Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (June 2018)
32 slides from Fulton Financial's investor presentation, Jun 5, 2018
Slide 1: Investor Presentation
INVESTOR PRESENTATION D A T A AS OF M A R C H 3 1 , 2 0 1 8 U N L E S S O T H E R W I S E N O T E D
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? • Risk Management Foundation • Management Depth and Experience • Stability of Geographic Markets / Franchise Value • Strong Capital & Reserves • Commitment to Enhancing Shareholder Value • Relationship Banking Strategy / Customer Experience • Quality Loan Growth / Solid Asset Quality • A
Slide 4: A Valuable Franchise
A VALUABLE FRANCHISE • 243 community banking offices across the Mid-Atlantic • Asset size: $19.9 billion • 3,700+ team members (3,580 FTEs (1)) • Market capitalization: $3.1 billion (2) (1) Average full-time equivalent employees. (2) Based on shares outstanding and the closing price as of March 31,
Slide 5: Strong Position in Attractive Markets
STRONG POSITION IN ATTRACTIVE MARKETS Median Deposits Market Market Household (HH) 2018-2023 Projected Change Metropolitan Statistical Area (MSA) (in millions) Rank Share Income Population HH Income Lancaster, PA 3,131 1 28.28% 64,827 2.16% 9.70% Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 2,966 14
Slide 6: Deep Executive Bench with Continuity
DEEP EXECUTIVE BENCH WITH CONTINUITY Years in Years at Prior Financial Name Position Fulton Services Experience E. Philip Wenger Chairman and CEO 38 38 Various roles since joining in 1979 President/COO of Fulton Curtis Myers Financial Corporation and 27 27 Various roles since joining in 1990 Fulton
Slide 7: First Quarter 2018 Highlights
FIRST QUARTER 2018 HIGHLIGHTS Net income per diluted share: $0.28 in 1Q18, 47.4% increase from 4Q17 and 12.0% increase from 1Q17. 4Q17 included a $15.6 million, or $0.09 per share, charge related to the re-measurement of net deferred tax assets. Pre-Provision Net Revenue(1): $62.2 million, 10.4% dec
Slide 8: Income Statement Summary
INCOME STATEMENT SUMMARY Change from 1Q18 4Q17(1) 1Q17 Net Income of $49.5 million, 45.5% increase from 4Q17 and 14.1% increase from 1Q17. 4Q17 included a $15.6 million, or $0.09 per share, (dollars in thousands, except per-share data) charge related to the re-measurement of net deferred tax asset
Slide 9: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields ($ IN MILLIONS) ($ IN BILLIONS) 3.83% 3.93% 3.74% 3.78% 3.80% $20.0 4.00% $160.0 4.00% $15.0 $140.0 3.50% $15.4 $15.6 $15.7 $10.0 $14.9 $15.1 2.00% 3.35% 3.29% 3.27% 3.29% ~ $730 $120.0
Slide 10: Loan Portfolio Composition & Yield
LOAN PORTFOLIO COMPOSITION & YIELD Average loans for the first quarter of 2018 are up 5.4% compared to the first quarter of 2017. $16.0 $15.7 12.00% $15.2 $0.6 $0.4 $1.0 $14.1 $0.9 $14.0 $13.3 $0.4 $12.9 $0.8 10.00% $1.8 $2.0 $0.4 $0.7 $12.0 $0.6 $1.5 $1.4 $1.4 $1.6 $1.5 $1.7 8.00% $10.0 $1.7 (1) Yi
Slide 11: Deposit Portfolio Composition
DEPOSIT PORTFOLIO COMPOSITION Average demand and savings are up 4.5% compared to the first quarter of 2017; total average deposits are up 3.6%. Year Ended December 31, 2016 Three Months Ended March 31, 2017 Three Months Ended March 31, 2018 19% 9% 17% 28%10% 18% 20% 19% 29% 28% 26% 24%24% 29% 10% 18
Slide 12: Positioned for Rising Interest Rate Environment
POSITIONED FOR RISING INTEREST RATE ENVIRONMENT MARCH 31, 2018 Rate Annual Change in % Change in Change (1) Net Interest Income (2) Net Interest Income (2) +300 bps $ 84.5 million 13.1% +200 bps $ 57.8 million 9.0% +100 bps $ 29.0 million 4.5% - 100 bps $ (49.0) million -7.6% 1) A variety of interes
Slide 13: Asset Quality
ASSET QUALITY ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans $6.7 $6.7 $7.0 $160.0 2.00% $135.7 $136.5 $134.8 $134.6 $6.0 $131.5 $5.1 $4.8 $120.0 1.50% $5.0 $4.0 $4.0 $80.0 1.00% $3.0 0.88% 0.88% 0.88% 0.85% 0.86% $2.0 $40.0 0.50% $1.0 $0.0 0.00% $- 1Q17 2Q17
Slide 14: Non-Interest Income
NON-INTEREST INCOME ($ IN MILLIONS) Non-Interest Income, Excluding Securities Gains Mortgage Banking Income & Spreads $7.0 4.00% $6.1 $6.0 3.50% $4.8 3.00% $60.0 $5.0 $4.6 $4.4 $4.2 2.50% $4.0 2.00% $3.0 $50.0 1.50% $2.0 1.62% 1.62% 1.44% ~ $730 1.36% 1.00% 1.11% $1.0 million 0.50% $40.0 $- 0.00% 1Q
Slide 15: Non-Interest Expenses
NON-INTEREST EXPENSES ($ IN MILLIONS) Non-Interest Expense & Efficiency Ratio (1) Salaries and Employee Benefits & Staffing $80.0 $74.5 $75.8 4,000 $69.2 $72.9 $73.5 $70.0 $160.0 80.0% $60.0 $50.0 $140.0 70.0% $40.0 3,580 3,500 3,520 $30.0 67.5% $20.0 ~ $730 $120.0 64.2% 64.3% 64.2% 60.0% 65.3% mill
Slide 16: Profitability & Capital
PROFITABILITY & CAPITAL ROA(1) ROE and ROE (tangible)(2) 1.20% 11.52% 11.85% 12.00% 10.93% 11.06% 0.98% 1.01% 1.00% 0.92% 0.94% 8.76% 9.02% 8.22% 8.36% 7.91% 0.80% 8.00% 0.67% 6.03% 0.60% 4.00% 0.40% 0.20% 0.00% 1Q17 2Q17 3Q17 4Q17(3) 1Q18 0.00% 1Q17 2Q17 3Q17 4Q17(3) 1Q18 ROE ROE (tangible) Tangibl
Slide 17: 2018 Outlook
2018 OUTLOOK Changes from original outlook have been underlined. • Loans & Deposits: Average annual loan and core deposit growth rates in the mid single digits • Asset Quality: Provision will reflect loan growth and previously disclosed 2Q18 individual credit loss • Non-Interest Income(1): Low singl
Slide 18: Appendix
APPENDIX
Slide 19: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS Change in 1Q 2018 Balance From Yield From Balance Yield 4Q 2017 1Q 2017 4Q 2017 1Q 2017 (dollars in millions) Comm'l Mort $ 6,306 4.16% $ 73 $ 267 0.07% 0.18% Commercial 4,289 4.15% 26 84 0.10% 0.26% Resid Mort 1,958 3.85% 32 320 0.02% 0.09% Home Equity 1,539 4.65%
Slide 20: Average Customer Funding and Rates
AVERAGE CUSTOMER FUNDING AND RATES Change In 1Q 2018 Balance From Rate From Balance Rate 4Q 2017 1Q 2017 4Q 2017 1Q 2017 (dollars in millions) Nonint DDA $ 4,246 - % $ (208) $ (56) - % - % Int DDA 3,959 0.41% (79) 308 0.01% 0.16% Savings/MMDA 4,494 0.39% (258) 300 0.01% 0.18% Brokered Deposits 74 1.
Slide 21: Loan Distribution by State
LOAN DISTRIBUTION BY STATE AS OF MARCH 31, 2018 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania $ 3,176,454 $ 3,305,385 $ 471,864 $ 730,699 $ 1,271,875 $ 8,956,277 New Jersey 541,364 1,444,925 180,339 268,378 402,727 2,837,733 Maryland 340,814 693,090 159,
Slide 22: Non-Performing Loans
NON-PERFORMING LOANS(1) AS OF MARCH 31, 2018 Comm'l Consumer Ending Loans NPLs/Loans Comm'l Mortgage Constr. Res. Mtg. & Other Total NPLs by State by State (dollars in thousands) Pennsylvania $ 33,582 $ 13,689 $ 4,113 $ 7,885 $ 5,711 $ 64,980 $ 8,956,277 0.73% New Jersey 6,359 13,147 1,763 4,648 4,7
Slide 23: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) THREE MONTHS ENDED MARCH 31, 2018 Annualized Comm'l Consumer Average Loans Charge-Offs to Comm'l Mortgage Constr. Res. Mtg. & Other Total by State Average Loans (dollars in thousands) Pennsylvania $ 2,707 $ 142 $ 148 $ 26 $ 481 $ 3,504 $ 8,967,781 0.16% New Jersey 204 (1
Slide 24: Investment Portfolio
INVESTMENT PORTFOLIO MARCH 31, 2018 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value (dollars in millions) Residential mortgage-backed securities 5.0 $ 1,085 $ (31) $ 1,054 Collateralized mortgage obligations 3.7 696 (16) 680 State and municipal secu
Slide 25: Non-Interest Income (Excluding Securities Gains)
NON-INTEREST INCOME (EXCLUDING SECURITIES GAINS) Change From 1Q 2018 4Q 2017 1Q 2017 4Q 2017 1Q 2017 (in thousands) Other service charges and fees: Merchant fees $ 4,115 $ 4,308 $ 3,607 $ (193) $ 508 Debit card income 2,817 3,526 2,665 (709) 152 Commercial loan interest rate swap fees 1,291 2,914 3,
Slide 26: Non-Interest Expense
NON-INTEREST EXPENSE Change From 1Q 2018 4Q 2017 1Q 2017 4Q 2017 1Q 2017 (in thousands) Salaries and employee benefits $ 75,768 $ 73,504 $ 69,236 $ 2,264 $ 6,532 Net occupancy expense 13,632 12,549 12,663 1,083 969 Data processing and software 10,473 10,401 8,979 72 1,494 Other outside services 8,12
Slide 27: A Sustainable Payout
A SUSTAINABLE PAYOUT Cash Dividend Per Common Share & Yield $0.52 4.5% $0.47 $0.48 (2) CAGR = 8.4% 4.0% $0.44 $0.41 $0.40 $0.38 3.5% $0.36 $0.34 (1) YieldDividend 3.0% $0.32 2.63% $0.32 2.92% $0.28 2.75% 2.70% 2.5% 2.44% $0.24 2.0% 2.18% $0.20 1.5% $0.16 $0.12 Cash Dividend Dividend Cash PerCommon S
Slide 28: The Impact of Tax Reform
THE IMPACT OF TAX REFORM During the fourth quarter of 2017, the Corporation recorded a $15.6 million tax charge to income taxes related to the re-measurement of net deferred tax assets as a result of a new federal tax legislation enacted in December 2017. In the following table, the “As Adjusted” co
Slide 29: 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 30: Non-GAAP Reconciliation (Continued)
NON-GAAP RECONCILIATION (CONTINUED) Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2017 2017 2017 2017 2018 Tangible Common Equity to Tangible Assets (TCE Ratio) (dollars in thousands) Shareholders' equity $ 2,154,683 $ 2,191,770 $ 2,225,786 $ 2,229,857 $ 2,235,493 Less: Intangible assets (531,556) (531,556) (5
Slide 31: Non-GAAP Reconciliation (Continued)
NON-GAAP RECONCILIATION (CONTINUED) Reconciliation of Net Income; Net Income per share, diluted; and Selected Financial Ratios, adjusted to exclude the charge recognized in the fourth quarter of 2017 related to the re-measurement of net deferred tax assets: T hree M o nths Ended D ec 31, 2017 Dilute
Slide 32: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fult.com