First Defiance Financial in Defiance, Ohio, reported higher quarterly profit after posting higher fee income.

The $2.2 billion-asset company's third-quarter earnings rose 40% from a year earlier, to $7.7 million.

Net interest income increased by 3%, to $17.7 million, even though the net interest margin compressed by 11 basis points, to 3.73%.

Noninterest income rose by 29%, to $9.4 million, largely because of $1.4 million in tax-free income derived from the company's life insurance and deferred compensation plan trust.

Noninterest expenses increased by 4%, to $16.8 million. The loan-loss provision decreased by 15%, to $406,000.

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