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FULTON FINANCIAL CORP (FULT)·Q2 2025 Earnings Summary

Executive Summary

  • Record operating EPS of $0.55 and operating net income of $100.6M; GAAP diluted EPS $0.53; NIM expanded 4 bps to 3.47% and efficiency ratio held at 57.1% .
  • EPS beat consensus materially (actual $0.55 vs $0.448*) and total revenue came in below consensus (actual $315.5M vs $322.1M*) — a mixed headline with stronger profitability despite slightly lighter revenue* (Values retrieved from S&P Global).
  • 2025 guidance tightened/raised: NII raised to $1.005–$1.025B, provision lowered to $50–$70M, operating expense lowered to $750–$765M, tax rate raised to 18.5%–19.5%; non‑operating expense cut to $10M .
  • Capital and liquidity remain strong (CET1 ~11.3%; available liquidity $16.6B, 270% of net estimated uninsured deposits), while asset quality steady with ACL/loans at 1.57% and NCOs at 0.20% annualized .
  • Potential stock reaction catalysts: record earnings and improved guidance vs cautious credit tone (construction nonaccrual uptick from a single project) and deposit competition/mix headwinds noted on the call .

What Went Well and What Went Wrong

What Went Well

  • “Operating earnings of $100.6 million, or $0.55 per share, represent a record for the company” — CEO Curt Myers highlighting positive operating leverage and balanced growth .
  • NIM improved to 3.47% on lower cost of funds (total deposit cost fell 5 bps to 1.98% q/q), supporting higher NII ($254.9M, +$3.7M q/q) .
  • Broad-based fee growth: non-interest income up $1.9M q/q to $69.1M, with strength in mortgage, merchant & card, cash management, wealth, consumer deposit fees, and capital markets .

What Went Wrong

  • Deposits declined $190.9M q/q (seasonal municipal outflows, noninterest-bearing mix drift; brokered deposits rose), highlighting continued deposit competition and mix pressures .
  • Non-performing assets rose to $215.6M (0.67% of assets) driven by a construction project migrating to nonaccrual; management remains cautious on macro/tariff uncertainty .
  • Operating non-interest expense increased $4.8M q/q (merit increases, incentive comp, professional fee normalization), though 2025 full-year operating expense guidance was lowered .

Financial Results

MetricQ4 2024Q1 2025Q2 2025Q2 2025 ConsensusBeat/Miss
Diluted EPS ($)$0.36 $0.49 $0.53 $0.448*Beat*
Operating Diluted EPS ($)$0.48 $0.52 $0.55 ——
Total Revenue ($MM) (company definition)$326.3 $322.6 $328.4 $322.1*Miss*
Net Interest Income ($MM)$253.7 $251.2 $254.9
Non-Interest Income ($MM)$65.9 $67.2 $69.1
Provision for Credit Losses ($MM)$16.7 $13.9 $8.6
Net Income to Common ($MM)$66.1 $90.4 $96.6
NIM (%) (FTE)3.41% 3.43% 3.47%
Total Deposit Cost (%)2.14% 2.03% 1.98%

* Values retrieved from S&P Global.

Segment (Non-Interest Income) Breakdown

Category ($000s)Q3 2024Q4 2024Q1 2025Q2 2025
Wealth Management21,596 22,002 21,785 22,281
Merchant & Card7,496 7,082 6,591 7,376
Cash Management7,201 7,633 7,799 8,376
Capital Markets3,311 2,797 2,411 2,945
Other Commercial4,281 4,942 4,528 4,734
Consumer Banking – Card7,917 8,064 7,544 7,958
Consumer Banking – Overdraft3,957 3,644 3,295 3,817
Other Consumer3,054 2,601 2,229 2,753
Mortgage Banking3,142 3,759 3,138 3,991
Other5,425 6,089 7,914 4,917
Non-Interest Income before securities59,674 65,924 67,234 69,148

Key KPIs

KPIQ4 2024Q1 2025Q2 2025
ROAA (%)0.85% 1.18% 1.25%
Operating ROAA (%)1.14% 1.25% 1.30%
Efficiency Ratio (%) (Operating)58.4% 56.7% 57.1%
CET1 (%)10.8% 11.1% 11.3%
ACL/Loans (%)1.58% 1.59% 1.57%
NCOs to Avg Loans (annualized, %)0.22% 0.21% 0.20%
NPAs/Assets (%)0.69% 0.62% 0.67%
Net Loans ($MM, end)$24,044.9 $23,862.6 $24,012.5
Deposits ($MM, end)$26,129.4 $26,329.0 $26,138.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non‑FTE Net Interest IncomeFY 2025$995M–$1,020M $1,005M–$1,025B Raised
Provision for Credit LossesFY 2025$60M–$80M $50M–$70M Lowered
Non‑Interest IncomeFY 2025$265M–$280M $265M–$280M Maintained
Operating Non‑Interest ExpenseFY 2025$755M–$775M $750M–$765M Lowered
Non‑Operating ExpensesFY 2025$14M $10M Lowered
Effective Tax RateFY 2025~18% 18.5%–19.5% Raised
Rate AssumptionsFY 2025Four 25 bps cuts (as of Q1 update) Two 25 bps cuts (Sep, Dec) Lower easing

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
NII/NIM trajectoryAnticipated gradual NII cadence improvement over 2025; NIM pressure after Fed easing NIM +2 bps to 3.43%; sub debt floating reset headwind highlighted NIM 3.47% with deposit cost down; sustained competition; closer to deposit cost trough Improving NIM, disciplined funding amid competition
Fee income growthBroad noninterest income growth; watch mortgage/ swaps sensitivity Fee growth; cautious on market rate sensitivities Broad-based fee strength across categories; wealth/merchant/cash mgmt highs Strength with known rate sensitivities
Tariffs/macro uncertaintyMonitoring exposure; asset quality steady Tariff/macro caution; ag and manufacturing watched Pipeline up, pull-through below normal; cautious macro/tariffs Persistent caution; pipelines improving
Credit qualityACL ~1.58%; NPA modest increase Reserve steady; Moody’s scenarios noted ACL/loans 1.57%; NCOs 0.20%; construction nonaccrual uptick from one project Stable with identified issue managed
Operating efficiencyFultonFirst savings ramp; 2025 opex flat target Opex guide $190–$195M per quarter in back half Q2 below $190–$195M range; FY opex guide lowered Improving, savings pulled forward
Capital & buybacksBuybacks third priority; authorization in place Opportunistic repurchases; price sensitivity 522K shares repurchased, $10M; $115M authorization remaining Opportunistic buybacks continue
Technology/operations——New Chief Operations & Technology Officer appointed (post-Q2) Strengthening digital ops leadership

Management Commentary

  • CEO Curt Myers: “Operating earnings of $100.6 million, or $0.55 per share, represent a record for the company…our quarterly efficiency ratio was 57.1%, operating ROAA increased to 1.3%, and operating ROTCE increased to 16.26%” .
  • CFO Rick Kraemer: “Net interest margin increased four basis points to 3.47%…average cost of total deposits decreased five basis points to 1.98%…we are increasing net interest income to $1.005–$1.025 billion and lowering provision to $50–$70 million” .
  • CEO on credit: “Late quarter, we experienced an uptick in nonaccrual loans. However, these balances remain in line with recent periods…coverage ratio remains appropriate” .
  • CFO on deposit competition: “We are seeing increased competition…our betas are slowing; closer to the bottom, barring any future rate cuts” .

Q&A Highlights

  • Expenses: Back-half quarterly operating expense expected $190–$195M but trending below midpoint; FY operating expense range lowered, with optionality for initiatives .
  • Fee income: Broad strength; tracking towards top end if categories outperform; headwinds could move to mid/low end .
  • Loan pipeline/pull-through: Pipelines up linked-quarter; customer caution (tariffs, taxes) depresses pull-through; aiming for low single-digit loan growth .
  • Deposits/NIM: Seasonality (municipal flows) and wholesale use; desire to fund loan growth with customer deposits; closer to trough in deposit costs .
  • Accretable yield: Republic portfolio accretion guided ~$11–$12M per quarter (no prepayments ~high $10M) .
  • Capital deployment: $10M repurchases; $115M remain; opportunistic approach amid organic growth priorities .
  • Credit detail: Construction NPL increase largely “one project,” reserved and being worked to resolution; overall metrics stable .

Estimates Context

MetricQ2 2025 ActualQ2 2025 Consensus# of Estimates
Primary EPS ($)$0.55 0.448*6*
Revenue ($MM)$315.5*322.1*5*
Target Price ($)—20.6*5*

* Values retrieved from S&P Global.

  • EPS delivered a material beat; total revenue (as defined by S&P Global) missed. Expect estimate revisions upward on EPS/PPNR and potentially modest adjustments to revenue trajectories, with FY guidance shifts (higher NII, lower provision/opex) anchoring models .

Key Takeaways for Investors

  • Profitability momentum: NIM expansion and disciplined costs drove record operating EPS; guidance implies sustained PPNR strength into 2H25 .
  • Asset quality stable: ACL/loans 1.57% with low NCOs; single construction issue contained; credit remains a monitored risk amid macro/tariff uncertainty .
  • Deposit dynamics: Mix/competition persist; management sees betas slowing and deposit cost near trough, but competition could temper spreads .
  • Guidance positive skew: Raised NII, lowered provision/operating expense and non-operating expense; higher tax rate slightly offsets positives .
  • Fee diversification: Non-interest income up across categories; wealth, merchant/card, cash management and mortgage provide resilience, but rate sensitivity remains .
  • Capital returns: Opportunistic buybacks ongoing with ample authorization; CET1 ~11.3% supports flexibility for growth and returns .
  • Execution focus: FultonFirst efficiencies tracking ahead; new Ops/Tech leadership enhances digital and process execution (post-Q2 announcement) .

Appendix: Liquidity and Balance Sheet Highlights

  • Liquidity coverage: Available liquidity $16.6B; 270% of net estimated uninsured deposits; robust Fed/FHLB capacity .
  • Balance sheet: Net loans $24.0B (+$150M q/q); deposits $26.1B (−$191M q/q) .
  • Capital ratios: CET1 11.3%; TCE 8.0%; total risk-based capital 14.7% .