,610 (10) -1% Resid Mort 1,180 1,140 40 4% Construction 640 640 - 0% Consumer/ Other 380 385 (5) -1% _ Total Loans $ 11,965 $ 11,980 $ (15) O0%- FULTON FINANCIAL CORPORATIO
Slide 57: Summary of Larger Loans
57 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 $470,776 Loans and correspo
Slide 58: Average Loan Growth
Average Loan Growth (vs. prior year period) *
Slide 59: Net Charge-offs (YTD June 2012)
Net Charge-offs (YTD June 2012) *
Slide 60: Net Charge-Offs To Average Loans
Net Charge-Offs To Average Loans *
Slide 61: Allowance for Loan Losses to Non-accrual Loans
Allowance for Loan Losses to Non-accrual Loans *
Slide 62: Commercial Loans by Industry
Commercial Loans by Industry *
Slide 63: Loan Distribution by State
Loan Distribution by State (6/30/12) *
Slide 64: Residential Mortgages
Residential Mortgages (6/30/12) *
Slide 65: Fulton Mortgage Company
Fulton Mortgage Company 78% Available for Sale GOS Spread 1.42% GOS Spread 1.30% GOS Spread 1.55% GOS Spread 1.66% 84% Available for Sale 83% Available for Sale 71% Available for Sale 86% Available for Sale GOS Spread 1.58% 69% Available for Sale ($ in thousands) 65
Slide 66: Residential Mortgage Repurchase Activity
Residential Mortgage Repurchase Activity First & Second Quarter: 2012 – Servicing Retained Repurchased $ 3,550,000. 2012 – Servicing Released Repurchased $ 610,000. *
Slide 67: Loans and allowance by state
Ending % of NPL Allowance Balance Total Balance Allocations (dollars in thousands) Pennsylvania $2,510,000 70.9% $ 43,900 $ 38,620 New Jersey 510,000 14.4% 14,620 23,410 Maryland 300,000 8.5% 5,510 4,750 Virginia 180,000 5.1% 3,740 4,510 Delaware 40,000 1.1% 200 640 $3,540,000 $ 67,970 $ 71,930 FULT
Slide 68: Commercial Real Estate Loans
Commercial Real Estate Loans (6/30/12) *
Slide 69: Construction Loans
Construction Loans (6/30/12) *
Slide 70: Construction Loans by Type
Construction Loans by Type (6/30/12) *
Slide 71: Shared National Credits
Shared National Credits (6/30/12) *
Slide 72: Troubled Debt Restructurings
Troubled Debt Restructurings * Note: Excludes non-accrual TDRs
Slide 73: Investment Portfolio
Investment Portfolio (06-30-12) * 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 $101.48 Book Price $102.12
Slide 76: Investment Portfolio – Transactions
Investment Portfolio – Transactions (2nd Quarter 2012) ($ 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 2012-09-05
Fulton Financial — Investor Presentation (September 2012) on 6ix