Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (October 2023)
35 slides from Fulton Financial's investor presentation, Oct 30, 2023
Slide 1: Investor Presentation
z INVESTOR PRESENTATION Data as of or for the period ended September 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 September 30, 2023. (2) Data as of June 30, 2023, per S&P Global Market Intelligence; FDIC SOD. (3) Based on shares outstanding of 164 million and closing p
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, 2023 per S&P Global Market Intelligence; FDIC Summary of Deposits. (1) Median Household (“HH”) Income, 2023 – 2028 Projected Population Change and Projected HH Income Change are weighted by deposits in each M
Slide 8: Opportunities to Expand Our Presence in Urban Markets Remain A Priority
Opportunities to Expand Our Presence in Urban Markets Remain A Priority 8 ▪ Philadelphia remains a natural fill-in opportunity within our current footprint o 1 financial center opened in 3Q23 o 1 financial center targeted to open in 4Q23 ▪ Philadelphia Market: o The acquisition of Prudential Bancorp
Slide 9: A Well-Diversified Loan Portfolio, Balanced Growth, at Higher Yields
A Well-Diversified Loan Portfolio, Balanced Growth, at Higher Yields . . . 9 Note: Loan portfolio composition is based on average loan balances for the years ended December 31, 2019 to 2022 and nine months ended September 30, 2023. (1) Presented on a fully-taxable equivalent (“FTE”) basis using a 21
Slide 10: The Loan Mix is Diversified, Granular, with Low CRE and Low Office Concentrations
10 The Loan Mix is Diversified, Granular, with Low CRE and Low Office Concentrations (1) Refer to the Corporation’s 2023 Proxy statement for the listing of peers. (2) LTV as of most recent appraisal.
Slide 11: The Office Portfolio Has Been Originated Over Time and Remains Granular and Diverse
11 (1) Metropolitan Statistical Area’s or “MSA’s” titled in short name for presentation purposes. (2) Fulton’s presence in the New York-Newark-Jersey City MSA extends from central NJ into northern NJ, and includes zero office loans in the state of New York component of the New York MSA. The Office P
Slide 12: Stable Credit Metrics with Non-Performing Loans in Decline
Stable Credit Metrics with Non-Performing Loans in Decline, Net Charge-Offs Back to Modest Levels, and Increasing Coverage Ratios 12 (1) Includes the CECL Day 1 provision for credit losses of $8.0 million for the acquired Prudential Bancorp, Inc. loan portfolio. (2) The allowance for credit losses (
Slide 13: An Attractive Core Deposit Profile Despite Near-Term Industry Pressures
And an Attractive Core Deposit Profile Despite Near-Term Industry Pressures 13 ▪ Deposit household and account growth partially offsetting declining average balances and remains a key driver of our long-term relationship banking strategy. ▪ Deposit betas remain below loan betas, at 29% and 46%, resp
Slide 14: The Noninterest-Bearing Deposit Mix Has Trended Up Over Time
14 Source: S&P Global Market Intelligence, New York Fed 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, 2023. The Noninterest-Bearing Deposit Mix Has Trended Up Over Time Despite Periodi
Slide 15: A Deposit Portfolio that Remains Granular, Tenured And Diversified
15 * Not meaningful A Deposit Portfolio that Remains Granular, Tenured And Diversified
Slide 16: A Committed and Healthy Liquidity Profile with Significant Coverage
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. A Committed and Healthy Liquidity Profile with Significant Coverage (dol
Slide 17: While Expense Ratios Have Improved, Opportunities Exist to Manage Lower
While Expense Ratios Have Improved, Opportunities Exist to Manage Lower 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 announced
Slide 18: Stable Capitalization Provides Flexibility
18 Stable Capitalization(1) Provides Flexibility. . . ▪ Strong regulatory capital ratios provide operational and strategic flexibility ▪ Share repurchase authorization of $29 million remaining as of September 30, 2023, out of an original $100 million authorization, in place through December 31, 2023
Slide 19: Capital Remains Stable When Adjusted for Unrealized Losses on Investment Securities
. . . And Remains Stable When Adjusted for Unrealized Losses on the Investment Securities Portfolio(1) (1) Regulatory capital ratios and excess capital amounts as of September 30, 2023 are preliminary estimates. (2) Excesses shown are to regulatory minimums, including the 250 basis point capital con
Slide 20: 2023 Outlook
20 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% +/- 2023 OUTLOOK (1) Assumes Fed Funds Rate increase of 25 bps in November 2023. Updated as of
Slide 21: 3Q 2023 Financial Highlights
3Q 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 3Q23 2Q23 3Q22 (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 – Operating Net Income to Common Shareholders
Non-GAAP Reconciliation – Operating Net Income to Common Shareholders 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 fi
Slide 28: Non-GAAP Reconciliation – Operating Return on Average Assets
Non-GAAP Reconciliation – Operating Return on Average Assets 28
Slide 29: Non-GAAP Reconciliation – Return on Average Common Shareholders' Equity (Tangible)
Non-GAAP Reconciliation – Return on Average Common Shareholders’ Equity (Tangible) 29
Slide 30: Non-GAAP Reconciliation – Efficiency Ratio (Quarter-to-Date)
30 Non-GAAP Reconciliation – Efficiency Ratio (Quarter-to-Date)
Slide 31: Non-GAAP Reconciliation – Tangible Book Value Per Share
Non-GAAP Reconciliation – Tangible Book Value Per Share and Tangible Book Value Per Share Excluding AOCI 31 (dol lars in thousands , except per share data) Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 2018 2019 2020 2021 2022 2023 Tangible book value per share Shareholders ' equity $2,283,014 $2,324,01
Slide 32: Non-GAAP Reconciliation – Efficiency Ratio (Year-to-Date)
Non-GAAP Reconciliation – Efficiency Ratio (Year-to-Date) 32 (dollars in thousands) 2018 2019 2020 2021 2022 2023 Efficiency ratio Non-interest expense $546,104 $567,736 $579,440 $617,830 $633,728 $498,656 Less: Amortization of tax credit investments (11,449) (6,021) (6,126) (6,187) (2,783) - Less:
Slide 33: Non-GAAP Reconciliation – Operating Non-Interest Expense to Total Average Assets
Non-GAAP Reconciliation – Operating Non-Interest Expense to Total Average Assets 33 (dollars 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 $498,656 Less: Amortization of tax credit
Slide 34: Non-GAAP Reconciliation – Adjusted Tangible Common Equity to Tangible Assets
Non-GAAP Reconciliation – Adjusted Tangible Common Equity to Tangible Assets (TCE Ratio) 34
Slide 35: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fultonbank.com FULTON FINANCIAL CORPORATION
Fulton Financial — Investor Presentation (October 2023) on 6ix