Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2024)
37 slides from Fulton Financial's investor presentation, Nov 8, 2024
Slide 1: Investor Presentation
z INVESTOR PRESENTATION Data as of or for the period ended September 30, 2024 unless otherwise noted
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 This presentation may contain forward-looking statements with respect to Fulton Financial Corporation's (the “Corporation“ or “Fulton”) financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements c
Slide 3: A Growing Franchise, Well-Positioned for Long-Term Profitability
3 A Growing Franchise, Well-Positioned for Long-Term Profitability, with Enhanced Liquidity, Solid Capital, and Disciplined Credit Culture (1) As of September 30, 2024. (2) Data as of June 30, 2024 per S&P Capital IQ; FDIC Summary of Deposits. Population excludes the State of New York. (3) Based on
Slide 4: A Balanced Business Model, Complementary Mix of Products and Services
A Balanced Business Model, Complementary Mix of Products and Services, Technology-Enabled Delivery Channels and a Compelling Value Proposition • Non-interest income as a percentage of revenue of approximately 20%(1) • Wealth management accounts for approximately 1/3 of total non-interest income(1),
Slide 5: A Robust and Scalable Product Suite Built Upon Significant Investment in Technologies
A Robust and Scalable Product Suite Built Upon Significant Investment in Leading-Edge Technologies and Customer Adoption Well positioned to compete in and serve our market • Significant technology spend over the past 5 years o New commercial origination system, new mortgage origination system, new
Slide 6: Deepens Our Commitment To Purpose, Vision, & Strategic Execution By Three Key Tenets
Deepens Our Commitment To Purpose, Vision, & Strategic Execution By Three Key Tenets 6 Simplicity in the operating model - Realign value propositions and coverage models by customer size and complexity - Redesign end-to-end processes with single ownership to deliver superior customer experience - Si
Slide 7: FultonFirst and Republic cost saves drive flat 2025 operating expenses
7 FultonFirst plus full-year Republic Bank cost saves should drive 2025 total operating expenses of “flat” when compared to 2024 Success to Date Positions Fulton Well for 2025 & Beyond Positioning for GrowthEstimated FultonFirst Financial Benefits •Anticipate ~45% in 1H25; balance in 2H25 2025 estim
Slide 8: Risk Management Utilizes a Three Lines of Defense Model
Our Approach to Risk Management is Comprehensive and Utilizes a “Three Lines of Defense Model” 8 Our approach to risk management is layered and has three lines of defense
Slide 9: Fulton's Lending Model Has Resulted in Solid Asset Quality Trends
Fulton’s Lending Model has Resulted in Solid Asset Quality Trends Through Many Cycles 9 Sources: Top 100 Commercial Banks and All Commercial Banks - Board of Governors of the Federal Reserve System (Top 100 Commercial Banks are the 100 largest banks based on consolidated assets); Fulton historical d
Slide 10: A Well-Diversified Loan Portfolio With Growth in Multiple Categories
10 A Well-Diversified Loan Portfolio With Growth in Multiple Categories • The loan portfolio has grown $8.0 billion since 2018 • A balanced loan mix, with adjustable-rate mortgage growth in 2022 and 2023 outpacing other categories, despite the rise in mortgage rates o Fulton Mortgage Company is a br
Slide 11: Asset Quality
Asset Quality (1) The allowance for credit losses (“ACL”) relates specifically to “Loans, net of unearned income” and does not include reserves related to off-balance sheet credit exposures.11 Provision for Credit Losses Non-Performing Loans (“NPLs”) & NPLs to Loans Net Charge-offs (“NCOs”) and NCOs
Slide 12: Non-Owner Occupied Commercial Mortgage Portfolio Well Diversified
Fulton’s Non-Owner Occupied Commercial Mortgage(1) Portfolio is Well Diversified within the Industries Served At September 30, 2024 Fulton Bank’s CRE / Total Risk-Based Capital is 204%, and below the 300% regulatory threshold. 12 (1) Non-owner occupied commercial mortgage of $5.3 billion represents
Slide 13: Office Portfolio Remains Diversified and Granular
13 The Office Portfolio Remains Diversified and Granular with Low Office Concentration at 3% of Total Loans (1) LTV as of most recent appraisal. Office Only Profile • $876 million in office loan commitments • $812 million in office loans outstanding • representing 3% of total loans • Average loan si
Slide 14: Acquired Office Portfolio Has Similar Characteristics
14 The Acquired Office Portfolio Has Similar Characteristics With Some Seasoning and a Later Maturity (1) Metropolitan Statistical Areas or “MSAs” titled in short name for presentation purposes. Originated Over Time Maturing Over Time Granular Loan Portfolio Geographically Diverse by MSA(1) $80 $227
Slide 15: Multi-Family Loans Represent 8% of Total Loan Portfolio
15 Multi-Family Loans Represent 8% of the Total Loan Portfolio With a Small Average Loan Size, Low LTVs and Solid DSCR (1) LTV as of most recent appraisal. Multi-Family Profile • $2.4 billion in multi-family loan commitments • $1.9 billion in multi-family loans outstanding • representing 8% of total
Slide 16: Majority of Multi-Family Portfolio Recently Originated and Appraised
16 The Majority of the Multi-Family Portfolio Has Been Recently Originated and Appraised and Has a Long-Dated Maturity Horizon Recently Originated and Appraised Maturing Over Time Diversified by Size Diversified by Geographical MSA $148 $449 $464 $513 $823 398 189 63 36 32 Under $1MM $1MM - $5MM $5M
Slide 17: A Growing Deposit Portfolio That Remains Granular, Tenured and Diversified
A Growing Deposit Portfolio that Remains Granular, Tenured and Diversified with Significant Liquidity Coverage (1) As of September 30, 2024. Estimated uninsured deposits net of collateralized municipal deposits and inter-company deposits. For the calculation of the coverage of estimated uninsured de
Slide 18: Better Positioned and Prepared to Manage Lower Interest Rate Scenarios
Starting From A Similar Interest Rate Position to Prior Cycles, Fulton is Better Positioned and Prepared to Actively Manage Potentially Lower Interest Rate Scenarios Deposit Mix by Rate Type(2) (September 30, 2024) • $2.3 billion notional amount of interest rate derivatives in the form of interest r
Slide 19: Balance Sheet Positioned for Higher Or Lower Interest Rate Scenarios
• Attractive long-term customer relationships with active dialog between customer and the bank • 90% of time deposits (retail & brokered) mature in less than 1 year at a weighted average rate of 4.57%(2) • CD renewals continue to fund at lower rates than maturities Fulton’s Balance Sheet Is Position
Slide 20: Strategic Actions Taken To Neutralize Interest Rate Risk and Enhance Earnings
Strategic Actions Taken To Neutralize Interest Rate Risk and Enhance Earnings • Focus on profitable loan growth with wider spreads • Continued focus on growing customers and deposits • Completed the Republic transaction in April 2024, which moved our balance sheet to a more neutral interest rate ris
Slide 21: Noninterest-Bearing Deposit Trends
Noninterest-Bearing Deposit Trends Source: S&P Global Market Intelligence, Federal Reserve Bank of New York and Board of Governors of the Federal Reserve System (US); Corporation’s reported results for NIM and percentage of noninterest-bearing deposits at September 30,2024. 21 • Growth in the Corpor
Slide 22: Geographically Diversified Market with Top Market Share in Key Markets
Fulton's Market is Geographically Diversified, with Top Market Share in Key Markets and Additional Growth Opportunity in Others; Republic Increasing Fulton’s Customer Base and Deposit Market Share In the Philadelphia MSA 22 Note: Data as of June 30, 2024 per S&P Capital IQ; FDIC Summary of Deposits.
Slide 23: Estimated Uninsured Deposits
Estimated Uninsured Deposits September 30, 2024 Total Deposits $26,152 Estimated Uninsured Deposits $9,468 Estimated Uninsured Deposits to Total Deposits 36% Estimated Uninsured Deposits $9,468 Less: Collateralized Municipal Deposits (3,365) Net Estimated Uninsured Deposits (4) $6,103 Net Estimated
Slide 24: 3Q24 Income Statement Summary
(1) Non-GAAP financial measure. Please refer to the calculation and management’s reason for using this measure on the slides titled “Non-GAAP Reconciliation” at the end of this presentation. 3Q24 Income Statement Summary 24 3Q24 2Q24 Linked-Quarter Change Net interest income $258,009 $241,720 $16,28
Slide 25: Net Interest Income and NIM
Net Interest Income and NIM 25 • NIM was 3.49% in the third quarter of 2024, increasing six basis points compared to the second quarter of 2024. • Loan yields improved by eight basis points during the third quarter of 2024, increasing to 6.20% compared to 6.12% in the second quarter of 2024. • Total
Slide 26: Non-Interest Income
Non-Interest Income 26 Increases due to: • Commercial banking revenue, specifically commercial interest rate swap income • Record wealth management income • Consumer transaction fees modestly higher Offset by: • $7.7 million fair value adjustment to the gain on acquisition, net of tax • Lower gain o
Slide 27: Focus on Controlling Non-Interest Expense
Focus on Controlling Non-Interest Expense 27 • A $5.9 million increase in operating non-interest expense due to a full quarter contribution of the Republic transaction, offset by a $4.6 million decline in Fulton organic expenses. (dollars in thousands) 3Q24 Fulton Organic 3Q24 Republic Transaction 3
Slide 28: Excess Capital Supports A Solid Risk Profile and Provides Flexibility
28 Excess Capital Supports A Solid Risk Profile and Provides Flexibility . . . ▪ Solid regulatory capital ratios provide operational and strategic flexibility ▪ $95 million remaining share repurchase authorization in place through December 31, 2024(1) ▪ Capital ratios improving as internal capital g
Slide 29: 2024 Operating Outlook
29 2024 Operating Outlook (1) On a non-FTE basis. Incorporates the Fed Funds Rate decrease of 50 basis points in September, 25 basis points in November and 25 basis points in December 2024. (2) Excludes the CECL day 1 provision for credit losses of $23.4 million related to non-purchased credit deter
Slide 30: Approach to Environmental, Social & Governance (ESG)
30 Approach to Environmental, Social & Governance (“ESG”) - Doing what is right is a core value at Fulton. ESG is not about “checking a box,” we focus on activities that meaningfully change lives for the better. • Enhanced 2023 Corporate Social Responsibility report with selected ESG metrics. • Inte
Slide 31: Appendix
APPENDIX
Slide 32: Non-GAAP Reconciliation – Operating Net Income Available to Common Shareholders
Non-GAAP Reconciliation – Operating Net Income Available to Common Shareholders (quarterly) 32 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 result
Slide 33: Non-GAAP Reconciliation – Operating Return on Average Assets
Non-GAAP Reconciliation – Operating Return on Average Assets 33 (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. (dollars in thousands) Sep 30 Jun 30 2024 2024 Operating return on average assets Net income $63,20
Slide 34: Non-GAAP Reconciliation – Operating Return on Average Common Shareholders' Equity (Tangible)
Non-GAAP Reconciliation – Operating Return on Average Common Shareholders’ Equity (Tangible) 34 (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. (dollars in thousands) Sep 30 Jun 30 2024 2024 Operating return on
Slide 35: Non-GAAP Reconciliation – Efficiency Ratio
35 Non-GAAP Reconciliation – Efficiency Ratio (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. Three months ended (dollars in thousands) Sep 30 Jun 30 Efficiency ratio 2024 2024 Non-interest expense $226,089 $199
Slide 36: Non-GAAP Reconciliation – Tangible Book Value Per Share
Non-GAAP Reconciliation – Tangible Book Value Per Share and Tangible Book Value Per Share Excluding AOCI 36 (dollars in thousands, except per share data) Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 2019 2020 2021 2022 2023 2024 Tangible book value per share Shareholders' equity $2,324,016 2,390,261$ $
Slide 37: The Bank of Choice
The Bank of Choice because of Who he Ave and Low Me Opevile.
Fulton Financial — Investor Presentation (November 2024) on 6ix