KeyCorp in Cleveland reported lower quarterly profit as expenses tied to its pending purchase of First Niagara Financial Group cut into its earnings.
The $98.4 billion-asset company said in a press release Thursday that its net income fell 19% from a year earlier to $183 million. Keycorp recorded $24 million in merger-related expenses, including $16 million in personnel costs for technology development for systems conversions and employees dedicated to integration efforts. Overall noninterest expenses rose roughly 5%, to $703 million.
KeyCorp agreed in October to buy the $39.9 billion-asset First Niagara, of Buffalo, N.Y., for $4.1 billion. Beth Mooney, Key's chairman and chief executive, said in Thursday's release that Key continued to make progress on finalizing the acquisition.
Revenue increased by almost 3% to $1 billion.
Net interest income rose by 6% to $612 million. Total loans increased by more than 4%, to $60.2 billion, as Key's commercial, financial and agricultural portfolio climbed more than 11%, to $31.6 billion. The net interest margin compressed by 2 basis points, to 2.89%.
Noninterest income fell more than 1% to $431 million, largely reflecting a $29 million decline in gains from principal investing.