Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Q4 2020 Earnings Presentation
21 slides from Fulton Financial's earnings presentation, Jan 20, 2021
Slide 1: 2020 and Fourth Quarter Results
2020 AND FOURTH QUARTER RESULTS NASDAQ: FULT Data as of December 31, 2020 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: Income Statement Summary
INCOME STATEMENT SUMMARY Change From 4Q20 3Q20 4Q19 (dollars in thousands, except per-share data) Net Interest Income $ 161,591 $ 7,475 $ 2,321 Provision for Credit Losses 6,240 (840) (14,290) Non-Interest Income 55,574 (7,672) 293 Securities Gains — (2) — Non-Interest Expense 154,737 15,592 15,763
Slide 4: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields ($ IN BILLIONS) ($ IN MILLIONS) $25 8.00% $20 $4 $4 $5 $3 $4 6.00% $200 4.00% $19 $18 $19 $15 $17 $17 $180 4.00% 3.75% $10 4.07% 3.97% $159 $161 $162 3.32% 3.13% 3.12% $160 $154 $5 2.00%
Slide 5: Asset Quality
ASSET QUALITY ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans $50 $200 1.50% $44 $40 $175 0.84% 0.82% 0.78% 1.00% 0.75% 0.75% $30 $150 $21 $147 0.50% $20 $141 $140 $140 $142 $20 $125 $10 $7 $6 $100 0.00% 4Q19 1Q20 2Q20 3Q20 4Q20 4Q19 1Q20 2Q20 3Q20 4Q20 NPL NP
Slide 6: Non-Interest Income
NON-INTEREST INCOME(1) Three months ended December 31, 2020 (percent of total non-interest income) 4Q20 3Q20 Change (dollars in thousands) n Wealth Management $ 15,653 $ 14,943 $ 710 5% n Mortgage Banking 9,311 16,801 (7,490) n Consumer Banking 10,798 10,423 375 28% n Commercial Banking 16,809 18,31
Slide 7: Non-Interest Expense
NON-INTEREST EXPENSE Three months ended December 31, 2020 (percent of total non-interest expense) 4Q20 3Q20 Change (dollars in thousands) 24% n Salaries and Benefits $ 83,929 $ 79,227 $ 4,702 n Occupancy 13,161 13,221 (60) n Data Processing and Software 11,951 12,285 (334) n Other Outside Services 8
Slide 8: Cost Saving Initiatives
COST SAVING INITIATIVES Initiatives included the following outcomes: • Reallocation of management responsibilities and flattening of reporting structures Cost Saving Initiative • Closures of 21 financial centers $20.0 • The renegotiation of certain vendor Actual contracts $15.4(2) $15.0 $16.2 millio
Slide 9: Capital Position Remains Strong
CAPITAL POSITION REMAINS STRONG (as of December 31, 2020) 17.5% 15.0% 14.5% 12.5% $801 10.3% 10.0% $361 9.4% 8.1% $466 7.5% $788 5.0% 2.5% —% Tier 1 Leverage Tier 1 Risk Based CE Tier 1 Total Risk Based Regulatory Minimums Excess(2) In the fourth quarter of 2020, the Corporation issued $200 million
Slide 10: 2021 Outlook
2021 OUTLOOK Net interest income: $620 - $640 million Provision for credit losses: $30 - $50 million Non-interest income: $210 - $220 million Non-interest expense: $550 - $570 million 10
Slide 11: 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 12: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended Dec 31 Sep 30 Dec 31 Efficiency ratio 2020 2020 2019 Non-interest expense $ 154,737 $ 139,145 $ 138,974 Less: Amortization of tax credit investments (1,532) (1,694) (1,505) Less: Intangible amortization (132) (132) (142) Non-interest expense (numerator) 153
Slide 13: Appendix - Credit Disclosures
APPENDIX - CREDIT DISCLOSURES Additional detail on deferrals and select industries (data as of December 31, 2020; all industry classifications based on NAICS codes) 13
Slide 14: Active COVID Deferrals Continue to Decline
Active COVID Deferrals(1) Continue to Decline Commercial • At December 31, 2020, active deferrals declined to ~$200 million, or 2% of the commercial portfolio(2) • Majority of active deferrals are in the hospitality, entertainment, and fitness industries • Increased focus to obtain credit enhancemen
Slide 15: Selected Industries With Heightened Risk Due to COVID-19
Selected Industries With Heightened Risk Due to COVID-19 (1) Based on regulatory classifications. Commercial Portfolio consists of Commercial and Industrial, Commercial Mortgage, and Construction loans to commercial borrowers. Note: "Pass," "Special Mention" and "Substandard or Lower" are the Corpor
Slide 16: Complete Hotel Portfolio Reviewed With Updated Risk Ratings
Complete Hotel Portfolio Reviewed With Updated Risk Ratings • 60 hotel loans totaling $366 million or 2.6% of the portfolio. • Average loan size of $3.0 million. • Concentration in hotels that primarily rely on leisure segments in “drive-to” markets, which have been recovering faster than those depe
Slide 17: Food Services/Restaurant Portfolio Reflects Diversity In Size, Type And Geography
Food Services/Restaurant Portfolio Reflects Diversity In Size, Type And Geography Food Services/Restaurants portfolio reflects diversity in size, type and 12% geography • Portfolio size of $164 million. 17% • Diversified and granular portfolio with average loan size of $250 thousand. 71% • Geographi
Slide 18: Arts and Entertainment: Portfolio Risk Assessment
Arts and Entertainment: Portfolio Risk Assessment Shows Reasonable Ability To Perform Given Current Environment The Arts/Entertainment portfolio risk assessment 4% 2% shows reasonable ability to perform given current 4% environment 11% • Portfolio of $307 million. 37% • Diverse portfolio with averag
Slide 19: Healthcare: CCRC's Show Solid Occupancy, Performance
Healthcare: CCRC's Show Solid Occupancy, Performance And Continue To Have Waiting Lists CCRC's show solid occupancy, performance and 5% continue to have waiting lists 13% • Portfolio of $1.1 billion. • Healthcare portfolio granular and diverse. 44% • Largest exposure is Nursing and Continuing 24% Ca
Slide 20: Retail Exposure Includes Significant Auto Dealership Portfolio
Retail Exposure Includes Significant Auto Dealership Portfolio That Has Rebounded Nicely Retail exposure includes significant auto dealership portfolio that has rebounded nicely 9% 5% 4% • Portfolio of $768 million. 15% • Approximately $514 million in Auto and Equipment 67% Dealership exposure. Reta
Slide 21: Energy Portfolio Detail: No Direct Exposure to Upstream or Midstream
Energy Portfolio Detail: No Direct Exposure to Upstream or Midstream; Downstream Comprised of Oil and Gasoline Retail Distribution • Upstream - Exploration and production sector. Includes searching for crude oil and natural gas fields, drilling of exploratory wells, and drilling and operating wells