Attached files
| file | filename |
|---|---|
| 8-K - 8-K - FULTON FINANCIAL CORP | a8-k6x30x15.htm |
| EX-99.2 - SUPPLEMENTAL FINANCIAL INFORMATION FOR THE QUARTER ENDED JUNE 30, 2015 - FULTON FINANCIAL CORP | exhibit9926-30x15.htm |
| EX-99.1 - PRESS RELEASE DATED JULY 21, 2015 - FULTON FINANCIAL CORP | exhibit9916-30x15.htm |
D A T A A S O F J U N E 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 2015 SECOND QUARTER RESULTS NASDAQ: FULT
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 words such as “may,” “should,” “will,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future,” “intends” and similar expressions which are intended to identify forward-looking statements. Management’s “2015 Outlook” contained herein is comprised of forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, some of which are beyond the Corporation’s control and ability to predict, that could cause actual results to differ materially from those expressed in the forward-looking statements. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation’s actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2014 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, which have been filed with the Securities and Exchange Commission and are available in the Investor Relations section of the Corporation’s website (www.fult.com) and on the Securities and Exchange Commission’s website (www.sec.gov). The Corporation uses certain non-GAAP financial measures in this presentation. These non-GAAP financial measures are reconciled to the most comparable GAAP measures at the end of this presentation. 2
SECOND QUARTER HIGHLIGHTS • Diluted Earnings Per Share Growth • 4.5% decrease compared to 1Q15 • Loans & Deposits • 0.7% increase in average loans compared to 1Q15, driven by Commercial and Commercial Real Estate; 3.1% increase compared to 2Q14 • 0.8% increase in average deposits compared to 1Q15, driven by an increase in savings and demand deposits; 7.0% increase compared to 2Q14 • Net Interest Income & Margin • 0.5% decrease in net interest income and a 7 basis point decrease in net interest margin compared to 1Q15 • Asset Quality • $2.2 million loan loss provision; increase in net charge-offs, stable non-performing loans • Non-Interest Income • Increased 8.6% compared to 1Q15 and increased 0.7% compared to 2Q14; increase in other service charges and fees in comparison to both periods • Non-Interest Expenses • Very slight (0.1%) decrease compared to 1Q15; 1.9% increase compared to 2Q14 • Strong Capital Levels • Capital levels remain above regulatory minimums under Basel III standards • Quarterly cash dividend to shareholders remained at nine cents; 1.5 million shares repurchased during 2Q15 • Issued $150 million of subordinated debt; proceeds used to redeem $150 million of trust preferred securities 3
INCOME STATEMENT SUMMARY – QUARTERLY COMPARISON Net Income of $36.7 million; an 8.4% decrease from 1Q15 and a 7.4% decrease from 2Q14 Net Interest Income From 1Q15: Decrease of 0.5% due to a 7 bps decline in net interest margin (NIM) From 2Q14: Decrease of 3.9% due to 21 bps decline in NIM, partially offset by 2.5% increase in average earning assets Loan Loss Provision $3.7 million negative provision in Q1 2015 Non-Interest Income From 1Q15: Increase of 8.6% driven by increases in overdraft fees, merchant and mortgage sale gains From 2Q14: Increase of 0.7% due to increased merchant and debit card income and other service charges and fees Non-Interest Expenses From 1Q15: Decrease of 0.1% reflecting lower occupancy and OREO costs, offset by higher outside services and marketing From 2Q14: Increase of 1.9% due to higher staffing costs and outside services 4 Note: ROA is return an average assets determined by dividing net income for the period indicated by average assets (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 2Q15 1Q15 2Q14 Net Interest Income 122,920$ (661)$ (4,978)$ Loan Loss Provision 2,200 5,900 (1,300) Non-interest Income 44,074 3,482 314 Securities Gains 2,415 (1,730) 1,303 Non-interest Expense 118,354 (124) 2,180 Income Taxes 12,175 (1,329) (1,325) Net Income 36,680$ (3,356)$ (2,916)$ Per Share (Diluted) 0.21$ (0.01)$ -$ ROA 0.86% (0.09%) (0.08%) ROE (tangible) (1) 9.83% (1.13%) (0.47%) Efficiency ratio (1) 68.94% (1.22%) 3.09% (dollars in thousands, except per-share data) Change from
NET INTEREST INCOME AND MARGIN 5 Net Interest Income & Net Interest Margin ~ $730 million ~ $610 million $127.9 $129.4 $128.0 $123.6 $122.9 3.41% 3.39% 3.31% 3.27% 3.20% 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 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Net Interest Income Net Interest Margin (Fully-taxable equivalent basis, or FTE) Average Interest-Earning Assets & Yields Average Liabilities & Rates $2.8 $2.8 $2.9 $2.8 $2.8 $12.8 $12.9 $13.1 $13.1 $13.2 3.92% 3.90% 3.85% 3.83% 3.74% 0.0% 2.0% 4.0% $- $4.0 $8.0 $12.0 $16.0 $20.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Securities & Other Loans Earning Asset Yield (FTE) $12.6 $13.0 $13.3 $13.4 $13.5 $1.9 $1.7 $1.5 $1.4 $1.4 0.71% 0.73% 0.76% 0.80% 0.77% 0.5% 0.7% 0.9% $- $4.0 $8.0 $12.0 $16 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Deposits Borrowings Cost of Interest-bearing Liabilities ($ IN MILLIONS) ($ IN BILLIONS) ($ IN BILLIONS)
ASSET QUALITY ($ IN MILLIONS) 6 Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans 129.56% 132.85% 134.26% 120.34% 113.34% 1.51% 1.47% 1.42% 1.37% 1.28% 0.00% 1.00% 2.00% 3.00% 0.00% 25.00% 50.00% 75.00% 100.00% 125.00% 150.00% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Allowance/NPLs Allowance/Loans Net Charge-offs (NCOs) and NCOs to Average Loans Allowance for Credit Losses (Allowance) to NPLs & Loans $9.1 $5.8 $8.2 $2.6 $12.4 0.28% 0.18% 0.25% 0.08% 0.38% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 Q2 2014 Q3 2014 Q4 2014 1 5 2 2015 NCOs NCOs/Average Loans $3.5 $3.5 $3.0 $(3.7) $2.2 $(6.0) $(4.0) $(2.0) $- $2.0 $4.0 $6.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $149.3 $143.8 $138.5 $149.3 $149.5 1.16% 1.10% 1.06% 1.14% 1.13% 0.00% 0.50% 1.00% 1.50% 2.00% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 $160.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 NPL NPLs/Loans
NON-INTEREST INCOME, EXCLUDING SECURITIES GAINS ($ IN MILLIONS) 7 Non-interest Income, Excluding Securities Gains ~ $730 million ~ $610 million $43.8 $41.8 $41.3 $40.6 $44.1 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Mortgage Banking Income & Spreads Other Non-interest Income 1.15% 1.32% 1.03% 1.11% 1.62% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% $- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Gains on Sales Servicing Income Spread on Sales (1) $5.7 $4.0 $3.7 $4.7 $5.3 $- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40 $45.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Invt Mgmt & Trust Srvs Deposit Srv Chgs Oth Srv Chgs Other $38.0 $37.8 $37.5 $34.9 $38.7 8.6% (1) Represents Gains on Sales divided by total commitments to originate residential mortgage loans for customers.
NON-INTEREST EXPENSES ($ IN MILLIONS) 8 Non-interest Expense & Efficiency Ratio (1) ~ $730 million ~ $610 million $116.2 $115.8 $117.7 $118.5 $118.4 65.9% 65.8% 67.5% 70.2% 68.9% 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 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Salaries and Employee Benefits & Staffing Other Non-interest Expenses 3,530 3,468 - 2,000 4,000 6,000 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Total Salaries Employee Benefits Average Full-time Equivalent Employees $63.6 $62.4 $65.4 $65.0 $65.1 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Occp & Equip Data Processing & Software Outside Srvs Other $52.6 $53.4 $52.3 $53.5 $53.3 - 0.1% (1) Non-GAAP based financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non- GAAP Reconciliation” at the end of this presentation.
COMPLIANCE & RISK MANAGEMENT $1.8 $2.1 $3.2 $4.1 $4.6 $1.4 $8.2 $4.2 13 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# Staffing $0.8 YTD Jun15: $2.0 YTD Jun15: $3.0 $0.1 9 # Represents third-party consulting and legal services directly related to BSA/AML compliance program. 2015 and 2014 exclude $0.7 million and $0.6 million, respectively, of capitalized software costs. To tal A n n u al E xp e n ses , in m ill io n s • Strengthening Risk Management and Compliance infrastructures • Address deficiencies within BSA/AML compliance • Recent BSA/AML enforcement actions at the Corporation and banking subsidiaries • Significant investments in personnel, outside services and systems; largely in-line with amounts previously disclosed BSA/AML Compliance Program Expenses and Staffing To tal N u m b e r o f Em p lo ye e s at Pe rio d En d
PROFITABILITY & CAPITAL 10 ROA ROE (tangible) (1) Tangible Common Equity Ratio (1) Diluted Earnings Per Common Share 10.30% 9.88% 9.96% 10.96% 9.83% 0.00% 4.00% 8.00% 12.00% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 0.94% 0.90% 0.88% 0.95% 0.86% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 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 slide titled “Non-GAAP Reconciliation” at the end of this presentation. 9.5% 9.3% 8.8% 8.9% 8.9% 0.0% 4. 8. 12.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $0.21 $0.21 $0.21 $0.22 $0.21 $- $0.05 $0.10 $0.15 $0.20 $0.25 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015
2015 OUTLOOK 11 Area Original Updated 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 Compression of 5-8 basis points over the second half of 2015 Asset Quality Continued modest provision; volatility may occur due to individual credits No change Non-Interest Income Mid- to high- single digit growth rate Growth at lower end of range Non-Interest Expense Low- single digit growth rate No change, except for $5.6 million of debt extinguishment costs in Q3 2015 Compliance, Risk Management and Technology Continued focus on program build- out No change Capital Continued commitment to return of capital to shareholders No change
NON-GAAP RECONCILIATION Note: The Corporation has presented the following non-GAAP (Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Corporation's results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Corporation evaluates its performance internally and these non- GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. 12 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Efficiency ratio Non-interest expense 116,174$ 115,798$ 117,720$ 118,478$ 118,354$ Less: Intangible amortization (315) (314) (315) (130) (106) Numerator 115,859$ 115,484$ 117,405$ 118,348$ 118,248$ Net interest income (fully taxable equivalent) 132,175$ 133,692$ 132,614$ 128,085$ 127,444$ Plus: Total Non-interest income 44,872 41,900 42,101 44,737 46,489 Less: Investment securities (gains) losses (1,112) (81) (848) (4,145) (2,415) Denominator 175,935$ 175,511$ 173,867$ 168,677$ 171,518$ Efficiency ratio 65.85% 65.80% 67.53% 70.16% 68.94% Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Return on Average Shareholders' Equity (ROE) (Tangible) Net income 39,596$ 38,566$ 37,949$ 40,036$ 36,680$ Plus: Intangible amortization, net of tax 204 204 205 85 69 umer to 39,800$ 38,770$ 38,154$ 40,121$ 36,749$ Ave age sh r holders' equity 2,081,898$ 2,089,459$ 2,052,211$ 2,015,963$ 2,031,788$ Less: Average goodwill and intangible assets (532,585) (532,271) (531,955) (531,732) (531,618) Average tangible shareholders' equity (denominator) 1,549,313$ 1,557,188$ 1,520,256$ 1,484,231$ 1,500,170$ Return on average common shareholders' equity (tangible), annualized 10.30% 9.88% 9.96% 10.96% 9.83% Three Months Ended Three Months Ended (dollars in thousands) (dollars in thousands)
NON-GAAP RECONCILIATION (CON’T) 13 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 2014 2014 2014 2015 2015 Tangible Common Equity to Tangible Assets (TCE Ratio) Shareholders' equity 2,099,800$ 2,078,006$ 1,996,665$ 2,031,513$ 2,024,817$ Less: Intangible assets (532,432) (532,117) (531,803) (531,672) (531,567) Tangible shareholders' equity (numerator) 1,567,368$ 1,545,889$ 1,464,862$ 1,499,841$ 1,493,250$ Total assets 17,033,639$ 17,238,174$ 17,124,767$ 17,363,341$ 17,365,462$ Less: Intangible assets (532,432) (532,117) (531,803) (531,672) (531,567) Total tangible assets (denominator) 16,501,207$ 16,706,057$ 16,592,964$ 16,831,669$ 16,833,895$ Tangible Common Equity to Tangible Assets 9.5% 9.3% 8.8% 8.9% 8.9%
V E R S I O N 4 . 2 1 . 2 0 1 5 www.fult.com