Fulton Financial Aided by Credit Improvements, Securities in 1Q

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.

For reprint and licensing requests for this article, click here.
Community banking
MORE FROM AMERICAN BANKER