FULT - Earnings call transcript Q3 2018 | Fulton Financial Corporation

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Operator

Good day, ladies and gentlemen and welcome to the Fulton Financial Third Quarter Results Conference Call. [Operator Instructions] It is now my pleasure to turn the conference over to Jason Weber. Please go ahead.

Jason Weber

Thanks, Haley. Good morning. for earnings conference of for us to and XXXX. joining our discuss the for Fulton call Financial's webcast Thanks third quarter

and Your Phil Fulton conference today's Corporation. Chief Chairman Financial host of Executive call Officer for Wenger, is

Executive Joining Chief President Financial McCollom, and Vice Phil Mark Wenger is Senior Officer.

site of measures. financial Please and earnings for the to performance, Fulton's those reconciliation Please to risks, announcement to refer factors. XX and representatives undertakes to Presentations GAAP results related discussing the today's and statements. and These materially. on by which Our required at we most refer slide yesterday or financial comparable no on will measures and are of guarantees and operations X:XX the Fulton today's XX under fulton.com documents of may any for other performance our update with of found on included at PM financial Slides of to make statements uncertainties financial today revise other Fulton presentation on on Web regarding of earnings slides our factors release then and afternoon. refer financial non-GAAP presentation measures. in can forward-looking forward-looking clicking the released other In differ future the our business. condition, be Web non-GAAP and News. results These comments on two respect with statements Relations are information Safe presentation released Financial's site. information found certain page information a can statements than as yesterday Investor additional not forward-looking supplemental refer uncertainties slide of subject this could and by Fulton representatives statements earnings relations these included announcement, On be risks, also call, with Harbor Relations, actual Fulton's to may Investor our to obligation Fulton The law to

would to over call Wenger. turn host, Phil I Now, like the to your

Philip Wenger

everyone. a for morning, details good and McCollom, third the will he we're very remarks And quarter have quarter. shares Thank pleased for outlook. Jason. before us. phone I third performance XXXX line joining we our our When prepared performance you the financial of Thanks, open for questions. concludes, discusses our CFO, our the Mark with few financial Overall,

.X% We execute on increase value net quarter second as included continue record shareholder our growth, the interest our improvement growth, year-over-year, growth strategic loan to with our initiatives steady quality. noninterest and efficiency our to growth year-over-year. growth, on level. consumer grew quarter in strong which and Average guidance credit profitability quarter. an X.X% to we an to margin, loans The such relative in focusing earnings income a maximize is in and and Positives increased linked loan lagged linked our last mortgage and loan quarter commercial line in from and

as we interest environment. income in borrowings benefit a loan net in business. certain loan structure. remains declines the We from note, a growth and while higher are price competed on in can have we extremely quarter disciplined commercial rising continue mainly commercial we slower our noticeable growth competitive to lending this believe situations, two remains pipeline double-digit quarters. On see headwinds and the our prior rate continue near in environment to to Despite stabilize prepayments, on our healthy after The we remaining deliver growth, for line year from we positive

Fulton. long-term presents opportunity We Philadelphia, current growth continue fast-growing which a is for our to in and a extension Philadelphia urban market. is natural of invest a tremendous footprint

regulatory million production office two approval Regional in to site branches, you a we’ve with loan we’ve If received since XXXX. We opened in third over to of mortgage XXXX. In full $XXX targeted May branches all, net we open a generated and early in relationship service commercial The managers President application. in open recall, currently are loan a balances hired and team a in XXXX.

Philadelphia, and other to Baltimore plans commercial market growth tremendous of grow market. a and the lenders Fulton. a addition to We’ve that for In serving consumer in already team we’ve long-term represents opportunity

once However, we’ve beyond. production at Maryland year our Baltimore BSA/AML to XXXX bank are plan for service mortgage growth lifted. and to next plans a loan is open a and early in targeted area office We’ve full open branches orders

credit of said, quality during being the linked improved we Virtually improvement are analyze portfolio or are loan we showed in quality. economic for asset cycle signs to Overall and are stress. continuing of Turning and mindful where we monitor That to quarter. weakness quarter. every the metric assess

Our net agricultural decrease area carefully an we’ve portfolio The been due delinquencies slight were quarter to and charge-offs close commodity prices. a linked portfolio compressed is monitoring in saw minimal.

interest to was strong We rate swap services Mortgage saw a third into primarily trust fees. by linked a quarter, that loan fees. fees, heading growth weaker pipeline solid had increase Moving quarter our income translated driven to income and income noninterest increase. banking management a solid commercial but nice the swap linked was in quarter, investment

Assets under and reached administration billion. management $XX

ratio Our second efficiency consecutive for quarter. declined

ratio the inside pleased reached For We XX% to quarter to bank first to ratio of consolidate charters origination platforms, efficiency there channels, level stated decline the we and and our servicing exit exist delivery gain were in are the our and goal upgrade efficiencies. optimize as orders. a our our third XX.X%, see our quarter, lowest our efficiency and continue our XXXX. believe we opportunities since BSA/AML Opportunities further to of was XX%

and per XX, current any in have common We authorized paid $X.XX quarterly during is we stock the the $XX.X of we front, did common capital million quarter share. not share dividend which left through approximately program, XXXX. a repurchase December repurchase On our

all to our excess and our in continue to most deploy efficient We weigh options capital manner. effective the

dividends through our capital and past the stock several Over excess repurchases. distributed years, we

our as we acquisitions especially we may Moving bank exit bigger in and distributing orders. BSA/AML capital, our role forward, believe non-bank excess a play

On the had quarter. we during corporate the two milestones front,

and First are the bank BSA/AML progressing BSA/AML respect orders were we resolution. confident the similar our achieving that Jersey we with terminated, to New to orders remaining consent towards are issued subsidiary consent a in

week Fulton into and consolidated largest our last FNB Early had and hoped feedback is Bank, have we Bank. well subsidiary, subsidiary banking banks the our went National Bank Second, to Swineford into we that like to our to the remaining banks I'd detail. by XXXX. financial McCollom call of discuss At performance Mark point, Mark? in consolidated subsidiary turn Fulton the end Bank to over consolidation the more this

Mark McCollom

everyone. morning, good and Phil, Thanks,

diluted noted earnings of this per I Slide income the second to $XX.X of $X.XX quarter on Starting X, diluted XXXX. on comparisons Turning share record XXXX. million. to the will quarter were second with the in quarterly earnings share earnings, otherwise, unless our compares discuss of $X.XX quarter net This per are

which related As customer earnings components losses color. of million, you our earnings may and $X.XX I provide additional of some for to recall, per second fraud $XX.X provision impacted after-tax. each of share our by discuss credit approximately now quarter the a equated were will

an of well expanded Moving growing day $XXX driven to as was third by our the $X.X and quarter X.XX% accruals sheet as Slide in linked quarter. margin X, to interest of interest during net interest a the million basis additional balance modest points growth X which increase million, net income quarter, an

the third XX, I year. driven the with from with at our rate in The quarter of our points liabilities is meaning past quarters, increased expect the June previous deposit our our themes We line benefit beta. of expectations. that XX our anticipate is our or Our assets we repricing is in but basis net and of LIBOR. the loan increased also to a increase, X yields of rate rate. nine prime rates are by X remains the faster XX% and compared will is in total that fixed basis year-to-date to beta resulted basis our to the few earning the want expect the that fourth asset beta growth points. In our to rising first interest-bearing but in we've indices than been sensitive most as two funds quarter funds rate X-month This increases XX% year-to-date only deposit loans adjustable, sheet XX% increases net portfolio than the September fed either variable whereas margin is throughout everyone seen macro of deposit interest and margin June months that the March, asset also slower our balance remind would quarter, adjustable, second follow are year point XX%. higher see this cost variable, Of as XX% interest relevant it our approximately coupled deposit through fed of have September has

third occur of to couple loans linked Average over by receipts base in business. in annualized. segment deposit and million quarter these the expected indices of business of municipal outflows the annualized public as quarters our was seasonality XX% this for increase X.X%. Now grew an spent. by our loan This growth million respectively. loan quarter anticipate this linked $XXX impacted for $XX is in we of in and Average deposit are would XX% $XXX total tax XX.X% funds next increase or two our rate deposits portfolio, quarter account The million increased

average However, annualized. $XXX excluding deliver linked able or of growth this approximately municipal still X.X% deposit were million business, we to quarter

$X.X the million X.XX% allowance trend quarter the the third of end our $XXX to to as million points credit delinquencies The X, by and of decreased percent at to decreased for losses of steady loans quarter improvement. improved Slide Turning credit X.XX% X the loans X.XX%. to performance basis second from a quarter. total Nonperforming linked continue in

or quarter. charge-offs net loans basis quarter customer to second of coverage the $X XX XXXX. Adjusting points quarter to XXX% points net quarter were the to XXX% the from for However, for million XXX mentioned basis the the X previously points. fraud basis linked in second loans as were average nonperforming of the for charge-offs allowance to increased compared Annualized

of our $X.X The loan X was by to $X.X the $XX linked commercial income increase to quarter, swap noninterest million, quarter. Slide was which Moving grew the securities representing for driven an quarter. third million million million fees rate excluding by for increase interest $X.X gains

We and revenues well credit as as also management services realized income. increases in card debit investment and trust our

grew by were from quarter. a The by primarily stronger which million Slide increase prior X, increase and earnings result an to to of $X.X employee million, as $X.X incentive due expenses $XXX.X of the million for largely compensation noninterest Moving benefits was driven salaries higher the quarter.

which year costs services fees. is the typical These are associated also quarter also were increases occurred, category was on increased offset outside by seen by professional aforementioned the deductibles lower linked tax operating which $X due as later insurance a mainly lower well occupancy costs in and lower other expense and increased equipment expenses decrease and health Our cost were due driven owned as to higher expense in estate $X consolidations partially cost just pre-tax as Income the as income. expenses, real plan with to million in categories. in million other our participant quarter bank in risk other this Increases also reached.

profitability improved provision significant our XX.X%, over the which of with quarter quarter tax since equity an Slide X effective the our increase rate highest Returns of both level that the XXXX, This the XXXX, and in third the losses guidance. the on and reaching quarters. a assets second the For past credit five of effective was as is rate period. in our capital for tax XXXX levels financial is in crisis. of in line was X% lower result third which the displays quarter from

with equity we common outlook the our remains XX of outlook summary provided which on the exception provides a our strong. call net unchanged the remains of last Slide tangible interest year margin. ratio quarter's from Our for

net operator For the quarter, over expect basis grow and for Haley? call will interest we X that, the I And turn points. now questions. with to between fourth the our X margin to

Operator

Thank O'Neill. question And our Frank Instructions] of you. from [Operator Sandler comes first Schiraldi

Your now line open. is

Frank Schiraldi

morning. Good

Philip Wenger

morning, Good Frank.

Mark McCollom

Good morning, Frank.

Frank Schiraldi

to trying in were by the I'm how inflows impacted out or deposit -- -- quarter. wondered figure muni betas betas the I think about

the of any versus along wondering if out those quarter, you something coming deposits muni the incremental maybe I'm to had onboard break So other the deposits in cost ability lines?

Mark McCollom

of can the Yes, quarter funds. -- here were end It's is business I what third deposits index a third Frank, of time now of $X.X of index the a that that about now of billion I’m at and for total that the lot in kind tied that, Of that to XXX business that we quarter. fed of total to At is XX% say, the basis of deposit of of end points. an book speaking spot is business. -- cost the

we just that inflows money the year. the deposit higher kind core is the that and outflows of that covered that really has of and some again, So, throughout of index some is rate in money

Frank Schiraldi

was was Is stuff was you it I guess implying a is of rate more higher the seasonal? And the it -- Okay. -- the there? what -- are that

Mark McCollom

Throughout lower as balance operating much Yes, I accounts in fund. mean, that core accounts seasonal the are the Correct. to tax obviously year, don’t checking correct. the the fluctuate as core accounts a money through that comes

Frank Schiraldi

Okay.

So it that inflows think and as of is plus kind reasonable outflows to about money? X%

Mark McCollom

fair. I think that’s

For -- quarters. we the the the and that then of quarter for drift off next see third bump the that in subsequent over couple

Frank Schiraldi

then if about -- And linked connected of promissory I don't product down. that guys And quarter talked the were borrowing is the have know to the Okay. costs note actually past. sort in that's you

phenomenon. speak to maybe just you If that could

Mark McCollom

little but incremental versus something customer rate little in that we terms of them those to customers offer or if that’s insured, and they not. as they are those but the higher a we perhaps that could might whether features carry product, not the to care are vary going for insurance Well, lower to risk. are customer couple to insurance vehicles bit going the kind FDIC a because to other that customer use, getting be pay we have insurance cost about going that vary be bit of funding the related about to in to FDIC a for cares taking costs, or customer then they can FDIC not a If

Frank Schiraldi

I say the advance surprised just by just should as mean, was unless I Is kind just -- both guess that, borrowing anything -- line. there incremental, costs think quarter it the reduction I’m or quarter? linked wrong, read I of I driving in FHLB as specific short-term linked I well Okay. that’s it

Mark McCollom

to going is that. mix the yes, Well, be

as more vehicles will influx our a of and have If sheet, stay would muni our gone funding short-term borrowings purchased the our customer that the down you a with But balance constant. gone at those look customer as percentage related up vehicles money. funding related funds fed percentage have of

Frank Schiraldi

Okay.

pipeline swap then income, the just And you Okay. the on mentioned into Phil, going XQ. fee finally strong

going those XQ, line I we As that pipeline is look at how into the moderate, you about should here item? that think should mean, levels your or expectation

Philip Wenger

possible We that believe that will will moderate, but so. have they again, strong swap it's fees

Frank Schiraldi

Okay.

you. thank Okay,

Operator

you. Thank

KBW. from Chris line next Our question the of comes of McGratty

is now Your line open.

Chris McGratty

Hey, good morning. Thanks for the question.

Philip Wenger

Chris. Hi,

Chris McGratty

the kind I’m given have you the at backed loan X remarks to; of by rates looking composition of the about, growth the growth, driven interested year-to-date in C&I Mark, of in you And XXXX? broadly, mentioned effectively or think maybe your family. where balances growth prepared Phil are to the also the how and has your of I flat. composition are up loan been X a sustainability of source entering thinking and of Thanks. mortgage growth, lot

Mark McCollom

which to volume our over down. combination rates X% demand we have when they be quarter, demand expect gone down and have do time-to-time, seasonality slows of mortgage So fourth from

being largely of another good. some classified during its the prepayments getting by -- XX criticized $XX We had the the of payoff are side million and in still We commercial quarter. impacted on loans

helps us that standpoint. from So provisioning a

is So, mean, yes, and to we see loan I quarter that -- again. fourth challenge a I in expect the growth

Chris McGratty

another for return, that. the kind about Thanks to Maybe buyback that's Phil, still the Okay. couple of implications capital on you out talked for pivoting months.

said, XXXX? would that is about all top is last markets I really you that to doesn’t M&A that loan the consider least M&A that probably I in your think quarter of referenced. a prepared remarks about two us you priority more buyback. at Is want kind think what sounded, you growth you optimistic for to narrative returning if In the potentially you the materialize heard,

Philip Wenger

acquisition depend as comes we price. it, and for I a be year things would the balance Yes, the do, they whether away. to have in of lot look And like the go awful we way, still fourth the if think on the be of move would that BSA -- an acquirer, us probably more actually of opportunistic would into year, we including part a we if next buybacks strategic And orders to to our it even some need quarter.

it's it's be XXXX but involved So its mean, we in, say to really acquisition. are -- something going that I hard an have want in to to we

Chris McGratty

for Thanks Okay. that color.

targeted clarifying that point, us at, of Thanks. Just balance remind in look sheet just you terms institutions a like would to could geography, you size, profile?

Philip Wenger

Yes.

counties. we growth So, a -- in share we XX in of That’s the And our our in we’ve those generate footprint, where counties, operate where current profits. five in or XX and third, that’s position first, markets market we is state fourth, second, fifth. our XX

we will institutions us of really we're give And that footprint holes, the think our I that on think would in are at depends venture target, primary we you said but smaller I kind world, do we $X really if that couple the counties billion within acquisition don't to in, billion So like mass In a an have is and much opportunity. counties looking in then be ideal $X mode. at end, as our will. we the we also it but to into

Chris McGratty

a questions. for the taking Thanks Great. lot

Philip Wenger

You bet.

Operator

you. Thank

of line question Austin next the Our from Nicholas comes of Stephens.

line now is Your open.

Austin Nicholas

morning. Good guys. Hey,

Philip Wenger

morning. Good

Mark McCollom

morning. Good

Austin Nicholas

in but that deposit have already on us maybe would general there, kind the deposits, a in some magnitude the feeling there? on give for the you be Maybe you could of the outflow municipal of addressed could inflow You give if the and the seasonality that, expectations may helpful. color

Mark McCollom

basis was average growth related Good municipal an -- basis. the quarter morning. average our The on is deposits to This balance on $XXX Mark. balance this Yes. million of

quarter. the lot second until wasn't of money that of a in Now the half coming

$XXX in in we’ve we of see time some number comes sort then low spot the the balance. months million a be bleed in our kind $XXX that the of to million, a now. of mark and the off balance, during higher of again, that range years in of see that little But prior seen and muni that third the to spot terms $XXX anywhere million is on So six even And is starts about from quarter business immediately period bit. water number

Austin Nicholas

pretty, really any the Mark. board, nicely. loan there the core it. anything maybe just Got outside was on movement NIM obviously And just all normal Thanks, any up fees boats? or yields, in That’s that or improvement, was of very then it helpful. across kind the lifting of of affecting Was

Philip Wenger

across unusual in mean that No, anything nonaccrual of or like it quarters. material really way from was like that or loan terms I there's board. nothing that much or the fees pretty anything loan interest that prior juice in margin any prepayments

this say sensitive the sheet bps would is increase. fundamental I balance So just benefited asset rate from that .X

Austin Nicholas

disclose then Got of last helpful. CECL. have you Any one the releases could able you it. reserve could you if us? maybe to you kind And but share don’t could see -- see reserve any that impact and on what And with are thoughts That’s areas know loan there, thoughts if on see there it some CECL be. some commentary built? just on any I one

Philip Wenger

Yes, sure.

financial this as are in an we are sense to ready nor testing implementation. development and are active we're on impact now are a at whether a heavily will of in any on parties implementation. kind of any with quarter be we basis But diligently. track do We not and some to makes model the we internal impact financial -- disclose XXXX and first disclosing parallel continue disclose position midst position involved, the I early we Right both 'XX the to for and and we working throughout we’ve of assess of point team external it mean, in are not to

Austin Nicholas

Appreciate Understood. Thanks Bye. it. questions. for the

Philip Wenger

you. Thank Sure.

Operator

Thank you.

D.A. the of from line Gunther of comes question next Russell Our Davidson.

open. now is line Your

Russell Gunther

Hey, good morning guys.

Philip Wenger

Good morning, Russell.

Mark McCollom

Russell. morning, Good

Russell Gunther

third line delinquencies this on that sort put the implementation, have Just question you to mid low could on classified a do guys direction the await of moving there. we result up NPLs, from considering there. million provision CECL in as you $XX and modest think single-digit loss paid trend right then quarter; of follow-up picked Good results? growth Where of provisioning quarter's But loan out criticized the the content, and the down. guide

Mark McCollom

results quarter were third good. Well, really

I trends you to But we time, So, be tell our at here can't same sit that and continue the every expect quarter. level positive.

Russell Gunther

outside earlier geography And Thanks. seeing, earlier of asset an on, be which ag, weakness your in the there flagged that of sort it Okay. you then eye or of class are you pockets any your you of are footprint? got kind

Philip Wenger

not seen now. any We’ve others

Russell Gunther

you back as guys Could what Okay. appealing out to And M&A then you? something mentioned flesh well. would you would you to circling be the kind discussion earlier, non-bank of as consider, M&A

Mark McCollom

appealing most think investment would management be I trust.

Russell Gunther

one last then growth is the me And Okay. for loan on side.

also strength guys. on single thoughts strength going You driving and been for driver you earlier. your little Consumer spoke family a has just about nice forward. commentary a on the sustainability that Maybe what’s

Mark McCollom

through from reserve, indirect go markups to markup, were a in that give encouraged is the started look backed and did that. really set indirect when the people being closely the active just with auto did market. in to most are vary. player could which the some of think CFPB at months, indirect lending pretty last And a really you auto. away I used folks flat They stop So, that to ourselves they’ve a we to dealers the years the the in dealer spreads background, that for -- that XX lender we to They

back we gone business. So in the markup range, that dealer that’s set put but being the the us able -- back have varied to within to markup

Russell Gunther

helpful Okay. my That’s questions, very Thanks taking for color. guys.

Operator

you. Thank

Merion of the of next comes Group. question Our line Capital from Joe Gladue

is open. now line Your

Joe Gladue

Hi. Yes, good morning.

Philip Wenger

Joe. Hi,

Mark McCollom

Hey, morning, good Joe.

Joe Gladue

structures and loan you being slowing of a bit. me I a that this, so by you briefly, competitors and I to reluctant -- meet, pardon little second that on quarter touched you were in offered but about competitive growth guess if you interrupted the down call, talked cause guys was pricing that

have environment those Just changed wondering and competitive pressures competitive is. at if all, the what

Philip Wenger

and some more changed they’ve they’ve that say would become I competitive.

XX-year to real not XX-year get XX not they’ve do likely offered sorry, going year payoff. a estate XX been -- or But just rate, heard things. amortization, much -- of commercial I’m a a those I interest-only, We which the deal nonrecourse. but years we're rate pretty So deal, have

Joe Gladue

Right. All all really had. That’s right. I

Philip Wenger

All right. Thanks.

Operator

Thank you.

Our the of Breese comes Piper next question Matthew of from line Jaffray.

is open. now line Your

Matthew Breese

morning, Good everybody.

Philip Wenger

morning. Good

Mark McCollom

Good morning, Matt.

Matthew Breese

M&A clarify I to the on just commentary. wanted

to all the You have in to do of BSA/AML order correct? be orders out engage,

Philip Wenger

do. we Yes,

Matthew Breese

you are reading year-end like leaves, XXXX out comfortable fact, position you do in in be and tea by that to the will And able feel you to a the be, so, of engage M&A? orders in

Philip Wenger

we optimistic the are to released. orders progressing getting We that are

Matthew Breese

into okay. to little you different exiting on was in bit they Understood, fact, let was, extent could and the orders. prior those a efficiencies, exist. then bit, and expense in opportunities the area consolidation gain just That little I And commentary, a you than are where you said that from opportunities us charter hoping to comments. and the And noted know there were one go and what sounds

Philip Wenger

have So significant. but a let be expense we the the that me including should clarify. level The think to going we don’t expense they it's level consolidations reduction expenses. we're after year, incurring them are this But prior we compared to occur, while going through to happening

be those forward, away. move we as So going will

… in the third quarter So

Mark McCollom

and lot the $X.X in In conversions of number two October would four this third of and as quarters the happened so over them consultancy XXXX would well. take actual seen planning we that quarter But number that we’ve go those fourth than the as cost one, few related and to be of will maybe quarter, to charter pushed conversion just of more our subsidiary expect costs. in have anticipate in then were they that are to able remaining banks even down and thousand our expense that numbers banks this our consolidate we a one-time past you extended of a costs ultimately actually third occurred because costs the weekend, hundred incurred lift million quarter, Matt, to through actually of in with back that some we had an We away. feel consolidation half

Matthew Breese

Okay.

roughly XQ $X $X.X charter to it think in way So million have is costs. million the about to consolidation will

right? it XXXX have might two first You back of the and away of or those kind in fades year, one more then the of the towards of half half

Philip Wenger

That’s right.

Mark McCollom

That’s right.

Matthew Breese

Okay, understood.

in The a Another question do have I was, New Jersey. laws presence there have changed. had you tax

And so might is. what early estimate XXXX what impact be beyond, I wondering was for and the the

Mark McCollom

you our Yes. We higher of we have it for to the Jersey, range. but our from are from it our going XX% to quarter-to-quarter, much New the is of think reasons for that -- varies as to pointed drift generated tax the effective of rate that And think out, quarter, pre-tax the one XX%. how that obviously fourth in of to XX% XX% we earnings range -- end call

four I’m New sure years X% to well it's two your So effective X% back is you rate that rate. aware corporate the X.X% down would two years higher And of increase .X at the generated to work, for from have point from a rate rule tax -- going aware be increases in way Jersey. X% state, it earnings with your a then your roughly to translates for to XX.X% we of steps to you’re XX% then forward, as a XX% related And a as years you’re that tax. percentage business that to and about

Matthew Breese

looking the from for quarter But speakers]? higher fourth or you this and year Okay. [multiple basis for XXXX, that are X.X XX points, point

Philip Wenger

impact the that’s of Yes, New Jersey.

to as the our including effective credit ballpark what But we and tax rate. just increase otherwise our tax variety for of rate impact that ultimate investments well. earnings obviously, percentage of effective New effect point vehicles, of ratio tax it's other tax pre-tax of our discrete have in planning is the which Jersey, factors, level a X.X are, Now the

Matthew Breese

good building. profitability sort Is with could My change pull? lever the growth, obviously to portfolio? size Okay. the it securities one question increase slow Will in other of will any or you there that was capital, tied of be be you

Mark McCollom

averaged asset securities liquidity and our XX% for sheet overall earning portfolio view And with be, grow would growth. around purposes. We it principally give or of Its take. assets expectation our balance would future for commensurate our the

Matthew Breese

guide, X margin just higher. to My would flat? get Could have for X just to the some last that for the you give the the remain Okay, one of X dynamics idea quarter, basically understood. basis points versus take is to place us fourth you

Mark McCollom

would mean, betas. be I there variable Yes, principal deposit

look in interest-bearing points you beta. about move, XX up that’s If XX% the on quarter, point most a basis recent was so deposit our XX rate basis cost

with depending be And our need factor where X to expect into the being in play fourth than IVD quarter that and fourth in low we they’re the just being think I of if clear, on to we end to is up X cost being that. deposit would on the the X be higher what would expect. guidance move quarter to betas margin that the X if we end our one

Matthew Breese

in include a you hike that? Do December rate

Mark McCollom

We do assume one.

think, after right really the between of through cycles and somewhere -- about it mean, effect of that consensus is XX%, a the I our that XX-day all products. it's lending a increase market timeframe XX% now but I until rate

impact occurred. So getting that from quarter as you feel one the the that the wouldn’t much of just effect really as obviously full

Matthew Breese

Understood.

Okay. you questions. my taking for That’s had. Thank all I

Mark McCollom

Sure. Absolutely.

Operator

Barclays. next Our the Instructions] from comes of Matthew question line of [Operator you. Thank Keating

Your now open. line is

Matthew Keating

Thank you. Great.

Philip Wenger

Matt. Hi,

Matthew Keating

been time really acquisition. -- long Phil, since pretty Fulton's how a It's are last you?

XXXX. in back was it think I

to dilution tangible And imperative I I period to there's way? And why am in add M&A. earnback could guess, if could the book curious you of you value just about any look -- maybe greater discuss it also and at that parameters book tangible the, Thanks. potential transactions? from seems look institutional So feel a at like then you some

Philip Wenger

the a of there know So to for the the greater assets and and don't banks. rest. and acquire us grow footprint, do our way Mark earnings are there that imperative grow to our strategic us is let investors believe that will a our we opportunities company value for within But I answer our as for it's I

Mark McCollom

I our Yes, book you in can terms tangible earnback, small a really a low to of giving of earnback could and it going value short be that’s deal because I lot our relative number, earnback, IRR, overall really, the be value but just really but be organization. would a tangible got of it a size talk instead of mean, discrete a depend about on that’s acquisition the to the people think

have So for it's services we acquisition care about like we we we would management interest also whether whole hurdle deal -- expectations numbers in. have IRR earnbacks, effective financial Phil risks. from our to attached different whether different TBV mentioned shareholders we deal targets I deals in the as -- of we and are make prudent what an perspective at our going our Those because And those a sense both we they’re deploying that them, to are would make investment levels maybe most a or and well. an that that make well manner as it's would a are market and sure bank as think mindful interested of ancillary sure for risk capital

Matthew Keating

of And quarter helpful. expense additional Thank run potential of Thanks. thinking But sequential gains. I for consolidation. very there's QX charter you. anything think longer given this earlier rate talked last mean, costs. sort the about know fourth? efficiency talked guidance, some sort you’ve be sort I you as I single-digit million expense term costs in to beyond $XXX a we basis low charter the guess the meaningfully but That’s full-year you core you Okay. consolidation we the about of should about of expect on of for else some standpoint, nonrecurring near-term, expense Do additional from sort up additional, move of in

Mark McCollom

single you as were growth roughly X% put you year XXX we Matt, total it pointed out, were we if where given to or -- you so you last the at about takes can No, we’ve on digits and to math. run guidance of that, OpEx, -- in X up low

think anywhere about kind think else that be I be growth need there's could unusual anything activity it's at under the to for I You don't be year. single-digit thinking from probably standpoint. of still sequential low XXX, a

Matthew Keating

[ph] so basis Okay, tax great. last right. because New from rate points the would And Jersey, Mark, that full-year guess, to did are the thought level, XX hear that in high-end I but correctly parts, moving guess quarter effective if of towards closer some look, run QX somewhere XX.X%, I the I there you guidance, XX% you

viewpoint conservative be a close or just that you QX? think you really in is so, that to And do Thanks. could XX%

Mark McCollom

third quarter, in items, couple a here to think move some in charge there our the last tax true-ups up their little were companies a returns of specifically bit the the also we that quarter because will in No, when discrete true-ups fourth it for quarter year we’ve relating file of the in do estimates took of last you quarter of you the write-down tax end we make the and the that at DTAs fourth year.

discrete a that’s So item.

add you'd impact that the closer we New in fourth be which think that’s we’re of pull So of any why we that think to quarter, discrete for that where then higher quarter. Jersey, guidance range this out be items to of end those the when you is going also and

Matthew Keating

some But if today Thanks. total your profile? on raise align and lastly you right, could make maybe talk risk deal just the about, some stars profile, I at at if to there's just for ratio, increase additional comes seem I then doesn't the And point, buybacks capital payout the extent obviously thought if your sense think of -- deal be generated and of your about organization. capital needed right as that Bank's fair be in might hey, Okay. excess it does amount here, you could a And deploy going capital Bank's return, to the capital to. is the a process the potential given you today forward. likely potentially you given to there like it M&A growth excess share understand, And

Philip Wenger

all to considers Board and every them. Our time things continue those we consider meet, will we of

Matthew Keating

Thank Okay. you.

Operator

concludes CEO, remarks. for gentlemen, I today’s Phil back session. would to Thank you. closing this any question-and-answer the Wenger, like Ladies to and turn call

Philip Wenger

and in for we will able you results quarter us to you we fourth when with January. joining be today us Thank hope discuss be all

Operator

today's you concludes program. and Ladies thank participating gentlemen, conference. for This today's in

disconnect. great You may a day. all Have

Fulton Financial (FULT) 17 Oct 182018 Q3 Earnings call transcript