Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (August 2024)
35 slides from Fulton Financial's investor presentation, Aug 30, 2024
Slide 1: Investor Presentation
z INVESTOR PRESENTATION Data as of or for the period ended June 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 Compelling Franchise, Well-Positioned for Long-Term Growth
3 A Compelling Franchise, Well-Positioned for Long-Term Growth, with Solid Liquidity and Capital, and Disciplined Credit Culture (1) As of June 30, 2024. (2) Data as of June 30, 2023 per S&P Capital IQ; FDIC Summary of Deposits. Excludes Republic First Bank (“Republic”). (3) Based on shares outstand
Slide 4: A Balanced Business Model, Differentiated Mix of Services
A Balanced Business Model, Differentiated Mix of Services, Technology- Enabled Delivery Channels and a Compelling Value Proposition • Non-interest income as a percentage of revenue of over 20%(1) • Wealth management accounts for approximately 1/3 of total non-interest income(1), delivering an 8%, 5-
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: Customer-Focused and Employee-Powered Digital Ecosystem
Customer-Focused and Employee-Powered Digital Ecosystem Designed to Change Lives For The Better 6 Our technology strategy aligns to our people-minded business objectives … … Prioritizing digital transformation through industry-leading technology empowers our employees, customers and operations
Slide 7: Our Approach to Risk Management is Comprehensive: Three Lines of Defense
Our Approach to Risk Management is Comprehensive and Utilizes a “Three Lines of Defense Model” 7 Our approach to risk management is layered and has three lines of defense
Slide 8: Republic Transaction: Loan and Deposit Portfolio
8 Meaningful contribution: Similar lending products, services and markets of operation Loan Portfolio (June 30,2024) Deposit Portfolio (June 30,2024) $25.6BN $24.1BN 11 basis point improvement to net interest margin (“NIM”) in 2Q24 ~$34.8 million improvement to net interest income in 2Q24 Transactio
Slide 9: A Well-Diversified Loan Portfolio With Growth in Multiple Categories
9 A Well-Diversified Loan Portfolio With Growth in Multiple Categories • The loan portfolio has grown $7.9 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 bra
Slide 10: 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 10 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
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 NCO
Slide 12: Non-Owner-Occupied Commercial Mortgage Portfolio is Well Diversified
Fulton’s Non-Owner-Occupied Commercial Mortgage(1) Portfolio is Well Diversified within the Industries Served At June 30, 2024 Fulton Bank’s CRE / Total Risk-Based Capital is 210%, below the 300% regulatory threshold. 12 (1) Non-owner-occupied commercial mortgage of $5.2 billion represents 56% of th
Slide 13: Commercial Real Estate – Office Concentration is Low
13 Commercial Real Estate – the Office Concentration is Low and the Loan Mix is Diversified and Granular (1) LTV as of most recent appraisal. Office Only Profile • $896 million in office loan commitments • $824 million in office loans outstanding • representing 3% of total loans • Average loan size
Slide 14: The 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)
Slide 15: Multi-Family Loans Represent 8% of the Total Loan Portfolio
15 Multi-Family Loans Represent 8% of the Total Loan Portfolio With a Small Average Loan Size, Low LTV’s 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 tota
Slide 16: The Majority of the Multi-Family Portfolio Has Been 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
Slide 17: A Larger Deposit Portfolio that Remains Granular, Tenured and Diversified
A Larger Deposit Portfolio that Remains Granular, Tenured and Diversified with Significant Liquidity Coverage (1) As of June 30, 2024. Estimated uninsured deposits net of collateralized municipal deposits and inter-company deposits. For the calculation of the coverage of estimated uninsured deposits
Slide 18: A Committed and Healthy Liquidity Profile
18 (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. (4) Net estimated uninsured deposits are net of collateralized municipal
Slide 19: Fulton's Market is Geographically Diversified
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 19 Note: Data as of June 30, 2023 per S&P Capital IQ; FDIC Summary of Deposits.
Slide 20: Well Positioned to Actively Manage Deposit Pricing in Down Rate Scenarios
Looking Ahead, Fulton is Well Positioned, Experienced and Prepared to Actively Manage Deposit Pricing in Down Rate Scenarios Deposit Mix by Rate Type(2) (June 30, 2024) • $2.3 billion notional amount of interest rate derivatives in the form of interest rate collars indexed to the one-month Secured O
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 June 30,2024. 21 • Growth in the Corporation
Slide 22: 2Q24 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. 2Q24 Income Statement Summary 2Q24 1Q24 Linked-Quarter Change Net interest income $241,720 $206,937 $34,783 P
Slide 23: Net Interest Income and Margin
Net Interest Income and Margin • NIM was 3.43% in the second quarter of 2024, increasing 11 basis points compared to the first quarter of 2024. • Loan yield improved by 22 basis points during the second quarter of 2024, increasing to 6.12% compared to 5.90% in the first quarter of 2024. • Total cost
Slide 24: Integrated Businesses Drive Significant Sources of Non-Interest Income
Integrated Businesses Drive Significant Sources of Non-Interest Income(1) (1) Excluding investment securities gains. Non-interest Income (percentage of total non-interest income, three months ended June 30, 2024) Increases due to: • Broad-based commercial banking increases (all categories) • Record
Slide 25: Focus on Controlling Non-Interest Expense
Focus on Controlling Non-Interest Expense Non-interest Expense (percentage of total non-interest expense, three months ended June 30, 2024) Decreases primarily due to: • The $20.3 million pre-tax gain on sale of real estate related to the sale-leaseback transaction is presented as an offset to other
Slide 26: Stable Capitalization Provides Flexibility
26 Stable Capitalization Provides Flexibility. . . ▪ Strong regulatory capital ratios provide operational and strategic flexibility ▪ $95 million remaining share repurchase authorization in place through December 31, 2024(1) ▪ Ratios improving as internal capital generation exceeds tangible and risk
Slide 27: 2024 Outlook
27 2024 OUTLOOK (1) Assumes Fed Funds Rate decrease of 25 basis points in September 2024. (2) Excludes the CECL day 1 provision for credit losses of $23.4 million related to non-purchased credit deteriorated loans acquired in the Republic transaction. (3) Excludes investment securities gains and los
Slide 28: Approach to Environmental, Social & Governance
28 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 29: Appendix
APPENDIX
Slide 30: Non-GAAP Reconciliation – Operating Net Income Available to Common Shareholders
Non-GAAP Reconciliation – Operating Net Income Available to Common Shareholders (quarterly) 30 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 31: Non-GAAP Reconciliation – Operating Return on Average Assets
Non-GAAP Reconciliation – Operating Return on Average Assets 31 (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. (dollars in thousands) Jun 30 Mar 31 2024 2024 Operating return on average assets Net Income $94,97
Slide 32: Non-GAAP Reconciliation – Operating Return on Average Common Shareholders' Equity (Tangible)
Non-GAAP Reconciliation – Operating Return on Average Common Shareholders’ Equity (Tangible) 32 (dollars in thousands) Jun 30 Mar 31 2024 2024 Operating return on average common shareholders' equity (tangible) Net income available to common shareholders $92,413 $59,379 Less: Interest rate derivative
Slide 33: Non-GAAP Reconciliation – Efficiency Ratio
33 Non-GAAP Reconciliation – Efficiency Ratio Three months ended (dollars in thousands) Jun 30 Mar 31 Jun 30 Efficiency ratio 2024 2024 2023 Non-interest expense $199,488 $177,600 $168,018 Less: Intangible amortization (4,688) (573) (1,072) Less: Acquisition-related expenses (13,803) - - Less: FDIC
Slide 34: Non-GAAP Reconciliation – Tangible Book Value Per Share
Non-GAAP Reconciliation – Tangible Book Value Per Share and Tangible Book Value Per Share Excluding AOCI 34 Three Months Ended (dollars in thousands, except per share data) Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 2019 2020 2021 2022 2023 2024 Tangible book value per share Shareholders' equity $2,3
Slide 35: The Bank of Choice
The Bank of Choice because of Who he Ave and Low Me Opevile.
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