Lower yields weighed on People's United Financial (PBCT) in Bridgeport, Conn., in the first quarter.
Earnings at the $31 billion-asset company fell 8.4% from a year earlier, to $52.5 million. The company made 16 cents a share, roughly 2 cents a share below analysts' estimates, according to Bloomberg.
Net interest income fell 6% year over year, to $219.3 million, while net interest margin shrank 59 basis points, to 3.38%.
Noninterest income rose 14.5% from a year earlier, to $82.9 million, primarily because of gains on sale of residential mortgage loans and added revenue from fee-based businesses.
Noninterest expense rose 1.6% year over year, to $212 million. The company's efficiency ratio deteriorated 50 basis points, to 64.1%.
People's United's loan book grew roughly 10% from a year earlier, to $22.1 billion, primarily because of business lending.
Jack Barnes, People's United's chief executive, said in a press release that net interest margin "has now largely stabilized, which should allow net interest income to increase at a pace more closely aligned with our earning asset growth in the quarters ahead."
People's United, which has 417 branches in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, has made five acquisitions in metropolitan New York and New England in the last few years.
Barnes added that People's United saw the benefits of its expansion in the first quarter, which "is typically a seasonally slower quarter for loan growth."