Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Q2 2023 Earnings Presentation
20 slides from Fulton Financial's earnings presentation, Jul 19, 2023
Slide 1: Second Quarter 2023 Results
SECOND QUARTER 2023 RESULTS NASDAQ: FULT Data as of or for the period ended June 30, 2023 unless otherwise noted
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: A Granular, Tenured and Diversified Deposit Portfolio
A GRANULAR, TENURED AND DIVERSIFIED DEPOSIT PORTFOLIO 3
Slide 4: Loan Mix Is Diversified and Granular, With Low CRE Concentration
LOAN MIX IS DIVERSIFIED AND GRANULAR, WITH LOW CRE CONCENTRATION, AND OFFICE LOANS REPRESENTING 3% OF TOTAL LOANS Total Loan Portfolio: $21.0 BN (June 30, 2023) RE - Commercial Mortgage (excl. office) — 30% Leases and other loans | 2% Consumer __ 4% RE - Office Only 3% RE - Home. Equity ~ 5% \ ‘Comm
Slide 5: The Office Portfolio Is Granular, Diversified, and Tenured
THE OFFICE PORTFOLIO IS GRANULAR, DIVERSIFIED, AND TENURED 5
Slide 6: Income Statement Summary
INCOME STATEMENT SUMMARY 2Q23 1Q23 2Q22 (dollars in thousands, except per-share data) Net interest income $212,852 $215,587 $178,831 Provision for credit losses 9,747 24,544 1,500 Non-interest income 60,589 51,730 58,383 Securities gains (losses) (4) 23 8 Non-interest expense 168,018 159,616 148,703
Slide 7: Noninterest-Bearing Deposit Mix Trend Has Increased Over Time
NONINTEREST-BEARING DEPOSIT MIX TREND HAS INCREASED OVER TIME 7
Slide 8: Net Interest Income and Margin
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields (DOLLARS IN MILLIONS) (DOLLARS IN BILLIONS) 4.50% $25 10.00% $5 $5 $5 $5 $250 $20 $5 8.00% $20 $20 $20 $21 $15 $19 4.99% 4.25% 4.36% 4.73% 6.00% $226 3.83% $225 $10 3.24% 4.00% $216 $216
Slide 9: Asset Quality
ASSET QUALITY (DOLLARS IN MILLIONS) Provision for Credit Losses Non-Performing Loans (NPLs) & NPLs to Loans $25 $25 $200 0.98% 0.92% $19 0.85% 0.80% 1.00% $20 $193 0.70% $175 $15 $174 $172 $15 $165 $150 0.50% $10 $148 $10 $125 $5 $100 0.00% $2 2Q22 3Q22 4Q22 1Q23 2Q23 $— (1) 2Q22 3Q22 4Q22 1Q23 2Q23
Slide 10: Non-Interest Income
NON-INTEREST INCOME(1) Three months ended June 30, 2023 (percent of total non-interest income) 2Q23 1Q23 Change (dollars in thousands) n Commercial Banking $23,145 $17,513 $5,632 7% n Wealth Management 18,678 18,062 616 n Consumer Banking 11,720 11,217 503 31% n Mortgage Banking 2,940 1,970 970 n Ot
Slide 11: Non-Interest Expense
NON-INTEREST EXPENSE Three months ended June 30, 2023 2Q23 1Q23 Change (percent of total non-interest expense) (dollars in thousands) n Salaries and Benefits $94,102 $89,283 $4,819 n Data Processing and Software 16,776 15,796 980 n Occupancy 14,374 14,438 (64) 19% n Other Outside Services 10,834 10,
Slide 12: Capital Position Remains Strong
(1) CAPITAL POSITION REMAINS STRONG (as of June 30, 2023) (dollars in millions) 17.5% 15.0% 13.7% 12.5% $736 10.9% 10.1% 10.0% 9.3% $547 $697 $1,156 7.5% 5.0% 2.5% —% Tier 1 Leverage CE Tier 1 Tier 1 Risk-Based Total Risk-Based (2) Regulatory Minimums Excess (1) Regulatory capital ratios and excess
Slide 13: Capital Ratios Adjusted for Unrealized Losses on Investment Securities
CAPITAL RATIOS ADJUSTED FOR UNREALIZED LOSSES ON INVESTMENT SECURITIES - RATIOS REMAIN STRONG(1) (as of June 30, 2023) (dollars in millions) 12.5% | | 10.0% | 8.0% 8.3% | 7.5% $300 | $772 | 6.6% | 5.0% | | | 2.5% | | —% | Tier 1 Leverage(3) CE Tier 1(3) TCE(4) (2) n Regulatory Minimums n Excess (1)
Slide 14: A Committed and Healthy Liquidity Profile With Significant Coverage
A COMMITTED AND HEALTHY LIQUIDITY PROFILE WITH SIGNIFICANT COVERAGE 14
Slide 15: 2023 Outlook
2023 OUTLOOK Net interest income: $830 - $840 million(1) Non-interest income: $220 - $230 million(2) Provision for credit losses: $55 - $65 million(3) Non-interest expense: $645 - $660 million Effective tax rate: 17.5% +/-(4) (1) Assumes Fed Funds Rate increase of 25 bps in July 2023. Previously $85
Slide 16: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Note: The Corporation has presented the following non-GAAP 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
Slide 17: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended (dollars in thousands) Jun 30 Mar 31 Jun 30 2023 2023 2022 Operating return on average assets Net income $79,607 $68,314 $69,989 Plus: Core deposit intangible amortization 912 514 — Plus: Merger-related expenses — — 1,027 Less: Tax impact of adjustments (19
Slide 18: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended (dollars in thousands) Jun 30 Mar 31 Jun 30 2023 2023 2022 Return on average common shareholders' equity (tangible) Net income available to common shareholders $77,045 $65,752 $67,427 Plus: Intangible amortization 1,072 674 177 Plus: Merger-related expenses
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (dollars in thousands) Three months ended Jun 30 Mar 31 Jun 30 Efficiency ratio 2023 2023 2022 Non-interest expense $168,018 $159,616 $149,730 Less: Amortization of tax credit investments — — (696) Less: Merger-related expenses — — (1,027) Less: Intangible amortization (1,072
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended (dollars in thousands) Jun 30 2023 Adjusted tangible common equity to tangible assets (TCE Ratio) Shareholders' equity $ 2,642,152 Less: Preferred stock (192,878) Less: Goodwill and intangible assets (561,885) Less: Unrealized gain/(loss) - HTM (148,690) Le