Fulton Financial (NASDAQ:FULT) reported record operating results for the third quarter of 2026, supported by higher net interest income, growth in customer deposits, expanding fee revenue and lower credit-loss provisions.
Operating net income available to common shareholders rose to $119.8 million, or $0.62 per diluted share, from $115.9 million, or $0.60 per diluted share, in the second quarter. On a GAAP basis, net income available to common shareholders was $114.1 million, or $0.59 per diluted share.
“The third quarter represented another period of strong performance for Fulton,” Chairman, Chief Executive Officer and President Curt Myers said on the company’s earnings call. He said the company added customers, invested in commercial banking talent and capabilities, and delivered what he described as record financial results.
Deposits Grow as Wholesale Funding Declines
Deposits totaled $28.8 billion at Sept. 30, increasing $571 million from the end of the second quarter. Fulton said customer deposit balances grew by nearly $1 billion during the quarter, while brokered deposits fell by $428 million to $547 million and Federal Home Loan Bank advances declined by $553 million and were fully repaid.
Demand and savings deposits increased $879 million, including a $601 million rise in savings deposits and a $324 million increase in interest-bearing demand deposits. Myers said commercial deposit growth was driven by both seasonal municipal inflows and core business wins.
During the question-and-answer session, Myers said commercial deposit growth was nearly $600 million, while municipal flows accounted for about $400 million. He attributed the commercial gains to new customer relationships, treasury management capabilities and additions to the company’s commercial banking team.
Fulton increased its commercial sales force by 14% year to date, with more than two-thirds of that expansion occurring in the third quarter. Myers said the company added approximately 30 commercial bankers over the past year and expects the new talent, alongside investments in market presence and banking capabilities, to support loan growth in 2027.
Loan Growth Limited by Commercial Real Estate Payoffs
Total loans increased $44 million during the quarter, as consumer-related portfolios grew $107 million and commercial loan balances declined $63 million. Chief Financial Officer Rick Kraemer said the commercial decline was primarily tied to lower commercial construction balances.
Loan originations increased 23% from the second quarter, which management said reflected healthy production activity. However, Myers said commercial real estate payoffs exceeded expectations, particularly in multifamily lending, where competition from insurance companies and non-bank lenders has increased.
“Those are our customers,” Myers said, adding that Fulton may retain relationships even when it elects not to match pricing or credit terms on individual loans.
Kraemer said overall new loan originations carried yields in the low 6% range, with consumer originations somewhat higher than commercial production. He identified multifamily commercial real estate as an area where pricing has compressed and Fulton has exercised greater discipline.
Management expects structural loan runoff and maturities to ease in 2027. Myers said the company is targeting mid-single-digit organic growth as a base and aims to accelerate beyond that level if conditions permit.
Margin, Fee Businesses and Credit Metrics
Net interest income increased $5.8 million, or about 2% from the prior quarter, to $290 million. Net interest margin was 3.58%, compared with 3.60% in the second quarter. Kraemer said the decline reflected lower purchase accounting accretion and higher average cash balances, which reduced margin by about 2 basis points.
Average cash balances were approximately $1.1 billion, up from $842 million in the second quarter. Total purchase accounting accretion income was $12.9 million, down from $15.1 million in the prior quarter.
Kraemer said management expects net interest margin to be stable to slightly higher in coming quarters. He said excess liquidity carried through quarter-end had pressured margin, but that effect should diminish. He also said further rate increases and the current yield-curve shape could provide support for net interest income and margin, although deposit betas could moderate the benefit.
Non-interest income totaled $77.2 million. The prior quarter included $6.9 million of income from an equity-method investment that was sold during that period. Wealth management revenue rose $2.1 million sequentially, and assets under management and administration reached a record $18.6 billion.
Myers said the wealth business has benefited from new advisor hiring, new customer wins and additional assets from existing clients. Commercial, consumer and mortgage banking fee businesses also grew, and non-interest income represented about 21% of total revenue.
Credit quality improved during the quarter. Net charge-offs were 0.14% of average loans, down from 0.34% in the second quarter, while nonperforming assets improved to 0.52% of total assets from 0.54%. The allowance for credit losses was 1.45% of loans, compared with 1.48% in the prior quarter, and provision expense declined to $4.1 million from $4.9 million.
Capital Returns and Updated Outlook
Fulton repurchased $56.1 million of common stock during the quarter at an average price of $24.14 per share. Year to date, the company has repurchased 4.1 million shares at an average of $22.58 per share and had approximately $58 million remaining under its authorization.
The company’s common equity tier 1 ratio was 12.2%, total risk-based capital was 16%, and tangible common equity was 8.4%. Myers said buyback activity could moderate as organic growth and capital needs increase.
For 2026, Fulton raised the low end of its net interest income outlook by $5 million to $1.125 billion. It lowered its expected loan-loss provision range to $30 million to $40 million, raised its non-interest income outlook to $295 million to $305 million, and increased the low end of its operating non-interest expense range to $820 million. The company did not change its full-year tax-rate outlook.
About Fulton Financial (NASDAQ:FULT)
Fulton Financial Corporation is a regional bank holding company headquartered in Lancaster, Pennsylvania. Through its principal subsidiary, Fulton Bank, N.A., the company provides banking and financial services to individuals, businesses, and institutions.
Fulton Bank offers deposit accounts, consumer and commercial lending, residential mortgages, and cash-management and treasury services. Its other offerings include wealth management, trust and investment services, financial planning, and insurance solutions.
Founded in 1882, Fulton Financial serves customers through banking offices and digital channels in Pennsylvania, Delaware, Maryland, New Jersey, and Virginia.
