FULT - Earnings call transcript Q3 2021 | Fulton Financial Corporation

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Operator

Good day, everyone and welcome to the Fulton Financial Third Quarter 2021 Results Conference Call. [Operator Instructions] As a reminder, this conference call maybe recorded. It is now my pleasure to hand the conference over to Mr. Matt Jozwiak, Director of Investor Relations.

You may proceed.

Matt Jozwiak

for to for the discuss of thanks call Financial’s third and XXXX. webcast and our morning joining Fulton us conference quarter Good earnings for

Chief is for Wenger, conference host call Your Chairman today’s and Executive Officer. Phil

Phil Officer Mark Operating McCollom, and and Officer. Curt President Financial Joining are Chief Myers, Chief

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

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

Phil Wenger

Thanks, then questions morning, our everyone. will begin McCollom Fulton’s will business I may quarter overall after financial and Myers you with was of Curt solid discuss the performance in Mark And again Matt. any third the performance. our some we the that, details share and of answer Good have. will will XXXX. thoughts quarter on performance

Our we levels and future quality earnings decline optimistic to improvement. stable. per And we continue economy communities the $X.XX another record of as the and the will forward. our record per as segments we we of future first our is show serve. increase, business share markets quarterly Mark serve quarter Unemployment share many to markets of remains in in us, We XXXX. about $X.XX, our for Curt was of growth and and asset previous remain continue in of the The discuss and vaccination saw the move serve surpassing company’s

good supporting noted we a have opportunities a fit mergers I and growth third interested has the for that quarter, trend and through continued in Fulton our look quarter. in last and and might that around remain As footprint acquisitions taken we future select M&A. our at has us seen in be several

We a Fulton’s community-oriented are be for strategy in would those and of fit which particularly good style interested our banking. companies

our presents itself. on will focused on opportunity remain pricing disciplined we always, if right As the shareholders and remain

have of the dip one-third a authorization. price During our approximately share repurchase able of our we were advantage utilized $XX and in quarter, stock million to take

markets week vaccination rise do the rates forward our plans have COVID-XX. Fulton throughout to to of adapted on the the And repurchase to announced continue could to and the under throughout team We our are pandemic. provided of of so. we makes And our work members authorization really have we that challenges I proud are members circumstances to November sense essential begin customers with we will now changing year, previously is how it referenced to an have depend our continue more the past X. by financial bringing constantly Throughout brought that to back serve, stock moving pleased if about beginning team as onsite service

sustaining our on compliance. we we management company, reunite As operational team, our three priorities excellence and the focused achieving of remain main achieving growing risk and effective

Now, Curt performance. to discuss business I turn our things over to will

Curt Myers

Well, thank you, good Phil everyone. and morning,

like or loan produced annualized activity consumer loan loan and an performance basis. construction this growth solid mortgage the Strong share loans key Phil growth contributing our on growth by with mortgage mortgage areas growth on business This or as lending, lending, other the balance we noted, consumer banking XX% in conforming PPP to from with lending, origination X.X% $XXX quarter. at yields. also categories beneficial consumer sheet As remains and led secondary certain excluding loan in increase sell I’d from primarily or and residential in when experience Overall, annualized continue our to strong was our strong moderate at commercial million detail to either to driven about million pre-pandemic the market opportunities approximately residential see some to levels and $XXX mortgages above healthy spreads quarter results grew forgiveness. third areas. quarter balances Starting growth lending and X.X% growth several of total residential loan linked impact

prior room mortgage noted to our quarter, million, we do the evaluate purchase segment the XX% mortgage of in prior As quarter. the and originations XX% in-market quarters, the mortgage to the from residential Residential in sensitive at activity high-quality, up remains second accounted to so. balance our of levels. were XX% asset the September mortgage for pipeline At of Xx to continue opportunities $XXX XX, during continue residential from total loans for approximately a but approximately this our provides quarter, originations decrease grow quarter pre-pandemic sheet

quarter. or also linked As increasing XX% residential construction I $XX noted before, a quarter, strong had million

fin-tech loan growth by a consumer utilization. overall offset quarter. student partly contributed growth new banking, consumer partnership business this consumer refinance continued equity headwinds in The line lending loan loan was in home for Finally, to

line by strong lending core pockets increased Turning growth loans, growth of construction our utilization, to commercial business. C&I in we commercial driven saw and

pressure we quarter. dealers inventory. floor struggle continued plan loans the our commercial continue However, flat to business for kept get This to saw in as total

line During $XX the million. quarter were X.X% quarter, have activity. C&I construction as first down of This utilization million, X.X% grew is sign annualized. up business encouraging loans the beginning commercial linked XXXX. or well, loans increased the Commercial of increase since growth $X and we an seen

However, and pipeline the ended few Commercial flat linked year-to-date for quarter, relatively mortgages over excluding loans annualized. were quarter the been on past and and up linked quarter X.X% flat consistent floor The X% commercial the quarters plan, C&I basis. has were a year-over-year quarter.

as deposits expected million Also we that deposit seasonal deposits, growth inflow representing costs seasonal quarter, balances balances. actively $XXX of or million with deposit Total to quarter municipal growth. for lower. during of $XXX to Turning quarter, continued municipal X.X% increased continued our we saw the the linked manage

the income businesses management to quarter results were million. increased pleased fee $XX income solid fee banking in this with businesses, Moving as consumer strong fee performance and drove wealth and increase. we Strong mortgage in

good continues business client equity strong very wealth Our and solid to by efforts sales markets, management well, retention. driven perform

fee at $XX.X to third servicing Assets sales under These end ago a valuation levels quarter second billion in income the the of in linked a excluding trends the income in in Offsetting management on on which the and Capital fourth change consumer fees SBA banking from drove management transactional merchant the decline up linked quarter to consumer rate period. was which the modestly was these the down activity, another products. capital swaps, on the $XX.X year and loan recorded positive consumer strong interest fees as up at fees. were customer This end in loan We to gain management sizable markets quarter, quarter third increased Mortgage a in rights continues quarter. on sizable linked a of activity wealth sale billion of grow. income. quarter Continuing majority quarter row. Overall, commercial margins. primarily quarterly mortgage the banking the gain grew delivered card billion sale solid will modest wider saw the for and fee quarter banking $XX increase growth banking, Mark commercial a with in decline in is and up were across slight discuss quarter. board X.X% cash record and basis. Even increase administration markets and categories when for in the was

more trends markets historic return time. over We expect to revenue capital to

business during a encouraged expectations. increased continue to depend sale interest period. and coming preferences, this fees the quarter linked quarter. rate In SBA very gain our will summary, on demand activity within strong commercial second by commercial remain loan declined However, on off we the customer

to to and decline. stable remains credit, beginning pandemic. to low remains $X.X asset since of quality relatively the and continued remained Non-performing declined Delinquency loans linked the million deferrals Moving prior stable. quarter and forbearance

the basis a recovery basis loan we points of have annualized or we a the to $X.X Historically, This of deferrals. second detailed quarter. million charge-offs quarter, X XX COVID net or points. During net booked $X.X included million slide compares in on

loss and from forbearance for that remainder our our COVID the XXXX. result, provision credit million. as as outlook. notice optimistic decline, $XX for quarter have deferrals have reduced a at outlook only you the we However, continued credit presentation remains the XXXX to of cautiously will And removed Overall, we further ending

the financial Now, I’ll to our little to call over more results in turn detail. discuss Mark a

Mark McCollom

$X.XX I good to Thank represents were versus per prior quarter this available increase will net of the shareholders diluted quarter. share discuss quarterly everyone comparisons the $XX X, Starting you, income per are Unless Curt Slide note earnings on with This on to call. was the second I the $X.XX, of while million. XXXX. morning an and otherwise, common share quarter

for in offset interest high which non-interest expenses, third increases strong in in later detail quarter net my included well operating performance income Our provision more I’ll negative cover income the as comments. and quarter a as by

due X, Slide and loans our a second pickup $X This quarter net sizable earned interest loan quarter, the fees expense. the million in during quarter, Moving a PPP million, coupled income quarter. decline linked a on assets was to yields the growth in third relatively versus during on higher moderate was with to interest increase earning forgiven $XXX

loans fees. provide and PPP PPP had First, the our of of around detail outstanding billion some more of At the quarter, second $XX I we unearned end million $X.X program. will

forgiven have During million of loan the PPP of quarter. on of books, XX, $XXX PPP earned start fees and in PPP And second from of loans. were million was the be with Since approximately at our loans recognized. our program, quarter, million $XXX PPP XX% $XX SBA third still fees to we $XX loan million, September earned the $XX up approximately the our million the yet forgiveness has

during the prior to the end did consistent increasing if billion. modestly see grew fourth to million We by institutions we Turning balances period, $XX a in increase are with to the at would $X other but portfolio, in investment an years. about the deposit patterns quarter during decline expect quarter this million with deposits the quarter, bit $XXX

grew an points as $XXX approximately our Turning periods. modestly cost million migrate deposits basis we to XX noted, deposits this lower in points by total the on expect lowered from basis. future Curt quarter balance XX And and for we to deposits, ending basis to of

deposits the third and begin inflow our year. and expect quarter, increased quarter outflow peak Non-municipal to municipal $XXX deposits to increase. municipal approximately balances those fourth The traditionally during next the would quarterly deposit the of overall whereas we represents quarter million in of into $XX our see represented million balances

loans. declined average the significant quarter third deposits second well loan-to-deposit from in increased decline of as XX.X% in combination as to quarter a XX.X% ratio PPP the a from in Our

quarter higher yields quarter asset fee margin X in X.XX% in third well net and continued for as of as was expansion versus the resulted higher quarter. points recognition PPP decline a interest Our linked deposit second costs. from the The X.XX% basis loan earning

quality to loans was $X.X quarter non-performing and Turning in quarter, points credit net credit a currently negative allowance for and quarterly or loans, previously of quarter due including first quarter release loans loans net million remained on of the a to whether our third to a recorded of PPP The $X.X for shows recovery losses, loans. reserves a stands We appropriate charged-off last and third million asset to negative $XXX,XXX in for million credit X.XX%. total the and a X X, negative declined, to provision Slide since basis, PPP our excluding on last a Slide quarter. $X.X losses XX on performance, excluding at basis including XXXX. improving been flat recovery linked-quarter metrics. quality, end credit the down view an year has it Year-to-date, compared solid the throughout

could loss on allowance longer our future origination change in economic loan new volumes, term always, net for loan periods charge-off and mix, credit activity projections. based trends As

a X income, and Slide bit quarter. were that on by driven sales this not touch I more last will to revenues sale loan which non-interest few in points did Moving a quarter were strong basis detail. spreads, on points Mortgage cover on items Curt little XXX just basis gain widening versus XXX banking mortgage

investment long-term During quarter, of for to banking year, mortgage the we benefit this sheet impacted salable mortgage net more has on far production the of a versus lower-yielding our have significant balance portfolio but revenues put modestly mortgage income approximately year. $XXX Keeping third our provide this with balance interest sheet product a securities. XXXX, may purchase have thus consistent and chosen mortgages million salable on now

during mortgage the rights asset million due a valuation $X.X we recorded valuation quarter, of interest rate servicing Lastly, to primarily to the the of our environment. allowance higher

$XX.X MSR rights September at quarter which as valuation on Our balance allowance, asset end. mortgage of remains This million net was a balance XX. servicing $X.X million of sheet is

fee other $X.X recently. very seen of primarily $X.X a fin-tech increased quarter. on million equity to returns income, million fee investments as generate This fund by income gains have in in was linked we due investment strong an Lastly,

of for X, This and about third the expenses following the by was that to in in non-interest costs linked due for saw Moving $X.X the approximately to factors: quarter Slide increase, were million up $XXX benefits the $X driven million the $X.X million increased of third healthcare accounted were we count million the day quarter quarter, increased increase quarter. costs.

we decline as employees and XXXX self-funded expect limits. We reminder, deductible we costs deductibles a early revert to healthcare, trends quarter their fourth then hitting historic would saw the are in As for our to in and reset. these

higher to These increases, branch one were And million. various to estate in sales our real the also wealth initiatives costs during in expenses some recur, to when offset due expenses, variable saw pretax area. occur well as year part the which, earlier to processing higher are which not leaseback comp also data We management company. related sale combined, by closings due of of our in earnings both costs on we higher saw higher commissions by the reduced expected other transaction, $X.X and approximately as quarter technology lastly, across

consistent Turning on to was with second tax gives for taxes, rate XX% Slide our the X the more quarter. quarter, effective you detail our capital ratios.

bank maintained we our cushions minimums, over XX, September of strong liquidity As the regulatory remain parent company and strong. very and

share we During authorization. we X, of $XX.XX guidance price the quarter, $XX have and million for million repurchased XXXX. at approximately of an one-third our average shares approximately repurchase Slide provide our utilized updated On X.X

be losses expect for We year. in We credit net million. income provision to our to $XXX the negative of interest the range for expect to million our $XXX be now

the to some million vaccine restructuring, to to $XXX the And $XXX Forward of to expenses year. non-interest Included range balance income, in bonuses related to $XXX securities of related as $XXX in this We planned to range be excluding the expect well our are operating million. as contribution for expenses, COVID we in charges in sheet the gains, a fourth to quarter our our Foundation. expect be Fulton excluding million million number

of metric or many net of to you that look revenue Lastly, operations. aware as profitability we key a PPNR key are pre-provision the at assess

know that this differently. of also calculate many We metric you

as We our to our of We couple press would you to version additional consider PPNR out this point items also results. of assess metric of financial have included the tables like in our release. a

quarter our asset from with quarter. earned third valuation MSR second PPNR the also, And of efforts. a the these we quarter turn fees second questions. in the continued earning balance of $X.X to each and in adjustments from result for PPP $X million stabilization operator quarter. in allowance third over valuation Brian? And the margin items, million now shown swing growth, quarter to have to that, the in improvement core sheet allowance When the net our as first decrease to million $X.X increase continued cost-containment impact resulted allowance our XXXX remove call a a a believe I’ll million First, the increased $X.X you quarter has restructuring, in

Operator

will [Operator from Instructions] with question Thank Our Schiraldi the first come you. of line Frank Piper Sandler.

line Your now open. is

Frank Schiraldi

Good morning.

Phil Wenger

Frank. Hi,

Curt Myers

Frank. Hi,

Frank Schiraldi

wondering about follow-up sounds Just, Curt, of dealer pipeline and there third are like rates if your the if in you it bit utilization stable. XQ thoughts where terms and you quarter. could comments the And just quantify slower now? on that in a it you the just mentioned plan your has reduced pipeline, the or – commercial utilization, of wondered I’m could been size again I was floor pretty the forward and little again mechanics going right about

Curt Myers

Frank. Sure, Yes.

little more a quarter-to-quarter. fourth well, feel activity in the see so steady remains Just business do look as I loan will overall. we into steady – overall. as originations that pretty remain Originations growth We color on Pipeline we just think consistent quarter. increased forward were

overall growth encouraging the line was utilization commercial a think I really factor.

at So we originations to there, forward accelerate pipeline, continue we the we as is to point. and look stable this think, positive expect

Specifically business dealers essentially, And growing was we’re $XX that linked on million. dealers, headwind car all and pre-sold. the their of can’t are our maintaining that that cars. just for quarter get cars even business, Almost new dealer, but all

us very, That is are for the they $XXX So business about quickly. line million. very in and overall off

Frank Schiraldi

– on partnership also color. mentioned fin-tech the for And Thanks Great. the side. consumer Okay. the lastly, just on you then the

think loans. said student you I

growth And in now. terms I and partnership you’re just pretty partnerships, board could really at is a that would the across growth that, your think on right something tailwind? side it’s of wondering so fin-tech the looking business this consumer provide on that these if thoughts what be that And actually or slow would refi

Curt Myers

Yes, Frank.

the we student business. been We a in good looking loan the are origination not business. on had partnerships way So at side. it to get was that into fin-tech And

accept modest that million we grow. this have our continue at that looking origination that million overall point. consumer originations side. but partnerships are at and to very the will program, originations we we we think will month, ranging other under accelerate We $X it is per of on can specific And It’s $X activity to

Frank Schiraldi

terms the sneak in offset being just if talked Okay. a gotten cost could as expenses, in digital investment of more about sort one Great. of Thanks. you And the on the, I you’ve Mark, saves to in partial elsewhere.

talked run just You that to and software of – still I’m million like ramp in $X and data in expense that the And well? a up think you’ll rate. about running that XXXX maybe still that terms wondering, maybe seems XQ? good $X year-over-year. running million It bogey is that true something higher is holding to pretty already about is through in as

Mark McCollom

Yes.

I our X that’s I’ll see go up we’re guess software comment, I line you also we of I the think expense mean, more the piece line year. just higher. as think previously on Frank, higher the on expenses, with while on expect amortize with I the a would think it processing But a accounting of going that the our creep is changed to well of to buy the on going probably the to talking guess, that, I data cloud what also being little gave see just the discretely. years. subscription-based, you’ve about as to overall continue much when bit continued seen consistent make base. that to could at things I one that and and where you guidance so over digitization beginning industry the way

costs year fact under expenses debt at the and reason really when you reasons million this you then a at year. ago. That’s principal the more a for and If the that, making out from that our about over increase the expenses about $XXX money year-over-year. period X.X% year-to-date if little our down to take the year-to-date just $X.X million or comes look to that we’re But look million you that’s up $XXX takes extinguishment a same

of as commissions area, account so months, If which accruals wealth $X.X revenue, year-over-year you additional as those more incentive million, specific produced incentive between our well and take than X through million wealth commissions our year-over-year is management-related XXX% bonuses within $XX increase. of for

out we delivered more the little So bit that when we pretax, put the we’re program strip have we a you that last and year. cost that think savings fact on in place making

Frank Schiraldi

Prefect.

Okay, the great. color. Thanks all for

Phil Wenger

You bet. Thanks for the questions, Frank.

Operator

next question our with line the James. will you. Daniel Thank from Raymond come Tamayo And of

Your now open. line is

Daniel Tamayo

morning Thanks. Good everyone.

Phil Wenger

morning, Good Dan.

Curt Myers

Good morning, Dan.

Daniel Tamayo

heard on comment I sure want right. to maybe just just starting make So this I –

in comment made overall a fourth in decline about I on You talked municipals peaking deposits? quarter, quarter? but expected decline you in deposits. did that Was in the about fourth comment deposit an catch Was that quarter? And third overall the a the

Mark McCollom

Danny. Yes,

is this – So Mark.

you business, of have watermark. and about always trends if the prior in million And in high a think peak our our with quarter to business, peaks normal always between the we the third in between valleys $XXX quarter. the third years, deposit million If back the is that municipal look occurring would you $XXX

time, is again, to that to when one from of now moving historically whole of out million of the been during of surge the that, of trough, $XXX much over And the how really the much top that surge is as of the wondering is beginning versus then – on COVID. still industry the has range. to we’re is around. that that to right questions that think you the so that, you the would $XXX of third is stick had jury I sort typically, X-month us, period the is million for quarter how see deposits But to quarter, peak which, going in from first

Daniel Tamayo

And But what’s moving sounds talk for there – guidance, a little the on beat it maybe but you number about like of just kind just That’s the parts dead not to quarter – horse a get of and Great. be on Thanks onetime lot a in about either could helpful. is fourth we how side we in expense going then XXXX bit get Okay. fourth is us to provided to guidance. here, going the and start that. modeling? a much – where be nature as us try of to help the quarter base

Mark McCollom

Yes.

pretax similar that up that in with but Dan, – I think script, those would recur we the be million think million – being, that on there year, would unless could of to $X earnings to year into I some one in I have the overall end the mentioned items I range, depending this what in another and then think we not next terms profitability. of pretax $X

Daniel Tamayo

Okay.

So $X million be, Can would that’s sum what the but repeating, drop Thank sum $X apologize I up just you with related to to I’ll those and up just million? you. kind off. of then of –

Mark McCollom

Yes.

employees Danny, I the You are a we specifically, comes little are again, a our the that employees just mentioned, vaccinated And $X bit we’re think receive a for they X, were million there, bit by who is that asking receive to would a call more it but those to bonus. $XXX fading vaccine. little $X two detail on which fully on down million. encouraging offering, I you’re for to And items November

the of the that will Forward one-time Foundation, number. to contribution that remainder a Fulton make number. that And of be remainder would up be So our part then would which

Daniel Tamayo

Yes.

was I it. for. what exactly That’s Okay. all set. I Thanks am Mark. Appreciate looking

Mark McCollom

Sure.

Operator

KBW. with And you. Chris next our of from question the Thank come McGratty will line

now is line open. Your

Chris McGratty

sheet, Mark, it growth, growth think grow know more the in asset assets shift few here? next or is Hi, a should or the – question into it’s I profitable – the earning about on balance composition we good on it Is quarters? more how of likely remixing the morning. to but likely outright more deposit dependent just from

Mark McCollom

depends of how a that things issues and fully open. on country our Well, supply chain again, lot in

– As optimism not XX% levels utilization. do you saw at you overdraft Curt say the the increase we back line signs did an increase have of when still script, commercial when of which we would referenced up overdrafts that, pre-pandemic I fees, in overdrafts were of money which actually and our burn we within a with in that and to are surge details we $XXX,XXX, loan quarter, our may then activity in would $X.X income, periods. we but you that also fee to our of noticed trend, but does sign his got incidence some see excess today billion – overall a folks look that make think, through – than – goal pre-pandemic. are in one the clearly be a we linked and may that I some still quarter the is higher stimulus mean not lead future a Certainly, of think in we to may about into are what did money sign that be sitting starting this cash

of guidance that that’s loan what room of us set expectation. what So, our certainly for that into Exactly and a earnings lot there And classes. shift is when will speaking on certainly quarter call of percent our make percent certainly to for XXXX. that be from growth, cash to overnight asset we our we more fourth profitable

Chris McGratty

– the The Great. dealer just Thank you for that clarification color. plan. floor a on

peak $XXX said I was What it in the that million. around think portfolio? you was

Curt Myers

$XXX quarter, in quarter was don’t the the It it’s quarter was balances, balances, first million linked million. about and million. but the $XX historical another have off $XX I then and like second it

point. So, would expect million $XXX $XX at this of kind to of off what be million to we

Chris McGratty

on market Thanks. maybe said then the billion, I end fits. remarks. past, what know consider? update the potential of Can us could you it M&A the you you in but of range cultural sounds an think I Phil, Okay. minimum like But And I size? your in of on $X a prepared if just kind refresh comments, just might

Phil Wenger

Yes.

$X $X at billion are looking still we think billion. I $X or to billion

Chris McGratty

Great. Thank you.

Operator

will with Thank come the D.A. from Russell line you. question Davidson. of And our next Gunther

open. Your line is now

Russell Gunther

guys. Good Hey. morning

Phil Wenger

Good morning.

Russell Gunther

growth the piggyback loan Just question a and up on of a bit conversation. Chris’ following to

originations, appreciate the of the detail I commercial quarters, pockets So, color seen in growth pipeline prior you the haven’t headwinds. some on just with

optimism tie that as about to way next seeing the are near-term, annualized X.X% expecting right or of X%, guys are quarters? Fulton together, this we tailwinds that we So, is of or couple think there that over the all ex-PPP, not you are additional

Curt Myers

it’s Curt. Yes. Russell,

are range, to expecting X%. We that X%

look that growth, in you If organic it’s at historically range. the been

other like We are partnership some and originations. doing the accelerate things fin-tech to some things

So, we commercial equal commercial business all get The want business back pickup some we They forward. and being customers. activity now. where growth think will that mortgages at are things that We a growing look significant that as in to They funded. of drive are to there range, are new tailwind shows construction the point just be we kind just top when at moving customers. Certainly, normal construction new at We utilization, without the those That of end done. we right in adding book. by well. a they adding are activity our referenced is being business

a think well. as I positive that’s sign

happens. I think depends just on it that how really quickly

Russell Gunther

Okay. appreciate Very on And helpful. the securities I it, Curt. portfolio. just then

dynamics you terms and the about well this next near-term of appetite? as quarter and quarter growth inflow that the think growth So, But overall in we of should deposit this as the mentioned investment how some over couple.

Mark McCollom

a seem the supporting attractive as it us, quarter, was good customers. asset excess was classes a with a that Yes. that’s bit here, that in this and liquidity. been of yielding I rates to obviously, as like think of more late us. put we the it’s are ideally to lot when just while end for higher we And earlier, said some really I our sheet a We – mean up for down, just largely put grown to year, see be our commensurate the of would chunk bit liquidity in primarily the investment bit investment growth. overall There into went didn’t longer balance portfolio quarter portfolio. little maybe and little opportunity little for classes a But

commensurately. would see then on for sheet to I the balance so see than could And to portfolio percentage grows, a not to investment increase expect But you the basis that you extent portfolio to the investment more expect it grow has historically. overall what our

Russell Gunther

Okay, and great. everyone thanks questions. Thanks my for taking Mark

Mark McCollom

Russell. Thanks

Operator

line Instructions] the Stephens from next of Matthew Inc. will Breese come Our [Operator question with

Your line is open. now

Matthew Breese

Good morning.

Phil Wenger

Good morning.

Matthew Breese

forgiveness expect and outlook sheet? the million what on from how do And here? fees? along recognizing current the When cadence question for you is lines, balances it’s for remaining your those of you First just think same do balance the PPP $XX off totally me,

Mark McCollom

Yes.

term $XX on But be the is be we end are a majority million of assumption there of remain, to be of the the expect we So, of that expect to forgiven. the going of around And somewhere that XX% go of next it, to is – forgiven that out become of loan. to books $XXX fees to going and year. and to the first the in be quarter by our actually majority balances we that – million remain might XX%

the So, in while of little that $XX million fits fees, a has been with and SBA. starts bit of there

expect to recognized be in the fourth around give general we then two-thirds first quarter that would million, the $X next think in recognized to around Matt, quarter be year. of and million I in or or $XX or of take, one-third

Matthew Breese

it. Got

the on hiring on us of for be? talking there disruption or color of that Are that individuals give mentioned could Okay. to opportunity of you needle extent opportunities to Perfect. And terms Phil, just in moving just teams? a lenders get in-market those wanted front. you sense kind opportunities? Could were the some more what you M&A due

Phil Wenger

Yes.

mean I time. teams and are for So, lenders all the looking we

for I everywhere greater. we think folks throughout are there can opportunity footprint. our acquisitions, those when become But the are looking

Matthew Breese

for you sense stock but remaining know quarter, did or was whether a there get price. release. didn’t wanted some did the buyback this me, quarter? I more that have were just actually for you first you I is you just one the authorization, mention outstanding stock that to I this Two you shares repurchase noticed actually see what in repurchased down quarter-over-quarter. mentioned common Okay. I stock not

Mark McCollom

Yes.

Phil Wenger

Go Mark. ahead, Yes.

Mark McCollom

did. We we was in It remarks. our X.X on average. a at prepared of repurchased Yes, million shares $XX.XX price

Matthew Breese

Perfect.

you in critical by as the just buyer not markets stocks Thank have well, recurring performed This wanted deals great. but and a on not have a being you And well I could M&A. successful where at some have performed of of you us thoughts looked shareholders share Okay. one year, stocks buyer items your we just The lot think versus not? to in – on with deals you. this a deal particular, topic, last the to other in your have is is get received seen are

Mark McCollom

Yes.

Matt, – is think this I Mark.

think to higher First, right focus. those bit always it’s maybe earn-back upfront tangible strong at value a together a book if you heightened could accept certainly earn-back important look buying. really now, has two dilution little because I are and you a have you company that

upfront more I larger always because in entity you perspective, accretion. the cost EPS us, more of accretion revenue of earn-back much that little a and target’s on internal a the rate I operations sure And earn-back with be is on of there the capital be on diversified deal Again, of less target’s look when entities. size also And of entity, return then to be to of we relative in that the general, there relative say, becomes at higher a numbers, that a embedded say of the with to depends as than make on dilution or earn-back. risk absolute you well, that the than bit function focus going capital. years it’s could of we for IRR show want of And important do from in deal would But entity with on focus that X% would stream. first upfront X always how that combined a I more dilution, you accretion, also smaller year well. say, bit is So, the then the you never cost a a show terms caution of because the X% a or lot we that, are we an then than earn-back size of EPS that acquiring the lower. – little also

will the a CFO, stuff with cultural for end is fit deal important being in always mean really of top we I fit. I a talked as that, excess – a And you most that, want bad financial tell but thing the a of all to culture what’s an IRR that up just non-financial on good bad cost as great terms, would there ultimately in shareholders. mean well. financial have capital about I So, I deal the target’s then And a of is

Matthew Breese

I it. I Great. Thank for you appreciate all taking had. questions. That’s my

Phil Wenger

you. Thank

Mark McCollom

Matt. Thanks

Operator

line you. Thank of next from with Zwick & And the our question Scattergood. Boenning Erik comes

now is open. line Your

Erik Zwick

guys. morning Good

Phil Wenger

Hi Erik.

Erik Zwick

question, are I there Curious, mid appreciate inflationary wondering the expense all about either any just look lenders outlook, associates asking internal is in commentary bit near-term anything part you color on inflation of merit the in recruit when obviously those decisions? me already to from award kind and a typically if of new pressures has then you maybe remind longer outlook. as sources press And the pressure lot been employees or how increases other second or you for of or can Maybe labor little you increases. external thinking markets. from more and seeing guys maybe a term considered

Phil Wenger

to all hire very we is it’s wages getting people. think to And is we This pressure intense a has I and employees. wages And inflation. level of on every – with industries, tough it’s continuing climb, biggest Phil. to permanent business, see our see Sure. company. environment as I as problem for And at every talk There our the everyone is businesses, think we

Erik Zwick

do That’s award helpful. And you of kind typically annual increases? when

Phil Wenger

April.

Erik Zwick

gears even average that the increase today that’s M&A out where about or a just levers of kind yield profitability ROA of tracking growing or a maybe PPNR, that to been assets within to Mark and ROE, standpoint from a looking the opportunities switching relative outside environment? or If bit, appreciate calling little year-over-year. pull gradually are then curve improved the to steepened interest considering rate And the think I we organization at and

Mark McCollom

now, $X.X points. have effectively on we obvious earning are that that about got liquidity excess Yes, is basis area Right billion the most to XX is focus we sitting on.

think So, that strip to – analysts out Because more of PPNR. yields, this understand normalized to environment call, when and when of on are more the of ratio we I as PPP impact But strip then the there down think impacts get and our you know our PPP out loan-to-deposit I and – XXX%. out excess get also and about – a our appropriate know long-term the need a loan on think our – you environment we between normalized that like is you which XX% some core margin you company piece, liquidity. a for to to back is strip

same away. – And are you pulling what level, the as so of that that amount when PPP that you excess kind to get redeploying back the gives about liquidity back actually fees

biggest by for opportunity that’s the think far lever we our So, company. and

Erik Zwick

Thanks today. for taking questions my

Mark McCollom

Thanks Erik.

Operator

time. no showing you. further Thank this am at I questions And

hand Phil comments Officer, closing Executive the conference Wenger, to So, and to over now it is pleasure my back for remarks. Chief and Chairman

Phil Wenger

discuss again for you. you fourth to in quarter Thank able today. results when we joining be hope And thank will with Well, be us you January we us the XXXX.

Operator

Thank have a today. this our Everyone, you. Everyone, conference call concludes wonderful day.

Fulton Financial (FULT) 20 Oct 212021 Q3 Earnings call transcript