Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (September 2023)
35 slides from Fulton Financial's investor presentation, Sep 8, 2023
Slide 1: Investor Presentation
z INVESTOR PRESENTATION Data as of or for the period ended June 30, 2023 unless otherwise noted
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 This presentation may contain forward-looking statements with respect to the Fulton Financial Corporation’s (the “Corporation”) financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be id
Slide 3: An Undervalued Franchise, Well-Positioned for Long Term Growth
3 An Undervalued Franchise, Well-Positioned for Long Term Growth, with Strong Liquidity, Solid Capital and Disciplined Credit Culture (1) As of June 30, 2023. (2) Data as of June 30, 2022, per S&P Global Market Intelligence; FDIC SOD; market excludes money center banks and removes online only bank d
Slide 4: 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 Leading Technology Partners Well-positioned to compete in and serve our market • Significant technology spend over past five years • 30+ full-time equivalent employees hired to bu
Slide 5: An Experienced Executive Team Leveraging a Robust Franchise
An Experienced Executive Team Leveraging a Robust Franchise 5 (1) Includes years of service in public accounting and investment banking as a financial services industry specialist. (2) Includes years of service in public accounting as a financial services industry specialist. ▪ Prudent Expense Manag
Slide 6: Approach to Environmental, Social & Governance (ESG)
6 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 2022 Corporate Social Responsibility report with selected ESG metrics. • Integ
Slide 7: Operating In Dense and Stable Markets With Tenured Market Share
Operating In Dense and Stable Markets With Tenured Market Share 7 Note: Data as of June 30, 2022 per S&P Global Market Intelligence; FDIC Summary of Deposits. (1) Median Household (“HH”) Income, 2022 – 2027 Projected Population Change and Projected HH Income Change are weighted by deposits in each M
Slide 8: Continually Identifying Opportunities in Growing Urban Markets
Continually Identifying Opportunities in Growing Urban Markets 8 ▪ Philadelphia remains a natural fill-in opportunity within our current footprint o 1 financial center opened in 1Q22 o 1 financial center opened in 3Q23 o 1 financial center targeted to open in 4Q23 ▪ Philadelphia Market: o The acquis
Slide 9: With a Well-Diversified Loan Portfolio with Balanced Growth among Loan Types
With a Well-Diversified Loan Portfolio with Balanced Growth among Loan Types . . . 9 Note: Loan portfolio composition is based on average loan balances for the years ended December 31, 2019 to 2022 and six months ended June 30, 2023. (1) Presented on a fully-taxable equivalent (“FTE”) basis using a
Slide 10: Loan Mix Diversified and Granular, Office Loans 3% of Total Loans
10 (1) Refer to the Corporation’s Proxy Statement for listing of peers. (2) LTV as of most recent appraisal. Loan Mix is Diversified and Granular, with Low CRE Concentration, and Office Loans Representing 3% of Total Loans Office Only Profile • $757 million in office loan commitments • $707 million
Slide 11: The Office Portfolio is Granular, Diversified, and Tenured
The Office Portfolio is Granular, Diversified, and Tenured 11 (1) Metropolitan Statistical Areas of “MSAs” titled in short name for presentation purposes. The Corporation’s presence in the New York-Newark-Jersey City MSA extends from central NJ into northern NJ, and no office loans in the state of N
Slide 12: Non-Performing Loans In Decline, Net Charge-Offs Back to Modest Levels
Non-Performing Loans In Decline, Net Charge-Offs Back to Modest Levels and Provision Expense and Allowance For Credit Losses Increasing Due to Strong Loan Growth and Changes in the Macroeconomic Outlook 12 (1) Includes the CECL Day 1 provision for credit losses of $8.0 million for the acquired Prude
Slide 13: And An Attractive Core Deposit Profile Despite Near-Term Industry Pressures
And An Attractive Core Deposit Profile Despite Near-Term Industry Pressures 13 ▪ Growth in deposit customers partially offsetting declining average balances as household growth remains at the forefront of our long-term relationship banking strategy ▪ Deposit betas remain below loan betas, at 26% and
Slide 14: Noninterest-Bearing Deposit Mix Trend Has Increased Over Time
14 Noninterest-Bearing Deposit Mix Trend Has Increased Over Time With The Growth In Commercial Banking Source: -S&P Global Market Intelligence, Federal Reserve Bank of New York - Corporation’s reported results for NIM and percentage of Noninterest-Bearing Deposits at June 30, 2023 • Growth in the Co
Slide 15: And the Deposit Portfolio Is Granular, Tenured and Diversified
And the Deposit Portfolio Is Granular, Tenured and Diversified 15 * Not meaningful
Slide 16: Committed Liquidity is Healthy, Covering 160% of Net Estimated Uninsured Deposits
16 (1) Includes cash at the FHLB and Federal Reserve and vault cash for liquidity purposes only. (2) Includes accrued interest, fees, and other adjustments. (3) Brokered deposit availability is based upon internal policy limit. Committed Liquidity is Healthy, Covering 160% of Net Estimated Uninsured
Slide 17: Managing Expenses and Selective Investments To Offset Inflationary Headwinds
Managing Expenses and Selective Investments To Offset Inflationary Headwinds 17 ~ $730 million ~ $610 million Efficiency Ratio(1) ▪ Positive operating leverage and recent impact of higher interest rates resulted in improvement in the efficiency ratio o 2021 reflects the impact of the previously anno
Slide 18: Strong and Stable Capitalization Provides Flexibility
18 Strong and Stable Capitalization(1) Provides Flexibility. . . ▪ Strong regulatory capital ratios provide operational and strategic flexibility ▪ Share repurchase authorization of $60 million remaining as of June 30, 2023, out of an original $100 million authorization, in place through December 31
Slide 19: And Remains Solid When Adjusted for Unrealized Losses on Investment Securities
. . . And Remains Solid When Adjusted for Unrealized Losses on the Investment Securities Portfolio(1) (1) Regulatory capital ratios and excess capital amounts are based on actual amounts as of June 30, 2023. (2) Excesses shown are to regulatory minimums, including the 250 basis point capital conserv
Slide 20: 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) 20 (1) Includes Fed Funds Rate increase of 25 bps in July 2023. Updated as
Slide 21: 2Q 2023 Financial Highlights
2Q 2023 FINANCIAL HIGHLIGHTS
Slide 22: 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. Income Statement Summary 22 2Q23 1Q23 2Q22 (dollars in thousands, except per-share data) Net interest income
Slide 23: Net Interest Income And Margin
Net Interest Income And Margin 23 ~ $730 million ~ $610 million (DOLLARS IN MILLIONS) (DOLLARS IN BILLIONS) (DOLLARS IN BILLIONS) Average Interest-Earning Assets & YieldsNet Interest Income & Net Interest Margin Average Deposits and Borrowings & Other & Cost of Funds
Slide 24: Fully Integrated Businesses Drive Significant Sources of Non-Interest Income
24 Fully Integrated Businesses Drive Significant Sources of Non-Interest Income(1) (1) Excludes investment securities gains.
Slide 25: Focus on Controlling Non-interest Expense
25 Focus on Controlling Non-interest Expense
Slide 26: Appendix
APPENDIX
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation 27 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-G
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 28 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
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation 29 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 expen
Slide 30: Non-GAAP Reconciliation
30 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,
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation 31 (dol lars in thousands , except per share data) Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 2018 2019 2020 2021 2022 2023 Tangible book value per share Shareholders ' equity $2,245,785 $2,308,798 $2,340,501 $2,692,958 $2,471,093 $2,642,152 Less : Goodwi l l and intangible as
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation 32 (dol lars in thousands) 2018 2019 2020 2021 2022 2023 Efficiency ratio Non-interest expense $546,104 $567,736 $579,440 $617,830 $633,728 $327,636 Less : Amortization of tax credit investments (11,449) (6,021) (6,126) (6,187) (2,783) - Less : Intangible Amortization - (1,42
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation 33 (dol lars in thousands) 2018 2019 2020 2021 2022 2023 Operating non-interest expense to total average assets Non-interest expense $546,104 $567,736 $579,440 $617,830 $633,728 $327,636 Less : Amortization of tax credit investments (11,449) (6,021) (6,126) (6,187) (2,783) -
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation 34 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 gains (losses) - HTM (148,6
Slide 35: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fultonbank.com FULTON FINANCIAL CORPORATION
Fulton Financial — Investor Presentation (September 2023) on 6ix