Fulton Financial (FULT) in Lancaster, Pa., reported higher quarterly profit that benefited from a cost-cutting initiative.

The $17 billion-asset company’s first-quarter earnings rose 6.5% from a year earlier, to $41.8 million, or 22 cents a share. The average estimate of analysts polled by Bloomberg was 20 cents.

Fulton reported a huge drop in its loan-loss provision for loan losses, which fell 83% to $2.5 million

Noninterest expense fell 1.2% to $109.6 million. Fulton reported lower costs in employee salaries, data processing, professional fees and other items. The company made several changes during the first quarter to lower expenses, including the closure of 13 branches and restructuring management. Fulton has said that it expects to save about $8 million annually from the changes.

Despite cutting costs, Fulton's efficiency ratio rose by 160 basis points, to 63.38%. A low ratio is an indication of an efficiently run bank. Investors have been placing more emphasis on bank efficiency ratios in light of low interest rates.

Net interest income fell 0.1%, to $129.6 million. Fee income fell 19%, to $38.5 million, in part because mortgage banking income fell 56%. to $3.6 milion.

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