Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Shareholder Meeting (May 2018)
75 slides from Fulton Financial's shareholder meeting presentation, May 21, 2018
Slide 1: Annual Shareholders' Meeting May 21, 2018
ANNUAL SHAREHOLDERS’ MEETING May 21, 2018 1
Slide 2: Reminder: vote your shares
REMINDER: If you have not yet voted your shares, please do so now by visiting the Judge of Election table at the side of the room. 2
Slide 3: 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 4: Rules of Conduct for Today's Meeting
RULES OF CONDUCT FOR TODAY’S MEETING • Large bags, cameras, cell phones, recording devices and other electronic devices are not permitted at, or to be used during, the meeting. • The display of placards and/or signs is prohibited. • Questions from shareholders should be directed to the Chairman of t
Slide 5: Welcome and Opening Remarks
Phil Wenger, Chairman and CEO WELCOME AND OPENING REMARKS 5
Slide 6: Today's Agenda
TODAY’S AGENDA • Business Meeting • Proposals: • Election of Directors • Say on Pay • Ratification of appointment of independent auditor • Introductions • Results of Voting • Conclusion of Business Meeting • Management Presentation • Questions and Answers 6
Slide 7: Board of Directors
BOARD OF DIRECTORS 7
Slide 8: Board of Directors: Lisa Crutchfield
BOARD OF DIRECTORS Lisa Crutchfield 8
Slide 9: Board of Directors: Denise Devine
BOARD OF DIRECTORS Denise Devine 9
Slide 10: Board of Directors: Pat Freer
BOARD OF DIRECTORS Pat Freer 10
Slide 11: Board of Directors: George Hodges
BOARD OF DIRECTORS George Hodges 11
Slide 12: Board of Directors: Al Morrison
BOARD OF DIRECTORS Al Morrison 12
Slide 13: Board of Directors: Rob Moxley
BOARD OF DIRECTORS Rob Moxley 13
Slide 14: Board of Directors: Scott Smith
BOARD OF DIRECTORS Scott Smith 14
Slide 15: Board of Directors: Scott Snyder
BOARD OF DIRECTORS Scott Snyder 15
Slide 16: Board of Directors: Ron Spair
BOARD OF DIRECTORS Ron Spair 16
Slide 17: Board of Directors: Mark Strauss
BOARD OF DIRECTORS Mark Strauss 17
Slide 18: Board of Directors: Ernie Waters
BOARD OF DIRECTORS Ernie Waters 18
Slide 19: Senior Management
SENIOR MANAGEMENT 19
Slide 20: Retirements: Phil Rohrbaugh, Craig Roda
Retirements Phil Rohrbaugh Craig Roda 20
Slide 21: Senior Management: Mark McCollom
SENIOR MANAGEMENT Mark McCollom 21
Slide 22: Senior Management: Curt Myers
SENIOR MANAGEMENT Curt Myers 22
Slide 23: Senior Management: Meg Mueller
SENIOR MANAGEMENT Meg Mueller 23
Slide 24: Senior Management: Betsy Chivinski
SENIOR MANAGEMENT Betsy Chivinski 24
Slide 25: Senior Management: Angie Sargent
SENIOR MANAGEMENT Angie Sargent 25
Slide 26: Senior Management: Dave Campbell
SENIOR MANAGEMENT Dave Campbell 26
Slide 27: Senior Management: Angela Snyder
SENIOR MANAGEMENT Angela Snyder 27
Slide 28: Senior Management: Dan Stolzer
SENIOR MANAGEMENT Dan Stolzer 28
Slide 29: Senior Management: Bernadette Taylor
SENIOR MANAGEMENT Bernadette Taylor 29
Slide 30: Report of the Judge of Election
REPORT OF THE JUDGE OF ELECTION 30
Slide 31: Annual Shareholders' Meeting May 21, 2018
ANNUAL SHAREHOLDERS’ MEETING May 21, 2018 31
Slide 32: A Look Back and a Look Ahead
Phil Wenger, Chairman and CEO A LOOK BACK AND A LOOK AHEAD 32
Slide 33: Pennsylvania, New Jersey, Delaware, Maryland, Virginia
Pennsylvania New Jersey Delaware Maryland Virginia 33
Slide 34: Basic Facts (at 3/31/18)
BASIC FACTS (AT 3/31/18) Banking offices: 243 Asset size: $19.9 billion Team members: Nearly 3,700 Shares outstanding: 175.4 million Market capitalization: $3.1 billion Book value per share: $12.74 Tangible book value per share*: $9.71 *Non-GAAP based financial measure. For a reconciliation to the m
Slide 35: Financial Performance
FINANCIAL PERFORMANCE 35
Slide 36: 2017 Highlights
2017 HIGHLIGHTS(1) Increased diluted earnings per share Record year of revenues and net income, excluding tax charge(2) Growth in loans and deposits Stable asset quality Pre-provision net revenue(3) increased Surpassed $20 billion in total assets (1) Comparisons are to 2016. (2) In the f
Slide 37: Return on Average Assets, Tangible Equity & Average Equity
RETURN ON AVERAGE ASSETS, TANGIBLE EQUITY & AVERAGE EQUITY Return on Average Assets Return on Tangible Equity Return on Average Equity 1.00% 14.0% 10.0% 1.00% 9.34% 0.98% 12.30% 0.90% 12.0% 7.83% 0.88% 11.57% 8.0% 0.80% 10.0% 10.33% 7.81% 0.70% 8.0% 6.0% 2013 2014 2015 2016 2017 2013 2014 2015 2016
Slide 38: Average Loan and Average Deposit Growth
AVERAGE LOAN AND AVERAGE DEPOSIT GROWTH Average Loan Growth Average Deposit Growth 13.0% 13.0% 11.0% 9.4% 11.0% 9.4% 9.0% 9.0% 7.8% 6.1% 7.0% 7.0% 5.0% 6.0% 5.0% 6.0% 3.0% 3.0% 1.0% 1.0% -1.0% -1.0% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 FULT Peer^ Top 50* FULT Peer^ Top 50* Note: 2013 th
Slide 39: Deposit Portfolio Composition
DEPOSIT PORTFOLIO COMPOSITION Average demand and savings were up 8.1% compared to 2016; while total average deposits were up 6.1%. Year Ended Year Ended December 31, 2016 December 31, 2017 10% 19% 9% 18% 18% 20% 29% 28% 24% 25% Note: Deposit composition is based on average balances for the periods i
Slide 40: Non-Performing Loans & NPLs to Loans
NON-PERFORMING LOANS (NPLS) & NPLS TO LOANS ($ IN MILLIONS) $175.0 3.00% $154.3 $150.0 $144.8 $138.5 $131.6 $134.8 2.50% $125.0 2.00% $100.0 1.50% $75.0 1.00% $50.0 1.21% 1.05% 1.06% 0.90% 0.85% $25.0 0.50% $- 0.00% 2013 2014 2015 2016 2017 NPLs NPLs/Loans Note: NPLs consist of nonaccrual loans and
Slide 41: Provision for Credit Losses
PROVISION FOR CREDIT LOSSES ($ IN MILLIONS) $50.0 $40.5 $40.0 $30.0 $23.3 $20.0 $12.5 $13.2 $10.0 $2.3 $- 2013 2014 2015 2016 2017 41
Slide 42: Net Interest Margin
NET INTEREST MARGIN 4.0% 3.8% 3.6% 3.48% 3.4% 3.2% 3.28% 3.0% 3.16% 2.8% 2.6% 2013 2014 2015 2016 2017 FULT Peer^ Top 50* Note: Fully-taxable equivalent. ˄ See “Appendix” for listing of 2017 Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size as of D
Slide 43: Efficiency Ratio
EFFICIENCY RATIO 70.0% 68.0% 66.0% 64.0% 64.5% 62.0% 62.6% 60.0% 58.0% 59.3% 56.0% 54.0% 2013 2014 2015 2016 2017 FULT Peer^ Top 50* Note: The efficiency ratio is a non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slides titled
Slide 44: Capital Strength
CAPITAL STRENGTH Regulatory Capital Ratios & TCE Ratio 16.0% 15.0% 14.7% 13.1% 13.2% 13.2% 13.0% 12.3% 12.0% 10.4% 10.2% 10.4% 9.3% 8.8% 8.7% 8.6% 8.7% 8.0% 4.0% 0.0% 2013 2014 2015 2016 2017 Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio TCE Ratio (1) (1) Non-GAAP based financial me
Slide 45: Capital Deployment
CAPITAL DEPLOYMENT 2017: • Increased quarterly cash dividend by $0.01 to $0.11 • Paid a $0.03 special dividend in 4th quarter March 2018: • Increased quarterly cash dividend by $0.01 to $0.12 45
Slide 46: A Sustainable Payout
A SUSTAINABLE PAYOUT CAGR (2) = 10.1% Cash Dividend Per Common Share & Yield $0.50 $0.47 4.5% $0.45 $0.41 4.0% $0.38 $0.40 3.5% $0.32 $0.34 $0.35 3.0% $0.30 2.92% 2.5% 2.75% $0.25 2.63% 2.44% 2.0% $0.20 2.18% 1.5% $0.15 $0.10 1.0% $0.05 0.5% $0.00 0.0% 2013 2014 2015 2016 2017 Cash Dividend Yield (1
Slide 47: Share Repurchase Programs
SHARE REPURCHASE PROGRAMS • Repurchased 31.9 million shares (June 2012 – December 2017) • $31.4 million remaining in current board-authorized share repurchase program 47
Slide 48: 1st Quarter 2018 Performance
1ST QUARTER 2018 PERFORMANCE • Diluted earnings per share: $0.28 • 47.4% increase linked quarter • 12.0% increase year over year • Return on assets: 1.01% • Return on equity: 9.02% • Return on tangible equity(1): 11.85% • Average loans increased 5.4% year over year • Average demand and savings depos
Slide 49: Fulton Financial Stock Performance and Analysts' Recommendations
FULTON FINANCIAL STOCK PERFORMANCE AND ANALYSTS’ RECOMMENDATIONS 49
Slide 50: Stock Performance
STOCK PERFORMANCE Stock Price Change FULT Peer (1) Large Banks (2) December 31, 2014 – 44.82% 35.38% 42.30% December 31, 2017 December 31, 2016 – -4.79% -0.81% 20.10% December 31, 2017 (1) See “Appendix” for listing of 2017 Peer Group banks (2) Price change of Large Banks, which consist of: Bank of
Slide 51: Analysts' Recommendations (as of 4/18/18)
ANALYSTS’ RECOMMENDATIONS (AS OF 4/18/18) • Barclays Capital, Inc. Underweight • Boenning & Scattergood, Inc. Neutral • D.A. Davidson & Co. Neutral • Hovde Group, LLC Market Perform • Jefferies LLC Hold • Keefe, Bruyette & Woods, Inc. Market Perform • Merion Capital Group Neutral • Piper Jaffray & C
Slide 52: The Story Behind the Numbers
THE STORY BEHIND THE NUMBERS 52
Slide 53: Key Goals and Objectives
KEY GOALS AND OBJECTIVES: • Sustaining our BSA/AML program • Consolidating subsidiary banks • Controlling expenses • Enhancing shareholder value • Optimizing customer delivery channels • Investing in talent • Advancing digital and other technologies • Promoting home ownership to low- and moderate-in
Slide 54: Bank Secrecy Act/Anti-Money Laundering
BANK SECRECY ACT/ ANTI-MONEY LAUNDERING 54
Slide 55: Progress Is Being Made
PROGRESS IS BEING MADE • Enforcement actions terminated at: 55
Slide 56: Consolidating Our Banking Charters
CONSOLIDATING OUR BANKING CHARTERS 56
Slide 57: Pennsylvania (Post-Charter Consolidation)
Pennsylvania (Post-Charter Consolidation) New Jersey Delaware Maryland Virginia 57
Slide 58: Optimizing Customer Delivery Channels
OPTIMIZING CUSTOMER DELIVERY CHANNELS 58
Slide 59: Three Main Business Areas
THREE MAIN BUSINESS AREAS . Focused on the needs of specific customer segments Consumer Shared Commercial Services 59
Slide 60: Consumer: Branch Optimization
CONSUMER: BRANCH OPTIMIZATION • Transforming the environment • More reflective of customer needs/ market opportunities • Developed team in new ways • Transformed physical space • Increasing transaction automation 60
Slide 61: Commercial: Specialized Banking
COMMERCIAL: SPECIALIZED BANKING • Focus on specific industries and business segments • Expanding in commercial real estate, municipalities and health care • Enhanced training and support for staff 61
Slide 62: Creating an Outstanding Customer Experience
CREATING AN OUTSTANDING CUSTOMER EXPERIENCE 62
Slide 63: Deeper and Broader Use of Data and Technology
DEEPER AND BROADER USE OF DATA AND TECHNOLOGY 63
Slide 64: New Fulton Bank Website
NEW FULTON BANK WEBSITE • Mobile-friendly • Improved user experience • Ability to tailor content to each user’s interests www.fultonbank.com 64
Slide 65: Serving Low- and Moderate-Income and Minority Individuals and Communities
SERVING LOW- AND MODERATE- INCOME AND MINORITY INDIVIDUALS AND COMMUNITIES 65
Slide 66: Partners in Serving Our Community
PARTNERS IN SERVING OUR COMMUNITY • Credit and money management counseling • Homebuyer financial assistance • Offices open in: • Reading, PA • Baltimore, MD • Opening soon in: • Philadelphia, PA 66
Slide 67: Serving Low- and Moderate-Income and Minority Individuals and Communities
SERVING LOW- AND MODERATE- INCOME AND MINORITY INDIVIDUALS AND COMMUNITIES 67
Slide 68: Thank You to Our Shareholders!
THANK YOU TO OUR SHAREHOLDERS! 68
Slide 69: Questions & Answers May 21, 2018
QUESTIONS & ANSWERS May 21, 2018 69
Slide 70: Annual Shareholders' Meeting May 21, 2018
ANNUAL SHAREHOLDERS’ MEETING May 21, 2018 70
Slide 71: Appendix
APPENDIX 71
Slide 72: 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 73: Non-GAAP Reconciliation (Continued)
NON-GAAP RECONCILIATION (CONTINUED) Y ear End ed D ec 3 1, 2 0 17 2 0 16 2 0 15 2 0 14 2 0 13 (dollars in thousands) T ang ib le C o mmo n Eq uit y t o T ang ib le A sset s ( T C E R at io ) Shareholders' equity $ 2,229,857 $ 2,121,115 $ 2,041,894 $ 1,996,665 $ 2,063,187 Less: Intangible assets (531
Slide 74: 2017 Peer Group
2017 PEER GROUP(1) BancorpSouth Bank Trustmark Corporation Commerce Bancshares, Inc. UMB Financial Corporation F.N.B. Corporation Umpqua Holdings Corporation Hancock Holding Company United Bankshares, Inc. IBERIABANK Corporation Valley National Bancorp MB Financial, Inc. Webster Financial Corporatio
Slide 75: 2018 Peer Group
2018 PEER GROUP(1) BancorpSouth Bank Provident Financial Services, Inc. Commerce Bancshares, Inc. TCF Financial Corporation First Midwest Bancorp, Inc. Trustmark Corporation F.N.B. Corporation UMB Financial Corporation Hancock Holding Company Umpqua Holdings Corporation IBERIABANK Corporation Union