Fulton Financial (NASDAQ:FULT) executives highlighted record full-year operating results, improving credit trends and a stronger capital position during the company’s fourth-quarter 2025 earnings call, while also outlining expectations for mid-single-digit loan growth and stable profitability drivers in 2026.
Record operating EPS and improving profitability metrics
Chairman, CEO and President Curt Myers said 2025 was “another outstanding year,” pointing to record operating earnings per share of $2.16. He said the company maintained a “solid balance sheet” and disciplined expense management while delivering growth in deposits, loans and fee-based revenue.
Deposits grew, consumer engagement increased
On the full-year view, Myers said customer deposits grew $449 million and that enhanced deposit initiatives helped drive a 25% year-over-year increase in consumer demand deposit account openings. He also said sales productivity remained strong and certificate of deposit retention was “solid,” supporting deposit growth and helping the company manage its cost of funds over time.
During the fourth quarter, CFO Rick Kramer said total deposits increased $257 million, with growth “relatively balanced” between interest-bearing deposits (up $137 million) and non-interest-bearing deposits (up $120 million). Kramer said the consumer business was a key driver of the increase, while commercial deposits and account counts were stable. Non-interest-bearing commercial balances rebounded by $40 million.
Kramer noted municipal deposits declined $254 million during the quarter, while other wholesale funding, including brokered balances, decreased $29 million. The loan-to-deposit ratio ended the quarter unchanged at 91%.
In the Q&A, management said it sees “good momentum” across consumer and small business deposit categories, and highlighted treasury and cash management as a generator of low-cost operating deposits. Kramer also provided a spot cost of deposits figure, saying the company finished December at 1.80%, about six basis points below the fourth-quarter average deposit cost of 1.86%.
Loan growth shaped by strategic runoff; mid-single-digit growth expected in 2026
Myers and Kramer reiterated that 2025 loan growth was tempered by deliberate portfolio actions. Myers said strategic actions taken during 2025 represented more than an $800 million headwind. Even so, he said organic loan growth originations resulted in overall net loan growth year over year and that quarterly originations increased consistently throughout the year.
For the fourth quarter, Kramer said total period-end loans increased $103 million, with growth across most categories offset by declines in construction balances. He also said the company saw planned runoff of about $30 million of indirect auto loans and resolved an additional $211 million of adversely rated loans during the quarter.
Management said it expects the impact of these strategic actions to moderate in 2026, aside from continued planned indirect auto runoff. Myers told analysts the company believes eliminating the 2025 headwinds would have equated to roughly 3.5% organic growth, supporting the outlook for a return to historical mid-single-digit loan growth rates. He added that the company has been adding bankers across commercial banking, business banking and SBA teams, generally in small increments each quarter, and cited an improving pipeline.
In response to questions about loan mix, Myers said Fulton aims to maintain a diversified loan portfolio and sees opportunities across CRE, C&I and business banking. He also noted the company’s commercial real estate concentration is below 200%, and said management is selective but believes it can grow multiple categories at a normal or “even accelerated” pace.
On the commercial pipeline, Myers said it was up more than 10% year over year, and he cited modest improvement in “pull-through” as customers move forward with projects and purchases. On geography related to the pending Blue Foundry deal, Myers said Fulton likes northern New Jersey and that “crossing the state lines” from there is not part of its strategy.
Fee income grew in 2025; quarterly non-interest income steady
Myers highlighted fee-based performance as another contributor to 2025 results. Excluding bargain purchase and investment securities gains and losses, he said non-interest income totaled $277 million, up nearly 7%, and remained more than 20% of total revenue.
He said non-interest income growth was broad-based, with commercial fees up 8% overall and cash management revenue up 17%. Myers also said Fulton Financial Advisors remained a meaningful contributor, with wealth assets under management and administration surpassing $17 billion and referrals from financial centers to advisors increasing 17% (nearly $50 million) year over year. He attributed some of that activity to “significant new opportunities” from legacy Republic First financial centers.
For the fourth quarter, Kramer said non-interest income was stable at $70 million, and that although consolidated fees were flat, wealth, capital markets and the Fulton Financial Advisors businesses showed strong linked-quarter growth. Non-interest income represented 21% of total revenue in the quarter.
During Q&A, management said commercial interest rate swap income tends to track originations and is more likely associated with larger deals, which can create quarterly variability. Kramer also said quarterly volatility in “other” fee income was driven in part by equity method investment results, noting a net decline of about $1.7 million in the fourth quarter and suggesting roughly $2.5 million as a reasonable normalized level for that line item.
Expenses, credit trends, capital actions, and 2026 guidance
Myers said operating expenses increased a modest 1.9% in 2025, and that when normalized for a full year of Republic First expenses in 2024, operating expenses would have been down 2.7% year over year. Kramer said fourth-quarter operating non-interest expense was $204 million, up $12.7 million from the third quarter, primarily due to higher variable compensation accruals tied to strong annual performance. He also cited “unseasonably high snow removal costs” and elevated healthcare claims. Kramer added that core salaries increased less than 1% from the prior quarter.
On credit, Myers said metrics improved meaningfully in 2025, with non-performing assets to total assets ending the year at 0.58% and net charge-offs at 21 basis points of average loans. Kramer reported fourth-quarter provision expense of $2.9 million, helped by a $5 million recovery from a loan acquired in the Republic First acquisition. Net charge-offs were 24 basis points in the quarter, and the allowance for credit losses ended the year at 1.51% of total loans, with ACL to non-performing loan coverage at 198%. In discussing 2026 provision guidance, Kramer said that in a stable credit and economic environment, the allowance could “drift a little bit lower,” with charge-offs expected to be relatively flat versus 2025.
Capital strengthened during the year, and Kramer said the company repurchased 1.1 million shares in the fourth quarter at a weighted average cost of $18.34. The board approved a new $150 million repurchase authorization in December, effective through January 2027. Kramer said tangible common equity to tangible assets increased to 8.5% and CET1 to 11.8%.
Looking ahead, management’s 2026 operating guidance assumes one 25-basis-point Fed cut in March and that the Blue Foundry Bancorp acquisition closes early in the first quarter of 2026. Kramer outlined the following targets:
- Net interest income: $1.12 billion to $1.14 billion (including an annual FTE adjustment of $16 million to $18 million)
- Provision for loan losses: $55 million to $75 million
- Non-interest income: $285 million to $300 million
- Operating expense: $800 million to $835 million
- Effective tax rate: 18.5% to 19.5%
- Non-operating expenses: approximately $60 million, including $22 million of CDI and $36 million of merger-related costs
Myers said the company is focused on making 2026 “a year of continued strength,” building on momentum in deposits, loan origination activity and fee income growth while integrating the pending Blue Foundry acquisition.
About Fulton Financial (NASDAQ:FULT)
Fulton Financial Corporation, trading on the NASDAQ under the ticker FULT, is the financial holding company for Fulton Bank, headquartered in Lancaster, Pennsylvania. The company delivers a broad range of banking and financial services through its subsidiary, Fulton Bank, targeting both individual and corporate clients. Fulton Financial’s offerings include deposit accounts, lending solutions, treasury management, and specialized banking services designed to support personal wealth goals and business growth initiatives.
Through Fulton Bank, the company provides retail banking services such as checking and savings accounts, consumer and residential mortgage loans, and home equity products.
