Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Q3 2024 Earnings Presentation
26 slides from Fulton Financial's earnings presentation, Oct 16, 2024
Slide 1: Third Quarter 2024 Results
THIRD QUARTER 2024 RESULTS NASDAQ: FULT Data as of or for the period ended September 30, 2024 unless otherwise noted
Slide 2: Forward-looking statements
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 can be identified by the use o
Slide 3: Third Quarter 2024 Financial Highlights
Third Quarter 2024 Financial Highlights GAAP Reported Operating(1) 3Q24 2Q24 3Q24 2Q24 Net Income ($ in millions) $60.6 $92.4 $91.3 $82.5 Return on Average Assets (annualized) 0.79% 1.24% 1.17% 1.11% Return on Average Tangible Common Equity (annualized; non-GAAP) -- -- 15.65% 15.56% Efficiency Ratio
Slide 4: Deepening Our Commitment to Purpose, Vision, & Strategic Execution
Deepening Our Commitment to Purpose, Vision, & Strategic Execution Simplicity in the operating model - Realign value propositions and coverage models by customer size and Focus on Fulton’s core relationships complexity - Invest in “relationship” products & Productivity across the Bank - Redesign end
Slide 5: Income Statement Summary
Income Statement Summary Linked-Quarter 3Q24 2Q24 Change (dollars in thousands, except per-share data) Net interest income $258,009 $241,720 $16,289 Provision for credit losses 11,929 32,056 (20,127) Non-interest income 59,674 113,276 (53,602) Securities (losses) (1) (20,282) 20,281 Non-interest exp
Slide 6: Net Interest Income and Net Interest Margin ("NIM")
Net Interest Income and Net Interest Margin (“NIM”) 3Q24 Highlights Average Interest-Earning Assets & Yields (dollars in billions) • 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
Slide 7: Non-Interest Income
Non-Interest Income 3Q24 2Q24 Linked- (dollars in thousands) 3Q24 Fulton Republic 3Q24 2Q24 Fulton Republic 2Q24 Quarter Organic Transaction Consolidated Organic Transaction Consolidated Change Commercial Banking $21,905 $384 $22,289 $21,027 $383 $21,410 $879 Wealth Management 21,596 - 21,596 20,990
Slide 8: Non-Interest Expense
Non-Interest Expense Linked- (dollars in thousands) 3Q24 Fulton 3Q24 Republic 3Q24 2Q24 Fulton 2Q24 Republic 2Q24 Quarter Organic Transaction Consolidated Organic Transaction Consolidated Change Salaries and employee benefits $107,986 $10,838 $118,824 $102,117 $8,513 $110,630 $8,194 Data processing
Slide 9: Success to Date Positions Fulton Well for 2025 & Beyond
Success to Date Positions Fulton Well for 2025 & Beyond Estimated FultonFirst Financial Benefits Positioning for Growth 2025 estimated cost saves of ~$25 million Implementation costs associated with FultonFirst should abate through 2025: •Anticipate ~45% in 1H25; balance in 2H25 • Implementation-to-
Slide 10: Asset Quality
Asset Quality Provision for Credit Losses Non-Performing Loans (“NPLs”) & NPLs to Loans Net Charge-offs (“NCOs”) and NCOs to Average Loans ACL(1) to NPLs & Loans (1) The allowance for credit losses (“ACL”) relates specifically to “Loans, net of unearned income” and does not include reserves related
Slide 11: Capital Ratios
Capital Ratios(1) (as of September 30, 2024) (dollars in millions) $790 $581 $730 $1,181 (2) (1) Regulatory capital ratios and excess capital amounts as of September 30, 2024 are preliminary estimates. (2) Excesses shown are to regulatory minimums, including the 250 basis point capital conservation
Slide 12: 2024 Operating Outlook
2024 Operating Outlook Net Interest Income: $925 - $950 million(1) Provision for Credit Losses: $40 - $60 million(2) Non-Interest Income: $240 - $260 million(3) Non-Interest Expense: $750 - $770 million(4) Effective Tax Rate: 16% - 18%(5) (1) Incorporates the Fed Funds Rate decrease of 50 basis poin
Slide 13: A Larger Deposit Portfolio That Remains Granular, Tenured and Diversified
A Larger Deposit Portfolio That Remains Granular, Tenured and Diversified With Significant Liquidity Coverage Deposit Mix By Customer Deposit Portfolio Highlights(1) (September 30, 2024) 877,000 deposit accounts $29,535 average account balance ~10 year average account age 23% estimated uninsured dep
Slide 14: Loan Portfolio Remains Diversified and Granular With Low Office Concentration
The Loan Portfolio Remains Diversified and Granular With Low Office Concentration at 3% of Total Loans Total Loan Portfolio Office Only Profile (September 30, 2024) • $876 million in office loan commitments • $812 million in office loans outstanding • representing 3% of total loans • Average loan si
Slide 15: The Office Portfolio Has Been Originated Over Time and Remains Granular
The Office Portfolio Has Been Originated Over Time, Will Mature Over Time, and Remains Granular and Diverse Granular Loan Portfolio Geographically Diverse by MSA(1) $374 $271 241 80% $227 73% $197 67% 61% 61% 51% $150 104 $102 $80 $104 $113 $103 20 $32 14 8 $1.2 $2.3 $4.7 $4.9 $1.4 $2.3 Under $1MM $
Slide 16: Multi-Family Loans Represent 8% of the Total Loan Portfolio
Multi-Family Loans Represent 8% of the Total Loan Portfolio With a Small Average Loan Size, Low LTV’S and Solid DSCR Total Loan Portfolio (September 30, 2024) Multi-Family Profile • $2.4 billion in multi-family loan commitments • $1.9 billion in multi-family loans outstanding • representing 8% of to
Slide 17: Multi-Family Portfolio Recently Originated and Appraised, Long-Dated Maturity
The Majority of the Multi-Family Portfolio Has Been Recently Originated and Appraised and Has a Long-Dated Maturity Horizon Diversified by Size Diversified by Geographical MSA $1,084 $823 398 $513 $449 $464 $584 70% 64% 189 60% 55% 55% 49% $226 $242 $148 63 $147 36 32 $114 $6.3 $5.9 $2.5 $3.6 $3.1 $
Slide 18: Noninterest-Bearing Deposit Trends
Noninterest-Bearing Deposit Trends • Growth in the Corporation’s commercial banking business, as well as the historically low levels of interest rates for much of the post-2008 period, led to a generally increasing trend in the percentage of noninterest-bearing deposits. • Prior to 2008, noninterest
Slide 19: Liquidity Profile
Liquidity Profile Available Liquidity September 30, 2024 Estimated Uninsured Deposits September 30, 2024 (dollars in thousands) Cash On-Hand (1) $ 1,175 Total Deposits $26,152 Estimated Uninsured Deposits $9,468 Federal Reserve Capacity $ 1,515 Estimated Uninsured Deposits to Total Deposits 36% Tota
Slide 20: 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 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three months ended (dollars in thousands) Sep 30 Jun 30 2024 2024 Operating return on average assets Net income $63,206 $94,975 (1) Less: Interest rate derivative transition valuation 138 (137) Less: Loss (gain) on acquisition, net of tax 7,706 (47,392) Less: Non-PCD credit-r
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three months ended (dollars in thousands) Sep 30 Jun 30 2024 2024 Operating non-interest expense to total average assets Non-interest expense $226,089 $199,488 Less: Amortization of tax credit investments - - Less: Intangible amortization (6,287) (4,688) Less: Acquisition-rel
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three months ended (dollars in thousands) Sep 30 Jun 30 2024 2024 Pre-provision net revenue / average assets Plus: Net interest income $258,009 $241,720 Plus: Non-interest income 59,673 92,994 Less: Non-interest expense (226,089) (199,488) Less: Non-PCD credit-related interes
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three months ended (dollars in thousands) Sep 30 Jun 30 2024 2024 Operating return on average common shareholders' equity (tangible) Net income available to common shareholders $60,644 $92,413 (1) Less: Interest rate derivative transition valuation 138 (137) Less: Loss (gain)
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three months ended (dollars in thousands) Sep 30 Jun 30 Efficiency ratio 2024 2024 Non-interest expense $226,089 $199,488 Less: Intangible amortization (6,287) (4,688) Less: Acquisition-related expense (14,195) (13,803) Less: FDIC special assessment 16 - Plus: Gain on sale-le
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Three Months Ended (dollars in thousands, except per share data) Sep 30 Jun 30 2024 2024 Tangible book value per share Shareholders' equity $3,203,943 $3,101,609 Less: Goodwill and intangible assets (641,739) (648,026) Less: Preferred stock (192,878) (192,878) Tangible common