8-K
FULTON FINANCIAL CORP (FULT)
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
April 16, 2024
Date of Report (date of earliest event reported)
Fulton Financial Corporation
(Exact name of registrant as specified in its charter)
| Pennsylvania | 001-39680 | 23-2195389 | ||
|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
| One Penn Square, | P.O. Box 4887 | Lancaster, | Pennsylvania | 17604 |
| (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):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $2.50 | FULT | The Nasdaq Stock Market, LLC |
| Depositary Shares, Each Representing 1/40th Interest in a Share of Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A | FULTP | The Nasdaq Stock Market, LLC |
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.
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Item 2.02 Results of Operations and Financial Condition.
On April 16, 2024, Fulton Financial Corporation (the "Corporation") issued a press release (the "Press Release") announcing its results of operations for the first quarter ended March 31, 2024. 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, April 17, 2024 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 "2024 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, 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 |
|---|---|
| 99.1 | Press release dated April 16, 2024 containing financial information for the quarter ended March 31, 2024, deemed filed under the Securities Exchange Act of 1934. |
| 99.2 | Presentation materials to be discussed during the conference call and webcast on April 17, 2024, 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: April 16, 2024 | FULTON FINANCIAL CORPORATION |
|---|---|
| By: /s/ Beth Ann L. Chivinski | |
| Beth Ann L. Chivinski | |
| Senior Executive Vice President and | |
| Interim Chief Financial Officer |
Document
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 First Quarter 2024 Results
(April 16, 2024) – Lancaster, PA – Fulton Financial Corporation (NASDAQ: FULT) (“Fulton” or the “Corporation”) reported net income available to common shareholders of $59.4 million, or $0.36 per diluted share, for the first quarter of 2024, a decrease of $2.3 million, or 3.8%, in comparison to the fourth quarter of 2023. Operating net income available to common shareholders for the three months ended March 31, 2024 was $65.4 million, or $0.40 per diluted share(1), a decrease of $3.5 million, or 5.0% in comparison to the fourth quarter of 2023.
“We are pleased with our first quarter results, which are a good start to the year; operating earnings were solid, deposit growth outpaced loan growth during the quarter, net interest margin was in line with our expectations, and asset quality remained stable,” said Curtis J. Myers, Chairman and CEO of Fulton Financial Corporation. "We are focused and making progress on our strategic initiatives.”
Net Interest Income and Balance Sheet
Net interest income for the first quarter of 2024 was $206.9 million, a decrease of $5.1 million in comparison to the fourth quarter of 2023, due to slight decreases in both average interest-earning assets and the net interest margin.
Total average interest-earning assets for the first quarter of 2024 were $25.6 billion, a decrease of $41.0 million from the fourth quarter of 2023 primarily driven by a decrease in average investment securities and average other interest-earning assets of $137.0 million and $18.3 million, respectively, partially offset by an increase in average net loans of $114.3 million.
Total average interest-bearing liabilities increased $347.9 million to $18.9 billion in the first quarter of 2024 in comparison to $18.6 billion in the fourth quarter of 2023. The increase in average interest-bearing liabilities was driven by an increase in the average balance of total interest-bearing deposits and the average balance of borrowings and other interest-bearing liabilities of $281.2 million and $66.6 million, respectively.
(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.
The net interest margin for the first quarter of 2024 decreased four basis points to 3.32% in comparison to 3.36% in the fourth quarter of 2023. The decrease was primarily due to an increase in the rate on average interest-bearing deposits and a shift in the funding mix from noninterest-bearing demand deposits to interest-bearing deposits, partially offset by higher loan yields and a lower rate on average borrowings and other interest-bearing liabilities.
A seven basis point increase in the yield on average net loans and an increase in the average balance of net loans of $114.3 million in the first quarter of 2024 drove an increase in interest income of $1.5 million to $339.7 million in comparison to $338.1 million in the fourth quarter of 2023.
Interest expense on interest-bearing liabilities for the first quarter of 2024 increased by $6.6 million to $132.7 million in comparison to $126.1 million in the fourth quarter of 2023. The linked-quarter increase in interest expense in the first quarter of 2024 was primarily due to an increase in the rate on average interest-bearing deposits of 16 basis points, a decline of $379.0 million in the average balance of noninterest-bearing deposits and an increase in the average balance of interest-bearing deposits of $281.2 million in comparison to the fourth quarter of 2023, partially offset by a decrease in the rate on borrowings and other interest-bearing liabilities of 12 basis points.
For the first quarter of 2024, net interest income was $206.9 million, a decrease of $8.7 million, or 4.0%, in comparison to the first quarter of 2023. Interest income for the first quarter of 2024 increased by $49.8 million to $339.7 million in comparison to $289.8 million in the first quarter of 2023, primarily driven by rising interest rates resulting in an increase in interest income from net loans of $50.6 million.
Total average interest-earning assets for the first quarter of 2024 increased by $357.0 million from the first quarter of 2023. Average net loans for the first quarter of 2024 were $21.4 billion, an increase of $0.9 billion from the same period in 2023. Compared to the first quarter of 2023, average investment securities decreased $305.9 million and average other interest-earning assets decreased $244.1 million in the first quarter of 2024.
Total average interest-bearing liabilities for the first quarter of 2024 increased $1.9 billion to $18.9 billion in comparison to $17.0 billion in the first quarter of 2023, driven by an increase in the average balance of total interest-bearing deposits of $2.4 billion, partially offset by a decrease in the average balance of borrowings and other interest-bearing liabilities of $0.5 billion.
Increases in the average balance of net loans of $0.9 billion and yields on net loans of 69 basis points in the first quarter of 2024 compared to the first quarter of 2023 each contributed to the increase in interest income.
Interest expense on interest-bearing liabilities for the first quarter of 2024 increased by $58.5 million to $132.7 million in comparison to $74.2 million in the first quarter of 2023, primarily driven by rising interest rates resulting in an increase to interest expense from interest-bearing deposits of $62.0 million. A decrease in the average balance of noninterest-bearing deposits of $1.6 billion and an increase in the
average balance of interest-bearing deposits of $2.4 billion, in the first quarter of 2024 in comparison to the first quarter of 2023 also contributed to the increase in interest expense.
Asset Quality
The provision for credit losses was $10.9 million in the first quarter of 2024 compared to $9.8 million in the fourth quarter of 2023 and $24.5 million in the first quarter of 2023. The provision for credit losses of $10.9 million recorded in the first quarter of 2024 was primarily due to net charge-offs of $8.6 million and loan growth.
Non-performing assets were $156.4 million, or 0.57% of total assets, at March 31, 2024, in comparison to $154.2 million, or 0.56% of total assets, at December 31, 2023, and $167.9 million, or 0.62% of total assets, at March 31, 2023.
Net charge-offs for the first quarter of 2024 were 0.16% of total average loans in comparison to 0.15% and 0.27% in the fourth quarter of 2023 and the first quarter of 2023, respectively.
Non-interest Income
Non-interest income before investment securities gains (losses) in the first quarter of 2024 was $57.1 million, a decrease of $3.0 million, or 5.0%, from the fourth quarter of 2023. The decrease in non-interest income was due to a $2.0 million decrease in commercial customer interest rate swap fee income, reflected in capital markets, a $2.2 million decrease in other non-interest income (including a $0.9 million decrease in income from equity method investments and a $1.0 million net change from market movements 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")). These decreases were partially offset by increases in wealth management revenues due to an increase in assets under management and mortgage banking income due to higher loan sales volumes and higher spreads.
Compared to the first quarter of 2023, non-interest income before investment securities gains (losses) increased $5.4 million, or 10.5%, from $51.7 million. The increase in non-interest income was primarily due to increases of $2.1 million in wealth management revenues due to an increase in assets under management, $1.3 million in commercial banking income, $1.1 million in mortgage banking income and $0.5 million in consumer banking income. The increase in commercial banking income was primarily due to increases of $0.8 million in cash management fee income and $0.3 million in gains on sale from Small Business Administration loans, reflected in other commercial banking income. The increase in mortgage banking income was driven by higher loan sale volumes and higher spreads.
Non-interest Expense
Non-interest expense was $177.6 million in the first quarter of 2024, a decrease of $3.0 million, or 1.6%, compared to $180.6 million in the fourth quarter of 2023. The decrease was primarily due to a
$5.0 million decrease in FDIC insurance expense, which included special assessment charges of $1.0 million in the first quarter of 2024 and $6.5 million in the fourth quarter of 2023, assessed to recover the loss to the Deposit Insurance Fund in connection with the closures of certain banks in 2023. The decrease was partially offset by an increase in FultonFirst implementation costs and loss on asset disposals of $3.1 million. The FultonFirst implementation costs and loss on asset disposals of $6.3 million in the first quarter of 2024 included a $3.6 million loss on disposal of assets, reflected in other non-interest expense, $2.5 million of consulting service expense, included in other outside services, and $0.2 million of severance expense, reflected in salaries and employee benefits expense. The FultonFirst implementation costs and loss on asset disposals of $3.2 million in the fourth quarter of 2023 included $2.6 million of consulting services, reflected in other outside services, and $0.6 million of severance expense, included in salaries and employee benefits expense.
Excluding FultonFirst implementation costs and loss on asset disposals, and FDIC expense noted above in the first quarter of 2024 and the fourth quarter of 2023, non-interest expense decreased $0.5 million, or 0.3%, compared to the fourth quarter of 2023, largely due to decreases in marketing expense of $1.6 million and salaries and employee benefits expense of $1.4 million, partially offset by increases in snow removal costs of $1.1 million, included in net occupancy expense, $0.7 million in data processing and software expense and a debt extinguishment gain of $0.7 million recorded in the fourth quarter of 2023. The $1.6 million decrease in marketing expense was the result of higher costs incurred in the fourth quarter of 2023 related to a targeted customer deposit acquisition program and brand marketing campaigns in growth markets. The $1.4 million decrease in salaries and benefits expense was primarily due to a decrease in healthcare costs and variable incentive expenses, partially offset by an increase in payroll taxes due to the reset of payroll tax caps.
Compared to the first quarter of 2023, excluding the FultonFirst implementation costs and loss on asset disposals of $6.3 million discussed above, non-interest expense increased $11.7 million, or 7.3%. The increase was primarily due to increases of $6.0 million in salaries and employee benefits expense, $1.9 million in data processing and software expense primarily due to technology investments made in 2023, $1.7 million in net occupancy expense driven by snow removal costs, $1.3 million in FDIC insurance, which includes the $1.0 million special assessment charge noted above, and $0.7 million in other outside services expense. The $6.0 million increase in salaries and benefits expense was primarily due to merit increases and healthcare costs.
Income Tax Expense
For the first quarter of 2024 the effective tax rate was 18.0% in comparison to 18.5% for the full-year of 2023.
Additional information on Fulton is available on the Internet at www.fultonbank.com.
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, 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).
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 and shares data) | |||||
| Three months ended | |||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |
| 2024 | 2023 | 2023 | 2023 | 2023 | |
| Ending Balances | |||||
| Investment securities | |||||
| Net loans | 21,444,483 | 21,351,094 | 21,177,508 | 21,044,685 | 20,670,188 |
| Total assets | 27,642,957 | 27,571,915 | 27,375,177 | 27,403,163 | 27,112,176 |
| Deposits | 21,741,950 | 21,537,623 | 21,421,589 | 21,206,540 | 21,316,584 |
| Shareholders' equity | 2,757,679 | 2,760,139 | 2,566,693 | 2,642,152 | 2,618,998 |
| Average Balances | |||||
| Investment securities | 3,672,844 | 3,665,261 | 3,834,824 | 3,916,130 | 3,964,615 |
| Net loans | 21,370,033 | 21,255,779 | 21,121,277 | 20,866,235 | 20,463,096 |
| Total assets | 27,427,626 | 27,397,671 | 27,377,836 | 27,235,567 | 26,900,653 |
| Deposits | 21,378,754 | 21,476,548 | 21,357,295 | 21,207,143 | 20,574,323 |
| Shareholders' equity | 2,766,945 | 2,618,024 | 2,645,977 | 2,647,464 | 2,613,316 |
| Income Statement | |||||
| Net interest income | 206,937 | 212,006 | 213,842 | 212,852 | 215,587 |
| Provision for credit losses | 10,925 | 9,808 | 9,937 | 9,747 | 24,544 |
| Non-interest income | 57,140 | 59,378 | 55,961 | 60,585 | 51,753 |
| Non-interest expense | 177,600 | 180,552 | 171,020 | 168,018 | 159,616 |
| Income before taxes | 75,552 | 81,024 | 88,846 | 95,672 | 83,180 |
| Net income available to common shareholders | 59,379 | 61,701 | 69,535 | 77,045 | 65,752 |
| Pre-provision net revenue(1) | 94,184 | 100,050 | 102,342 | 106,495 | 108,375 |
| Per Share | |||||
| Net income available to common shareholders (basic) | 0.36 | 0.38 | 0.42 | 0.46 | 0.39 |
| Net income available to common shareholders (diluted) | 0.36 | 0.37 | 0.42 | 0.46 | 0.39 |
| Operating net income available to common shareholders(1) | 0.40 | 0.42 | 0.43 | 0.47 | 0.39 |
| Cash dividends | 0.17 | 0.17 | 0.16 | 0.16 | 0.15 |
| Common shareholders' equity | 15.82 | 15.67 | 14.47 | 14.75 | 14.67 |
| Common shareholders' equity (tangible)(1) | 12.37 | 12.25 | 11.05 | 11.36 | 11.26 |
| Weighted average shares (basic) | 162,706 | 163,975 | 164,566 | 165,854 | 166,605 |
| Weighted average shares (diluted) | 164,520 | 165,650 | 166,023 | 167,191 | 168,401 |
| (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. |
All values are in US Dollars.
| Three months ended | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Asset Quality | |||||||||||||||||||
| Net charge-offs to average loans | 0.16 | % | 0.15 | % | 0.10 | % | 0.04 | % | 0.27 | % | |||||||||
| Non-performing loans to total net loans | 0.73 | % | 0.72 | % | 0.67 | % | 0.70 | % | 0.80 | % | |||||||||
| Non-performing assets to total assets | 0.57 | % | 0.56 | % | 0.52 | % | 0.55 | % | 0.62 | % | |||||||||
| ACL - loans(1) to total loans | 1.39 | % | 1.37 | % | 1.38 | % | 1.37 | % | 1.35 | % | |||||||||
| ACL - loans(1) to non-performing loans | 191 | % | 191 | % | 208 | % | 195 | % | 169 | % | |||||||||
| Profitability | |||||||||||||||||||
| Return on average assets | 0.91 | % | 0.93 | % | 1.04 | % | 1.17 | % | 1.03 | % | |||||||||
| Operating return on average assets(2) | 1.00 | % | 1.03 | % | 1.08 | % | 1.18 | % | 1.04 | % | |||||||||
| Return on average common shareholders' equity | 9.28 | % | 10.09 | % | 11.25 | % | 12.59 | % | 11.02 | % | |||||||||
| Operating return on average common shareholders' equity (tangible)(2) | 13.08 | % | 14.68 | % | 15.17 | % | 16.52 | % | 14.46 | % | |||||||||
| Net interest margin | 3.32 | % | 3.36 | % | 3.40 | % | 3.40 | % | 3.53 | % | |||||||||
| Efficiency ratio(2) | 63.2 | % | 62.0 | % | 61.5 | % | 60.1 | % | 58.5 | % | |||||||||
| Non-interest expense to total average assets | 2.60 | % | 2.61 | % | 2.48 | % | 2.47 | % | 2.41 | % | |||||||||
| Operating non-interest expense to total average assets(2) | 2.49 | % | 2.47 | % | 2.47 | % | 2.46 | % | 2.40 | % | |||||||||
| Capital Ratios(3) | |||||||||||||||||||
| Tangible common equity ratio ("TCE")(2) | 7.4 | % | 7.4 | % | 6.8 | % | 7.0 | % | 7.0 | % | |||||||||
| Tier 1 leverage ratio | 9.4 | % | 9.5 | % | 9.4 | % | 9.3 | % | 9.2 | % | |||||||||
| Common equity Tier 1 capital ratio | 10.2 | % | 10.3 | % | 10.3 | % | 10.1 | % | 9.8 | % | |||||||||
| Tier 1 risk-based capital ratio | 11.0 | % | 11.2 | % | 11.1 | % | 11.0 | % | 10.6 | % | |||||||||
| Total risk-based capital ratio | 13.9 | % | 14.0 | % | 14.0 | % | 13.8 | % | 13.4 | % | |||||||||
| (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<br><br>("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) Regulatory capital ratios as of March 31, 2024 are preliminary estimates and prior periods are actual. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED ENDING BALANCE SHEETS (UNAUDITED) | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 247,581 | $ | 300,343 | $ | 304,042 | $ | 123,779 | $ | 129,003 | |||||||||
| Other interest-earning assets | 231,389 | 373,772 | 222,781 | 505,141 | 545,355 | ||||||||||||||
| Loans held for sale | 10,624 | 15,158 | 20,368 | 14,673 | 6,507 | ||||||||||||||
| Investment securities | 3,783,392 | 3,666,274 | 3,698,601 | 3,867,334 | 3,950,101 | ||||||||||||||
| Net loans | 21,444,483 | 21,351,094 | 21,177,508 | 21,044,685 | 20,670,188 | ||||||||||||||
| Less: ACL - loans(1) | (297,888) | (293,404) | (292,739) | (287,442) | (278,695) | ||||||||||||||
| Loans, net | 21,146,595 | 21,057,690 | 20,884,769 | 20,757,243 | 20,391,493 | ||||||||||||||
| Net premises and equipment | 213,541 | 222,881 | 215,626 | 216,322 | 216,059 | ||||||||||||||
| Accrued interest receivable | 107,089 | 107,972 | 101,624 | 96,991 | 90,267 | ||||||||||||||
| Goodwill and intangible assets | 560,114 | 560,687 | 561,284 | 561,885 | 563,502 | ||||||||||||||
| Other assets | 1,342,632 | 1,267,138 | 1,366,082 | 1,259,795 | 1,219,889 | ||||||||||||||
| Total Assets | $ | 27,642,957 | $ | 27,571,915 | $ | 27,375,177 | $ | 27,403,163 | $ | 27,112,176 | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Deposits | $ | 21,741,950 | $ | 21,537,623 | $ | 21,421,589 | $ | 21,206,540 | $ | 21,316,584 | |||||||||
| Borrowings | 2,296,040 | 2,487,526 | 2,370,112 | 2,719,114 | 2,446,770 | ||||||||||||||
| Other liabilities | 847,288 | 786,627 | 1,016,783 | 835,357 | 729,824 | ||||||||||||||
| Total Liabilities | 24,885,278 | 24,811,776 | 24,808,484 | 24,761,011 | 24,493,178 | ||||||||||||||
| Shareholders' equity | 2,757,679 | 2,760,139 | 2,566,693 | 2,642,152 | 2,618,998 | ||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 27,642,957 | $ | 27,571,915 | $ | 27,375,177 | $ | 27,403,163 | $ | 27,112,176 | |||||||||
| LOANS, DEPOSITS AND BORROWINGS DETAIL: | |||||||||||||||||||
| Loans, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 8,252,117 | $ | 8,127,728 | $ | 8,106,300 | $ | 7,846,861 | $ | 7,746,920 | |||||||||
| Commercial and industrial | 4,467,589 | 4,545,552 | 4,577,334 | 4,599,759 | 4,596,096 | ||||||||||||||
| Real estate - residential mortgage | 5,395,720 | 5,325,923 | 5,279,681 | 5,147,262 | 4,880,919 | ||||||||||||||
| Real estate - home equity | 1,040,335 | 1,047,184 | 1,045,438 | 1,061,891 | 1,074,712 | ||||||||||||||
| Real estate - construction | 1,249,199 | 1,239,075 | 1,078,263 | 1,308,564 | 1,326,754 | ||||||||||||||
| Consumer | 698,421 | 729,318 | 743,976 | 763,530 | 730,775 | ||||||||||||||
| Leases and other loans(2) | 341,102 | 336,314 | 346,516 | 316,818 | 314,012 | ||||||||||||||
| Total Net Loans | $ | 21,444,483 | $ | 21,351,094 | $ | 21,177,508 | $ | 21,044,685 | $ | 20,670,188 | |||||||||
| Deposits, by type: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 5,086,514 | $ | 5,314,094 | $ | 5,575,374 | $ | 5,865,855 | $ | 6,403,484 | |||||||||
| Interest-bearing demand | 5,521,017 | 5,722,695 | 5,757,487 | 5,543,320 | 5,478,237 | ||||||||||||||
| Savings | 6,846,038 | 6,616,901 | 6,707,729 | 6,646,448 | 6,579,806 | ||||||||||||||
| Total demand and savings | 17,453,569 | 17,653,690 | 18,040,590 | 18,055,623 | 18,461,527 | ||||||||||||||
| Brokered | 1,152,427 | 1,144,692 | 941,059 | 949,259 | 960,919 | ||||||||||||||
| Time | 3,135,954 | 2,739,241 | 2,439,940 | 2,201,658 | 1,894,138 | ||||||||||||||
| Total Deposits | $ | 21,741,950 | $ | 21,537,623 | $ | 21,421,589 | $ | 21,206,540 | $ | 21,316,584 | |||||||||
| Borrowings, by type: | |||||||||||||||||||
| Federal funds purchased | $ | — | $ | 240,000 | $ | 544,000 | $ | 555,000 | $ | 525,000 | |||||||||
| Federal Home Loan Bank advances | 900,000 | 1,100,000 | 730,000 | 1,165,000 | 747,000 | ||||||||||||||
| Senior debt and subordinated debt | 535,566 | 535,384 | 540,174 | 539,994 | 539,814 | ||||||||||||||
| Other borrowings | 860,474 | 612,142 | 555,938 | 459,120 | 634,956 | ||||||||||||||
| Total Borrowings | $ | 2,296,040 | $ | 2,487,526 | $ | 2,370,112 | $ | 2,719,114 | $ | 2,446,770 | |||||||||
| (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. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | |||||||||||||||||||
| (dollars in thousands, except per share and share data) | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Net Interest Income: | |||||||||||||||||||
| Interest income | $ | 339,666 | $ | 338,134 | $ | 330,371 | $ | 314,912 | $ | 289,820 | |||||||||
| Interest expense | 132,729 | 126,128 | 116,529 | 102,060 | 74,233 | ||||||||||||||
| Net Interest Income | 206,937 | 212,006 | 213,842 | 212,852 | 215,587 | ||||||||||||||
| Provision for credit losses | 10,925 | 9,808 | 9,937 | 9,747 | 24,544 | ||||||||||||||
| Net Interest Income after Provision | 196,012 | 202,198 | 203,905 | 203,105 | 191,043 | ||||||||||||||
| Non-Interest Income: | |||||||||||||||||||
| Wealth management | 20,155 | 19,388 | 19,413 | 18,678 | 18,062 | ||||||||||||||
| Commercial banking: | |||||||||||||||||||
| Merchant and card | 6,808 | 7,045 | 7,626 | 7,700 | 6,834 | ||||||||||||||
| Cash management | 6,305 | 6,030 | 5,960 | 5,835 | 5,515 | ||||||||||||||
| Capital markets | 2,341 | 4,258 | 2,960 | 6,092 | 2,344 | ||||||||||||||
| Other commercial banking | 3,375 | 3,447 | 3,176 | 3,518 | 2,820 | ||||||||||||||
| Total commercial banking | 18,829 | 20,780 | 19,722 | 23,145 | 17,513 | ||||||||||||||
| Consumer banking: | |||||||||||||||||||
| Card | 6,628 | 6,739 | 6,770 | 6,592 | 6,243 | ||||||||||||||
| Overdraft | 2,786 | 2,991 | 2,996 | 2,696 | 2,733 | ||||||||||||||
| Other consumer banking | 2,254 | 2,357 | 2,407 | 2,432 | 2,241 | ||||||||||||||
| Total consumer banking | 11,668 | 12,087 | 12,173 | 11,720 | 11,217 | ||||||||||||||
| Mortgage banking | 3,090 | 2,288 | 3,190 | 2,940 | 1,970 | ||||||||||||||
| Other | 3,398 | 5,587 | 1,463 | 4,106 | 2,968 | ||||||||||||||
| Non-interest income before investment securities gains (losses) | 57,140 | 60,130 | 55,961 | 60,589 | 51,730 | ||||||||||||||
| Investment securities gains (losses), net | — | (752) | — | (4) | 23 | ||||||||||||||
| Total Non-Interest Income | 57,140 | 59,378 | 55,961 | 60,585 | 51,753 | ||||||||||||||
| Non-Interest Expense: | |||||||||||||||||||
| Salaries and employee benefits | 95,481 | 97,275 | 96,757 | 94,102 | 89,283 | ||||||||||||||
| Data processing and software | 17,661 | 16,985 | 16,914 | 16,776 | 15,796 | ||||||||||||||
| Net occupancy | 16,149 | 14,647 | 14,561 | 14,374 | 14,438 | ||||||||||||||
| Other outside services | 13,283 | 14,670 | 12,094 | 10,834 | 10,126 | ||||||||||||||
| FDIC insurance | 6,104 | 11,138 | 4,738 | 4,895 | 4,795 | ||||||||||||||
| Equipment | 4,040 | 3,995 | 3,475 | 3,530 | 3,389 | ||||||||||||||
| Professional fees | 2,088 | 2,302 | 1,869 | 1,829 | 2,392 | ||||||||||||||
| Marketing | 1,912 | 3,550 | 1,913 | 1,655 | 1,886 | ||||||||||||||
| Intangible amortization | 573 | 597 | 601 | 1,072 | 674 | ||||||||||||||
| Other | 20,309 | 15,393 | 18,098 | 18,951 | 16,837 | ||||||||||||||
| Total Non-Interest Expense | 177,600 | 180,552 | 171,020 | 168,018 | 159,616 | ||||||||||||||
| Income Before Income Taxes | 75,552 | 81,024 | 88,846 | 95,672 | 83,180 | ||||||||||||||
| Income tax expense | 13,611 | 16,761 | 16,749 | 16,065 | 14,866 | ||||||||||||||
| Net Income | 61,941 | 64,263 | 72,097 | 79,607 | 68,314 | ||||||||||||||
| Preferred stock dividends | (2,562) | (2,562) | (2,562) | (2,562) | (2,562) | ||||||||||||||
| Net Income Available to Common Shareholders | $ | 59,379 | $ | 61,701 | $ | 69,535 | $ | 77,045 | $ | 65,752 | |||||||||
| Three months ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | |||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| PER SHARE: | |||||||||||||||||||
| Net income available to common shareholders (basic) | $0.36 | $0.38 | $0.42 | $0.46 | $0.39 | ||||||||||||||
| Net income available to common shareholders (diluted) | $0.36 | $0.37 | $0.42 | $0.46 | $0.39 | ||||||||||||||
| Cash dividends | $0.17 | $0.17 | $0.16 | $0.16 | $0.15 | ||||||||||||||
| Weighted average shares (basic) | 162,706 | 163,975 | 164,566 | 165,854 | 166,605 | ||||||||||||||
| Weighted average shares (diluted) | 164,520 | 165,650 | 166,023 | 167,191 | 168,401 | ||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONDENSED CONSOLIDATED AVERAGE BALANCE SHEET ANALYSIS (UNAUDITED) | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | Average | Yield/ | ||||||||||||||
| Balance | Interest(1) | Rate | Balance | Interest(1) | Rate | Balance | Interest(1) | Rate | |||||||||||
| ASSETS | |||||||||||||||||||
| Interest-earning assets: | |||||||||||||||||||
| Net loans(2) | $ | 21,370,033 | $ | 313,882 | 5.90 | % | $ | 21,255,779 | $ | 311,992 | 5.83 | % | $ | 20,463,096 | $ | 263,065 | 5.21 | % | |
| Investment securities(3) | 3,983,753 | 27,048 | 2.71 | % | 4,120,750 | 27,227 | 2.64 | % | 4,289,643 | 27,522 | 2.60 | % | |||||||
| Other interest-earning assets | 249,079 | 3,328 | 5.36 | % | 267,329 | 3,464 | 5.17 | % | 493,130 | 3,648 | 3.00 | % | |||||||
| Total Interest-Earning Assets | 25,602,865 | 344,258 | 5.40 | % | 25,643,858 | 342,683 | 5.31 | % | 25,245,869 | 294,235 | 4.73 | % | |||||||
| Noninterest-earning assets: | |||||||||||||||||||
| Cash and due from banks | 282,895 | 282,614 | 141,254 | ||||||||||||||||
| Premises and equipment | 223,375 | 219,994 | 223,025 | ||||||||||||||||
| Other assets | 1,614,746 | 1,545,535 | 1,563,806 | ||||||||||||||||
| Less: ACL - loans(4) | (296,255) | (294,330) | (273,301) | ||||||||||||||||
| Total Assets | $ | 27,427,626 | $ | 27,397,671 | $ | 26,900,653 | |||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Interest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | $ | 5,596,725 | $ | 20,500 | 1.47 | % | $ | 5,723,169 | $ | 20,737 | 1.44 | % | $ | 5,326,566 | $ | 8,455 | 0.64 | % | |
| Savings deposits | 6,669,228 | 38,797 | 2.34 | % | 6,682,512 | 38,239 | 2.27 | % | 6,469,468 | 20,535 | 1.29 | % | |||||||
| Brokered deposits | 1,083,382 | 14,655 | 5.44 | % | 1,051,369 | 14,078 | 5.31 | % | 439,670 | 5,173 | 4.77 | % | |||||||
| Time deposits | 2,968,344 | 29,622 | 4.01 | % | 2,579,400 | 23,575 | 3.63 | % | 1,696,878 | 7,458 | 1.78 | % | |||||||
| Total Interest-Bearing Deposits | 16,317,679 | 103,574 | 2.55 | % | 16,036,450 | 96,629 | 2.39 | % | 13,932,582 | 41,621 | 1.21 | % | |||||||
| Borrowings and other interest-bearing liabilities | 2,608,376 | 29,155 | 4.46 | % | 2,541,727 | 29,499 | 4.58 | % | 3,058,684 | 32,613 | 4.32 | % | |||||||
| Total Interest-Bearing Liabilities | 18,926,055 | 132,729 | 2.82 | % | 18,578,177 | 126,128 | 2.69 | % | 16,991,266 | 74,234 | 1.78 | % | |||||||
| Noninterest-bearing liabilities: | |||||||||||||||||||
| Demand deposits | 5,061,075 | 5,440,098 | 6,641,741 | ||||||||||||||||
| Other noninterest-bearing liabilities | 673,551 | 761,372 | 654,330 | ||||||||||||||||
| Total Liabilities | 24,660,681 | 24,779,647 | 24,287,337 | ||||||||||||||||
| Total Deposits | 21,378,754 | 1.95 | % | 21,476,548 | 1.79 | % | 20,574,323 | 0.82 | % | ||||||||||
| Total interest-bearing liabilities and non-interest bearing deposits | 23,987,130 | 2.22 | % | 24,018,275 | 2.08 | % | 23,633,007 | 1.27 | % | ||||||||||
| Shareholders' equity | 2,766,945 | 2,618,024 | 2,613,316 | ||||||||||||||||
| Total Liabilities and Shareholders' Equity | $ | 27,427,626 | $ | 27,397,671 | $ | 26,900,653 | |||||||||||||
| Net interest income/net interest margin (fully taxable equivalent) | 211,529 | 3.32 | % | 216,555 | 3.36 | % | 220,001 | 3.53 | % | ||||||||||
| Tax equivalent adjustment | (4,592) | (4,549) | (4,414) | ||||||||||||||||
| Net Interest Income | $ | 206,937 | $ | 212,006 | $ | 215,587 | |||||||||||||
| (1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. | |||||||||||||||||||
| (2) Average balances include non-performing loans. | |||||||||||||||||||
| (3) Average balances include amortized historical cost for available for sale ("AFS") securities; the related unrealized holding gains (losses) are included in other assets. | |||||||||||||||||||
| (4) ACL - loans relates to the ACL for net loans and does not include the ACL related to OBS credit exposures, which is included in other liabilities. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| AVERAGE LOANS, DEPOSITS AND BORROWINGS DETAIL (UNAUDITED): | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Loans, by type: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 8,166,018 | $ | 8,090,627 | $ | 7,912,801 | $ | 7,775,436 | $ | 7,720,975 | |||||||||
| Commercial and industrial | 4,517,179 | 4,579,441 | 4,611,376 | 4,629,919 | 4,565,923 | ||||||||||||||
| Real estate - residential mortgage | 5,353,905 | 5,303,632 | 5,209,105 | 5,008,295 | 4,790,868 | ||||||||||||||
| Real estate - home equity | 1,039,321 | 1,043,753 | 1,045,806 | 1,066,615 | 1,086,032 | ||||||||||||||
| Real estate - construction | 1,240,640 | 1,153,601 | 1,254,577 | 1,306,286 | 1,276,145 | ||||||||||||||
| Consumer | 721,523 | 746,011 | 761,273 | 763,407 | 721,248 | ||||||||||||||
| Leases and other loans(1) | 331,447 | 338,714 | 326,339 | 316,277 | 301,905 | ||||||||||||||
| Total Net Loans | $ | 21,370,033 | $ | 21,255,779 | $ | 21,121,277 | $ | 20,866,235 | $ | 20,463,096 | |||||||||
| Deposits, by type: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 5,061,075 | $ | 5,440,098 | $ | 5,672,411 | $ | 6,021,091 | $ | 6,641,741 | |||||||||
| Interest-bearing demand | 5,596,725 | 5,723,169 | 5,740,229 | 5,535,669 | 5,326,566 | ||||||||||||||
| Savings | 6,669,228 | 6,682,512 | 6,676,792 | 6,632,572 | 6,469,468 | ||||||||||||||
| Total demand and savings | 17,327,028 | 17,845,779 | 18,089,432 | 18,189,332 | 18,437,775 | ||||||||||||||
| Brokered | 1,083,382 | 1,051,369 | 937,657 | 954,773 | 439,670 | ||||||||||||||
| Time | 2,968,344 | 2,579,400 | 2,330,206 | 2,063,038 | 1,696,878 | ||||||||||||||
| Total Deposits | $ | 21,378,754 | $ | 21,476,548 | $ | 21,357,295 | $ | 21,207,143 | $ | 20,574,323 | |||||||||
| Borrowings, by type: | |||||||||||||||||||
| Federal funds purchased | $ | 173,659 | $ | 446,707 | $ | 634,163 | $ | 679,401 | $ | 505,142 | |||||||||
| Federal Home Loan Bank advances | 902,890 | 760,087 | 793,098 | 880,811 | 1,261,589 | ||||||||||||||
| Senior debt and subordinated debt | 535,479 | 539,186 | 540,086 | 539,906 | 539,726 | ||||||||||||||
| Other borrowings and other interest-bearing liabilities | 996,348 | 795,747 | 723,740 | 690,742 | 752,227 | ||||||||||||||
| Total Borrowings | $ | 2,608,376 | $ | 2,541,727 | $ | 2,691,087 | $ | 2,790,860 | $ | 3,058,684 | |||||||||
| (1) Includes equipment lease financing, overdraft and net origination fees and costs. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| ASSET QUALITY INFORMATION (UNAUDITED) | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Allowance for credit losses related to net loans: | |||||||||||||||||||
| Balance at beginning of period | $ | 293,404 | $ | 292,739 | $ | 287,442 | $ | 278,695 | $ | 269,366 | |||||||||
| Loans charged off: | |||||||||||||||||||
| Real estate - commercial mortgage | (26) | (3,547) | (860) | (230) | (13,362) | ||||||||||||||
| Commercial and industrial | (7,632) | (3,397) | (3,220) | (2,017) | (612) | ||||||||||||||
| Real estate - residential mortgage | (251) | — | — | (62) | — | ||||||||||||||
| Consumer and home equity | (2,238) | (2,192) | (1,803) | (1,313) | (2,206) | ||||||||||||||
| Real estate - construction | — | — | — | — | — | ||||||||||||||
| Leases and other loans(1) | (805) | (1,096) | (1,396) | (1,165) | (723) | ||||||||||||||
| Total loans charged off | (10,952) | (10,232) | (7,279) | (4,787) | (16,903) | ||||||||||||||
| Recoveries of loans previously charged off: | |||||||||||||||||||
| Real estate - commercial mortgage | 152 | 160 | 101 | 29 | 786 | ||||||||||||||
| Commercial and industrial | 1,248 | 779 | 620 | 988 | 1,086 | ||||||||||||||
| Real estate - residential mortgage | 116 | 278 | 37 | 58 | 48 | ||||||||||||||
| Consumer and home equity | 676 | 555 | 1,023 | 959 | 661 | ||||||||||||||
| Real estate - construction | — | 87 | — | 569 | 202 | ||||||||||||||
| Leases and other loans(1) | 162 | 374 | 400 | 213 | 116 | ||||||||||||||
| Recoveries of loans previously charged off | 2,354 | 2,233 | 2,181 | 2,816 | 2,899 | ||||||||||||||
| Net loans charged off | (8,598) | (7,999) | (5,098) | (1,971) | (14,004) | ||||||||||||||
| Provision for credit losses | 13,082 | 8,664 | 10,395 | 10,718 | 23,333 | ||||||||||||||
| Balance at end of period | $ | 297,888 | $ | 293,404 | $ | 292,739 | $ | 287,442 | $ | 278,695 | |||||||||
| Net charge-offs to average loans | 0.16 | % | 0.15 | % | 0.10 | % | 0.04 | % | 0.27 | % | |||||||||
| Provision for credit losses related to OBS Credit Exposures | |||||||||||||||||||
| Provision for credit losses | $ | (2,157) | $ | 1,144 | $ | (458) | $ | (971) | $ | 1,211 | |||||||||
| NON-PERFORMING ASSETS: | |||||||||||||||||||
| Non-accrual loans | $ | 129,628 | $ | 121,620 | $ | 113,022 | $ | 123,280 | $ | 134,303 | |||||||||
| Loans 90 days past due and accruing | 26,521 | 31,721 | 27,962 | 24,415 | 30,336 | ||||||||||||||
| Total non-performing loans | 156,149 | 153,341 | 140,984 | 147,695 | 164,639 | ||||||||||||||
| Other real estate owned | 277 | 896 | 2,549 | 3,881 | 3,304 | ||||||||||||||
| Total non-performing assets | $ | 156,426 | $ | 154,237 | $ | 143,533 | $ | 151,576 | $ | 167,943 | |||||||||
| NON-PERFORMING LOANS, BY TYPE: | |||||||||||||||||||
| Real estate - commercial mortgage | $ | 47,891 | $ | 46,527 | $ | 44,058 | $ | 55,048 | $ | 61,322 | |||||||||
| Commercial and industrial | 44,118 | 41,020 | 33,365 | 30,588 | 33,555 | ||||||||||||||
| Real estate - residential mortgage | 40,685 | 42,029 | 40,560 | 39,157 | 46,576 | ||||||||||||||
| Consumer and home equity | 10,172 | 10,878 | 11,580 | 10,469 | 8,983 | ||||||||||||||
| Real estate - construction | 3,148 | 2,876 | 677 | 1,099 | 1,509 | ||||||||||||||
| Leases and other loans(1) | 10,135 | 10,011 | 10,744 | 11,334 | 12,694 | ||||||||||||||
| Total non-performing loans | $ | 156,149 | $ | 153,341 | $ | 140,984 | $ | 147,695 | $ | 164,639 | |||||||||
| (1) Includes equipment lease financing, overdraft and net origination fees and costs. | |||||||||||||||||||
| FULTON FINANCIAL CORPORATION | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) | |||||||||||||||||||
| (dollars in thousands, except per share and 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 | |||||||||||||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Operating net income available to common shareholders | |||||||||||||||||||
| Net income available to common shareholders | $ | 59,379 | $ | 61,701 | $ | 69,535 | $ | 77,045 | $ | 65,752 | |||||||||
| Plus: Core deposit intangible amortization | 441 | 441 | 441 | 912 | 514 | ||||||||||||||
| Plus: Interest rate derivative transition valuation(1) | (151) | (1,102) | 2,958 | — | — | ||||||||||||||
| Plus: FDIC special assessment | 956 | 6,494 | — | — | — | ||||||||||||||
| Plus: FultonFirst implementation and asset disposals | 6,329 | 3,197 | — | — | — | ||||||||||||||
| Less: Tax impact of adjustments | (1,591) | (1,896) | (714) | (192) | (108) | ||||||||||||||
| Operating net income available to common shareholders (numerator) | $ | 65,363 | $ | 68,835 | $ | 72,220 | $ | 77,765 | $ | 66,158 | |||||||||
| Weighted average shares (diluted) (denominator) | 164,520 | 165,650 | 166,023 | 167,191 | 168,401 | ||||||||||||||
| Operating net income available to common shareholders, per share (diluted) | $ | 0.40 | $ | 0.42 | $ | 0.43 | $ | 0.47 | $ | 0.39 | |||||||||
| Common shareholders' equity (tangible), per share | |||||||||||||||||||
| Shareholders' equity | $ | 2,757,679 | $ | 2,760,139 | $ | 2,566,693 | $ | 2,642,152 | $ | 2,618,998 | |||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | ||||||||||||||
| Less: Goodwill and intangible assets | (560,114) | (560,687) | (561,284) | (561,885) | (563,502) | ||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 2,004,687 | $ | 2,006,574 | $ | 1,812,531 | $ | 1,887,389 | $ | 1,862,618 | |||||||||
| Shares outstanding, end of period (denominator) | 162,087 | 163,801 | 164,084 | 166,097 | 165,396 | ||||||||||||||
| Common shareholders' equity (tangible), per share | $ | 12.37 | $ | 12.25 | $ | 11.05 | $ | 11.36 | $ | 11.26 | |||||||||
| Operating return on average assets | |||||||||||||||||||
| Net income | $ | 61,941 | $ | 64,263 | $ | 72,097 | $ | 79,607 | $ | 68,314 | |||||||||
| Plus: Core deposit intangible amortization | 441 | 441 | 441 | 912 | 514 | ||||||||||||||
| Plus: Interest rate derivative transition valuation(1) | (151) | (1,102) | 2,958 | — | — | ||||||||||||||
| Plus: FDIC special assessment | 956 | 6,494 | — | — | — | ||||||||||||||
| Plus: FultonFirst implementation and asset disposals | 6,329 | 3,197 | — | — | — | ||||||||||||||
| Less: Tax impact of adjustments | (1,591) | (1,896) | (714) | (192) | (108) | ||||||||||||||
| Operating net income (numerator) | $ | 67,925 | $ | 71,397 | $ | 74,782 | $ | 80,327 | $ | 68,720 | |||||||||
| Total average assets | $ | 27,427,626 | $ | 27,397,671 | $ | 27,377,836 | $ | 27,235,567 | $ | 26,900,653 | |||||||||
| Less: Average net core deposit intangible | (4,666) | (5,106) | (5,548) | (6,417) | (6,937) | ||||||||||||||
| Total operating average assets (denominator) | $ | 27,422,960 | $ | 27,392,565 | $ | 27,372,288 | $ | 27,229,150 | $ | 26,893,716 | |||||||||
| Operating return on average assets | 1.00% | 1.03% | 1.08% | 1.18% | 1.04% | ||||||||||||||
| (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Operating return on average common shareholders' equity (tangible) | |||||||||||||||||||
| Net income available to common shareholders | $ | 59,379 | $ | 61,701 | $ | 69,535 | $ | 77,045 | $ | 65,752 | |||||||||
| Plus: Intangible amortization | 573 | 597 | 601 | 1,072 | 674 | ||||||||||||||
| Plus: Interest rate derivative transition valuation(1) | (151) | (1,102) | 2,958 | — | — | ||||||||||||||
| Plus: FDIC special assessment | 956 | 6,494 | — | — | — | ||||||||||||||
| Plus: FultonFirst implementation and asset disposals | 6,329 | 3,197 | — | — | — | ||||||||||||||
| Less: Tax impact of adjustments | (1,618) | (1,929) | (747) | (225) | (142) | ||||||||||||||
| Adjusted net income available to common shareholders (numerator) | $ | 65,468 | $ | 68,958 | $ | 72,347 | $ | 77,892 | $ | 66,284 | |||||||||
| Average shareholders' equity | $ | 2,766,945 | $ | 2,618,024 | $ | 2,645,977 | $ | 2,647,464 | $ | 2,613,316 | |||||||||
| Less: Average preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | ||||||||||||||
| Less: Average goodwill and intangible assets | (560,393) | (560,977) | (561,578) | (563,146) | (561,744) | ||||||||||||||
| Average tangible common shareholders' equity (denominator) | $ | 2,013,674 | $ | 1,864,169 | $ | 1,891,521 | $ | 1,891,440 | $ | 1,858,694 | |||||||||
| Operating return on average common shareholders' equity (tangible) | 13.08% | 14.68% | 15.17% | 16.52% | 14.46% | ||||||||||||||
| Tangible common equity to tangible assets (TCE Ratio) | |||||||||||||||||||
| Shareholders' equity | $ | 2,757,679 | $ | 2,760,139 | $ | 2,566,693 | $ | 2,642,152 | $ | 2,618,998 | |||||||||
| Less: Preferred stock | (192,878) | (192,878) | (192,878) | (192,878) | (192,878) | ||||||||||||||
| Less: Goodwill and intangible assets | (560,114) | (560,687) | (561,284) | (561,885) | (563,502) | ||||||||||||||
| Tangible common shareholders' equity (numerator) | $ | 2,004,687 | $ | 2,006,574 | $ | 1,812,531 | $ | 1,887,389 | $ | 1,862,618 | |||||||||
| Total assets | $ | 27,642,957 | $ | 27,571,915 | $ | 27,375,177 | $ | 27,403,163 | $ | 27,112,176 | |||||||||
| Less: Goodwill and intangible assets | (560,114) | (560,687) | (561,284) | (561,885) | (563,502) | ||||||||||||||
| Total tangible assets (denominator) | $ | 27,082,843 | $ | 27,011,228 | $ | 26,813,893 | $ | 26,841,278 | $ | 26,548,674 | |||||||||
| Tangible common equity to tangible assets | 7.40% | 7.43% | 6.76% | 7.03% | 7.02% | ||||||||||||||
| Efficiency ratio | |||||||||||||||||||
| Non-interest expense | $ | 177,600 | $ | 180,552 | $ | 171,020 | $ | 168,018 | $ | 159,616 | |||||||||
| Less: FDIC special assessment | (956) | (6,494) | — | — | — | ||||||||||||||
| Less: FultonFirst implementation and asset disposals | (6,329) | (3,197) | — | — | — | ||||||||||||||
| Less: Intangible amortization | (573) | (597) | (601) | (1,072) | (674) | ||||||||||||||
| Less: Debt extinguishment | — | 720 | — | — | — | ||||||||||||||
| Non-interest expense (numerator) | $ | 169,742 | $ | 170,984 | $ | 170,419 | $ | 166,946 | $ | 158,942 | |||||||||
| Net interest income | $ | 206,937 | $ | 212,006 | $ | 213,842 | $ | 212,852 | $ | 215,587 | |||||||||
| Tax equivalent adjustment | 4,592 | 4,549 | 4,442 | 4,405 | 4,414 | ||||||||||||||
| Plus: Total non-interest income | 57,140 | 59,378 | 55,961 | 60,585 | 51,753 | ||||||||||||||
| Plus: Interest rate derivative transition valuation(1) | (151) | (1,102) | 2,958 | — | — | ||||||||||||||
| Less: Investment securities (gains) losses, net | — | 752 | — | 4 | (23) | ||||||||||||||
| Total revenue (denominator) | $ | 268,518 | $ | 275,583 | $ | 277,203 | $ | 277,846 | $ | 271,731 | |||||||||
| Efficiency ratio | 63.2% | 62.0% | 61.5% | 60.1% | 58.5% | ||||||||||||||
| (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program. | |||||||||||||||||||
| Three months ended | |||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||
| Mar 31 | Dec 31 | Sep 30 | Jun 30 | Mar 31 | |||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||||||
| Operating non-interest expense to total average assets | |||||||||||||||||||
| Non-interest expense | $ | 177,600 | $ | 180,552 | $ | 171,020 | $ | 168,018 | $ | 159,616 | |||||||||
| Less: Intangible amortization | (573) | (597) | (601) | (1,072) | (674) | ||||||||||||||
| Less: FDIC special assessment | (956) | (6,494) | — | — | — | ||||||||||||||
| Less: FultonFirst implementation and asset disposals | (6,329) | (3,197) | — | — | — | ||||||||||||||
| Non-interest expense (numerator) | $ | 169,742 | $ | 170,264 | $ | 170,419 | $ | 166,946 | $ | 158,942 | |||||||||
| Total average assets (denominator) | $ | 27,427,626 | $ | 27,397,671 | $ | 27,377,836 | $ | 27,235,567 | $ | 26,900,653 | |||||||||
| Operating non-interest expenses to total average assets | 2.49% | 2.47% | 2.47% | 2.46% | 2.40% | ||||||||||||||
| Pre-provision net revenue | |||||||||||||||||||
| Net interest income | $ | 206,937 | $ | 212,006 | $ | 213,842 | $ | 212,852 | $ | 215,587 | |||||||||
| Non-interest income | 57,140 | 59,378 | 55,961 | 60,585 | 51,753 | ||||||||||||||
| Plus: Interest rate derivative transition valuation(1) | (151) | (1,102) | 2,958 | — | — | ||||||||||||||
| Less: Investment securities (gains) losses, net | — | 752 | — | 4 | (23) | ||||||||||||||
| Total revenue | $ | 263,926 | $ | 271,034 | $ | 272,761 | $ | 273,441 | $ | 267,317 | |||||||||
| Non-interest expense | $ | 177,600 | $ | 180,552 | $ | 171,020 | $ | 168,018 | $ | 159,616 | |||||||||
| Less: Intangible amortization | (573) | (597) | (601) | (1,072) | (674) | ||||||||||||||
| Less: FDIC special assessment | (956) | (6,494) | — | — | — | ||||||||||||||
| Less: FultonFirst implementation and asset disposals | (6,329) | (3,197) | — | — | — | ||||||||||||||
| Less: Debt extinguishment | — | 720 | — | — | — | ||||||||||||||
| Total non-interest expense | $ | 169,742 | $ | 170,984 | $ | 170,419 | $ | 166,946 | $ | 158,942 | |||||||||
| Pre-provision net revenue | $ | 94,184 | $ | 100,050 | $ | 102,342 | $ | 106,495 | $ | 108,375 | |||||||||
| (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. |
16
esslide-consolidated1q24
FIRST QUARTER 2024 RESULTS NASDAQ: FULT Data as of or for the period ended March 31, 2024 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 "2024 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, 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. 2
3 A STABLE DEPOSIT PORTFOLIO THAT REMAINS GRANULAR, TENURED AND DIVERSIFIED WITH SIGNIFICANT LIQUIDITY COVERAGE Deposit Mix By Customer (March 31, 2024) Deposit Portfolio Highlights(1) 755,000 deposit accounts $28,820 average deposit account balance 10+ years average deposit account age 24% estimated uninsured deposits 243% coverage of estimated uninsured deposits Deposit Mix By Product(2) (1) As of March 31, 2024. Estimated uninsured deposits net of collateralized municipal deposits and inter-company deposits. For the calculation of the coverage of estimated uninsured deposits, please refer to the slide titled “Liquidity Profile.” (2) Deposit balances are ending balances. (dollars in millions)
THE LOAN PORTFOLIO IS DIVERSIFIED AND GRANULAR, WITH LOW OFFICE CONCENTRATION AT 3% OF LOANS 4 Office Only Profile • $694 million in office loan commitments • $662 million in office loans outstanding • representing 3% of total loans • Average loan size is $2.2 million • Weighted average loan-to-value(1) (“LTV”) ratio of 60% • Weighted average debt service coverage ratio (“DSCR”) of 1.34x • 77% of loans with full recourse; 63% LTV; 1.26x DSCR • 23% of loans non-recourse; 52% LTV; 1.60x DSCR • Eight relationships over $20 million, totaling $196 million in commitments, including: • Three relationships in central business districts • $146 million in commitments located in central business districts • Classification • 37% Class A • 23% Class B • 5% Class C • 35% Not Classified Total Loan Portfolio (March 31, 2024) (1) LTV as of most recent appraisal.
$63 $161 $93 $204 $173 204 75 13 16 7 Under $1MM $1MM - $5MM $5MM - $10MM $10MM - $20MM Greater than $20MM Commitments (in millions) Number of Loans THE OFFICE PORTFOLIO HAS BEEN ORIGINATED OVER TIME, WILL MATURE OVER TIME, AND REMAINS GRANULAR AND DIVERSE 5 Originated Over Time Maturing Over Time Granular Loan Portfolio Geographically Diverse by MSA(1) (1) Metropolitan Statistical Areas or “MSA” titled in short name for presentation purposes. (2) The Corporation’s presence in the New York-Newark-Jersey City MSA extends from central New Jersey into northern New Jersey, and includes zero office loans in the State of New York component of the New York MSA. (2)
MULTI-FAMILY LOANS REPRESENT 7% OF THE TOTAL LOAN PORTFOLIO WITH A SMALL AVERAGE LOAN SIZE 6 (1) LTV as of most recent appraisal. Multi-Family Profile • $2.1 billion in multi-family loan commitments • $1.6 billion in multi-family loans outstanding • Average loan size is $3.8 million • Weighted average LTV(1) ratio of 59% • Weighted Average DSCR of 1.26x • 89% of loans with recourse • 39% construction, 61% stabilized • Classification o 48% Class A o 14% Class B o 3% Class C o 35% Not Classified Total Loan Portfolio (March 31, 2024)
$253 $255 $420 $1,199 43 48 66 408 2024 2025 2026 2027 & after Commitments (in millions) Number of Loans $109 $311 $395 $449 $864 319 125 55 33 33 Under $1MM $1MM - $5MM $5MM - $10MM $10MM - $20MM Greater than $20MM Commitments (in millions) Number of Loans $117 $122 $193 $237 $595 $863 $6.9 $5.8 $3.4 $2.7 $3.1 $4.6 53% 60% 58% 67% 59% 58% Virginia Beach Baltimore New York Lancaster Other MSAs Philadelphia Commitments (in millions) Avg Loan Size (in millions) Wtd Avg LTV THE MULTI-FAMILY PORTFOLIO HAS BEEN RECENTLY ORIGINATED AND APPRAISED, HAS A LONG-DATED MATURITY HORIZON AND IS ALSO GEOGRAPHICALLY DIVERSE 7 (1) The Corporation’s presence in the New York-Newark-Jersey City MSA extends from central New Jersey into northern New Jersey and includes one multi-family loan in New York City component of the New York MSA. Recently Originated and Appraised Maturing Over Time Diversified by Size Diversified by Geographical MSA (1)
(1) Non-GAAP financial measure. Please refer to the calculation and management’s reason for using this measure on the slide titled “Non-GAAP Reconciliation” at the end of this presentation. 8 1Q24 4Q23 1Q23 (dollars in thousands, except per-share data) Net interest income $206,937 $212,006 $215,587 Provision for credit losses 10,925 9,808 24,544 Non-interest income 57,140 60,130 51,730 Securities gains (losses) — (752) 23 Non-interest expense 177,600 180,552 159,616 Income before income taxes 75,552 81,024 83,180 Income taxes 13,611 16,761 14,866 Net income 61,941 64,263 68,314 Preferred stock dividends (2,562) (2,562) (2,562) Net income available to common shareholders $59,379 $61,701 $65,752 Net income available to common shareholders, per share (diluted) $0.36 $0.37 $0.39 Operating net income available to common shareholders, per share (diluted)(1) $0.40 $0.42 $0.39 ROAA 0.91% 0.93% 1.03% Operating ROAA(1) 1.00% 1.03% 1.04% ROAE 9.28% 10.09% 11.02% Operating ROAE (tangible)(1) 13.08% 14.68% 14.46% Efficiency ratio(1) 63.2% 62.0% 58.5%
9 NONINTEREST-BEARING DEPOSIT TRENDS • Growth in the Corporation’s commercial banking business, as well as the historically low levels of interest rates for much of the post-2008 period, led to a generally increasing trend in the percentage of noninterest-bearing deposits. • Prior to 2008, noninterest-bearing deposits averaged 15%-20% of total deposits. As of March 31, 2024, noninterest-bearing deposits were 23.4% of total deposits down from a peak of 35% in June 2022. • Deposit growth, including growth in noninterest-bearing deposits, remains a key component of the Corporation’s relationship banking strategy. Source: S&P Global Market Intelligence, Federal Reserve Bank of New York and Board of Governors of the Federal Reserve System (US); Corporation’s reported results for NIM and percentage of noninterest-bearing deposits at March 31,2024. % Noninterest-Bearing Deposits, Net Interest Margin (“NIM”) and Fed Funds Effective Rate
• NIM was 3.32% in the first quarter of 2024, declining four basis points compared to the fourth quarter of 2023. • Loan yield improved by seven basis points during the first quarter of 2024, increasing to 5.90% compared to 5.83% in the fourth quarter of 2023. Loan yields have benefited from new originations and higher rates. • Total cost of deposits was 1.95% for the first quarter of 2024, an increase of 16 basis points compared to the fourth quarter of 2023, due to continued migration into interest-bearing deposit products. 10 NET INTEREST INCOME AND NIM 1Q24 Highlights Net Interest Income & NIM Average Deposits and Borrowings & Other and Cost of Funds Average Interest-Earning Assets & Yields (dollars in millions) (dollars in billions) (dollars in billions)
11 ASSET QUALITY Provision for Credit Losses Non-Performing Loans (“NPLs”) & NPLs to Loans Net Charge-offs (“NCOs”) and NCOs to Average Loans ACL(1) to NPLs & Loans (1) The allowance for credit losses (“ACL”) relates specifically to “Loans, net of unearned income” and does not include reserves related to off-balance sheet credit exposures.
12 NON-INTEREST INCOME(1) Non-interest Income (percentage of total non-interest income, three months ended March 31, 2024) (1) Excluding investment securities gains. Decreases due to: • $2.0 million decline in commercial customer swap fees • Other fee income attributable to the valuation of certain equity method investments Increases due to: • Record wealth management income • Gain on sale of mortgage loans on solid originations and spreads 1Q24 4Q23 Change Wealth Management 20,155$ 19,388$ 767$ Commercial Banking 18,829 20,780 (1,951) Consumer Banking 11,668 12,087 (419) Mortgage Banking 3,090 2,288 802 Other 3,398 5,587 (2,189) Total 57,140$ 60,130$ (2,990)$ (dollars in thousands)
13 NON-INTEREST EXPENSE Non-interest Expense (percentage of total non-interest expense, three months ended March 31, 2024) Decreases primarily due to: • $1.0 million Federal Deposit Insurance Corporation special assessment in 1Q24 compared to $6.5 million in 4Q23 • Reductions in incentive compensation accruals Increases primarily due to: • $3.6 million loss due to closure of financial centers • $2.5 million consulting expenses • $0.2 million in severance expense 1Q24 4Q23 Change Salaries and employee benefits 95,481$ 97,275$ (1,794)$ Data processing and software 17,661 16,985 676 Net Occupancy 16,149 14,647 1,502 Other outside services 13,283 14,670 (1,387) FDIC Insurance 6,104 11,138 (5,034) Equipment 4,040 3,995 45 Marketing 1,912 3,550 (1,638) Other 22,970 18,292 4,678 Total 177,600$ 180,552$ (2,952)$ (dollars in thousands)
14 (1) Regulatory capital ratios and excess capital amounts as of March 31, 2024 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. $1,181 $581 $730 $790 (as of March 31, 2024) (dollars in millions) (2)
Estimated Uninsured Deposits March 31, 2024 Total Deposits 21,742$ Estimated Uninsured Deposits 7,070$ Estimated Uninsured Deposits to Total Deposits 33% Estimated Uninsured Deposits 7,070$ Less: Collateralized Municipal Deposits (1,930)$ Net Estimated Uninsured Deposits (4) 5,140$ Net Estimated Uninsured Deposits to Total Deposits 24% Committed Liquidity to Net Estimated Uninsured Deposits 143% Available Liquidity to Net Estimated Uninsured Deposits 243% Available Liquidity March 31, 2024 Cash On-Hand (1) 147$ Federal Reserve Capacity 1,231 Total Available @ Federal Reserve 1,231$ FHLB Borrowing Capacity 9,359 Advances (2) (905) Letters of Credit (2,359) Total Available @ FHLB 6,095$ Total Committed Liquidity 7,326$ Fed Funds Lines 2,556 Outstanding Net Fed Funds - Total Fed Funds Lines Available 2,556$ Brokered Deposit Capacity (3) 3,603 Brokered & Wholesale Deposits (1,152) Total Brokered Deposit Availability 2,451$ Total Uncommitted Availability Liquidity 5,007$ Total Available Liquidity 12,480$ 15 LIQUIDITY PROFILE (1) Includes cash at the FHLB and Federal Reserve and vault cash for liquidity purposes only. (2) Includes accrued interest, fees, and other adjustments. (3) Brokered deposit availability is based upon internal policy limit. (4) Net estimated uninsured deposits are net of collateralized municipal deposits and inter-company deposits. • Cash On-Hand typically ranges between $50 - $100 million • Total committed and available liquidity meaningfully exceeds net estimated uninsured deposits (dollars in thousands)
2024 OUTLOOK 16 Net interest income: $790 - $820 million(1) Provision for credit losses: $45 - $65 million Non-interest income: $235 - $250 million(2) Non-interest expense: $670 - $690(3) Effective tax rate: 17% - 18% (1) Assumes Fed Funds Rate decreases of 75 basis points in the second half of 2024 (2) Excludes investment securities gains and losses (3) Excludes implementation costs associated with the FultonFirst initiative
17 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, except per share and share data) Mar 31 Dec 31 Mar 31 2024 2023 2022 Operating net income available to common shareholders Net income available to common shareholders $59,379 $61,701 $65,752 Plus: Core deposit intangible amortization 441 441 514 Plus: Interest rate derivative transition valuation(1) (151) (1,102) — Plus: FDIC special assessment 956 6,494 — Plus: FultonFirst implementation and asset disposals 6,329 3,197 — Less: Tax impact of adjustments (1,591) (1,896) (108) Operating net income available to common shareholders (numerator) $65,363 $68,835 $66,158 Weighted average shares (diluted) (denominator) 164,520 165,650 168,401 Operating net income available to common shareholders, per share (diluted) $0.40 $0.42 $0.39 (1) Resulting from the reference rate transition from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") in the Corporation's commercial customer interest rate swap program.
18 Three months ended (dollars in thousands) Mar 31 Dec 31 Mar 31 2024 2023 2023 Operating return on average assets Net income $61,941 $64,263 $68,314 Plus: Core deposit intangible amortization 441 441 514 Plus: Interest rate derivative transition valuation(1) (151) (1,102) — Plus: FDIC special assessment 956 6,494 — Plus: FultonFirst implementation and asset disposals 6,329 3,197 — Less: Tax impact of adjustments (1,591) (1,896) (108) Operating net income (numerator) $67,925 $71,397 $68,720 Total average assets $27,427,626 $27,397,671 $26,900,653 Less: Average net core deposit intangible (4,666) (5,106) (6,937) Total average operating assets (denominator) $27,422,960 $27,392,565 $26,893,716 Operating return on average assets 1.00 % 1.03 % 1.04 % (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
19 Three months ended (dollars in thousands) Mar 31 Dec 31 Mar 31 2024 2023 2023 Operating return on average common shareholders' equity (tangible) Net income available to common shareholders $59,379 $61,701 $65,752 Plus: Intangible amortization 573 597 674 Plus: Interest rate derivative transition valuation(1) (151) (1,102) — Plus: FDIC special assessment 956 6,494 — Plus: FultonFirst implementation and asset disposals 6,329 3,197 — Less: Tax impact of adjustments (1,618) (1,929) (142) Adjusted net income available to common shareholders (numerator) $65,468 $68,958 $66,284 Average shareholders' equity $2,766,945 $2,618,024 $2,613,316 Less: Average preferred stock (192,878) (192,878) (192,878) Less: Average goodwill and intangible assets (560,393) (560,977) (561,744) Average tangible common shareholders' equity (denominator) $2,013,674 $1,864,169 $1,858,694 Operating return on average common shareholders' equity (tangible) 13.08 % 14.68 % 14.46 % (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.
20 (dollars in thousands) Three months ended Mar 31 Dec 31 Mar 31 Efficiency ratio 2024 2023 2023 Non-interest expense $177,600 $180,552 $159,616 Less: Intangible amortization (573) (597) (674) Less: FDIC special assessment (956) (6,494) — Less: FultonFirst implementation and asset disposals (6,329) (3,197) — Less: Debt extinguishment — 720 — Non-interest expense (numerator) $169,742 $170,984 $158,942 Net interest income $206,937 $212,006 $215,587 Tax equivalent adjustment 4,592 4,549 4,414 Plus: Total non-interest income 57,140 59,378 51,753 Plus: Interest rate derivative transition valuation(1) (151) (1,102) — Less: Investment securities (gains) losses, net — 752 (23) Total revenue (denominator) $268,518 $275,583 $271,731 Efficiency ratio 63.2% 62.0% 58.5% (1) Resulting from the reference rate transition from LIBOR to SOFR in the Corporation's commercial customer interest rate swap program.