Fulton Financial earnings increased in the third quarter of 2026 as stronger customer deposits reduced reliance on wholesale funding and net interest income rose. Results released on October 22 showed net income available to common shareholders of $114.1 million, or $0.59 per diluted share, compared with $99.9 million, or $0.52 per share, in the second quarter. Management also raised parts of its full-year revenue outlook.
Key Takeaways
- Non-GAAP operating earnings reached $119.8 million, or $0.62 per diluted share, up from $115.9 million in the second quarter.
- Customer deposits grew approximately $1 billion, helping Fulton reduce brokered deposits and repay its Federal Home Loan Bank advances.
- Loan growth remained modest despite stronger originations, while credit-loss measures improved sequentially.
Table of Contents
- Fulton Financial earnings improve despite a narrower margin
- Deposit inflows replace wholesale funding
- Loan payoffs restrain growth as credit improves
- Higher revenue guidance sets the year-end benchmark
- Conclusion
Fulton Financial earnings improve despite a narrower margin
Fulton’s third-quarter investor presentation distinguishes reported earnings from its non-GAAP operating measures. Operating earnings exclude items including intangible amortization and acquisition-related expenses, making the $0.62 operating earnings per share different from the $0.59 reported result.
Net interest income increased $5.8 million from the second quarter to approximately $290 million. Net interest margin nevertheless slipped two basis points to 3.58%. Higher average cash balances reduced the margin by approximately two basis points, while purchase accounting accretion declined to $12.9 million from $15.1 million.
Operating noninterest expense rose modestly to $211.2 million from $210.6 million. The efficiency ratio improved to 56.8% from 57.3%, indicating lower operating costs relative to revenue on that measure.
| Item | Details |
|---|---|
| 2026 net interest income guidance | $1.125 billion–$1.135 billion, on a non-tax-equivalent basis |
| 2026 provision for credit losses guidance | $30 million–$40 million |
| 2026 noninterest income guidance | $295 million–$305 million |
| 2026 operating noninterest expense guidance | $820 million–$830 million; excludes non-operating expenses and core deposit intangible amortization |
Deposit inflows replace wholesale funding
Quarter-end deposits totaled $28.8 billion, up $571 million from June 30. Customer deposit growth of approximately $1 billion was partly offset by a $428 million reduction in brokered deposits, which ended the quarter at $547 million.
Chief Executive Curtis Myers said commercial deposit growth was almost $600 million and municipal inflows were about $400 million. He attributed commercial gains to treasury management platforms, new customers and additional commercial and treasury bankers.
Fulton also reduced Federal Home Loan Bank advances by $553 million, paying them off entirely. The funding shift matters because customer inflows allowed the bank to replace wholesale sources rather than simply expand its balance sheet.
Loan payoffs restrain growth as credit improves
Total loans increased just $44 million, with consumer portfolios growing $107 million and commercial balances declining $63 million. That modest net increase contrasted with a 23% sequential rise in loan originations.
Myers said accelerated commercial real estate payoffs, particularly in multifamily lending, held back balances. Insurance companies and nonbank lenders were competing aggressively on rates and terms, and Fulton sometimes declined to retain loans on those terms.
Credit measures improved from the second quarter. Net charge-offs fell to 0.14% of average loans from 0.34%, while nonperforming assets declined to 0.52% of total assets from 0.54%. The quarterly provision for credit losses decreased to $4.1 million from $4.9 million.
Higher revenue guidance sets the year-end benchmark
Management raised the lower end of its annual net interest income forecast by $5 million, increased its noninterest income outlook and lowered its provision forecast. It also raised the lower end of expected operating expenses. These are management projections, not completed full-year results.
Wealth management supported the revenue outlook: quarterly revenue increased $2.1 million, or more than 9%, and assets under management and administration reached $18.6 billion. Total noninterest income nevertheless declined to $77.2 million from $79.3 million, partly because the second quarter included $6.9 million from an equity-method investment sold during that period.
Fulton repurchased $56.1 million of shares during the quarter. Approximately $58 million remained under an authorization running through January 31, 2027. Myers said repurchases were expected to moderate as loan growth and other capital deployment increased.
Conclusion
The fourth quarter will determine whether Fulton can convert stronger originations into loan-balance growth while meeting its revised 2026 guidance. Deposit inflows have already reduced wholesale funding, but the pace of lending and capital deployment will shape management’s planned moderation in buybacks.
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