Summary of Fulton Financial Q4 2025 Earnings Call

1Key Financial Results and Metrics

Operating Earnings per Share:: $2.16 for the full year, a record high.

Quarterly Operating Earnings:: $0.55 per diluted share, translating to $99.4 million in net income.

Net Interest Margin (NIM):: Increased to 3.51% for the year and 3.59% in Q4, despite Fed rate cuts.

Customer Deposits:: Grew by $449 million for the year, with a quarterly increase of $257 million (3.9% annualized).

Loan Growth:: Total loans increased by $103 million in Q4, with a year-end loan-to-deposit ratio of 91%.

Noninterest Income:: Excluding certain gains, it rose to $277 million, up nearly 7% year-over-year.

Operating Expenses:: Grew modestly by 1.9% for the year; normalized expenses would have decreased by 2.7%.

Credit Quality:: Nonperforming assets improved to 0.58% of total assets, with net charge-offs at 21 basis points.

2Strategic Updates and Business Highlights

Community Banking Strategy:: Successfully executed, leading to strong operating results and customer engagement.

Deposit Initiatives:: Enhanced initiatives led to a 25% growth in consumer demand deposit account openings year-over-year.

Acquisition of Blue Foundry Bancorp:: Announced in November, expected to close in Q2 2026, aimed at expanding market presence.

Business Banking Growth:: Focused on building a larger team to support small and middle-market businesses, contributing to loan growth.

3Forward Guidance and Outlook

2026 Operating Guidance::

Net Interest Income:: Expected between $1.120 billion and $1.140 billion.

Loan Loss Provision Expense:: Projected at $55 million to $75 million.

Noninterest Income:: Anticipated to reach $285 million to $300 million.

Operating Expenses:: Expected to be between $800 million and $835 million.

Effective Tax Rate:: Estimated at 18.5% to 19.5%.

Loan Growth:: Expected to return to mid-single-digit growth rates, driven by increased productivity and reduced headwinds from strategic actions.

4Bad News, Challenges, or Points of Concern

Headwinds from Strategic Actions:: Over $800 million in headwinds from portfolio derisking in 2025, which are expected to moderate but may still impact growth.

Loan Portfolio Management:: Ongoing runoff of certain loan categories (e.g., indirect auto loans) could affect growth rates.

Economic Environment:: Future provisions for loan losses may need to adjust based on economic stability and credit quality trends.

5Notable Q&A Insights

Loan Growth Expectations:: Management indicated that the removal of strategic headwinds could lead to organic growth of approximately 3.5% in 2025, with a return to historical growth rates in 2026.

Deposit Composition:: Growth is expected to continue in consumer and small business segments, with a focus on low-cost operating deposits.

Fee Income Variability:: Commercial interest rate swap income is expected to fluctuate with origination volumes, while other fee income may stabilize around $2.5 million on a normalized basis.

Market Expansion:: The acquisition of Blue Foundry is seen as a strategic move to enhance presence in Northern New Jersey and potentially the Metro New York City market. Overall, Fulton Financial demonstrated strong performance in 2025, with a positive outlook for 2026 despite some challenges related to strategic portfolio management and economic conditions.