Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2012)
81 slides from Fulton Financial's investor presentation, Nov 26, 2012
Slide 1: Investor Presentation
Investor Presentation Data as of September 30, 2012 Ticker Symbol: FULT (NASDAQ) Exhibit 99.1
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: 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
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
Slide 5: Goals and Priorities: EPS 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 0% Securities Gains 1,538 (1,496) -97% Non-Interest Expenses (110,043) (
Slide 7: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION
Slide 8: Income Statement Summary (Nine Months Ended September 30th)
Income Statement Summary (Nine Months Ended September 30 th ) $ % (dollars in thousands, except per-share data) Net Interest Income 412,106 $ 421,701 $ (9,595) $ -2% Loan Loss Provision (76,500) (105,000) 28,500 -27% Non-Interest Income 154,217 137,872 16,345 12% Securities Gains 2,831 1,507 1,324 8
Slide 9: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION
Slide 10: Ending Loans
Ending Loans Q3 2012 Q3 2011 $ % (dollars in millions) Comm'l Mort 4,633 $ 4,491 $ $ 3% Commercial 3,508 3,690 (182) -5% Home Equity 1,603 1,631 (28) -2% Resid Mort 1,214 1,041 17% Construction (51) -8% Consumer/Other (16) -4% Total Loans 11,933 $ 11,895 $ $ 0%
Slide 11: Diluted EPS
Diluted EPS $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 12: Non-Interest Income (in millions)
Non-Interest Income (in millions) $- $40 $80 $120 $160 $200 YTD Sep YTD Dec CAGR = 6.4% (2002-2011)
Slide 13: 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 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) -2% De
Slide 14: Non-Interest Income (Nine Months Ended September 30th)
Non-Interest Income (Nine Months Ended September 30 th ) $ % (dollars in thousands) Mort. Banking Income 31,787 $ 19,454 $ 12,333 $ 63% Invt Mgt & Trust 28,628 27,756 3% Overdraft & NSF Fees 24,612 23,988 3% Service Charges 13,060 10,880 2,180 20% Merchant Fees 9,363 7,124 2,239 31% Cash Mgt Fees 8,
Slide 15: 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 16: 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 17: 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 4% Data Proc. & Software 6,287 6,031 4% Outside Services 4,996 4,476 12% FDIC Insurance 3,029 3,002 1% Professional Fees 2,729 2,984 (255) -9% Supplies &
Slide 18: Priority Resource Commitments
Priority Resource Commitments Asset Quality Improvement Core Platform Conversion Enterprise-wide Risk Management and Compliance
Slide 19: Peer Group
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 Ban
Slide 20: More Efficient Than Peers
More Efficient Than Peers 57.1 62.9 63.0 50.0 52.0 54.0 56.0 58.0 60.0 62.0 64.0 66.0 YTD FULT Peer Top 50* * 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 21: Goals and Priorities: Improve Return on Assets
Goals and Priorities 2. Improve Our Return on Assets Q3/12: 1.02% YTD 9/30/12: 0.98%
Slide 22: ROA Growth
ROA Growth 0.98 0.88 0.93 -0.40 0.00 0.40 0.80 1.20 1.60 YTD FULT Peer Top 50
Slide 23: ROA and Assets, by Bank
ROA and Assets, by Bank Return on Average Assets Assets 9Months Year ($ Millions) 09/30/12 Lafayette Ambassador Bank 1,406 $ 1.56% 1.48% FNB Bank, NA 1.24% 1.46% Fulton Bank, NA 9,041 1.29% 1.40% Swineford National Bank 1.25% 1.60% The Columbia Bank 2,025 0.92% 0.75% Fulton Bank of New Jersey 3,334
Slide 24: Goals and Priorities: Spread Management / Net Interest Margin
Goals and Priorities 3. Spread Management / Net Interest Margin Q3/12: 3.74% Cost of interest bearing liabilities: 0.90% Yield on earning assets: 4.42%
Slide 25: Net Interest Margin
Net Interest Margin 3.74 3.48 3.42 3.00 3.25 3.50 3.75 4.00 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q3 12 FULT Peer Top 50
Slide 26: Interest Rate Shocks (9/30/12)
Interest Rate Shocks (9/30/12) 6 month cumulative gap: 1.15 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 27: Deposit Mix: Q1 2009 vs Q3 2012
Q1 2009 @Non-Int DDA int DDA Money Mkt Savings Time 50% 11% Q3 2012 @Non-Int DDA aint DDA Money Mkt Savings uTime 29% FULTON FINANCIAL CORPORATION
Slide 28: Goals and Priorities: Improve Asset Quality
Goals and Priorities 4. Improve Asset Quality
Slide 29: Non-accrual Loans to Loans
Non-accrual Loans to Loans 1.56 1.30 1.36 0.00 1.00 2.00 3.00 Q3 12 FULT Peer Top 50
Slide 30: Allowance for Loan Losses to Loans
Allowance for Loan Losses to Loans 1.96 1.65 1.72 0.80 1.10 1.40 1.70 2.00 2.30 2.60 Q3 12 FULT Peer Top 50
Slide 31: Non-performing Loans (9/30/12)
Non-performing Loans* (9/30/12) Comm'l Comm'l Mortgage Constr. Res. Mtg. Other Total (in thousands) Pennsylvania 50,294 $ 18,451 $ 9,706 $ 8,078 $ 6,237 $ 92,766 $ Maryland 4,845 12,198 9,510 1,687 1,718 29,958 New Jersey 14,147 26,013 10,172 6,633 7,233 64,198 Virginia 4,553 6,762 3,354 6,908 22,28
Slide 32: Loan Delinquency Days
Loan Delinquency 90 Days Total 90 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, leasing and other 1.07% 2.92% 0.99%
Slide 33: Construction Exposure
Construction Exposure Construction Loans / Total Loans 10.5% 8.2% 6.7% 5.1% 5.0%
Slide 34: Provision for Credit Losses
Provision for Credit Losses 25.5 $0 $20 $40 $60 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 35: Goals and Priorities: Deploy Capital Prudently
Goals and Priorities 5. Deploy Capital Prudently
Slide 36: Total Risk-Based Capital Ratio
Total Risk-Based Capital Ratio 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% Q3 12
Slide 37: Capital Adequacy (9/30/12 - estimate)
Capital Adequacy (9/30/12 - estimate) Well- FULT Capitalized Total Risk-Based Capital Ratio 15.40% 10.00% Tier 1 Risk-Based Capital Ratio 13.20% 6.00% Leverage Capital Ratio 10.70% 5.00%
Slide 38: Capital Adequacy vs. Basel III
Capital Adequacy vs. Basel III FULT (1) Basel III (2) Total Risk-Based Capital Ratio 14.60% 10.50% Tier 1 Risk-Based Capital Ratio 11.30% 8.50% Leverage Capital Ratio 9.50% 6.50% Common Equity Tier 1 Ratio 11.30% 7.00% (1) Estimates - based on proposed rules. Final rules, when issued, may differ fro
Slide 39: Tangible Book Value Per Share
Tangible Book Value Per Share $0.00 $2.00 $4.00 $6.00 $8.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 CAGR = 10.8%
Slide 40: 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 41: Deploying Capital
Deploying Capital Current Uses Support organic growth Increase our cash dividend Stock repurchase Potential Uses Acquisitions with right opportunities
Slide 42: FULT – Cash Dividend and Yield
FULT – Cash Dividend and Yield 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% $- $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 $0.07 $0.08 $0.09 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Cash Dividend per Share Yield CAGR (cash dividend) = 32.3%
Slide 43: Stock Repurchase Program
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
Slide 44: Goals and Priorities: Leverage Market Opportunities
Goals and Priorities 6. Leverage Market Opportunities
Slide 45: Superior Customer Experience
Superior Customer Experience CARE, LISTEN, UNDERSTAND and DELIVER
Slide 46: Retail Customer Satisfaction
Retail Customer Satisfaction* Top 3 Box Satisfaction: 84% Delivery on our Promise: Top 3 Box 85% *Survey Sample Size: 4,897 customers
Slide 47: New Household Growth YTD
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)
Slide 48: Top County Market Share (6/30/12)
Top County Market Share (6/30/12) 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
Slide 49: Goals and Priorities: Profitable Organic / Acquisitive Growth
Goals and Priorities 7. Profitable Organic / Acquisitive Growth
Slide 50: Fulton's Six Banks
@ The Columbia Bank i FNB Bank @ Fulton Bank i Fulton Bank of New Jersey Lafayette Ambassador Bank @ Swineford National Bank FULTON FINANCIAL CORPORATION
Slide 51: ‘Warrington, Ape
‘Warrington, Ape $71,820 FULTON FINANCIAL CORPORATION
Slide 52: Acquisitive Growth
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
Slide 53: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com Version 2012-11-26
Slide 54: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION
Slide 55: Average Deposits
Average Deposits Q3 2012 Q2 2012 $ % (dollars in millions) Nonint DDA 2,836 $ 2,669 $ $ 6% Int DDA 2,608 2,485 5% Savings/MMDA 3,364 3,293 2% Total Core Deposits 8,808 8,447 4% CD's 3,658 3,791 (133) -4% Cash Management (34) -9% Total Deposits 12,804 $ 12,610 $ $ 2%
Slide 56: Interest Rates
Interest Rates Q3 2012 Q2 2012 Change % Net Interest Margin 3.74% 3.78% -0.04% -1% Yield on Earning Assets 4.42% 4.48% -0.06% -1% Cost of Funds 0.72% 0.75% -0.03% -4% Fed Funds 0.25% 0.25% - -
Slide 57: $800 2.00% $726 ° $700 1.75% $600 1.50% $500 1.25% z $400 1.00% &
$800 2.00% $726 ° $700 1.75% $600 1.50% $500 1.25% z 3 $400 1.00% & 8 $300 0.75% = 2 $200 0.50% & $100 0.25% $0 0.00% 4Q2012 192013 2Q2013 3Q2013 FULTON FINANCIAL CORPORATION
Slide 58: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION
Slide 59: Average Loans
Average Loans Q3 2012 Q2 2012 $ % (dollars in millions) Comm'l Mort 4,603 $ 4,634 $ (31) $ -1% Commercial 3,530 3,530 - 0% Home Equity 1,597 1,600 (3) 0% Resid Mort 1,201 1,180 2% Construction (34) -5% Consumer/Other 0% Total Loans 11,920 $ 11,966 $ (46) $ 0%
Slide 60: Summary of Larger Loans (9/30/12)
Summary of Larger Loans (9/30/12) 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
Slide 61: Average Loan Growth (vs. prior year period)
Average Loan Growth (vs. prior year period) 0.5 3.4 5.3 -3.0 0.0 3.0 6.0 9.0 12.0 YTD 09/12 FULT Peer Top 50
Slide 62: Net Charge-offs (YTD September 2012)
Net Charge-offs (YTD September 2012) Comm'l Comm'l Mortgage Constr. Res. Mtg. Other Total (in thousands) Pennsylvania 13,480 $ 14,808 $ 4,979 $ $ 2,976 $ 36,525 $ Maryland 2,333 3,333 2,451 1,772 10,537 New Jersey 9,192 17,059 7,353 2,043 36,331 Virginia 3,698 7,925 1,015 14,325 Delaware 1,691 26,11
Slide 63: Net Charge-Offs To Average Loans
Net Charge-Offs To Average Loans 1.11 0.57 0.57 0.00 0.50 1.00 1.50 YTD 09/12 FULT Peer Top 50
Slide 64: Allowance for Loan Losses to Non-accrual Loans
Allowance for Loan Losses to Non-accrual Loans 125.9 109.9 118.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 Q3 12 FULT Peer Top 50
Slide 65: Commercial Loans by Industry
Commercial Loans by Industry Industry % Services 17.7 Manufacturing 15.8 Construction 11.9 Wholesale 9.9 Retail 8.5 Other 8.0 Health Care 7.5 Real Estate 7.4 Agriculture 5.5 Transportation 3.0 Arts & Entertainment 2.5 Financial Services 2.3 Total 100.0
Slide 66: Loan Distribution by State (9/30/12)
Loan Distribution by State (9/30/12) Ending % of Variance to 9/30/11 Balance Total $ % (dollars in thousands) Pennsylvania 7,124,012 $ 59.6% 211,197 $ 3% New Jersey 2,297,259 19.3% (100,791) -4% Maryland 1,201,613 10.1% (51,509) -4% Virginia 931,105 7.8% (36,117) -4% Delaware 379,012 3.2% 14,565 4%
Slide 67: Residential Mortgages (9/30/12)
Residential Mortgages (9/30/12) Ending % of NPL Allowance Balance Total Balance Allocations (dollars in thousands) Pennsylvania 605,947 $ 50.0% 8,078 $ 6,819 $ Virginia 225,863 18.6% 6,908 12,695 New Jersey 166,398 13.7% 6,633 4,889 Maryland 137,730 11.3% 1,687 2,500 Delaware 77,893 6.4% 1,604 1,953
Slide 68: Fulton Mortgage Company
Fulton Mortgage Company ($ in thousands) $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $- $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Originations Rate Locks Gain On Sale 1.42% GOS
Slide 69: 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 70: C&I Loans (9/30/12)
C&I Loans (9/30/12) Ending % of NPL Allowance Balance Total Balance Allocations (dollars in thousands) Pennsylvania 2,497,526 $ 71.2% 50,294 $ 34,332 $ New Jersey 508,297 14.5% 14,147 24,361 Maryland 296,225 8.4% 4,845 5,066 Virginia 165,220 4.7% 4,553 3,221 Delaware 40,578 1.2% 3,507,846 $ 73,879 $
Slide 71: Commercial Real Estate Loans (9/30/12)
Commercial Real Estate Loans (9/30/12) Ending % of NPL Allowance Balance Total Balance Allocations (dollars in thousands) Pennsylvania 2,517,564 $ 54.3% 18,451 $ 24,759 $ New Jersey 1,202,520 26.0% 26,013 33,932 Maryland 409,443 8.8% 12,198 6,438 Virginia 345,895 7.5% 6,762 4,253 Delaware 157,087 3.
Slide 72: Construction Loans (9/30/12)
Construction Loans (9/30/12) Ending % of NPL Allowance Balance Total Balance Allocations (dollars in thousands) Pennsylvania 310,893 $ 52.1% 9,706 $ 5,398 $ Virginia 122,441 20.5% 3,354 3,692 New Jersey 77,523 13.0% 10,172 5,892 Maryland 72,573 12.1% 9,510 6,174 Delaware 13,928 2.3% - 597,358 $ 32,7
Slide 73: Construction Loans by Type (9/30/12)
Construction Loans by Type (9/30/12) Ending % of Balance Total (dollars in thousands) Commercial Residential 312,658 $ 52.4% Commercial 218,828 36.6% Other 65,872 11.0% 597,358 $
Slide 74: Shared National Credits (9/30/12)
Shared National Credits (9/30/12) Ending Balance (dollars in thousands) Commercial 83,565 $ Commercial Real Estate 63,386 Total Outstanding 146,951 $ Delinquency: 2.6%
Slide 75: Troubled Debt Restructurings
Troubled Debt Restructurings 09/30/12 12/31/11 (in thousands) Residential Mtg 36,946 $ 32,330 $ C&I/Comm'l Mtg 36,993 26,010 Construction 10,525 7,650 Consumer/other 85,219 $ 66,180 $ Note: Excludes non-accrual TDRs
Slide 76: Investment Portfolio
Investment Portfolio (09 - 30 - 12) Book Yield (monthly) 3.49% ENDING WEIGHTED BALANCE AVG. LIFE (in millions) Agency mortgage-backed securities 1,022.2 $ 2.93 Agency collateralized mortgage obligations 1,014.8 1.95 Municipal bonds 293.2 6.25 Auction rate securities 188.4 4.92 Corporate & trust pref
Slide 77: Projected Investment Security Cash Flows
Projected Investment Security Cash Flows
Slide 78: Investment MBS & CMO Cash Flows (2011 - 2012)
Investment MBS & CMO Cash Flows (2011 - 2012) Book Price $101.51 Book Price $101.87 Book Price $102.12 $112,300,966 $181,596,288 $157,060,613 $163,241,031 $179,433,591 $1,927,653 $4,883,560 $4,074,329 $3,998,272 $4,591,601 $0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,0
Slide 79: Investment Portfolio – Transactions (3rd Quarter 2012)
Investment Portfolio – Transactions (3 Quarter 2012) RD ($ in Thousands) Purchases Amount Yield Weighted Avg. Life US Treasury $ 0.17% 0.66 MBS 10,678 1.56% 3.75 CMO - Agency 135,465 1.44% 3.41 Municipal Bans 6,453 1.45% 0.51 Municipal Bonds 14,942 3.57% 4.90 Corporate / Trust Preferred 1,000 5.38%
Slide 80: Projected FHLB Advance Maturities
Projected FHLB Advance Maturities
Slide 81: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com Version 2012-11-26
Fulton Financial — Investor Presentation (November 2012) on 6ix