- Total Revenue: $1.2 billion for the year, a record for the company.
- Operating Earnings Per Share (Annual): $1.85, a record performance.
- Total Deposit Growth (Annual): $4.6 billion or 21.3%, including Republic deposits.
- Legacy Fulton Deposit Growth (Annual): $878 million or 4.1%.
- Total Loan Growth (Annual): $2.7 billion or 12.6%, including Republic loans.
- Legacy Fulton Loan Growth (Annual): $16 million or 1.5%.
- Net Interest Margin: 3.42%, consistent with last year.
- Non-Interest Income (Annual): $259 million, up $31 million or 13.4%.
- Wealth Management Growth (Annual): $9.2 million or 12.2%.
- Dividends Declared: $0.69 per share, a 6% increase year over year.
- Operating Earnings Per Share (Quarterly): $0.48.
- Total Loans Decline (Quarterly): $131 million.
- Non-Interest Income (Quarterly): $68.6 million, up $1.2 million linked quarter.
- Provision for Credit Losses (Quarterly): $16.7 million.
- ACL to Total Loans: 1.58%.
- Net Interest Income (Quarterly): $254 million, a $4 million decrease linked quarter.
- Net Interest Margin (Quarterly): 3.41%, an eight basis points decline linked quarter.
- Non-Interest Expense (Quarterly): $190.6 million, a decrease of $5.5 million linked quarter.
- Net Charge Off Ratio: 22 basis points.
- Nonperforming Assets to Total Assets: 69 basis points.
- Tangible Capital Ratio: Flat linked quarter.
- Operating Guidance for 2025: Net interest income $995 million to $1.02 billion; Provision for credit losses $60 million to $80 million; Non-interest income $265 million to $280 million; Non-interest expense $755 million to $775 million.
- Warning! GuruFocus has detected 7 Warning Signs with FULT.
Release Date: January 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fulton Financial Corp (NASDAQ:FULT) achieved a record $1.2 billion in total revenue for 2024, marking a significant milestone for the company.
- The company successfully completed and integrated the Republic transaction, realizing cost savings and financial contributions as expected.
- FULT's non-interest income grew by $31 million or 13.4% to $259 million, with all non-interest income generating businesses showing growth.
- The company declared dividends of $0.69 per share, representing a 6% increase year over year.
- FULT maintained a stable net interest margin of 3.42% despite a volatile interest rate environment, which is seen as a positive outcome.
Negative Points
- Total loans declined by $131 million in the fourth quarter due to portfolio repositioning and a planned decline in the indirect auto portfolio.
- The provision for credit losses was $16.7 million, with the ratio of ACL to total loans increasing to 1.58%, indicating caution as the company enters 2025.
- Net interest income on a non-FTE basis decreased by $4 million linked quarter, with the net interest margin declining by eight basis points to 3.41%.
- The company faces ongoing pressure from higher rates and costs, impacting its performance in 2024.
- FULT's tangible capital ratio was flat despite being impacted by an additional OCI reserve of $44.5 million, ending the year at a negative $288 million.
Q & A Highlights
Q: Can you clarify the guidance on average earning asset growth? Is it based on the annual number or a decline from the fourth quarter number? A: We didn't provide guidance on average earning assets. Our focus is on net interest income guidance, and we expect low to mid-single digit growth on both sides of the balance sheet in the current operating environment. - Curtis Myers, CEO
Q: Could you discuss the provision guidance and how you see loss rates evolving? Are we in a normalization process or approaching a peak? A: For 2024, we were in line with expectations, and for 2025, we expect a similar year with a provision range of $60 million to $80 million. We have a bigger reserve going into the year, and we see things as stable relative to past experiences. - Curtis Myers, CEO
Q: Regarding the net interest income guidance, how should we think about the margin's cadence throughout the year? A: We are avoiding specific margin guidance due to potential dynamics. However, we expect to start the year slightly lower in Q1 and gradually drift higher over the course of the year. - Richard Kraemer, CFO
Q: What is the status of the Fulton First initiative in terms of realized cost savings? A: In the fourth quarter, we realized just under $5 million in cost savings on a quarterly basis. For 2025, we estimate $25 million in total savings for the year. - Richard Kraemer, CFO
Q: Can you provide an update on the retention of Republic Bank deposits and any trends affecting margin expansion? A: The deposit portfolio is stable, and we are ahead of our initial assumptions on potential runoff. The team is managing it well, and we continue to see stability in the deposit base. - Curtis Myers, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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