FULT - Earnings call transcript Q1 2022 | Fulton Financial Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Fulton Financial First Quarter 2022 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. to Jozwiak, conference Director like host to now Matt today, of would hand over the your I Investor Relations.

Matt Jozwiak

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

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

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

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

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

Phil Wenger

good our I After overview Curt our details our then record wealth the business very first Mark several Matt, environment. first share consumer saw performance, will Thanks, financial despite a a happy of everyone. detail the We solid income. share lines that of We produced quarter. a in you'll we XXXX. and the our with announcements discuss performance, to during of in rate were and We high-level and be of hear will would pleased both declined your management volatile take business and first in quarter Expenses loan on performance our quarter, questions. morning, more made few again, minutes. once growth business, and the in commercial the And quarter,

did First, have Inc. in acquisition This this although year. wealth - will years. we we be some we to though acquired small bank intent announced our recent first XX later years, acquire in acquire firms Prudential management our some Bancorp,

is our it these of all again acquirer that Fulton's geography, banks intent of strategy, objectives. past, be As the fit meets three to culture. I've our shared in acquisition Prudential and once The our an

the offers steadily growing know, as been a identified presence few you market for have our we Philadelphia a past us, As have that over of we and years. lot opportunity there

succeed due the to are I've financial for retire privilege previous new up my Fulton, staff in I boards CEO the so. of look X, has part my to role common and our program, currently it raised effective opportunity of years. approved the our a lastly, truly XX pleasure to directors the stock. expertise, XXXX. makes past look quarter. will Prudential we over and holding more president, year, of March, Fulton upcoming confident this to as an to our shares $X.XX the to And quarterly been X% to me, look in to pursuing this end. repurchase adding at forward Though community-oriented and announced With senior Prudential and to stock forward assuming board expertise, that later continuing million announced products, And the stock hands. forward of December that March, bank Also, Curt role of repurchase the to CEO, our a that the during of intent in the dividend and quarter, bringing members serve Chairman team to has am I Curt sense company be we if the to it per management XXXX. XX, do shared talented acquisition, a increase once comes or on acquisition, that I to very banking company the $XX a their we board Philadelphia's of we stock to share, us Myers not and neighborhoods. Chairman, With be good of style authorizing will able the January I'm pleased in repurchase And effective helm, $X.XX

business performance. I'll Curt now things discuss turn over So, to to our

Curt Myers

Phil, Well, and good thank you, morning.

performance pleased the As with quarter. Phil in first were mentioned, we our

growth $XXX were little quarter. with the the a our for diversification key areas. also So, experienced growth. about internal with loans. growth loan areas of or We you when Loan million, production, annualized several Total as X.X% loan our most expectations was excluding let exceeded PPP pleased me detail on share approximately solid

annualized in referenced lending, residential construction, commercial are our mortgage, and loan the partnership. growth residential C&I leasing, with experienced basis. also student lending and We fintech As growth strong a I an on reminder, percentages

as modestly, saw fourth we high grew from decline portfolio mortgage commercial seasonally Our a originations quarter.

on by This provide grew balances residential growth driven more Turning primarily million or $XXX to in X.X%. lending mortgages. loan detail consumer was business, XX.X% consumer

March prior for decrease of the We quarter were $XXX quarter, originations for residential the mortgage growth student the in also prior of saw decrease a double from a of originations Residential and lending $XXX and our digit year. accounted XX% Purchase million, XX% from million, quarter. construction portfolio. the approach overall contributed was from to traditional mortgages mortgage At to nicely construction of continued and million, growth. during our grow XX% the we pipeline originations Residential XX% XX, approximately as digits double home-buying up year-end, loan season. total the mortgage residential $XXX

This quarter, residential million is XX%. This construction growth is with or seasonal line growth expectations. was in $XX and our

progress our of As partnership past quarter. $XX I refinance quarters, student for million fintech mentioned two to originations with continues during business, the the loan nicely, recent

accelerated, or loan growth X.X% utilization, paydowns, a a loan as X.X%, this line increased Increased last million originations, $XXX versus $XX Now, provide little let as portfolio in drove more seasonally on increasing quarter. me million with grew a X.X% decline commercial quarter. or C&I commercial growth lending. The detail point growth. in combined well up quarter second seen ended low I $XXX from in the we outstandings has at for balances quarter XX% XXXX. line quarter. approximately have in note that three the increases the over the past the XX%, third million of would in line utilization growth Commercial of consecutive quarters. generated This strong

quarter was XXXX. As XX% a reminder, line commercial as of of the utilization first

the quarter. mortgages as declined elevated or a X.X%. advances Commercial we nicely, commercial $XX more line from a result, contributing levels. XX%, As loans million growth to grew during a construction $XX Originations grew at fourth modest quarter. utilization Also seasonally migrates by million see opportunity driven historical increased or

we XXXX. the equal rebuild pleased line decline After was originations, with quarters were in decline with and three remain quarters the Overall, paydowns. two in However, Offsetting seasonal pipeline remain in solid. strong to of our start and to year. originations, first loan growth commercial prepayments an the our of continues

decline a $XX decrease by million balances for to quarter, offset continues products. toward mix or saw in interest-bearing we by driven Turning Total to cost continued the in X.X%. products, And declined deposits, products. non-interest-bearing lower migrate modest non-interest-bearing deposits or in certain partially deposit growth our a

at cost XX gives quarter, cash multiple the our as points, rising strategic basis scenarios. excess we us maintained position During consider and our we deposits flexibility rate of

our fee to with we of pleased lines. Moving business, business our many were

pressure Our and record business in and positive management quarter, revenues markets. results, grow to banking experience mortgage residential nicely. another Despite capital cash delivered we these management wealth did continue

First, grow. our continues business wealth to management

small see assets Our did $XX.X strong these as billion, customer a efforts, and down decline on administration Despite retention, year-end. a acquisitions, of to to administration and from effort, management client billion under declined cumulative several management linked-quarter basis. effect under we have continue growth. assets $XX.X markets sales at drive and declined

However, they period. $XX.X up ago the billion from remain at end year the of

is have volatility in sale fees SBA fees, fees. Turning the versus customers to turned and declined structures, sale swap ago down revenues merchant or Capital pressure up gain exhibit decline declined ago was XX% business declines Offsetting fee fees in linked-quarter rate a swap direct cash and pressures see lower continue record expand. markets X.X% these our annualized, we activity and and coming markets Total on modest period, some by preference fixed year. SBA commercial after seasonality were $X.X throughout as on their as some management ‘XX. our year fees by X% commercial loan to management driven impacted program, with in near-term the income. to grew activity, gain capital SBA lines the million, transactional Cash versus This Swap seasonal and businesses. period. are linked-quarter of year off will business.

pipeline solid. SBA remains our However,

program and team. our is the by this As PPP income SBA reminder, a SBA separate from is dedicated generated

pressure banking during mortgage our quarter to line Turning business, the led banking see by we revenue. in did consumer decline of

interest the portion down gain to valuation talk income. decline a residential residential With margins our While pipeline banking will that were mortgage Overall, higher, Mark up of the reversed, fee about rates in mortgage later. declined, and originations remaining and little income on and a servicing was million quarter, moving $X.X rights quarter-over-quarter sale was applications allowance the linked-quarter. leading fee during

seasonal linked-quarter, income, mortgage were activity experienced annualized, In to down X.X% consumer banking as an XX.X% fee decline. or fees unexpected transactional customer addition

in a modest asset to in compares moving remains loans of credit, of to despite seven within basis narrow uptick Non-performing net recoveries net the ’XX, or solid. $X the Net of remain during experienced points seven basis and to quarter. million fourth $X.X low the of charge-offs and recoveries remain quarter quarter, Delinquency XXXX. million annualized for net of for first a Finally, we points quality all quarter. charge-offs range, the continues

XXXX. This credit provision for allowance provision for credit negative was fourth versus X.XX%. excluding at is $X consecutive negative our quarter quarter the loans, quarter losses of a $X The a PPP provision. negative fifth million losses, million stands of in first Our

periods always, projections. volumes, As change trends stable, credit based charge-off net trends. could economic no material allowance our future loan origination our remains longer-term and Overall, loss new outlook credit activity, current in on with for mix, change in our loan

financial Mark our Now, a and turn our detail. more to I'll outlook results a over in discuss call to little

Mark McCollom

otherwise, note I Slide diluted Curt, good quarterly share income will Great. and of the net the per quarter available of common to $XX.X earnings from were on on everyone $X.XX on $X.XX you, the Unless fourth to prior with Starting shareholders this XXXX. Thank are comparisons is quarter This up the quarter. morning million. I call. discuss in X,

a quarter losses, in these my performance a of and in expenses, decline non-interest more decline included a comments. cover operating I'll interest income net in in Our later each for and provision first credit income, and negative detail

to earned decrease at respect in a outstanding Moving million, and and in loan of unearned to forgiveness. solid from modest was earning quarter, With linked-quarter PPP end expense. interest million on of $XXX X, loans, This $XXX the decline a fees This the by million million net our to decline had a income due in program, offset of assets, yields increase our fourth loan $X $X PPP modest we growth, $X primarily fees. a million linked-quarter. Slide PPP was was decrease interest

PPP first quarter. down loan were on quarter, and fees million, from forgiveness $XX in $XXX the the the During $X earned million was million, that fourth

of our So, PPP yet of have books, with million $X in to March XX then, approximately at million be recognized. $XXX loan still fees we loans

work. the in With investment the increase rates, some to modestly portfolio, did the cash quarter excess a billion. grew balances of we $X.X our increasing $XXX end during period, Turning to put sharp at million to

excess measured remain securities. approach our we to cash into in deploying However, investment

approximately ending Turning an $XX on deposits, declined basis. million deposits total to balance

noted, quarter remained Curt cost for XX As low basis of points. at our deposits the

savings $XX decline the deposits, decreases During as the quarter, in for of and by we certain interest-bearing as deposits in saw non-interest-bearing well offset million. net time categories, increases

loans quarter in and first due ratio first the quarter, outstanding. the increased for increased XX.X% to ending from Our to loans primarily XX.X% deposit

partially quarter offset yields, an higher fee first the loan interest-earning one the costs, increase for deposit margin interest in quarter. net PPP X.XX% earning Our resulted X.XX% point by in linked-quarter, stable and The improvement the versus basis assets, loan mix primarily was a in of fourth recognition. assets, from decline

I'll business on some continued management additional Slide Curt detail income, deliver volatility the quarter to in discussed. Turning good provide Wealth despite results a just the non-interest to X, market. on

declined from points and Our sales last which and mortgage on XXX basis decrease a were revenues resulted spreads, points in decline basis banking XXX quarter. versus sales in gain loan this a quarter,

the slower We to also allowance prepayment to of our and valuation $XXX,XXX recorded rights a servicing mortgage reduction due rates higher interest asset speeds. for

at end, returns linked-quarter included Our our investment are MSR At on fintech million allowances gains in million method quarter from mortgage remaining. quarter. quarter $XX.X decreased Last basis. servicing during XX. that $X.X March a OXther of million income very investments, fee fund was asset equity no $X.X rights strong as there a generated valuation

costs, linked-quarter salaries outside was the certain the services driven in compensation, a by fourth $X Total our net company $X.X cushions due part partially parent Also regulatory decrease in of million to market. charitable Moving banking contributing decline. At quarter, as increase well primarily value decline down in lower on during XX was significant to solid our FAS resulting benefits on interest and share and to non-interest were driven linked-quarter, million This million $X.XX asset due and million rates swing expenses million in to bonuses first expenses by of the a positive $X.X quarter. detail expenses, our and sales the respectively. With in X first common during linked-quarter. negative lastly, incentive strong. more capital $X.X per declining over lower a in fourth $X certain quarter. incentives due ratio, to other in $XX share, tangible quarter, a XX, payroll in by totaling and we provides decline the $X.X contributions Slide reported very other a And income the linked-quarter per X, to costs million in increased XX fourth and our points remain factors. the approximately mortgage from we comprehensive were a quarter, and a decline deferrals quarter the $X.X quarter timing technology projects This taxes, offset and down This salary one-time million. following liquidity basis the million equity $XXX accumulated million in gain were book ratios. recorded linked-quarter, fixed a as minimums, million both swung both by maintained March the tangible bank impacted $XXX Slide increases

And board the repurchase share During shares. Phil $XX expiring mentioned, another not quarter, authorizing we year-end. our approved any at did million as repurchase

acquisition third A prior is three Bancorp, Given quarter. to guidance the the past which the Slide XXXX. repurchasing Prudential any for providing we're macroeconomic in updated On shares we months. obviously the the anticipated won't closing, of pending X, lot changed over to has environment be in be

The announced basis in XX in as Our XX XX as follows. is points a and forecast, basis guidance June, on points and funds rate Based Fed points of September. points this basis basis March, of occurring revised now follows. increases May, our guidance XXX in assumes each of July, total previously

We basis, expect net the on be equivalized non-tax our range to $XXX income million a to interest $XXX of million. in

We to non-interest our to range of be in million. excluding gains, million expect $XXX securities $XXX the income,

excludes to third million the tax $XXX range effective And guidance of the Prudential close in to be which XX.X% operating year. the quarter. of we to the to year. expected impact expect lastly, our of full expect transaction, million expenses the in range the XX% for $XXX be to in the We for is This rate

you of to Many PPNR, key revenue, provide. operations. incorporate the impact guidance or look future a profitability We as in the of Prudential of metric net assess at pre-provision that will we core

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

And two removing restructuring, declined growth. items, XXXX past the of the balance shown in $X believe of have quarter. in allowance additional MSR XXXX evaluation fees quarter $XXX,XXX our from in impact we PPP year, quarter fourth first decrease the allowance the an the of quarter. resulted Our a when stabilization, these as sheet earned fee the adjustments million valuation core first and asset growth earning margin has improvements our quarter first income the over since result PPNR first to business

call beyond. Additionally, from to our XXXX I’ll in asset-sensitive and the sheet rate now With increases turn is balance benefit positioned operator to the for questions. anticipated over that,

Justin?

Operator

Instructions]. from [Operators comes Gunther from question And Russell Davidson. first D.A. our

open. now is line Your

Russell Gunther

this discussion, morning, guys. growth Hey, very loan follow and on up result healthy Wanted the quarter diversified. good to

look out picture, stable give of for year? environment you more both could us there expect a you bigger a guys the the you then perspective? or in for mix remainder a any characterize And from half back and concern just As operating progress, the XXXX, growth of of how kind softness to the magnitude through sense is that from perspective,

Curt Myers

Curt. Russell. for I'll Thanks, This answer that question is Yes. you.

loan at So, with we as our look first growth. we loan quarter were growth, happy

start. off we're think to I good a

diversified. As We at growth we more for the residential diversified. steady consumer had of you it And contributor less business, year. a that look prepay consumer on and mortgage as in the we growth forward. relied will really I look We see think we becoming consumer, be see remainder the have becoming business more headwinds

good think will forward. as we a be steady performer So, consumer we look

good again origination had we last activity side, commercial the quarter. On

activity. in in product. even - and with good diversified that the is pipeline The stable, origination geography Our growth is

tailwind added The a that's going say final We and by to growth we talent. supporter those as line to thing we adding our that, to script continue look of I'd the be growth forward. look we on loan at we expect the as we've have continue and in So, that encouraged are referenced is, we think do we pipeline, and utilization. been

we government team to second a year. added in in that opportunities growth additions that we DC. services and a give added a the Southeast team in added are of PA. recent, team, So, those pretty with half going they're We've so,

we that we're think targets our So, positioned out. that meet in outlooks set the we had well can we

Russell Gunther

that. you Thank guidance me expectations just just fee a to that revision on in year? income question the what's guys, concentrated growth there. you Could dialed-back and one then give us of more and for sense more great. fee be this where the income Okay, And driving you, terms expect the for

Curt Myers

again. key Curt, Mark are of given it's going follow hopefully We be and year. Yes, the let flat increases that swap I'll to year-over-year, business, items year, up. were is to in Two headline we're to flat last rate kind the choppy. environment, probably expecting last

then purchase a business So, thought, the we in in going perform to and we mortgage went for us. Rates have quarter have forward. continue quicker think we The the thought. money-driven income. up first than Those fee we softer that's that headwind the headwinds a than we key mortgage two was shop, And we business. but are

Russell Gunther

me, Thanks great. Well, very for Okay, it much. that's guys.

Operator

comes our Thank Frank question from Piper Sandler. from you. Schiraldi next And

line now open. is Your

Frank Schiraldi

morning. Good

Just expenses the that wondering strictly in if guide. you guys of just a Is year, the strong or start about full start updated driver talk little what's the there could - for XQ? good for kind expense especially to inflationary follow given the on the pressures, up the adjustment or guide, on bit that

Phil Wenger

be almost entirely of related the and multiple categories. say effects it. would it's in inflation Frank, That'll I to Yes. that

Frank Schiraldi

in how betas thoughts Any costs. the in the you terms of thoughts side. picture, and/or rate the hikes the on deposit coming Mark, quarter mix on near-term to potential shift Okay. here quarters? And deposit out mentioned the as balances in in and updated play the just of deposit runoff terms

Mark McCollom

anticipated we Frank, a We in Yes. shift bearing. than first quarter, even the stronger to saw non-interest had

percentage to we much a have non-interest uprate we the XXXX of kind bearing than last back of if you and of had So, the DDAs higher cycle. go start

overnight now, just a still So, flexibility and as in bearing a combine I mean, us to customer-centric and of betas sitting we you the gives think going be. make the just betas organization, were of cash, non-interest increase generally we're our strategic end last opportunities think way hold because cycle. if a at those somewhere uprate percentage rates range beta right pace north that - early that's a sure when be at about of composition we of will on DDA, we $XXX in also customers. day-to-day million last a there's we bit and But it the day, what to expect going of going be in one we’re that through to at you least But to little our the to of slower all key XX% And here, than sheet. cycle, balance the the through we what look do cycle our the was higher

Frank Schiraldi

you. Okay. All Thank right, great.

Operator

Daniel Thank Raymond Tamayo from you. And comes our next James. question from

Your line open. is now

Daniel Tamayo

for Hey, my good morning, guys. Thanks taking question.

include wanted the to what numbers that correct? the guidance said first, deck I you guys of the slide that Just in any not Is confirm does Prudential. from

Mark McCollom

correct, That’s be We'll next providing those guide. we'll that not. does into the It start quarter. Danny. incorporating Yes,

Daniel Tamayo

Got it.

Okay.

field a quarter, thinking closes. you're with terms guidance of whenever change that in changed the to So, know environment the way accretion the next deal adding quarter anything you're with changing? I on - anything to changed rate provide this related at but about point Has has going and

Mark McCollom

hasn't, it Danny. No,

gave that at point. we has stayed deal announced relative when this the we for the the acquisition guide Our of existing back that same accretion

Daniel Tamayo

Got it.

then you’ve - maybe just on that the Does guidance. a still Okay. NII levels. excess got And clarification include cash

the you Does They You first in include of did talked the a as levels quarter that all, about guidance? giving how is included that cash or guidance come excess in down normalization the at flexibility. well.

Mark McCollom

Yes.

our normalization, cash is securities loan year, function gradual this than there's we use does historically So, loan held continued cash. cash would have way a assume still or rather there guide put that And but does really growth. be if we level that that that than to more overnight in of say which then the in assume we'd would growth, I a what obviously end sort of to by going excess be have pre-pandemic, we of that some of normalization. it

Daniel Tamayo

curious Okay, and from those for the expectation what on just finally, down are move updated reserves, just losses given great. thoughts your higher And on Thanks. may potentially here, then road? where higher rates

Mark McCollom

talking loss the him? lose correct? are about Did still You're line? Danny, you loan provision, on we

Operator

He’s line. on sir. not the No,

Phil Wenger

him. lost We

Mark McCollom

We lost him. All right.

Phil Wenger

the question. Still answer

Mark McCollom

Yes.

don't the CECL, others specific loss our for folks benign that But who be credit have losses a his of on with So, in amount guidance in today to give future. loan for provision we've provision. credit books we might all as so obviously interested know, theory sufficient And question, is we the cover had very allowance loss the on credit a in that we may incur environment.

unless the So, really changes, outlook growth. that forward be then our future, that economic going thing provision loan our would levels only impact would

Phil Wenger

And with … that

Operator

you. Thank

Phil Wenger

question. to go Danny not Yes. guess We'll the on. is next I

Operator

Okay.

Our comes from from Chris next question McGratty KBW.

Your open. is now line

Chris McGratty

just the wanted Fed a asset appetite and base sense revisit over about second. be for very a to function a months, hard, the sheet today. took thinking cash. Obviously, get a it's your of the we Mark, back the size I add-ons, XX given should earning to reduce morning. good and deposit of growth, trying what's to if in I projections I'm just balance of How to next taper there projections? deposit to of think I assets? just the step the the XX size are dynamics Hey, growth all earning out but know

Mark McCollom

Yes.

allow point some more we're So, So, - in of to stayed And be roughly to XX% total overall right? points. is over to us, to be opposed I by replaced mean, assets, loan the earning loans, mean, to right I couple our consistent entirely grossing loan eight I a of at back portfolio over just come of the next as don't six investment years that the position the you at willing going pretty than assets. that's cash we've portfolio, now. our our to percentage patient quarters, as where really changing think up see for growth overnight that

Chris McGratty

yield Okay. you book, And relative to of experiencing in be blended of yield first quarter? you bond what the what terms kind in the buying are in the may pickup then

Mark McCollom

XX-basis point the range. In

Chris McGratty

Okay. All right. you. Great. Thank

Operator

Zwick question comes from Scattergood. Thank you. And our Erik & next from Boenning

Your line open. is now

Erik Zwick

are in might just for the wealth balances to wondering of management that you kind market given terms AUM me in trend Thanks. of guys. me, of you going How recent if given Good how billed just dynamics. or the charge First morning, one kind arrears bill quarter-over-quarter. get remind fees, decline sense of you? for based balances? kind on trying average those of Are in a forward, or Just where can

Curt Myers

Curt. Yes, Erik, it’s

So, there's wealth under we business business our lines have little bulk a in is on levels portfolio fee, based the recurring a different is billing management - but and different, of levels. assets so management,

So, it's a forward. good we looking typically bill and quarter-end solid business on recurring fees,

assets we There'd see would forward, we pressure assets as revenue and look little bit. we grow So, but down a adding a little too. be on again, continue to the customers, business,

Erik Zwick

broader specific disclosures? I'm curious a earnings initiatives, color given ESG to outlook, quarter's Appreciate your for that regulatory into there. not And the could provide you some kind proposals this if current just question, or Thanks, of the but positioning and Curt. commentary enhanced

Phil Wenger

Yes.

we’re So, have what hard working forward. we'll going reporting understanding very requirements at

issuing first the corporate our We of weeks, couple report. social responsibility will over be, next

paying navigate working of force managing diligently being have that lot as are so - appropriately. that attention forward. the a We climate to we Internally, move task business we we can impact

make So, understand where making are we and to impact. need positive we to effort the necessary be feel we to

Erik Zwick

Great. looking forward report. I at had. I upcoming all to That’s look Thanks. the

Phil Wenger

We’ll make sure get you it.

Operator

And Thank Stephens Breese question Matthew Inc. next comes you. from from our

now line Your open. is

Matthew Breese

XXX, today of in much through by like basis as the the Fed XXX on could the year. have XX just XXX feels you so additional NII And now year-end much forecast, the Hey, hikes Fed of morning. your funds versus it as very increase basis model Good points basis points end points quarter. last

So, were does than the XXX, the outlook to XXX if more how you expect, NII versus we change? get

Mark McCollom

billion for up. unhedged. prime we on, comes I would rough loans of Matt, you of us aware And which little that. either obviously, $XX But a likely probably it think then definitely beta the XX see corresponding that incremental SOFR each LIBOR you're have numbers, Well, to more go would are are tied or of, deposit as roughly that with bit a

a little over then $X billion billion, $X We hedged to already have about back fixed. but are that

million impact So, you that's by deposit $XX about for whatever offset take on be. take give that NII, would XX-basis or point beta that incremental rate each move,

Matthew Breese

there movement - prices changed has this rate yet? core you any And your at Have Okay. core base deposit offered in or spot rates point? rates been

Mark McCollom

No.

Phil Wenger

Not in product. any

Matthew Breese

Got it.

Okay. In rates. utilization remark, C&I you'd prepared historical your mentioned

I mentioned low of kind think versus today. you'd range like the XX% XX%

would and to that were you be today's loan timeframe of what XX%, over think incremental growth, to what can get there? No. kind you we If do back back get terms in of on book

Phil Wenger

Yes.

two north and So, $XXX probably it's things. of million

So, Historical the over we're we've is But normal well. about couple average past business really of the years, XX%. as grown XX%.

and So, up. are our commitments commitments line

but increasing X% quarters. we much not the will think So, we much have we And occur, increase, that pace stand that but quarter of right upside do will each think average how we’re up million the will $XXX where that from pace we now. will to moved and $XXX over last think get see think I increase, quarters. historical pretty three we an that pace million between accelerate. will to that we sure do We've The that next

Matthew Breese

Okay.

the $XXX the the to million recent the sale thinking terms versus quarter of changed you're mortgage mortgage holding what in books? Going at this retained of much has business, on in And versus for was sold? originated originating all hike how rates

Mark McCollom

about just on books there the to my need past really how numbers on of this saleable the I sort look as here tell amount Yes. quarter. product to retain, can't can that grab nominal I but $XX kept much going we're me was fingertips, only there. we think was you, roughly that quickly. find we let It I'll of million. a Yes,

over obviously make - sense currently product to consideration. that business, but for increasing us time, remaining That's sell with consider, would we So under commercial just well. of might it more that as some

Matthew Breese

Last Okay. for me. one

direction terms on I CECL quarter just touched You two but the there items. were process, kind curious was this opposite obviously of in the reserve, of

and provisioning? Russia-Ukraine the increasing, and about items have around just process inputs talk the declining. those items outputs impacted you had COVID conflict reserve you also thought the You how Could and but

Mark McCollom

like rely we, lot a base mid-sized for of Moody’s forecast. so, on Yes, economic their banks, and

about has as all as a different as and stress of that team So, their look produces scenarios we macroeconomic factors, at their economists output, Moody’s well. base different that those think who obviously well

Matthew Breese

Got it.

I Okay. you. leave I'll there. Thank it That's all had.

Operator

next from Hovde our Dave comes Group. And from you. Thank Bishop question

now Your line is open.

Dave Bishop

that you Good range. investment Thank some portfolio, you much. gentlemen. Yes. securities think that of How the of at dollar this normalizing XX% from I percent cash we morning, terms Thank excess liquidity in you basis overnight see the Mark, centering over and around longer where the about of Hey, very you. targets term? longer the should a point in assets talked of term sort view maybe liquidity about then

Mark McCollom

XX% that go been is of That has the Yes. between cash. number $XXX we $X.X the we right investment $XXX as night, we've above $X.X where about were portfolio. to overnight like now much been Pre-pandemic, $XX a million million down kind run reluctant and assets million. David, as to at billion, And of during high in our billion. pandemic again, It's

sitting the level, was we're going to little levels. quarters, ago. then to just we've of month forecast see more it growth year, a little still which here been be historic loan probably bit by the bit in three overnight So, over I'd obviously But stay patient, only in we higher what ‘XX, cash, we'd today with and next to is than a than that that the revert back expect the but a end historic sometime for

Dave Bishop

then And it. question. final one Got

up management in the cash just of product, better noted Thanks. a just or you penetration? year-over-year change or increase on that on that pricing think structure in terms commercial account represents preamble, any I in nicely fee basis. the fees,

Phil Wenger

and activity. well growth as as it's just customers in really growth in Yes,

Dave Bishop

you. Thank Great.

Operator

am you. the would question. turn I I And back to thank like Phil to now CEO, further no call for showing closing remarks. And over Wenger,

Phil Wenger

us results Well, thank again joining we and with discuss today, second quarter July. you'll us hope able be to you, when everyone, for be we in

Operator

call. conference you for today's concludes This Thank participating.

You may now disconnect.

Fulton Financial (FULT) 20 Apr 222022 Q1 Earnings call transcript