First Niagara Financial Group (FNFG) in Buffalo, N.Y., met quarterly earnings estimates as its lending income ticked up and margins widened.
The $37 billion-asset company on Friday reported a profit of $63.6 million in the second quarter, after losing $18.5 million in the second quarter of 2012, when it recorded $135.2 million in expenses related to its purchase of more than 100 branches from HSBC. Earnings per share of 18 cents met the target of analysts polled by Bloomberg.
Net interest income rose 4%, to $269.4 million, as net interest margin widened by 10 basis points, to 3.36%. Total loans and leases rose 9%, to $20.5 billion, led by an expansion in commercial lending. Indirect auto loans ballooned to more than $1 billion from $185 million a year earlier, as the company originated $296 million in the loans in the second quarter.
Noninterest income dipped less than 1%, to $95.5 million, despite a 24% rise in fees on deposit accounts, to $26.5 million, as mortgage banking and miscellaneous income fell.
Provision for credit losses dropped nearly $3 million, to $25.2 million, and net chargeoffs fell 17%, to $13.1 million.
First Niagara is currently searching for a new chief executive after ousting John Koelmel in March. The company named Gary Crosby interim president chief executive.