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FULTON FINANCIAL CORP (FULT)·Q3 2025 Earnings Summary

Executive Summary

  • Record operating net income of $101.3M and $0.55 operating EPS; GAAP diluted EPS was $0.53. Net interest margin expanded 10 bps to 3.57% and efficiency improved to 56.5% .
  • Results vs S&P Global consensus: EPS beat ($0.55 vs $0.502), while revenue missed ($324.4M vs $332.0M); similar pattern in Q1–Q2 (EPS beats, revenue misses)*.
  • Guidance raised/tightened: non-FTE NII to $1.025–$1.035B (up), provision to $45–$55M (down), fee income to $270–$280M (tightened), operating expense to $750–$760M (lower top-end), tax rate 19–20% (up), non-operating expenses to $7M (down) .
  • Capital actions and credit: repurchased 1.65M shares at $18.67 with $86M authorization remaining; credit metrics improved (NPAs 0.63% of assets; NCOs 0.18%) aiding confidence in outlook .

What Went Well and What Went Wrong

What Went Well

  • Positive operating leverage drove “all-time high” quarterly revenue and record operating net income; operating ROA 1.29% and ROTCE 15.79% .
  • NIM up 10 bps QoQ to 3.57% as loan yields rose and cost of funds fell; non-interest income rose to 21% of revenue, with wealth AUM/AUA reaching $17B .
  • Management quote: “Operating earnings of $101.3 million, or $0.55 per share, demonstrate the impact of positive operating leverage” .

What Went Wrong

  • Non-interest expense rose $3.8M QoQ (operating +$3.8M) on salaries/benefits and one extra day in the quarter .
  • Mix shift: non-interest-bearing deposits trended lower to 19.5% of deposits; municipal inflows (Q3) will seasonally reverse in Q4 (40–50% outflow expected) .
  • Margin near-term pressure: management expects some NIM compression in Q4 tied to Fed cuts; each 25 bps cut is ~ $2M annualized NII headwind until betas catch up .

Financial Results

Core P&L and Profitability

MetricQ1 2025Q2 2025Q3 2025
Net Interest Income ($USD Millions)$251.2 $254.9 $264.2
Non-Interest Income ($USD Millions)$67.2 $69.1 $70.4
Total Revenue ($USD Millions)$304.5*$315.5*$324.4*
Diluted EPS (GAAP, $)$0.49 $0.53 $0.53
Operating EPS ($)$0.52 $0.55 $0.55
Net Interest Margin (%)3.43% 3.47% 3.57%
Efficiency Ratio (%)56.7% 57.1% 56.5%

Values marked with * are retrieved from S&P Global (GetEstimates actuals).

Results vs S&P Global Consensus

MetricQ1 2025 EstimateQ1 2025 ActualQ2 2025 EstimateQ2 2025 ActualQ3 2025 EstimateQ3 2025 Actual
EPS ($)0.43*0.52*0.448*0.55*0.502*0.55*
Revenue ($USD Millions)314.9*304.5*322.1*315.5*332.0*324.4*

Values retrieved from S&P Global. EPS beats in all three quarters; revenue missed in all three quarters (bold in narrative above)*.

Segment Breakdown – Non-Interest Income

Category ($USD Thousands)Q1 2025Q2 2025Q3 2025
Commercial Banking21,329 23,431 23,165
Wealth Management21,785 22,281 22,639
Consumer Banking13,068 14,528 15,174
Mortgage Banking3,138 3,991 3,711
Other7,914 4,917 5,718
Total Non-Interest Income67,234 69,148 70,407

KPIs and Balance Sheet

MetricQ1 2025Q2 2025Q3 2025
Operating ROAA (%)1.25% 1.30% 1.29%
Operating ROTCE (%)15.95% 16.26% 15.79%
Net Charge-Offs to Avg Loans (%)0.21% 0.20% 0.18%
ACL – Loans to Total Loans (%)1.59% 1.57% 1.57%
Non-Performing Assets to Total Assets (%)0.62% 0.67% 0.63%
Net Loans (Ending, $USD Millions)$23,862.6 $24,012.5 $24,041.5
Deposits (Ending, $USD Millions)$26,329.0 $26,138.1 $26,332.5

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025 Call)Current Guidance (Q3 2025)Change
Net Interest Income (non-FTE)FY 2025$1.005–$1.025B $1.025–$1.035B Raised
Provision for Credit LossesFY 2025$50–$70M $45–$55M Lowered/Tightened
Non-Interest IncomeFY 2025$265–$280M $270–$280M Raised bottom/Tightened
Operating ExpenseFY 2025$750–$765M $750–$760M Lowered top-end
Effective Tax RateFY 202518.5%–19.5% 19%–20% Increased
Non-Operating ExpensesFY 2025$10M $7M Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q1)Current Period (Q3)Trend
NIM / Rate CutsNIM up to 3.47% QoQ; betas slowing; two cuts assumed for 2025 Expect modest NIM pressure in Q4; each 25 bps cut ~ $2M annualized NII headwind until deposit betas catch up Near-term pressure
Deposits & SeasonalityMunicipal inflows expected in Q3 $450M municipal inflow in Q3; expect 40–50% outflow in Q4 Seasonal outflow ahead
Loan Growth & PipelinePipelines up; pull-through below normal; low-single-digit loan growth expected Strategic headwinds moderating; aiming to revert to 4–6% long-term trend; near-term leaning to ~4% Gradual improvement
Wealth/AUMAll-time high wealth revenues Q2 AUM/AUA reached $17B; fee businesses ~21% of revenue Growing
M&A StrategyTarget $1–$5B community banks infill; disciplined Strategy unchanged; active in-market focus Unchanged
Securities PortfolioNew purchases ~5.44% coupon Q2 New money yields high-4% to low-5%; cashflows steady; repricing tailwind Gradual yield uplift
Regulatory / NDFI—NDFI exposure de minimis; primarily non-rated community bank sub-debt notes Low exposure
Technology / DigitalSignificant technology spend (origination, CRM, servicing) highlighted in 8-K materials Ongoing digital enablement as growth/efficiency driver Continuing investment

Management Commentary

  • “Total quarterly revenue hit an all-time high… Operating earnings of $101.3 million, or $0.55 per share” – Curt Myers (CEO) .
  • “Non-interest income as a percentage of total revenue equaled 21%… Fulton Financial Advisors reached $17 billion in AUM/AUA” – Rick Kraemer (CFO) .
  • “Deposits grew $194 million… demand and savings grew $387 million, offset by declines in brokered and time” – CFO .
  • “We repurchased 1.65 million shares at $18.67; remaining buyback authorization $86 million” – CFO .
  • Credit: “Net charge-offs declined to 18 bps… NPAs to assets improved to 0.63%; ACL/NPL coverage increased to 189%” – CFO .

Q&A Highlights

  • NIM & Fed cuts: Management expects a small Q4 margin compression; each 25 bps cut ~ $2M annualized NII headwind, with ~3-month lag before deposit costs reset .
  • Deposit betas: Aim to maintain ~30–33% interest-bearing deposit beta through easing cycle; balancing funding growth and margin defense .
  • Loan growth trajectory: Strategic runoff headwinds (>$600M YTD) dissipating; pipelines up YoY but pull-through below normal; aiming first for ~4% growth within long-term 4–6% range .
  • Securities strategy: Portfolio additions in high-4% to low-5% yields; cashflows steady; repricing schedule provides cushion amid cuts .
  • Capital deployment: With organic/M&A uses limited near-term, buybacks remain a lever; $86M authorization remains .
  • NDFI exposure: Minimal, largely non-rated community bank holding company sub-debt; not a significant risk area .

Estimates Context

  • EPS beat pattern likely persists given raised NII guidance and contained provision; revenue comparisons continue to be modestly below consensus given classification and mix dynamics*.
  • Consensus revisions: Expect upward EPS revisions on guidance changes; fee income and expense tightening may modestly lift operating leverage expectations .

Key Takeaways for Investors

  • Operating momentum: NIM expansion, strong fee mix (21%), and improved efficiency underpin sustainable mid-teens ROTCE .
  • Guidance upgrade is material: Higher NII and lower provision ranges support EPS resilience even through rate cuts .
  • Near-term headwind: Expect some Q4 margin pressure from Fed easing; watch deposit beta execution and municipal outflows seasonality .
  • Credit quality stabilizing: Lower NCOs and improved NPAs/coverage reduce tail risk; ACL ratio stable at 1.57% .
  • Capital flexibility: Buybacks opportunistic with robust internal generation and improved AOCI; $86M authorization remains .
  • Growth trajectory: Strategic runoff moderating; pipelines improving; path back toward ~4% loan growth in 2026 looks feasible .
  • Wealth engine: $17B AUM/AUA and diversified fee businesses provide revenue ballast amid rate cycles .

Values marked with * are retrieved from S&P Global (GetEstimates).