First Niagara Profit Rises on Increased Commercial, Auto Lending

First Niagara Financial Group in Buffalo, N.Y., reported higher quarterly profit after increased commercial and auto lending offset an rise in spending and a decline in fee income.

The $38 billion-asset company's second-quarter net income rose 4.1% from a year earlier, to $66.2 million. At 19 cents a share, its earnings were a penny better than the average estimate of analysts polled by Bloomberg.

Net interest income rose 1%, to $272 million. Commercial loans rose 8.2%, to $13.7 billion, and indirect auto lending rose 78%, to $1.9 billion. The net interest margin narrowed by 10 basis points, to 3.26%.

Noninterest income fell 15%, to $81 million, on lower revenues from mortgage banking and capital markets income.

First Niagara is "on-time and on-budget" with implementation of its previously announced plan to spend $200 million to $250 million to upgrade technology and improve products and services, Gary Crosby, the company's president and chief executive, said in a statement. Noninterest expense rose 3.8%, to $244 million.