Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Q3 2023 Earnings Presentation
20 slides from Fulton Financial's earnings presentation, Oct 18, 2023
Slide 1: Third Quarter 2023 Results
THIRD QUARTER 2023 RESULTS NASDAQ: FULT Data as of or for the period ended September 30, 2023 unless otherwise noted
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements with respect to 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 identifi
Slide 3: A Deposit Portfolio That Remains Granular, Tenured and Diversified
A DEPOSIT PORTFOLIO THAT REMAINS GRANULAR, TENURED AND DIVERSIFIED 3
Slide 4: The Loan Mix Is Diversified, Granular, with Low CRE and Low Office Concentrations
THE LOAN MIX IS DIVERSIFIED, GRANULAR, WITH LOW CRE AND LOW OFFICE CONCENTRATIONS 4
Slide 5: The Office Portfolio Has Been Originated Over Time, Will Mature Over Time
THE OFFICE PORTFOLIO HAS BEEN ORIGINATED OVER TIME, WILL MATURE OVER TIME, AND REMAINS GRANULAR AND DIVERSE 5
Slide 6: Income Statement Summary
INCOME STATEMENT SUMMARY 3Q23 2Q23 3Q22 (dollars in thousands, except per-share data) Net interest income $213,842 $212,852 $215,582 Provision for credit losses 9,937 9,747 18,958 Non-interest income 55,961 60,589 59,215 Securities gains (losses) — (4) (53) Non-interest expense 171,020 168,018 162,5
Slide 7: Noninterest-Bearing Deposit Mix Has Trended Up Over Time
THE NONINTEREST-BEARING DEPOSIT MIX HAS TRENDED UP OVER TIME DESPITE PERIODIC CHANGES IN INTEREST RATES 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 $4 $250 $20 8.00% $20 $20 $20 $21 $21 $15 4.99% 5.20% 6.00% 4.25% 4.36% 4.73% $226 3.83% $225 $10 4.00% $216 $216
Slide 9: Asset Quality
ASSET QUALITY (DOLLARS IN MILLIONS) Provision for Credit Losses Non-Performing Loans ("NPLs") & NPLs to Loans $30 $200 0.98% $25 1.00% $25 0.85% $193 0.80% $175 0.70% 0.67% $20 $19 $172 $15 $165 $150 0.50% $15 $148 $10 $10 $141 $10 $125 $5 $100 0.00% 3Q22 4Q22 1Q23 2Q23 3Q23 $— (1) 3Q22 4Q22 1Q23 2Q
Slide 10: Non-Interest Income
NON-INTEREST INCOME(1) Three months ended September 30, 2023 (percent of total non-interest income) 3Q23 2Q23 Change (dollars in thousands) 3% n Commercial Banking $19,722 $23,145 ($3,423) n Wealth Management 19,413 18,678 735 n Consumer Banking 12,173 11,720 453 n Mortgage Banking 3,190 2,940 250 3
Slide 11: Non-Interest Expense
NON-INTEREST EXPENSE Three months ended September 30, 2023 3Q23 2Q23 Change (percent of total non-interest expense) (dollars in thousands) n Salaries and Benefits $96,757 $94,102 $2,655 n Data Processing and Software 16,914 16,776 138 n Net Occupancy 14,561 14,374 187 n Other Outside Services 12,094
Slide 12: Capital Ratios
(1) CAPITAL RATIOS (as of September 30, 2023) (dollars in millions) 17.5% 15.0% 13.8% 12.5% $759 11.0% 10.1% 10.0% 9.4% $566 $716 $1,168 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 capital amou
Slide 13: Capital Ratios Adjusted for Unrealized Losses on Investment Securities
CAPITAL RATIOS ADJUSTED FOR UNREALIZED LOSSES ON INVESTMENT SECURITIES(1) (as of September 30, 2023) (dollars in millions) 12.5% | | 10.0% | | 7.8% 7.5% 7.5% | $183 $653 | 6.2% | 5.0% | | | 2.5% | | —% | Tier 1 Leverage(3) CE Tier 1(3) TCE(4) (2) n Regulatory Minimums n Excess (1) Regulatory capital
Slide 14: A Committed and Healthy Liquidity Profile with Significant Coverage
A COMMITTED AND HEALTHY LIQUIDITY PROFILE WITH SIGNIFICANT COVERAGE (dollars in thousands) (dollars in thousands) 14
Slide 15: 2023 Outlook
2023 OUTLOOK Net interest income: $845 - $855 million(1) Non-interest income: $220 - $230 million(2) Provision for credit losses: $55 - $65 million Non-interest expense: $665 million +/-(3) Effective tax rate: 17.5% +/- (1) Assumes Fed Funds Rate increase of 25 bps in November 2023. Updated as of 3Q
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) Sep 30 Jun 30 Sep 30 2023 2023 2022 Operating return on average assets Net income $72,097 $79,607 $70,871 Plus: Core deposit intangible amortization 441 912 514 Plus: Merger-related expenses — — 7,006 Plus: CECL Day 1 Provision expens
Slide 18: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended (dollars in thousands) Sep 30 Jun 30 Sep 30 2023 2023 2022 Return on average common shareholders' equity (tangible) Net income available to common shareholders $69,535 $77,045 $68,309 Plus: Intangible amortization 601 1,072 690 Plus: Merger-related expenses
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (dollars in thousands) Three months ended Sep 30 Jun 30 Sep 30 Efficiency ratio 2023 2023 2022 Non-interest expense $171,020 $168,018 $169,558 Less: Amortization of tax credit investments — — (696) Less: Merger-related expenses — — (7,006) Less: Intangible amortization (601)
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Three months ended (dollars in thousands) Sep 30 2023 Adjusted tangible common equity to tangible assets (TCE Ratio) Shareholders' equity $ 2,566,693 Less: Preferred stock (192,878) Less: Goodwill and intangible assets (561,284) Less: Unrealized gain/(loss) - HTM (202,590) Le