Fulton Financial (US:FULT)2023-07-19 18:06Financial Data and Key Metrics Changes - Operating earnings per diluted share for Q2 2023 were $0.47, an increase from $0.39 in Q1 2023 [65] - Pre-provision net revenue (PPNR) for Q2 was approximately $106 million, a 19% year-over-year increase [39] - Total deposits declined by $110 million during the quarter, with a loan-to-deposit ratio increasing to 99% [66][39] Business Line Data and Key Metrics Changes - Fee income increased by $8.9 million, with commercial banking achieving record results driven by strong capital markets and merchant processing income [7] - Wealth Management revenues rose to $18.7 million from $18.1 million in Q1, with assets under management reaching $14.3 billion [15] - Consumer lending grew by $256 million or 15% during the quarter, primarily due to mortgage lending [12] Market Data and Key Metrics Changes - The overall concentration in commercial real estate remains at approximately 180% of total capital, which is below the proxy peer average [9] - Non-interest-bearing deposits are expected to decrease to around 23% of total deposits by year-end, down from 28% [13] Company Strategy and Development Direction - The company remains focused on growing core deposits, managing deposit mix effectively, and improving operating efficiency [8] - The capital strategy prioritizes organic growth, with potential for M&A or buybacks as capital is generated [21] - The company is committed to managing expenses appropriately while ensuring revenue growth [174] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning for continued success despite potential economic headwinds [8] - Credit metrics remain stable, with net charge-offs at $2 million or 4 basis points annualized [42] - The company anticipates a moderation in loan growth in the second half of 2023 due to rising rates affecting demand [12][144] Other Important Information - The tangible common equity ratio was 7% at quarter-end, consistent with the previous quarter [16] - The company raised its quarterly common dividend by 7% to $0.16 per share [61] - Committed liquidity increased to over $8.2 billion as of June 30 [26] Q&A Session Summary Question: What is the expectation for non-interest-bearing deposits by year-end? - Management expects non-interest-bearing deposits to decrease to around 23% of total deposits, with a potential slowdown in the mix shift observed [18][74] Question: Can you clarify the loan growth guidance? - Loan growth is expected to moderate from the previous guidance of 4% to 6%, reflecting strong growth in the first half of the year [144] Question: What are the expectations for expenses in the coming quarters? - Management anticipates a decline in expenses in the third and fourth quarters due to non-recurring items in Q2 [109] Question: How is the company positioned for M&A opportunities? - The company is actively looking for M&A opportunities, although current market conditions present challenges [134][205] Question: What is the outlook for net interest income? - The guidance for net interest income is set between $830 million to $840 million for 2023, assuming a 25 basis point Fed funds increase [49]