Profit declined at Fulton Financial in Lancaster, Pa., in the first quarter, as broad-based loan growth was offset by a drop in noninterest income.
The $18.1 billion-asset company's net income fell 4.4% to $38.3 million, compared to a year ago. Earnings per share were unchanged at 22 cents, a penny better than the average estimate of analysts polled by Bloomberg.
Net interest income after the provision for credit losses was little changed at $127.5 million. The net interest margin compressed to 3.23% from 3.27%.
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Several small and midsize banks generated large year-over-year loan growth despite a belief by some outsiders that a slowdown was looming. Bankers may have to spend coming months assuring investors that they can keep booking loans while adequately managing risk.
April 19 -
Since replacing Kevin Kabat in November, Greg Carmichael has said that the Cincinnati company needs to invest more heavily in technology and compliance now in order to boost profits and improve efficiency down the road. But investors worry that expenses will grow faster than revenues and further squeeze margins.
April 18 -
M&T is squeezing savings out of its newly purchased Hudson City Bancorp after fighting long and hard for regulatory approval. But it's also taking steps to keep Hudson City's customers from leaving, like offering higher rates on CDs in the New Jersey area.
April 18
Total loans increased 5.8% to $13.9 billion. Fulton originated more loans in its two largest categories, commercial real estate and business loans, including agricultural lending.
Noninterest income fell 3.6% to $43.1 million. The decrease was partly due to an unfavorable yearly comparison for investment securities gains. Those gains fell $3.2 million from last year's quarter, in which Fulton recorded gains from the sale of two pooled trust-preferred debt securities.
Noninterest expense rose 1.6% to $120.4 million, mainly on higher costs related to salaries and employee benefits, data processing and software. The efficiency ratio improved 183 basis points to 68.33%.
