Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (September 2014)
35 slides from Fulton Financial's investor presentation, Sep 5, 2014
Slide 1: Investor Presentation
Investor Presentation Data as of June 30, 2014 (unless otherwise noted)
Slide 2: 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 words such as “may,” “should
Slide 3: A Valuable Franchise
A Valuable Franchise 3 • 253 community banking offices across the Mid-Atlantic • Asset size: $17.0 billion • 3,800 team members (3,550 FTEs) • Market capitalization: $2.3 billion
Slide 4: Corporate Priorities
Enhance Compliance & Risk Management Infrastructure Earnings Per Share (EPS) Growth Quality Loan Growth Improve Asset Quality Core Deposit Growth Spread Management / Net Interest Margin Expense Management Increase Return on Average Assets (ROA) Increase Return on Average Equity (RO
Slide 5: Enhance Compliance & Risk Management Infrastructure
Strengthening the Corporation’s risk management and compliance infrastructures Address deficiencies within BSA/AML compliance Enforcement actions at three banking subsidiaries in July, 2014; other actions anticipated Significant investments in personnel, outside services and operating system
Slide 6: Income Statement Summary (June 30th – Quarter & Year-to-date)
YT D 2Q 14 Jun 14 1Q 14 2Q 13 YT D Jun 13 N et Interest Inco me 127,898$ 257,463$ (1,667)$ (4,167)$ (4,246)$ Lo an Lo ss P ro visio n 3,500 6 ,000 1,000 (10,000) (22,500) Other Inco me 43,760 82,266 5,254 (5,691) (11,971) Securit ies Gains 1,112 1,112 1,112 (1,753) (4,226) Other Expenses 116,174 225
Slide 7: Efficiency Ratio
64.6% 63.5% 64.0% 50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 2009 2010 2011 2012 2013 YTD June 30, 2014 FULT Peer^ Top 50* Efficiency Ratio (1) 7 (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-
Slide 8: BSA/AML Compliance Program Expenses and Staffing
BSA/AML Compliance Program Expenses and Staffing 8 0 10 20 30 40 50 60 $- $3.0 $6.0 $9.0 $12.0 $15.0 2011 2012 2013 Full Year 2014 (estimated) Outside Consulting Services# Salaries Expense* Staffing T o tal N u m b e r o f E m p lo y e e s at p e rio d en d ~ $7-$9 million for 2014 ~ $4.2 $2.1 $1.8
Slide 9: Cost Savings Initiatives
Branch closures / consolidation Organizational streamlining Compensation and benefit reductions Cost Savings Initiatives 9 Estimated Expense Reductions for the Implementation Expense Remainder of Expenses (Gains) Reductions 2014 Br ch consolidations (13 branches) 2,080$ (800)$ (1,600)$ Subsidi
Slide 10: Earnings Per Common Share Growth
Earnings Per Common Share Growth 10 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 $0.90 $1.00 2009 2010 2011 2012 2013 2014 $0.31 $0.59 $0.73 $0.80 $0.83 YTD Jun 30 YTD Dec 31 $0.43 CAGR (1) = 27.9% (1) Compounded annual growth rate from year-ended December 31, 2009 to December 31, 2013. $0.41
Slide 11: Loan Portfolio Growth & Composition
Loan Portfolio Growth & Composition 11 Note: Loan portfolio composition is based on average balances for the periods indicated. (1) Fully taxable-equivalent $4.6 $4.9 $5.1 $3.6 $3.7 $3.6 $1.6 $1.7 $1.7 $1.2 $1.3 $1.3 $0.6 $0.6 $0.6 $0.4 $0.4 $0.5 4.81% 4.39% 4.24% 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7
Slide 12: Improving Asset Quality
Improving Asset Quality: 1.01% 0.67% 0.70% 0.00% 1.00% 2.00% 3.00% Dec 31, 2009 Dec 31, 2010 Dec 31, 2011 Dec 31, 2012 Dec 31, 2013 Jun 30, 2014 FULT Peer^ Top 50* 12 ˄ See “Appendix” for listing of Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size
Slide 13: Core Deposits - Improved Mix
26% 23% 17% 10% 24% 2nd Quarter Ended June 30, 2014 Non-Int DDA Int DDA Money Mkt Savings Time Core Deposits - Improved Mix 13 16% 16% 11% 9% 49% 2nd Quarter Ended June 30, 2009 Non-Int DDA Int DDA Money Mkt Savings Time Note: Deposit composition is based on quarterly average balances for the period
Slide 14: Average Customer Funding Growth
Average Customer Funding Growth (June 30th – Quarter) Balance Rate 1Q 14 2Q 13 1Q 14 2Q 13 Non Int-Bearing Demand Deposits 3,322$ - % 79$ 205$ - % - % Int-Bearing Demand Deposits 2,915 0.12% (30) 196 (0.01%) (0.01%) Savings 3,356 0.12% 4 5 (0.01%) - % Time Deposits 3,012 0.90% 79 (157) 0.08% (0.06%)
Slide 15: Net Interest Margin
3.44% 3.53% 3.22% 3.00% 3.25% 3.50% 3.75% 4.00% 2009 2010 2011 2012 2013 YTD June 30, 2014 FULT Peer^ Top 50* Net Interest Margin (1) 15 (1) Fully –taxable equivalent. ˄ See “Appendix” for listing of Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets siz
Slide 16: Capital Strength
Capital Strength 15.2% 15.6% 15.0% 14.8% 12.7% 13.4% 13.1% 13.2% 10.3% 11.0% 10.6% 10.8% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% Dec 31, 2011 Dec 31, 2012 Dec 31, 2013 Jun 30, 2014 Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio Tier 1 Leverage Ratio 16 (1) Estimates – bas
Slide 17: Stock Repurchase Programs
Stock Repurchase Programs 17 January 2013 October 2013 May 2014 Program Program Program Authorized Shares to Repurchase 8.0 million 4.0 million 4.0 million % of Outstanding Shares 4.0% 2.1% 2.1% Shares Repurchased 8.0 million (1) 4.0 million (2) 4.0 million (3) Remaining Shares available to repurcha
Slide 18: A Sustainable Payout
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $0.00 $0.04 $0.08 $0.12 $0.16 $0.20 $0.24 $0.28 $0.32 $0.36 2009 2010 2011 2012 2013 YTD June 30, 2014 Cash Dividend Yield A Sustainable Payout 18 (1) Annualized dividend rate per share divided by period-end stock price. (2) Compounded annual growth rate from
Slide 19: Why Fulton?
Risk Management Foundation Management Depth and Experience Stability of Markets / Franchise Relationship Strategy Quality Loan Growth Strong Capital & Reserves A Focus on Shareholder Value Valuation Potential Expense Management Why Fulton? 19
Slide 20: Appendix
FULTON FINANCIAL CORPORATION Appendix
Slide 21: Capital Adequacy (June 30, 2014)
Capital Adequacy (June 30, 2014) (1) Estimates – based on final rules. Application of the Basel III rules are also subject to further interpretation, which could result in changes to the estimates shown above. (2) Well Capitalized minimums, fully-phased in requirements, with 2.50% conservation buffe
Slide 22: Return on Average Assets and Average Assets, by Bank
Return on Average Assets and Average Assets, by Bank 22 Six Mos. Ended June 30, 2014 Return on Average Assets* Average Assets ($ Millions) 2014 2013 Fulton Bank, N.A. 9,332$ 1.22% 1.19% Lafayette Ambassador Bank 1,380 1.04% 1.30% FNB Bank, N.A. 342 1.01% 0.85% Swineford National Bank 290 0.89% 0.62%
Slide 23: Other Income (June 30th – Quarter)
Other Income (June 30th – Quarter) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Invt. Mgt. & Trust 11,339$ 10,958$ 10,601$ 381$ 738$ Overdraft & NSF Fees 5,542 5,297 7,624 245 (2,082) Mortgage Banking Income 5,741 3,605 10,997 2,136 (5,256) Merchant Fees 3,843 2,723 3,600 1,120 243 Service Charges 3,717 3,309 4,05
Slide 24: Other Expenses (June 30th – Quarter)
Other Expenses (June 30th – Quarter) 2Q 14 1Q 14 2Q 13 1Q 14 2Q 13 Salaries & Benefits 63,623$ 59,566$ 63,490$ 4,057$ 133$ Occupancy & Equipment 14,824 17,205 15,340 (2,381) (516) Data Proc. & Software 7,540 6,721 7,603 819 (63) Outside Services 7,240 3,812 5,315 3,428 1,925 Professional fees 3,559
Slide 25: Average Loan Portfolio and Yields
Average Loan Portfolio and Yields Balance Yield 1Q 14 2Q 13 1Q 14 2Q 13 Comm'l Mort. 5,139$ 4.36% 54$ 381$ (0.08%) (0.36%) Commercial 3,618 3.95% (19) (97) (0.08%) (0.18%) Home Equity 1,735 4.18% (20) 3 - (0.06%) Resid. Mort. 1,339 3.97% 3 30 (0.02%) (0.12%) Construction 588 4.17% 12 (29) 0.09% 0.08
Slide 26: Average Interest-Bearing Liabilities and Rates
Average Interest-Bearing Liabilities and Rates Balance Rate 1Q 14 2Q 13 1Q 14 2Q 13 Int-Bearing Demand Deposits 2,915$ 0.12% (30)$ 196$ (0.01%) (0.01%) Savings 3,356 0.12% 4 5 (0.01%) - Time Deposits 3,012 0.90% 80 (157) 0.08% (0.06%) Short-term Borrowings 1,048 0.21% (161) (265) - - Long-term Debt
Slide 27: Ending Loan Distribution by State (June 30, 2014)
Ending Loan Distribution by State (June 30, 2014) Comm'l Comm'l Mortgage Constr. Res. Mtg. Other Total (in thousands) Pennsylvania 2,571,153$ 2,580,972$ 320,221$ 687,597$ 1,304,319$ 7,464,262$ New Jersey 531,916 1,357,197 91,905 165,221 355,839 2,502,078 Maryland 268,455 571,732 85,614 161,862 280,6
Slide 28: Non-performing Loans (June 30, 2014)
Non-performing Loans* (June 30, 2014) Comm'l Comm'l Mortgage Constr. Res. Mtg. Other Total (in thousands) Pennsylvania 24,313$ 18,219$ 11,200$ 10,713$ 8,292$ 72,737$ Maryland 3,061 2,373 3,505 2,125 2,244 13,308 New Jersey 9,199 21,038 4,305 6,345 6,410 47,297 Virginia 1,252 1,554 1,030 6,986 1,163
Slide 29: Net Charge-offs (Recoveries) (YTD June 2014)
Net Charge-offs (Recoveries) (YTD June 2014) Comm'l Comm'l Mortgage Constr. Res. Mtg. Other Total (dollars in thousands) Pennsylvania 7,790$ 1,348$ 186$ 1,008$ 1,782$ 12,114$ Maryland 416 60 (44) 231 871 1,534 New Jersey 1,227 1,656 111 187 1,039 4,220 Virginia (311) - (197) 205 (141) (444) Delaware
Slide 30: Investment Portfolio (June 30, 2014)
Investment Portfolio (June 30, 2014) Weighted Ave. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Agency collateralized mortgage obligations 4.1 1,023$ (20)$ 1,003$ Agency mortgage-backed securities 4.9 918 12 931 Municipal bonds 5.5 262 8 270 Auction rate secur
Slide 31: Interest Rate Shocks (June 30, 2014)
Interest Rate Shocks (June 30, 2014) 31 1) A variety of interest rate scenarios are used to measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to the results obtained in a flat or unchanged interest rate scenario. Simulation of earn
Slide 32: Peer Group
Private Bancorp, Inc. Prosperity Bancshares, Inc. Susquehanna Bancshares, Inc. TCF Financial Corporation Trustmark Corporation UMB Financial Corporation Umpqua Holdings Corporation Valley National Bancorp Webster Financial Corporation Wintrust Financial Corporation Associated Banc-Corp BancorpSouth,
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation 33 June 30, M arch 31, June 30, June 30, June 30, 2014 2014 2013 2014 2013 2013 2012 2011 2010 2009 Eff iciency rat io Non-interest expense 116,174$ 109,554$ 117,130$ 225,728$ 228,066$ 461,433$ 449,294$ 416,242$ 408,254$ 415,524$ Less: Intangible amortization (315) (315) (535
Slide 34: Non-GAAP Reconciliation (con't)
Non-GAAP Reconciliation (con’t) 34 Jun 30, M ar 31, Jun 30, Jun 30, Jun 30, 2014 2014 2013 2014 2013 R eturn o n A verage Shareho lders' Equity (T angible) Net income 39,596$ 41,783$ 40,582$ 81,379$ 79,809$ P lus: Intangible amortization, net of tax 204 204 349 410 696 Numerator 39,800$ 41,987$ 40,9
Slide 35: Fulton Financial Corporation contact details
Fulton Financial Corporation One Penn Square Lancaster, PA 17602 www.fult.com Version 2014-09-05
Fulton Financial — Investor Presentation (September 2014) on 6ix