Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (December 2019)
36 slides from Fulton Financial's investor presentation, Dec 9, 2019
Slide 1: Investor Presentation
INVESTOR PRESENTATION z Data as of September 30, 2019 - Unless otherwise noted
Slide 2: 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 3: Why Fulton?
Why Fulton? . Deep Executive Bench with Continuity . Valuable Franchise in Attractive Markets . Investing in People to Drive Growth . Relationship Banking Strategy Focused on the Customer Experience . Granular, Well-Diversified Loan Portfolio . Attractive Core Deposit Profile . Solid Asset Quality a
Slide 4: Deep Executive Bench With Continuity
Deep Executive Bench With Continuity Years in Financial Prior Name Position Years at Fulton Services Experience 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 Banking; Joined Mark McCol
Slide 5: A Valuable Franchise
A Valuable Franchise . ~230 financial centers throughout the Mid-Atlantic . Asset size of $21.7 billion . 3,600+ team members (3,500 FTEs (1)) . Market capitalization of $2.7 billion (2) . Opportunity to meaningfully grow our market share(3) o ~16.5% deposit market share across the 15 counties where
Slide 6: Strong Position In Attractive & Stable Markets
Strong Position In Attractive & Stable Markets Fulton Fulton Financial Fulton Financial Market Median Projected Fulton Financial Market Total Projected Financial Corporation Corporation Total Market Total Household Market Metropolitan Statistical Area (MSA) Corporation Total Active Branches Househol
Slide 7: Investing In People To Drive Growth
Investing In People To Drive Growth Commentary Revenue Producers . Renewed focus on front line hiring after years of building out the compliance and risk management areas 300 . Market disruption creates hiring opportunities 250 102 97 o Replace lower performing commercial relationship 97 managers wi
Slide 8: Extending Footprint Into Fast Growing Urban Markets
Extending Footprint Into Fast Growing Urban Markets Philadelphia, PA County Deposit Market Share – Top 20 Commentary Total Deposit Total Deposit Regulatory Total Active Total Deposits 2019 Parent Company Name Market Share Rank 2019 Industry Branches 2019 ($000) . Philadelphia is a natural extension
Slide 9: Strategic Initiatives Support Our Relationship Banking Strategy
Strategic Initiatives Support Our Relationship Banking Strategy Purpose We Change Lives for the Better OPERATIONAL EXCELLENCE GROWTH STRATEGIES Strategic Filter • Advancing business line structure Outcomes • Investing in talent for growth and charter consolidation. in targeted markets and • Focus on
Slide 10: Significant Investments To Enhance Digital Capabilities
Fulton Has Made Significant Investments To Enhance Its Digital Capabilities Commercial Online Commercial Loan NewNew Website Website PurchaseBanking Platform Origination System 2017 2017 2019 fultonbank.com . Personalizes experience . Best-in-class online platform for . Streamlines commercial . Prov
Slide 11: Website Recently Recognized As An Innovation Leader
Website Recently Recognized As An Innovation Leader Our redesigned customer website allows users to have a cohesive and personalized experience as they explore all of our products, services and capabilities in one place . Leverages data and customer insights to deliver personalized content to custom
Slide 12: Optimizing Our Branch Network
Optimizing Our Branch Network Optimizing our financial center network will: . Move us towards multiple financial center types vs. a one-size-fits-all model . Give us greater ability to re-invest in people & digital transactions . Orient the financial center as a primary touchpoint enabling higher- v
Slide 13: Granular, Well-Diversified Loan Portfolio
Granular, Well-Diversified Loan Portfolio . Average Loans for the nine months ended September 30, 2019 are up 3.5% compared to the same period in 2018 . Yields continue to move higher after several years of declines $16.3 $16.0 $15.8 4.70% $15.2 $0.8 $0.6 4.63% $0.5 $0.9 $14.1 $1.0 $14.0 $0.9 4.50%
Slide 14: Attractive Core Deposit Profile
Attractive Core Deposit Profile . Steady growth in core deposits . Average Deposits for the nine months ended September 30, 2019 are up 5.8% compared to the same period in 2018 $18.0 0.79% 0.80% $16.5 $15.8 $16.0 $15.5 $1.5 0.70% $14.6 $- $ $13.7 $1.4 $1.5 $14.0 $- $1.4 $- $3.5 0.60% $1.3 $3.0 $3.0
Slide 15: Solid Asset Quality And Reserves
Solid Asset Quality And Reserves Commentary Non-Performing Loans (NPLs) & Allowance/Loans . Overall asset quality continues to be stable 1.75% $144.8 $139.7 . We are mindful of where we are in the economic $150.0 $131.6 $134.8 $136.0 cycle and are continuing to assess and analyze the loan portfolio
Slide 16: Prudent Expense Management With Opportunities To Improve
Prudent Expense Management With Opportunities To Improve Commentary Efficiency Ratio (FTE) 71.00% 69.00% . Low rate environment and continued buildout of our 67.00% compliance, risk and technology infrastructures were the 65.00% primary drivers of the increase in the efficiency ratio in 63.00% 61.00
Slide 17: Excess Capital To Deploy
Excess Capital To Deploy Commentary Fulton 3Q19 Capital Ratios . Capital ratios exceed our internal minimums and regulatory 14.00% 12.0% 12.00% requirements 9.6% 9.6% 10.00% 8.5% o Opportunity exists to optimize the capital stack 8.5% 8.00% . Quarterly cash dividend increased to $0.13 per share in 6
Slide 18: Recent Financial Performance
RECENT FINANCIAL PERFORMANCE
Slide 19: Quarter Highlights: 3Q19 vs 2Q19
Quarter Highlights: 3Q19 vs 2Q19 Net income per diluted share: $0.37 in 3Q19, 5.7% increase from 2Q19 Loan Growth: 0.7% increase in average balances, driven by residential and commercial mortgages. Ending balances increased 1.9%, driven by C&I and residential mortgages. Core Deposit Growth: 3.1% inc
Slide 20: Quarter Highlights: 3Q19 vs 3Q18
Quarter Highlights: 3Q19 vs 3Q18 Net income per diluted share: $0.37 in 3Q19, unchanged from 3Q18 Loan Growth: 3.6% increase in average balances and 4.8% increase ending balances with growth in all categories, except for home equity and construction. Core Deposit Growth: 4.5% increase in average bal
Slide 21: Income Statement Summary
Income Statement Summary Change from 3Q19 2Q19 3Q18 (dollars in thousands, except per-share data) Net Interest Income $ 161,260 $ (3,284) $ 1,133 Provision for Credit Losses 2,170 (2,855) 550 Non-Interest Income 55,321 1,182 4,302 Securities Gains 4,492 4,316 4,478 Non-Interest Expense 146,770 2,602
Slide 22: Net Interest Income And Margin
Net Interest Income And Margin AVERAGE INTEREST-EARNING ASSETS & YIELDS ($ IN BILLIONS) NET INTEREST INCOME & NET INTEREST MARGIN $20.0 $16.0 $16.2 $16.3 $16.4 5.00% ($ IN MILLIONS) $15.9 4.75% $15.0 $180.0 4.00% 4.35% 4.37% 4.50% 4.25% 4.22% $165.0 $10.0 4.13% 4.25% 3.75% $150.0 4.00% $5.0 ~ $730 $
Slide 23: Asset Quality
Asset Quality PROVISION FOR CREDIT LOSSES NON-PERFORMING LOANS (NPLS) & NPLS TO LOANS ($ IN MILLIONS) $160.0 $147.7 2.00% $10.0 $139.7 $138.7 $136.0 $8.2 $120.1 $120.0 1.50% $5.1 $5.0 $80.0 1.00% 0.90% 0.86% 0.85% 0.81% $2.2 $40.0 0.75% 0.50% $1.6 $0.0 0.00% $- 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q1
Slide 24: Non-interest Income
Non-interest Income(1) Three months ended September 30, 2019 (percent of total non-interest income) 3Q19 2Q19 Change (in thousands) n Wealth management $ 13,867 $ 14,153 $ (286) n Mortgage banking 6,658 6,593 65 n Consumer banking 13,333 12,367 966 n Commercial banking 18,284 18,442 (158) ~ $730 n O
Slide 25: Non-interest Expenses
Non-interest Expenses Three months ended September 30, 2019 (percent of total non-interest expense) 3Q19 2Q19 Change (in thousands) n Salaries and benefits $ 78,211 $ 78,991 $ (780) n Occupancy 12,368 14,469 (2,101) n Data Processing and software 11,590 11,268 322 n Other outside services 12,163 11,
Slide 26: Profitability & Capital
Profitability & Capital ROA(1) ROE AND ROE (TANGIBLE)(2) 1.40% 1.28% 16.00% 14.99% 14.03% 1.20% 1.12% 1.11% 1.14% 1.15% 13.17% 13.28% 13.60% 11.48% 1.00% 12.00% 10.10% 10.15% 10.42% 10.64% 0.80% 8.00% 0.60% 4.00% 0.40% 0.20% 0.00% 3Q18 4Q18 1Q19 2Q19 3Q19 0.00% 3Q18 4Q18 1Q19 2Q19 3Q19 ROE ROE (tang
Slide 27: 2019 Outlook
2019 Outlook Changes from the outlook as of the end of the second quarter of 2019 have been underlined. • Loans & Deposits: Average annual loan and deposit growth rates in the low to mid single-digits • Net Interest Income: Low single-digit growth rate • Net Interest Margin: A decrease of 3 to 5 bas
Slide 28: Appendix
APPENDIX
Slide 29: Average Loan Portfolio And Yields
Average Loan Portfolio And Yields Change in 3Q 2019 Balance From Yield From Balance Yield 2Q 2019 3Q 2018 2Q 2019 3Q 2018 (dollars in millions) Comm'l Mtg $ 6,489 4.57% $ 65 $ 179 (0.10%) 0.11% Commercial 4,415 4.56% (26) 111 (0.17%) 0.20% Res Mtg 2,513 4.06% 146 370 (0.03%) 0.10% Home Equity 1,364
Slide 30: Average Customer Funding And Rates
Average Customer Funding And Rates Change In 3Q 2019 Balance From Rate From Balance Rate 2Q 2019 3Q 2018 2Q 2019 3Q 2018 (dollars in millions) Non-int DDA $ 4,248 - % $ 47 $ (50) - % - % Int DDA 4,448 0.82% 262 332 0.04% 0.21% Savings/Money Mkt 5,026 0.87% 100 308 0.01% 0.23% Brokered 253 2.40% 7 91
Slide 31: Non-Interest Income
Non-Interest Income(1) Change From 3Q 2019 2Q 2019 3Q 2018 2Q 2019 3Q 2018 (in thousands) Wealth management $ 13,867 $ 14,153 $ 13,066 $ (286) $ 801 Commercial banking: Merchant and card 6,166 6,512 6,307 (346) (141) Cash management 4,696 4,638 4,472 58 224 Commercial loan interest rate swap 3,944 3
Slide 32: Non-Interest Expense
Non-Interest Expense Change From 3Q 2019 2Q 2019 3Q 2018 2Q 2019 3Q 2018 (in thousands) Salaries and employee benefits $ 78,211 $ 78,991 $ 76,770 $ (780) $ 1,441 Net occupancy 12,368 14,469 12,578 (2,101) (210) Other outside services 12,163 11,259 9,122 904 3,041 Data processing and software 11,590
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 2018 2018 2019 2019 2019 Note: The Corporation has presented the Tangible Common Equity to Tangible Assets (TCE Ratio) (dollars in thousands) following non-GAAP (Generally Accepted Accounting Principles) financial measures
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation Years Ended Nine Months Ended Three Months Ended Sep 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2015 2016 2017 2018 2019 2018 2018 2019 2019 Efficiency ratio Non-interest expense $ 459,246 $ 480,160 $ 489,519 $ 525,579 $ 546,104 $ 428,762 $ 135,413 $ 140,685 $ 137,824 $ 144,168 Less
Slide 35: Peer Group
Peer Group . Atlantic Union Bankshares Corporation . Prosperity Bancshares, Inc. . 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 .
Slide 36: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fult.com CORPORATION:
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