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INVESTOR PRESENTATION z Data as of March 31, 2020 - Unless otherwise noted.
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 "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results. Management’s 2020 Outlook contained herein is comprised of forward-looking statements. Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, they are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. 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, 2019, Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and other current and periodic reports, which have been or will be filed with the Securities and Exchange Commission and are or will be 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
Why Fulton? ▪ Deep Executive Bench with Continuity ▪ Valuable Franchise in Attractive Markets ▪ Relationship Banking Strategy Focused on the Customer Experience ▪ Granular, Well-Diversified Loan Portfolio ▪ Attractive Core Deposit Profile ▪ Solid Asset Quality and Reserves ▪ Prudent Expense Management with Opportunities to Improve ▪ Strong Capital Position ▪ Strong and Diverse Liquidity Position 3
Deep Executive Bench With Continuity Years in Financial Prior Name Position Years at Fulton Services Experience Phil Wenger Chairman/CEO 41 41 Various roles since joining in 1979 Curt Myers President/COO 30 30 Various roles since joining in 1990 PwC, Banking and Investment Banking; Joined Mark McCollom (1) Chief Financial Officer 2 32 Fulton in November 2017 Meg Mueller Head of Commercial Banking 24 34 Various roles since joining in 1996 Angela Snyder Head of Consumer Banking 18 35 Various roles since joining in 2002 Angie Sargent Chief Information Officer 28 28 Various roles since joining in 1992 Betsy Chivinski (2) Chief Risk Officer 26 38 Various roles since joining in 1994 (1) Includes years of service in public accounting and investment banking as a financial services industry specialist. 4 (2) Includes years of service in public accounting as a financial services industry specialist.
A Valuable Franchise ▪ ~230 financial centers throughout the Mid-Atlantic ▪ Asset size of $22.9 billion ▪ 3,600+ team members (3,480 FTEs (1)) ▪ Market capitalization of ~ $1.9 billion (2) ▪ Opportunity to meaningfully grow our market share(3) o ~16.5% deposit market share across the 15 counties where we have a Top 5 deposit market share; Represents 57% of our total deposits o ~1.0% deposit market share across the 38 counties where we do not have a Top 5 deposit market share; Represents 43% of our total deposits (1) Average full-time equivalent employees. (2) Shares outstanding and closing price as of March 31, 2020 (3) Data as of June 30, 2019 per S&P Global Market Intelligence ; Map includes Fulton 5 Financial counties with a financial center and/or a loan production office (“LPO”), and incorporated cities in MD and VA with a financial center and/or LPO and removes online only bank deposits.
Strong Position In Attractive & Stable Markets Fulton Fulton Financial Fulton Financial Market Median Projected Fulton Financial Market Total Projected Financial Corporation Corporation Total Market Total Household Market Metropolitan Statistical Area (MSA) Corporation Total Active Branches Household Corporation Total Active Deposit Market Deposits 2019 ($000) Income Current Population Deposits 2019 ($000) 2019 Income Growth Market Rank Branches 2019 Share 2019 ($) Growth Lancaster, PA 1 24 3,228,191 27.66% 181 11,671,747 69,608 11.38% 2.04% Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 14 56 3,299,399 0.79% 1,601 418,987,025 74,223 11.20% 1.26% Allentown-Bethlehem-Easton, PA-NJ 4 21 1,499,163 8.61% 240 17,410,952 69,431 9.00% 1.58% New York-Newark-Jersey City, NY-NJ-PA 62 24 1,358,751 0.08% 5,070 1,645,630,716 82,805 12.53% 0.77% Baltimore-Columbia-Towson, MD 11 17 1,049,259 1.41% 658 74,304,274 84,221 9.33% 1.94% York-Hanover, PA 3 12 1,010,021 13.19% 126 7,658,433 69,716 9.62% 1.69% Harrisburg-Carlisle, PA 7 10 842,850 5.29% 182 15,922,557 69,485 7.97 2.17% Lebanon, PA 1 8 782,242 33.99% 40 2,301,438 63,465 8.45% 2.89% Reading, PA 6 9 682,100 4.11% 112 16,604,892 66,616 9.71% 1.38% Hagerstown-Martinsburg, MD-WV 2 9 506,424 12.73% 80 3,979,699 62,916 7.12% 3.11% Top 10 Fulton Financial Corporation MSAs (1) 190 14,258,400 0.64% 8,290 2,214,471,733 71,249 9.63% 1.88% Total Franchise 230 16,493,305 0.65% 11,070 2,550,346,666 71,983 10.19% 1.73% Nationwide 66,010 9.87% 3.27% Note: Data as of June 30, 2019 per S&P Global Market Intelligence. 6 (1) Median HH Income, 2020 – 2025 Projected Population Change and Projected HH Income Change are weighted by deposits in each MSA.
Extending Footprint Into Fast Growing Urban Markets Philadelphia, PA County Deposit Market Share – Top 20 Commentary Total Deposit Total Deposit Regulatory Total Active Total Deposits 2019 Parent Company Name Market Share ▪ Philadelphia is a natural extension of our current Rank 2019 Industry Branches 2019 ($000) 2019 (%) footprint 1 Bank Wells Fargo & Co. 39 11,615,910 23.35 o Opened 3 financial centers in 2019 2 Bank PNC Financial Services Group Inc. 38 9,302,303 18.70 3 Bank Bank of America Corp. 18 8,686,901 17.46 o 1 financial center targeted to open in 2021 4 Bank Citizens Financial Group Inc. 46 7,237,769 14.55 ▪ No bank of Fulton’s size in Philadelphia Bank Toronto-Dominion Bank 21 3,480,879 7.00 5 o The top 5 banks have ~80% of the deposit 6 Bank Banco Santander SA 20 2,232,221 4.49 market share 7 Thrift WSFS Financial Corp. 13 1,362,418 2.74 8 Savings Bank Firstrust Savings Bank 5 875,291 1.76 o Presents a tremendous growth opportunity for 9 Bank M&T Bank Corp. 6 819,766 1.65 Fulton 10 Bank Republic First Bancorp Inc. 7 679,981 1.37 ▪ Health Care, Technology and Professional Services are Thrift Prudential Bancorp Inc. 8 669,678 1.35 11 major economic forces, which are target business 12 Bank Univest Financial Corp. 7 472,309 0.95 13 Bank Truist Financial Corp. 11 457,406 0.92 segments for Fulton 14 Bank HSBC Holdings PLC 2 305,731 0.61 ▪ The Philadelphia-Camden-Wilmington MSA is a large 15 Bank Bryn Mawr Bank Corp. 5 198,793 0.40 economic region with GDP of over $440bn, and is the Bank S&T Bancorp Inc. 2 173,029 0.35 16 9th largest metropolitan area in the U.S(1) 17 Bank Asian Financial Corp. 2 167,100 0.34 18 Savings Bank United Savings Bank 3 161,887 0.33 ▪ Baltimore is another targeted area for growth 19 Bank Hyperion Bank 1 133,407 0.27 o Opened 1 financial center and 1 loan production 20 Thrift William Penn 4 128,762 0.26 office in 2019 All Others 31 589,680 1.19 o Total 289 49,751,221 100.00 1 financial center opening in June 2020 and 1 in 2021 Note: Deposit data as of June 30, 2019 per S&P Global Market Intelligence (excludes non-retail deposits and closed/proposed branches) . 7 (1) 2018 advance statistics; source: U.S. Bureau of Economic Analysis.
Strategic Initiatives Support Our Relationship Banking Strategy Purpose We Change Lives for the Better OPERATIONAL EXCELLENCE GROWTH STRATEGIES Strategic Filter • Advancing business line structure Outcomes • Investing in talent for growth and charter consolidation. in targeted markets and • Focus on consistency and businesses. effectiveness across all operations • Investing in digital capabilities areas through enterprise process to enable Fulton to design, improvement and incrementally acquire new automation (workflow, RPA, AI). relationships and cross-sell • Developing an enterprise existing clients and leverage O technology strategy including customer intelligence L A N O I AT R E P defining the future state platform R capabilities. UTSIDE and execution roadmap. ISK • Differentiating Fulton in O NSIDE serving all segments of I communities through Customer & C & G XCELLENCE THE execution and expansion of H T W O R E Community THE Fulton Forward®. • Implementing new branch E C N A I L P M O ON EFFECTIVE RISK MANAGEMENT formats/designs. E ON AND COMPLIANCE E C N E L L E C X WITH • Sustaining risk management, compliance and systems to ensure stakeholder expectations are met. • Implementing technology enhancements to limit manual IMPLIFY XECUTE controls and enable on-going S E monitoring. IFFERENTIATE D T ALENT S TRATEGY & T ECHNOLOGY S TRATEGY 8
Fulton Has Made Significant Investments To Enhance Its Digital Capabilities Commercial Online Commercial Loan Mortgage Loan NewPurchaseBanking Website Platform Origination System Origination System 2017 2019 2020 ▪ Best-in-class online platform for ▪ Streamlines commercial ▪ Cloud-based loan origination customers to track, manage, and underwriting process to condense system with a network of grow their business timeline from application to close integrated partners ▪ Integrates easily with other ▪ Integrates with CRM platform to ▪ Provides an enhanced customer platforms such as QuickBooks® streamline processes and keep experience with the right blend of customers more informed human interaction and mobile technology 9
Website Recently Recognized As An Innovation Leader Our redesigned customer website allows users to have a cohesive and personalized experience as they explore all of our products, services and capabilities in one place ▪ Leverages data and customer insights to deliver personalized content to customers and prospects while capturing valuable information that can be translated into sales and marketing opportunities Fulton Bank won Sitecore’s 2018 annual award for Best Use of Personalization in North America. 10
Optimizing Our Branch Network Optimizing our financial center network has: ▪ Moved us towards multiple financial center types vs. a one-size-fits-all model ▪ Given us greater ability to re-invest in people & digital transactions ▪ Oriented the financial center as a primary touchpoint enabling higher- value activities geared towards advice and sales ▪ Created greater focus on customer experience in the financial centers ▪ Closed 37 financial centers and upgraded 56 financial centers to the new format since 2014 11 Note: Closed financial center information is net of new openings as of March 31, 2020.
Granular, Well-Diversified Loan Portfolio ▪ Average Loans YTD 3/2020 are up 4.1% compared to YTD 3/2019 ▪ Yields had risen for several years, but declined in Q1 2020. $18.0 4.70% $16.9 $16.4 $15.8 $0.8 $16.0 $0.7 $15.2 4.50% $0.6 4.55% $0.9 $0.5 $0.9 $14.1 $1.0 $0.9 $14.0 $0.4 4.38% $2.4 $2.7 Total Loan Portfolio Yield (1) $0.8 4.30% $1.8 $2.0 4.23% $12.0 $1.5 $1.4 $1.3 $1.5 4.10% $1.7 $1.6 $10.0 4.07% 3.95% $4.2 $4.3 $4.5 $4.5 3.90% $8.0 $4.2 Average Loan Portfolio Balances Portfolio Loan Average 3.70% $6.0 $6.3 $6.5 $6.7 $5.6 $6.2 $4.0 3.50% 2016 2017 2018 2019 YTD 3/2020 ($ IN BILLIONS) Comm'l Mtg Comm'l Home Equity Res Mtg Construction Consumer/Other FTE loan yield (1) Note: Loan portfolio composition is based on average balances for the years ended December 31, 2016 to 2019 and the three months ended March 31, 2020. 12 (1) Presented on a fully-taxable equivalent (“FTE”) basis using a 21% and 35% federal tax rate and statutory interest expense disallowances in the 2018 through 2020 periods and the 2016 through 2017 periods, respectively .
Attractive Core Deposit Profile ▪ Steady growth in core deposits ▪ Average Deposits for YTD 3/2020 are up 5.2% compared to YTD 3/2019 0.79% $18.0 0.80% $17.1 $16.8 $15.8 $ $1.5 $16.0 $15.5 $1.5 0.70% $14.6 $0.1 $- $1.4 $- $1.5 $14.0 $1.4 0.62% 0.60% $3.0 $3.5 $3.6 $3.0 $12.0 $2.7 0.55% 0.50% Deposit Costs(1) $10.0 $4.0 $3.8 $4.4 $4.6 $3.6 0.40% $8.0 0.37% 0.31% 0.30% Average Deposit Balances Deposit Average $6.0 $4.2 $4.4 $4.3 $4.2 $4.3 0.20% $4.0 $2.0 0.10% $2.8 $2.7 $2.7 $2.9 $2.8 $- 0.00% 2016 2017 2018 2019 YTD 3/2020 ($ IN BILLIONS) Time Non-Int DDA Int DDA Money Mkt Savings Brokered Deposits Costs (1) Note: Deposit composition is based on average balances for the years ended December 31, 2016 to 2019 and three months ended March 31, 2020. Average brokered deposits were $49 million for 13 2017, $122 million for 2018, $245 million for 2019 and $275 million for YTD 3/2020. Core Deposits equal total deposits less brokered and time deposits. (1) Deposit costs calculated by dividing interest expense on interest-bearing deposits by total average deposits.
Adoption of CECL1) Three Months Ended March 31, 2020 (in thousands) Allowance for Credit Losses Rollforward (1) Balance at beginning of period, December 31, 2019 $ 166,209 Impact of adopting ASU 2016-13 58,349 Loans charged-off (14,003) Recoveries of loans previously charged off 2,887 Net loans charged off (11,116) Provision for credit losses 44,029 Balance at end of period, March 31, 2020 $ 257,471 ▪ CECL approach based on segment-level models developed in coordination with Big 4 accounting firm and supplemented with overlays and general qualitative additions. ▪ Base models leverage Moody’s baseline economic forecast which incorporates their most probable economic scenario associated with the COVID-19 pandemic. ▪ Additional model overlays and qualitative adjustments were added to account for potential forecast imprecision and additional risk not accounted for in modeled results. (1) Effective January 1, 2020, Fulton adopted Accounting Standards Update 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on 14 Financial Instruments,” referred to as the current expected credit loss model (“CECL”). This accounting standard requires that credit losses for financial assets and off- balance-sheet ("OBS") credit exposures be measured based on expected credit losses, rather than on incurred credit losses as in prior periods.
Solid Asset Quality And Reserves Commentary Non-Performing Loans (NPLs) & Allowance/Loans ▪ Overall asset quality continued to be relatively 1.75% stable through Q1 2020 $139.7 $141.2 $139.9 $150.0 $131.6 $134.8 ▪ 1.50% We are mindful of where we are in the $125.0 economic cycle, including considerations for COVID-19 and are continuing to assess and $100.0 1.40% 1.25% analyze the loan portfolio for signs of weakness $75.0 1.24% or stress 1.17% 1.00% $50.0 1.12% Performing Loans Performing 0.97% ▪ Agriculture portfolio is an area we have been - 0.75% Non $25.0 monitoring carefully over the last couple of years due to compressed commodity prices $0.0 0.50% 2016 2017 2018 2019 YTD o ~$1bn in balances, with dairy having the 3/2020(1) largest concentration (~28%) NPL Allowan ce /Loans ($ IN MILLIONS) o ~70% family farms/~30% Agribusiness 15 (1) Refer to the previous “Adoption of CECL” slide for information on the impact to the allowance in 2020.
COVID-19 Impact on Business Sectors Limited exposure to some of the asset classes that were hit hardest initially from COVID-19, such as hotels, restaurants, energy and entertainment. Most of the loans are secured by real estate or other forms of collateral, which should help mitigate losses in the event of default. Loan Portfolio P&I Deferrals/ Commitments Balances Forbearances (1) ($s in M M s) ($s in M M s) Hotels & Restaurants (2) $ 495 $ 473 57.9% Energy (2) 179 93 10.1% Entertainment (2) 305 247 16.1% Other Loan Portfolios 22,203 16,264 8.5% $ 23,182 $ 17,077 10.9% (1) Percentages of total ending loan balances by each category as of April 17, 2020. 16 (2) Fulton internal classifications.
Prudent Expense Management With Opportunities To Improve Commentary Efficiency Ratio (FTE) 71.00% ▪ Low rate environment and continued buildout of our 69.00% compliance, risk and technology infrastructures were the 67.00% 65.00% primary drivers of the increase in the efficiency ratio in 63.00% 2015 61.00% ~ $730 59.00% million ▪ Positive operating leverage from 2016 through 2019 57.00% ~ $610 reduced the efficiency ratio 2014Y 2015Y 2016Y 2017Y million2018Y 2019Y o Closed 37 financial centers, net of new openings, since 2014 Non-Interest Expenses / Average Assets ▪ Our efficiency ratio (FTE) was 64.5%(1) for 1Q20 within our 3.00% goal of 60.0% - 65.0% 2.90% ▪ Opportunities exist to gain efficiencies as we continue to: 2.80% o Optimize our delivery channels 2.70% o Upgrade our origination and servicing platforms 2.60% 2.50% 2.40% 2014Y 2015Y 2016Y 2017Y 2018Y 2019Y Note: Chart Data from S&P Global Market Intelligence regulatory data; YTD data as of the most recent reporting date 17 See “Appendix” for listing of Peer Group banks. (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.
Strong Capital Position COMMENTARY CAPITAL RATIOS(1) ▪ Capital remains strong 13.8% 14.00% ▪ Suspended share repurchases in Mid- 12.00% $630 March 10.00% 9.4% 9.4% $170 7.9% ▪ Dividend elected to remain at $0.13 8.00% $450 quarterly $650 6.00% 4.00% ▪ Raised $375 million of subordinated debt in Q1 2020 2.00% Tier 1 Leverage Tier 1 Risk Based CE Tier 1 Total Risk-Based Regulatory Limits Excess(2) ▪ Internal stress analyses indicate sufficient capital currently 1) Regulatory capital ratios as of March 31, 2020 are preliminary. 18 2) Excesses shown are to regulatory minimums, including the 250 basis point capital conservation buffer, except for Tier 1 Leveragewhich is the well-capitalized minimum. Dollars are in millions.
Strong and Diverse Liquidity Position COMMENTARY AVAILABLE LIQUIDITY ▪ Liquidity remains strong and diverse As of March 31, 2020 (in thousands) Cash On-Hand $272,501 ▪ Continue efforts to increase capacity with the FHLB and Federal Reserve Federal Reserve Capacity 465,000 ▪ Sitting on excess cash reserves since mid- Outstanding Loans - March Total Available @ Federal Reserve 465,000 ▪ Evaluated Federal Reserve facility for funding FHLB Capacity 6,450,000 of PPP loans Advances (1,344,000) Letters of Credit (1,762,000) o Have applied and received approval Total Available @ FHLB 3,344,000 ▪ Additional liquidity is available through (1) Unencumbered Securities 2,511,000 Federal funds lines and brokered deposits Total Committed Liquidity 6,320,000 19 (1) 5% haircut applied to market value of unencumbered securities.
RECENT FINANCIAL PERFORMANCE & HIGHLIGHTS
It’s Personal Some of the COVID-19 assistance programs offered to our customers: CONSUMER COMMERCIAL • Temporary forbearance up to six months on • SBA Paycheck Protection Program (PPP) residential mortgage loans and closed-end consumer loans secured by real estate • Small Business Unsecured Line of Credit with introductory rate offer • Consumer loan payments deferral up to three • For commercial online banking users, we months are offering mobile remote deposit capture • Overdraft/NSF fee waivers, and monthly and ACH payment options maintenance service fee waivers • Commercial loan payment deferral program • Temporary suspension of late fees and adverse credit reporting • An early withdrawal penalty waiver for one Certificate of Deposit 21
Paycheck Protection Program (PPP) PPP RESULTS AS OF May 21, 2020 • Over 500 Fulton team members re-deployed to help support this effort • Focus has been initially on existing Fulton customers • Results to date (through May 21, 2020): o Applications confirmed: ~ 10,000 o Dollars confirmed: ~$2.0 billion o Average Fee: ~3.00% o Estimated job retention: ~100,000 • Fulton has considered various funding sources for PPP – has been approved to participate in PPP Loan Facility 22
Income Statement Summary Change from 1Q20 4Q19 1Q19 (dollars in thousands, except per-share data) Net Interest Income $ 160,746 $ 1,476 $ (2,569) Provision for Credit Losses 44,030 23,500 38,930 Non-Interest Income 54,598 (683) 7,912 Securities Gains 46 46 (19) Non-Interest Expense 142,552 3,578 4,728 Income before Income Taxes 28,808 (26,239) (38,334) Income Taxes 2,761 (4,497) (7,718) Net Income $ 26,047 $ (21,742) $ (30,616) Net income per share (diluted) $ 0.16 $ (0.13) $ (0.17) ROA (1) 0.47% (0.40%) (0.64%) ROE (2) 4.48% (3.62%) (5.67%) ROE (tangible) (3) 5.84% (4.68%) (7.44%) Efficiency ratio (3) 64.5% 1.4% 0.6% (1) ROA is return an average assets determined by dividing net income for the period indicated by average assets, annualized. 23 (2) ROE is return on average shareholders’ equity determined by dividing net income for the period indicated by average shareholders’ equity, annualized. (3) Non-GAAP 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.
Net Interest Income And Margin AVERAGE INTEREST-EARNING ASSETS & YIELDS NET INTEREST INCOME & NET INTEREST MARGIN(1) ($ IN BILLIONS) ($ IN MILLIONS) $20 5.00% 4.00% $15 4.35% 4.37% $180.0 4.00% 4.25% 4.07% 3.97% 3.00% $10 $16 $16 $16 $17 $17 3.75% 2.00% $163 $165 $5 ~ $730 1.00% $161 $161 $159 $3 million$3 $3 $3 $3 $160.0 3.50% $0 0.00% 1Q19 2Q19 3Q19 4Q19 1Q20 3.49% 3.44% ~ $610 3.25% Securities & Other Loans millionEarning Asset Yield (FTE) 3.31% 3.22% 3.21% $140.0 3.00% AVERAGE LIABILITIES & RATES ($ IN BILLIONS) 2.75% $20 5.00% $2 $2 $2 $2 $2 $120.0 2.50% 4.00% $15 $17 $17 $16 $17 $16 3.00% 2.25% $10 2.00% 1.29% 1.29% 1.21% 1.16% 1.02% $5 $100.0 2.00% 1.00% 1Q19 2Q19 3Q19 4Q19 1Q20 $0 0.00% Net Interest Income 1Q19 2Q19 3Q19 4Q19 1Q20 Net Interest Margin (Fully-taxable equivalent basis, or FTE) Deposits Borrowings Cost of Interest-bearing Liabilities 24 (1) Using a 21% federal tax rate and statutory interest expense disallowances.
Asset Quality ($ IN MILLIONS) PROVISION FOR CREDIT LOSSES NON-PERFORMING LOANS (NPLS) & NPLS TO LOANS $160.0 $147.7 2.00% $50.0 $141.2 $44.0 $138.7 $136.0 $139.9 $40.0 $120.0 1.50% $30.0 $80.0 1.00% $20.5 $20.0 0.90% 0.85% 0.81% 0.84% 0.82% $40.0 0.50% $10.0 $5.1 $5.0 $2.2 $- $0.0 0.00% 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 NPL NPLs/Loans NET CHARGE-OFFS (NCOS) AND NCOS TO AVERAGE LOANS ALLOWANCE FOR CREDIT LOSSES (ALLOWANCE) TO NPLS & LOANS 180.0% $40.0 170% 1.00% 170.0% 0.65% 1.75% $30.0 160.0% 0.26% 0.50% 150.0% 0.15% $27.1 $20.0 -0.04% 140.0% 0.00% $11.1 130.0% 1.40% 1.25% 0.10% 115% 122% $10.0 $6.3 $4.1 117% 116% $(1.5) 120.0% -0.50% $- 110.0% 1.00% 1.04% 1.00% 1Q19 2Q19 3Q19 4Q19 1Q20 0.97% 100.0% 0.75% $(10.0) -1.00% 1Q19 2Q19 3Q19 4Q19 1Q20(1) NCOs/(recoveries) NCOs/Average Loans (annualized) Allowance/NPLs Allowance/Loans (1) The allowance for credit losses (“ACL”) relates specifically to "Loans, net of unearned income" and does not include the ACL 25 related to off-balance-sheet credit exposures. See slide 14 for note around CECL adoption.
Non-Interest Income(1) 1Q20 4Q19 Change (in thousands) n Wealth management $ 15,055 $ 14,419 $ 636 n Mortgage banking 6,234 5,076 1,158 n Consumer banking 11,239 12,429 (1,190) n Commercial banking 18,419 20,140 (1,721) n Other 3,651 3,217 434 $ 54,598 $ 55,281 (683) Non-interest income(1) decreased 1% from 4Q19 Increases in: n Brokerage and trust income n Higher mortgage loan volumes, partial offset by $1.1 million in valuation allowance on MSRs. Decreases in: n Consumer card income n Capital markets, merchant income and commercial card income 26 (1) Excludes investment securities gains.
Non-Interest Expense 27
Profitability & Capital ROA(1) ROE AND ROE (TANGIBLE)(2) 1.40% 16.00% 1.15% 14.03% 1.20% 1.11% 1.14% 13.28% 13.60% 1.00% 12.00% 10.42% 10.64% 10.52% 0.87% 10.15% 0.80% 8.10% 8.00% 5.84% 0.60% 0.47% 4.48% 0.40% 4.00% 0.20% 0.00% 0.00% 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 ROE ROE (tangible) TANGIBLE COMMON EQUITY RATIO(2) NET INCOME PER DILUTED SHARE 12.0% $0.40 $0.37 $0.35 $0.35 $0.33 8.5% 8.6% 8.5% 8.5% $0.29 7.8% $0.30 8.0% $0.25 $0.20 $0.16 4.0% $0.15 $0.10 $0.05 0.0% $- 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 2Q19 3Q19 4Q19 1Q20 (1) ROA is return an average assets determined by dividing net income for the period indicated by average assets, annualized. 28 (2) 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.
Q2 2020 Outlook All previous guidance for 2020 has been withdrawn due to the impact from COVID-19. At this time, select guidance will be provided on the following areas as it relates to the second quarter of 2020: • Loans: Current approved PPP applications ~ $1.7 billion. For other loan categories, expect growth on an annualized basis to be in the low single digits overall. • Deposits: Excluding the impact of PPP, modest run-off to slight growth • Net Interest Income: In the range of $150 - $160 million • Non-Interest Income: Decline 5% -15% from first quarter 2020 levels • Non-Interest Expense: In the range of $140 - $144 million • Effective Tax Rate: Between 11.5% - 12.5% 29
APPENDIX
Average Loan Portfolio And Yields Change in 1Q 2020 Balance From Yield From Balance Yield 4Q 2019 1Q 2019 4Q 2019 1Q 2019 (dollars in millions) Real estate - commercial mortgage $ 6,747 4.20% $ 186 $ 369 (0.14%) (0.49%) Commercial & industrial 4,447 4.21% (128) (16) (0.03%) (0.45%) Real estate - residential mortgage 2,670 3.97% 64 393 (0.03%) (0.09%) Real estate - home equity 1,300 4.73% (31) (134) (0.24%) (0.60%) Real estate - construction 930 4.13% (5) - (0.24%) (0.70%) Consumer 466 4.34% 1 42 (0.10%) (0.15%) Equipment lease financing 285 4.32% 4 8 (0.03%) (0.08%) Other 16 - 2 4 - % - % - Total Loans $ 16,861 4.23% $ 93 $ 666 (0.08%) (0.42%) 31 Note: Presented on an FTE basis, using a 21% federal tax rate and statutory interest expense disallowances. Average loan portfolio and yield are for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019.
Average Customer Funding And Rates Change In 1Q 2020 Balance From Rate From Balance Rate 4Q 2019 1Q 2019 4Q 2019 1Q 2019 (dollars in millions) Non-interest bearing demand $ 4,307 - % $ (18) $ 84 - % - % Interest-bearing demand 4,650 0.49% (49) 496 (0.22%) (0.24%) Savings and money market 5,128 0.56% (77) 215 (0.22%) (0.26%) Brokered 275 1.57% 13 55 (0.37%) (0.98%) Time 2,761 1.84% (198) (5) (0.02%) 0.25% Total Deposits 17,121 0.62% (329) 845 (0.15%) (0.12%) Cash Management 428 0.58% 50 59 (0.21%) -0.14% Total Customer Funding $ 17,549 0.62% $ (279) $ 904 -0.15% (0.12%) 32
Non-Interest Income(1) $ Change from Q1 2020 Q4 2019 Q1 2019 Q4 2019 Q1 2019 Actual Actual Actual Actual Actual (in thousands) Wealth management $ 15,055 $ 14,419 $ 13,239 636 1,816 Mortgage banking 6,234 5,076 4,772 1,158 1,462 Consumer banking: Card 4,685 4,991 4,686 (306) (1) Overdraft 4,058 4,750 4,104 (692) (46) Other consumer banking 2,496 2,688 2,587 (192) (91) Total consumer banking 11,239 12,429 11,377 (1,190) (138) Commercial banking: Merchant and card income 5,624 5,841 5,558 (217) 66 Cash management 4,742 4,697 4,361 45 381 Capital markets 5,075 5,939 2,515 (864) 2,560 Other commercial banking 2,978 3,664 2,816 (686) 162 TotalOther commercial service charges banking and fees 18,419 20,141 15,250 (1,722) 3,169 Other 3,651 3,217 2,048 434 1,603 Non-Interest Income before Investment Securities Gains $ 54,598 $ 55,282 $ 46,686 (684) 7,912 33 (1) Excluding investment securities gains.
Non-Interest Expense $ Change from Q1 2020 Q4 2019 Q1 2019 Q4 2019 Q1 2019 Actual Actual Actual Actual Actual (in thousands) Salaries and employee benefits $ 80,228 $ 76,975 $ 77,757 $ 3,253 $ 2,471 Net occupancy 13,486 13,080 12,909 406 577 Data processing and software 11,645 11,468 10,353 177 1,292 Other outside services 7,881 8,215 8,352 (334) (471) Professional 4,202 2,873 3,960 1,329 242 Equipment 3,418 3,475 3,342 (57) 76 FDIC insurance 2,808 2,177 2,609 631 199 Marketing 1,579 1,503 2,160 76 (581) Amortization of tax credit investments 1,450 1,505 1,491 (55) (41) Intangible amortization 132 142 107 (10) 25 Other 15,723 17,561 14,784 (1,838) 939 Total Non-Interest Expense $ 142,552 $ 138,974 $ 137,824 $ 3,578 $ 4,728 34
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. Three Months Ended Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2019 2019 2019 2019 2020 Tangible Common Equity to Tangible Assets (TCE Ratio) (dollars in thousands) Shareholders' equity $ 2,301,019 $ 2,308,798 $ 2,324,016 $ 2,342,176 $ 2,285,748 Less: Intangible assets (535,356) (535,249) (534,178) (535,303) (535,171) Tangible shareholders' equity (numerator) $ 1,765,663 $ 1,773,549 $ 1,789,838 $ 1,806,873 $ 1,750,577 Total assets $ 20,974,649 $ 21,308,670 $ 21,703,618 $ 21,886,040 $ 22,929,859 Less: Intangible assets (535,356) (535,249) (534,178) (535,303) (535,171) Total tangible assets (denominator) $ 20,439,293 $ 20,773,421 $ 21,169,440 $ 21,350,737 $ 22,394,688 Tangible Common Equity to Tangible Assets 8.6% 8.5% 8.5% 8.5% 7.8% 35
Non-GAAP Reconciliation Years Ended Three Months Ended Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2014 2015 2016 2017 2018 2019 2019 2019 2019 2019 2020 Efficiency ratio Non-interest expense $ 459,246 $ 480,160 $ 489,519 $ 525,579 $ 546,104 $ 567,736 $ 137,824 $ 144,168 $ 146,770 $ 138,974 $ 142,552 Less: Intangible Amortization (1,259) (247) - - - (1,427) (107) (107) (1,071) (142) (132) Less: Amortization of tax credit investments - - - (11,028) (11,449) (6,021) (1,491) (1,492) (1,533) (1,505) (1,450) Less: Loss on redemption of trust preferred securities - (5,626) - - - - - - - - - Less: Prepayment penalty on FHLB advances - - - - - (4,326) - - (4,326) - - Non-interest expense (numerator) $ 457,987 $ 474,287 $ 489,519 $ 514,551 $ 534,655 $ 555,962 $ 136,226 $ 142,569 $ 139,840 $ 137,327 $ 140,970 Net interest income (fully taxable-equivalent) $ 532,322 $ 518,464 $ 541,271 $ 598,565 $ 642,577 $ 661,356 $ 166,564 $ 167,796 $ 164,517 $ 162,479 $ 163,970 Plus: Total Non-interest income 167,379 181,839 190,178 207,974 195,525 216,160 46,751 54,315 59,813 55,281 54,644 Less: Investment securities gains (2,041) (9,066) (2,550) (9,071) (37) (4,733) (65) (176) (4,492) - (46) Net interest income (denominator) $ 697,660 $ 691,237 $ 728,899 $ 797,468 $ 838,065 $ 872,783 $ 213,250 $ 221,935 $ 219,838 $ 217,760 $ 218,568 Efficiency ratio 65.6% 68.6% 67.2% 64.5% 63.8% 63.7% 63.9% 64.2% 63.6% 63.1% 64.5% Three Months Ended Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 2019 2019 2019 2019 2020 Return on Average Shareholders' Equity (ROE) (Tangible) Net income $ 56,663 $ 59,779 $ 62,108 $ 47,789 $ 26,047 Plus: Intangible amortization, net of tax 85 85 846 112 104 Net income (numerator) $ 56,748 $ 59,864 $ 62,954 $ 47,901 $ 26,151 Average shareholders' equity $ 2,265,097 $ 2,301,258 $ 2,315,585 $ 2,341,397 $ 2,337,016 Less: Average goodwill and intangible assets (531,767) (535,301) (535,184) (534,190) (535,214) Average tangible shareholders' equity (denominator) $ 1,733,330 $ 1,765,957 $ 1,780,401 $ 1,807,207 $ 1,801,802 Return on average shareholders' equity (tangible), annualized 13.28% 13.60% 14.03% 10.52% 5.84% 36
Peer Group ▪ Atlantic Union Bankshares Corporation ▪ Provident Financial Services, Inc. ▪ BancorpSouth Bank ▪ Trustmark Corporation ▪ Commerce Bancshares, Inc. ▪ UMB Financial Corporation ▪ First Midwest Bancorp, Inc. ▪ Umpqua Holdings Corporation ▪ F.N.B. Corporation ▪ United Bankshares, Inc. ▪ Hancock Whitney Corporation ▪ United Community Banks, Inc. ▪ Investors Bancorp, Inc. ▪ Valley National Bancorp ▪ Northwest Bancshares, Inc. ▪ Webster Financial Corporation ▪ Old National Bancorp ▪ Wintrust Financial Corporation ▪ Prosperity Bancshares, Inc. 37
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