Fulton Financial Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: $99.9 million, or $0.52 per diluted share.

Operating Earnings: $115.9 million, or $0.60 per diluted share, up from $0.55 in Q1 2026.

Net Interest Income: Increased by $22.2 million (8% linked quarter) to $284.3 million, largely due to the Blue Foundry acquisition.

Net Interest Margin (NIM): Expanded to 3.6%, up 2 basis points from Q1 and 13 basis points year-over-year.

Loan Growth: Total loans reached $25.9 billion, up $1.7 billion from the previous quarter, with $1.6 billion attributed to Blue Foundry.

Deposits: Increased by $1.5 billion to $28.3 billion, primarily due to the Blue Foundry acquisition.

Non-Interest Income: Rose to $79.3 million, up $9.5 million from Q1, driven by increased fee income.

Credit Quality: Provision expense was $4.9 million, with annualized net charge-offs at 0.34% of average loans, up from 0.25%.

2Strategic Updates and Business Highlights

Successful completion of the Blue Foundry acquisition on April 1, followed by the merger and integration on July 11, enhancing Fulton's presence in Northern New Jersey.

Continued focus on customer relationships and service, contributing to solid loan and deposit growth.

Increased tangible book value per share by 13% linked quarter annualized.

Strong capital position with a common equity Tier 1 ratio of approximately 12.1%.

3Forward Guidance and Outlook

Adjusted guidance for net interest income to a range of $1.12 billion to $1.135 billion.

Full-year loan growth guidance lowered to low single digits.

Loan loss provision guidance reduced to $40 million-$60 million.

Non-interest income guidance raised to a minimum of $290 million.

Operating non-interest expense guidance tightened to $810 million-$830 million.

4Bad News, Challenges, or Points of Concern

Loan growth expectations moderated to low single digits for the second half of 2026, reflecting slower growth in the first half.

Increased competition in deposit pricing, with modest increases in deposit costs expected to continue.

A rise in net charge-offs to 0.34%, attributed to timing rather than new credit issues, but still a point of monitoring.

The integration of Blue Foundry may present transitional challenges, although management expects minimal headwinds.

5Notable Q&A Insights

Management clarified that the reduction in loan growth guidance is primarily reflective of first-half performance and does not indicate a long-term trend.

There is optimism about achieving positive operating leverage in the second half of the year, driven by cost savings from the Blue Foundry integration.

The company remains open to future M&A opportunities, particularly within the $1 billion-$5 billion community bank segment.

Management expressed confidence in maintaining strong credit quality despite the slight increase in charge-offs, attributing it to timing rather than underlying issues.

The potential for stable to slightly higher net interest margins was discussed, contingent on market dynamics and Fed actions. Overall, Fulton Financial reported a strong second quarter with solid financial performance and strategic progress, despite some challenges related to loan growth and competitive pressures in the deposit market.