Fulton Financial Corporation

Ladies and gentlemen, thank you for standing by. Welcome to the Fulton Financial Third Quarter 2023 results. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Matt Josbeck, Director of Investor Relations. Please go ahead.

Thank you, Michelle. And good morning and thanks for joining us for Fulton Financial Corporation's conference call and webcast to discuss our earnings for the third quarter, which ended September 30th, 2023. Your host for today's conference call is Kurt Myers, Chairman and Chief Executive Officer Joining her is Mark McCollum, Chief Financial Officer. Our comments today will refer to the financial information and related slide presentation included with our earnings announcement, which was released yesterday afternoon. These documents can be found on our website at fult.com by clicking on investor relations and then on news. The slides can also be found on the presentation page under our investor relations website. On this call, representatives of Fulton may make forward-looking statements with respect to Fulton's financial condition, results of operations, and business. These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, and actual results could differ materially. Please refer to the safe harbor statement on forward-looking statements in our earnings release on slide two of today's presentation for additional information regarding these risks, uncertainties, and other factors. Fulton undertakes no obligation other than as required by law to update or revise any forward-looking statements. In discussing Fulton's performance, representatives of Fulton may refer to certain non-GAAP financial measures. Please refer to the supplemental financial information included with Fulton's earnings announcement released yesterday, as well as slides 16 through 20 of today's presentation for reconciliation of those non-GAAP financial measures to the most comparable GAAP measures. Now I'd like to call the turnover to your host, Kirk Myers.

Thanks, Matt, and good morning, everyone. Today I'll provide a summary comments on our company, including comments on our financial results, our growth, and an overview of the credit environment. Then Mark will share more details on the financial results and step through our outlook for the remainder of 2023. After our prepared remarks, we'll be happy to take any questions you may have. We were pleased with our third quarter results. Operating earnings of 43 cents per share were solid. We saw deposit and loan growth. Our net interest margin was stable, and we maintained solid asset quality. Our pre-provision net revenue was down 4% as fee income on an operating basis was down length quarter. We generated strong results in wealth management that helped offset a decline in capital markets income this quarter. Operating expenses were higher during the quarter, largely driven by additional technology expense as well as higher salaries and benefits expense. Our core operating expenses are expected to decline in the fourth quarter from the third quarter levels. We are focused on our current level of core operating expenses and are committed to realizing the full benefit of recent technology investments, continuing to generate smart growth, and obtaining staffing efficiencies to drive core operating expenses to average assets down in future periods. In addition to our solid operating results, we repurchased 2.2 million shares in the third quarter and continue to monitor capital deployment opportunities. As of September 30th, 29 million remains from our $100 million 2023 repurchase authorization. Turning to growth, total loan growth moderated this quarter, growing $133 million, or 2.5% annualized. These results were in line with our expectations as communicated in prior quarters. Commercial loans experienced modest growth and a mixed shift occurred as commercial mortgage loans moved from construction to permanent status. Consumer loan growth was driven by residential mortgages. However, that growth continues to moderate as expected. Overall, we are focused on originating loans at the appropriate risk-adjusted spreads and acknowledge the impacts of a higher for longer interest rate environment and current economic conditions may have on this loan growth. Deposit growth outpaced loan growth and was $215 million for the quarter. This was driven by seasonal inflows of municipal deposits of $270 million. As a result, our loan-to-deposit ratio benefited, declining from 98% declining to 98.9%. This remains well within our long-term target range of 95 to 105%. We continue to invest in long-term organic growth. During the quarter, we opened one new financial center in Philadelphia. In addition, we have financial centers targeted to open in the Philadelphia, Richmond, and the Wilmington MSAs in the fourth quarter. We also recently opened a loan production office in Norfolk, Virginia, in order to further accelerate growth in that market. Turning to credit quality, our credit quality metrics remained stable. Net charge-offs were 5 million, or 10 basis points annualized. Criticized and classified loans declined, non-performing assets declined, and delinquencies remained historically low. We have again provided detail on our loan portfolio and specifically on our office portfolio in slides four and five. I'd like to note that our overall concentration in commercial real estate is approximately 185% of total capital, well below our proxy peer average. Overall, we remain pleased with our credit metrics. However, we acknowledge the broad market trends and their potential impacts on credit quality. Now I'll turn the call over to Mark to discuss the details of our third quarter financial performance and our 2023 outlook in a little more detail.