(RTTNews) - Tuesday, multi-bank holding company Fulton Financial Corp. (FULT: News ) reported a decline in net income for the third quarter on higher provisions for loan losses and lower interest income compared with last year. Net income per share for the quarter, however, beat Wall Street expectations by 3 cents.

The Lancaster, Pennsylvania-based company reported a 37.1% decrease in third quarter net income available to common shareholders to $18.3 million from $29.08 million reported in the prior-year period. On a per share basis, net income dropped to $0.10 from $0.17 in the the same period last year.

On average, twelve analysts polled by Thomson Reuters expected the company to earn $0.07 per share on revenues of $175.39 million in the third quarter. Analysts' estimates typically exclude one-time items.

The company's net interest income declined 0.9% year-on-year to $132.80 million from $134.02 million. Net interest margin was lower at 3.55% for the third quarter compared with 3.77% for the same period last year.

While the company earned 7.5% lower at $197.86 million from interests in the third quarter compared with $213.81 million last year, interest expenses also declined 18.5% to $65.06 million from $79.79 million in the prior-year quarter.

The provision for loan losses increased $18.3 million or 68.5% for the third quarter to $45 million from $26.7 million in the same quarter last year. However, on a sequential basis, the provision for loan losses reflected a 10% decrease.
Scott Smith Jr, chairman and chief executive officer said "While the past year has been extremely challenging for us, the quarter just completed showed slowing in the rate of credit deterioration within our loan portfolio and, as a result, we were able to decrease the provision from the second quarter"

Non-interest income increased 2.3% in the third quarter to $41.23 million from $40.32 million,helped by a $0.51 million increase in gains on sales of mortgage loans, offset by an $0.86 million decrease in service charges on deposit accounts.

Non-interest expenses also increased 0.5% year-on-year to $99.81 million from $99.36 million reported last year, primarily due to $4.1 million increase in Federal Deposit Insurance Corporation or FDIC insurance expense, partially offset by a $3.1 million decrease in operating risk loss.

While total loans increased $144.7 million or 1.2% to $12.0 billion at September 30, 2009, compared with $11.8 billion at the prior-year, total deposits also increased $2.1 billion or 21.3% to $12.0 billion at September 30, 2009 compared with $9.9 billion last year.

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