Fulton Financial Corporation · NASDAQ:FULT
Fulton Financial — Investor Presentation (November 2022)
30 slides from Fulton Financial's investor presentation, Nov 8, 2022
Slide 1: Investor Presentation
z INVESTOR PRESENTATION Data as of or for the period ended September 30, 2022 unless otherwise noted
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 This presentation may contain forward-looking statements with respect to the Corporation’s financial condition, results of operations and business. Do not unduly rely on forward-looking statements. Forward-looking statements can be identified by the use of words such as
Slide 3: Deep Executive Bench With Continuity; Compelling Opportunity
Deep Executive Bench With Continuity; Compelling Opportunity 3 (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. Name Position Years at
Slide 4: A Valuable Franchise, Well Positioned with Strong Liquidity, Solid Capital and Disciplined Credit Culture
4 (1) As of September 30, 2022. (2) Data as of June 30, 2022, per S&P Global Market Intelligence; market excludes money center banks and removes online only bank deposits. (3) Shares outstanding and closing price as of November 1, 2022. (4) Non-GAAP based financial measure. Please refer to the calcu
Slide 5: Strong Position In Attractive & Stable Markets
Strong Position In Attractive & Stable Markets 5 Note: Data as of June 30, 2022 per S&P Global Market Intelligence; FDIC Summary of Deposits. (1) Median Household Income, 2022 – 2027 Projected Population Change and Projected HH Income Change are weighted by deposits in each MSA.
Slide 6: Extending Footprint Into Fast-Growing Urban Markets
Extending Footprint Into Fast-Growing Urban Markets 6 Philadelphia remains a natural fill-in opportunity within our current footprint o Opened 3 financial centers in 2019 o 1 financial center opened in 1Q22 and 1 financial center targeted to open in 1Q23 Philadelphia Market: o The acquisition of
Slide 7: Enhanced Suite of Products and Embedded Value from Technology Spending
Enhanced Suite of Products and Embedded Value from Technology Spending Leading Technology Partners Well-positioned to compete in and serve our market • Significant technology spend over prior five years • 30+ full-time equivalent employees hired to build out data and analytics capabilities Investmen
Slide 8: Granular, Well-Diversified Loan Portfolio
Granular, Well-Diversified Loan Portfolio 8 Note: Loan portfolio composition is based on average loan balances for the years ended December 31, 2018 to 2021 and the nine months ended September 30, 2022. (1) Presented on a fully-taxable equivalent (“FTE”) basis using a 21% federal tax rate and statut
Slide 9: Attractive Core Deposit Profile
Attractive Core Deposit Profile 9 Deposits have leveled off and include the third quarter seasonal inflow of municipal deposits and Prudential Bank deposits Deposit costs have bottomed and are expected to move higher at a measured pace relative to the Fed rate increases 1/3 of the deposit base
Slide 10: Solid Asset Quality And Reserves
$139.2 $141.2 $147.1 $152.1 $192.8 1.05% 0.97% 1.47% 1.36% 1.35% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% $0.0 $25.0 $50.0 $75.0 $100.0 $125.0 $150.0 $175.0 $200.0 2018 2019 2020 2021 Q3-2022 NPLs ACL/Loans 10 Solid Asset Quality And Reserves ($ in millions) N o n -P e rf o rm in g L o a n s Growth in
Slide 11: Prudent Expense Management, Selective Investment in Technology
Prudent Expense Management, Selective Investment in Technology, Coupled with Some Inflationary Headwinds, Offset by Benefits of Rising Interest Rates 11 ~ $730 million ~ $610 million Positive operating leverage trend from 2016 through 2021 drove the efficiency ratio lower o 2021 reflects the impac
Slide 12: Strong Capital Position
12 Strong Capital Position(1) Current common dividend of $0.15 and a current dividend payout ratio of approximately 35% Current repurchase authorization of $75 million of shares of the Corporation's common stock, in place through December 31, 2022 9.3% 10.0% 10.9% 13.7% $1,096 $661 $527 $697 2.0
Slide 13: Environmental, Social & Governance ("ES&G")
13 Environmental, Social & Governance (“ES&G”) • Introduced our 2021 Corporate Social Responsibility report – a first for the Corporation • Established Board governance and oversight of ES&G principles and priorities as we work to build maturity and capability • The Climate Impact Working Group was
Slide 14: Recent Financial Performance & Highlights
RECENT FINANCIAL PERFORMANCE & HIGHLIGHTS
Slide 15: 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 15
Slide 16: Net Interest Income And Margin
Net Interest Income And Margin 16 ~ $730 million ~ $610 million Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields Average Deposits and Borrowings & Cost of Funds ($ IN MILLIONS) ($ IN BILLIONS) ($ IN BILLIONS)
Slide 17: Asset Quality
Asset Quality 17 (1) The allowance for credit losses (“ACL”) relates specifically to "Loans, net of unearned income" and does not include the ACL related to off-balance-sheet credit exposures. (2) Non-GAAP financial measure. Please refer to the calculation and management's reasons for using this mea
Slide 18: Non-Interest Income
18 Non-Interest Income(1) (1) Excludes investment securities gains. Three months ended September 30, 2022 (percent of total non-interest income) Non-interest income increased 1% from 2Q22(1) Increases in: n Commercial banking merchant and card income and cash management fees. n Consumer banking over
Slide 19: Non-interest Expense
19 Non-interest Expense(1) (1) Excludes merger-related expenses. Three months ended September 30, 2022 (percent of total non-interest expense) 3Q22 2Q22 Change (dollars in thousands) n Salaries and Benefits $94,283 $85,404 $8,879 n Data Processing and Software 15,807 14,685 1,122 n Occupancy 14,025
Slide 20: 2022 Outlook
2022 Outlook(4) 20 Net interest income: $770 - $780 million(1) Non-interest income: $225 - $230 million(2) Non-interest expense: $615 - $620 million(3) Effective tax rate: 18.0% +/- (1) Assumes Fed Funds Rate increases of: 75 bps in November 2022 and 50 bps in December 2022. Updated as of 3Q 2022; p
Slide 21: Appendix
APPENDIX
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation 22 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-G
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation (dollars in thousands) Three months ended Sep 30 Jun 30 Sep 30 2022 2022 2021 Operating return on average assets Net income $70,871 $69,989 $75,583 Plus: Core deposit intangible amortization, net of tax 406 _ _ Plus: Merger-related expenses, net of tax 5,535 811 — Plus: CECL
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation (dollars in thousands) Three months ended Sep 30 Jun 30 Sep 30 Efficiency ratio 2022 2022 2021 Non-interest expense $169,558 $149,730 $144,596 Less: Amortization of tax credit investments (696) (696) (1,546) Less: Intangible amortization (690) (177) (150) Less: Merger-related
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation 25 (dollars in thousands) Sep 30 2016 2017 2018 2019 2020 2021 2022 Efficiency ratio Non-interest expense $489,519 $525,579 $546,104 $567,736 $579,440 $617,830 $465,266 Less : Amortizati on of tax credi t investments - (11,028) (11,449) (6,021) (6,126) (6,187) (2,088) Less :
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation (dollars in thousands) Sep 30 2022 Return on average common shareholders’ equity (tangible) Net income available to common shareholders $68,309 Plus: Merger-related expenses, net of tax 5,535 Plus: Intangible amortization, net of tax 545 Plus: CECL Day 1 Provision expense, ne
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation 27 (dollars in thousands) Sep 30 2016 2017 2018 2019 2020 2021 2022 Non-interest expense to total average assets Non-interest expense $489,519 $525,579 $546,104 $567,736 $579,440 $617,830 $465,266 Les s: Amortization of tax credit i nvestments - (11,028) (11,449) (6,021) (6,1
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 28 (dollars in thousands), except per share data Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 2017 2018 2019 2020 2021 2022 Tangible book value per share Shareholders' equity $2,225,786 $2,283,014 $2,324,016 $2,390,261 $2,699,818 $2,471,159 Less: Goodwill and intangible assets (
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation 29 (dollars in thousands)
Slide 30: Fulton Financial Corporation
FULTON FINANCIAL CORPORATION www.fultonbank.com FULTON FINANCIAL CORPORATION TE
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