Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — IPO Roadshow (February 2020)
22 slides from Fulton Financial's IPO roadshow presentation, Feb 24, 2020
Slide 1: Subordinated Notes Offering February 2020
Subordinated Notes Offering February 2020 NASDAQ: FULT Data as of December 31, 2019 unless otherwise noted
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements with respect to Fulton Financial Corporation’s (the “Corporation”) financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identifi
Slide 3: Legal Disclaimer
LEGAL DISCLAIMER We have filed a registration statement (including a prospectus) (File No. 333-221393) and a preliminary prospectus supplement with the SEC for the offering to which this presentation relates. Before you invest, you should read the prospectus and the preliminary prospectus supplement
Slide 4: Terms of the Proposed Offering
TERMS OF THE PROPOSED OFFERING Issuer Fulton Financial Corporation Security Subordinated Notes Amount $250 million Rating Baa1 by Moody’s and BBBH by DBRS Structure Fixed-to-Floating Rate Issuance Type SEC Registered Term 10 Years or 15 Years Call Date 5 Years or 10 Years Use of Proceeds General cor
Slide 5: A Diverse and Valuable Franchise
A DIVERSE AND VALUABLE FRANCHISE • 230 financial centers throughout the Mid-Atlantic • $21.9 billion in assets • $16.8 billion in loans and leases, net of unearned income • $17.4 billion in deposits • 2019 ROAA of 1.06% • Approximately 3,500 FTEs (1) • $2.9 billion market capitalization (2) (1) Aver
Slide 6: Deep Executive Bench with Continuity
DEEP EXECUTIVE BENCH WITH CONTINUITY Years in Name Position Years at Financial Prior Fulton Experience Services Phil Wenger Chairman/CEO 41 41 Various roles since joining in 1979 Curt Myers President/COO 30 30 Various roles since joining in 1990 PwC, Banking and Investment Mark McCollom (1) Chief Fi
Slide 7: Strong Position in Attractive and Stable Markets
STRONG POSITION IN ATTRACTIVE AND STABLE MARKETS Fulton Market Fulton Financial Fulton Financial Market Median Projected Projected Financial Total Active Fulton Financial Total Deposit Total Active Market Total Household Household Market Market Branches Total Deposits Market Share Branches Deposits
Slide 8: 2019 Highlights
2019 HIGHLIGHTS Net income of $226.3 million, or $1.35 per diluted share. Key Accomplishments ïƒ~ Termination of remaining BSA/AML regulatory orders ïƒ~ Successful consolidation of affiliate banks into Fulton Bank, N.A.ïƒ~ Continuation of organic growth into fast growing urban marketsïƒ~ Record year
Slide 9: Quarter Highlights: 4Q19 vs 3Q19
QUARTER HIGHLIGHTS: 4Q19 vs 3Q19 Net income per diluted share: $0.29 in 4Q19, 22% decrease from 3Q19 Loan Growth: 2% increase in average balances driven by C&I, commercial and residential mortgages and construction. Deposit Growth: 3% increase in average balances, largely driven by interest bearing
Slide 10: Quarter Highlights: 4Q19 vs 4Q18
QUARTER HIGHLIGHTS: 4Q19 vs 4Q18 Net income per diluted share: $0.29 in 4Q19, 12% decrease from 4Q18 Loan Growth: 5% increase in average balances with growth in all categories, except for home equity. Deposit Growth: 6% increase in average balances with growth in all categories. Net Interest Income
Slide 11: Income Statement Summary – Year to Date
INCOME STATEMENT SUMMARY – YEAR TO DATE Year Ended Dec 31, 2019 2018 Change (dollars in thousands, except per-share data) Net Interest Income $ 648,389 $ 630,456 $ 17,933 Provision for Credit Losses 32,825 46,907 (14,082) Non-Interest Income (1) 211,427 195,488 15,939 Securities Gains 4,733 37 4,696
Slide 12: Income Statement Summary – Quarter to Date
INCOME STATEMENT SUMMARY – QUARTER TO DATE Change from 4Q19 3Q19 4Q18 (dollars in thousands, except per-share data) Net Interest Income $ 159,270 $ (1,990) $ (3,674) Provision for Credit Losses 20,530 18,360 12,330 Non-Interest Income (1) 55,281 (40) 5,758 Securities Gains - (4,492) - Non-Interest E
Slide 13: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields ($ IN MILLIONS) ($ IN BILLIONS) $20 5.00% $180.0 4.00% 4.00% $15 4.22% 4.35% 4.37% 4.25% 4.07% 3.00% 3.75% $165 $10 $16 $16 $17 $163 $163 $16 $16 2.00% $161 $160.0 $159 3.50% $5 1.00% $3
Slide 14: Asset Quality – Annual Comparison
ASSET QUALITY – ANNUAL COMPARISON ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans $160 2.00% $140 $141 $135 $50 $47 $132 $120 1.50% $40 $33 $80 1.00% $30 $23 0.90% 0.85% 0.86% 0.84% $20 $40 0.50% $13 $10 $0 0.00% $0 2016 2017 2018 2019 2016 2017 2018 2019 NPL
Slide 15: Non-Interest Income
NON-INTEREST INCOME(1) Three months ended December 31, 2019 (percent of total non-interest income) 4Q19 3Q19 Change 7% (in thousands) 9% n Wealth management $ 14,419 $ 13,867 $ 552 22% n Mortgage banking 5,076 6,658 (1,582) n Consumer banking 12,426 13,333 (907) n Commercial banking 19,628 18,284 1,
Slide 16: Non-Interest Expenses
NON-INTEREST EXPENSES Three months ended December 31, 2019 (percent of total non-interest expense) 4Q19 3Q19 Change (in thousands) 21% n Salaries and benefits $ 76,975 $ 78,211 $ (1,236) n Occupancy 13,080 12,368 712 n Data Processing and software 11,468 11,590 (122) n Other outside services 8,215 1
Slide 17: Profitability & Capital
PROFITABILITY & CAPITAL ROA(1) ROE and ROE (tangible)(2) 1.40% 16.00% 1.20% 12.84% 1.03% 1.06% 12.09% 1.00% 0.88% 12.00% 10.30% 10.33% 0.88% 9.81% 9.24% 0.80% 7.69% 7.83% 8.00% 0.60% 4.00% 0.40% 0.20% 0.00% 2016 2017 2018 2019 0.00% 2016 2017 2018 2019 ROE ROE (tangible) Tangible Common Equity to Ta
Slide 18: Illustrative Impact of the Proposed Offering on Capital Ratios
ILLUSTRATIVE CAPITAL RATIOS IMPACT OF THE PROPOSED OFFERING ON Pro Forma Actual Offering For Sub Debt ($000’s) 12/31/2019 Adjustments 12/31/2019 Regulatory Capital Tier 1 Capital 1,796,987 1,796,987 ALLL allowable as Tier 2 Capital 166,210 — 166,210 Trust Preferred Debt 16,000 — 16,000 Subordinated
Slide 19: Illustrative Leverage & Interest Coverage Impact
ILLUSTRATIVE LEVERAGE & INTEREST IMPACT ON COVERAGE THE PROPOSED DOUBLE For the Twelve Months Ended ($000s) 12/31/2017 12/31/2018 12/31/2019 Double Leverage Investment(s) in Bank Subsidiary(ies) $2,399,053 $2,451,651 $2,555,448 Consolidated Equity $2,229,857 $2,247,573 $2,342,176 Double Leverage Rat
Slide 20: 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 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Y ear Ended Dec 3 1, 2 0 19 2 0 18 2 0 17 2 0 16 (dollars in thousands) Tangible Common Equity to Tangible Assets ( TCE Ratio) Shareholders’ equity $ 2,342,176 $ 2,247,573 $ 2,229,857 $ 2,121,115 Less: Intangible assets (535,303) (531,556) (531,556) (531,556) Tangible shareho
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION For the Twelve Months Ended ($000s) 12/31/2017 12/31/2018 12/31/2019 GAAP to Non-GAAP Reconciliation Pre-tax Income (GAAP) $234,454 $232,970 263,988 Adjustment to Pre-tax Income: Loss (gain) on sale of securities (9,071) (37) (4,733) Prepayment penalty on FHLB advances -—- 4,