Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2015)
35 slides from Fulton Financial's investor presentation, Nov 3, 2015
Slide 1: Investor Presentation
D A T A A S O F S E P T E M B E R 3 0 , 2 0 1 5 U N L E S S O T H E R W I S E N O T E D INVESTOR PRESENTATION
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 Geographic Markets / Franchise Value • Strong Capital & Reserves • Commitment to Enhancing Shareholder Value o Cash Dividends o Share Repurchase Programs • Relationship Banking Strategy / Customer Experience •
Slide 4: A Valuable Franchise
A VALUABLE FRANCHISE • 243 community banking offices across the Mid-Atlantic • Asset size: $17.8 billion • 3,650+ team members (3,440 FTEs (1)) • Market capitalization: $2.1 billion (2) 4 (1) Full-time equivalent employees. (2) Based on shares outstanding and the closing price as of September 30, 20
Slide 5: Strong Position in Attractive Markets
STRONG POSITION IN ATTRACTIVE MARKETS 5 Note: Data as of June 30, 2015 per Federal Deposit Insurance Corporation (FDIC) Summary of Deposits. Household Income Data as of June 30, 2015 per SNL Financial LC. (1) Median HH Income, 2016 – 2021 Projected Population Change and 2016 – 2021 Projected HH Inco
Slide 6: Deep Executive Management Team
Name Position Years at Fulton Years in Financial Services Prior Experience E. Philip Wenger Chairman, President & CEO 36 36 Various roles since joining in 1979 Patrick Barrett (1) Senior EVP & CFO 2 23 SunTrust, JPMorgan, Deloitte Touche Tomatsu Craig Roda Senior EVP/ Community Banking 37 37 Various
Slide 7: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS Diluted Earnings Per Share Growth • $0.20 diluted earnings per share in 3Q15 • 4.8% decrease compared to 2Q15, as improvements in Net Interest Income and credit provision were more than offset by the loss on redemption of trust preferred securities (TruPS) Loans & Deposits •
Slide 8: Income Statement Summary – Quarterly Comparison
INCOME STATEMENT SUMMARY – QUARTERLY COMPARISON Net Income of $34.3 million; a 6.6% decrease from 2Q15 and an 11.2% decrease from 3Q14 Net Interest Income From 2Q15: Increase of 2.3% due to an extra day of interest in Q3 and a 2.0% increase in average earning assets, partially offset by a 2 bp
Slide 9: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN 9 Net Interest Income & Net Interest Margin ~ $730 million ~ $610 million $129.4 $128.0 $123.6 $122.9 $125.7 3.39% 3.31% 3.27% 3.20% 3.18% 0.0% 0.5% 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 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Ne
Slide 10: Loan Portfolio Composition & Yield
LOAN PORTFOLIO COMPOSITION & YIELD 10 Note: Loan portfolio composition is based on average balances for the years ended December 31, 2011 to 2014 and for the nine months ended September 30, 2015. (1) Presented on a fully-taxable equivalent basis. $4.5 $4.6 $4.9 $5.1 $5.2 $3.7 $3.6 $3.7 $3.7 $3.8 $1.
Slide 11: Deposits Portfolio Composition
DEPOSITS PORTFOLIO COMPOSITION 11 Note: Deposit composition is based on average balances for the periods indicated. 24% 26% 23% 17% 10% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Nine Months Ended September 30, 2014 22% 28% 24% 17% 9% Time Deposits Non-Int DDA Int DDA Money Mkt Savings Nine
Slide 12: Interest Rate Sensitivity of Net Interest Income
1) A variety of interest rate scenarios are used to measure the effects of sudden and gradual movements upward and downward in the yield curve. These results are compared to the results obtained in a flat or unchanged interest rate scenario. Simulation of net interest income is used primarily to mea
Slide 13: Asset Quality
ASSET QUALITY ($ IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans 132.85% 134.26% 120.34% 113.34% 116.81% 1.47% 1.42% 1.37% 1.28% 1.25% 0.00% 1.00% 2.00% 3.00% 0.00% 25.00% 50.00% 75.00% 100.00% 125.00% 150.00% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Allowance/NPL
Slide 14: Non-Interest Income, Excluding Securities Gains
NON-INTEREST INCOME, EXCLUDING SECURITIES GAINS ($ IN MILLIONS) 14 Non-interest Income, Excluding Securities Gains ~ $730 million ~ $610 million $41.8 $41.3 $40.6 $44.1 $43.0 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Mortgage Banking Income & Spr
Slide 15: Non-Interest Expenses
NON-INTEREST EXPENSES ($ IN MILLIONS) 15 Non-interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $115.8 $117.7 $118.5 $118.4 $119.3 65.8% 67.5% 70.2% 68.9% 68.8% 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 $140.0 Q3 2014 Q4 2014 Q1
Slide 16: Compliance & Risk Management
COMPLIANCE & RISK MANAGEMENT $1.8 $2.1 $3.2 $4.3 $4.6 $1.4 $8.2 $4.8 $0.4 $1.5 13 26 30 45 47 0 5 10 15 20 25 30 35 40 45 50 $- $3.0 $6.0 $9.0 $12.0 2011 2012 2013 2014 2015 (Projected) Salaries & Benefits Expense Outside Consulting Services# Temporary Employee Expense Staffing $0.8 YTD Sep 15: $3.1
Slide 17: Cost Savings Initiatives
COST SAVINGS INITIATIVES 2014 Cost Savings Initiatives: Branch consolidations (13 total) Organizational streamlining Compensation and benefit reductions 17 Implementation Expense Implementation Expense Implementation Expense Implementation Expense Expenses (Gains) Reductions Expenses (Gains) Reducti
Slide 18: Profitability & Capital
PROFITABILITY & CAPITAL ROA ROE Diluted Earnings Per Common Share 6.72% 8.11% 8.50% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 FULT Peer^ Top 50* 0.78% 0.96% 0.94% 0.75% 0.80% 0.85% 0.90% 0.95% 1.00% 1.05% 1.10% Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 FULT Peer^ Top
Slide 19: Stock Repurchase Programs
STOCK REPURCHASE PROGRAMS June 2012 to October 2015 Repurchase Programs (1) Shares Repurchased 30.4 million % of Outstanding Shares 15.1% (2) Amount Repurchased $357 million Average Purchase Price $11.73 19 demand and savings (1) Share repurchases completed from June 2012 through October 25, 2015. (
Slide 20: Average Assets and ROA, by Bank
AVERAGE ASSETS AND ROA, BY BANK Nine Months Ended Sep 30, 2015 Return on Average Assets (1) Average Assets ($ Millions) 2015 2014 Fulton Bank, N.A. $9,604 1.04% 1.21% Lafayette Ambassador Bank 1,440 0.98% 1.03% FNB Bank, N.A. 340 0.62% 1.00% Swineford National Bank 303 1.05% 0.84% The Columbia Bank
Slide 21: 2015 Outlook
2015 OUTLOOK 21 Area Original – January 2015 Updated – September 2015 Loans & Deposits Annual average growth of 3%-7% Loans - Growth at lower end of range; Deposits - no change Net Interest Margin Compression of 0-4 bps per quarter, on average, based on the current interest rate environment Compress
Slide 22: Appendix
APPENDIX
Slide 23: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS 23 Note: Yields presented on a fully taxable-equivalent basis, using a 35% federal tax rate and statutory interest expense disallowances. Balance Yield Q2 2015 Q3 2014 Q2 2015 Q3 2014 Comm'l Mort 5,242$ 4.09% 31$ 128$ (0.06%) (0.26%) Commercial 3,887 3.78% 51 230 (0
Slide 24: Average Customer Funding and Rates
AVERAGE CUSTOMER FUNDING AND RATES 24 Balance Rate Q2 2015 Q3 2014 Q2 2015 Q3 2014 Nonint DDA 3,904$ - % 169$ 390$ - % - % Int DDA 3,317 0.13% 164 270 0.00% 0.01% Savings/MMDA 3,714 0.15% 145 245 0.01% 0.03% CD's 2,964 1.03% (63) (45) (0.01%) 0.11% Total Deposits 13,899 0.29% 415 860 (0.01%) 0.02% C
Slide 25: Ending Loan Distribution by State
ENDING LOAN DISTRIBUTION BY STATE SEPTEMBER 30, 2015 25 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 2,821,355$ 2,695,604$ 457,471$ 675,786$ 1,295,563$ 7,945,779$ New Jersey 556,217 1,356,900 134,779 169,239 364,164 2,581,299 Maryland 324,777 599,798 62
Slide 26: Non-Performing Loans
NON-PERFORMING LOANS* SEPTEMBER 30, 2015 26 Comm'l Consumer Ending Loans NPLs/Loans Comm'l Mortgage Constr. Res. Mtg. & Other Total NPLs by State by State (dollars in thousands) Pennsylvania 24,662$ 16,570$ 10,365$ 10,159$ 6,908$ 68,664$ 7,945,779$ 0.86% Maryland 2,060 5,531 1,638 3,913 1,523 14,665
Slide 27: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) NINE MONTHS ENDED SEPTEMBER 30, 2015 27 Comm'l Consumer Average Loans Charge-Offs to Comm'l Mortgage Constr. Res. Mtg. & Other Total by State Average Loans (dollars in thousands) Pennsylvania 10,211$ 466$ (730)$ 1,998$ 2,498$ 14,443$ 7,736,460$ 0.25% Maryland (72) (63) (
Slide 28: Investment Portfolio
INVESTMENT PORTFOLIO SEPTEMBER 30, 2015 28 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Collateralized mortgage obligations 3.7 880$ (6)$ 874$ Mortgage-backed securities 4.5 1,036 16 1,052 State and municipal securities 4.9 235 5 240 Auction rate
Slide 29: 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 $0.36 2011 2012 2013 2014 YTD 9/2015 Cash Dividend Yield 29 (1) Annualized dividend rate per share divided by period-end stock price. (2) Compounded annual growth rate from December 31,
Slide 30: Non-Interest Income (Excluding Securities Gains)
NON-INTEREST INCOME (EXCLUDING SECURITIES GAINS) 30 Q3 2015 Q2 2015 Q3 2014 Q2 2015 Q3 2014 Invt Mgt & Trust 11,237$ 11,011$ 11,120$ 226$ 117$ Overdraft & NSF Fees 5,652 5,352 5,806 300 (154) Merchant Fees 4,001 4,088 3,774 (87) 227 Service Charges 3,912 3,916 3,804 (4) 108 Mortgage Banking Income 3
Slide 31: Non-Interest Expense
NON-INTEREST EXPENSE 31 Q3 2015 Q2 2015 Q3 2014 Q2 2015 Q3 2014 Salaries & Benefits 65,308$ 65,067$ 62,434$ 241$ 2,874$ Occupancy & Equipment 14,305 15,144 14,889 (839) (584) Data Proc. & Software 9,089 8,270 8,042 819 1,047 Outside Services 7,373 8,125 8,632 (752) (1,259) Loss on redemption of TRUP
Slide 32: 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 33: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 33 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 2014 2014 2015 2015 2015 Shareholders' equity (tangible), per share Shareholders' equity 2,078,006$ 1,996,665$ 2,031,513$ 2,024,817$ 2,025,904$ Less: Intangible assets (532,117) (531,803) (531,672) (531,567) (531,562) Tangible sha
Slide 34: 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. (1) Private Bancorp,
Slide 35: www.fult.com
V E R S I O N 1 0 . 3 0 . 2 0 1 5 www.fult.com
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