KeyCorp in Cleveland continues to reap the benefits of buying First Niagara Financial Group in Buffalo, N.Y.

The $136 billion-asset company reported Thursday that its second-quarter profit more than doubled from a year earlier to $398 million. The numbers were skewed by Key’s July 2016 purchase of the $40 billion-asset First Niagara, which added about 300 branches in four states.

"We were pleased with the strength and quality of our second-quarter results, which reflect Key's continued business momentum and realization of value from the First Niagara acquisition," Chairman and CEO Beth Mooney said in a press release. "We also made investments for growth across our franchise, including the repositioning of our merchant services business and the recent acquisition of HelloWallet."

Keycorp Chairman and CEO Beth Mooney.
Beth Mooney, KeyCorp's chairman and CEO, has made a number of strategic acquisitions in the past year. Bloomberg News

Key agreed in May to buy HelloWallet, a personal finance software platform, from Morningstar. Key previously had an exclusive partnership with HelloWallet where it was the only bank with access to the platform. Key said the deal closed in early July.

Second-quarter results included a number of special items, including a gain related to its merchant services business, the finalization of purchase accounting, merger-related charges and a charitable contribution. These items resulted in a net benefit of $43 million.

Total revenue increased by 52% to $1.6 billion.

Net interest income, which included $100 million of purchase-accounting accretion, increased 63%, to $987 million. Average loans rose 41% to $86.5 billion, while the net interest margin widened by 54 basis points to 3.30%.

Commercial-and-industrial loans surged by almost 25% to $40.7 billion.

Noninterest income jumped 38% to $653 million, mostly because of First Niagara and a $64 million one-time gain from buying the remaining ownership interest in a merchant services joint venture. Trust and investment services income increased by almost 22% to $134 million, while investment banking and debt placement fees rose by about 38% to $135 million.

Noninterest expenses rose by more than 32% to $995 million. Personnel costs were up 29% to $551 million. The quarter also included $44 million of merger-related charges.

The loan-loss provision increased by 27% to $66 million.

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