Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (May 2010)
64 slides from Fulton Financial's investor presentation, May 12, 2010
Slide 1: Fulton Financial Corporation Investor Presentation May 2010
Fulton Financial Corporation - ------------------------------------- May 2010 Investor Presentation Data as of March 31, 2010
Slide 2: Forward-Looking Statement
Forward-Looking Statement n This presentation may contain forward-looking statements about Fulton Financial Corporation’s financial condition, results of operations, business, strategies, products and services. You can identify forward-looking statements by the use of words such as “may”, “should”,
Slide 3: Presentation Outline
Presentation Outline u Corporate Profile u Franchise and Markets u Investment Highlights u Capital u Loan Portfolio Snapshot u Earnings/Peer Group u Financial Performance u Summary u Supplemental Credit Information
Slide 4: Fulton Financial Profile (as of 3/31/10)
Fulton Financial Profile (as of 3/31/10) n Mid-Atlantic regional financial holding company n A family of 8 community banks in 5 states n Fulton Financial Advisors n Fulton Mortgage Company n 270 community banking offices n Asset size: $ 16.4 billion n 3,950 Team Members n Market capitalization: $ 1.
Slide 5: A Valuable Geographic Franchise
A Valuable Geographic Franchise
Slide 6: Fulton community banks
j The Columbia Bank Hagerstown Trust The Peoples Bank of Elkton FULTON FINANCIAL CORPORATION
Slide 7: Superior Customer Experience
Superior Customer Experience Care, Listen, Understand, Deliver
Slide 8: Our Brand
Our Brand COMMUNITY BANKING SMALL BUSINESS HIGH NET WORTH RETAIL BANKING LISTENING IS JUST THE BEGINNING.
Slide 9: Market Share
Market Share n Market share increased in 36 out of 53 counties served in our five-state market n Market share increased in 27 out of 31 counties served in PA, MD, and DE
Slide 10: Investment Highlights
Investment Highlights n $230 Million Common Stock Offering / Intend to repay TARP n Strong capital ratios - Tier 1 risk-based capital ratio of 11.00% pro forma for common equity offering and TARP repayment n Expanding net interest margin n Stabilizing asset quality - provision and net charge-offs de
Slide 11: Details of Common Stock Offering
Details of Common Stock Offering n Announced April 29, 2010 n 21.8 million shares, at $10.40 per share n $226.7 million proceeds, net of underwriting discount and commissions n Shares outstanding, post-offering: 198.3 million n Underwriter has option to purchase additional 3.3 million shares by May
Slide 12: Reasons for Stock Offering
Reasons for Stock Offering n Redeem preferred stock issued to US Treasury under TARP n Repurchase of warrant to purchase 5.5 million shares of common stock n Strengthen capital position in anticipation of increases in regulatory capital requirements n Acquisitions n Support internal growth initiativ
Slide 13: Paying Back TARP
Paying Back TARP n Eliminates $18.8 million in annual dividends paid to the U. S. Treasury n Additional capital cushion initially obtained as “insurance” for protracted recession no longer necessary as economy improves and asset quality stabilizes n Combined with common equity offering will enhance
Slide 14: Capital: Reported and Pro-Forma
Capital 3/31/10 Reported Pro-Forma* GAAP Capital $1.97 billion $1.82 billion Total Risk-Based Capital $1.92 billion $1.77 billion Total Risk-Based Capital 15.10% 13.90% Tier 1 Risk-Based Capital 12.20% 11.00% Leverage Capital 9.80% 8.80% Tangible Common Equity 6.60% 8.00% Tangible Common Equity to R
Slide 15: Forbes.com 100 Most Trustworthy Companies
Forbes.com n Fulton Financial named one of the nation’s “100 Most Trustworthy Companies” n Selected from over 8,000 publicly held companies n Only bank included in large-cap or mid-cap company lists n One of only four banks on entire list
Slide 16: Summary of Larger Loans
Summary of Larger Loans n 50 relationships with commitments to lend of $20 million or more n Maximum individual commitment: $33 million n Maximum commitment land development: $25 million n Maximum commitment any one development project: $15 million n Average commercial lending relationship size is $
Slide 17: 2009 Earnings Growth/Peer Group
2009 Earnings Growth/Peer Group Fulton Financial Corporation 0.31 -0.03 BOK Financial Corporation 2.96 2.27 First Citizens BancShares, Inc. 11.15 8.73 Valley National Bancorp 0.67 0.67 International Bancshares Corporation 1.90 1.92 UMB Financial Corporation 2.20 2.38 Commerce Bancshares, Inc. 2.07 2
Slide 18: Q1 2010 Earnings Growth/Peer Group
Q1 2010 Earnings Growth/Peer Group Company Name First Citizens BancShares, Inc. 10.31 0.83 City National Corporation 0.19 0.04 Fulton Financial Corporation 0.13 0.05 Susquehanna Bancshares, Inc. 0.04 0.02 TCF Financial Corporation 0.26 0.17 Old National Bancorp 0.12 0.08 Bank of Hawaii Corporation 1
Slide 19: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION
Slide 20: First Quarter 2010 Earnings
First Quarter 2010 Earnings Net income: Up 18 percent over previous quarter Up 178 percent over first quarter of 2009 n n
Slide 21: 2010 Financial Results (Q1 2010 vs. Q4 2009)
2010 Financial Results (Q1 2010 vs. Q4 2009) Net income 27,480,000 $ 24,390,000 $ Cost of preferred stock Net income available Earnings per share 0.13 $ 0.11 $ Return on tangible equity 9.13% 7.96%
Slide 22: Income Statement Summary (Q1 2010 vs. Q4 2009)
Income Statement Summary (Q1 2010 vs. Q4 2009) Net Interest Income 138,510 $ 136,090 $ 2,420 $ 2% Loan Loss Provision (40,000) (45,020) 5,020 -11% Other Income 39,690 41,160 (1,470) -4% Securities Losses (2,220) (1,870) (350) 19% Pre-Tax Income 36,750 29,990 6,760 23% $
Slide 23: 2010 Financial Results (First Quarter)
2010 Financial Results (First Quarter ) Net income 27,480,000 $ 13,080,000 $ Cost of preferred stock Net income (loss) available Earnings per share 0.13 $ 0.05 $ Return on tangible equity 9.13% 3.88%
Slide 24: Pre-Tax Income Summary (First Quarter)
Pre-Tax Income Summary (First Quarter) Net Interest Income 138,510 $ 124,120 $ 14,390 $ 12% Other Income 39,690 44,000 (4,310) -10% Pre-Tax Income Before LLP, Sec Gains (Losses) and unusual items 78,970 67,890 11,080 16% Loan Loss Provision (40,000) (50,000) 10,000 -20% Securities Gains (Losses) (2,
Slide 25: Peer Group
Peer Group* International Bancshares Corporation Old National Bancorp South Financial Group, Inc. Susquehanna Bancshares, Inc. TCF Financial Corporation Trustmark Corporation UMB Financial Corporation United Bankshares, Inc. Valley National Bancorp Whitney Holding Corporation Wilmington Trust Corpor
Slide 26: Increasing Net Interest Margin
Increasing Net Interest Margin 3.78 3.66 3.39 3.00 3.25 3.50 3.75 4.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FULT Peer Top 50
Slide 27: Well Positioned for Rate Increases
Well Positioned for Rate Increases 6 month cumulative gap: 1.10 Rate Change NII Change (Annual) % Change +300 bp + $ 47.3 million + 8.0% +200 bp + $ 27.8 million + 4.7% +100 bp + $ 9.4 million + 1.6% - 100 bp - $ 0.7 million - 0.1%
Slide 28: Average Loans (Q1 2010 vs. Q4 2009)
Average Loans (Q1 2010 vs. Q4 2009) Q1 2010 Q4 2009 $ % (dollars in millions) Comm'l Mort 4,310 $ 4,240 $ $ 2% Commercial 3,690 3,710 (20) -1% Home Equity 1,640 1,650 (10) -1% Construction 1,020 (60) -6% Resid Mort 1% Cons./Other (10) -2% Total Loans 11,970 $ 11,990 $ (20) $ 0%
Slide 29: Average Loans (First Quarter)
Average Loans (First Quarter) $ % (dollars in millions) Comm'l Mort 4,310 $ 4,050 $ $ 6% Commercial 3,690 3,660 1% Home Equity 1,640 1,700 (60) -4% Construction 1,230 (270) -22% Resid Mort (20) -2% Cons./Other (10) -2% Total Loans 11,970 $ 12,040 $ (70) $ -1%
Slide 30: Average Loan Growth
Average Loan Growth -0.6 -5.9 -6.5 -9.0 -6.0 -3.0 0.0 3.0 6.0 9.0 12.0 15.0 Q1 10 FULT Peer Top 50
Slide 31: Net Charge-Offs To Average Loans
Net Charge-Offs To Average Loans 0.95 1.22 1.69 0.00 0.50 1.00 1.50 2.00 Q1 10 FULT Peer Top 50
Slide 32: Non-performing Loans to Loans
Non-performing Loans to Loans 2.39 2.46 3.21 0.00 1.00 2.00 3.00 4.00 5.00 Q1 10 FULT Peer Top 50
Slide 33: Allowance to Loans
Allowance to Loans 2.25 1.91 2.69 0.80 1.10 1.40 1.70 2.00 2.30 2.60 2.90 Q1 10 FULT Peer Top 50
Slide 34: Allowance to Non-performing Loans
Allowance to Non-performing Loans 94.1 85.8 77.9 50.0 100.0 150.0 200.0 250.0 300.0 Q1 10 FULT Peer Top 50
Slide 35: Average Deposits (First Quarter)
Average Deposits (First Quarter) $ % (dollars in millions) Nonint DDA 1,970 $ 1,660 $ $ 19% Int DDA 1,980 1,750 13% Savings/MMDA 2,850 2,060 38% CD's 5,210 5,440 (230) -4% Cash Management (110) -19% Total Deposits 12,480 $ 11,490 $ $ 9%
Slide 36: Average Deposit Growth
Average Deposit Growth 10.1 6.6 6.3 (3.0) 0.0 3.0 6.0 9.0 12.0 15.0 18.0 Q1 10 FULT Peer Top 50
Slide 37: Average Core Deposit Growth
Average Core Deposit Growth 24.4 18.1 20.6 -5.0 0.0 5.0 10.0 15.0 20.0 25.0 Q1 10 FULT Peer Top 50
Slide 38: Other Borrowings (First Quarter)
Other Borrowings (First Quarter) $ % (dollars in millions) Federal Funds $ $ (390) $ -49% FHLB Advances 1,100 1,400 (300) -21% Other LT Debt - 0% Other ST Borrowings - (140) -100% Total Borrowings 1,880 $ 2,710 $ (830) $ -31%
Slide 39: Other Income
Other Income $0 $40 $80 $120 $160 $200 Millions
Slide 40: Other Income as a Percent of Total Income
Other Income as a Percent of Total Income 21.8 32.5 33.0 20.0 25.0 30.0 35.0 40.0 Q1 10 FULT Peer Top 50
Slide 41: Efficiency Ratio Lower Than Peers
Efficiency Ratio Lower Than Peers 53.8 61.4 62.9 50.0 52.0 54.0 56.0 58.0 60.0 62.0 64.0 1Q 10 FULT Peer Top 50
Slide 42: Other Expense (Q1 2010 vs. Q4 2009)
Other Expense (Q1 2010 vs. Q4 2009) (dollars in thousands) Salaries & Benefits 52,350 $ 53,620 $ (1,270) $ -2% Occupancy & Equip. 14,740 13,770 7% FDIC Insurance 4,950 4,840 2% Data Proc. & Software 4,240 3,890 9% Supplies & Postage 2,630 2,740 (110) -4% Legal & Audit 2,550 2,400 6% Telecommunicatio
Slide 43: Other Expense (First Quarter)
Other Expense (First Quarter) (dollars in thousands) Salaries & Benefits 52,350 $ 55,300 $ (2,950) $ -5% Occupancy & Equip. 14,740 14,100 5% FDIC Insurance 4,950 4,290 15% Data Proc. & Software 4,240 4,630 (390) -8% Supplies & Postage 2,630 2,660 (30) -1% Legal & Audit 2,550 2,230 14% Telecommunicat
Slide 44: Overview of First Quarter 2010
Overview of First Quarter 2010 n 18.2% increase in EPS linked quarter n 11 basis point increase in NIM n Strong funding and liquidity positions n Stabilization of asset quality n $5 million reduction in the provision for loan losses n Improved coverage ratio n Reduced construction exposure n Expense
Slide 45: Future Growth Initiatives
Future Growth Initiatives n Leverage community banking market presence and brand n Core deposit growth / segmentation n Expand market share n Grow quality earning assets n Superior customer experience n Grow non-interest income n Branch expansion / select markets
Slide 46: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com
Slide 47: Supplemental Credit Information
Supplemental Credit Information
Slide 48: Commercial Loans by Industry
Commercial Loans by Industry Manufacturing 13.0 RE - Rental and Leasing 12.7 Construction 11.0 Agriculture 8.5 Retail 8.5 Wholesale 7.3 Health Care 6.7 Other 6.0 Financial Services 3.0 Arts and Entertainment 3.0 Transportation
Slide 49: Loan Distribution by State (First Quarter)
Loan Distribution by State (First Quarter) Average % of 10 v. 09 % Balance Total Growth Growth Pennsylvania 6,617,000 $ 55.3% 147,000 $ 2% New Jersey 2,479,000 20.7% (17,000) -1% Maryland 1,471,000 12.3% (121,000) -8% Virginia 1,072,000 8.9% (64,000) -6% Delaware 333,000 2.8% (14,000) -4% 11,972,000
Slide 50: Declining Provision / Stable Net Charge Offs
Declining Provision / Stable Net Charge Offs Provision Net Charge-Offs / Average Loans $50 $50 $45 $45 $40 $0 $20 $40 $60 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 ($ in millions) 1.00% 0.97% 0.81% 0.97% 0.95% 0.00% 0.50% 1.00% 1.50% Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010
Slide 51: Net Charge-offs (Q1 2010)
Net Charge-offs (Q1 2010) Comm'l Res. Mtg. (in thousands) Pennsylvania $ $ 3,000 $ $ $ 5,263 $ Maryland - 7,915 - 8,355 New Jersey 1,648 1,492 1,893 5,401 Virginia (5) 7,430 1,125 9,101 Delaware Avg Loans 3,687,000 4,306,000 962,000 2,582,000 435,000 11,972,000 NCO % 0.28% 0.21% 8.41% 0.22% 1.76% 0.
Slide 52: Loan Delinquency (Key Sectors)
Loan Delinquency (Key Sectors) Category Total (%) 3/31/09 90-Days 3/31/09 Total (%) 3/31/10 90-Days 3/31/10 Commercial Loans 2.26 1.59 2.84 2.13 Consumer Direct 1.27 .54 1.75 .81 Commercial Mortgage 1.88 1.27 2.99 1.62 Residential Mortgage 6.88 3.20 7.65 4.26 Construction 8.78 7.65 10.68 8.49 Total
Slide 53: Non-performing Loans (March 31, 2010)
Non-performing Loans* (March 31, 2010) Comm'l Res. Mtg. (in thousands) Pennsylvania 36,870 $ 24,962 $ 10,817 $ 10,245 $ 5,289 $ 88,183 $ Maryland 8,510 1,775 34,054 4,997 2,838 52,174 New Jersey 17,943 37,269 18,126 9,012 4,186 86,536 Virginia 14,351 2,740 16,131 14,346 1,877 49,445 Delaware End Loa
Slide 54: Residential Mortgage and HE Loans
Residential Mortgage and HE Loans Q1 2010 % of Avg. Bal. Total Pennsylvania 1,322,000 $ 51.3% New Jersey 453,000 17.5% Maryland 438,000 17.0% Virginia 218,000 8.4% Delaware 151,000 5.8% 2,582,000 $
Slide 55: C&I Loans by State (March 31, 2010)
C&I Loans by State (March 31, 2010) Ending % of NPL Allowance Pennsylvania 2,460,000 $ 66.7% 36,870 $ 56,930 $ New Jersey 566,000 15.4% 17,950 17,730 Maryland 364,000 9.9% 8,510 6,860 Virginia 265,000 7.2% 14,350 5,990 Delaware
Slide 56: Construction Loans (March 31, 2010)
Construction Loans (March 31, 2010) Ending % of NPL Allowance Pennsylvania 290,000 $ 31.0% 10,820 $ 12,740 $ Virginia 234,000 25.0% 16,130 30,690 Maryland 227,000 24.2% 34,050 21,260 New Jersey 171,000 18.2% 18,130 7,310 Delaware
Slide 57: Declining Construction Exposure
Declining Construction Exposure $937 $1,205 $1,367 $1,269 $978 $0 $250 $500 $750 $1,000 $1,250 $1,500 $1,750 12/31/2007 12/31/2008 12/31/2009 3/31/2009 3/31/2010 (7%) (23%) (22%) ($ in millions) Construction Loans / Total Loans 12.2% 10.5% 8.2% 10.0% 7.8%
Slide 58: Construction Loans by Type
Construction Loans by Type Ending % of Balance Total Commercial Residential 629,000 $ 67.1% Commercial 238,000 25.4% Real Estate 52,000 5.5% Other Commercial 18,000 1.9% 937,000 $
Slide 59: CRE Loans by State (March 31, 2010)
CRE Loans by State (March 31, 2010) Ending % of NPL Allowance Balance Total Balance Allocations Pennsylvania 2,253,000 $ 52.1% 24,960 $ 12,480 $ New Jersey 1,216,000 28.1% 37,270 13,380 Maryland 387,000 9.0% 1,780 2,890 Virginia 337,000 7.8% 2,740 4,240 Delaware 130,000 3.0% 3,820 3,440 4,323,000 $
Slide 60: Shared National Credits
Shared National Credits Ending Commercial / Industrial 110,980 $ Commercial Real Estate Total Outstanding Delinquency: 6.1%
Slide 61: Troubled Debt Restructurings
Troubled Debt Restructurings Residential Mtg 27,290 $ 16,470 $ C&I/Comm'l Mtg 19,290 24,640 Construction Note: Excludes non-accrual TDR's
Slide 62: Investment Portfolio Detail
Investment Portfolio Detail
Slide 63: Investment Portfolio (March 31, 2010)
Investment Portfolio (March 31, 2010) ENDING MODIFIED BALANCE DURATION (in millions) Agency mortgage-backed securities 921.6 $ 2.85 Agency collateralized mortgage obligations 1,093.9 1.88 Municipal bonds 373.7 4.50 Auction rate securities 292.3 3.70 Corporate & trust preferred securities 146.7 10.52
Slide 64: Fulton Financial Corporation
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com