FULT 8-K
Fulton Financial Corp (FULT)
8-K
2023-10-17
For: 2023-10-17
View Original
Added on
April 12, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) | ||||||||||||||||
(717 ) 291-2411
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
o
Item 2.02 Results of Operations and Financial Condition.
On October 17, 2023, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the third quarter ended September 30, 2023. A copy of the Press Release and supplementary financial information which accompanied the Press Release are attached as Exhibit 99.1 to this Current Report on Form 8-K (this "Current Report") and are incorporated herein by reference. The Corporation also posted on its Investor Relations website, www.fultonbank.com, presentation materials the Corporation intends to use during a conference call and webcast to discuss those results on Wednesday, October 18, 2023 at 10:00 a.m. eastern time. A copy of the presentation materials is attached as Exhibit 99.2 to this Current Report and is incorporated herein by reference.
The information included in Exhibit 99.1 shall be deemed filed for purposes of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and therefore may be incorporated by reference in filings under the Securities Act of 1933, as amended (the "Securities Act"). The information included in Exhibit 99.2 is being furnished and shall not be deemed filed for purposes of the Exchange Act or be incorporated by reference in any filing under the Securities Act.
Forward-Looking Statements
This Current Report, including Exhibits 99.1 and 99.2 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 "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," "projects," the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation's future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation's business or financial results. Management’s "2023 Outlook" contained in Exhibit 99.2 to this Current Report is comprised of forward-looking statements.
Forward-looking statements are neither historical facts nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation's business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation's control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | ||||
Press release dated October 17, 2023 containing financial information for the quarter ended September 30, 2023, deemed filed under the Securities Exchange Act of 1934. | |||||
| Presentation materials to be discussed during the conference call and webcast on October 18, 2023, deemed furnished under the Securities Exchange Act of 1934. | |||||
| 104 | Cover page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: October 17, 2023 | FULTON FINANCIAL CORPORATION | ||||
| By: /s/ Mark R. McCollom | |||||
| Mark R. McCollom | |||||
| Senior Executive Vice President and | |||||
| Chief Financial Officer | |||||
Exhibit 99.1
FULTON FINANCIAL
CORPORATION
FOR IMMEDIATE RELEASE
Media Contact: Lacey Dean (717) 735-8688
Investor Contact: Matt Jozwiak (717) 327-2657
Fulton Financial Corporation Announces Third Quarter 2023 Results
(October 17, 2023) – Lancaster, PA – Fulton Financial Corporation (NASDAQ: FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $69.5 million, or $0.42 per diluted share, for the third quarter of 2023, a decrease of $7.5 million, or 9.7%, in comparison to the second quarter of 2023. Operating net income available to common shareholders for the three months ended September 30, 2023 was $72.2 million, or $0.43 per diluted share(1).
For the nine months ended September 30, 2023, net income available to common shareholders was $212.3 million, or $1.27 per diluted share, an increase of $14.9 million, or 7.5%, in comparison to the same period in 2022. Operating net income available to common shareholders for the nine months ended September 30, 2023 was $216.1 million, or $1.29 per diluted share(1).
"We were pleased with our third quarter results; operating earnings were solid, we generated deposit and loan growth, we maintained our net interest margin and net interest income grew," said Curtis J. Myers, Chairman and CEO of Fulton Financial Corporation. "Our results reflect solid core business trends, stable credit metrics, and modest growth in our core lines of business."
Net Interest Income and Balance Sheet
Net interest income for the third quarter of 2023 was $213.8 million, an increase of $1.0 million in comparison to the second quarter of 2023. The net interest margin for the third quarter of 2023 was 3.40%, consistent with the second quarter of 2023.
The linked-quarter increase in net interest income was primarily due to higher loan yields and an increase in the average balance of net loans, partially offset by an increase in the rate of average interest-bearing deposits and a shift in the funding mix from noninterest-bearing demand deposits to interest-bearing deposits.
(1) Financial measure derived by methods other than generally accepted accounting principles ("GAAP"). Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of the press release.
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A 20 basis points increase in the yield on average net loans and an increase in the average balance of net loans of $255.0 million in the third quarter of 2023 drove an increase in interest income of $15.5 million to $330.4 million in comparison to $314.9 million in the second quarter of 2023.
Interest expense on interest-bearing liabilities for the third quarter of 2023 increased by $14.5 million to $116.5 million in comparison to $102.1 million in the second quarter of 2023. The linked-quarter increase in interest expense in the third quarter of 2023 was primarily due to an increase in the rate on average interest-bearing deposits of 29 basis points, a decline of $348.7 million in the average balance of noninterest-bearing deposits and an increase in the average balance of interest-bearing deposits of $498.8 million in comparison to the second quarter of 2023.
For the third quarter of 2023, net interest income was $213.8 million, a decrease of $1.7 million, or 0.8%, in comparison to the third quarter of 2022. Interest income for the third quarter of 2023 increased by $96.7 million to $330.4 million in comparison to $233.7 million in the third quarter of 2022, primarily driven by rising interest rates resulting in increases in interest income from net loans and other interest-earning assets of $96.2 million and $1.1 million, respectively. Increases in the average balance of net loans in the third quarter of 2023 of $1.6 billion and in yields on net loans of 151 basis points each contributed to the increase in interest income. Interest expense on interest-bearing liabilities for the third quarter of 2023 increased by $98.4 million to $116.5 million in comparison to $18.1 million in the third quarter of 2022, primarily driven by rising interest rates resulting in increases in interest expense from interest-bearing deposits and borrowings and other interest-bearing liabilities of $74.1 million and $24.3 million, respectively. A decrease in the average balance of noninterest-bearing deposits of $1.9 billion, and an increase in the average balances of interest-bearing deposits and borrowings and other interest-bearing liabilities of $1.4 billion and $1.3 billion, respectively, in the third quarter of 2023 in comparison to the third quarter of 2022 also contributed to the increase in interest expense.
Total average interest-earning assets for the third quarter of 2023 were $25.6 billion, a decrease of $47.8 million from the second quarter of 2023 primarily driven by a decrease in average other interest-earning assets of $266.3 million and a decrease in average investment securities of $36.5 million, partially offset by an increase in average net loans of $255.0 million.
Total average interest-earning assets for the third quarter of 2023 increased by $886.0 million from the third quarter of 2022. Average net loans for the third quarter of 2023 were $21.1 billion, an increase of $1.6 billion from the same period in 2022. Compared to the third quarter of 2022, average other interest-earning assets decreased $368.5 million and average investment securities decreased $302.9 million in the third quarter of 2023.
Total average interest-bearing liabilities increased $399.1 million to $18.4 billion in the third quarter of 2023 in comparison to $18.0 billion in the second quarter of 2023. The increase in average interest-bearing liabilities was driven by an increase in the average balance of total interest-bearing deposits of $498.8 million, partially offset by a decrease in the average balance of borrowings and other interest-bearing liabilities of $99.8 million.
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Total average interest-bearing liabilities for the third quarter of 2023 increased $2.8 billion to $18.4 billion in comparison to $15.6 billion in the third quarter of 2022, driven by increases in the average balances of total interest-bearing deposits and borrowings and other interest-bearing liabilities of $1.4 billion and $1.3 billion, respectively.
Asset Quality
In the third quarter of 2023, a provision for credit losses of $9.9 million was recorded in comparison to $9.7 million in the second quarter of 2023 and $19.0 million in the third quarter of 2022. The provision for credit losses of $9.9 million recorded in the third quarter of 2023 was primarily due to loan growth and net charge-offs recorded during the period.
Non-performing assets were $143.5 million, or 0.52% of total assets, at September 30, 2023, in comparison to $151.6 million, or 0.55% of total assets, at June 30, 2023, and $198.6 million, or 0.76% of total assets, at September 30, 2022.
Net charge-offs for the third quarter of 2023 were 0.10% of total average loans in comparison to 0.04% and 0.01% in the second quarter of 2023 and the third quarter of 2022, respectively.
Non-interest Income
Non-interest income before investment securities gains (losses) in the third quarter of 2023 was $56.0 million, a decrease of $4.6 million, or 7.6%, from the second quarter of 2023. The decrease in non-interest income was primarily due to a $3.0 million market valuation movement in our commercial customer interest rate swap program resulting from the reference rate transition from the London Inter-Bank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") and is reflected as a reduction to other non-interest income. Additional contributors to the decrease in non-interest income were a decrease of $3.0 million in commercial customer interest rate swap fee income, reflected in capital markets, partially offset by increases in wealth management, overdraft fees and mortgage banking income of $0.7 million, $0.3 million and $0.3 million, respectively.
Compared to the third quarter of 2022, non-interest income before investment securities gains (losses) in the third quarter of 2023 decreased $3.3 million, or 5.5%, from $59.2 million. The decrease in non-interest income was primarily due to the aforementioned $3.0 million market valuation movement in our commercial customer interest rate swap program resulting from the reference rate transition from LIBOR to SOFR and is reflected as a reduction to other non-interest income.
Non-interest Expense
Non-interest expense was $171.0 million in the third quarter of 2023, an increase of $3.0 million, or 1.8%, compared to $168.0 million in the second quarter of 2023. The increase was primarily due to increases of $2.7 million in salaries and employee benefits expense and $1.3 million in other outside services related to a number of corporate initiatives, partially offset by a decrease of $0.5 million in charitable contributions
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and $0.5 million in gains on sales from fixed assets disposals, in each case, reflected in other expense. The $2.7 million increase in salaries and benefits expense was primarily driven by one additional calendar day in the third quarter of 2023 compared to the second quarter of 2023.
Compared to the third quarter of 2022, non-interest expense, excluding merger-related expenses of $7.0 million in the third quarter of 2022, increased $8.5 million, or 5.2%. The increase was primarily due to increases of $2.7 million in other outside services expense driven by a number of corporate initiatives, $2.5 million in salaries and employee benefits expense, $1.6 million in FDIC insurance expense, primarily due to the adoption of a final rule to increase base deposit insurance assessment rates effective January 1, 2023, and $1.1 million in data processing and software expense. The $2.5 million increase in salaries and benefits expense was primarily driven by annual merit increases, lower deferred employee loan origination costs, higher employee benefits expense, due to healthcare claims experience, and higher pension costs, partially offset by lower incentive plan compensation expense.
Income Tax Expense
For the third quarter of 2023, the effective tax rate was 18.9%, in comparison to 17.3% for the full-year of 2022.
Additional information on Fulton is available on the Internet at www.fultonbank.com.
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Safe Harbor Statement
This press release 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 "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results.
Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation's actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation's website (www.fultonbank.com) and on the SEC's website (www.sec.gov).
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Non-GAAP Financial Measures
The Corporation uses certain financial measures in this press release that have been derived from methods other than GAAP. These non-GAAP financial measures are reconciled to the most comparable GAAP measures in tables at the end of this press release.
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||
| SUMMARY CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED) | ||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||||||||||
| Ending Balances | ||||||||||||||||||||||||||||||||
| Investment securities | $ | 3,698,601 | $ | 3,867,334 | $ | 3,950,101 | $ | 3,968,023 | $ | 3,936,694 | ||||||||||||||||||||||
| Net loans | 21,177,508 | 21,044,685 | 20,670,188 | 20,279,547 | 19,695,199 | |||||||||||||||||||||||||||
| Total assets | 27,380,836 | 27,403,163 | 27,112,176 | 26,931,702 | 26,146,042 | |||||||||||||||||||||||||||
| Deposits | 21,421,589 | 21,206,540 | 21,316,584 | 20,649,538 | 21,376,554 | |||||||||||||||||||||||||||
| Shareholders' equity | 2,566,693 | 2,642,152 | 2,618,998 | 2,579,757 | 2,471,159 | |||||||||||||||||||||||||||
| Average Balances | ||||||||||||||||||||||||||||||||
| Investment securities | 3,834,824 | 3,916,130 | 3,964,615 | 3,936,579 | 4,254,216 | |||||||||||||||||||||||||||
| Net loans | 21,121,277 | 20,866,235 | 20,463,096 | 20,004,513 | 19,563,825 | |||||||||||||||||||||||||||
| Total assets | 27,377,836 | 27,235,567 | 26,900,653 | 26,386,355 | 26,357,095 | |||||||||||||||||||||||||||
| Deposits | 21,357,295 | 21,207,143 | 20,574,323 | 21,027,656 | 21,788,052 | |||||||||||||||||||||||||||
| Shareholders' equity | 2,645,977 | 2,647,464 | 2,613,316 | 2,489,148 | 2,604,057 | |||||||||||||||||||||||||||
| Income Statement | ||||||||||||||||||||||||||||||||
| Net interest income | 213,842 | 212,852 | 215,587 | 225,911 | 215,582 | |||||||||||||||||||||||||||
| Provision for credit losses | 9,937 | 9,747 | 24,544 | 14,513 | 18,958 | |||||||||||||||||||||||||||
| Non-interest income | 55,961 | 60,585 | 51,753 | 54,321 | 59,162 | |||||||||||||||||||||||||||
| Non-interest expense | 171,020 | 168,018 | 159,616 | 168,462 | 169,558 | |||||||||||||||||||||||||||
| Income before taxes | 88,846 | 95,672 | 83,180 | 97,257 | 86,228 | |||||||||||||||||||||||||||
| Net income available to common shareholders | 69,535 | 77,045 | 65,752 | 79,271 | 68,309 | |||||||||||||||||||||||||||
Pre-provision net revenue(1) | 102,342 | 106,495 | 108,375 | 115,049 | 113,631 | |||||||||||||||||||||||||||
| Per Share | ||||||||||||||||||||||||||||||||
| Net income available to common shareholders (basic) | $0.42 | $0.46 | $0.39 | $0.47 | $0.41 | |||||||||||||||||||||||||||
| Net income available to common shareholders (diluted) | $0.42 | $0.46 | $0.39 | $0.47 | $0.40 | |||||||||||||||||||||||||||
Operating net income available to common shareholders(1) | $0.43 | $0.47 | $0.39 | $0.48 | $0.48 | |||||||||||||||||||||||||||
| Cash dividends | $0.16 | $0.16 | $0.15 | $0.21 | $0.15 | |||||||||||||||||||||||||||
| Common shareholders' equity | $14.47 | $14.75 | $14.67 | $14.24 | $13.61 | |||||||||||||||||||||||||||
Common shareholders' equity (tangible)(1) | $11.05 | $11.36 | $11.26 | $10.90 | $10.26 | |||||||||||||||||||||||||||
| Weighted average shares (basic) | 164,566 | 165,854 | 166,605 | 167,504 | 167,353 | |||||||||||||||||||||||||||
| Weighted average shares (diluted) | 166,023 | 167,191 | 168,401 | 169,136 | 168,781 | |||||||||||||||||||||||||||
(1) Non-GAAP financial measure. Refer to the calculation on the page titled “Reconciliation of Non-GAAP Measures” at the end of this press release. | ||||||||||||||||||||||||||||||||
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| Three months ended | ||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||||||||||
| Asset Quality | ||||||||||||||||||||||||||||||||
| Net charge-offs (recoveries) to average loans | 0.10 | % | 0.04 | % | 0.27 | % | 0.23 | % | 0.01 | % | ||||||||||||||||||||||
| Non-performing loans to total net loans | 0.67 | % | 0.70 | % | 0.80 | % | 0.85 | % | 0.98 | % | ||||||||||||||||||||||
| Non-performing assets to total assets | 0.52 | % | 0.55 | % | 0.62 | % | 0.66 | % | 0.76 | % | ||||||||||||||||||||||
ACL - loans(1) to total loans | 1.38 | % | 1.37 | % | 1.35 | % | 1.33 | % | 1.35 | % | ||||||||||||||||||||||
ACL - loans(1) to non-performing loans | 208 | % | 195 | % | 169 | % | 157 | % | 138 | % | ||||||||||||||||||||||
| Profitability | ||||||||||||||||||||||||||||||||
| Return on average assets | 1.04 | % | 1.17 | % | 1.03 | % | 1.23 | % | 1.07 | % | ||||||||||||||||||||||
Operating return on average assets(2) | 1.08 | % | 1.18 | % | 1.04 | % | 1.26 | % | 1.25 | % | ||||||||||||||||||||||
| Return on average common shareholders' equity | 11.25 | % | 12.59 | % | 11.02 | % | 13.70 | % | 11.24 | % | ||||||||||||||||||||||
Return on average common shareholders' equity (tangible)(2) | 15.17 | % | 16.52 | % | 14.46 | % | 18.59 | % | 17.31 | % | ||||||||||||||||||||||
| Net interest margin | 3.40 | % | 3.40 | % | 3.53 | % | 3.69 | % | 3.54 | % | ||||||||||||||||||||||
Efficiency ratio(2) | 61.5 | % | 60.1 | % | 58.5 | % | 58.1 | % | 57.8 | % | ||||||||||||||||||||||
| Non-interest expenses to total average assets | 2.48 | % | 2.47 | % | 2.41 | % | 2.53 | % | 2.55 | % | ||||||||||||||||||||||
Operating non-interest expenses to total average assets(2) | 2.47 | % | 2.46 | % | 2.40 | % | 2.48 | % | 2.43 | % | ||||||||||||||||||||||
| Capital Ratios | ||||||||||||||||||||||||||||||||
Tangible common equity ratio ("TCE")(2) | 6.8 | % | 7.0 | % | 7.0 | % | 6.9 | % | 6.7 | % | ||||||||||||||||||||||
TCE ratio, excluding AOCI(2)(3) | 8.4 | % | 8.3 | % | 8.3 | % | 8.2 | % | 8.3 | % | ||||||||||||||||||||||
Tier 1 leverage ratio(4) | 9.4 | % | 9.3 | % | 9.2 | % | 9.5 | % | 9.2 | % | ||||||||||||||||||||||
Common equity Tier 1 capital ratio(4) | 10.1 | % | 10.1 | % | 9.8 | % | 10.0 | % | 10.0 | % | ||||||||||||||||||||||
Tier 1 risk-based capital ratio(4) | 11.0 | % | 11.0 | % | 10.6 | % | 10.9 | % | 10.9 | % | ||||||||||||||||||||||
Total risk-based capital ratio(4) | 13.8 | % | 13.8 | % | 13.4 | % | 13.6 | % | 13.6 | % | ||||||||||||||||||||||
(1) "ACL - loans" relates to the allowance for credit losses ("ACL") specifically on "Net Loans" and does not include the ACL related to off-balance-sheet ("OBS") credit exposures. | ||||||||||||||||||||||||||||||||
(2) Non-GAAP financial measure. Refer to the calculation on the page titled "Reconciliation of Non-GAAP Measures" at the end of this press release. | ||||||||||||||||||||||||||||||||
(3) Tangible common equity ("TCE") ratio, excluding accumulated other comprehensive income ("AOCI"). | ||||||||||||||||||||||||||||||||
(4) Regulatory capital ratios as of September 30, 2023 are preliminary estimates and prior periods are actual. | ||||||||||||||||||||||||||||||||
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| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 304,042 | $ | 123,779 | $ | 129,003 | $ | 126,898 | $ | 143,465 | ||||||||||||||||||||||
| Other interest-earning assets | 222,781 | 505,141 | 545,355 | 685,209 | 467,164 | |||||||||||||||||||||||||||
| Loans held for sale | 20,368 | 14,673 | 6,507 | 7,264 | 14,411 | |||||||||||||||||||||||||||
| Investment securities | 3,698,601 | 3,867,334 | 3,950,101 | 3,968,023 | 3,936,694 | |||||||||||||||||||||||||||
| Net loans | 21,177,508 | 21,044,685 | 20,670,188 | 20,279,547 | 19,695,199 | |||||||||||||||||||||||||||
Less: ACL - loans(1) | (292,739) | (287,442) | (278,695) | (269,366) | (266,838) | |||||||||||||||||||||||||||
| Loans, net | 20,884,769 | 20,757,243 | 20,391,493 | 20,010,181 | 19,428,361 | |||||||||||||||||||||||||||
| Net premises and equipment | 215,626 | 216,322 | 216,059 | 225,141 | 221,496 | |||||||||||||||||||||||||||
| Accrued interest receivable | 101,624 | 96,991 | 90,267 | 91,579 | 72,821 | |||||||||||||||||||||||||||
| Goodwill and intangible assets | 561,284 | 561,885 | 563,502 | 560,824 | 561,495 | |||||||||||||||||||||||||||
| Other assets | 1,371,741 | 1,259,795 | 1,219,889 | 1,256,583 | 1,300,135 | |||||||||||||||||||||||||||
| Total Assets | $ | 27,380,836 | $ | 27,403,163 | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | ||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||
| Deposits | $ | 21,421,589 | $ | 21,206,540 | $ | 21,316,584 | $ | 20,649,538 | $ | 21,376,554 | ||||||||||||||||||||||
| Borrowings | 2,370,112 | 2,719,114 | 2,446,770 | 2,871,207 | 1,424,681 | |||||||||||||||||||||||||||
| Other liabilities | 1,022,442 | 835,357 | 729,824 | 831,200 | 873,648 | |||||||||||||||||||||||||||
| Total Liabilities | 24,814,143 | 24,761,011 | 24,493,178 | 24,351,945 | 23,674,883 | |||||||||||||||||||||||||||
| Shareholders' equity | 2,566,693 | 2,642,152 | 2,618,998 | 2,579,757 | 2,471,159 | |||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 27,380,836 | $ | 27,403,163 | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | ||||||||||||||||||||||
| LOANS, DEPOSITS AND BORROWINGS DETAIL: | ||||||||||||||||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 8,106,300 | $ | 7,846,861 | $ | 7,746,920 | $ | 7,693,835 | $ | 7,554,509 | ||||||||||||||||||||||
| Commercial and industrial | 4,577,334 | 4,599,759 | 4,596,096 | 4,473,004 | 4,240,865 | |||||||||||||||||||||||||||
| Real estate - residential mortgage | 5,279,681 | 5,147,262 | 4,880,919 | 4,737,279 | 4,574,228 | |||||||||||||||||||||||||||
| Real estate - home equity | 1,045,438 | 1,061,891 | 1,074,712 | 1,102,838 | 1,110,103 | |||||||||||||||||||||||||||
| Real estate - construction | 1,078,263 | 1,308,564 | 1,326,754 | 1,269,925 | 1,273,097 | |||||||||||||||||||||||||||
| Consumer | 743,976 | 763,530 | 730,775 | 699,179 | 633,666 | |||||||||||||||||||||||||||
Leases and other loans(2) | 346,516 | 316,818 | 314,012 | 303,487 | 308,731 | |||||||||||||||||||||||||||
| Total Net Loans | $ | 21,177,508 | $ | 21,044,685 | $ | 20,670,188 | $ | 20,279,547 | $ | 19,695,199 | ||||||||||||||||||||||
| Deposits, by type: | ||||||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 5,575,374 | $ | 5,865,855 | $ | 6,403,484 | $ | 7,006,388 | $ | 7,372,896 | ||||||||||||||||||||||
| Interest-bearing demand | 5,757,487 | 5,543,320 | 5,478,237 | 5,410,903 | 5,676,600 | |||||||||||||||||||||||||||
| Savings | 6,707,729 | 6,646,448 | 6,579,806 | 6,434,621 | 6,563,003 | |||||||||||||||||||||||||||
| Total demand and savings | 18,040,590 | 18,055,623 | 18,461,527 | 18,851,912 | 19,612,499 | |||||||||||||||||||||||||||
| Brokered | 941,059 | 949,259 | 960,919 | 208,416 | 226,883 | |||||||||||||||||||||||||||
| Time | 2,439,940 | 2,201,658 | 1,894,138 | 1,589,210 | 1,537,172 | |||||||||||||||||||||||||||
| Total Deposits | $ | 21,421,589 | $ | 21,206,540 | $ | 21,316,584 | $ | 20,649,538 | $ | 21,376,554 | ||||||||||||||||||||||
| Borrowings, by type: | ||||||||||||||||||||||||||||||||
| Federal funds purchased | $ | 544,000 | $ | 555,000 | $ | 525,000 | $ | 191,000 | $ | 136,000 | ||||||||||||||||||||||
| Federal Home Loan Bank advances | 730,000 | 1,165,000 | 747,000 | 1,250,000 | 265,500 | |||||||||||||||||||||||||||
| Senior debt and subordinated debt | 540,174 | 539,994 | 539,814 | 539,634 | 539,461 | |||||||||||||||||||||||||||
| Other borrowings | 555,938 | 459,120 | 634,956 | 890,573 | 483,720 | |||||||||||||||||||||||||||
| Total Borrowings | $ | 2,370,112 | $ | 2,719,114 | $ | 2,446,770 | $ | 2,871,207 | $ | 1,424,681 | ||||||||||||||||||||||
(1) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures. | ||||||||||||||||||||||||||||||||
(2) Includes equipment lease financing, overdraft and net origination fees and costs. | ||||||||||||||||||||||||||||||||
8
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share) | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine months ended | ||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Sep 30 | ||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||
| Interest Income: | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 330,371 | $ | 314,912 | $ | 289,820 | $ | 267,847 | $ | 233,691 | $ | 935,103 | $ | 596,991 | |||||||||||||||||||||||||||||||||
| Interest expense | 116,529 | 102,060 | 74,233 | 41,936 | 18,109 | 292,822 | 41,268 | ||||||||||||||||||||||||||||||||||||||||
| Net Interest Income | 213,842 | 212,852 | 215,587 | 225,911 | 215,582 | 642,281 | 555,723 | ||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 9,937 | 9,747 | 24,544 | 14,513 | 18,958 | 44,228 | 13,508 | ||||||||||||||||||||||||||||||||||||||||
| Net Interest Income after Provision | 203,905 | 203,105 | 191,043 | 211,398 | 196,624 | 598,053 | 542,215 | ||||||||||||||||||||||||||||||||||||||||
| Non-Interest Income: | |||||||||||||||||||||||||||||||||||||||||||||||
| Commercial banking: | |||||||||||||||||||||||||||||||||||||||||||||||
| Merchant and card | 7,626 | 7,700 | 6,834 | 7,223 | 7,601 | 22,160 | 21,053 | ||||||||||||||||||||||||||||||||||||||||
| Cash management | 5,960 | 5,835 | 5,515 | 5,756 | 6,483 | 17,310 | 17,973 | ||||||||||||||||||||||||||||||||||||||||
| Capital markets | 2,960 | 6,092 | 2,344 | 2,627 | 4,060 | 11,396 | 9,629 | ||||||||||||||||||||||||||||||||||||||||
| Other commercial banking | 3,176 | 3,518 | 2,820 | 2,998 | 2,664 | 9,514 | 8,520 | ||||||||||||||||||||||||||||||||||||||||
| Total commercial banking | 19,722 | 23,145 | 17,513 | 18,604 | 20,808 | 60,380 | 57,175 | ||||||||||||||||||||||||||||||||||||||||
| Wealth management | 19,413 | 18,678 | 18,062 | 17,531 | 17,610 | 56,152 | 55,312 | ||||||||||||||||||||||||||||||||||||||||
| Consumer banking: | |||||||||||||||||||||||||||||||||||||||||||||||
| Card | 6,770 | 6,592 | 6,243 | 6,331 | 6,278 | 19,604 | 18,141 | ||||||||||||||||||||||||||||||||||||||||
| Overdraft | 2,996 | 2,696 | 2,733 | 3,364 | 4,463 | 8,425 | 12,116 | ||||||||||||||||||||||||||||||||||||||||
| Other consumer banking | 2,407 | 2,432 | 2,241 | 2,380 | 2,534 | 7,081 | 7,164 | ||||||||||||||||||||||||||||||||||||||||
| Total consumer banking | 12,173 | 11,720 | 11,217 | 12,075 | 13,275 | 35,110 | 37,421 | ||||||||||||||||||||||||||||||||||||||||
| Mortgage banking | 3,190 | 2,940 | 1,970 | 2,140 | 3,720 | 8,100 | 12,064 | ||||||||||||||||||||||||||||||||||||||||
| Other | 1,463 | 4,106 | 2,968 | 3,972 | 3,802 | 8,539 | 10,863 | ||||||||||||||||||||||||||||||||||||||||
| Non-interest income before investment securities gains (losses) | 55,961 | 60,589 | 51,730 | 54,322 | 59,215 | 168,281 | 172,835 | ||||||||||||||||||||||||||||||||||||||||
| Investment securities gains (losses), net | — | (4) | 23 | (1) | (53) | 19 | (26) | ||||||||||||||||||||||||||||||||||||||||
| Total Non-Interest Income | 55,961 | 60,585 | 51,753 | 54,321 | 59,162 | 168,300 | 172,809 | ||||||||||||||||||||||||||||||||||||||||
| Non-Interest Expense: | |||||||||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 96,757 | 94,102 | 89,283 | 92,733 | 94,283 | 280,142 | 264,151 | ||||||||||||||||||||||||||||||||||||||||
| Data processing and software | 16,914 | 16,776 | 15,796 | 15,448 | 15,807 | 49,486 | 44,807 | ||||||||||||||||||||||||||||||||||||||||
| Net occupancy | 14,561 | 14,374 | 14,438 | 14,061 | 14,025 | 43,373 | 42,134 | ||||||||||||||||||||||||||||||||||||||||
| Other outside services | 12,094 | 10,834 | 10,126 | 10,860 | 9,361 | 33,054 | 26,292 | ||||||||||||||||||||||||||||||||||||||||
| FDIC insurance | 4,738 | 4,895 | 4,795 | 3,219 | 3,158 | 14,427 | 9,328 | ||||||||||||||||||||||||||||||||||||||||
| Equipment | 3,475 | 3,530 | 3,389 | 3,640 | 3,548 | 10,395 | 10,393 | ||||||||||||||||||||||||||||||||||||||||
| Marketing | 1,913 | 1,655 | 1,886 | 2,380 | 1,859 | 5,454 | 4,505 | ||||||||||||||||||||||||||||||||||||||||
| Professional fees | 1,869 | 1,829 | 2,392 | 2,945 | 2,373 | 6,090 | 6,178 | ||||||||||||||||||||||||||||||||||||||||
| Intangible amortization | 601 | 1,072 | 674 | 688 | 690 | 2,347 | 1,043 | ||||||||||||||||||||||||||||||||||||||||
| Merger-related expenses | — | — | — | 1,894 | 7,006 | — | 8,434 | ||||||||||||||||||||||||||||||||||||||||
| Other | 18,098 | 18,951 | 16,837 | 20,594 | 17,448 | 53,888 | 48,001 | ||||||||||||||||||||||||||||||||||||||||
| Total Non-Interest Expense | 171,020 | 168,018 | 159,616 | 168,462 | 169,558 | 498,656 | 465,266 | ||||||||||||||||||||||||||||||||||||||||
| Income Before Income Taxes | 88,846 | 95,672 | 83,180 | 97,257 | 86,228 | 267,697 | 249,758 | ||||||||||||||||||||||||||||||||||||||||
| Income tax expense | 16,749 | 16,065 | 14,866 | 15,424 | 15,357 | 47,680 | 44,610 | ||||||||||||||||||||||||||||||||||||||||
| Net Income | 72,097 | 79,607 | 68,314 | 81,833 | 70,871 | 220,017 | 205,148 | ||||||||||||||||||||||||||||||||||||||||
| Preferred stock dividends | (2,562) | (2,562) | (2,562) | (2,562) | (2,562) | (7,686) | (7,686) | ||||||||||||||||||||||||||||||||||||||||
| Net Income Available to Common Shareholders | $ | 69,535 | $ | 77,045 | $ | 65,752 | $ | 79,271 | $ | 68,309 | $ | 212,331 | $ | 197,462 | |||||||||||||||||||||||||||||||||
9
| Three Months Ended | Nine months ended | ||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Sep 30 | ||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||
| PER SHARE: | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common shareholders (basic) | $0.42 | $0.46 | $0.39 | $0.47 | $0.41 | $1.28 | $1.21 | ||||||||||||||||||||||||||||||||||||||||
| Net income available to common shareholders (diluted) | $0.42 | $0.46 | $0.39 | $0.47 | $0.40 | $1.27 | $1.20 | ||||||||||||||||||||||||||||||||||||||||
| Cash dividends | $0.16 | $0.16 | $0.15 | $0.21 | $0.15 | $0.47 | $0.45 | ||||||||||||||||||||||||||||||||||||||||
| Weighted average shares (basic) | 164,566 | 165,854 | 166,605 | 167,504 | 167,353 | 165,667 | 162,979 | ||||||||||||||||||||||||||||||||||||||||
| Weighted average shares (diluted) | 166,023 | 167,191 | 168,401 | 169,136 | 168,781 | 167,181 | 164,254 | ||||||||||||||||||||||||||||||||||||||||
10
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2023 | June 30, 2023 | September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance | Interest(1) | Rate | Balance | Interest(1) | Rate | Balance | Interest(1) | Rate | ||||||||||||||||||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loans | $ | 21,121,277 | $ | 304,167 | 5.72 | % | $ | 20,866,235 | $ | 287,154 | 5.52 | % | $ | 19,563,825 | $ | 207,343 | 4.21 | % | ||||||||||||||||||||||||||||||||||||||
Investment securities(2) | 4,197,550 | 27,274 | 2.59 | % | 4,234,096 | 27,303 | 2.57 | % | 4,500,461 | 28,022 | 2.49 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Other interest-earning assets | 263,244 | 3,372 | 5.11 | % | 529,582 | 4,860 | 3.68 | % | 631,771 | 2,297 | 1.45 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total Interest-Earning Assets | 25,582,071 | 334,813 | 5.20 | % | 25,629,913 | 319,317 | 4.99 | % | 24,696,057 | 237,662 | 3.83 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-Earning assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 306,496 | 129,682 | 152,349 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Premises and equipment | 217,447 | 216,847 | 223,880 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other assets | 1,562,233 | 1,541,657 | 1,545,812 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Less: ACL - loans(3) | (290,411) | (282,532) | (261,003) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 27,377,836 | $ | 27,235,567 | $ | 26,357,095 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-Bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 5,740,229 | $ | 18,690 | 1.29 | % | $ | 5,535,669 | $ | 14,612 | 1.06 | % | $ | 5,708,059 | $ | 1,886 | 0.13 | % | ||||||||||||||||||||||||||||||||||||||
| Savings deposits | 6,676,792 | 34,277 | 2.04 | % | 6,632,572 | 29,289 | 1.77 | % | 6,681,713 | 3,414 | 0.20 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Brokered deposits | 937,657 | 12,250 | 5.18 | % | 954,773 | 12,135 | 5.10 | % | 247,105 | 1,346 | 2.16 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Time deposits | 2,330,206 | 18,939 | 3.22 | % | 2,063,038 | 13,763 | 2.68 | % | 1,615,384 | 3,404 | 0.84 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total Interest-Bearing Deposits | 15,684,884 | 84,156 | 2.13 | % | 15,186,052 | 69,799 | 1.84 | % | 14,252,261 | 10,050 | 0.28 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Borrowings and other interest-bearing liabilities | 2,691,087 | 32,373 | 4.74 | % | 2,790,860 | 32,261 | 4.60 | % | 1,359,348 | 8,060 | 2.35 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total Interest-Bearing Liabilities | 18,375,971 | 116,529 | 2.51 | % | 17,976,912 | 102,060 | 2.27 | % | 15,611,609 | 18,110 | 0.47 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-Bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | 5,672,411 | 6,021,091 | 7,535,791 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 683,477 | 590,100 | 605,638 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | 24,731,859 | 24,588,103 | 23,753,038 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Deposits/Cost of Deposits | 21,357,295 | 1.56 | % | 21,207,143 | 1.32 | % | 21,788,052 | 0.18 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 24,048,382 | 1.92 | % | 23,998,003 | 1.70 | % | 23,147,400 | 0.31 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 2,645,977 | 2,647,464 | 2,604,057 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 27,377,836 | $ | 27,235,567 | $ | 26,357,095 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 218,284 | 3.40 | % | 217,257 | 3.40 | % | 219,552 | 3.54 | % | |||||||||||||||||||||||||||||||||||||||||||||||
| Tax equivalent adjustment | (4,442) | (4,405) | (3,970) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Interest Income | $ | 213,842 | $ | 212,852 | $ | 215,582 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Balances include amortized historical cost for available for sale ("AFS") securities. The related unrealized holding gains (losses) are included in other assets. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||||
| AVERAGE LOANS, DEPOSITS AND BORROWINGS DETAIL (UNAUDITED): | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||||||||||||||||||
| Loans, by type: | |||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,912,801 | $ | 7,775,436 | $ | 7,720,975 | $ | 7,696,997 | $ | 7,566,259 | |||||||||||||||||||||||||
| Commercial and industrial | 4,611,376 | 4,629,919 | 4,565,923 | 4,372,935 | 4,250,573 | ||||||||||||||||||||||||||||||
| Real estate - residential mortgage | 5,209,105 | 5,008,295 | 4,790,868 | 4,643,784 | 4,485,649 | ||||||||||||||||||||||||||||||
| Real estate - home equity | 1,045,806 | 1,066,615 | 1,086,032 | 1,106,325 | 1,099,487 | ||||||||||||||||||||||||||||||
| Real estate - construction | 1,254,577 | 1,306,286 | 1,276,145 | 1,209,998 | 1,268,590 | ||||||||||||||||||||||||||||||
| Consumer | 761,273 | 763,407 | 721,248 | 679,108 | 604,634 | ||||||||||||||||||||||||||||||
Leases and other loans(1) | 326,339 | 316,277 | 301,905 | 295,366 | 288,633 | ||||||||||||||||||||||||||||||
| Total Net Loans | $ | 21,121,277 | $ | 20,866,235 | $ | 20,463,096 | $ | 20,004,513 | $ | 19,563,825 | |||||||||||||||||||||||||
| Deposits, by type: | |||||||||||||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 5,672,411 | $ | 6,021,091 | $ | 6,641,741 | $ | 7,310,824 | $ | 7,535,791 | |||||||||||||||||||||||||
| Interest-bearing demand | 5,740,229 | 5,535,669 | 5,326,566 | 5,479,443 | 5,708,059 | ||||||||||||||||||||||||||||||
| Savings | 6,676,792 | 6,632,572 | 6,469,468 | 6,466,775 | 6,681,713 | ||||||||||||||||||||||||||||||
| Total demand and savings | 18,089,432 | 18,189,332 | 18,437,775 | 19,257,042 | 19,925,563 | ||||||||||||||||||||||||||||||
| Brokered | 937,657 | 954,773 | 439,670 | 215,729 | 247,105 | ||||||||||||||||||||||||||||||
| Time | 2,330,206 | 2,063,038 | 1,696,878 | 1,554,885 | 1,615,384 | ||||||||||||||||||||||||||||||
| Total Deposits | $ | 21,357,295 | $ | 21,207,143 | $ | 20,574,323 | $ | 21,027,656 | $ | 21,788,052 | |||||||||||||||||||||||||
| Borrowings, by type: | |||||||||||||||||||||||||||||||||||
| Federal funds purchased | $ | 634,163 | $ | 679,401 | $ | 505,142 | $ | 261,737 | $ | 96,965 | |||||||||||||||||||||||||
| Federal Home Loan Bank advances | 793,098 | 880,811 | 1,261,589 | 564,692 | 206,152 | ||||||||||||||||||||||||||||||
| Senior debt and subordinated debt | 540,086 | 539,906 | 539,726 | 539,550 | 554,735 | ||||||||||||||||||||||||||||||
| Other borrowings and other interest-bearing liabilities | 723,740 | 690,742 | 752,227 | 659,543 | 501,496 | ||||||||||||||||||||||||||||||
| Total Borrowings | $ | 2,691,087 | $ | 2,790,860 | $ | 3,058,684 | $ | 2,025,522 | $ | 1,359,348 | |||||||||||||||||||||||||
(1) Includes equipment lease financing, overdraft and net origination fees and costs. | |||||||||||||||||||||||||||||||||||
12
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||||||||||||
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30 | ||||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||||||||||||||||||||||||||||
| Balance | Interest(1) | Rate | Balance | Interest(1) | Rate | |||||||||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Net loans | $ | 20,819,280 | $ | 854,384 | 5.49 | % | $ | 18,865,672 | $ | 524,150 | 3.71 | % | ||||||||||||||||||||||||||||||||
Investment securities(2) | 4,240,093 | 82,098 | 2.58 | % | 4,376,084 | 78,334 | 2.39 | % | ||||||||||||||||||||||||||||||||||||
| Other interest-earning assets | 427,810 | 11,882 | 3.71 | % | 954,267 | 5,192 | 0.73 | % | ||||||||||||||||||||||||||||||||||||
| Total Interest-Earning Assets | 25,487,183 | 948,364 | 4.97 | % | 24,196,023 | 607,676 | 3.35 | % | ||||||||||||||||||||||||||||||||||||
| Noninterest-Earning assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Cash and due from banks | 193,083 | 158,267 | ||||||||||||||||||||||||||||||||||||||||||
| Premises and equipment | 219,087 | 220,218 | ||||||||||||||||||||||||||||||||||||||||||
| Other assets | 1,555,891 | 1,534,314 | ||||||||||||||||||||||||||||||||||||||||||
Less: ACL - loans(3) | (282,144) | (253,725) | ||||||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | 27,173,100 | $ | 25,855,097 | ||||||||||||||||||||||||||||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||
| Interest-Bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 5,535,671 | $ | 41,756 | 1.01 | % | $ | 5,657,165 | $ | 3,411 | 0.08 | % | ||||||||||||||||||||||||||||||||
| Savings deposits | 6,593,703 | 84,102 | 1.71 | % | 6,515,529 | 5,561 | 0.11 | % | ||||||||||||||||||||||||||||||||||||
| Brokered deposits | 779,191 | 29,557 | 5.07 | % | 254,100 | 2,181 | 1.14 | % | ||||||||||||||||||||||||||||||||||||
| Time deposits | 2,032,360 | 40,160 | 2.64 | % | 1,633,053 | 10,299 | 0.84 | % | ||||||||||||||||||||||||||||||||||||
| Total Interest-Bearing Deposits | 14,940,925 | 195,575 | 1.75 | % | 14,059,847 | 21,452 | 0.20 | % | ||||||||||||||||||||||||||||||||||||
| Borrowings and other interest-bearing liabilities | 2,848,704 | 97,247 | 4.53 | % | 1,133,524 | 19,816 | 2.34 | % | ||||||||||||||||||||||||||||||||||||
| Total Interest-Bearing Liabilities | 17,789,629 | 292,822 | 2.20 | % | 15,193,371 | 41,268 | 0.36 | % | ||||||||||||||||||||||||||||||||||||
| Noninterest-Bearing liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | 6,108,197 | 7,538,597 | ||||||||||||||||||||||||||||||||||||||||||
| Other | 639,569 | 515,615 | ||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities | 24,537,395 | 23,247,583 | ||||||||||||||||||||||||||||||||||||||||||
| Total Deposits/Cost of Deposits | 21,049,122 | 1.24 | % | 21,598,444 | 0.13 | % | ||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities and non-interest bearing deposits ("Cost of Funds") | 23,897,826 | 1.63 | % | 22,731,968 | 0.24 | % | ||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 2,635,705 | 2,607,514 | ||||||||||||||||||||||||||||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 27,173,100 | $ | 25,855,097 | ||||||||||||||||||||||||||||||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 655,542 | 3.44 | % | 566,408 | 3.13 | % | ||||||||||||||||||||||||||||||||||||||
| Tax equivalent adjustment | (13,261) | (10,685) | ||||||||||||||||||||||||||||||||||||||||||
| Net Interest Income | $ | 642,281 | $ | 555,723 | ||||||||||||||||||||||||||||||||||||||||
(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. | ||||||||||||||||||||||||||||||||||||||||||||
(2) Balances include amortized historical cost for AFS. The related unrealized holding gains (losses) are included in other assets. | ||||||||||||||||||||||||||||||||||||||||||||
(3) "ACL - loans" relates to the ACL specifically on "Net Loans" and does not include the ACL related to OBS credit exposures. | ||||||||||||||||||||||||||||||||||||||||||||
13
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||
| AVERAGE LOANS, DEPOSITS AND BORROWINGS DETAIL (UNAUDITED): | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Nine months ended September 30 | ||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||
| Loans, by type: | ||||||||||||||||||||
| Real estate - commercial mortgage | $ | 7,803,775 | $ | 7,401,094 | ||||||||||||||||
| Commercial and industrial | 4,602,573 | 4,205,236 | ||||||||||||||||||
| Real estate - residential mortgage | 5,004,289 | 4,143,850 | ||||||||||||||||||
| Real estate - home equity | 1,066,003 | 1,099,310 | ||||||||||||||||||
| Real estate - construction | 1,278,923 | 1,197,947 | ||||||||||||||||||
| Consumer | 748,788 | 532,396 | ||||||||||||||||||
Leases and other loans(1) | 314,929 | 285,839 | ||||||||||||||||||
| Total Net Loans | $ | 20,819,280 | $ | 18,865,672 | ||||||||||||||||
| Deposits, by type: | ||||||||||||||||||||
| Noninterest-bearing demand | $ | 6,108,197 | $ | 7,538,597 | ||||||||||||||||
| Interest-bearing demand | 5,535,671 | 5,657,165 | ||||||||||||||||||
| Savings | 6,593,703 | 6,515,529 | ||||||||||||||||||
| Total demand and savings | 18,237,571 | 19,711,291 | ||||||||||||||||||
| Brokered | 779,191 | 254,100 | ||||||||||||||||||
| Time | 2,032,360 | 1,633,053 | ||||||||||||||||||
| Total Deposits | $ | 21,049,122 | $ | 21,598,444 | ||||||||||||||||
| Borrowings, by type: | ||||||||||||||||||||
| Federal funds purchased | $ | 606,708 | $ | 33,629 | ||||||||||||||||
| Federal Home Loan Bank advances | 976,783 | 69,473 | ||||||||||||||||||
| Senior debt and subordinated debt | 539,907 | 572,690 | ||||||||||||||||||
| Other borrowings | 725,306 | 457,732 | ||||||||||||||||||
| Total Borrowings | $ | 2,848,704 | $ | 1,133,524 | ||||||||||||||||
(1) Includes equipment lease financing, overdraft and net origination fees and costs. | ||||||||||||||||||||
14
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||||||||||||||||||||||||||||||
| ASSET QUALITY INFORMATION (UNAUDITED) | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | Sep 30 | Sep 30 | |||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||
| Allowance for credit losses related to net loans: | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 287,442 | $ | 278,695 | $ | 269,366 | $ | 266,838 | $ | 248,564 | $ | 269,366 | $ | 249,001 | |||||||||||||||||||||||||||||||||
| CECL Day 1 provision expense | — | — | — | — | 7,954 | — | 7,954 | ||||||||||||||||||||||||||||||||||||||||
| Initial purchased credit deteriorated loans | — | — | — | — | 1,135 | — | 1,135 | ||||||||||||||||||||||||||||||||||||||||
| Loans charged off: | |||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | (860) | (230) | (13,362) | (12,235) | (86) | (14,452) | (238) | ||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | (3,220) | (2,017) | (612) | (179) | (1,783) | (5,849) | (2,211) | ||||||||||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | — | (62) | — | — | — | (62) | (66) | ||||||||||||||||||||||||||||||||||||||||
| Consumer and home equity | (1,803) | (1,313) | (2,206) | (1,311) | (1,172) | (5,322) | (3,101) | ||||||||||||||||||||||||||||||||||||||||
Leases and other loans(1) | (1,396) | (1,165) | (723) | (505) | (683) | (3,284) | (1,626) | ||||||||||||||||||||||||||||||||||||||||
| Total loans charged off | (7,279) | (4,787) | (16,903) | (14,230) | (3,724) | (28,969) | (7,242) | ||||||||||||||||||||||||||||||||||||||||
| Recoveries of loans previously charged off: | |||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | 101 | 29 | 786 | 183 | 29 | 916 | 3,677 | ||||||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 620 | 988 | 1,086 | 961 | 2,213 | 2,694 | 4,932 | ||||||||||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | 37 | 58 | 48 | 10 | 101 | 143 | 415 | ||||||||||||||||||||||||||||||||||||||||
| Consumer and home equity | 1,023 | 959 | 661 | 683 | 682 | 2,643 | 1,898 | ||||||||||||||||||||||||||||||||||||||||
| Real estate - construction | — | 569 | 202 | 530 | — | 771 | 44 | ||||||||||||||||||||||||||||||||||||||||
Leases and other loans(1) | 400 | 213 | 116 | 132 | 247 | 729 | 627 | ||||||||||||||||||||||||||||||||||||||||
| Recoveries of loans previously charged off | 2,181 | 2,816 | 2,899 | 2,499 | 3,272 | 7,896 | 11,593 | ||||||||||||||||||||||||||||||||||||||||
| Net loans recovered (charged off) | (5,098) | (1,971) | (14,004) | (11,731) | (452) | (21,073) | 4,351 | ||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | 10,395 | 10,718 | 23,333 | 14,259 | 9,637 | 44,446 | 4,397 | ||||||||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 292,739 | $ | 287,442 | $ | 278,695 | $ | 269,366 | $ | 266,838 | $ | 292,739 | $ | 266,838 | |||||||||||||||||||||||||||||||||
| Net (recoveries) charge-offs to average loans | 0.10 | % | 0.04 | % | 0.27 | % | 0.23 | % | 0.01 | % | 0.13 | % | (0.03) | % | |||||||||||||||||||||||||||||||||
| Provision for credit losses related to OBS Credit Exposures | |||||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | $ | (458) | $ | (971) | $ | 1,211 | $ | 254 | $ | 1,367 | $ | (218) | $ | 1,157 | |||||||||||||||||||||||||||||||||
| NON-PERFORMING ASSETS: | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-accrual loans | $ | 113,022 | $ | 123,280 | $ | 134,303 | $ | 144,443 | $ | 178,204 | |||||||||||||||||||||||||||||||||||||
| Loans 90 days past due and accruing | 27,962 | 24,415 | 30,336 | 27,463 | 14,559 | ||||||||||||||||||||||||||||||||||||||||||
| Total non-performing loans | 140,984 | 147,695 | 164,639 | 171,906 | 192,763 | ||||||||||||||||||||||||||||||||||||||||||
| Other real estate owned | 2,549 | 3,881 | 3,304 | 5,790 | 5,877 | ||||||||||||||||||||||||||||||||||||||||||
| Total non-performing assets | $ | 143,533 | $ | 151,576 | $ | 167,943 | $ | 177,696 | $ | 198,640 | |||||||||||||||||||||||||||||||||||||
| NON-PERFORMING LOANS, BY TYPE: | |||||||||||||||||||||||||||||||||||||||||||||||
| Real estate - commercial mortgage | $ | 44,058 | $ | 55,048 | $ | 61,322 | $ | 72,634 | $ | 96,281 | |||||||||||||||||||||||||||||||||||||
| Commercial and industrial | 33,365 | 30,588 | 33,555 | 28,288 | 29,831 | ||||||||||||||||||||||||||||||||||||||||||
| Real estate - residential mortgage | 40,560 | 39,157 | 46,576 | 46,509 | 41,597 | ||||||||||||||||||||||||||||||||||||||||||
| Consumer and home equity | 11,580 | 10,469 | 8,983 | 9,800 | 10,016 | ||||||||||||||||||||||||||||||||||||||||||
| Real estate - construction | 677 | 1,099 | 1,509 | 1,368 | 1,456 | ||||||||||||||||||||||||||||||||||||||||||
Leases and other loans(1) | 10,744 | 11,334 | 12,694 | 13,307 | 13,582 | ||||||||||||||||||||||||||||||||||||||||||
| Total non-performing loans | $ | 140,984 | $ | 147,695 | $ | 164,639 | $ | 171,906 | $ | 192,763 | |||||||||||||||||||||||||||||||||||||
(1) Includes equipment lease financing, overdraft and net origination fees and costs. | |||||||||||||||||||||||||||||||||||||||||||||||
15
| FULTON FINANCIAL CORPORATION | ||||||||||||||||||||||||||||||||||||||||||||
| RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) | ||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||
| Explanatory note: | This press release contains supplemental financial information, as detailed below, that has been derived by methods other than GAAP. The Corporation has presented these 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 financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Management believes that these non-GAAP financial measures, in addition to GAAP measures, are also useful to investors to evaluate the Corporation's results. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures, and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measure follow: | |||||||||||||||||||||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||||||||||||||||||||||
| Operating net income available to common shareholders | ||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common shareholders | $ | 69,535 | $ | 77,045 | $ | 65,752 | $ | 79,271 | $ | 68,309 | ||||||||||||||||||||||||||||||||||
| Plus: Core deposit intangible amortization | 441 | 912 | 514 | 514 | 514 | |||||||||||||||||||||||||||||||||||||||
| Plus: Merger-related expenses | — | — | — | 1,894 | 7,006 | |||||||||||||||||||||||||||||||||||||||
| Plus: CECL Day 1 Provision expense | — | — | — | — | 7,954 | |||||||||||||||||||||||||||||||||||||||
Plus: Interest rate derivative transition valuation(1) | 2,958 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Less: Tax impact of adjustments | (714) | (192) | (108) | (506) | (3,250) | |||||||||||||||||||||||||||||||||||||||
| Operating net income available to common shareholders (numerator) | $ | 72,220 | $ | 77,765 | $ | 66,158 | $ | 81,173 | $ | 80,533 | ||||||||||||||||||||||||||||||||||
| Weighted average shares (diluted) (denominator) | 166,023 | 167,191 | 168,401 | 169,136 | 168,781 | |||||||||||||||||||||||||||||||||||||||
| Operating net income available to common shareholders, per share (diluted) | $ | 0.43 | $ | 0.47 | $ | 0.39 | $ | 0.48 | $ | 0.48 | ||||||||||||||||||||||||||||||||||
| Common shareholders' equity (tangible), per share | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,566,693 | $ | 2,642,152 | $ | 2,618,998 | $ | 2,579,757 | $ | 2,471,159 | ||||||||||||||||||||||||||||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (561,284) | (561,885) | (563,502) | (560,824) | (561,495) | |||||||||||||||||||||||||||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 1,812,531 | $ | 1,887,389 | $ | 1,862,618 | $ | 1,826,055 | $ | 1,716,786 | ||||||||||||||||||||||||||||||||||
| Shares outstanding, end of period (denominator) | 164,084 | 166,097 | 165,396 | 167,599 | 167,399 | |||||||||||||||||||||||||||||||||||||||
| Common shareholders' equity (tangible), per share | $ | 11.05 | $ | 11.36 | $ | 11.26 | $ | 10.90 | $ | 10.26 | ||||||||||||||||||||||||||||||||||
| Operating return on average assets | ||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 72,097 | $ | 79,607 | $ | 68,314 | $ | 81,833 | $ | 70,871 | ||||||||||||||||||||||||||||||||||
| Plus: Core deposit intangible amortization | 441 | 912 | 514 | 514 | 514 | |||||||||||||||||||||||||||||||||||||||
| Plus: Merger-related expenses | — | — | — | 1,894 | 7,006 | |||||||||||||||||||||||||||||||||||||||
| Plus: CECL Day 1 Provision expense | — | — | — | — | 7,954 | |||||||||||||||||||||||||||||||||||||||
Plus: Interest rate derivative transition valuation(1) | 2,958 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Less: Tax impact of adjustments | (714) | (192) | (108) | (506) | (3,250) | |||||||||||||||||||||||||||||||||||||||
| Operating net income (numerator) | $ | 74,782 | $ | 80,327 | $ | 68,720 | $ | 83,735 | $ | 83,095 | ||||||||||||||||||||||||||||||||||
| Total average assets | $ | 27,377,836 | $ | 27,235,567 | $ | 26,900,653 | $ | 26,386,355 | $ | 26,357,095 | ||||||||||||||||||||||||||||||||||
| Less: Average net core deposit intangible | (5,548) | (6,417) | (6,937) | (7,478) | (8,053) | |||||||||||||||||||||||||||||||||||||||
| Total operating average assets (denominator) | $ | 27,372,288 | $ | 27,229,150 | $ | 26,893,716 | $ | 26,378,877 | $ | 26,349,042 | ||||||||||||||||||||||||||||||||||
| Operating return on average assets | 1.08% | 1.18% | 1.04% | 1.26% | 1.25% | |||||||||||||||||||||||||||||||||||||||
(1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. | ||||||||||||||||||||||||||||||||||||||||||||
16
| Three months ended | ||||||||||||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||||||||||||||||||||||
| Return on average common shareholders' equity (tangible) | ||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common shareholders | $ | 69,535 | $ | 77,045 | $ | 65,752 | $ | 79,271 | $ | 68,309 | ||||||||||||||||||||||||||||||||||
| Plus: Intangible amortization | 601 | 1,072 | 674 | 688 | 690 | |||||||||||||||||||||||||||||||||||||||
| Plus: Merger-related expenses | — | — | — | 1,894 | 7,006 | |||||||||||||||||||||||||||||||||||||||
| Plus: CECL Day 1 Provision expense | — | — | — | — | 7,954 | |||||||||||||||||||||||||||||||||||||||
Plus: Interest rate derivative transition valuation(1) | 2,958 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Less: Tax impact of adjustments | (747) | (225) | (142) | (542) | (3,287) | |||||||||||||||||||||||||||||||||||||||
| Operating net income available to common shareholders (numerator) | $ | 72,347 | $ | 77,892 | $ | 66,284 | $ | 81,311 | $ | 80,672 | ||||||||||||||||||||||||||||||||||
| Average shareholders' equity | $ | 2,645,977 | $ | 2,647,464 | $ | 2,613,316 | $ | 2,489,148 | $ | 2,604,057 | ||||||||||||||||||||||||||||||||||
| Less: Average preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||||||||||||||||||||||||
| Less: Average goodwill and intangible assets | (561,578) | (563,146) | (561,744) | (561,219) | (562,285) | |||||||||||||||||||||||||||||||||||||||
| Average tangible common shareholders' equity (denominator) | $ | 1,891,521 | $ | 1,891,440 | $ | 1,858,694 | $ | 1,735,051 | $ | 1,848,894 | ||||||||||||||||||||||||||||||||||
| Return on average common shareholders' equity (tangible) | 15.17% | 16.52% | 14.46% | 18.59% | 17.31% | |||||||||||||||||||||||||||||||||||||||
| Tangible common equity to tangible assets (TCE Ratio) | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,566,693 | $ | 2,642,152 | $ | 2,618,998 | $ | 2,579,757 | $ | 2,471,159 | ||||||||||||||||||||||||||||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (561,284) | (561,885) | (563,502) | (560,824) | (561,495) | |||||||||||||||||||||||||||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 1,812,531 | $ | 1,887,389 | $ | 1,862,618 | $ | 1,826,055 | $ | 1,716,786 | ||||||||||||||||||||||||||||||||||
| Total assets | $ | 27,380,836 | $ | 27,403,163 | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | ||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (561,284) | (561,885) | (563,502) | (560,824) | (561,495) | |||||||||||||||||||||||||||||||||||||||
| Total tangible assets (denominator) | $ | 26,819,552 | $ | 26,841,278 | $ | 26,548,674 | $ | 26,370,878 | $ | 25,584,547 | ||||||||||||||||||||||||||||||||||
| Tangible common equity to tangible assets | 6.76% | 7.03% | 7.02% | 6.92% | 6.71% | |||||||||||||||||||||||||||||||||||||||
| Tangible common equity to tangible assets (TCE Ratio) excluding AOCI | ||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | $ | 2,566,693 | $ | 2,642,152 | $ | 2,618,998 | $ | 2,579,757 | $ | 2,471,159 | ||||||||||||||||||||||||||||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | |||||||||||||||||||||||||||||||||||||||
| Less: Accumulated other comprehensive (income) loss | 472,756 | 379,286 | 350,992 | 385,476 | 442,947 | |||||||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (561,284) | (561,885) | (563,502) | (560,824) | (561,495) | |||||||||||||||||||||||||||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 2,285,287 | $ | 2,266,675 | $ | 2,213,610 | $ | 2,211,531 | $ | 2,159,733 | ||||||||||||||||||||||||||||||||||
| Total assets | $ | 27,380,836 | $ | 27,403,163 | $ | 27,112,176 | $ | 26,931,702 | $ | 26,146,042 | ||||||||||||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (561,284) | (561,885) | (563,502) | (560,824) | (561,495) | |||||||||||||||||||||||||||||||||||||||
| Plus: AOCI - unrealized losses/(gains) on AFS investments securities | 415,369 | 311,813 | 282,092 | 632,456 | 368,196 | |||||||||||||||||||||||||||||||||||||||
| Total tangible assets (denominator) | $ | 27,234,921 | $ | 27,153,091 | $ | 26,830,766 | $ | 27,003,334 | $ | 25,952,743 | ||||||||||||||||||||||||||||||||||
| Tangible common equity to tangible assets, excluding AOCI | 8.39% | 8.35% | 8.25% | 8.19% | 8.32% | |||||||||||||||||||||||||||||||||||||||
(1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. | ||||||||||||||||||||||||||||||||||||||||||||
17
| Three months ended | ||||||||||||||||||||||||||||||||||||||||||||
| Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | ||||||||||||||||||||||||||||||||||||||||
| 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||||||||||||||||||||||
| Efficiency ratio | ||||||||||||||||||||||||||||||||||||||||||||
| Non-interest expense | $ | 171,020 | $ | 168,018 | $ | 159,616 | $ | 168,462 | $ | 169,558 | ||||||||||||||||||||||||||||||||||
| Less: Amortization of tax credit investments | — | — | — | (696) | (696) | |||||||||||||||||||||||||||||||||||||||
| Less: Merger-related expenses | — | — | — | (1,894) | (7,006) | |||||||||||||||||||||||||||||||||||||||
| Less: Intangible amortization | (601) | (1,072) | (674) | (688) | (690) | |||||||||||||||||||||||||||||||||||||||
| Non-interest expense (numerator) | $ | 170,419 | $ | 166,946 | $ | 158,942 | $ | 165,184 | $ | 161,166 | ||||||||||||||||||||||||||||||||||
| Net interest income | $ | 213,842 | $ | 212,852 | $ | 215,587 | $ | 225,911 | $ | 215,582 | ||||||||||||||||||||||||||||||||||
| Tax equivalent adjustment | 4,442 | 4,405 | 4,414 | 4,310 | 3,970 | |||||||||||||||||||||||||||||||||||||||
| Plus: Total non-interest income | 55,961 | 60,585 | 51,753 | 54,321 | 59,162 | |||||||||||||||||||||||||||||||||||||||
Plus: Interest rate derivative transition valuation(1) | 2,958 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Less: Investment securities (gains) losses, net | — | 4 | (23) | 1 | 53 | |||||||||||||||||||||||||||||||||||||||
| Total revenue (denominator) | $ | 277,203 | $ | 277,846 | $ | 271,731 | $ | 284,543 | $ | 278,767 | ||||||||||||||||||||||||||||||||||
| Efficiency ratio | 61.5% | 60.1% | 58.5% | 58.1% | 57.8% | |||||||||||||||||||||||||||||||||||||||
| Operating non-interest expenses to total average assets | ||||||||||||||||||||||||||||||||||||||||||||
| Non-interest expense | $ | 171,020 | $ | 168,018 | $ | 159,616 | $ | 168,462 | $ | 169,558 | ||||||||||||||||||||||||||||||||||
| Less: Amortization of tax credit investments | — | — | — | (696) | (696) | |||||||||||||||||||||||||||||||||||||||
| Less: Intangible amortization | (601) | (1,072) | (674) | (688) | (690) | |||||||||||||||||||||||||||||||||||||||
| Less: Merger-related expenses | — | — | — | (1,894) | (7,006) | |||||||||||||||||||||||||||||||||||||||
| Non-interest expense (numerator) | $ | 170,419 | $ | 166,946 | $ | 158,942 | $ | 165,184 | $ | 161,166 | ||||||||||||||||||||||||||||||||||
| Total average assets (denominator) | $ | 27,377,836 | $ | 27,235,567 | $ | 26,900,653 | $ | 26,386,355 | $ | 26,357,095 | ||||||||||||||||||||||||||||||||||
| Operating non-interest expenses to total average assets | 2.47% | 2.46% | 2.40% | 2.48% | 2.43% | |||||||||||||||||||||||||||||||||||||||
| Pre-provision net revenue | ||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 213,842 | $ | 212,852 | $ | 215,587 | $ | 225,911 | $ | 215,582 | ||||||||||||||||||||||||||||||||||
| Non-interest income | 55,961 | 60,585 | 51,753 | 54,321 | 59,162 | |||||||||||||||||||||||||||||||||||||||
Plus: Interest rate derivative transition valuation(1) | 2,958 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Less: Investment securities (gains) losses, net | — | 4 | (23) | 1 | 53 | |||||||||||||||||||||||||||||||||||||||
| Total revenue | $ | 272,761 | $ | 273,441 | $ | 267,317 | $ | 280,233 | $ | 274,797 | ||||||||||||||||||||||||||||||||||
| Non-interest expense | $ | 171,020 | $ | 168,018 | $ | 159,616 | $ | 168,462 | $ | 169,558 | ||||||||||||||||||||||||||||||||||
| Less: Amortization on tax credit investments | — | — | — | (696) | (696) | |||||||||||||||||||||||||||||||||||||||
| Less: Merger-related expenses | — | — | — | (1,894) | (7,006) | |||||||||||||||||||||||||||||||||||||||
| Less: Intangible amortization | (601) | (1,072) | (674) | (688) | (690) | |||||||||||||||||||||||||||||||||||||||
| Total non-interest expense | $ | 170,419 | $ | 166,946 | $ | 158,942 | $ | 165,184 | $ | 161,166 | ||||||||||||||||||||||||||||||||||
| Pre-provision net revenue | $ | 102,342 | $ | 106,495 | $ | 108,375 | $ | 115,049 | $ | 113,631 | ||||||||||||||||||||||||||||||||||
| Nine months ended | ||||||||||||||||||||||||||||||||||||||||||||
| Sep 30 | ||||||||||||||||||||||||||||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||||||||||||||||||||
| Operating net income available to common shareholders | ||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common shareholders | $ | 212,331 | ||||||||||||||||||||||||||||||||||||||||||
| Plus: Core deposit intangible amortization | 1,867 | |||||||||||||||||||||||||||||||||||||||||||
| Plus: Merger-related expenses | — | |||||||||||||||||||||||||||||||||||||||||||
| Plus: CECL Day 1 Provision expense | — | |||||||||||||||||||||||||||||||||||||||||||
Plus: Interest rate derivative transition valuation(1) | 2,958 | |||||||||||||||||||||||||||||||||||||||||||
| Less: Tax impact of adjustments | (1,013) | |||||||||||||||||||||||||||||||||||||||||||
| Operating net income available to common shareholders (numerator) | $ | 216,143 | ||||||||||||||||||||||||||||||||||||||||||
| Weighted average shares (diluted) (denominator) | 167,181 | |||||||||||||||||||||||||||||||||||||||||||
| Operating net income available to common shareholders, per share (diluted) | $ | 1.29 | ||||||||||||||||||||||||||||||||||||||||||
(1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. | ||||||||||||||||||||||||||||||||||||||||||||
| Note: numbers in this report may not sum due to rounding. | ||||||||||||||||||||||||||||||||||||||||||||
18
THIRD QUARTER 2023 RESULTS NASDAQ: FULT Data as of or for the period ended September 30, 2023 unless otherwise noted
This presentation may contain forward-looking statements with respect to 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 identified by the use of words such as "may," "should," "will," "could," "estimates," "predicts," "potential," "continue," "anticipates," "believes," "plans," "expects," "future," "intends," “projects,” the negative of these terms and other comparable terminology. These forward-looking statements may include projections of, or guidance on, the Corporation’s future financial performance, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Corporation’s business or financial results. Management’s "2023 Outlook" contained herein is comprised of forward-looking statements. Forward-looking statements are neither historical facts, nor assurance of future performance. Instead, the statements are based on current beliefs, expectations and assumptions regarding the future of the Corporation’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Corporation’s control, and actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not unduly rely on any of these forward-looking statements. Any forward-looking statement is based only on information currently available and speaks only as of the date when made. The Corporation undertakes no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A discussion of certain risks and uncertainties affecting the Corporation, and some of the factors that could cause the Corporation’s actual results to differ materially from those described in the forward-looking statements, can be found in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023 and other current and periodic reports, which have been, or will be, filed with the Securities and Exchange Commission (the "SEC") and are, or will be, available in the Investor Relations section of the Corporation’s website (www.fultonbank.com) and on the SEC’s website (www.sec.gov). The Corporation uses certain financial measures in this presentation that have been derived by methods other than generally accepted accounting principles ("GAAP"). These non-GAAP financial measures are reconciled to the most comparable GAAP measures at the end of this presentation. FORWARD-LOOKING STATEMENTS 2
A DEPOSIT PORTFOLIO THAT REMAINS GRANULAR, TENURED AND DIVERSIFIED 3
4 THE LOAN MIX IS DIVERSIFIED, GRANULAR, WITH LOW CRE AND LOW OFFICE CONCENTRATIONS
THE OFFICE PORTFOLIO HAS BEEN ORIGINATED OVER TIME, WILL MATURE OVER TIME, AND REMAINS GRANULAR AND DIVERSE 5
(1) Non-GAAP financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. INCOME STATEMENT SUMMARY 6 3Q23 2Q23 3Q22 (dollars in thousands, except per-share data) Net interest income $213,842 $212,852 $215,582 Provision for credit losses 9,937 9,747 18,958 Non-interest income 55,961 60,589 59,215 Securities gains (losses) — (4) (53) Non-interest expense 171,020 168,018 162,552 Merger-related expenses — — 7,006 Income before income taxes 88,846 95,672 86,228 Income taxes 16,749 16,065 15,357 Net income 72,097 79,607 70,871 Preferred stock dividends (2,562) (2,562) (2,562) Net income available to common shareholders $69,535 $77,045 $68,309 Net income available to common shareholders, per share (diluted) $0.42 $0.46 $0.40 Operating net income available to common shareholders, per share (diluted)(1) $0.43 $0.47 $0.48 ROAA 1.04% 1.17% 1.07% Operating ROAA(1) 1.08% 1.18% 1.25% ROAE 11.25% 12.59% 11.24% ROAE (tangible)(1) 15.17% 16.52% 17.31% Efficiency ratio(1) 61.5% 60.1% 57.8%
THE NONINTEREST-BEARING DEPOSIT MIX HAS TRENDED UP OVER TIME DESPITE PERIODIC CHANGES IN INTEREST RATES 7
NET INTEREST INCOME AND MARGIN Net Interest Income & Net Interest Margin Average Interest-Earning Assets & Yields Average Deposits and Borrowings & Other & Cost of Funds (DOLLARS IN MILLIONS) (DOLLARS IN BILLIONS) (DOLLARS IN BILLIONS) 8 $22 $21 $21 $21 $21 $1 $2 $3 $3 $3 0.31% 0.72% 1.27% 1.70% 1.92% 0.18% 0.42% 0.82% 1.32% 1.56% Cost of Deposits Cost of Funds Borrowings & Other Deposits 3Q22 4Q22 1Q23 2Q23 3Q23 $12 $15 $18 $21 $24 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% $216 $226 $216 $213 $214 3.54% 3.69% 3.53% 3.40% 3.40% Net Interest Income Net Interest Margin (Fully-taxable equivalent basis, or FTE) 3Q22 4Q22 1Q23 2Q23 3Q23 $50 $75 $100 $125 $150 $175 $200 $225 $250 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00% 4.25% 4.50% $20 $20 $20 $21 $21 $5 $5 $5 $5 $4 3.83% 4.36% 4.73% 4.99% 5.20% Loans Securities & Other Interest-Earning Asset Yield (FTE) 3Q22 4Q22 1Q23 2Q23 3Q23 $5 $10 $15 $20 $25 4.00% 6.00% 8.00% 10.00%
ASSET QUALITY (DOLLARS IN MILLIONS) Provision for Credit Losses Non-Performing Loans ("NPLs") & NPLs to Loans Net Charge-offs ("NCOs") and NCOs to Average Loans ACL(2) to NPLs & Loans 9(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 (“ACL”) relates specifically to "Loans, net of unearned income" and does not include reserves related to off-balance-sheet credit exposures. $19 $15 $25 $10 $10 3Q22 4Q22 1Q23 2Q23 3Q23 $— $5 $10 $15 $20 $25 $30 $193 $172 $165 $148 $141 0.98% 0.85% 0.80% 0.70% 0.67% NPL NPLs/Loans 3Q22 4Q22 1Q23 2Q23 3Q23 $100 $125 $150 $175 $200 0.00% 0.50% 1.00% $0 $12 $14 $2 $5 0.01% 0.23% 0.27% 0.04% 0.10% Net charge-offs/(recoveries) NCOs/Average Loans (annualized) 3Q22 4Q22 1Q23 2Q23 3Q23 $0 $3 $6 $9 $12 $15 $18 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 138% 157% 169% 195% 208% 1.35% 1.33% 1.35% 1.37% 1.38% ACL/NPLs ACL/Loans 3Q22 4Q22 1Q23 2Q23 3Q23 50% 75% 100% 125% 150% 175% 200% 225% 1.00% 1.25% 1.50% 1.75% 2.00% (1)
NON-INTEREST INCOME(1) (1) Excluding investment securities gains. Three months ended September 30, 2023 (percent of total non-interest income) 10 Decreases in: n Other income from a $3.0 million market valuation movement in our commercial customer interest rate swap program resulting from the reference rate transition from the London Inter-Bank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR"). n Commercial banking customer interest rate swap fees from ongoing operations. Increases in: n Wealth management due to a favorable impact from the equity markets for the period and stronger revenues from the Fulton Private Bank division of Fulton Bank, N.A.. n Consumer banking primarily due to overdraft fees. 35% 6% 21% 35% 3% 3Q23 2Q23 Change (dollars in thousands) n Commercial Banking $19,722 $23,145 ($3,423) n Wealth Management 19,413 18,678 735 n Consumer Banking 12,173 11,720 453 n Mortgage Banking 3,190 2,940 250 n Other 1,463 4,106 (2,643) Total $55,961 $60,589 ($4,628) Non-interest income decreased 7.6% from 2Q23(1) due primarily to:
NON-INTEREST EXPENSE Three months ended September 30, 2023 (percent of total non-interest expense) 11 57% 10% 8% 7% 3% 2% 1% 12% 3Q23 2Q23 Change (dollars in thousands) n Salaries and Benefits $96,757 $94,102 $2,655 n Data Processing and Software 16,914 16,776 138 n Net Occupancy 14,561 14,374 187 n Other Outside Services 12,094 10,834 1,260 n FDIC Insurance 4,738 4,895 (157) n Equipment 3,475 3,530 (55) n Marketing 1,913 1,655 258 n Other 20,568 21,852 (1,284) Total $171,020 $168,018 $3,002 Increases in: n Salaries and employee benefits expense primarily due to one additional calendar day. n Other outside services driven by a number of corporate initiatives. Decreases in: n Other expense primarily due to a decrease in charitable contributions and gain on sales from fixed asset disposals. . Non-interest expense increased 1.8% from 2Q23 due primarily to:
CAPITAL RATIOS(1) 12 (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 conservation buffer, except for Tier 1 Leverage which is the well- capitalized minimum. 9.4% 10.1% 11.0% 13.8% Regulatory Minimums Excess Tier 1 Leverage CE Tier 1 Tier 1 Risk-Based Total Risk-Based —% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% $1,168 $566 $716 $759 (as of September 30, 2023) (dollars in millions) (2)
CAPITAL RATIOS ADJUSTED FOR UNREALIZED LOSSES ON INVESTMENT SECURITIES(1) 13 (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 conservation buffer, except for Tier 1 Leverage which is the well-capitalized minimum. (3) Tier 1 Leverage and CE Tier 1 capital ratios were adjusted to incorporate unrealized losses, net of tax, on held-to-maturity investment securities of $156.7 million and unrealized losses net of tax, on available-for-sale investment securities of $371.0 million. (4) Non-GAAP financial measure. Please refer to the calculation and management’s reasons for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 6.2% 7.5% 7.8% —% 2.5% 5.0% 7.5% 10.0% 12.5% $653 $183 (as of September 30, 2023) (dollars in millions) n Regulatory Minimums n Excess(2) | | | | | | | | | | | | | Tier 1 Leverage(3) CE Tier 1(3) TCE(4)
A COMMITTED AND HEALTHY LIQUIDITY PROFILE WITH SIGNIFICANT COVERAGE 14 (dollars in thousands)(dollars in thousands)
2023 OUTLOOK 15 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% +/- (1) Assumes Fed Funds Rate increase of 25 bps in November 2023. Updated as of 3Q23, previously: $830 - $840 million. (2) Excludes investment securities gains and the 3Q23 market valuation amount for the movement related to our commercial customer swap program. (3) Updated as of 3Q23, previously: $645 - $660 million.
NON-GAAP RECONCILIATION 16 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 financial measures is consistent with how the Corporation evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Corporation's industry. Investors should recognize that the Corporation's presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Corporation strongly encourages a review of its condensed consolidated financial statements in their entirety. Three months ended (dollars in thousands) Sep 30 Jun 30 Sep 30 2023 2023 2022 Operating net income available to common shareholders Net income available to common shareholders $69,535 $77,045 $68,309 Plus: Core deposit intangible amortization 441 912 514 Plus: Merger-related expenses — — 7,006 Plus: CECL Day 1 Provision expense — — 7,954 Plus: Interest rate derivative transition valuation(1) 2,958 — — Less: Tax impact of adjustments (714) (192) (3,250) Operating net income available to common shareholders (numerator) $72,220 $77,765 $80,533 Weighted average shares (diluted) (denominator) 166,023 167,191 168,781 Operating net income available to common shareholders, per share (diluted) $0.43 $0.47 $0.48 (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
NON-GAAP RECONCILIATION 17 Three months ended (dollars in thousands) Sep 30 Jun 30 Sep 30 2023 2023 2022 Operating return on average assets Net income $72,097 $79,607 $70,871 Plus: Core deposit intangible amortization 441 912 514 Plus: Merger-related expenses — — 7,006 Plus: CECL Day 1 Provision expense — — 7,954 Plus: Interest rate derivative transition valuation(1) 2,958 — — Less: Tax impact of adjustments (714) (192) (3,250) Operating net income (numerator) $74,782 $80,327 $83,095 Total average assets $27,377,836 $27,235,567 $26,357,095 Less: Average net core deposit intangible (5,548) (6,417) (8,053) Total average operating assets (denominator) $27,372,288 $27,229,150 $26,349,042 Operating return on average assets 1.08 % 1.18 % 1.25 % (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
NON-GAAP RECONCILIATION 18 Three months ended (dollars in thousands) Sep 30 Jun 30 Sep 30 2023 2023 2022 Return on average common shareholders' equity (tangible) Net income available to common shareholders $69,535 $77,045 $68,309 Plus: Intangible amortization 601 1,072 690 Plus: Merger-related expenses — — 7,006 Plus: CECL Day 1 Provision expense — — 7,954 Plus: Interest rate derivative transition valuation(1) 2,958 — — Less: Tax impact of adjustments (747) (225) (3,287) Operating net income available to common shareholders (numerator) $72,347 $77,892 $80,672 Average shareholders' equity $2,645,977 $2,647,464 $2,604,057 Less: Average preferred stock (192,878) (192,878) (192,878) Less: Average goodwill and intangible assets (561,578) (563,146) (562,285) Average tangible common shareholders' equity (denominator) $1,891,521 $1,891,440 $1,848,894 Return on average common shareholders' equity (tangible) 15.17 % 16.52 % 17.31 % (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
NON-GAAP RECONCILIATION 19 (dollars in thousands) Three months ended Sep 30 Jun 30 Sep 30 Efficiency ratio 2023 2023 2022 Non-interest expense $171,020 $168,018 $169,558 Less: Amortization of tax credit investments — — (696) Less: Merger-related expenses — — (7,006) Less: Intangible amortization (601) (1,072) (690) Non-interest expense (numerator) $170,419 $166,946 $161,166 Net interest income $213,842 $212,852 $215,582 Tax equivalent adjustment 4,442 4,405 3,970 Plus: Total non-interest income 55,961 60,585 59,162 Plus: Interest rate derivative transition valuation(1) 2,958 — — Less: Investment securities (gains) losses, net — 4 53 Total revenue (denominator) $277,203 $277,846 $278,767 Efficiency ratio 61.5% 60.1% 57.8% (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
20 Three months ended (dollars in thousands) Sep 30 2023 Adjusted tangible common equity to tangible assets (TCE Ratio) Shareholders' equity $ 2,566,693 Less: Preferred stock (192,878) Less: Goodwill and intangible assets (561,284) Less: Unrealized gain/(loss) - HTM (202,590) Less: Tax impact of adjustments 45,887 Adjusted tangible common shareholders' equity (numerator) $ 1,655,828 Total assets $ 27,380,836 Less: Goodwill and intangible assets (561,284) Less: Unrealized gain/(loss) - HTM (202,590) Less: Tax impact of adjustments 45,887 Adjusted total tangible assets (denominator) $ 26,662,849 Adjusted tangible common equity to tangible assets 6.2 % NON-GAAP RECONCILIATION