Fulton Financial Corporation Q4 FY2024 earnings call

• Fourth quarter and year results driven by team effort, with company reaching over 750,000 customers and $1.2 billion total revenue (record).
• Completed and integrated Republic transaction, made progress on FultonFirst transformation to simplify operating model.
• Strong deposit growth: Legacy Fulton deposits up $878M (4.1%), total including Republic up $4.6B (21.3%). Strong loan growth: Legacy Fulton loans up $316M (1.5%), total including Republic up $2.7B (12.6%).
• Net interest margin 3.42%, consistent despite volatile rates. Noninterest income strong, excluding certain items up 13.4% to $259M.
• Dividends increased 6% to $0.69 per share. Quarter operating earnings $0.48 per share, deposits flat, loans declined $131M, noninterest income $68.6M.

For the year, Legacy Fulton deposits grew $878 million (4.1%), with total deposits including Republic growing $4.6 billion (21.3%). Legacy Fulton loans grew $316 million (1.5%), while total loans including Republic grew $2.7 billion (12.6%). Net interest margin was 3.42%, consistent with last year. Noninterest income excluding the impact of the gain on acquisition and securities restructuring grew $31 million (13.4%) to $259 million, with wealth management leading at $9.2 million (12.2%) growth. Noninterest income contributes over 20% to total revenue.

• 2025 operating guidance: Net interest income expected $995 million to $1.02 billion, provision for credit losses $60 million to $80 million, noninterest income $265 million to $280 million, noninterest expense $755 million to $775 million, effective tax rate ~18%.
• Expect low to mid-single-digit growth on balance sheet. Provision guidance in line with 2024 expectations, reserve bigger at start of year.

• Volatile interest rate environment posing challenges.
• Credit environment pressure due to higher rates and costs.
• Impact of balance sheet trends such as deposit and loan dynamics affecting financials.

Q: Clarification on average earning asset guidance and balance sheet growth A: Focus on NII guidance, expecting low to mid-single-digit growth on both loan and deposit sides Q: Provision guidance and loss rate expectations A: Guidance in line with 2024, reserve is bigger at start of year, range for provision is $60M-$80M Q: NII guide and margin cadence A: NII growth expected, margin cadence to start lower then gradually drift higher through the year Q: Buybacks and capital use priorities A: Buybacks remain third in line for capital utilization, priorities unchanged Q: FultonFirst cost saves and deposit trends A: $5M run rate in Q4 for FultonFirst cost saves, deposit portfolio stable with initial runoff stabilizing Q: Accretion income and fee income outlook A: Accretion income expected ~$13.5M-$14M per quarter, fee income affected by interest rate changes Q: Loan growth areas and confidence A: Focus on all loan categories, low to mid-single-digit growth expected with headwinds from consumer indirect auto and acquired loan repositioning; growth depends on borrower confidence in improving environment Q: M&A priorities and FultonFirst revenue A: M&A possible, FultonFirst initiatives expense-based, with growth initiatives to drive corporate growth over time Q: Commercial pipelines and loan growth outlook A: Commercial pipeline flat, loan growth tied to borrower confidence in economic and policy improvements