Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Shareholder Meeting (May 2019)
72 slides from Fulton Financial's shareholder meeting presentation, May 21, 2019
Slide 1: Annual Shareholders' Meeting May 21, 2019
ANNUAL SHAREHOLDERS’ MEETING May 21, 2019 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 • Directors’ Equity Participation Plan • Say on Pay Resolution • Ratification of appointment of KPMG, LLC as Fulton’s independent auditor • Introductions • Results of Voting • Conclusion of Business Meeting • Management Presentat
Slide 7: Board of Directors
BOARD OF DIRECTORS 7
Slide 8: Board of Directors – New Nominee Jennifer Craighead Carey
BOARD OF DIRECTORS – NEW NOMINEE Jennifer Craighead Carey 8
Slide 9: Board of Directors – New Nominee Steven Etter
BOARD OF DIRECTORS – NEW NOMINEE Steven Etter 9
Slide 10: Board of Directors – New Nominee Carlos Graupera
BOARD OF DIRECTORS – NEW NOMINEE Carlos Graupera 10
Slide 11: Board of Directors – New Nominee Curt Myers
BOARD OF DIRECTORS – NEW NOMINEE Curt Myers 11
Slide 12: Board of Directors Lisa Crutchfield
BOARD OF DIRECTORS Lisa Crutchfield 12
Slide 13: Board of Directors Denise Devine
BOARD OF DIRECTORS Denise Devine 13
Slide 14: Board of Directors Pat Freer
BOARD OF DIRECTORS Pat Freer 14
Slide 15: Board of Directors George Hodges
BOARD OF DIRECTORS George Hodges 15
Slide 16: Board of Directors Rob Moxley
BOARD OF DIRECTORS Rob Moxley 16
Slide 17: Board of Directors Scott Snyder
BOARD OF DIRECTORS Scott Snyder 17
Slide 18: Board of Directors Ron Spair
BOARD OF DIRECTORS Ron Spair 18
Slide 19: Board of Directors Mark Strauss
BOARD OF DIRECTORS Mark Strauss 19
Slide 20: Board of Directors Ernie Waters
BOARD OF DIRECTORS Ernie Waters 20
Slide 21: Board of Directors – Retiring Al Morrison
BOARD OF DIRECTORS – RETIRING AT ANNUAL MEETING Al Morrison 21
Slide 22: Board of Directors – Retiring Scott Smith
BOARD OF DIRECTORS – RETIRING AT ANNUAL MEETING Scott Smith 22
Slide 23: Senior Management
SENIOR MANAGEMENT 23
Slide 24: Senior Management Curt Myers
SENIOR MANAGEMENT Curt Myers 24
Slide 25: Senior Management Dave Campbell
SENIOR MANAGEMENT Dave Campbell 25
Slide 26: Senior Management Betsy Chivinski
SENIOR MANAGEMENT Betsy Chivinski 26
Slide 27: Senior Management Mark McCollom
SENIOR MANAGEMENT Mark McCollom 27
Slide 28: Senior Management Meg Mueller
SENIOR MANAGEMENT Meg Mueller 28
Slide 29: Senior Management Angie Sargent
SENIOR MANAGEMENT Angie Sargent 29
Slide 30: Senior Management Angela Snyder
SENIOR MANAGEMENT Angela Snyder 30
Slide 31: Senior Management Dan Stolzer
SENIOR MANAGEMENT Dan Stolzer 31
Slide 32: Senior Management Bernadette Taylor
SENIOR MANAGEMENT Bernadette Taylor 32
Slide 33: Report of the Judge of Election
REPORT OF THE JUDGE OF ELECTION 33
Slide 34: Annual Shareholders' Meeting May 21, 2019
ANNUAL SHAREHOLDERS’ MEETING May 21, 2019 34
Slide 35: A Look Back and a Look Ahead
Phil Wenger, Chairman and CEO A LOOK BACK AND A LOOK AHEAD 35
Slide 36: Corporate Footprint
CORPORATE FOOTPRINT oe ME Fulton Bank, N. A. Lafayette Ambassador Bank The Columbia Bank 36
Slide 37: Basic Facts (at 3/31/19)
BASIC FACTS (AT 3/31/19) Banking offices: 230 Asset size: $21.0 billion Team members: ~3,600 Shares outstanding: 169.9 million Market capitalization: $2.6 billion Book value per share: $13.54 Tangible book value per share*: $10.39 *Non-GAAP based financial measure. For a reconciliation to the most c
Slide 38: Financial Performance
FINANCIAL PERFORMANCE 38
Slide 39: 2018 Highlights
2018 HIGHLIGHTS(1) Record year of revenues and net income Average loan growth of 3.8% Average demand and savings deposit growth of 2.6% Pre-provision net revenue(2) increased 12.2% Efficiency ratio(2) improved to 63.8% (1) Comparisons are to 2017 (2) Non-GAAP based financial measure. Pleas
Slide 40: Return on Average Assets, Tangible Equity & Average Equity
RETURN ON AVERAGE ASSETS, TANGIBLE EQUITY & AVERAGE EQUITY Return on Average Assets Return on Tangible Equity Return on Average Equity 1.40% 1.33% 16.26% 12.0% 11.42% 16.0% 1.20% 14.0% 10.0% 9.24% 1.18% 14.68% 1.00% 1.03% 12.0% 12.09% 8.0% 8.91% 0.80% 10.0% 0.60% 8.0% 6.0% 2014 2015 2016 2017 2018 2
Slide 41: Average Loan and Average Deposit Growth
AVERAGE LOAN AND AVERAGE DEPOSIT GROWTH Average Loan Growth Average Deposit Growth 13.0% 13.0% 11.0% 11.0% 9.0% 7.1% 9.0% 7.0% 7.0% 6.4% 5.3% 5.0% 5.0% 3.6% 3.8% 3.0% 3.0% 2.3% 1.0% 1.0% -1.0% -1.0% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 FULT Peer^ Top 50* FULT Peer^ Top 50* Note: 2014 th
Slide 42: Non-Performing Loans & NPLs to Loans
NON-PERFORMING LOANS (NPLS) & NPLS TO LOANS ($ IN MILLIONS, AS OF DECEMBER 31 OF THE INDICATED YEARS) $175.0 3.00% $150.0 $138.5 $144.8 $139.7 $131.6 $134.8 2.50% $125.0 2.00% $100.0 1.50% $75.0 1.00% $50.0 1.06% 1.05% 0.90% 0.86% $25.0 0.85% 0.50% $- 0.00% 2014 2015 2016 2017 2018 NPLs NPLs/Loans N
Slide 43: Provision for Credit Losses
PROVISION FOR CREDIT LOSSES ($ IN MILLIONS) $50.0 $46.9 $40.0 $30.0 $23.3 $20.0 $12.5 $13.2 $10.0 $2.3 $- 2014 2015 2016 2017 2018 43
Slide 44: Net Interest Margin
NET INTEREST MARGIN 4.0% 3.8% 3.6% 3.57% 3.4% 3.40% 3.38% 3.2% 3.0% 2014 2015 2016 2017 2018 FULT Peer^ Top 50* Note: Fully-taxable equivalent. ˄ See “Appendix” for listing of 2018 Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size as of December 31
Slide 45: Efficiency Ratio
EFFICIENCY RATIO 70.0% 68.0% 66.0% 64.0% 63.8% 62.0% 60.0% 58.0% 58.0% 56.0% 56.8% 54.0% 2014 2015 2016 2017 2018 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 46: Capital Strength
CAPITAL STRENGTH Regulatory Capital Ratios & TCE Ratio 16.0% 14.7% 13.2% 13.2% 13.0% 12.7% 12.3% 12.0% 10.2% 10.4% 10.4% 10.2% 8.8% 8.7% 8.7% 8.6% 8.5% 8.0% 4.0% 0.0% 2014 2015 2016 2017 2018 Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio TCE Ratio (1) (1) Non-GAAP based financial me
Slide 47: Capital Deployment
CAPITAL DEPLOYMENT 2018: • Increased quarterly cash dividend by $0.01 to $0.12 • Paid a $0.04 special dividend in 4th quarter March 2019: • Increased quarterly cash dividend by $0.01 to $0.13 47
Slide 48: A Sustainable Payout
A SUSTAINABLE PAYOUT CAGR (2) = 11.2% Cash Dividend Per Common Share & Yield $0.55 $0.52 4.5% $0.47 $0.50 4.0% $0.45 $0.41 $0.38 3.5% $0.40 $0.34 3.36% 3.0% $0.35 $0.30 2.92% 2.5% 2.75% 2.63% $0.25 2.18% 2.0% $0.20 1.5% $0.15 1.0% $0.10 $0.05 0.5% $0.00 0.0% 2014 2015 2016 2017 2018 Cash Dividend Yi
Slide 49: Share Repurchase Programs
SHARE REPURCHASE PROGRAMS • During 2018, repurchased 6.0 million shares • $11.3 million remained available under existing program at December 31, 2018 • In March 2019, the board of directors approved an additional $100 million share-repurchase program 49
Slide 50: 1st Quarter 2019 Performance
1ST QUARTER 2019 PERFORMANCE • Diluted earnings per share: $0.33 • Unchanged linked quarter • 17.9% increase year over year • Return on assets: 1.11% • Return on equity: 10.15% • Return on tangible equity(1): 13.28% • Average loans increased 3.4% year over year • Average demand and savings deposits
Slide 51: Fulton Financial Stock Performance and Analysts' Recommendations
FULTON FINANCIAL STOCK PERFORMANCE AND ANALYSTS’ RECOMMENDATIONS 51
Slide 52: Stock Performance
STOCK PERFORMANCE Stock Price Change FULT Peer (1) Large Banks (2) December 31, 2015 – 18.99% 14.04% 17.80% December 31, 2018 December 31, 2017 – -13.52% -15.53% -18.08% December 31, 2018 (1) See “Appendix” for listing of 2018 Peer Group banks (2) Price change of Large Banks, which consist of: Bank
Slide 53: Analysts' Recommendations (as of 5/3/19)
ANALYSTS’ RECOMMENDATIONS (AS OF 5/3/19) • Barclays Capital, Inc. Overweight • Boenning & Scattergood, Inc. Neutral • D.A. Davidson & Co. Neutral • Hovde Group, LLC Market Perform • Jefferies LLC Hold • Keefe, Bruyette & Woods, Inc. Market Perform • Alden Securities Neutral • Piper Jaffray & Co. Neu
Slide 54: The Story Behind the Numbers
THE STORY BEHIND THE NUMBERS 54
Slide 55: Key Goals and Objectives
KEY GOALS AND OBJECTIVES: • Growing Your Company • Achieving Operational Excellence • Sustaining and Scaling Effective Risk Management and Compliance Activities 55
Slide 56: Growing Your Company
GROWING YOUR COMPANY Key priority 56
Slide 57: Market Expansion – Philadelphia & Baltimore
MARKET EXPANSION – PHILADELPHIA & BALTIMORE 57
Slide 58: Changing Customer Behavior and Preferences
CHANGING CUSTOMER BEHAVIOR AND PREFERENCES 58
Slide 59: Fulton Forward – Areas of Focus
FULTON FORWARDTM – AREAS OF FOCUS Affordable Housing & Home Ownership Job Training & Workforce Development Financial Education & Economic Empowerment Diversity & Inclusion 59
Slide 60: Achieving Operational Excellence
ACHIEVING OPERATIONAL EXCELLENCE Key priority 60
Slide 61: (Post-Charter Consolidation)
(Post-Charter Consolidation) 61
Slide 62: Progress Is Being Made
PROGRESS IS BEING MADE As of today’s meeting, we’ve consolidated the following three subsidiaries into Fulton Bank, N.A.: 62
Slide 63: Deploying Technology to Improve Efficiency
DEPLOYING TECHNOLOGY TO IMPROVE EFFICIENCY 63
Slide 64: Risk & Compliance
RISK & COMPLIANCE Key priority 64
Slide 65: Fulton Financial Corporation Thank You!
FULTON FINANCIAL CORPORATION THANK YOU! May 21, 2019
Slide 66: Questions & Answers
QUESTIONS & ANSWERS May 21, 2019 66
Slide 67: Annual Shareholders' Meeting May 21, 2019
ANNUAL SHAREHOLDERS’ MEETING May 21, 2019 67
Slide 68: Appendix
APPENDIX 68
Slide 69: 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 70: Non-GAAP Reconciliation (Continued)
NON-GAAP RECONCILIATION (CONTINUED) Year Ended Dec 31, 2 0 18 2 0 17 2 0 16 2 0 15 2 0 14 (dollars in thousands) Tangible Common Equity to Tangible Assets (TCE Ratio) Shareholders' equity $ 2,247,573 $ 2,229,857 $ 2,121,115 $ 2,041,894 $ 1,996,665 Less: Intangible assets (531,556) (531,556) (531,556
Slide 71: 2018 Peer Group
2018 PEER GROUP(1) BancorpSouth Bank TCF Financial Corporation Commerce Bancshares, Inc. Trustmark Corporation First Midwest Bancorp, Inc. UMB Financial Corporation F.N.B. Corporation Umpqua Holdings Corporation Hancock Whitney Corporation Union Bankshares Corporation IBERIABANK Corporation United B
Slide 72: 2019 Peer Group
2019 PEER GROUP(1) BancorpSouth Bank Provident Financial Services, Inc. Commerce Bancshares, Inc. Trustmark Corporation First Midwest Bancorp, Inc. UMB Financial Corporation F.N.B. Corporation Umpqua Holdings Corporation Hancock Whitney Corporation Union Bankshares Corporation IBERIABANK Corporation