Fulton Financial in Lancaster, Pa., reported lower second-quarter profit, as low interest rates pressured lower yields on earning assets.
The $17.4 billion-asset company's net income fell 7.3% to $36.7 million, or 21 cents per share, from a year earlier, meeting the average estimate of analysts polled by Bloomberg.
Net interest income fell 3.9% to $122.9 million. Average yields on interest-earning assets fell 18 basis points to 3.74%. The net interest margin compressed 21 basis points to 3.20%.
"In light of the current low interest rate environment, we took steps to reduce interest expense over the long term through the issuance of $150 million in subordinated debt which was used to redeem higher cost trust preferred securities," Philip Wenger, chairman and chief executive, said in a news release.
Fee income rose 3.6% to $46.5 million on higher service charges on deposit accounts, due to an increase in overdraft fees.
Noninterest expense rose 1.8% to $118.4 million on higher costs for salaries and employee benefits, marketing and for other outside services.