Fulton Financial Q2 2025 Earnings Report

Fulton Financial EPS Results

• Actual EPS: $0.55
• Consensus EPS: $0.43
• Beat/Miss: Beat by +$0.12
• One Year Ago EPS: $0.52

Fulton Financial Revenue Results

• Actual Revenue: $328.45 million
• Expected Revenue: $320.47 million
• Beat/Miss: Beat by +$7.98 million
• YoY Revenue Growth: N/A

Fulton Financial Announcement Details

• Quarter: Q2 2025
• Date: 7/15/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, July 16, 2025
• Conference Call Time: 10:00AM ET

Fulton Financial (NASDAQ:FULT) (NASDAQ:FULT) is a bank holding company headquartered in Lancaster, Pennsylvania. Its primary subsidiary, Fulton Bank, provides banking and financial services to consumers, businesses and institutions.

The company offers deposit accounts, residential and commercial lending, mortgages, treasury management, cash management and other commercial banking services. Through its broader financial services platform, Fulton also provides wealth management, investment services and insurance solutions.

Fulton serves customers through branches and digital channels across Pennsylvania, Delaware, Maryland, New Jersey and Virginia. The company traces its banking roots to 1882 and has expanded its regional presence through organic growth and acquisitions. David M. Campbell serves as president and chief executive officer.

Fulton Financial Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: The company delivered record operating earnings of $100.6 million (0.55 EPS), marking its first $100 million quarter, with improved efficiency (57.1%) and strong returns (ROAA 1.3%, ROTCE 16.3%).
• Neutral Sentiment: Total loans grew 2.5% sequentially to $150 million, driven by mortgage and home equity, while deposits dipped 2.9% seasonally, with management expecting low single-digit loan growth and long-term deposit expansion.
• Positive Sentiment: Net interest margin rose four basis points to 3.47%, supporting higher net interest income, even as accretion from the acquired portfolio declined and subordinated debt repriced to a ~6.6% floating rate.
• Positive Sentiment: Noninterest income climbed across all categories, with wealth management and commercial banking fees each reaching all-time quarterly highs and solid contributions from consumer banking and mortgage.
• Neutral Sentiment: Updated 2025 guidance assumes two Fed rate cuts, raises net interest income and lowers provisions and operating expenses, while increasing the effective tax rate to 18.5–19.5%.

Presentation

[Operator]

Welcome to the Fulton Financial second quarter 2025 results conference call. At this time all participants are in a listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Jozwiak, Director of Investor Relations. Please go ahead.

[Matt Jozwiak, Director of Investor Relations at Fulton Financial]

Good morning and thanks for joining us for Fulton Financial's conference call and webcast to discuss our earnings for the second quarter ending June 30th, 2025. Your host for today's conference call is Curt Myers, Chairman and Chief Executive Officer. Joining Curt is Rick Kraemer, Chief Financial Officer. Our comments today will refer to the financial information and related slide presentation included with our earnings announcement which we released yesterday afternoon. These documents can be found on our website at fult.com by clicking on investor relations and then on news. The slides can also be found on the presentations page under investor relations on our website. On this call, representatives of Fulton [audio distortion] may make forward-looking statements with respect to Fulton's financial condition, results of operations, and business.

[Matt Jozwiak, Director of Investor Relations at Fulton Financial]

These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, and actual results could differ materially. Please refer to the safe harbor statement on forward-looking statements in our earnings release and on slide two of today's presentation for additional information regarding these risks, uncertainties, and other factors. Fulton undertakes no obligation other than as required by law to update or revise any forward-looking statements in discussing Fulton's performance. Representatives of Fulton may refer to certain non-GAAP financial measures. Please refer to the supplemental financial information included with Fulton's earnings announcement released yesterday and slides 16 through 22 of today's presentation for reconciliation of those non-GAAP financial measures to the most comparable GAAP measures. Now I'd like to turn the call over to your host, Curt Myers.

[Curt Myers, Chairman and CEO at Fulton Financial]

Thanks, Matt, and good morning everyone. For today's call, I'll be providing a few high-level comments as well as some operating highlights for the quarter. Rick will review our financial results in more detail and discuss updates to our 2025 operating guidance. After our prepared remarks, we'll be happy to take any questions you may have. We were pleased with our strong second quarter operating earnings. Our community banking strategy continues to attract and retain valuable customers. We are delivering great customer outcomes, which translate into strong results for our shareholders. We are also proud to reinvest in our communities, making a positive impact in.

[Curt Myers, Chairman and CEO at Fulton Financial]

Changing lives for the better.

[Curt Myers, Chairman and CEO at Fulton Financial]

This impact is made clear by the many stories in our Corporate Social Responsibility Report, which we released in June and you can find on our investor relations website. Let me turn to the numbers. Operating earnings of $100.6 million, or $0.55 per share, represents a $0.03 linked-quarter increase and a record for the company. These results demonstrate the impact of consistent positive operating leverage while maintaining a strong balance sheet. Total revenue increased linked-quarter as we delivered growth in net interest income and fee income. Effective expense management continues to contribute nicely to our overall profitability as well. Combining those positive trends, our quarterly efficiency ratio was 57.1%, our operating return on average assets increased to 1.3%, and operating return on average tangible common equity increased to 16.26%. With these results, we were able to deliver our first $100 million operating net income quarter in company history.

[Curt Myers, Chairman and CEO at Fulton Financial]

During the quarter, we were opportunistic and repurchased shares while growing tangible book value per share 9.5% on a linked-quarter annualized basis. Our strong performance, disciplined approach to balance sheet management, diversified business model, and strong liquidity and capital position the company for continued success. Now let me provide a few more comments on the quarter. Total loans grew $150 million, or 2.5%, as originations were solid. This growth more than offset the strategic runoff of our indirect auto portfolio and managed reductions in certain commercial loans. Based on our year-to-date performance and our origination trends, we continue to expect low single-digit loan growth for the year. Turning to deposits, we remain focused on balancing long-term deposit growth with prudent interest cost management. During the quarter, we saw a modest decline in balances largely due to seasonal trends.

[Curt Myers, Chairman and CEO at Fulton Financial]

Based on new customer acquisition and overall customer sentiment, we continue to be positioned for long-term deposit growth. Turning to the income statement, revenue growth was driven by a strong net interest margin and a solid linked-quarter increase in noninterest income. All noninterest income categories grew linked-quarter. Wealth management hit an all-time high in quarterly revenue. We're adding team members and continuing to grow our customer base. Commercial banking fees also hit an all-time high as customer activity continues to drive growth. Consumer banking and our residential mortgage business delivered solid linked-quarter growth as well. Overall, our noninterest income businesses continue to make a consistent and meaningful contribution to overall revenue, and we have a solid strategy for continued growth. Lastly, let me touch on credit. Overall, we remain cautious given general economic and geopolitical uncertainty. However, we continue to see steady performance in our portfolio.

[Curt Myers, Chairman and CEO at Fulton Financial]

Charge-offs and provision expense were down. Late quarter, we experienced an uptick in nonaccrual loans. However, these balances remain in line with recent periods. Overall, our coverage ratio remains appropriate given our cautious outlook. Now I'll turn the call over to Rick to discuss the details of our financial results and provide comments on our 2025 operating guidance in a little more detail.

[Rick Kraemer, CFO at Fulton Financial]

Thank you Curt and good morning. Unless I note otherwise, the quarterly comparisons.

[Rick Kraemer, CFO at Fulton Financial]

I discuss with the first quarter.

[Rick Kraemer, CFO at Fulton Financial]

Of 2025 loan and deposit growth. Numbers I reference are annualized percentages on a linked-quarter basis. Starting on Slide four, operating earnings per diluted share was $0.55 or $100.6 million of operating net income available to common shareholders. Revenue growth, a stable balance sheet, and an increase in net interest margin offset a modest increase in operating expenses, driving positive operating leverage when compared to the year-ago period. Total end of period loans increased $150 million or 2.5% during the quarter, primarily in our residential mortgage portfolio, home equity portfolio, and certain commercial categories. Deposits declined $191 million or 2.9%. Growth of $120 million in money market balances and an increase of $89 million in wholesale channels were offset by seasonal declines in municipal balances of $135 million and noninterest bearing balances of $98 million. Our noninterest bearing balances ended the quarter at 20% of total deposits.

[Rick Kraemer, CFO at Fulton Financial]

We expect to see municipal balance inflows in line with historical trends in the third quarter. With these results, our loan to deposit ratio ended the quarter at 92%. As part of our ongoing balance sheet management, we added $117 million of securities to offset investment portfolio cash flows and to maintain our on-balance sheet liquidity. The weighted average coupon on new purchases this quarter was approximately 5.44%. These additions carried an effective duration of approximately 3.2 years. The impact of these balance sheet trends are shown on Slide five. Net interest income on a non-FTE basis was $254.9 million, a $3.7 million increase linked-quarter while net interest margin increased four basis points to 3.47%. Loan yields remained steady at 5.86% while fixed rate asset repricing represented a tailwind during the quarter.

[Rick Kraemer, CFO at Fulton Financial]

Accretion interest attributable to the acquired Republic portfolio declined $1.7 million linked-quarter to $11.4 million, offsetting most of that benefit for the quarter. Our average cost of total deposits decreased five basis points to 1.98%. Through the cycle, our total deposit beta has been 28%. We continue to identify opportunities and manage deposit costs with discipline and to be supportive of our overall balance sheet growth. As a reminder, we had $195 million of subordinated debt reset to floating rate in late March, repricing from a fixed 3.25% to approximately 6.6%. This security is SOFR-based and will float at 2.3% over 3-month term SOFR. Turning to slide six, noninterest income for the quarter was $69.1 million. The linked-quarter increase was broad based when excluding the benefit from equity method investment adjustment of $2.7 million in the first quarter of 2025. Fee income increased 7%.

[Rick Kraemer, CFO at Fulton Financial]

Linked-quarter noninterest income as a percentage of total revenue remained at 21% during the second quarter. Moving to slide seven, noninterest expense on an operating basis was $187.6 million, an increase of $4.8 million linked-quarter. As we indicated last quarter, we expected operating expenses to fall in the $190 million-$195 million per quarter range for the remaining three quarters of 2025. While the second quarter was below that range, we are confirming the range for both the third and fourth quarters of 2025 when looking at our expense base. Items excluded from operating expenses as listed on slide seven include $5.5 million of core deposit intangible amortization and a $270,000 benefit of other items. Turning to asset quality, provision expense declined approximately $5.3 million linked-quarter to $8.6 million. As Curt mentioned, modest loan growth combined with no material changes to our outlook contributed to lower provisioning linked-quarter.

[Rick Kraemer, CFO at Fulton Financial]

Our allowance for credit losses to total loans ratio ended the period at 1.57% and our ACL to nonperforming loan coverage was 177%. Slide nine shows a snapshot of our capital base as of June 30. We maintain a solid capital position that provides us with future balance sheet flexibility. During the quarter, we repurchased 522,000 shares at a weighted average price of $16.09. Including repurchases and internal capital generation, we added $55 million in total equity. AOCI ended the quarter flat at $272 million and our CET1 increased to 11.3%. On slide 10, we are updating our operating guidance for 2025 considering more recent events and additional economic data. We have updated our rate forecast to now include two 25 basis point rate cuts in 2025, one in September and one in December. This is down from four assumed cuts previously.

[Rick Kraemer, CFO at Fulton Financial]

In addition to this macro assumption, we have made the following adjustments to our guidance. We are increasing net interest income to a range of $1.005 billion-$1.025 billion. We are lowering provision expense to a range of $50 million-$70 million. There is no change to the fee income range, remaining at $265 million-$280 million. We are lowering our operating expense to a range of $750 million-$765 million. We are increasing our effective tax rate to a range of 18.5%-19.5%. Lastly, lowering our estimate of nonoperating expenses from $14 million to $10 million. With that, we'll now turn the call over to our operator, Gigi, to open up for questions.

[Operator]

Thank you. As a reminder, to ask a question, please press Star one one on your telephone and wait for your name to be announced. To withdraw your question, please press Star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Daniel Tamayo from Raymond James.

[Daniel Tamayo, VP at Raymond James]

Thank you. Good morning everyone. Maybe just starting on the expense guidance. You had a nice quarter, and you talked about kind of keeping the back half in that $190-$195 million range. You lowered the overall 2025 range as well. I guess just curious how you see the pace in the back half of the year getting there. You had a steep decline in the first quarter, and then there's been a little bit of a ramp since then implied in the back half of the year as well. Just curious if there's some help you could give us on geography and timing of the increase.

[Daniel Tamayo, VP at Raymond James]

In the expenses in the back half.

[Rick Kraemer, CFO at Fulton Financial]

Yeah, thanks Danny. Look, I think you're directionally right [audio distortion]. I think the range of $190 million-$195 million should land below the midpoint of that, a little bit of timing just on day count alone, obviously additional day. Recognize the magnitude of increase in 2Q had a lot to do with merit in the second quarter, which accounted for a couple million dollars of the increase. You don't have that kind of step up in 3Q and 4Q. I think what we're trying to do is provide a little bit of optionality for some initiatives that may start in the second half, which could increase a little bit. I don't expect geographically, I guess on the expense line, to see any major outlier moves for the second half.

[Daniel Tamayo, VP at Raymond James]

Okay. If you end up kind of below that midpoint, then you know that points us to, I guess, below the midpoint of the overall range for the year. Is that a fair way to think about it?

[Rick Kraemer, CFO at Fulton Financial]

That's a fair way to think about it. You know, with the caveat that we are obviously leaving ourselves a little room to start certain projects in the second half, which could incur costs more immediately and move that up a little higher.

[Daniel Tamayo, VP at Raymond James]

Okay, all right, fair enough. Appreciate that color. Kind of a similar question on the fee income guidance. Just assuming kind of a modest pace of increase in the back half gets us to kind of above the midpoint of the guidance that you guys have in there. It's been certainly a nice quarter, a nice year of growth on the wealth management side. I just want to make sure as we're working our way through the models that we're not missing any kind of one-time increases that you think may back off. Cash management looks like it was pretty strong in the second quarter. Card income bounced back. As we look through the fee income side, if there's anything that you'd point us towards in terms of moving parts in the back half of the year.

[Curt Myers, Chairman and CEO at Fulton Financial]

Yes, Danny, the second quarter was good across the board. As you mentioned in fee income, we look forward, we feel we have good strategies in place as we look forward. If we get that kind of consistent outperformance in each category, we're going to trend to the top end of that range. If we hit any headwinds in any one of those business units, we would trend to the midpoint or low end of the range. We feel pretty good about the overall outlook there. That is one of the outlook items that we did not change. We think we are tracking as expected and are pretty happy about the quarter and the consistent performance in each.

[Curt Myers, Chairman and CEO at Fulton Financial]

Of the fee income categories.

[Daniel Tamayo, VP at Raymond James]

Great. All right, thanks for all the color. Appreciate it, guys.

[Rick Kraemer, CFO at Fulton Financial]

You bet.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of David Bishop from Hovde Group.

[David Bishop, Director at Hovde Group]

Yeah, good morning gentlemen.

[David Bishop, Director at Hovde Group]

Hey, just curious for Rick, maybe just.

[David Bishop, Director at Hovde Group]

Bring us up to speed on the.

[David Bishop, Director at Hovde Group]

Status of the loan pipeline.

[David Bishop, Director at Hovde Group]

Just curious what you're seeing and hearing.

[David Bishop, Director at Hovde Group]

From your relationship managers and your commercial clients, if we're starting to see any impact.

[David Bishop, Director at Hovde Group]

Some of the uncertainty from tariff talk is starting to impact pipeline and loan demand.

[David Bishop, Director at Hovde Group]

Thanks.

[Curt Myers, Chairman and CEO at Fulton Financial]

Yeah, pipeline linked-quarter is up.

[Curt Myers, Chairman and CEO at Fulton Financial]

We feel that that's encouraging in this environment. Again, we still have the pull through rate being below historical norms as customers are cautious about new projects. The more certainty we get in the marketplace, whether it's taxes or tariffs or all of the many things that you could point to, we're hoping.

[Curt Myers, Chairman and CEO at Fulton Financial]

That pull through rate increases.

[Curt Myers, Chairman and CEO at Fulton Financial]

We get some tailwinds for loan growth.

[Curt Myers, Chairman and CEO at Fulton Financial]

Linked-quarter, we were pleased with our loan growth.

[Curt Myers, Chairman and CEO at Fulton Financial]

In the second quarter, we're hoping that continues. Pipelines are up, and we're really monitoring pull through rates. It really comes down to customers, you know, deciding to spend that money and move forward with that project.

[David Bishop, Director at Hovde Group]

Got it.

[David Bishop, Director at Hovde Group]

I have a follow up.

[David Bishop, Director at Hovde Group]

You know, Curt, maybe just remind us. Appetite for M&A here with.

[David Bishop, Director at Hovde Group]

Republic the rearview mirror.

[David Bishop, Director at Hovde Group]

Just curious where any sort of M&A.

[David Bishop, Director at Hovde Group]

Focus might be sort of geographically and maybe size parameters.

[David Bishop, Director at Hovde Group]

Thanks.

[Curt Myers, Chairman and CEO at Fulton Financial]

Yes, our M&A strategy remains the same.

[Curt Myers, Chairman and CEO at Fulton Financial]

We will stick to that strategy. As a reminder, we look at community banks in the $1 billion-$5 billion range. Really, the focal point for our strategy, they add to the company we're predominantly focused on in market and we think those opportunities would be additive and then we would look at bigger deals. There are very few of them. We monitor that. Our primary focus remains the same. I think the key message is as usual, we will be disciplined in metrics and we'll be disciplined on strategy.

[David Bishop, Director at Hovde Group]

Perfect, thanks.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of David Conrad from Keefe Bruyette & Woods.

[David Conrad, Managing Director and Senior Equity Analyst at KBW]

Hi, good morning.

[David Conrad, Managing Director and Senior Equity Analyst at KBW]

Good morning. I just want to talk a little bit.

[David Conrad, Managing Director and Senior Equity Analyst at KBW]

About the deposits and the outlook there, this quarter you saw about three basis points increase in savings but really good growth and able to push down really expensive broker deposits. Just wondering as you kind of look at the NIM outlook, kind of your ability to continue to remix the deposits.

[Rick Kraemer, CFO at Fulton Financial]

Yeah, thanks, David. I think there's a couple things to consider.

[Rick Kraemer, CFO at Fulton Financial]

Consider.

[Rick Kraemer, CFO at Fulton Financial]

When it comes to the cost, obviously we do have some seasonality in our portfolio driven by the municipal kind of inflows and outflows. At times, to offset that, we do utilize some more wholesale methods and more costly methods in short term. That obviously has a mitigating effect on lower cost. I think we still kind of, you know, there's this, still as rates stay higher, this drift that is occurring in non-interest bearing. That's a trend on mix you're kind of consistently fighting. We are seeing, I think, increased competition across the board for deposits more recently. Candidly, our desire is to fund all of our future loan growth with customer deposits, so that may amplify a little bit. Our betas are slowing.

[Rick Kraemer, CFO at Fulton Financial]

It may be too early to say there's a trough in deposit cost, but I think we're closer to the bottom, barring any future rate cuts.

[David Conrad, Managing Director and Senior Equity Analyst at KBW]

Got it, thanks. On the NII guide, I guess it feels like if you held things flat here for a couple quarters, you'd be kind of the midpoint, above the midpoint and towards the higher end. Maybe some comments on the exit rate of this year. I think you have two cuts in, but the December cut probably doesn't matter too much. Maybe just some thoughts on the exit rate of NII.

[Rick Kraemer, CFO at Fulton Financial]

Yeah, I think obviously what I just mentioned on the funding side.

[Rick Kraemer, CFO at Fulton Financial]

Is.

[Rick Kraemer, CFO at Fulton Financial]

A little bit of a headwind. I think we fully recognize the tailwind from the fixed rate asset repricing. What I would say there is, though, there are also competitive pressures that ebb and flow at any given time, which can impact yield and spreads.

[Rick Kraemer, CFO at Fulton Financial]

So.

[Rick Kraemer, CFO at Fulton Financial]

It's a tough business, and spreads are not always expanding. I think you'll see a natural, assuming no Fed moves, you see this kind of steady state, modest growth in NII from here on out. Obviously, there's lots of things from the macro that can change that.

[David Conrad, Managing Director and Senior Equity Analyst at KBW]

Okay, thank you.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Matthew Breese from Stephens Inc.

[Matthew Breese, Managing Director at Stephens Inc]

Good morning. I was hoping we could go back to the pipeline for just a second, you know, maybe discuss the components more. Recently we've seen growth in the form of commercial real estate and residential mortgage. Historically, I know Fulton has been more of a C&I focused type bank.

[Matthew Breese, Managing Director at Stephens Inc]

I wanted to get a sense.

[Matthew Breese, Managing Director at Stephens Inc]

For what we might see in terms of near-term loan growth. Rick, you had mentioned spreads are not always constant. What are you seeing for new loan spreads? Are you seeing competition kind of erode spreads in the hunt for growth?

[Curt Myers, Chairman and CEO at Fulton Financial]

Matt, I'll first respond just on growth and strategy. We're very committed to a diversified loan book. I think that served us well over time. We're looking to grow each category as appropriate from a risk standpoint. Quarter to quarter that ebbs and flows based on where loan originations are and opportunities are. You mentioned C&I loan growth. We are focused on C&I loan growth. It's a good business for us and drives treasury and a lot of.

[Curt Myers, Chairman and CEO at Fulton Financial]

Our other business lines.

[Curt Myers, Chairman and CEO at Fulton Financial]

Strategically, C&I is really important. C&I customers. It's very competitive right now, and it also is where they're dealing most with tariffs and costs and uncertainty. We're looking at each segment, trying to grow that prudently and responsibly. We think we have opportunities in each. We have market disruption, we've got good pipelines.

[Curt Myers, Chairman and CEO at Fulton Financial]

I think we can grow each category.

[Curt Myers, Chairman and CEO at Fulton Financial]

You're really going to see.

[Curt Myers, Chairman and CEO at Fulton Financial]

Quarter to quarter, maybe even year to year.

[Curt Myers, Chairman and CEO at Fulton Financial]

Year, our ability to grow certain segments more than others.

[Curt Myers, Chairman and CEO at Fulton Financial]

Again, the strategic focus is to.

[Curt Myers, Chairman and CEO at Fulton Financial]

Grow each segment appropriately.

[Rick Kraemer, CFO at Fulton Financial]

Maybe. Matt, I'll just comment quickly on spreads. I think what I would say is spreads are still healthy, and overall yields are still healthy. When we go back maybe to.

[Rick Kraemer, CFO at Fulton Financial]

The third, fourth quarter of last year.

[Rick Kraemer, CFO at Fulton Financial]

You probably were seeing new origination spreads and we were in the 7% plus. Over time, that was probably unsustainable in certain categories. You're seeing, I think, quarter over quarter compression on new origination yields of around 0.125% to 0.25% depending on what portfolios you're looking at. That is a little bit choppy and this is probably more normalized, but recognizing that just industry pressure and competitive pressure puts overall pressure on that for everybody.

[Matthew Breese, Managing Director at Stephens Inc]

Got it. Okay. Rick, you'd also mentioned, and it's in the release too, but accretable yield, step down. Should we use this $11.4 million as a new starting point and maybe you.

[Matthew Breese, Managing Director at Stephens Inc]

Could you just help us out for the new trend?

[Matthew Breese, Managing Director at Stephens Inc]

Is it down and to the right? What does the credible yield look like, you know, three, four quarters from now?

[Rick Kraemer, CFO at Fulton Financial]

I think $11 million-$12 million is a reasonable range, assuming some level of prepayments. Obviously, there is an estimate there in terms of prepayment speeds. If you had no prepayments, that number would be closer to $10.5 million to high $10 million.

[Matthew Breese, Managing Director at Stephens Inc]

Last one for me, you bought back some stock this quarter. You still have, I think, around $100 million, $125 million repurchase authorization. I noticed that authorization also includes preferreds and sub debt. You had mentioned sub debt is now floating or a portion is now floating. Curious if there's an appetite, one, for additional common repurchases or alternative forms of capital repurchase, including that sub debt.

[Matthew Breese, Managing Director at Stephens Inc]

What circumstances would you execute on those?

[Curt Myers, Chairman and CEO at Fulton Financial]

Yeah, the overall capital planning strategy is the same.

[Curt Myers, Chairman and CEO at Fulton Financial]

We want to support organic growth.

[Curt Myers, Chairman and CEO at Fulton Financial]

You know, we'd really like organic growth to continue.

[Curt Myers, Chairman and CEO at Fulton Financial]

Growth rates continue to improve.

[Curt Myers, Chairman and CEO at Fulton Financial]

That's always the, you know, first use of capital, and then any corporate initiatives that we would want to invest in, and then we would get to buybacks, and we look at those opportunistically. We had some opportunity in the second quarter. We used about $10 million of that. We have $115 million remaining for stock buybacks or other uses. We are evaluating that as we move forward. It really depends on outlook and overall capital and balance sheet strategy.

[Curt Myers, Chairman and CEO at Fulton Financial]

Great. That's all I had. Thanks for taking my questions.

[Rick Kraemer, CFO at Fulton Financial]

Thanks, Matt.

[Operator]

Thank you. One moment for our next question. Our next question comes from the line of Manuel Navas from D.A. Davidson.

[Manuel Navas, Analyst at D.A. Davidson]

Hey, how would you describe kind of the consumer pipelines that was pretty strong this quarter? Is that still going to have some seasonality or kind of carry over to the third quarter, and with the pipelines building on commercial, you're going to kind of see a handoff in better growth.

[Manuel Navas, Analyst at D.A. Davidson]

There in the back half of the year?

[Manuel Navas, Analyst at D.A. Davidson]

Just kind of talk about those dynamics, please.

[Curt Myers, Chairman and CEO at Fulton Financial]

Yes, there's definitely some seasonal effect on the consumer business.

[Curt Myers, Chairman and CEO at Fulton Financial]

The second quarter is good.

[Curt Myers, Chairman and CEO at Fulton Financial]

Home buying opportunity projects, consumer projects for driving the home equity. We referenced both of those categories growing nicely in the second quarter.

[Curt Myers, Chairman and CEO at Fulton Financial]

There is some seasonality to the business.

[Curt Myers, Chairman and CEO at Fulton Financial]

All of those underlying businesses were focused on attracting customers, adding new customers, and driving business organically. I think there's base level of growth in each of those businesses, and then it'll be either more significant or lower quarter to quarter based on seasonality. We really didn't see anything specific in the second quarter that would be an anomaly. That was good, solid second.

[Curt Myers, Chairman and CEO at Fulton Financial]

Quarter consumer growth.

[Manuel Navas, Analyst at D.A. Davidson]

Is kind of shifting over to pretty strong performance in fees and OpEx.

[Manuel Navas, Analyst at D.A. Davidson]

Could you kind of map out if.

[Manuel Navas, Analyst at D.A. Davidson]

Any of that outperformance has been kind of driven by the FultonFirst initiative?

[Rick Kraemer, CFO at Fulton Financial]

On the fee side, we talked about it a little bit before. It was a good quarter for us. We grew in each category.

[Rick Kraemer, CFO at Fulton Financial]

We feel we have just good underlying strategies there. There are some FultonFirst initiatives that we're focused on accelerating growth over time. Over time, it's hard to separate those from core business. As we move forward, the growth related initiatives for FultonFirst will show up in accelerating growth rates in certain categories.

[Rick Kraemer, CFO at Fulton Financial]

There's really not anything specific FultonFirst.

[Rick Kraemer, CFO at Fulton Financial]

To that growth rate that we would call out, it's just really managing those businesses in.

[Rick Kraemer, CFO at Fulton Financial]

A way that our long-term growth.

[Rick Kraemer, CFO at Fulton Financial]

Trajectory is higher than expected.

[Manuel Navas, Analyst at D.A. Davidson]

On the expense side.

[Rick Kraemer, CFO at Fulton Financial]

On the expense side, there's about, you know, we're about $8.5 million in net realized benefit from FultonFirst in 2Q. You know, still remain well on track. Obviously, just annualizing that number, well ahead of our original $25 million net save for 2025. I wouldn't necessarily say that the program in total has grown. I think a lot of that is just getting pulled forward in 2025 versus 2026.

[Manuel Navas, Analyst at D.A. Davidson]

That's helpful. You talked about credit trends being very solid. There was a little bit of a tick up in NPLs, I think in construction. Any color there, just kind of any broader comments on credit? Yeah, most of that.

[Curt Myers, Chairman and CEO at Fulton Financial]

Increase in commercial construction. Most of that was one project. It's a mixed-use project, predominantly multifamily but mixed-use project. We feel we have it appropriately reserved. It's an identified issue that we've been working on. We already have it reserved for and are working towards resolution. What you see there is just that migration from classified criticized to.

[Curt Myers, Chairman and CEO at Fulton Financial]

Nonaccrual for the quarter.

[Curt Myers, Chairman and CEO at Fulton Financial]

It is an identified issue we're working through to resolution. The second part of your question, just more broadly, credit metrics have remained stable. We feel good about the credit performance.

[Curt Myers, Chairman and CEO at Fulton Financial]

We remain cautious.

[Curt Myers, Chairman and CEO at Fulton Financial]

are just a lot of moving parts in the marketplace, a lot of factors that consumers and businesses are dealing with. At this point, the portfolio has been very resilient and credit metrics are holding strong. We still do have a cautious outlook just based on the overall environment.

[Manuel Navas, Analyst at D.A. Davidson]

Thank you very much.

[Manuel Navas, Analyst at D.A. Davidson]

I appreciate the comments.

[Operator]

Thank you. At this time, I would now like to turn the conference back over to Curt Myers for closing remarks.

[Curt Myers, Chairman and CEO at Fulton Financial]

Thank you again for joining us today.

[Curt Myers, Chairman and CEO at Fulton Financial]

We hope you'll be able to be.

[Curt Myers, Chairman and CEO at Fulton Financial]

With us when we discuss third quarter results in October. Thank you.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.

Participants

Executives

• Rick Kraemer, CFO
• Matt Jozwiak, Director of Investor Relations
• Curt Myers, Chairman and CEO

Analysts

• Daniel Tamayo, VP at Raymond James
• Matthew Breese, Managing Director at Stephens Inc
• David Bishop, Director at Hovde Group
• Manuel Navas, Analyst at D.A. Davidson
• David Conrad, Managing Director and Senior Equity Analyst at KBW