Good morning, ladies and gentlemen, and welcome to the Fulton Financial Fourth Quarter Results Conference Call. This call is being recorded. I will now turn the call over to Jason Weber. Please go ahead, sir.

Thanks, Kevin. Good morning. Thanks for joining us for Fulton Financial’s conference call and webcast to discuss our earnings for 2017. Your host for today’s conference call is Phil Wenger, Chairman, President and Chief Executive Officer of Fulton Financial Corporation. Joining Phil Wenger is Phil Rohrbaugh, Senior Executive Vice President, Chief Operating Officer and 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 at 4:30 PM yesterday afternoon. These documents can be found on our website at fult.com by clicking on Investor Relations, then on News. The slides can also be found under the – on the Presentations page under Investor Relations on the 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 and on Slide 2 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 in Slides 13, 14 and 15 of today’s presentation for a reconciliation of those non-GAAP financial measures to the most comparable GAAP measures. Now, I would like to turn the call over to your host, Phil Wenger.

Thanks, Jason, and good morning, everyone, and thank you for joining us. I have a few prepared remarks before our Interim CFO, Phil Rohrbaugh, shares the details of our financial performance. When he concludes, I will review our 2018 outlook and then open the phone line for questions. Excluding the impact of the tax charge, we reported diluted per share earnings of $1.07 for 2017, an increase of 15% year-over-year. Pre-provision net revenue increased approximately $41 million, or 18.7% year-over-year. Excluding the impact of the tax charge, our return on assets was 0.96% and our return on tangible equity was 11.27% for the year. 2017 was another solid year for our company as we hit record levels in revenue and net income, excluding the impact of the tax charge. Our financial results in 2017 reflected the continued progress in executing our growth strategies and the benefit of multiple interest rate increases by the federal reserve. We generated meaningful positive operating leverage, a goal that we set out at the beginning of the year. Our average loan portfolio increased 7.8% year-over-year, which was in line with our 2017 outlook and was driven by growth in most of our loan portfolios. Our average residential mortgage portfolio increased 21.5% year-over-year. Growth was concentrated in our Maryland and Virginia markets. Although we anticipate meaningful growth in our overall residential mortgage portfolio in 2018, we do not expect the ending balances in that portfolio to grow at the rate we saw in 2017, as we plan on selling more production into the secondary market. Our average commercial mortgage portfolio increased 9.3% year-over-year and growth was spread throughout our footprint, but primarily in our Pennsylvania market. As we have mentioned in prior quarters, our owner occupied commercial mortgages represent close to half of the overall commercial…

Thank you, Phil, and good morning to everyone on the call. Unless I note otherwise, quarterly comparisons are with the third quarter of 2017 and annual comparisons are with 2016. Starting on Slide 6, earnings per diluted share this quarter are $0.19 on net income of $34 million. Fourth quarter’s earnings were adversely impacted by the new federal tax legislation requiring a tax charge, which resulted in a $15.6 million charge to income tax expense in the quarter. Excluding this charge, earnings per share would have been $0.28 on net income of $49.7 million. Fourth quarter earnings reflected an increase in net interest income and non-interest income offset by increases in the provision for credit losses, non-interest expense and income taxes. Moving to Slide 7, our net interest income in the fourth quarter improved by $2.6 million, or 2%, driven by a 2 basis point increase in the net interest margin and a $207 million, or 1% increase in average interest-earning assets. Average yields on interest-earning assets increased 3 basis points, with loan yields increasing 2 basis points. The improvements in loan yields was aided by increases in net non-accrual interest income recoveries and loan fees. In addition, there was another federal funds rate increase in December. Partially offsetting the increase was the cost of interest bearing deposits increasing 2 basis points, primarily due to promotional campaigns and higher average index deposit balances impacted by interest rate increases. There was a seasonal decline in the index deposit balances at the end of the year. The 2 basis point increase in the net interest margin for the last quarter was within the range we provided in our updated outlook during the third quarter of 2017. Average interest bearing deposits were up linked quarter by $222 million, or 2%. The increase was…

Ladies and gentlemen, please standby, your conference call will resume momentarily. Once again, ladies and gentlemen, please stay on the line.

Thanks, everyone, for your patience.

You’re live.

Okay. Thank you, everyone, for your patience. We had a telecommunication interruption here that impacted the Lancaster area. I was beginning to talk about Slide 9 and non-interest income. So moving to that Slide 9, non-interest income, excluding securities gains increased $7.6 million, or 16% in comparison to the third quarter of 2017. The increase was primarily driven by a $5.1 million net gain recognized in the fourth quarter upon the settlement of the litigation matter. Excluding this item, non-interest income increased $2.5 million, or 5.3%, driven by various key categories. The largest increase was in other service charges and fees of $1.6 million, or 12.9%, driven by higher commercial loan interest rate swap fees and debit card income. Investment management and trust services income increased $1 million, or 8.2%, with the increase generally equally split between brokerage fees and trust commissions. Also contributing to the increase in non-interest income were higher gains from the sales of SBA loans. Slightly offsetting these increases was a seasonal decline in mortgage banking income. Moving to Slide 10, non-interest expenses increased $6.3 million, or 4.8% in the fourth quarter. We had one unusual item in the quarter, a $3.4 million write-off of certain accumulated capital expenditures related to in-process technology initiatives in our commercial banking business. During the fourth quarter of 2017, we made a strategic decision to shift to an alternative technology solution. Other increases were realized in other outside services, largely due to consulting cost incurred for the commercial banking initiatives and FDIC insurance expense due to the impact of our lead bank becoming subject to the large bank premium requirements. Other real estate owned expense, which is a component of other expense also increased $940,000, mainly as a result of the timing of sales of foreclosed properties resulting in lower net gains during the quarter. Income tax expense increased $14.5 million linked quarter and $16.1 million year-over-year due to the tax charge of $15.6 million. Excluding this charge, the effective tax rate was 18.9% for the fourth quarter, as compared to 20.5% in the third quarter. The decrease resulted primarily from lower state income taxes. For the year, excluding the tax charge, the effective tax rate was 20.1%, as compared to 22.4% in 2016. Slide 11 displays our profitability and capital levels over the past four years. We continue to see increases in both return on average assets and returns on tangible equity over the periods presented despite the impact of new tax legislation at the end of 2017. At this point, I’d like to turn the call back to Phil Wenger, who will review our 2018 outlook shown on Slide 12.

Thank you, Phil. We expect average annual loan and core deposit growth rates in the mid single digits. We expect loan loss provision to be driven primarily by loan growth. We expect the growth rate for non-interest income, excluding security gains and the litigation settlement in 2017 to be in the low single digits. And we expect the growth rate for non-interest expenses, including the amortization of tax credit investments to be in the low single digits. We will manage our capital and support loan growth and provide appropriate returns to our shareholders. As we have mentioned in the past, we target an annual dividend payout ratio between 40% and 50%. As a result of the impact of the lower corporate income tax rate on primarily, the tax rate loan portfolio, net interest margin in the first quarter of 2018 is expected to decline 1 to 5 basis points. However, for the full-year 2018, the outlook for net interest margin is an increase of 2 to 7 basis points as we’re expecting two additional interest rate increases this year. Finally, we anticipate an effective tax rate between 11% and 16% depending on the level of tax credits realized. Thank you for your attention, for your continued interest in Fulton Financial Corporation. And now, we will be glad to answer your questions.

[Operator Instructions] Our first question comes from Chris McGratty with KBW.

Good morning, everybody.

Good morning, Chris.

Maybe a quick question on the guidance just for clarification. The expense guide, what is assumed in terms of tax credits to get to the 11% to 16% tax rate, like what’s the number of expenses?

Well, from the perspective, the effective tax rate in terms of the range we provided from the 11% to 16%. Our expectation is to be at the lower-end of that effective tax rate range. However, that’s going to be influenced by a number of factors, including the mix of the type of tax credits that we experienced. As you recall, new markets tax credits versus low income housing tax credits have a different geography and different impact that flows through the effective tax rate. And – but our expectation is target – and what we have targeted, we expect to be at the lower-end of that range.

Okay. Just so I’m clear, the 11% -- the low-end of 11% to 16%, does that correspond to like a $14 million am expense for the year, like similar to the last couple of quarters?

So if you’re talking about above the line investment tax credit amortization expense…

Yes.

Our expectation there is, that will be below the 2017 level, slightly less than half of that level.

And that level was $11 million just so I’m [Multiple Speakers]…

That’s correct.

So less than half of $11 million? Okay, got it.

Correct.

Thank you for that. In terms of the balance sheet, your loan to deposit ratio is around 100%. I think, you’ve commented that it was within the long-term expectations for the company. How should we be thinking about the securities portfolio, given the move in rates, the move in tax rates? Is that a source of funding for the mid single-digit loan growth, or do you expect loan and deposit growth in terms of dollars kind of to be one for one? Thank you.

Yes. We’re still expecting to have a fairly strong deposit growth in 2018 as we did in 2017. And our focus on core deposits is where we expect that funding to come from to support our loan growth.

Okay. So not a lot of change in the securities book if I’m hearing you?

Not other than what we’ve already accomplished in certain restructuring that we’ve done.

Got it. Okay, thank you.

Our next question comes from Brian Zabora with Hovde Group.

Thanks. Good morning.

Good morning.

Good morning.

A question on the mortgage production, you mentioned that in your prepared remarks that about 50-50 was split between portfolio and sales. And you said that may change going forward or less portfolioing. What is – can we – can you talk about maybe what drives that decision? And does the loan deposit ratio play a factor into that?

That – I don’t know, maybe it was necessarily a decision, but we’ve been able to find outlets for some of our jumbo production and/or and for our CRA production.

Okay. So and just overall how do you think about the mortgage market with maybe higher rates? Do you think overall production may be down in 2018?

We’re expecting similar production with a slight increase. We do expect margins perhaps to tighten a little.

Okay. All right. And then just last question on the tax rate. Do you have – you provided the effective guidance. Do you have that on an FTE basis, what you think that may be as well?

Are you saying what? Could you repeat that one more time?

I’m sorry, the fully taxable – instead of just the effective tax rate, do you have it what might be on the fully taxable equivalent tax rate?

Yes. We probably should take that offline just to discuss your question in a little bit more detail?

Okay.

If you’re talking about, how do you – how does it flow through and affect, for example, tax equivalent net interest margin or something like that…

Well, I guess, that was – we’ve got to kind of look at on a fully taxable equivalent, taking into consideration the – mid-year income and then a higher tax rate to take into consideration. But yes, we can talk offline, that’s probably maybe best.

Okay.

The next question comes from Brody Preston with Piper Jaffray.

Good morning, guys. How are you?

Good morning.

Good morning.

Just touching on fee income for a minute. I know, you said brokered services really drove some of the investment management side. But I just wanted to sort of run through what you are seeing there moving forward and whether or not you think sort of the 9% growth you saw in that overall line item is repeatable through strategy, or if it’s more dependent on the direction of the market?

So our increase this year in investment management trust between 60% and 65% of that increase was generated by new business, and then the balance was generated by increase in the market.

Okay, okay.

Okay. Yes, just to add to that, I do want to indicate that the assets under management for the full-year increased about $900 million in the trust business.

Okay, great. All right, what else? On loan growth, I just wanted to touch real quick, it seems like it occurred late in the quarter just judging by the average balance sheet, is that accurate?

That is accurate, yes.

Okay.

And I would say that a portion of that loan growth, I think, was driven by the new tax law and the desire for companies to expense as much as they could in 2017.

Okay. And I guess, what makes you say that? Is it just the segments of growth, or is it the pipeline?

A piece of that, a larger piece than normal was from increase in line balances.

Okay. And what was that increase for the quarter?

$65 million.

Okay. And what are utilization rates?

$65 million doesn’t impact the utilization rates much. So it really is not a whole lot different than what it’s been in the past. From the top of my head 43% to 44%.

All right. And I guess, maybe just one last question on the pipeline?

Go ahead.

Can you sort of give some more clarity on to which segments are driving the pipeline at this point?

Yes. So our pipeline going into 2018 was at the same level than it was at the end of the third quarter, but it would be 15% lower than it was year-over-year.

Okay. And then is the pipeline made up more of C&I versus CRE versus resi at this point?

Well, C&I and CRE would be the largest part of that.

Okay. And with the yield curve backing up, are you guys seeing any move in yield in certain asset classes being passed through?

Well, on the loan side I would say not yet, a slight increase on the investment side.

Okay. All right. And then one last question from me. Can you just remind us of the costs involved with the consent orders and the DOJ investigation?

Well, I think that we’ve detailed the cost that that we’ve had in regards to BSA/AML. And our run rate in that area is about $6.6 million, and then our outside services running about $4 million.

Okay, great. Thank you very much, guys.

Sure.

And I’m not showing any further questions at this time. I’d like to turn the call back over to Phil Wenger.

Thank you, everyone, for joining us today. I apologize for the interruption in communication. But we hope, you will all be able to be with us when we discuss first quarter results in April. Thank you.

Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day.