Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (February 2024)
39 slides from Fulton Financial's investor presentation, Feb 13, 2024
Slide 1: Investor Presentation
z INVESTOR PRESENTATION Data as of or for the period ended December 31, 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” or “Fulton”) financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statemen
Slide 3: A Valuable Franchise, Well-Positioned for Long-Term Growth
3 A Valuable Franchise, Well-Positioned for Long-Term Growth, with Strong Liquidity, Solid Capital and Disciplined Credit Culture (1) As of December 31, 2023. (2) Data as of June 30, 2023 per S&P Capital IQ; FDIC Summary of Deposits. (3) Based on shares outstanding of 164 mil lion and closing price
Slide 4: A Diversified Business Model, Differentiated Service Mix and Technology-Enabled Delivery Channels
A Diversified Business Model, Differentiated Service Mix, Technology-Enabled Delivery Channels and a Compelling Value Proposition • Non-interest income as a percentage of revenue of over 20% • Wealth management accounts for 1/3 of total non-interest income, having grown at a 6% 5-year CAGR, AUM/AUA(
Slide 5: A Robust and Scalable Product Suite Built Upon Significant Investment in Leading-Edge Technologies
A Robust and Scalable Product Suite Built Upon Significant Investment in Leading-Edge Technologies and Customer Adoption 5 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, ne
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: A Well-Diversified Loan Portfolio With Growth in Multiple Categories
7 A Well-Diversified Loan Portfolio With Growth in Multiple Categories • The loan portfolio has grown $5.2 billion over the past 5 years • 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 Compa
Slide 8: 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 8 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); Company historical
Slide 9: Asset Quality
Asset Quality ACL(1) to NPLs and Loans Provision for Credit Losses Non-Performing Loans ("NPLs") and NPLs to Loans Net Charge-offs ("NCOs") and NCOs to Average Loans ((1) The allowance for credit losses (“ACL”) relates specifically to “Loans, net of unearned income” and does not include reserves rel
Slide 10: Non-Owner-Occupied Commercial Real Estate Portfolio is Stabilized and Well Diversified
Fulton’s Non-Owner-Occupied Commercial Real Estate(1) Portfolio is Stabilized and Well Diversified within the Industries Served At September 30, 2023 CRE / Total Risk-Based Capital is 175%, well below the regulatory threshold, providing room to expand market share and customer accommodation 10 (1) N
Slide 11: Commercial Real Estate – Office Concentration is Low and Loan Mix is Diversified
11 Commercial Real Estate – the Office Concentration is Low and the Loan Mix is Diversified and Granular Office Only Profile • $710 million in office loan commitments • $683 million in office loans outstanding o representing 3% of total loans • Average loan size is $2.2 million • Weighted average lo
Slide 12: The Office Portfolio has been Originated Over Time and Remains Granular and Diversified
12 The Office Portfolio has been Originated Over Time, Will Mature Over Time and Remains Granular and Diversified Originated Over Time And Maturing Over Time Granular Loan Portfolio Geographically Diverse by MSA(1) (2) (1) Metropolitan Statistical Areas or “MSAs” titled in short name for presentatio
Slide 13: Multi-Family Profile
13 Multi-Family Profile • $2.1 billion in multi-family loan commitments • $1.6 billion in multi-family loans outstanding • Average loan size is $3.8 million • Weighted average LTV(1) ratio of 57% • Weighted Average DSCR of 1.25x • 90% of loans with recourse • 43% construction, 57% stabilized • Class
Slide 14: The Multi-Family Portfolio has been Recently Originated and is Geographically Diverse
14 (1) The Corporation’s presence in the New York-Newark-Jersey City MSA extends from central New Jersey into northern New Jersey and includes one multi-family loan in New York City component of the New York MSA. The Multi-Family Portfolio has been Recently Originated and Appraised, has a Long-Dated
Slide 15: A Stable Deposit Portfolio that Remains Granular, Tenured and Diversified
A Stable Deposit Portfolio that Remains Granular, Tenured and Diversified with Significant Liquidity Coverage (1) As of December 31, 2023. Total households include loan and deposit households; Estimated uninsured deposits net of collateral ized municipal deposits and inter-company deposits. For the
Slide 16: Estimated Uninsured Deposits and Available Liquidity
Estimated Uninsured Deposits December 31, 2023 Total Deposits $21,538 Estimated Uninsured Deposits $7,153 Estimated Uninsured Deposits to Total Deposits 33% Estimated Uninsured Deposits $7,153 Less: Collateralized Municipal Deposits (2,099) Net Estimated Uninsured Deposits(5) $5,054 Net Estimated Un
Slide 17: Fulton's Market is Geographically Diversified with Top Market Share in Key Markets
Fulton's Market is Geographically Diversified, with Top Market Share in Key Markets and Additional Growth Opportunity in Others 17 Note: Data as of June 30, 2023 per S&P Capital IQ; FDIC Summary of Deposits. (1) Median Household (“HH”) Income, 2023 – 2028 Projected Population Change and Projected HH
Slide 18: Recent Growth in Philadelphia County has Increased Our Share
Recent Growth in Philadelphia County has Increased Our Share While also Presenting Room for Continued Growth 18 ▪ Philadelphia remains a natural fill-in opportunity within our current footprint ▪ Philadelphia Market: o The acquisition of Prudential Bancorp, Inc. (“Prudential Bancorp”) added 8 locati
Slide 19: 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) (December 31, 2023) • $2.3 billion notional amount of interest rate derivatives in the form of interest rate collars indexed to the one-month Secur
Slide 20: The 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 • 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 per
Slide 21: 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 21 4Q23 3Q23 4Q22 (dollars in thousands, except per-share data) Net interest income
Slide 22: Net Interest Income and Margin
Net Interest Income and Margin Net Interest Income and NIM Average Deposits and Borrowings and Other and Cost of Funds Average Interest-Earning Assets and Yields • NIM was 3.36% in the fourth quarter of 2023, declining 4 basis points compared to the third quarter of 2023 • Loan yield improved by 11
Slide 23: Integrated Businesses Drive Significant Sources of Non-Interest Income
23 Integrated Businesses Drive Significant Sources of Non-Interest Income(1) (1) Excludes investment securities gains. Increases due to: • $1.6 million increase in commercial banking (capital markets and Small Business Administration revenues) Offset by decreases due to: • Decline in mortgage bankin
Slide 24: Focus on Controlling Non-Interest Expense
24 Focus on Controlling Non-Interest Expense Increases primarily due to: • $6.5 million Federal Deposit Insurance Corporation special assessment • $3.2 million in expenses related to the FultonFirst initiative • $1.6 million increase in marketing expense in connection with a targeted customer deposi
Slide 25: Stable Capitalization Provides Flexibility
25 Stable Capitalization(1) Provides Flexibility. . . ▪ Strong regulatory capital ratios provide operational and strategic flexibility ▪ $125 million share repurchase authorization in place through December 31, 2024 ▪ Ratios improving as internal capital generation exceeds tangible and risk-weighted
Slide 26: 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 December 31, 2023 are preliminary estimates.(2) Excesses shown are to regulatory minimums, including the capital conservation buffer;
Slide 27: 2024 Outlook
27 Net interest income: $790 - $820(1) Provision for credit losses: $45 - $65 Non-interest income: $235 - $250(2) Non-interest expense: $670 - $690(3) Effective tax rate: 17.0% - 18.0% 2024 OUTLOOK (1) Assumes Fed Funds Rate decreases 75 bps in the second half of 2024. (2) Excludes investment securi
Slide 28: Approach to Environmental, Social & Governance (ESG)
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 2022 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 (quarterly)
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 Net Income Available to Common Shareholders (annual)
Non-GAAP Reconciliation – Operating Net Income Available to Common Shareholders (annual) 31 (dollars in thousands) Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 2023 2022 2021 2020 2019 2018 Net income available to common shareholders $ 274,032 $ 276,733 $ 265,220 $ 175,905 $ 226,339 $ 208,393 Plus: Cor
Slide 32: Non-GAAP Reconciliation – Operating Return on Average Assets (quarterly)
Non-GAAP Reconciliation – Operating Return on Average Assets (quarterly) 32
Slide 33: Non-GAAP Reconciliation – Operating Return on Average Assets (annual)
Non-GAAP Reconciliation – Operating Return on Average Assets (annual) 33
Slide 34: Non-GAAP Reconciliation – Return on Average Tangible Common Equity (quarterly)
Non-GAAP Reconciliation – Return on Average Common Shareholders’ Equity (Tangible) (quarterly) 34
Slide 35: Non-GAAP Reconciliation – Return on Average Tangible Common Equity (annual)
Non-GAAP Reconciliation – Return on Average Common Shareholders’ Equity (Tangible) (annual) 35
Slide 36: Non-GAAP Reconciliation – Efficiency Ratio
36 Non-GAAP Reconciliation – Efficiency Ratio
Slide 37: Non-GAAP Reconciliation – Tangible Book Value Per Share
Non-GAAP Reconciliation – Tangible Book Value Per Share and Tangible Book Value Per Share Excluding AOCI 37 (dol lars in thousands , except per share data) Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 2018 2019 2020 2021 2022 2023 Tangible book value per share Shareholders ' equity $2,247,573 $2,342,17
Slide 38: Non-GAAP Reconciliation – Adjusted Tangible Common Equity to Tangible Assets
Non-GAAP Reconciliation – Adjusted Tangible Common Equity to Tangible Assets (TCE Ratio) 38
Slide 39: The Bank of Choice
The Bank of Choice because of Who We Aveand How We Opevale. FULTON FINANCIAL CORPORATIC
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