Fulton Financial (US:FULT)2026-01-22 16:00Financial Data and Key Metrics Changes - Operating earnings per share reached a record $2.16 for 2025, reflecting strong performance compared to 2024 [5] - Customer deposits increased by $449 million, with a 25% growth in consumer demand deposit account openings year over year [5] - Operating return on assets improved by 17 basis points to 1.28%, and net interest margin increased by 9 basis points to 3.51% [9][10] Business Line Data and Key Metrics Changes - Non-interest income, excluding certain gains and losses, was $277 million, up almost 7% year over year, with commercial fees growing by 8% [7][8] - The business banking team raised over $133 million in lower-cost operating deposits, contributing to overall deposit growth [5] - Loan growth was impacted by strategic actions that represented over $800 million in headwinds, yet organic loan growth was achieved [6][12] Market Data and Key Metrics Changes - Total deposits grew by $257 million, or 3.9%, with balanced growth across categories [14] - Municipal deposits decreased by $254 million, while commercial deposits remained stable [14] - The commercial pipeline increased by more than 10% year over year, indicating strong future growth potential [48] Company Strategy and Development Direction - The company aims to create long-term value by growing the business and enhancing customer service [5] - The acquisition of Blue Foundry Bancorp is expected to strengthen the company's footprint and community banking model [11] - The company plans to return to historical loan growth rates in the mid-single-digit range in 2026 [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving mid-single-digit loan growth in 2026, supported by increased productivity and a strong pipeline [27][28] - The company anticipates stable credit conditions and a stable economic environment, which will influence the allowance for loan losses [30] - Management highlighted the importance of maintaining a diversified loan portfolio to support growth across various segments [38] Other Important Information - Operating expenses grew by 1.9% in 2025, with a normalized decrease of 2.7% when accounting for prior year expenses [9] - The company repurchased $59 million of common stock and increased its dividend, reflecting strong capital ratios [10][19] - The effective tax rate is projected to be between 18.5% and 19.5% for 2026 [20] Q&A Session Summary Question: Can you quantify the headwinds for loan growth in 2026? - Management noted over $800 million in headwinds from strategic actions in 2025, which are expected to moderate in 2026, allowing for a return to mid-single-digit growth [26] Question: What are the assumptions regarding pay downs in the loan portfolio? - Management indicated that they do not foresee significant changes in normal portfolio pay downs and prepayments year over year [28] Question: How will the loan mix change with new hires? - Management emphasized the strategy to grow all loan segments, including CRE and C&I, with a focus on maintaining a diversified loan book [38] Question: What are the expectations for deposit growth and cost of funds? - Management expressed confidence in deposit growth driven by consumer and small business segments, with the cost of deposits finishing December at 1.80% [45][46] Question: What is the outlook for commercial interest rate swap income? - Management stated that swap income correlates with originations and is expected to fluctuate based on larger deals [50] Question: What is the expected run rate for other fee income? - Management indicated that a normalized level for other fee income would be around $2.5 million [52]