Fulton Financial (US:FULT)2025-07-16 15:00Financial Data and Key Metrics Changes - Operating earnings reached $100.6 million or $0.55 per share, marking a 3% linked quarter increase and a record for the company [7][14] - Total revenue increased due to growth in net interest income and fee income, with a quarterly efficiency ratio of 57.1% [8][10] - Operating return on average assets rose to 1.3%, and operating return on average tangible common equity increased to 16.26% [8][14] Business Line Data and Key Metrics Changes - Total loans grew by $150 million or 2.5%, primarily in residential mortgage and home equity portfolios, despite strategic runoff in indirect auto and certain commercial loans [9][15] - Non-interest income for the quarter was $69.1 million, with all categories showing linked quarter growth, particularly in Wealth Management and Commercial Banking fees [11][18] - Non-interest expense on an operating basis was $187.6 million, an increase of $4.8 million linked quarter [19] Market Data and Key Metrics Changes - Deposits declined by $191 million or 2.9%, with seasonal declines in municipal and non-interest bearing balances [15][16] - Non-interest bearing balances accounted for 20% of total deposits at the end of the quarter [15] Company Strategy and Development Direction - The company continues to focus on its Community Banking strategy, aiming to attract and retain valuable customers while reinvesting in communities [6][8] - The M&A strategy remains focused on community banks in the $1 billion to $5 billion range, with a disciplined approach to metrics and strategy [44][45] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the economic and geopolitical environment but sees steady performance in the loan portfolio [12][85] - The company updated its 2025 operating guidance, including an increase in net interest income and a decrease in provision expense [22] Other Important Information - The company repurchased 522,000 shares at a weighted average price of $16.9 during the quarter [21] - The CET1 ratio increased to 11.3%, maintaining a solid capital position [21] Q&A Session Summary Question: Expense guidance for the back half of the year - Management indicated that the expense range for the back half should land below the midpoint due to timing and merit increases in Q2 [30] Question: Fee income guidance and potential headwinds - Management expressed confidence in fee income growth, stating that consistent outperformance could trend towards the top end of the guidance range [33] Question: Status of the loan pipeline and impact of economic uncertainty - The loan pipeline is up, but pull-through rates remain below historical norms due to customer caution [41] Question: M&A appetite post-Republic acquisition - The M&A strategy remains focused on community banks in the $1 billion to $5 billion range, with a disciplined approach [44] Question: Outlook on deposits and NIM - Management noted seasonality in deposits and competition for deposits, indicating a cautious but optimistic outlook [52] Question: Consumer pipelines and seasonality - There is some seasonality in the consumer business, but underlying growth strategies are expected to drive business organically [76] Question: Credit trends and non-performing loans - An uptick in non-performing loans was primarily due to one identified project, with overall credit metrics remaining stable [84]