Fulton Financial Corporation Q2 FY2025 earnings call

• Strong second-quarter operating earnings of $106 million or 55¢ per share, a record for the company, with $100 million operating net income for the first time.
• Total loans grew $150 million, with low single-digit loan growth expected for the year.
• Deposits saw a modest decline due to seasonal trends but positioned for long-term growth.
• Revenue growth driven by net interest margin and noninterest income, with all noninterest income categories growing linked quarter.
• Credit: Cautious outlook due to economic and geopolitical uncertainty, but steady portfolio performance with charge-offs and provision expense down, though nonaccrual loans ticked up.

Total loans grew $150 million or 2.5% during the quarter, primarily in residential mortgage, home equity, and certain commercial categories. Deposits declined $191 million or 2.9%, with money market balances growing $120 million and wholesale channels up $89 million, offset by seasonal declines in municipal balances ($135 million) and noninterest-bearing balances ($98 million). Net interest income on a non-FTE basis was $254.9 million, a $3.7 million increase linked quarter, with net interest margin increasing to 3.47%. Noninterest income was $69.1 million, with all categories growing linked quarter, including wealth management and commercial banking fees hitting all-time highs.

• Updated rate forecast includes two 25 basis point rate cuts in 2025 (one in September, one in December).
• Net interest income range revised to $1.005 billion to $1.025 billion.
• Provision expense range lowered to $50 million to $70 million.
• Fee income range remains $205 million to $280 million.
• Operating expense range lowered to $750 million to $765 million.
• Effective tax rate range increased to 18.5% to 19.5%.
• Non-operating expenses lowered to $10 million.

• General economic and geopolitical uncertainty impacting loan demand and credit performance.
• Competitive pressures affecting loan yields and spreads.
• Potential impact of tariffs, taxes, and other macro factors on pull-through rates for loan originations.

Q: Daniel Tamayo asks about expense guidance and fee income.

A: Richard Kraemer and Curtis Myers respond on expense range and fee income outlook.

Q: David Bishop asks about loan pipeline and M&A.

A: Curtis Myers responds on loan pipeline status and M&A strategy.

Q: David Conrad asks about loan pipeline components and spreads.

A: Curtis Myers and Richard Kraemer respond on loan pipeline and spread dynamics.

Q: Matthew Breese asks about loan pipeline components and stock buybacks.

A: Curtis Myers and Richard Kraemer respond on loan pipeline and capital repurchase strategy.

Q: Manuel Navas asks about consumer pipelines and credit trends.

A: Curtis Myers responds on consumer pipeline seasonality and credit outlook