Fulton Financial in Lancaster, Pa., reported lower first-quarter profit on a decline in net interest income and higher expenses.

Net income at the $17 billion-asset company fell 4% to $40 million, or 22 cents per share, from a year earlier. That was two cents higher than the average estimate of analysts polled by Bloomberg

Net interest income fell 5% to $123.6 million. The net interest margin compressed by 20 basis points to 3.27%.

Noninterest expense rose 8% to $118.6 million on higher salaries and employee benefits.

Fee income offset rose 16% to $44.7 million, primarily due to $4.1 million in investment securities gains. Mortgage income and other service charges also contributed to the increase.

Fulton's board this month approved a $50 million stock buyback, running through the end of the year.

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