Fulton Financial (FULT) in Lancaster, Pa., reported a slight increase in quarterly profit as better credit quality and higher securities gains offset revenue declines.
The $16.7 billion-asset company said Tuesday that it earned $39.2 million in the first quarter, up 3% from the same period in 2012. Per-share earnings of 20 cents were in line with the expectations of analysts surveyed by Bloomberg.
Net interest income fell 6.5%, to $129.6 million; net interest margin contracted by 30 basis points, to 3.55%.
Noninterest income fell by 9%, to $47.3 million, as service charges on deposit accounts, other fees and mortgage banking income fell. Fulton made $2.5 million in gains on investment securities, nearly double what it earned in the first quarter of 2012.
Foreign-currency processing revenue declined by $2.3 million because of its sale of a payments unit to Cambridge Mercantile Group in Toronto last December.
But improvements to Fulton's credit quality made up for the lost revenue. Its provision for loan losses fell 46%, to $15 million, and net chargeoffs declined 33%, to $18.9 million. Nonperforming loans fell by 27%, to $208.7 million.
Fulton appointed Philip Wenger as chairman and chief executive in January. He told American Banker he will focus on growth.
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