Fulton Financial Corporation

Good day and thank you for standing by. Welcome to the Fulton Financial third quarter 2024 results conference call. At this time, all participants are in a 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 now like to hand the conference over to Matt Jozwak, Director of Investor Relations. Please go ahead.

Good morning, and thanks for joining us for Fulton Financial's conference call and webcast to discuss our earnings for the third quarter ending September 30, 2024. Your host for today's conference call is Kurt Myers, Chairman and Chief Executive Officer. Joining Kurt today is Rick Kramer, Chief Financial Officer Designee, and Betsy Chavinsky, Interim Chief Financial Officer. Our comments today will refer to the financial information and related slide presentation included with our earnings announcement, which we 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 Presentations page under the Investor Relations website. On this call, representatives of Fulton, We 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 the forward-looking statements in our earnings release and 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 and slides 20 through 26 of today's presentation for reconciliation of those non-GAAP financial measures to the most comparable GAAP measure. Now I'd like to turn the call over to your host, Curt Myers.

Well, thanks, Matt, and good morning, everyone. For today's call, I'll be providing highlights on our performance for the quarter, updates on several key initiatives, and a few overall comments on the company. Then I'll turn the call over to Rick Kramer to review our financial results in more detail and step you through our 2024 guidance. After our prepared remarks, we'd be happy to take any questions you may have. Let me start by thanking our New Republic teammates, as well as a dedicated Fulton team, for an exceptional effort this year. We are delivering for our customers, communities, and for you, our shareholders. Our team's impact is evident in our record-setting results this quarter, and we are making great progress on several key initiatives. We're excited about the strategic steps we're taking, and I'd like to illustrate that by sharing some highlights of the quarter. Operating earnings of 50 cents per diluted share this quarter was a record for the company. We were especially pleased to see the momentum continuing following a strong second quarter. We saw loan growth in line with our expectations. Deposit growth exceeded our expectations, driven in part by growth in the Republic deposit portfolio. Through five months, Republic deposit balances remained comfortably within our original modeling. Our net interest income and net interest margin exceeded our expectations. On a linked quarter basis, the net interest income grew by $16 million, while net interest margin increased six basis points. These increases were attributable to a full quarter impact of the Republic transaction, the benefit of recent balance sheet restructurings, and our organic growth. Non-interest income grew $1.5 million linked quarter when excluding the bargain purchase gain adjustments. Most categories were up linked quarter, and non-interest income remains a meaningful and stable component of our overall revenue stream. Operating non-interest expense increased 1.3 million, or 2.7%, on an annualized basis. This increase includes a full quarter of Republic expenses, offset by a decline in Fulton organic expenses. Provision expense declined to $11.9 million and was relatively in line with recent quarters. As a result, operating net income grew $9 million to $91.3 million. During the quarter, as part of the Republic integration and the Fulton First initiative, we consolidated 16 financial centers, which exceeded our original estimate. Additionally, as part of Fulton First, we announced several leadership appointments within commercial banking, business banking, credit, and market leadership. These appointments bring increased focus to core areas of our business and positions us for continued growth. Our performance allowed us to increase our already healthy capital levels, grow our tangible book value, reinvest in our business, and deliver strong results for our shareholders. Overall, another strong quarter for our company. Now let me provide a bit more detail on our growth. Third quarter deposit growth was $745 million, or 12% annualized, when excluding $153 million planned reduction in broker deposits. We delivered growth in both the Legacy Republic deposit portfolio as well as growth in the Fulton portfolio. This growth was further enhanced by our seasonal inflow of municipal deposits. As always, we remain focused on customer retention and customer growth. Loan growth for the quarter was $70 million, or 1% annualized, slightly below recent periods. As part of our Fulton First initiative, we evaluated and exited our indirect auto lending channel during the quarter as we're focused on higher margin and relational products. Our loan-to-deposit ratio ended the quarter at 92.4%, below our long-term operating target of 95% to 105%. We continue to feel it is appropriate in this environment to operate below our long-term targets. Now let me provide some comments on credit. Net charge-offs of $11 million or 18 basis points was stable on a length quarter basis. Non-performing loans increased $30 million or 12 basis points to 0.84% of total loans. This increase was due to a mix of borrowers, geographies, and loan types and not concentrated in any one portfolio or industry. Certain customers continue to struggle in this higher interest rate and higher cost environment. We continue to be diligent on our credit monitoring and are managing the portfolio closely. Now moving forward, I will provide updates on two key corporate initiatives. First, we are focused on the timely and effective integration of the Republic transactions. We accomplished a lot in a short amount of time and anticipate systems conversion in the fourth quarter. This will be the last major milestone of the integration process. We expect to have all material integration benefits implemented by year end, and we remain confident in our 40% cost savings estimate. Next, let me turn to Fulton First. Fulton First is a transformational change to how we operate. Accordingly, implementation requires a thoughtful and paced approach over time. We're encouraged by early results and optimistic about the impact to our growth and to our efficiency over the short and long term. It's important to reinforce a few key themes that drive this initiative. This is a critical step in our journey to be the bank of choice for not only who we are, but also how we operate. This initiative deepens our commitment to our purpose, our vision, and our strategic execution by simplifying our operating model, focusing on core relationships, and improving productivity across the bank. During the quarter, we've made progress towards implementation of this strategic Fulton First initiative. We've created one credit organization to streamline underwriting processes and deliver prudent and faster credit decisioning. which will provide a platform to support long-term growth as well as deliver near-term efficiency. We've realigned our commercial segments to focus our talented team with specific customer segments to drive customer value and growth at an even faster pace. We further invested in our business banking segment. We have over 65,000 business banking customers and a market opportunity of more than 1.5 million. With enhanced focus, we will attract, serve, and grow even faster in this highly attractive segment. These actions will position us to accelerate our growth and improve how we operate. Overall, we are making progress on all strategic initiatives, and we are pleased with our results year to date. Before I turn the call over to Rick to discuss our financial performance and 2024 guidance in more detail, I'd like to say a special thank you to Betsy Chavinsky, Betsy served in many roles with the organization for over 30 years, most recently as interim CFO. Thank you, Betsy, for your dedicated service to our company, your commitment to this organization, and the positive impact that you have made. Now I'll turn things over to Rick for more details on our financial results. Thank you, Kurt, and good morning.