Slide 1: 2014 and Fourth Quarter Results
D A T A A S O F D E C E M B E R 3 1 , 2 0 1 4 U N L E S S O T H E R W I S E N O T E D 2014 AND FOURTH QUARTER RESULTS
Slide 2: Forward-Looking Statements
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 wor
Slide 3: Why Fulton?
WHY FULTON? • Risk Management Foundation • Management Depth and Experience • Stability of Markets / Franchise • Strong Capital & Reserves • Relationship Strategy • Quality Loan Growth / Solid Asset Quality • Attractive Core Deposit Profile • Expense Management • Balance Sheet Is Positioned for Risin
Slide 4: A Valuable Franchise
A VALUABLE FRANCHISE • 254 community banking offices across the Mid-Atlantic • Asset size: $17.1 billion • 3,800+ team members (3,570 FTEs (1)) • Market capitalization: $2.2 billion (2) 4 (1) Full-time equivalent employees. (2) Based on shares outstanding and the closing price as of December 31, 201
Slide 5: Strong Position in Attractive Markets
STRONG POSITION IN ATTRACTIVE MARKETS 5 Source: SNL Financial LC. Note: Data as of June 30, 2014 per FDIC Summary of Deposits. (1) Median HH Income, 2014 – 2019 Projected Population Change and 2014 – 2019 Projected HH Income Change are weighted by deposits in each MSA. Deposits Market Market Median
Slide 6: Deep Executive Management Team
Name Position Years at Fulton Years in Financial Services Prior Experience E. Philip Wenger Chairman, President & CEO 35 35 Various roles since joining in 1979 Patrick Barrett (1) Senior EVP & CFO 1 21 SunTrust, JPMorgan, Deloitte Touche Tomatsu Craig Hill Senior EVP/ HR, Corporate Communications an
Slide 7: 2014 Highlights
2014 HIGHLIGHTS • Diluted Earnings Per Share Growth • Average Loan & Core Deposit Growth • Modest loan growth resumed after a slow start • Solid pace of core deposit growth throughout 2014 • Revenue Challenges Due To a Persistent Low Interest Rate Environment • Net interest margin compression contin
Slide 8: 2015 Outlook
2015 OUTLOOK • Loans & Deposits: Annual average growth of 3%-7% • Net Interest Margin: Compression of 0-4 bps per quarter, on average, based on the current interest rate environment • Asset Quality: Continued modest provision; volatility may occur due to individual credits • Non-Interest Income: Mid
Slide 9: Income Statement Summary – Annual Comparison
INCOME STATEMENT SUMMARY – ANNUAL COMPARISON 9 Note: ROA is return an average assets determined by dividing net income for the period indicated by average assets (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slides titled
Slide 10: Income Statement Summary – Quarterly Comparison
INCOME STATEMENT SUMMARY – QUARTERLY COMPARISON Net Income of $37.9 million, a 1.6% decrease due to lower net interest income and an increase in non-interest expense Net Interest Income Net interest income down 1.0% due to an 8 bps decline in net interest margin Loan Loss Provision Steady improve
Slide 11: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN 11 Net Interest Income & Net Interest Margin (NIM (1)) ~ $730 million ~ $610 million $ 5 6 0 .2 $ 5 4 4 .3 $ 5 2 7 .2 $ 5 1 4 .9 3.90% 3.76% 3.50% 3.39% 3.54% 3.14% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $
Slide 12: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN 12 Net Interest Income & Net Interest Margin ~ $730 million ~ $610 million $ 1 3 3 .0 $ 1 2 9 .6 $ 1 2 7 .9 $ 1 2 9 .4 $ 1 2 8 .0 3.48% 3.47% 3.41% 3.39% 3.31% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Slide 13: Loan Portfolio Composition & Yield
LOAN PORTFOLIO COMPOSITION & YIELD 13 Note: Loan portfolio composition is based on average balances for the periods indicated. (1) Presented on a fully-taxable equivalent basis. $4.5 $4.6 $4.9 $5.1 $3.7 $3.6 $3.7 $3.7 $1.6 $1.6 $1.7 $1.7 $1.0 $1.2 $1.3 $1.4 $0.7 $0.6 $0.6 $0.6 $0.4 $0.4 $0.4 $0.4 5.
Slide 14: Deposits Portfolio Composition
DEPOSITS PORTFOLIO COMPOSITION 14 Note: Deposit composition is based on annual average balances for the periods indicated. 35% 19% 19% 18% 9% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Year Ended December 31, 2011 23% 27% 23% 17% 10% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Year
Slide 15: Positioned for Rising Interest Rate Environment
(1) See note 2 on slide 39. (2) The actual impact of changes in interest rates on the Corporation’s net interest income may differ materially from the anticipated amounts presented above. Anticipated Rate Annual Change in % Change (1) Net Interest Income (2) Change +300 bps $ 70.6 mill ion 14.5% +20
Slide 16: Asset Quality
ASSET QUALITY ($ IN MILLIONS) $135.0 $94.0 $40.5 $12.5 $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 2011 2012 2013 2014 16 Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans 2.14% 1.84% 1.59% 1.40% 99.5% 121.1% 151.6% 152.1% 172.3% 187.4% 0.0% 50.0% 100.0% 150.0% 200.0% 0.00%
Slide 17: Non-Interest Income
NON-INTEREST INCOME ($ IN MILLIONS) 17 Non-interest Income (Excluding Securities Gains) ~ $730 million ~ $610 million $ 1 8 2 .9 $ 2 0 7 .2 $ 1 8 0 .0 $ 1 6 5 .3 $- $25.0 $50.0 $75.0 $100.0 $125.0 $150.0 $175.0 $200.0 $225.0 2011 2012 (1) 2013 2014 Mortgage Banking Income & Spreads Other Non-interes
Slide 18: Non-Interest Income
NON-INTEREST INCOME ($ IN MILLIONS) 18 Non-interest Income (Excluding Securities Gains) ~ $730 million ~ $610 million $ 4 0 .7 $ 3 8 .5 $ 4 3 .8 $ 4 1 .8 $ 4 1 .3 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 $50.0 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Mortgage Banking Income & Spreads O
Slide 19: Non-Interest Expense
NON-INTEREST EXPENSE ($ IN MILLIONS) 19 Non-interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $ 4 1 6 .2 $ 4 4 9 .3 $ 4 6 1 .4 $ 4 5 9 .2 65.7% 63.7% 64.4% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $- $100.0 $200.0 $300.0 $400.0 $500.0 2011 2012 2013 2014 Non-interest
Slide 20: Non-Interest Expense
NON-INTEREST EXPENSE ($ IN MILLIONS) 20 Non-interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $ 1 1 6 .8 $ 1 0 9 .6 $ 1 1 6 .2 $ 1 1 5 .8 $ 1 1 7 .7 65.1% 63.4% 65.9% 65.8% 67.5% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 Q4 2013
Slide 21: Compliance & Risk Management
COMPLIANCE & RISK MANAGEMENT 13 45 0 10 20 30 40 50 $- $3.0 $6.0 $9.0 $12.0 2011 2012 2013 2014 Outside Services Expense# Salaries & Benefits Expense Staffing (full-time headcount) To tal N u m b e r o f Em p lo ye e s at p e rio d e n d $8.2 $3.2 $2.1 $1.8 $0.8 21 # Represents third-party consultin
Slide 22: Cost Savings Initiatives
COST SAVINGS INITIATIVES 2014 Cost Savings Initiatives: Branch consolidations (13 total) Organizational streamlining Compensation and benefit reductions 22 Implementation Expense Implementation Expense Expenses (Gains) Reductions Expenses Reductions Branch consolidations 2,080$ (2,400)$ 1,500$ (1,80
Slide 23: Profitability & Capital
PROFITABILITY & CAPITAL 23 ROA ROE Regulatory Capital Ratios & TCE Ratio (1) Diluted Earnings Per Common Share 7.62% 8.06% 8.82% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 2011 2012 2013 2014 FULT Peer^ Top 50* 0.93% 0.95% 0.96% 0.75% 0.80% 0.85% 0.90% 0.95% 1.00% 2011 2012 2013 2014 FULT Peer^ Top 50* $
Slide 24: Capital Optimization Summary
CAPITAL OPTIMIZATION SUMMARY 24 Transactions (November 2014): 1) Issued $100 million of subordinated debt • 4.50% coupon; 4.85% effective rate (est.) 2) Authorized $100 million accelerated share repurchase program through Apr 2015 • 6.5 million share day-one benefit for EPS purposes(1) Benefits: • R
Slide 25: Stock Repurchase Programs
STOCK REPURCHASE PROGRAMS June 2012 to May 2014 November 2014 Repurchase Programs Accelerated Repurchase Shares Repurchased 18.1 million 6.5 million (2) % of Outstanding Shares 9.8% (1) 4.4% (2)(3) Amount Repurchased $206 million $100 million Average Purchase Price $11.40 (2) 25 demand and savings (
Slide 26: Average Assets and Return on Average Assets, by Bank
AVERAGE ASSETS AND RETURN ON AVERAGE ASSETS, BY BANK 2014 Return on Average Assets* Average Assets ($ Millions) 2014 2013 Fulton Bank, N.A. 9,389$ 1.21% 1.15% Lafayette Ambassador Bank 1,402 1.00% 1.24% FNB ank, N.A. 344 0.86% 0.91% Swineford National Bank 292 0.81% 0.77% The Columbia Bank 2,023 0.7
Slide 27: Appendix
APPENDIX
Slide 28: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS 28 Note: Yields presented on a fully taxable-equivalent basis, using a 35% federal tax rate and statutory interest expense disallowances. Balance Yield 3Q 14 4Q 13 3Q 14 4Q 13 Comm'l Mort 5,131$ 4.36% 17$ 65$ 0.01% (0.13%) Commercial 3,723 3.81% 66 83 (0.16%) (0.22%
Slide 29: Average Customer Funding and Rates
AVERAGE CUSTOMER FUNDING AND RATES 29 Balance Rate 3Q 14 4Q 13 3Q 14 4Q 13 Nonint DDA 3,631$ - % 117$ 314$ - % - % Int DDA 3,146 0.13% 99 179 0.01% 0.00% Savings/MMDA 3,548 0.13% 78 138 0.01% (0.01%) CD's 3,017 0.96% 8 51 0.04% 0.14% Total Deposits 13,342 0.28% 302 682 0.01% 0.03% Cash Mgt 270 0.08%
Slide 30: Ending Loan Distribution by State
ENDING LOAN DISTRIBUTION BY STATE DECEMBER 31, 2014 30 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 2,630,303$ 2,632,813$ 362,892$ 697,806$ 1,303,773$ 7,627,587$ New Jersey 554,235 1,357,963 90,879 167,474 357,650 2,528,201 Maryland 299,005 568,083 86,3
Slide 31: Non-Performing Loans
NON-PERFORMING LOANS* DECEMBER 31, 2014 31 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 15,676$ 18,317$ 9,695$ 11,321$ 7,873$ 62,882$ Maryland 2,153 2,847 3,172 2,376 1,675 12,223 New Jersey 9,093 20,148 2,927 5,333 5,776 43,277 Virginia 3,122 1,525 383
Slide 32: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) YEAR ENDED DECEMBER 31, 2014 32 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (dollars in thousands) Pennsylvania 13,052$ 1,355$ 142$ 1,780$ 3,902$ 20,231$ Maryland 3,461 47 (1,518) 245 1,566 3,801 New Jersey 4,073 2,665 96 196 1,290 8,320 Virginia (318
Slide 33: Investment Portfolio
INVESTMENT PORTFOLIO DECEMBER 31, 2014 33 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Agency collateralized mortgage obligations 4.1 917$ (15) 902$ Agency mortgage-backed securities 4.8 915 14 929 Municipal bonds 5.4 238 7 245 Auction rate secur
Slide 34: A Sustainable Payout
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 $0.36 2011 2012 2013 2014 Cash Dividend Yield 34 (1) Annualized dividend rate per share divided by period-end stock price. (2) Compounded annual growth rate from December 31, 2011 to De
Slide 35: Non-Interest Income (Excluding Securities Gains)
NON-INTEREST INCOME (EXCLUDING SECURITIES GAINS) QUARTER AND YEAR ENDED DECEMBER 31 35 4Q 14 2014 3Q 14 4Q 13 2014 Invt Mgt & Trust 11,188$ 44,605$ 68$ 599$ 2,899$ Overdraft & NSF Fees 5,500 22,145 (306) (446) (6,077) Mortgage Banking Income 3,723 17,107 (314) (640) (13,549) Service Charges 3,609 14
Slide 36: Non-Interest Expense
NON-INTEREST EXPENSE QUARTER AND YEAR ENDED DECEMBER 31 36 4Q 14 2014 3Q 14 4Q 13 2013 Salaries & Benefits 65,398$ 251,021$ 2,964$ 204$ (2,219)$ Occupancy & Equipment 14,779 61,697 (110) (1,331) (665) Outside Services 8,720 28,404 88 3,087 9,548 Data Proc. & Software 7,617 29,920 (425) 1,783 1,805 F
Slide 37: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION D ec 31, Sep 30, Jun 30, M ar 31, D ec 31, 2014 2014 2014 2014 2013 Eff iciency rat io (dollars in thousands) Non-interest expense 117,720$ 115,798$ 116,174$ 109,554$ 116,762$ Less: Intangible amortization (315) (314) (315) (315) (835) Numerator 117,405$ 115,484$ 115,859$ 109
Slide 38: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 38 D ec 31, Sep 30, 2014 2014 2014 2013 R eturn o n A verage Shareho lders' Equity (R OE) (T angible) Net income 37,949$ 38,566$ 157,894$ 161,840$ P lus: Intangible amortization, net of tax 205 204 818 1,585 Numerator 38,154$ 38,770$ 158,712$ 163,425$ Average sharehol
Slide 39: Notes
NOTES 39 1) On November 13, 2014, the Corporation entered into an accelerated share repurchase agreement (ASR) with Goldman, Sachs & Co. to repurchase $100 million of shares of the Corporation’s common stock. Under the terms of the ASR, the Corporation paid $100 million to Goldman Sachs on November
Slide 40: Peer Group
PEER GROUP* Associated Banc-Corp BancorpSouth, Inc. BOK Financial Corporation Commerce Bancshares, Inc. Cullen/Frost Bankers, Inc. FNB Corporation FirstMerit Corporation Hancock Holding Company IBERIABANK Corporation International Bancshares Corp. National Penn Bancshares, Inc. Private Bancorp, Inc.