Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (October 2014)
35 slides from Fulton Financial's investor presentation, Oct 31, 2014
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 4 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: A Valuable Franchise
A VALUABLE FRANCHISE • 253 community banking offices across the Mid-Atlantic • Asset size: $17.2 billion • 3,800+ team members (3,550 FTEs) • Market capitalization: $2.1 billion 3
Slide 4: Corporate Priorities
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
Slide 5: Enhance Compliance & Risk Management Infrastructure
ENHANCE COMPLIANCE & RISK MANAGEMENT INFRASTRUCTURE • Strengthening the Corporation’s risk management and compliance infrastructures • Address deficiencies within BSA/AML compliance • Recent BSA/AML enforcement actions at the Corporation and four banking subsidiaries; actions at other bank subsidiar
Slide 6: Income Statement Summary (September 30th – Quarter)
INCOME STATEMENT SUMMARY (SEPTEMBER 30TH – QUARTER) 3Q14 Net Income of $38.6 million, down 2.6% from 2Q14 due to a decrease in other income, partially offset by higher net interest income, while expenses were flat Net Interest Income Net interest income down 2.4% from 3Q13, reflecting a lower in
Slide 7: Income Statement Summary (September 30th – Year-to-Date)
INCOME STATEMENT SUMMARY (SEPTEMBER 30TH – YEAR-TO-DATE) Net Income of $119.9 million, flat compared to 2013 due to lower net interest income, decreases in other income and lower expenses, offset by lower loan loss provision Net Interest Income Net interest income down 1.9% due to margin compres
Slide 8: Efficiency Ratio
50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 2009 2010 2011 2012 2013 YTD Jun 30, 2014 YTD Sep 30, 2014 FULT Peer^ Top 50* 63.2% EFFICIENCY RATIO (1) 8 (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “
Slide 9: BSA/AML Compliance Program Expenses and Staffing
BSA/AML COMPLIANCE PROGRAM EXPENSES AND STAFFING 0 10 20 30 40 50 60 $- $3.0 $6.0 $9.0 $12.0 $15.0 2011 2012 2013 YTD Sep 30, 2014 Full Year 2014 (estimated) Outside Consulting Services# Salaries Expense* Staffing To tal N u m b e r o f Em p lo ye e s at p e rio d e n d ~ $9 for 2014 ~ $3.4@ $2.1 $1
Slide 10: Cost Savings Initiatives
COST SAVINGS INITIATIVES Branch consolidations Organizational streamlining Compensation and benefit reductions 10 Estimated Expense Reductions for the Implementation Expense Fourth Quarter of Expenses (Gains) Reductions 2014 Br ch consolidations (13 branches) 2,080$ (1,600)$ (800)$ Subsidiary bank m
Slide 11: Diluted Earnings Per Common Share Growth
DILUTED EARNINGS PER COMMON SHARE GROWTH $- $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 Sep 30 YTD Dec 31 $0.64 11 (1) Compounded annual growth rate from year-ended December 31, 2009 to December 31, 2013. $0.61 CAGR (1)
Slide 12: Loan Portfolio Growth & Composition
LOAN PORTFOLIO GROWTH & COMPOSITION 12 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 $0.5 4.81% 4.39% 4.23% 3.9 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7
Slide 13: Average Loan Portfolio and Yields
AVERAGE LOAN PORTFOLIO AND YIELDS 13 3Q 2014 Average loans up 1.0% from 2Q14 and 1.5% from 3Q 13 3Q 2014 Ending loans increased 1.5% from 2Q14 and 2.0% from 3Q 13 Note: Yields presented on a fully taxable-equivalent basis, using a 35% federal tax rate and statutory interest expense disallowances. Ba
Slide 14: Improving Asset Quality
IMPROVING ASSET QUALITY 0.00% 1.00% 2.00% 3.00% Dec 31, 2009 Dec 31, 2010 Dec 31, 2011 Dec 31, 2012 Dec 31, 2013 Jun 30, 2014 Sep 30, 2014 FULT Peer^ Top 50* 14 ˄ See “Appendix” for listing of Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets size as of
Slide 15: Core Deposits - Improved Mix
CORE DEPOSITS - IMPROVED MIX 15 Note: Deposit composition is based on quarterly average balances for the periods indicated. 47% 16% 16% 13% 8% 3rd Quarter Ended September 30, 2009 Time Deposits Non-Int DDA Int DDA Money Mkt Savings 23% 27% 23% 17% 10% 3rd Quarter Ended September 30, 2014 Time Deposi
Slide 16: Average Customer Funding Growth
AVERAGE CUSTOMER FUNDING GROWTH SEPTEMBER 30TH – QUARTER 16 Balance Rate 2Q 14 3Q 13 2Q 14 3Q 13 Nonint DDA 3,514$ - % 192$ 292$ - % - % Int DDA 3,047 0.12% 132 152 0.00% (0.01%) Savings/MMDA 3,469 0.12% 113 109 0.00% 0.00% Total Demand and Savings 10,030 0.08% 437 553 0.00% 0.00% CD's 3,009 0.92% (
Slide 17: Net Interest Margin
NET INTEREST MARGIN (1) 3.42% 3.00% 3.25% 3.50% 3.75% 4.00% 2009 2010 2011 2012 2013 YTD Jun 30, 2014 YTD Sep 30, 2014FULT Peer^ Top 50* 17 (1) Fully –taxable equivalent. ˄ See “Appendix” for listing of Peer Group banks. * Comprised of the 50 largest publicly traded domestic banks/thrifts in assets
Slide 18: Capital Strength
CAPITAL STRENGTH 15.2% 15.6% 15.0% 14.5% 12.7% 13.4% 13.1% 12.9% 10.3% 11.0% 10.6% 10.5% 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 Sep 30, 2014 (1) Total Risk-Based Capital Ratio Tier 1 Risk-Based Capital Ratio Tier 1 Leverage Ratio 18 0.0% 5.0% 10.0%
Slide 19: Stock Repurchase Programs
STOCK REPURCHASE PROGRAMS 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 repurchase
Slide 20: 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 $0.36 2009 2010 2011 2012 2013 YTD Sep 30, 2014 Cash Dividend Yield 20 (1) Annualized dividend rate per share divided by period-end stock price. (2) Compounded annual growth rate from D
Slide 21: Why Fulton?
WHY FULTON? • Risk Management Foundation • Management Depth and Experience • Stability of Markets / Franchise • Relationship Strategy • Quality Loan Growth • Strong Capital & Reserves • A Focus on Shareholder Value • Valuation Potential • Expense Management 21
Slide 22: Appendix
APPENDIX
Slide 23: Capital Adequacy
CAPITAL ADEQUACY (1) SEPTEMBER 30, 2014 23 (1) Estimates (2) Estimates – based on final rules. Application of the Basel III rules are also subject to further interpretation, which could result in changes to the estimates shown above. (3) Well Capitalized minimums, fully-phased in requirements, with
Slide 24: Average Assets and Return on Average Assets, by Bank
AVERAGE ASSETS AND RETURN ON AVERAGE ASSETS, BY BANK Nine Mos. Ended Sep 30, 2014 Return on Average Assets* Average Assets ($ Millions) 2014 2013 Fulton Bank, N.A. 9,363$ 1.21% 1.13% Lafayette mbassador Bank 1,389 1.03% 1.27% FN Bank, N.A. 343 1.00% 0.93% The Columbia Bank 2,009 0.87% 0.81% Swinefor
Slide 25: Other Income
OTHER INCOME SEPTEMBER 30TH – QUARTER & YEAR-TO-DATE 25 3Q 14 YTD 3Q 14 2Q 14 3Q 13 YTD 3Q 13 Invt Mgt & Trust 11,120$ 33,417$ (219)$ 700$ 2,300$ Overdraft & NSF Fees 5,806 16,645 264 (1,386) (5,631) Mortgage Banking Income 4,038 13,384 (1,703) (3,085) (12,909) Merchant Fees 3,774 10,340 (69) 376 26
Slide 26: Other Expenses
OTHER EXPENSES SEPTEMBER 30TH – QUARTER & YEAR-TO-DATE 26 3Q 14 YTD 3Q 14 2Q 14 3Q 13 YTD 3Q 13 Salaries & Benefits 62,434$ 185,623$ (1,189)$ (910)$ (2,423)$ Occupancy & Equipment 14,889 46,918 65 (276) 661 Data Proc. & Software 8,042 22,303 502 17 24 Outside Services 8,632 19,684 1,392 3,584 6,461
Slide 27: Ending Loan Distribution by State
ENDING LOAN DISTRIBUTION BY STATE SEPTEMBER 30, 2014 27 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 2,634,710$ 2,582,016$ 347,742$ 691,937$ 1,310,438$ 7,566,843$ New Jersey 561,944 1,357,703 111,078 168,123 355,730 2,554,578 Maryland 269,520 576,121 86
Slide 28: Non-Performing Loans
NON-PERFORMING LOANS* SEPTEMBER 30, 2014 28 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (in thousands) Pennsylvania 18,610$ 19,233$ 10,826$ 10,918$ 8,269$ 67,856$ Maryland 2,761 4,034 3,929 2,155 1,974 14,853 New Jersey 8,062 19,232 4,496 6,268 5,810 43,868 Virginia 3,510 1,563 3
Slide 29: Net Charge-Offs (Recoveries)
NET CHARGE-OFFS (RECOVERIES) YTD SEPTEMBER 2014 29 Comm'l Consumer Comm'l Mortgage Constr. Res. Mtg. & Other Total (dollars in thousands) Pennsylvania 8,277$ 1,265$ 224$ 1,171$ 2,723$ 13,660$ Maryland 2,873 (14) (291) 241 1,107 3,916 New Jersey 2,439 2,208 174 190 1,111 6,122 Virginia (311) - (205)
Slide 30: Investment Portfolio
INVESTMENT PORTFOLIO SEPTEMBER 30, 2014 30 Weighted Avg. Remaining Life Amortized Unrealized Estimated (in years) Cost Gain (Loss) Fair Value Agency collateralized mortgage obligations 4.0 976$ (21) 955$ Agency mortgage-backed securities 4.9 955 7 962 Municipal bonds 5.5 250 8 258 Auction rate secur
Slide 31: Interest Rate Sensitivity Simulation Notes
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 32: 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.
Slide 33: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Six M o nths Ended Sep 30, June 30, Sep 30, June 30, Sep 30, Sep 30, 2014 2014 2013 2014 2014 2013 2013 2012 2011 2010 2009 Eff iciency rat io Non-interest expense 115,798$ 116,174$ 116,605$ 225,728$ 341,526$ 344,671$ 461,433$ 449,294$ 416,242$ 408,254$ 415,524$ Less: Intangi
Slide 34: Non-GAAP Reconciliation (Con't)
NON-GAAP RECONCILIATION (CON’T) 34 Sep 30, Jun 30, Sep 30, Sep 30, Sep 30, 2014 2014 2013 2014 2013 R eturn o n A verage Shareho lders' Equity (T angible) Net income 38,566$ 39,596$ 39,948$ 119,945$ 119,757$ P lus: Intangible amortization, net of tax 203 204 347 614 1,042 Numerator 38,769$ 39,800$ 4
Slide 35: V E R S I O N . . ONE PENN SQUARE LANCASTER, PA
V E R S I O N 1 0 . 3 1 . 2 0 1 4 ONE PENN SQUARE LANCASTER, PA 17602 www.fult.com
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