Fulton Financial (FULT) in Lancaster, Pa., said Tuesday that its first-quarter earnings climbed nearly 13% from the same period last year, to $38.1 million, as strong refinancing activity, improved asset quality and sharply lower funding costs more than offset sluggish commercial loan growth.

Earnings per share rose nearly 12%, to 19 cents, in line with estimates of analysts polled by Thomson Reuters.

Fulton is a multi-bank holding company with $16.5 billion of assets and roughly 265 branches in Pennsylvania, New Jersey, Maryland, Delaware and Virginia. In a news release after markets closed Tuesday, Chairman and Chief Executive R. Scott Smith Jr. said that Fulton's first-quarter performance represented "a strong start for the year."

Total interest income fell 5% year over year, but its net interest income rose 9% thanks to a 22% drop in its funding costs and a 26% decline in its provision for loan losses. The company's fee income increased 14%, to $51.7 million, largely due to a surge in refinancing activity that helped to nearly double its income from mortgage banking.

Fulton's shares closed up 1.4% Tuesday, to $10.42.

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