Fulton Financial Corporation

Good day and thank you for standing by. Welcome to the Fulton Financial Fourth Quarter 2024 Results 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 a session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I will now attend the conference. Over to your speaker today. Matt Joswak, 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 fourth quarter and year-ended December 31, 2024. Your host for today's conference call is Kurt Myers, Chairman and Chief Executive Officer. Joining Kurt is Rick Kramer, 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 investor relations on our website. On this call, representatives of Fulton may make forward-looking statements with respect to financial Holton'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 and on slide two of today's presentation for additional information on these risks, uncertainties and other factors. Holton 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 in slides 19 through 28 of today's presentation for reconciliation of those non-GAAP financial measures to the most comparable GAAP measures. Now I'd like to turn the call over to your host, Curt Myers.

Thanks, Matt, and good morning, everyone. For today's call, I'll be providing a summary of the operating highlights for the fourth quarter and for the year. In addition, I'll provide the status of a few key strategic initiatives. Then Rick will review our financial results in more detail and step through our 2025 operating guidance. After our prepared remarks, we'll be happy to take any questions you may have. Fulton's results for the fourth quarter and for the year were driven by the extraordinary effort of our team. We worked together to deliver a very successful year, both operationally and strategically. For the year, we delivered on our strategy and focused on our corporate mission to change lives for the better. As a result, we grew to more than 750,000 customers, reached $1.2 billion in total revenue, a record for the company. We delivered strong operating earnings per share, which was also a record performance, and we made tremendous impact in the communities that we serve. We completed and fully integrated the Republic transaction, delivering strong financial results on an aggressive timeline. We made significant progress on our Fulton First transformation. This strategic initiative simplifies our operating model, focuses on key strengths, and enhances productivity across the bank. We strengthened our balance sheet by completing a sale-leaseback transaction, we restructured our investment portfolio, and we improved our liquidity and enhanced our earnings power. Our capital position grew throughout the year as we generated solid internal capital and supplemented that position with a successful capital raise. As a result, we delivered a strong year and positioned the company for continued success in 2025 and beyond. Our 2024 financial results were strong, especially considering the backdrop of a volatile interest rate environment. Operating earnings per share of $1.85 was driven by strong fundamentals, the impact of the Republic transaction, and the initial positive impact of our Fulton First initiative. In 2024, total deposit growth was solid. Legacy Fulton deposits grew $878 million, or 4.1%, And when including Republic deposits, total deposit growth was $4.6 billion or 21.3% for the year. Total loan growth was meaningful. While legacy Fulton loans grew $316 million or 1.5%, total loan growth for the year was $2.7 billion or 12.6% when including Republic. Our net interest margin was consistent with last year at 3.42%. Given the volatile interest rate environment, we feel that this was a positive outcome. Our non-interest income growth was strong. Excluding the impact of the gain on acquisition and the loss on the securities restructuring, non-interest income grew 31 million or 13.4% to 259 million. All non-interest income generating businesses grew. led by wealth management at $9.2 million, or 12.2% growth. Non-interest income continues to be a meaningful contributor to total revenue at over 20%. We declared dividends of 69 cents per share, a 6% increase year over year. And we continue to actively manage through the credit environment, working with borrowers and managing relationships for long-term performance. While we see pressure due to the ongoing impact of higher rates and higher costs, performance in 2024 was in line with our expectations. Overall, we were pleased with our performance and the results our team generated throughout the year. Now let me turn to our quarterly results. Operating earnings for the quarter was $0.48 per share. A stable balance sheet and noticeable improvement in expenses drove the quarter. Total deposits were relatively flat, with deposit costs down 10 basis points length quarter. Total loans declined $131 million length quarter. We generated a consistent level of originations. However, organic growth was offset by portfolio repositioning of selected Republic loans, as well as the planned decline in our indirect auto portfolio. Our loan-to-deposit ratio ended the year at 92%, slightly below our long-term operating target of 95 to 105. This position continues to provide balance sheet flexibility. Non-interest income for the quarter was $68.6 million, up $1.2 million linked quarter when excluding the adjustment to the bargain purchase gain. The provision for credit losses was $16.7 million, and our ratio of ACL to total loans increased to 1.58%. Overall, asset quality ended the year in line with our expectations, and we remain cautious as we enter 2025. Now I'll provide updates on two key initiatives. First, let me comment on the status of the Republic transaction. During the quarter, we completed the system's conversion, finalized our integration efforts, and are now realizing cost savings in line with our initial assumptions. We saw noticeable financial contributions to the fourth quarter results and are excited to see the full benefits impact our results in 2025. Finally, I'll provide you with our progress on Fulton First. As a reminder, Fulton First is an important initiative designed to enhance growth, improve operating effectiveness, and create sustainability, positive operating leverage over time. We are encouraged by the progress we've made to date and we are looking forward to the full benefit realization over the next year and beyond. For 2025, we expect the initiative will improve our operating efficiency and allow us to keep our expenses flat on a year-over-year basis. We feel this is a significant accomplishment in the current operating environment. Now I'll turn the call over to Rick to discuss our financial performance and our 2025 operating guidance in more detail.