Fulton Financial (FULT) in Lancaster, Pa., saw reduced revenue from mortgage sales and service charges in the third quarter, but improvements in credit quality partially offset those declines.
The $17 billion-asset Fulton reported earnings of $39.9 million in the third quarter, a 4% decrease from the same period a year earlier. Its 21 cents per share beat estimates of analysts polled by Bloomberg by 1 cent.
Fulton's net interest income dropped 3% to $132.5 million as construction and consumer loans dipped from the third quarter of 2012. Its net interest margin fell 29 basis points to 3.45%.
Noninterest income fell 9% to $47.4 million, largely because of lower revenue from mortgage sales and service charges. Noninterest expenses climbed 6%, driven by higher costs from salary and benefits, data processing, professional fees, operating risk loss, software and marketing.
Fulton slashed its provision for credit losses 59% to $9.5 million, while net loan chargeoffs fell 43% to $14.3 million. Fulton's nonperforming loans were down by 21% compared with the same period in 2012.
Fulton repurchased approximately 1.6 million shares during the third quarter, completing the repurchase of 8 million shares. Its board has approved a repurchase of up to 4 million shares through March 31, 2014.